SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                 FORM 10-K

    |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                            EXCHANGE ACT OF 1934

                For the fiscal year ended December 31, 2001

  |_| 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 000-31359

                              CORECOMM LIMITED
           (Exact Name of Registrant as Specified in its Charter)

                   Delaware                                 23-3032245
        (State or Other Jurisdiction of                   (I.R.S. Employer
         Incorporation or Organization)                  Identification No.)

         110 East 59th Street
             26th Floor
         New York, New York                                       10022
(Address of Principal Executive Offices)                       (Zip Code)

                               (212) 906-8485
            (Registrant's Telephone Number, Including Area Code)

      Securities registered pursuant to Section 12(b) of the Act: None

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

                  Common Stock, par value $0.01 per share
Rights to Purchase Series C Junior Participating Preferred Stock, par value
$0.01 per share

         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. |X| Yes |_|
No

         Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K 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. |_|

         The aggregate market value of the registrant's common stock held
by non-affiliates at April 4, 2002, valued in accordance with the Nasdaq
National Market closing sale price for the registrant's common stock, was
approximately $12,414,288.

         Number of shares of common stock, par value $0.01 per share,
outstanding as of April 4, 2002: 141,655,388.


<PAGE>


                    Documents Incorporated by Reference

                                                      Part of 10-K in which
         Document                                         Incorporated

Definitive Proxy Statement for the 2002                    Part III
Annual Meeting of the Stockholders of
CoreComm Limited

         This Annual Report on Form 10-K for the year ended December 31,
2001, at the time of filing with the Securities and Exchange Commission,
modifies and supersedes all prior documents filed pursuant to Section 13,
14 and 15(d) of the Securities Exchange Act of 1934 for purposes of any
offers or sales of any securities after the date of such filing pursuant to
any Registration Statement or Prospectus filed pursuant to the Securities
Act of 1933, as amended, which incorporated by reference this Annual
Report.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act
of 1995:

         Certain statements contained herein, specifically excluding
references to the exchange offers, constitute "forward-looking statements"
as that term is defined under the Private Securities Litigation Reform Act
of 1995. When used herein, the words, "believe," "anticipate," "plan,"
"will," "expects," "projects," "positioned," "strategy," and similar
expressions identify such forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of Limited,
or industry results, to be materially different from those contemplated,
projected, forecasted, estimated or budgeted, whether expressed or implied,
by such forward-looking statements. Such factors include the following:

         o        the ability of CoreComm Limited to continue as a going
                  concern;
         o        the continued viability of CoreComm Limited if the Holdco
                  recapitalization is not consummated on a timely basis;
         o        the ability of CoreComm Holdco to obtain trade credit and
                  shipments and terms with vendors and service providers
                  for current orders;
         o        CoreComm Holdco's ability to maintain contracts that are
                  critical to its operations;
         o        potential adverse developments with respect to CoreComm
                  Limited's liquidity or results of operations;
         o        the ability of CoreComm Holdco to fund and execute its
                  business plan;
         o        the ability to attract, retain and compensate key
                  executives and associates;
         o        the ability of CoreComm Holdco to attract and retain
                  customers;
         o        general economic and business conditions;
         o        technological developments;
         o        CoreComm Holdco's ability to continue to design networks,
                  install facilities, obtain and maintain any required
                  governmental licenses or approvals and finance
                  construction and development, all in a timely manner at
                  reasonable costs and on satisfactory terms and
                  conditions;
         o        CoreComm Holdco's assumptions about customer acceptance,
                  churn rates, overall market penetration and competition
                  from providers of alternative services;
         o        the impact of restructuring and integration actions;
         o        the impact of new business opportunities requiring
                  significant up-front investment;
         o        interest rate fluctuations; and
         o        availability, terms and deployment of capital.

         CoreComm Limited assumes no obligation to update the
forward-looking statements contained herein to reflect actual results,
changes in assumptions or changes in factors affecting such statements.

<PAGE>


<TABLE>
<CAPTION>

                             TABLE OF CONTENTS

                                                                                                               PAGE
<S>            <C>                                                                                              <C>
PART I
ITEM 1.        BUSINESS  .....................................................................................      1
ITEM 2.        PROPERTIES.....................................................................................     23
ITEM 3.        LEGAL PROCEEDINGS..............................................................................     23
ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................     27

PART II
ITEM 5.        MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
               STOCKHOLDER MATTERS............................................................................     28
ITEM 6.        SELECTED FINANCIAL DATA........................................................................     29
ITEM 7.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
               AND FINANCIAL CONDITION........................................................................     31
ITEM 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....................................     40
ITEM 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................................................     41
ITEM 9.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE............................................................     42

PART III
ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.............................................     43
ITEM 11.       EXECUTIVE COMPENSATION.........................................................................     43
ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
               MANAGEMENT AND RELATED SECURITY HOLDERS........................................................     43
ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................     43

PART IV
ITEM 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
               FORM 8-K.......................................................................................     43

SIGNATURES     ...............................................................................................     45
EXHIBIT INDEX  ...............................................................................................    E-1
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS....................................................................    F-1
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULES...........................................................    S-1
</TABLE>

<PAGE>



                                   PART I



Item 1. BUSINESS

         CoreComm Limited, referred to as CoreComm Limited or Limited,
formerly a wholly-owned subsidiary of Cellular Communications of Puerto
Rico, Inc., referred to as CCPR, was formed in March 1998 in order to
succeed to the businesses and assets that were operated by OCOM Corporation
and as an appropriate vehicle to pursue new telecommunications
opportunities outside of Puerto Rico and the U.S. Virgin Islands.
Operations commenced in April 1998. In September 1998, CCPR made a cash
contribution to Limited of $150 million and distributed 100% of the
outstanding shares of Limited on a one-for-one basis to CCPR's
stockholders.

         In September 2000, Limited, which at the time was a Bermuda
corporation, merged with and into its newly-formed, wholly-owned Delaware
corporate subsidiary. The Delaware corporation then merged into ATX
Telecommunications Services, Inc., referred to as ATX, with ATX being the
surviving corporation and changing its name to CoreComm Limited. For
accounting purposes, Limited's predecessor is the Bermuda corporation.

         On October 31, 2001, Limited first announced a restructuring
strategy whereby it would recapitalize a significant portion of its debt.
Limited felt it was prudent to embark on its restructuring process in
October 2001 because completion of the restructuring plan was necessary due
to Limited's significant interest and dividend obligations. This
restructuring plan is referred to as the Holdco recapitalization.

         As a result of the already completed phase of the Holdco
recapitalization described below which was completed on December 28, 2001,
CoreComm Limited's only material asset is its ownership of approximately
13% of the outstanding capital stock of CoreComm Holdco, Inc., referred to
as CoreComm Holdco or Holdco. Prior to December 28, 2001, CoreComm Limited
owned 100% of the outstanding capital stock of CoreComm Holdco.

         The auditors of CoreComm Limited have included a going concern
explanatory paragraph in their audit report for CoreComm Limited for the
year ended December 31, 2001, which states that these conditions raise
substantial doubt about CoreComm Limited's ability to continue as a going
concern. CoreComm Holdco's senior secured credit facility does not allow
CoreComm Holdco to pay any dividends or distribute assets to CoreComm
Limited. Therefore, there is substantial doubt that CoreComm Limited will
be able to meet its obligations when they become due. The audit report of
CoreComm Holdco does not contain such a paragraph as it is anticipated that
CoreComm Holdco will be able to meet its obligations as they become due
with cash on hand and funds from operations during 2002.

         CoreComm Limited does not contemplate raising any additional
financing in the foreseeable future.

         CoreComm Holdco was formed in May 1998 as a Bermuda corporation.
In July 1999, Holdco was domesticated under the laws of Delaware.

HOLDCO RECAPITALIZATION

         From October through December of 2001, CoreComm Limited entered
into agreements, referred to as the public note agreements, with numerous
holders of its 6% Convertible Subordinated Notes due 2006, referred to as
the public notes, whereby the holders agreed, among other things, to
exchange their notes for the amount of the October 1, 2001 interest payment
of $4.8 million in the aggregate, and shares of Holdco common stock as part
of a restructuring plan. The exchange was completed in December 2001,
including the payment of the $4.8 million by Limited.

<PAGE>

         In December 2001, both CoreComm Holdco and CoreComm Limited
entered into an exchange agreement with:

         (1) Holders of 10.75% Unsecured Convertible PIK Notes due 2011 and
             10.75% Senior Unsecured Convertible PIK Notes due 2010, both of
             which were a joint obligation of CoreComm Limited and CoreComm
             Holdco, in the initial principal amounts of $10 million and
             $16.1 million, respectively,

         (2) Holders of Senior Unsecured Notes due September 29, 2003 of
             CoreComm Limited in the principal amount of $105.7 million,
             referred to as the senior unsecured notes, and

         (3) Holders of all of the preferred stock of CoreComm Limited,
             with an aggregate liquidation preference of $300 million.

         The exchange agreement provided for the security holders to
exchange their securities for shares of CoreComm Holdco common stock as
part of the Holdco recapitalization. In December 2001, the credit agreement
governing the senior secured facility was amended to permit the Holdco
recapitalization to occur.

         In December 2001, Nasdaq granted CoreComm Limited an exception to
Nasdaq's stockholder approval requirements permitting the Holdco
recapitalization to proceed without a vote of the stockholders of CoreComm
Limited because requiring a stockholder vote would seriously jeopardize the
Holdco recapitalization and therefore the financial viability of CoreComm
Limited.

         By December 28, 2001, the recapitalization transactions described
above, which was the first phase of the Holdco recapitalization, was
completed.

         The following three charts summarize the corporate structure of
CoreComm Limited and CoreComm Holdco, through which CoreComm Holdco
conducts its operations and holds its investments. The first chart
illustrates the corporate structure prior to December 17, 2001. The second
chart illustrates the corporate structure following consummation of the
initial phase of the Holdco recapitalization which, as described below,
commenced on December 17, 2001 and was completed on December 28, 2001. The
third chart indicates the corporate structure assuming 100% of the
outstanding public notes have been validly tendered and accepted in the
exchange offers and the merger, as described below, has been consummated.
None of these charts show details of operating or other intermediate
companies or ownership interests in those entities.

                                     2

<PAGE>

[GRAPHIC OF CHART 1 - STRUCTURE PRIOR TO DECEMBER 17, 2001]

[GRAPHIC OF CHART 2 - PRESENT STRUCTURE]

[GRAPHIC OF CHART 3 - ASSUMING SUCCESSFUL COMPLETION OF THE HOLDCO
RECAPITALIZATION(1)(2)]

------------------
(1)   Based upon the number of shares of CoreComm Holdco common stock and
      CoreComm Limited common stock outstanding on December 31, 2001.
(2)   CoreComm Limited has agreed to surrender that number of shares of
      CoreComm Holdco common stock that are issued in the exchange offers
      and the merger, which leaves CoreComm Limited with little or no material
      assets.


         As part of the second phase of the Holdco recapitalization, on
February 8, 2002, CoreComm Holdco launched registered public exchange
offers whereby it is offering to exchange shares of CoreComm Holdco common
stock which will have been registered under the Securities Act of 1933, as
amended, pursuant to a Form S-4 registration statement to all holders of
CoreComm Limited common stock and all remaining holders of 6% Convertible
Subordinated Notes due 2006 of CoreComm Limited for their CoreComm Limited
common stock and their notes, respectively. As soon as practicable after
accepting at least 90% of the outstanding shares of CoreComm Limited common
stock in the exchange offers, CoreComm Holdco plans to transfer all such

                                     3


<PAGE>


shares to a newly formed, wholly-owned subsidiary and to merge this
subsidiary into CoreComm Limited with CoreComm Limited surviving the merger
as a wholly-owned subsidiary of CoreComm Holdco. On the business day
following the consummation of the merger, Nasdaq has informed CoreComm
Limited that CoreComm Limited's Nasdaq listing will be transferred to
CoreComm Holdco and CoreComm Holdco common stock will commence trading on
the Nasdaq National Market, and CoreComm Limited common stock will cease
trading on the Nasdaq National Market.

         As a result of the first phase of the Holdco recapitalization,
CoreComm Holdco holds $160 million principal amount of CoreComm Limited's
public notes, approximately $105.7 million principal amount of CoreComm
Limited's senior unsecured notes and all of CoreComm Limited's outstanding
preferred stock. CoreComm Limited does not have the financial resources to
meet the obligations under these notes and preferred stock if CoreComm
Holdco requires it to do so. Limited has agreed that it will surrender to
Holdco the number of shares of Holdco common stock that Holdco issues in
the exchange offers and the merger. Therefore, if the merger is completed,
Limited will own no common stock of Holdco, and thus will own no material
assets, since Holdco common stock is Limited's only material asset. In
exchange for Limited surrendering such shares of Holdco common stock,
Limited and CoreComm Holdco have agreed to waivers and amendments to delay
Limited from having to make any payments with respect to these securities.

         Under the terms of the exchange offers, those stockholders and
noteholders who exchange their shares and notes, respectively, will receive
shares of CoreComm Holdco, and would no longer have securities of CoreComm
Limited. CoreComm Limited currently lacks the resources to meet the
long-term obligations of the remaining $4.75 million principal amount of
public notes that are not held by CoreComm Holdco.

         On February 14, 2002, CoreComm Limited received written
notification from Nasdaq indicating that CoreComm Limited failed to comply
with the minimum market value of publicly held shares and minimum bid price
requirements for continued listing on the Nasdaq National Market and that
CoreComm Limited would have until May 15, 2002 to regain compliance. If the
Holdco recapitalization is not successfully completed and CoreComm Limited
does not regain compliance by this date, Nasdaq stated that it will then
provide CoreComm Limited with written notification that its common stock
will be delisted from the Nasdaq National Market. CoreComm Limited has not
yet determined what action it will take if it receives this written
notification. If CoreComm Limited common stock is delisted from the Nasdaq
National Market, shares may trade in the Nasdaq Small Cap Market or the
over-the-counter market and price quotations may be reported by other
sources. The extent of the public market for the shares of CoreComm Limited
common stock and the availability of quotations for shares of CoreComm
Limited common stock would, however, depend upon the number of holders of
shares remaining at that time, the interest in maintaining a market in
shares of CoreComm Limited common stock on the part of securities firms,
the possible termination of registration of the shares under the Securities
Exchange Act of 1934, as described below, and other factors.

CORECOMM HOLDCO'S BUSINESS

         CoreComm Holdco is an integrated communications provider that
offers local exchange carrier and interexchange carrier telephone,
Internet, web related and high-speed data services to business and
residential customers in targeted markets throughout the Mid-Atlantic and
Midwest regions of the United States. It operates three business divisions:
business services (ATX), residential services (CoreComm Residential) and
Internet services (Voyager). CoreComm Holdco is exploiting the convergence
of telecommunications and information services through its network
strategy, which involves the ownership of telephone switching equipment and
the purchase of local exchange services that connect to homes and
businesses, combined with the leasing of a national and International
network that carries Internet traffic. This configuration of locally and
regionally owned and leased facilities allows CoreComm Holdco to deliver a
wide range of communications services over a wide geography within our
regions. CoreComm Holdco currently offers services to business and
residential customers located principally in Pennsylvania, Ohio, New
Jersey, Michigan, Wisconsin, Maryland, Illinois, New York, Virginia,
Delaware, Massachusetts, Washington, D.C. and Indiana. In local exchange
services, CoreComm Holdco competes against the established local telephone
service provider, referred to as the ILEC, that was the service provider in
a region prior to the opening of local telephone service to competition,
and CoreComm Holdco competes against other CLECs.

                                     4
<PAGE>


         In 2001, CoreComm Holdco streamlined its strategy and operations
to focus on its two most successful and promising lines of business. The
first is integrated communications products and other high
bandwidth/data/web-oriented services for the business market. The second is
bundled local telephony and Internet products efficiently sold, serviced
and provisioned via Internet-centric interfaces to the residential market.
CoreComm Holdco's strategy is to attractively bundle telephony and data
services in its target markets in order to compete with the incumbents and
gain market share.

         As of December 31, 2001, CoreComm Holdco had approximately 275,000
local telephone access lines in service and more than 400,000 total
customers. The following table details its customer base:

<TABLE>
<CAPTION>

                                                                                        As of
                                                                                  December 31, 2001
                                                                                  -----------------
<S>                                                                           <C>
     Residential Local Access Lines                                                     54,200
     Business Local Access Lines                                                       220,700
     Toll-related Access Line Equivalents                                              487,000
     Internet Subscribers                                                              332,500
     Other Data Customers (1)                                                           21,300

------------------
(1)  Other data customers included Point-to-Point data, Frame Relay, Web
     Development, Web Hosting, E-Commerce, Co-location and other related
     customers.

         In 2001, CoreComm Holdco's revenues were attributable to the
following service categories:

                                                                                     Year ended
                                                                                  December 31, 2001
                                                                                  -----------------
     Local Exchange Services                                                               33%
     Toll-related Telephony Services                                                       26%
     Internet, Data and Web-related Services                                               32%
     Other Revenue                                                                          9%
                                                                              ---------------------------
          Total                                                                           100%
</TABLE>

         CoreComm Holdco has engaged in significant efforts to increase the
profitability of its services. It has capitalized on opportunities such as
more profitable unbundled network element - platform, which is referred to
as UNE-P, and enhanced extended loop, which is referred to as EEL
provisioning and pricing to reduce existing network costs and capital
expenditures and to enhance gross margins. UNE-P provisioning allows
CoreComm Holdco to lease all of an incumbent local exchange carrier's
unbundled network elements needed to provide service to a customer without
using any of its own facilities to provide the service. This is physically
similar to total service resale provisioning, but pricing is different and
it allows CoreComm Holdco to attain higher margins. With UNE-P, CoreComm
Holdco pays the total cost to lease each network element, which generally
provides it a greater gross margin than total service resale. Enhanced
extended loop provisioning allows CoreComm Holdco to lease a combination of
local network elements and collocation facilities from the incumbent local
exchange carrier to extend the reach of its regional networks to service
customers that are outside of service areas of its collocations. This
allows CoreComm Holdco to put more traffic on its regional networks without
needing to build additional infrastructure.

         Over the last year, a large portion of CoreComm Holdco's total
service resale business and residential local access lines have been
converted to these more profitable services. CoreComm Holdco continues to
provision many telephony customers onto its owned and leased networks where
it has facilities in place, while also taking advantage of UNE-P and EEL
provisioning to expand its service areas.

         The following is a description of CoreComm Holdco's three business
divisions, as well as a description of its network technology and
proprietary systems.

                                     5
<PAGE>


Business Services (ATX)

         Through its ATX business services division, CoreComm Holdco offers
customers a full range of high-speed communications services including
local exchange carrier and interexchange carrier telephony services,
network services such as network data integration, Internet access and Web
consulting, development and hosting, and other related services. In
addition, ATX offers Advanced Communications Solutions products tailored to
meet the needs of its business customers, such as conference calling,
travel services, pre-paid calling, enhanced fax and PC-based billing.
Customers are billed on a single, consolidated invoice, delivered by
traditional means or near real time Web-based billing that allows the
customer to sort the information to detail calling patterns. ATX's target
markets are the Mid-Atlantic region throughout the New York-Virginia
corridor and Midwest markets, including: Cleveland, Ohio; Columbus, Ohio;
Chicago, Illinois; and other markets in the Great Lakes region.

Business Products and Services

         The business division offers ATX's customers a full range of
broadband communications services, including:

         o  CoreConnect. ATX offers a single, simple solution for all of a
            customer's communications needs - local, long distance, toll,
            data and Internet access services bundled over a multi-purpose
            broadband connection. By combining all of a business' essential
            communications over the same facilities, ATX is able to offer
            an integrated access tool that enables higher speed, greater
            bandwidth, and significant cost savings, all from a single
            source. Through this integrated product, ATX is also able to
            offer custom-tailored bandwidth-intensive data solutions such
            as WAN/LAN connectivity, dedicated point-to-point circuits,
            frame relay to the Internet, and ATM for multimedia
            applications. ATX also offers these products on a stand-alone
            basis.

         o  Local Telephony Services. Local telephony services include
            local dial tone and a set of custom calling features that
            business customers can tailor to meet their local telephony
            needs. A sample of some of the most popular local features
            include alternate answer, automatic callback, busy line
            transfer, call blocking, call forwarding, call trace, call
            waiting, caller ID with name, multi-ring service, repeat
            dialing, remote access call forwarding, and speed calling.

         o  Toll-related Telephony Services. Toll-related telephony
            services include inbound/outbound service, international, 800
            or 888 service and calling card telephone service. ATX
            currently provides intraLATA and interstate long distance
            services nationwide and international termination worldwide.
            ATX also offers a full line of Advanced Communications
            Solutions along with its toll-related services, such as
            Internet-based call management, traveling calling cards, fax
            broadcasting, voice mail, conference calling and enhanced call
            routing services.

         o  Network Services. ATX also offer complete high-speed network
            solutions to its customers. These services include private line
            and frame relay services.

         o  Internet Services. ATX utilizes a state-of-the-art network to
            deliver Internet access designed for business use, ensuring
            high-speed and stable connectivity to a global resource of
            information. Its customers are connected via high-speed
            dedicated lines, from 56K up to DS3.

         o  Web Services/E-commerce. ATX is able to facilitate virtually
            every aspect of establishing and maintaining an interactive
            global presence in Web services. The various segments of Web
            services include Web design, development and hosting,
            electronic commerce, Intranet development, database
            integration, Internet marketing and Internet security.

         o  Consulting Services, Local Area Network/Wide Area Network Data
            Integration. ATX's network services and integration unit
            assists organizations in the design, construction,
            implementation and management of practical local and wide area
            networks. This business unit manages local area


                                     6
<PAGE>

            network/wide area network data integration for private line
            services, Internet network and integrated services digital
            network, as well as professional consulting services and
            hardware/software sales. It develops solutions while educating
            clients on specific business applications and the technology
            that make them possible. Consulting services include wide area
            network architecture and implementation, router and consumer
            premise equipment configuration, local area network switching,
            electronic commerce, cabling and virtual local area network
            design and set-up.

         o  Wireless Services. ATX also offers wireless services primarily
            as a customer retention tool, consisting of both cellular and
            paging service. ATX offers digital and analog cellular services
            as well as ESMR service, which is two-way radio and digital
            cellular service, through Nextel.

Business Sales and Marketing

         The business sales model is based on ATX's consultative sales
approach, its proprietary marketing and training tools, the experience of
its sales force, its "farm-team" training and career development program,
and its shared vision and incentive structure to reward individual and team
performance objectives.

         Each sale begins with an evaluative consultation that investigates
the telecom needs of the customer. The sales consultant then designs a
tailored, integrated and cost-effective telecom platform that addresses the
specific customer's communications needs. The level of the sales
consultant's telecom and customer knowledge necessary to sell successfully
can be achieved only through significant training, mentoring and devotion
of corporate resources.

         ATX has an experienced and long-tenured sales force. Over 25% of
its senior sales force professionals have been with ATX for more than five
years, and approximately 80% of the sales management team has been promoted
from within its organization.

Residential Services (CoreComm Residential)

         Through CoreComm Residential, CoreComm Holdco offers residential
customers voice, data and other telecommunications services in Ohio,
Illinois, Michigan, Wisconsin and Pennsylvania and Internet access services
over a wider footprint in the Midwest and Mid-Atlantic regions of the
United States. Customers are billed for their services with one,
consolidated bill. If they choose, customers can access their billing
information and pay their bills online, or they may elect automatic bill
payment via credit or debit card.

Residential Products and Services

         CoreComm Residential's strategy is to bundle telephony and
Internet products and services in ways that are attractive to the customer,
distinctive in the marketplace, and offer convenience and simplicity.
CoreComm Residential typically offer a platform of the most popular
services and then create ways for customers to purchase other services
easily and conveniently according to their tastes.

         For example, in the current residential offering, CoreComm
Residential combine a package of local and long distance phone service with
Internet access, which is called the "CoreComm Unlimited Premium" service.
Although the details of the offerings vary somewhat by region, the service
typically includes:

         -  Local dial tone;
         -  Local calls;
         -  Call waiting;
         -  Caller-ID with name;
         -  Personal "800" number;
         -  Premium Internet service;
         -  56K unlimited access;
         -  3 e-mail addresses;
         -  10 MB of personal web space;
         -  Long distance service option at 10 cents per minute; and

                                     7

<PAGE>


         -  100-200 minutes of long distance included with additional
            minutes at 6-8 cents per minute.

         Additional options and features, such as voice mail, three-way
calling, an additional line, and additional web site space, can be easily
and flexibly added to the service. The pricing for CoreComm Unlimited
Premium varies by region, but in all areas the price offers value and
convenience when compared to offerings from the incumbent telephone company
and other providers of these services.

         Although the specific components of the product offerings
continually change over time, CoreComm Residential plans to continue its
strategy of designing marketing packages that give the customer flexibility
and choice, with convenient ways to subscribe to additional services.

         In general, CoreComm Residential currently offer the following
voice, data and Internet services to residential customers in its markets:

         o  Local Telephony Services - including standard dial tone, local
            calling, Emergency 911 services, operator assisted calling,
            access to the long distance network, and other related
            services.

         o  Custom Calling Features - including call waiting, call
            forwarding, caller ID, voice mail, conference calling,
            multi-ring, speed calling and other enhanced features.

         o  Toll-related Telephony Services - including 1+ interLATA calls,
            which are calls across Local Access and Transport Areas,
            intraLATA calls, international calls, 800/888/877 toll free
            services, calling cards and other related services.

Residential Sales and Marketing

         CoreComm Residential focuses on a marketing approach that combines
targeted direct marketing with partnerships and local organizations. It
utilizes local media and partner with civic organizations to develop the
recognition of the brand and to create a captive potential base of
customers. CoreComm Residential also targets customers in our footprint via
direct mail, e-mail and telemarketing. All of its sales efforts are
designed to drive revenue growth by capitalizing on low cost opportunities
in our current markets.

         In addition to efforts designed to acquire new customers, CoreComm
Residential continually engages in efforts to sell additional services to
existing customers. For example, CoreComm Residential is currently working
on upselling its Internet-only customers to bundled local and toll-related
telephony and Internet products.

         The residential marketing efforts are intended to drive potential
customers to CoreComm Holdco's website, www.core.com. At this website,
customers can sign up for service in a fully online process. Customers may
also sign up for service by calling a toll-free number. CoreComm
Residential's product offerings are designed to be simple and flexible, so
that potential customers can easily perceive their value. In addition to
driving potential customers to the website, CoreComm Residential also
utilizes its call centers to sign up new customers.

Internet Services (Voyager)

         CoreComm Holdco's Internet services division, named Voyager,
provides Internet access and high-speed data communications services and to
residential and business subscribers. Services include dial-up Internet
access, dedicated telecommunications services to business, cable modem
access, Web-hosting, electronic commerce, and co-location services. Voyager
operates one of the largest dial-up Internet networks in the Midwest in
terms of geographic coverage, with approximately 170 owned points of
presence in Michigan, Wisconsin, Ohio, Illinois, Indiana, Minnesota,
Pennsylvania, New York and California.

         In April 2001, CoreComm Holdco announced that it was evaluating
strategic alternatives for its non-CLEC assets and businesses and it has
retained advisors for the purpose of conducting this review.

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Internet Products and Services

         Internet Access Services

         Voyager offers Internet access services to residential subscribers
and dedicated, web hosting, and dial-up Internet access to business
customers. By selecting between the various types of access services and
pricing plans available, subscribers can select services that fit their
specific needs.

         o  Dial-up Access. Voyager's residential access services are
            designed to provide subscribers with reliable Internet access
            through standard dial-up modems. The dial-up Internet access
            service includes:

            - local access numbers;
            - personal Web space;
            - multiple e-mail accounts;
            - toll-free customer support;
            - light usage plans;
            - optional content filters for parental or business use; and
            - Internet chat and news groups.

         Voyager also offers prepaid plans for quarterly, semi-annual and
annual access. A majority of Voyager's residential subscribers pay their
monthly fee automatically by a pre-authorized monthly charge to their
credit card. Additional service options include Web content filter service,
e-mail alias (forwarding) and national toll-free roaming service.

         o  Dedicated Access. Voyager offers high-speed dedicated
            connections to both business and residential subscribers at a
            range of speeds using traditional telecommunications lines and
            frame relay communications services for those customers
            requiring greater speed and reliability.

         o  Cable Modems. Through a reseller arrangement with Millennium
            Digital Media Systems, LLC, Voyager offers high-speed Internet
            access in some locations through the use of modems integrated
            with local cable television networks and provides the technical
            and billing support to this fast-growing segment of the
            Internet access business.

         Web Services

         Voyager's Web services help organizations and individuals
implement their Web site and e-commerce goals. Voyager offers various Web
hosting and other services that enable customers to establish a Web site
presence without maintaining their own Web servers and high-speed
connectivity to the Internet.

         o  Web Hosting. Voyager offers a diverse range of shared,
            dedicated and co-location Web hosting services for small and
            medium businesses. The Web hosting service includes
            state-of-the-art Web servers, high-speed connections to the
            Internet at its network operations centers, and registration of
            its customers' domain name and Internet address. Voyager also
            offers Web page design, development, maintenance and traffic
            reporting and consulting services.

         o  Co-location. Voyager offers co-location services, providing
            telecommunications facilities for customer-owned Web servers,
            for customers who prefer to own and have physical access to
            their servers but require the reliability, security and
            performance of our on-site facilities. Co-location customers
            house their equipment at our secure network operating centers
            and receive direct high-speed connections to the Internet.

         o  E-commerce. Voyager provides a suite of Web hosting and
            e-commerce solutions that enable businesses to easily and
            affordably create Web sites and sell their products and
            services over the Internet. The product suite includes EasyWeb,
            which allows a business to quickly create a Web site online
            through a series of menu-driven screens and templates, and
            EasyShop, a comprehensive e-commerce solution, which allows
            businesses to accept real-time credit card purchases via their
            Web

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<PAGE>

            site.

         o  Local Content. Voyager's portal is a web site including
            personalized local news and weather, sports, entertainment,
            finance, stock quotes, shopping, classifieds and chat services
            for our customers. Content is automatically tailored to
            individual customers using a database driven process that
            presents customers with location-specific information.
            Customers can also customize the layout and specific content
            options available to them. Content is made available through
            revenue sharing and co-branding agreements with organizations
            including CMGI Inc.'s MyWay.com, Wizshop.com, Amazon.com, and
            local media. Customers access the portal page at
            www.voyager.net.

         Other Services and Offerings

         Voyager also offers other enhanced communications services to meet
the one-stop shopping demands of residential and business customers.

         o  Virtual Private Networks. Voyager's custom virtual private
            networks solutions provide its customers a secure, managed
            network over the public Internet. This service is targeted
            towards organizations that desire a secure wide-area network
            between locations without building dedicated network
            infrastructure between such locations.

         o  Long Distance and other Telecommunications. Voyager currently
            resells long distance telecommunications services as well as an
            800 service, calling cards and prepaid cards to its Internet
            customers through its VoyagerLink operations. Voyager currently
            offers this interstate and intrastate long-distance service to
            our customers at a fixed rate per minute, with no set-up or
            monthly charges.

Internet Sales and Marketing

         Marketing. Voyager's marketing philosophy is based on the belief
that a consumer's selection of an Internet service provider is often
strongly influenced by a personal referral. Accordingly, Voyager believes
that the customer satisfaction of its subscriber base has led to
significant word-of-mouth referrals. Voyager's referral incentive program
awards subscribers one month of free service for every customer referred.
As a result, over 70% of new sign-ups come from existing subscriber
referrals. Voyager's proprietary customer care and billing system
automatically tracks and credits the subscriber's account, thus providing
valuable marketing information and flexibility with this program. Voyager
also markets services through strategic relationships with value added
resellers in the local communities, such as trade associations, unions, Web
development companies, local area network administrators and retail stores
which represent and promote us on a commission basis. These relationships
are a significant source of new customers. Voyager does not use mass
marketing media as a major source of acquiring new customers, but instead
believes that by providing superior customer service and developing strong
relationships within local communities, particularly in small- and
medium-sized markets, it can continue to grow with very low costs per new
customer acquired.

         Free CDs and Diskettes. Upon the request of prospective customers,
Voyager distributes free software via CD and diskettes that contain both
the Netscape browser software for Windows 2000/98/95, Windows 3.1 and
Macintosh, as well as Microsoft's Internet Explorer. The software is
configured to facilitate installation and connection to a point of
presence. Individuals receiving the CD or diskettes have the opportunity to
obtain the free browser software contained on the CD by opening an account
with Voyager, either online or via a toll-free telephone number. New
customers can be online in a matter of minutes after opening an account
online or by calling Voyager's toll-free telephone number.

         Business Sales and Support. Voyager has a business sales and
support team dedicated to selling and providing customized support to our
growing small- and medium-sized business customers. The business teams
include support personnel located throughout its target region. This strong
local presence allows it to meet face-to-face with its business customers
to evaluate their needs and respond with customized solutions. Voyager's


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<PAGE>


locally-based sales and support teams are supported by additional network
engineers at its call centers for trouble-shooting on specific problems.

Network and Technology

         Network Strategy. CoreComm Holdco's network strategy combines the
ownership of telephone switching equipment and the leasing of the local
telephone lines that run directly to homes and businesses, combined with
the leasing of a regional network that carries Internet traffic. This
configuration of locally and regionally owned and leased facilities allows
CoreComm Holdco to deliver a wide range of communications services over a
wide geography within its regions.

         Telephony Network Infrastructure. CoreComm Holdco currently has
Class 5 switches operating in Philadelphia, PA; Columbus, OH; Cleveland,
OH; and Chicago, IL. These switches are connected via leased local
transport to collocations throughout their respective markets where it has
equipment collocated with the incumbent local exchange carrier. CoreComm
Holdco is able to reduce the number of collocations it establishes with the
incumbent local exchange carrier, in each market by utilizing enhanced
extended loops, referred to as EELs, that virtually allow CoreComm Holdco
to extend its local networks to service customers well outside of the
collocation footprint. Also, in areas where CoreComm Holdco does not have
facilities in place, it utilizes unbundled network element - platform,
referred to as UNE-P, and total service resale provisioning to service its
customers. CoreComm Holdco also operates five Class 4 switches to handle
its toll-related traffic.

         Internet Network Infrastructure. CoreComm Holdco designed and
built its Internet network to specifically service Internet (data) traffic.
The network is comprised primarily of the latest Cisco Systems and Juniper
Networks routing and switching equipment, which provides a common platform
for increased flexibility and maintenance while allowing for the use of
advanced routing protocols to quickly and dependably deliver customer
traffic. CoreComm Holdco has two Internet network operating centers to
oversee traffic flows and general network operations, as opposed to a
single network operating center as found in many national networks, which
helps create redundancy and ensures a secure and reliable network. CoreComm
Holdco is continuously improving its network infrastructure and
connectivity costs through relationships with incumbent local exchange
carriers and competitive local exchange carriers.

         CoreComm Holdco's Internet points of presence are linked to
regional and international network points, or hubs, which are its two
Internet-dedicated network operating centers. These network points are
linked to the Internet by fiber optic connections and employ asynchronous
transfer mode, frame relay and other methods of handling traffic
efficiently. Interlinked network points allow Internet users to access
sites located on other network points. In the event that one of its
subscribers wishes to access a Web site that is located on another service
provider's network, data is directed to a network access point where
information sharing is conducted under arrangements known as peering. The
flow of information across a network access point allows information to be
downloaded from one service provider's network to a subscriber on another
service provider's network.

         Internet Points of Presence. CoreComm Holdco's approximately 170
dial-in points of presence primarily utilize digital access servers
manufactured by 3Com Corporation and Lucent Technologies, Inc. These
servers allow for a variety of customer connections from standard dial-up
to traditional telecommunications lines, including integrated digital
services network. Its network has been reconfigured to include redundant
data circuits, which will automatically route customer traffic in the event
of a failure, and our network topology offers high levels of performance
and security. Through various relationships with competitive local exchange
carriers, CoreComm Holdco has been able to reduce the overall number of
points of presence by consolidating several of them into "SuperPOPs" with
expanded calling areas. The SuperPOP allows CoreComm Holdco to consolidate
equipment into one large modem bank and eliminate various telecommunication
links from its points of presence back to the network operating center,
thereby creating enhanced network reliability and reducing
telecommunication costs.

         Network Operations Centers (NOCs). CoreComm Holdco currently has 4
network operations centers localized to manage traffic throughout its
footprint. The NOCs are located in Philadelphia, PA, Cleveland, OH, which
monitors the Cleveland, Columbus and Chicago networks, East Lansing, MI and
New Berlin, WI. The

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<PAGE>


East Lansing and New Berlin NOCs house all of CoreComm Holdco's internal
Internet network equipment, including servers, routers, mail, hosting and
disk arrays, as well as its main routing equipment and connection to the
Internet. These two NOCs have been interconnected to provide redundancy and
to ensure the highest quality data network. Each network operations center
is monitored on a 24 hours per day, 365 days per year basis in order to
provide the highest level of network performance.

         Peering Relationships. Peering is the act of exchanging data
across networks, typically at specific, discrete locations. By allowing
separate networks to exchange data, users on a particular Internet service
provider's network are able to access information and communicate with
users on another provider's network. Many formal peering points exist where
several dozen Internet service providers and other providers exchange data,
including network access points. Internet service providers can also run
connections to peer with several different providers, known as multihoming.
Multihoming allows an Internet service provider to provide better service,
as inbound and outbound data can go over different routes if a particular
network is overloaded. CoreComm Holdco has relationships at multiple points
with several different organizations, including Verio, Inc. in Ann Arbor,
Michigan, NAP.net in Chicago, Illinois and MCI and Savvis in Kalamazoo,
Michigan, thus building in network redundancy that allows for better
connectivity for its customers.

Electronic Bonding and Proprietary Systems

         CoreComm Holdco is currently bonded electronically with Ameritech
and Verizon. This electronic interface establishes an electronic link
between its operating support systems and those of Ameritech and Verizon.
Electronic bonding enables CoreComm Holdco to communicate in real-time and
ultimately allows for more timely and accurate service ordering and
provisioning of customers. CoreComm Holdco has real-time access to customer
information while order entry and confirmation are batched and transmitted
several times a day. CoreComm Holdco provides service to customers through
its proprietary systems, which are designed to interface with the incumbent
local exchange carriers' systems through a variety of delivery mechanisms.
Its systems and processes have been developed to decrease the risk of human
error associated with provisioning customers by manual keying or fax.

         CoreComm Holdco's customer interface systems have been developed
and continue to be enhanced in a client/server environment that allows for
flexibility to accommodate an expanding customer base, efficient entry into
new markets, switch-based services, and rapid development of additional
functionality. Its proprietary systems handle all pre-ordering activities,
including obtaining customer service records, referred to as CSR, finding
and reserving telephone numbers, verifying customer addresses, validating
due dates, searching the incumbent local exchange carrier's switches for
feature availability, referred to as COFA, and yellow page listings.

         CoreComm Holdco's recent and ongoing enhancements to its
information systems include the following:

         o  Rating and billing engines are being re-engineered for
            performance and scalability using a multi-tiered architecture.

         o  Provisioning systems for the Ameritech region have been
            enhanced to support Ameritech's five state region. CoreComm
            Holdco's service order management system has been enhanced to
            validate in real time the incumbent local exchange carrier
            feature availability, integrate the electronic generation of
            service order data, and integrate automated switch activation
            software for our Class 5 switches, all within a single system.
            The provisioning information is entered once, and it flows
            through our internal systems, our switch, and the incumbent
            local exchange carrier systems with minimal manual
            intervention.

         o  CoreComm Holdco has automated the migration processes to move
            customers from resale to on-switch and total service resale to
            unbundled network element - platform via its service order
            management system, which has been designed to minimize manual
            processes with the incumbent local exchange carrier.


                                    12

<PAGE>


         o  CoreComm Holdco has purchased and installed a platform for its
            call centers which has introduced skills-based routing of
            inbound calls with an automated attendant. This allows it to
            service its customers better by ensuring that a call is
            delivered to a customer service representative with the skills
            necessary to handle the customer.

         o  CoreComm Holdco has integrated an auto-dialer with our
            collections system, which has significantly increased
            collection agent productivity and effectiveness.

         CoreComm Holdco has invested in the construction of a series of
proprietary software applications and an extensive corporate Intranet in
its efforts to achieve a paperless work environment in which all job
critical information is readily available online. Its employees use the
corporate Intranet to access detailed product and corporate information,
industry research and updates, competitive intelligence files, online
training and certification, calendars, a personnel directory, community
activities, philanthropic organizations, and other important content from
the convenience of their desktops. Online forms and sophisticated e-mail
applications have further increased productivity by enhancing
communications.

         CoreComm Holdco currently utilizes internally developed
proprietary systems for integrated order management and provisioning, as
well as for customer relations management. For billing, it uses a
combination of proprietary software and an external service bureau.

         CoreComm Holdco provides customer service and technical support
through three call centers located in Philadelphia, PA, Columbus, OH, and
East Lansing, MI. It provides 100% of its customer care internally and does
not outsource any customer operations to third party providers. CoreComm
Holdco has upgraded our phone systems to route calls, track important
call-in data, automatically answer questions and move customers quickly
through the call-in process. Its comprehensive staff training program and
incentive compensation program linked to customer satisfaction has led to
significant improvements in the time required to move subscribers through
the various calling queues. In addition to using its call centers,
customers can also e-mail questions directly to technical support staff, as
well as find solutions online through the use of the tutorials found at its
web site.

Competition

         The telecommunications industry and all of its segments are highly
competitive and many of our existing and potential competitors have greater
financial, marketing, technical and other resources than we do. Competition
for our products and services is based on price, quality, network
reliability, service features and responsiveness to customers' needs.

Competitive Local Exchange Carrier

         In each of its markets, CoreComm Holdco faces competition from
incumbent local exchange carriers, including Verizon and Ameritech, as well
as other providers of telecommunications services, other competitive local
exchange carriers and cable television companies. In the local exchange
markets, its principal competitor will be the incumbent local exchange
carriers. CoreComm Holdco also faces competition or prospective competition
from one or more competitive local exchange carriers. For example the
following companies have each begun to offer local telecommunications
services in major U.S. markets using their own facilities or by resale of
the incumbent local exchange carrier's services or other providers'
services: AT&T, MCI WorldCom, McLeod USA, Choice One Communications and
Sprint.

         Some of CoreComm Holdco's competitors, including AT&T, MCI
WorldCom and Sprint, have entered into interconnection agreements with
Verizon and Ameritech in states in which we operate. These competitors
either have begun or in the near future likely will begin offering local
exchange service in those states. In addition to these long distance
service providers and existing competitive local exchange carriers,
entities that currently offer or are potentially capable of offering
switched telecommunications services include:


                                    13

<PAGE>


         -  wireless telephone system operators;
         -  large customers who build private networks;
         -  cable television companies; and
         -  other utilities.

         Competition in CoreComm Holdco's competitive local exchange
carrier business will continue to intensify in the future due to the
increase in the size, resources and number of market participants. Many
facilities-based competitive local exchange carriers have committed
substantial resources to building their networks or to purchasing
competitive local exchange carriers or inter-exchange carriers with
complementary facilities. By building or purchasing a network or entering
into interconnection agreements or resale agreements with incumbent local
exchange carriers, including regional Bell operating companies and
inter-exchange carriers, a provider can offer single source local and long
distance services similar to those offered by us. Additional alternatives
may provide competitors with greater flexibility and a lower cost structure
than ours. Some of these competitive local exchange carriers and other
facilities-based providers of local exchange service are acquiring or being
acquired by inter-exchange carriers. These combined entities may provide a
bundled package of telecommunications products, including local and long
distance telephony, that is in direct competition with the products offered
or planned to be offered by CoreComm Holdco.

Internet

         The Internet services market is also extremely competitive.
CoreComm Holdco competes directly or indirectly with the following
categories of companies:

         -  established online services, such as America Online, the
            Microsoft Network and Prodigy;
         -  local, regional and national Internet service providers, such
            as Earthlink, United Online and Internet America;
         -  national telecommunications companies, such as AT&T and MCI;
         -  providers of Web hosting, co-location and other Internet-based
            business services, such as Verio, Inc.;
         -  computer hardware and software and other technology companies
            that provide Internet connectivity with their products,
            including IBM and Microsoft Corporation;
         -  national long distance carriers such as AT&T, MCI WorldCom and
            Sprint Corporation;
         -  regional Bell operating companies, such as Verizon and
            Ameritech, and local telephone companies;
         -  cable operators, including AT&T, Comcast and Time Warner Cable;
         -  nonprofit or educational Internet service providers;
         -  online cable services, such as Excite@Home and Roadrunner; and
         -  satellite-based online providers, such as DIRECTV and EchoStar.

         CoreComm Holdco believes that the primary competitive factors
determining success as an Internet service provider are:

         -  accessibility and performance of service;
         -  quality customer support;
         -  price;
         -  access speed;
         -  brand awareness;
         -  ease of use; and
         -  scope of geographic coverage.

         Many of the major cable companies and some other Internet access
providers offer Internet connectivity through the use of cable modems and
wireless terrestrial and satellite-based service technologies. In addition,
several competitive local exchange carriers and other Internet access
providers have launched national or regional digital subscriber line
programs providing high speed Internet access using the existing copper
telephone infrastructure. Several of these competitive local exchange
carriers have announced strategic alliances with local, regional and
national Internet service providers to provide broadband Internet access.


                                    14

<PAGE>


CoreComm Holdco also believes that manufacturers of computer hardware and
software products, media and telecommunications companies and others will
continue to enter the Internet services market, which will also intensify
competition. Any of these developments could materially and adversely
affect CoreComm Holdco's business, operating results and financial
condition.

         Competition will increase as large diversified telecommunications
and media companies acquire Internet service providers and as Internet
service providers consolidate into larger, more competitive companies.
Diversified competitors may bundle other services and products with
Internet connectivity services, potentially placing us at a significant
competitive disadvantage. As a result, CoreComm Holdco's businesses may
suffer.

Customer Dependence and Seasonality

         CoreComm Holdco does not depend upon any single customer for any
significant portion of its business. Neither our business nor the
telecommunications industry are generally characterized as having a
material seasonal element, and it does not expect our business or the
industry to become seasonal in the foreseeable future.

Employees

         CoreComm Limited has approximately four employees, each of whom is
also employed by CoreComm Holdco. As of December 31, 2001, CoreComm Holdco
had an aggregate of approximately 1,350 employees. None of these employees
are represented by any labor organization. Each of CoreComm Limited and
CoreComm Holdco believes that its relationship with its employees is
excellent.

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<PAGE>


GOVERNMENT REGULATION OF THE TELECOMMUNICATIONS SERVICES BUSINESS

Overview

         The telecommunications services we provide are subject to
regulation by federal, state and local government agencies. The following
summary does not purport to describe all current and proposed regulations
and laws affecting the telecommunications industry. Federal and state
regulations and legislation are the subject of judicial proceedings,
legislative hearings and administrative proposals, which could change in
varying degrees the manner in which this industry operates. Neither the
outcome of these proceedings nor their impact on the telecommunications
industry or CoreComm Holdco's business can be determined at this time.
Future federal or state regulations and legislation may be less favorable
to CoreComm Holdco than current regulation and legislation and therefore
may have a material and adverse impact on its business and financial
prospects. In addition, CoreComm Holdco may expend significant financial
and managerial resources to participate in proceedings setting rules at
either the federal or state level, without achieving a favorable result.

         At the federal level, the FCC has jurisdiction over interstate and
international services. Interstate services are communications that
originate in one state and terminate in another. Intrastate services are
communications that originate and terminate in a single state and state
public service commissions exercise jurisdiction over intrastate services.
Municipalities and other local government agencies may also regulate
limited aspects of CoreComm Holdco's business, such as use of
government-owned rights-of-way and construction permits. CoreComm Holdco's
networks are also subject to numerous local regulations such as building
codes, franchise and right-of-way licensing requirements.

Telecommunications Act of 1996

         The federal Telecommunications Act, enacted in 1996, has resulted
and will continue to result in substantial changes in the marketplace for
telecommunications services. These changes include, at present, opening
local exchange services to competition and, in the future, a substantial
increase in the addressable services for CoreComm Holdco. Among its more
significant provisions, the Telecommunications Act:

         o  removes legal barriers to entry into some telecommunications
            services, such as long distance and local exchange services;

         o  requires incumbent local exchange carriers such as Verizon or
            SBC, which we refer to as ILECs, to "interconnect" with and
            provide services for resale by competitors;

         o  permits incumbent local exchange carriers, including Bell
            regional operating companies in some circumstances to enter
            into new markets, such as long distance and cable television;

         o  relaxes regulation of telecommunications services provided by
            incumbent local exchange carriers and all other
            telecommunications service providers; and

         o  directs the FCC to establish an explicit subsidy mechanism for
            the preservation of universal service. The FCC was also
            directed by Congress to revise and make explicit subsidies
            inherent in the access charges paid by interexchange carriers
            for use of local exchange carriers' services.

Removal of Entry Barriers

         The provisions of the Telecommunications Act should enable us to
provide a full range of telecommunications services in any state. Although
we may be required to obtain certification from state public service
commissions in almost all cases, the Telecommunications Act should limit
substantially the ability of a state public service commission to deny a
request for certification. The provisions of the Telecommunications Act
also reduce the barriers to entry by other potential competitors and
therefore increase the level of competition CoreComm Holdco will likely
face in all markets affected by the Act. Please refer to the section under
this Item 1 of this annual report entitled "CoreComm Holdco's
Business-Competition."


                                    16

<PAGE>

Interconnection with Local Exchange Carrier Facilities

         A company may not be able to compete effectively with the ILECs in
the switched local telephone services market unless it is able to connect
its facilities with the ILEC's facilities and obtain access to some ILEC
services and resources under reasonable rates, terms and conditions. The
Telecommunications Act imposes a number of access and interconnection
requirements on all local exchange providers, including CLECs, with
additional requirements imposed on non-rural ILECs. These requirements are
intended to provide access to some networks under reasonable rates, terms
and conditions. Specifically, ILECs must provide the following:

         o  Unbundling of Network Elements. ILECs must offer access to
            various unbundled elements of their network. This requirement
            allows competitors to purchase at cost-based rates elements of
            an ILEC's network that may be necessary to provide service to
            CoreComm Holdco's customers.

         o  Dialing Parity. All local exchange carriers must provide
            dialing parity, which means that a customer calling to or from
            a CLEC network cannot be required to dial more digits than is
            required for a comparable call originating and terminating on
            the ILEC's network.

         o  Telephone Number Portability. All local exchange carriers must
            provide telephone number portability, which enables a customer
            to keep the same telephone number when the customer switches
            local exchange carriers.

         o  Reciprocal Compensation. The duty to provide reciprocal
            compensation means that local exchange carriers must terminate
            calls that originate on competing networks in exchange for a
            given level of compensation and that they are entitled to
            termination of calls that originate on their network, for which
            they must pay a given level of compensation.

         o  Resale. All local exchange carriers generally may not prohibit
            or place unreasonable restrictions on the resale of their
            services. In addition, ILECs must offer local exchange services
            to resellers at a wholesale rate that is less than the retail
            rate charged to end users.

         o  Collocation. Subject to space and equipment use limitations,
            ILECs must permit CLECs to install and maintain some types of
            their own network equipment in ILECs' central offices and
            remote terminals. The rates, terms and conditions are subject
            to negotiation and, failing agreement, to arbitration before
            state public utility commissions.

         o  Access to Rights of Way. All ILECs, CLECs and some other
            utilities must provide access to their poles, ducts, conduits
            and rights-of-way on a reasonable, nondiscriminatory basis to
            telecommunications carriers.

         o  Good Faith Negotiations. ILECs are required to negotiate in
            good faith with other carriers that request any or all of the
            arrangements discussed above. If a requesting carrier is unable
            to reach agreement with the ILEC within a prescribed time,
            either carrier may request arbitration by the applicable state
            commission.

         o  Rates. The rates charged by incumbent local exchange carriers
            for interconnection and unbundled network elements must be
            calculated using a forward-looking, cost-based methodology, and
            may vary greatly from state to state. These rates must be
            approved by state regulatory commissions, which often follows a
            lengthy and expensive negotiation, arbitration, and review
            process. Recurring and non-recurring charges for telephone
            lines and other unbundled network elements may change based on
            the rates proposed by ILECs and approved by state regulatory
            commissions from time to time, which creates uncertainty about
            how interconnection and unbundled element rates will be
            determined in the future and which could have an adverse effect
            on our operations. The ILECs have appealed certain

                                    17

<PAGE>


            aspects of the methodology used to set these rates to the
            United States Supreme Court. If the appeal is successful, it
            could result in higher prices for interconnection and unbundled
            network elements.

         While the Telecommunications Act generally requires ILECs to offer
interconnection, unbundled network elements and resold services to CLECs,
ILEC-to-CLEC interconnection agreements have limited terms, requiring the
CLEC to renegotiate the agreements on a periodic basis. ILECs may not
provide timely provisioning or adequate service quality, thereby impairing
a CLEC's reputation with customers who can easily switch back to the ILEC.

Current Regulatory Issues

         The following regulatory issues are currently before the FCC and
various courts and may impact CoreComm Holdco's operations.

Reciprocal Compensation

         In March 2000, the U.S. Court of Appeals for the D.C. Circuit
overturned the FCC's previous determination that calls to Internet service
providers, which CoreComm Holdco refers to as ISPs, are not local. The
court found that the FCC had failed to explain adequately its determination
that a call does not "terminate" at an ISP merely because the ISPs then
originate further telecommunications that extend beyond state boundaries.
In response to this court ruling, in April 2001 the FCC once again
determined that calls to ISPs are jurisdictionally interstate, and thus,
not subject to reciprocal compensation under Section 251(b)(5) of the
Telecommunications Act. Instead, the FCC adopted an interim graduated rate
scheme for ISP-bound traffic in which the compensation rates for ISP-bound
traffic decrease on a yearly basis. In addition, the FCC initiated a
proceeding to comprehensively review all intercarrier compensation schemes,
in which it suggested moving to a bill-and-keep regime for all intercarrier
payments. The interim graduate rate regime for ISP-bound traffic will
remain in place for the next three years or until FCC concludes its review
of all intercarrier compensation schemes.

         A number of parties have filed petitions for reconsideration of
the FCC's decision regarding compensation for ISP-bound traffic, but the
FCC has yet to act on those petitions. In addition, many competitive
carriers and state public utility commissions have appealed the FCC's
determination to the U.S. Court of Appeals for the D.C. Circuit. The court
will hear oral arguments in February 2002. The outcome of this appeal could
have an impact on the amount of compensation CoreComm Holdco receives for
ISP-bound traffic. As its existing interconnection agreements expire and as
it enter new markets, CoreComm Holdco must negotiate new reciprocal
compensation rates and traffic scope with each incumbent carrier. A
reduction in rates payable for Internet service provider reciprocal
compensation could have an adverse effect on its future revenues and
business strategy.

Collocation

         The FCC has adopted rules requiring incumbent local exchange
carriers to provide collocation to competitive local exchange carriers for
the purpose of interconnecting their competing networks. In a July 2001
decision, the FCC concluded that collocating equipment is "necessary" for
interconnection or access to unbundled network elements if "an inability to
deploy that equipment would, as a practical, economic, or operational
matter, preclude the requesting carrier from obtaining interconnection or
access to unbundled network elements." In addition, the FCC found that
multifunction equipment satisfies the "necessary standard" only if the
equipment's primary purpose and function is to provide the requesting
carrier with "equal in quality" interconnection or "nondiscriminatory
access" to UNEs. Finally, the FCC determined that ILECs are no longer
required to permit competitors to construct and maintain cross-connects
outside the physical collocation space of the ILEC's premises. However,
ILECs must provision cross-connects between collocated carriers upon
reasonable request. The ILECs have appealed these findings to the U.S.
Court of Appeals for the D.C. Circuit. A successful appeal could provide
incumbent carriers with a basis for refusing to collocate multifunction
equipment or provide collocation in a timely and efficient manner. This
could have a negative impact on CoreComm Holdco's network deployment plans.


                                    18

<PAGE>


Line Sharing

         On December 9, 1999, the FCC released its line sharing order that
requires ILECs to offer line sharing as an unbundled network element by
June 6, 2000. Line sharing permits CLECs to use a customer's existing line
to provide DSL services while the ILEC continues to use the same line to
provide voice service. Prices for line sharing will be set by the states
based on a cost methodology adopted by the FCC. In January 2001, the FCC
clarified that line sharing applies to the entire loop, even when a portion
of the loop consists of fiber facilities. Incumbent carriers must also
permit competing carriers to self-provision or partner with a data carrier.
However, in a February 2001 Clarification Order, the FCC made clear that
its prior ruling did not expand an ILEC's obligation to provide access to
unbundled packet switching capability. The FCC is currently seeking comment
on issues relating to line sharing on fiber facilities.

Local Exchange Carrier Entry Into New Markets

         UNE Entry. The FCC has adopted rules that allow competitors to
purchase at cost-based rates elements of an ILEC's network that may be
necessary to provide service to CoreComm Holdco's customers. The FCC is
currently reviewing the framework under which ILECs must make unbundled
network elements available to competing carriers. As a result of this
review, the FCC may determine that ILECs no longer need to unbundle certain
network elements, which may impact CoreComm Holdco's ability to provide
service to its customers. In addition, the FCC is currently considering
whether to adopt performance standards for ILECs' provision of unbundled
network elements. These standards would ensure that ILECs provision those
elements on a timely basis.

         Section 271 Entry. CoreComm Holdco's principal competitor in each
market it enters is the ILEC. Some of these carriers, the Regional Bell
Operating Companies, which CoreComm Holdco refers to as RBOCs, are
currently permitted to provide long distance services to customers outside
of their local service areas and in conjunction with their mobile telephone
services, but are prohibited from providing long distance services that
originate in that states where they provide local telephone service, which
is referred to as "in-region long distance service." Section 271 of the
Telecommunications Act established procedures under which RBOCs can provide
in-region long distance services in a state after receiving approval from
the FCC. To obtain approval, the RBOC must comply with a competitive
checklist that incorporates, among other things, the interconnection
requirements discussed above. Please refer to the section under this Item 1
of this annual report entitled "CoreComm Holdco's
Business-Competition-Competitive Local Exchange Carrier."

         Approval from the FCC under Section 271 will enable a RBOC to
provide customers with a full range of local and long distance
telecommunications services. The provision of landline long distance
services by RBOCs is expected to reduce the market share of the major long
distance carriers, which may be significant customers of our services.
Consequently, the entry of the RBOCs into the long distance market may have
adverse consequences on the ability of CLECs both to generate access
revenues from the IXCs and to compete in offering a package of local and
long distance services. Starting in December 1999, the FCC has approved a
number of 271 applications, including applications for New York, Texas,
Oklahoma, Kansas, Massachusetts, Connecticut, Pennsylvania, Arkansas, and
Missouri. CoreComm Holdco anticipates that the ILECs will soon initiate
similar proceedings to obtain long distance service authority in every
other state in which CoreComm Holdco operates or plans to operate.

Access Charges

         In addition to charging other carriers reciprocal compensation for
terminating local traffic, CoreComm Holdco also collects access charges
from carriers for originating and terminating inter-exchange traffic.
Federal law requires that these charges be just and reasonable. Some
inter-exchange carriers have challenged the switched access rates of some
competitive local exchange carriers, asserting that these competitive local
exchange carriers' service charges for switched access services are higher
than those of the incumbent local exchange carriers serving the same
territory, and are therefore unjust and unreasonable. These inter-exchange
carriers have refused to pay competitive local exchange carriers any
originating access charges in excess of the corresponding incumbent rate.
In response, the FCC adopted an order in April 2001, which gradually aligns
competitors' access charge rates more closely with those of the ILECs.
Specifically, the FCC established a


                                    19

<PAGE>

benchmark rate of 2.5 cents per minute for the first year, at the end of
which, the rate will drop to 1.8 cents per minute, or the ILEC rate,
whichever is higher. At the beginning of year three, the benchmark rate
drops to 1.2 cents per minute, or the ILEC rate, whichever is higher. At
the end of the third year, the benchmark rate drops to the switched access
rate of the competing ILEC. On the effective date of these rules,
competitors have the option to tariff their access rates, for those areas
where they have previously offered service, at either the benchmark rate or
the rate of the corresponding ILEC in the study area of the relevant
end-user customer, whichever is higher. Any competitive carrier access
charges above the benchmark, will be mandatorily detariffed, although CLECs
may negotiate higher rates with inter-exchange carriers. These changes
could impair CoreComm Holdco's ability to offer customers lower-cost access
services. Moreover, because competitive local exchange carrier access
charges are reduced, CoreComm Holdco's revenue could decrease.

         In May 2000, the FCC issued an order adopting an integrated
interstate access reform and universal service proposal put forth by a
coalition of incumbent local exchange carriers and inter-exchange carriers.
Specifically, the FCC removed $650 million in universal service subsidies
from interstate access charges paid by long distance carriers and collects
that sum through an assessment on all carriers' interstate revenues. In
September 2001, the U.S. Court of Appeals for the Fifth Circuit remanded
the FCC's decision, concluding that the FCC failed to exercise sufficiently
independent judgment in establishing the $650 million amount. The FCC is
currently seeking comment on the remand. While these reforms are aimed
primarily at price cap, or incumbent, local exchange carriers, it is too
early to assess what impact, if any, they will have on CoreComm Holdco.

Universal Service

         Universal service obligations apply to all telecommunications
carriers that provide interstate telecommunications services. In May 1997,
the FCC issued an order implementing the provisions of the
Telecommunications Act relating to the preservation and advancement of
universal telephone service. This order requires all telecommunications
carriers providing interstate telecommunications services, including
CoreComm Holdco, to contribute to universal service support for schools,
libraries and rural health care programs. CoreComm Holdco's contribution to
the federal support funds is calculated based on a percentage of its gross
end-user interstate and international telecommunications revenue. The
amount of CoreComm Holdco's required contribution changes each quarter, but
may be passed on to its end users on a pro rata basis. The FCC is currently
seeking comment on whether it should change the manner in which it assesses
contributions, such as moving from revenue-based to flat-rate assessment,
and the way in which carriers recover USF costs from their customers.
Furthermore, CoreComm Holdco may be eligible to directly or indirectly
receive subsidy funds for telecommunications services it provides to some
covered end users. Most state public service commissions have adopted rules
or are currently considering actions to preserve universal service and
promote the public interest. CoreComm Holdco is currently unable to
quantify the amount of subsidy payments that it will be required to make
and the effect that these required payments will have on its financial
condition.

Relaxation of Regulation

Forbearance

         The Telecommunications Act gives the FCC authority to decide to
forebear from regulating carriers if it believes regulation would not serve
the public interest. The FCC is charged with reviewing its regulations for
continued relevance on a regular basis. As a result of this mandate, a
number of regulations that apply to competitive local exchange carriers
have been, and others may in the future be, eliminated. CoreComm Holdco
cannot, however, guarantee that any regulations that are now or will in the
future be applicable to it will be eliminated.

Dominance/Non-Dominance

         Through a series of proceedings, the FCC has established different
levels of regulation for "dominant carriers" and "non-dominant carriers."
As a non-dominant carrier, CoreComm Holdco is subject to relatively limited
regulation by the FCC. However, at a minimum, CoreComm Holdco must offer
interstate services at just and reasonable rates in a manner that is not
unreasonably discriminatory. One goal of the

                                  20

<PAGE>

Telecommunications Act is to increase competition for telecommunications
services and thus reduce the need for regulation of these services. To this
end, the Telecommunications Act requires the FCC to streamline its
regulation of incumbent local exchange carriers and permits the FCC to
forbear from regulating particular classes of telecommunications services
or providers. In fact, the FCC is currently considering whether to deem
ILECs non-dominant in the provision of broadband services. Since CoreComm
Holdco is a non-dominant carrier and, therefore, is not heavily regulated
by the FCC, the potential for regulatory forbearance likely will be more
beneficial to the incumbent local exchange carriers than to it in the long
run.

Detariffing

         The Telecommunications Act requires all common carriers, including
CoreComm Holdco, to charge just and reasonable rates for their services and
to file schedules of these rates with the FCC. These schedules are known as
"tariffs" and they represent a contract between a carrier and its
customers. The FCC has used its forbearance authority to eliminate the
filing of tariffs in several instances. Most non-dominant carriers must
detariff for their interstate inter-exchange services. However,
non-dominant carriers are permitted to continue to file tariffs for 101-XXX
dial-around type services. For international services, non-dominant
carriers may not file any new or revised contract tariffs or tariffs for
other long-term international service arrangements and most non-dominant
carriers must detariff by January 28, 2002. Rather, non-dominant carriers
must now post their rates, terms and conditions in a publicly available
form, such as on a website. Furthermore, as explained above, the FCC has
recently adopted permissive detariffing for the access charges competitive
carriers levy on interstate long distance carriers for completing calls to
competitive local exchange carriers' customers. The FCC's preclusion of
non-dominant interstate carriers from filing tariffs may increase CoreComm
Holdco's exposure to litigation. Currently, tariffs contain provisions
limiting the liability of providers on a variety of issues. In the absence
of filed tariffs, carriers must rely on negotiated contracts with each
customer to provide these liability limitations.

         In addition to requiring the incumbent local exchange carriers to
open their networks to competitors and reducing the level of regulation
applicable to competitive local exchange carriers, the Telecommunications
Act also reduces the level of regulation that applies to the incumbent
local exchange carriers, thereby increasing their ability to respond
quickly in a competitive market. For example, the FCC has applied
"streamlined" tariff regulation of the incumbent local exchange carriers
introduction of new services, which shortens the requisite waiting period
before which tariff changes may take effect. These developments enable the
incumbent local exchange carriers to change rates more quickly in response
to competitive pressures. The FCC has also adopted heightened price
flexibility for the incumbent local exchange carriers, subject to specified
caps. If exercised by the incumbent local exchange carriers, this
flexibility may decrease CoreComm Holdco's ability to compete effectively
with the incumbent local exchange carriers in its markets.

Local Government Authorizations

         Many jurisdictions where CoreComm Holdco may provide services
require license or franchise fees based on a percentage of revenues.
Because the Telecommunications Act specifically allows municipalities to
charge fees for use of the public rights-of-way, it is likely that
jurisdictions that do not currently impose fees will seek to impose fees in
the future. However, the amount and basis of these fees have been
successfully challenged by several telecommunications service providers.
Federal courts have struck down municipal ordinances that:

         o  do not relate the fees imposed under the ordinance to the
            extent of a provider's use of the rights-of-way;

         o  do not relate the fees imposed under the ordinance to the costs
            incurred by the local government in maintaining the
            rights-of-way; or

         o  seek to impose fees based on a concept of the "value" of the
            use to the provider by relating the fees to provider revenues.


                                    21

<PAGE>


         Additionally, because the Telecommunications Act requires
jurisdictions to charge non-discriminatory fees to all telecommunications
providers, telecommunications providers are challenging municipal fee
structures that excuse other companies, particularly the incumbent local
exchange carriers, from paying license or franchise fees, or allow them to
pay fees that are materially lower than those that are required from new
competitors such as us. A number of these decisions have been appealed and,
in any event, it is uncertain how quickly particular jurisdictions will
respond to the court decisions without a specific legal challenge initiated
by CoreComm Holdco or another competitive local exchange carrier to the fee
structure at issue.

Regulation of Resellers

         The FCC has defined resale as any activity in which a party, the
reseller, subscribes to the services or facilities of a facilities-based
provider, or another reseller, and then re-offers communications services
to the public for profit, with or without adding value. Resellers are
common carriers generally subject to all rules and regulations placed on
providers of the underlying services by either the FCC or the states in
which they operate. The FCC has held that prohibitions on the resale of
common carrier services are unjust, unreasonable, and unlawfully
discriminatory in violation of the Telecommunications Act. Accordingly, all
common carriers must make their services available for resale at rates,
terms, and conditions that do not unreasonably discriminate against
resellers.

         As to other telecommunications service providers, such as
competitive local exchange carriers and wireless providers, there is no
regulation that requires them to give discounts to resellers below the
rates offered to end users of the same quantities of similar services. The
FCC's requirement that wireless providers offer resale services is
currently set to expire on November 24, 2002. Because CoreComm Holdco's
cellular service offerings are resale-only, the termination of this policy
may adversely affect its ability to offer cellular services in the future.

International Operations

         CoreComm Holdco already provides international resale services and
may ultimately expand its operations to other countries. The FCC requires
every carrier that originates international telecommunications from within
the U.S., either through the use of its own facilities or on a resale
basis, to secure in advance an authorization from the FCC under Section 214
of the Telecommunications Act. Additionally, these carriers must comply
with other routine reporting requirements. CoreComm Holdco holds a Section
214 Authorization for both facilities-based and resale international
services.

Internet Regulation

         The FCC currently does not regulate the provision of Internet
service, although it does regulate common carriers that provide elements of
the "backbone" networks on which the Internet is based. Similarly, state
public utility commissions generally do not regulate Internet service,
except in some limited circumstances where incumbent local exchange
carriers provide Internet services. The FCC and some states, however, are
reviewing the development of the Internet and the types of services that
are provided through it. For example, if the FCC should determine that an
Internet service provider offers a service that is an exact substitute for
long distance telephone service with the sole distinction that it is based
on a packet-switched network rather than a circuit-switched network, the
FCC may determine that it should impose similar regulation on the new
services.

State Regulation Generally

         Most states require companies to be certified or authorized by the
state's public utility commission in order to provide intrastate common
carrier or telecommunications services. These certifications generally
require a showing that the carrier has adequate financial, managerial and
technical resources to offer the proposed services in a manner consistent
with the public interest.

         In addition to obtaining certification, in each state, CoreComm
Holdco must negotiate terms of interconnection with the incumbent local
exchange carrier before it can begin providing switched services. State
public utility commissions are required to approve interconnection
agreements before they become effective and

                                    22

<PAGE>


must arbitrate disputes among the parties upon request. CoreComm Holdco has
already entered into interconnection agreements with Ameritech, which is
now a part of SBC and Verizon. Regulatory changes could require
renegotiation of relevant portions of existing interconnection agreements,
or require additional court and regulatory proceedings. CoreComm Holdco is
not presently subject to state-initiated price regulation based on costs or
earnings. Most states require competitive local exchange carriers to file
tariffs setting forth the terms, conditions and prices for intrastate
services. Some states permit tariffs to list a rate range or set prices on
an individual case basis. Other state requirements may include filing of
periodic reports, the payment of regulatory fees and surcharges and
compliance with service standards and consumer protection rules. Please
refer to the section of the prospectus entitled "- Interconnection with
Local Exchange Carrier Facilities."

         Several states provide incumbent local exchange carriers with
flexibility for their rates, special contracts, such as selective
discounting, and tariffs, particularly for services that are considered to
be competitive. This pricing flexibility increases the ability of the
incumbent local exchange carrier to compete with CoreComm Holdco and
constrains the rates it may charge for its services. States may grant
incumbent local exchange carriers additional pricing flexibility. At the
same time, some incumbent local exchange carriers may request increases in
local exchange rates to offset revenue losses due to competition. Some
states require prior approvals or notification for some transfers of
assets, customers or ownership of a competitive local exchange carrier and
for issuance of bonds, notes or other evidence of indebtedness or
securities of any nature. Delays in receiving required regulatory approvals
may occur.

Item 2.  PROPERTIES.

         We do not own or lease any property. As discussed previously, the
first phase of the Holdco recapitalization was completed on December 28,
2001. As a result, CoreComm Limited now owns only approximately 13% of the
outstanding common shares of CoreComm Holdco, and CoreComm Holdco now
operates the businesses that were historically operated by CoreComm
Limited. CoreComm Holdco does not own any property. Some of CoreComm
Holdco's subsidiaries lease switch buildings, ILEC collocations and office
space in those areas of the Mid-Atlantic and Midwestern United States where
they maintain their operations. CoreComm Holdco believes its facilities are
adequate to serve its present business operations and needs for the
foreseeable future. See the Notes to the CoreComm Holdco Consolidated
Financial Statements included elsewhere in this Form 10-K for information
concerning lease commitments.

Item 3.  LEGAL PROCEEDINGS.

         As discussed above, the first phase of the Holdco recapitalization
was completed in December 2001. As a result, CoreComm Limited now owns only
approximately 13% of the outstanding common shares of CoreComm Holdco, and
CoreComm Holdco now operates the businesses that CoreComm Limited had
historically operated. Through its various operating subsidiaries, CoreComm
Holdco purchases goods and services from a wide variety of vendors under
contractual and other arrangements that sometimes give rise to litigation
in the ordinary course of business. It also provides goods and services to
a wide range of customers under arrangements that sometimes lead to
disputes over payment, performance and other obligations. Some of these
disputes, regardless of their merit, could subject it to costly litigation
and the diversion of its technical and/or management personnel.
Additionally, any liability from litigation that is not covered by
insurance or exceeds its coverage could have a material adverse effect on
its business, financial condition and/or operating results. Currently,
CoreComm Limited is involved, either directly as a litigant or indirectly
through its ownership interest in CoreComm Holdco, in the following
outstanding matters which, if resolved unfavorably to CoreComm Limited or
CoreComm Holdco, could have a material adverse effect on CoreComm Limited's
and/or CoreComm Holdco's business, financial condition and/or results of
operations:

         o  CoreComm Newco, Inc., an indirect, wholly-owned subsidiary of
            CoreComm Holdco referred to as CoreComm Newco, is currently in
            litigation with Ameritech Ohio, a supplier from whom it
            purchases telecommunications products and services, over the
            adequacy of Ameritech's performance under a 1998 contract
            between CoreComm Newco and Ameritech, and related issues. This
            litigation began in June 2001 when Ameritech threatened to stop
            processing new orders following CoreComm Newco's exercise of
            its right under the contract to withhold payments for
            Ameritech's performance failures. In response

                                    23
<PAGE>


            to this threat, CoreComm Newco sought and received an order
            from an official of the Public Utilities Commission of Ohio,
            which we refer to as the PUCO, barring Ameritech from refusing
            to process new CoreComm orders. Ameritech has appealed that
            order to the PUCO and the appeal is still pending.

            On July 5, 2001, Ameritech filed a claim with the PUCO seeking
            payment from CoreComm Newco of approximately $8,600,000
            allegedly owed under the contract. On August 8, 2001, Ameritech
            filed a second claim against CoreComm Newco in Ohio state
            court, seeking an additional approximately $4,300,000 in
            allegedly improperly withheld amounts. These claims were
            subsequently consolidated in the United States District Court,
            with an amended complaint from Ameritech seeking a total of
            approximately $14,400,000.

            On December 26, 2001, CoreComm Newco filed its answer to
            Ameritech's amended complaint and simultaneously filed three
            counterclaims against Ameritech and some of its affiliates,
            alleging breach of contract, antitrust violations, and
            fraudulent or negligent misrepresentation. In lieu of filing an
            answer to CoreComm Newco's counterclaims, Ameritech filed a
            series of motions on March 25, 2002, asking the Court to
            dismiss certain of CoreComm Newco's counterclaims. CoreComm
            Newco's response to those motions is currently due on April 17,
            2002 and it intends to oppose Ameritech's requests for
            dismissal vigorously.

            We believe that CoreComm Newco has meritorious defenses to
            Ameritech's amended complaint, and that the amount currently in
            dispute is substantially less than the $14,400,000 claimed in
            Ameritech's amended complaint. For example, the figure
            specified in Ameritech's complaint does not account for (a)
            more than $4.1 million in refunds that Ameritech contends it
            has already credited to CoreComm Newco's accounts since the
            filing its complaint, and (b) payments that were made by
            CoreComm Newco in the ordinary course after the time of
            Ameritech's submission. However, we cannot be certain how the
            matter will be resolved. We also believe that, to the extent
            Ameritech prevails with respect to any of its claims,
            Ameritech's award may be offset in whole or in part by amounts
            that CoreComm Newco is seeking to obtain from Ameritech under
            its counterclaims. However, it is impossible at this time to
            predict the outcome of the litigation.

         o  Certain operating subsidiaries of CoreComm Holdco are currently
            involved in litigation with certain subsidiaries of Verizon
            Communications, Inc., referred to as Verizon, relating to the
            timeliness and accuracy of Verizon's wholesale billing
            processes, the legitimacy of various charges that have been
            levied by Verizon, and the propriety of Verizon's effort to
            collect those charges by threatening to implement an account
            embargo and service suspension on the ability of CoreComm
            Holdco's subsidiaries to process new and pending service orders
            unless payment is made on the amounts demanded.

            On or about January 31, 2002, the subsidiaries of CoreComm
            Holdco operating in Delaware, District of Columbia, Maryland,
            Massachusetts, New York and Pennsylvania received
            correspondence from Verizon claiming that Verizon was owed a
            total of approximately $14 million for services allegedly
            provided in those states and threatening to activate embargo
            procedures on their accounts if payment of the alleged amounts
            was not received. In response, the subsidiaries challenged the
            accuracy of Verizon's figures and provided formal written
            notice to Verizon disputing its claims and reiterating their
            several prior requests that Verizon provide additional
            information to support its contentions and resolve a variety of
            apparently systemic problems with its wholesale billing
            systems. Additionally, the subsidiaries in Pennsylvania, New
            York and Massachusetts proceeded to initiate litigation against
            Verizon before the appropriate regulatory authorities and/or in
            civil court.

            After further discussions and agreements between the parties,
            on February 28, 2002 Verizon withdrew its embargo threats in
            all states except Massachusetts. In Massachusetts, Verizon
            filed an answer to the complaint along with counterclaims
            seeking approximately $1.4 million in payment for allegedly
            past due charges. CoreComm Massachusetts is currently preparing
            an answer to these counterclaims that will dispute the accuracy
            of Verizon's contentions and discussions regarding a mutually
            agreeable resolution of the matter are continuing between the
            parties.

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<PAGE>


            In Pennsylvania, litigation between ATX Telecommunications
            Services, Inc., a wholly-owned subsidiary of CoreComm Holdco,
            and Verizon is continuing. In the meantime, on March 4, 2002
            ATX received a letter from Verizon asserting that Verizon is
            owed approximately $5.7 million in allegedly past due charges
            and threatening to implement a service embargo. ATX is
            currently reviewing Verizon's claims against its own billing
            records and believes that the amount at issue could be
            substantially less than the amount claimed by Verizon when
            taking into account (a) Verizon's historical billing errors,
            (b) payments that have been or will be made in the ordinary
            course, and (c) unresolved disputes over prior charges.
            Accordingly, on March 29, 2002, ATX filed a petition with the
            Hearing Examiner in its complaint case advising that the $5.7
            million figure alleged in Verizon's embargo letter has been
            placed into dispute by ATX due to Verizon's billing errors,
            that approximately $3 million of erroneous charges have already
            been found which ATX believes should be deducted from the
            claimed amount, and asking the Hearing Examiner to issue an
            order that would prevent Verizon from implementing a service
            embargo during the pendancy of the complaint proceeding. ATX
            intends to vigorously litigate its complaint regarding
            Verizon's billing errors, including the longstanding,
            apparently systemic problems that ATX has experienced with
            Verizon's billing systems, and pursue all available claims,
            counterclaims and offsets, including defending against any
            effort to implement any embargo or service suspension. However,
            it cannot presently predict how the matter will be resolved and
            if Verizon were to prevail on its claims and/or activate an
            account embargo or service suspension, it could have a material
            adverse affect on our business, financial condition and/or
            results of operations.

         o  On December 3, 2001, General Electric Capital Corp. filed a
            lawsuit in the Circuit Court of Cook County, Illinois against
            CoreComm Limited and MegsINet, Inc., an indirect subsidiary of
            CoreComm Holdco, seeking approximately $8 million in allegedly
            past due amounts under a capital equipment lease agreement
            between Ascend and MegsINet. GECC is seeking all amounts
            allegedly owed under the lease as well as repossession of the
            equipment. On February 19, 2002, the defendants filed a motion
            to dismiss certain of GECC's claims. GECC's response to the
            motion is currently due on April 9, 2002, defendants' reply is
            presently due on April 26, 2002 and oral argument on the
            motions is presently scheduled for May 13, 2002. CoreComm
            Holdco is currently in settlement discussions with GECC
            regarding these claims.

         o  On May 25, 2001, KMC Telecom, Inc. and some of its operating
            subsidiaries filed an action in the Supreme Court of New York
            for New York County against CoreComm Limited, Cellular
            Communications of Puerto Rico, Inc., CoreComm New York, Inc.
            and MegsINet, Inc. On that same date, KMC filed the same cause
            of action in the Circuit Court of Cook County, IL. Upon
            defendant's Motion to Stay the New York action, KMC voluntarily
            dismissed the Illinois litigation and the matter is currently
            proceeding in New York. KMC contends that it is owed
            approximately $2 million, primarily in respect of alleged early
            termination liabilities, under a services agreement and a
            collocation agreement with MegsINet. The defendants have denied
            KMC's claims and have asserted that the contracts at issue were
            signed without proper authorization, that KMC failed to perform
            under the alleged contracts, and that the termination penalties
            are not enforceable. The defendants have served discovery and
            intend to defend themselves in coordination with one of their
            insurance carriers.

         o  On July 6, 2001, MCI initiated a compulsory arbitration action
            against CoreComm Holdco's subsidiary CoreComm Communications,
            Inc. in connection with a dispute arising under a carrier
            services agreement between the parties. The arbitration demand
            contends that MCI is owed in excess of $1.9 million for
            circuits that were allegedly ordered by CoreComm
            Communications, Inc. under a carrier agreement. MCI has
            subsequently asserted that under one theory of the case
            premised on its reading of provisions relating to alleged early
            termination penalties, its claims could exceed $10 million, and
            under another theory involving a different computation its
            claims could exceed $4.5 million. The defendant has denied
            MCI's claims, asserting that the circuits were never ordered
            under the contract and have been improperly billed by MCI, and
            the defendant does not agree with MCI's various damages
            theories. MCI has admitted that there are no signed written
            orders for a substantial majority of the circuits, and the
            contract states that all orders must be submitted in writing
            signed by the ordering party. Discovery in

                                    25

<PAGE>

            this matter has been completed, and the case is currently
            scheduled for trial before the arbitrator in April 2002. The
            defendant is litigating the suit vigorously and pursuing all
            available claims and defenses.

         o  We have received correspondence from a law firm on behalf of
            Weston Telecommunications, L.L.C., referred to as Weston,
            asserting that Weston is the assignee of certain rights of
            Easton Telecom Services, Inc., referred to as Easton, under an
            asset purchase agreement approved as part of the bankruptcy
            disposition of Teligent, Inc., and demanding payment of
            approximately $4.9 million for telecommunications services
            purportedly provided under alleged contracts between Easton and
            MegsINet, Inc. On March 1, 2002, Easton Telecom Services, LLC.,
            formerly known as Weston, initiated litigation in the Northern
            District of Ohio against CoreComm Internet Group, Inc.
            asserting the claims discussed above. The defendant has
            investigated Weston's claims and does not believe that they
            have merit. Defendant's answer to Easton's complaint is
            presently due on April 24, 2001 and we intend to defend
            ourselves vigorously and pursue all available claims and
            defenses, including multiple defenses to the validity of the
            alleged contracts at issue.

         o  FiberStream, Inc., a direct subsidiary of CoreComm Limited, has
            been in communications with Metromedia Fiber Networks, Inc.,
            referred to as MFN, regarding a dispute between the parties
            under a General Agreement dated September 29, 2000 and a
            related Product Order of the same date. The dispute centers
            around the accuracy of certain statements that were made by MFN
            concerning the nature of its network at the time of
            contracting, the timeliness of the installation of the circuits
            by MFN under the agreement, and FiberStream's obligation, if
            any, to make payments in respect of those circuits. MFN has
            indicated that unless payment is made for the circuits, it may
            initiate arbitration under the agreement and seek early
            termination penalties in excess of approximately $1.1 million.
            FiberStream has rejected MFN's demands and has advised that it
            will defend itself vigorously and pursue all available
            counterclaims, including claims for fraudulent inducement
            relating to the execution of the contract and damages arising
            from MFN's alleged failure to perform under the contract. The
            parties have discussed the prospect of settling their
            respective claims without resort to litigation and those
            discussions are presently ongoing.

         o  On October 9, 2001, Enavis Networks, Inc. filed an action in
            the Circuit Court of Pinellas County, Florida against CoreComm
            Limited asserting that Enavis is owed approximately $420,000
            relating to the alleged sale and installation of
            telecommunications equipment by Enavis. We have filed a motion
            to dismiss this action for lack of personal jurisdiction over
            us in Florida and this motion is still pending. Upon resolution
            of the motion to dismiss in Florida and assuming that the
            matter proceeds in litigation, we intend to defend this action
            vigorously and assert counterclaims against Enavis arising from
            Enavis' failure to provide equipment complying with CoreComm's
            specifications.

         o  On or about September 14, 2001, a lawsuit was filed by
            WXIII/Far Yale Gen-Par, LLC, as General Partner of WXIII/Far
            Yale Real Estate Limited Partnership, referred to as Yale,
            against CoreComm Communications, Inc., a direct, wholly-owned
            subsidiary of CoreComm Holdco, and CoreComm Limited seeking
            approximately $172,500 in unpaid rent, interest and other
            charges allegedly owed under a commercial real estate lease
            between Yale and CoreComm Communications as to which CoreComm
            Limited is the guarantor. On or about February 5, 2002, Yale
            filed a motion with the court requesting permission to amend
            the complaint to specify a revised figure of $404,290.87 as the
            amount allegedly due under the lease and to add an additional
            count asking the court to issue a preliminary injunction
            preventing the defendants from transferring, selling,
            assigning, encumbering or otherwise hypothecating any of their
            assets, including any debt or equity interests in their
            subsidiaries, except for usual and ordinary expenses paid in
            the usual and ordinary course of business. On February 27,
            2002, Yale's motion for a preliminary injunction was denied
            subject to the substitution of CoreComm Holdco for CoreComm
            Limited as guarantor on the lease and Yale's motion to specify
            the revised figure of $404, 290.87 was granted. The defendants
            are currently proceeding to make the substitution relating to
            the guarantee and are litigating the matter vigorously.

                                     26

<PAGE>

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was submitted to a vote of the security holders of
CoreComm Limited during the quarter ended December 31, 2001.

                                    27

<PAGE>


                                  PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

         CoreComm Limited formerly was a wholly owned subsidiary of
Cellular Communications of Puerto Rico, Inc., referred to as CCPR and
formerly known as CoreComm Incorporated. On September 2, 1998, CCPR
distributed to its stockholders, on a one for one basis, all of the capital
stock of CoreComm Limited. CoreComm Limited common stock began trading on
the Nasdaq National Market on September 2, 1998, under the Nasdaq symbol
"COMFV". Subsequently, on September 3, 1998, the symbol was changed to
"COMMF," and on September 17, 1999, the symbol was changed to "COMM", under
which it presently trades. The following table sets forth, for the periods
indicated, the high and low bid prices as reported on the Nasdaq National
Market.

<TABLE>
<CAPTION>

                                                                                             Bid Price
                                                                                             ---------
                                                                                       High               Low
2000                                                                                   ----               ---
<S>                                                                                    <C>               <C>
First Quarter                                                                          $49.13            $32.08
Second Quarter                                                                         $42.81            $14.69
Third Quarter                                                                          $20.38            $ 7.81
Fourth Quarter                                                                         $ 8.00            $ 2.06
2001
First Quarter                                                                          $ 4.75            $  .09
Second Quarter                                                                         $  .63            $  .09
Third Quarter                                                                          $  .22            $  .06
Fourth Quarter                                                                         $  .20            $  .07
2002
First Quarter                                                                          $  .16            $  .06
Second Quarter (through April 4, 2002)                                                 $  .10            $  .08
</TABLE>

         On April 4, 2002, the last bid price for CoreComm Limited common
stock on the Nasdaq National Market was $0.09. As of April 4, 2002, there
were approximately 505 record holders of CoreComm Limited common stock.
This figure does not reflect beneficial ownership of shares held in nominee
names.

         Limited has never paid cash dividends on its common stock and is
currently restricted from doing so by the terms of its senior credit
facility. Limited does not presently contemplate paying cash dividends and
believes that it is extremely unlikely that it will pay cash dividends in
the foreseeable future.


                                    28

<PAGE>


Item 6.  SELECTED FINANCIAL DATA.

         The following selected financial data of CoreComm Limited and its
predecessor, OCOM Corporation Telecoms Division, referred to as OCOM,
should be read in conjunction with the historical financial statements and
notes thereto of CoreComm Limited and CoreComm Holdco included elsewhere in
this Form 10-K. The selected historical financial data relates to OCOM as
it was operated prior to its acquisition by CoreComm Limited.

         The first phase of the Holdco recapitalization, which was
completed by December 28, 2001, reduced CoreComm Limited's ownership of
CoreComm Holdco from 100% to approximately 13%. At that time, CoreComm
Limited began to account for CoreComm Holdco on the equity method and no
longer consolidated CoreComm Holdco.



<TABLE>
<CAPTION>

                                                                                                     The Predecessor (OCOM)
                                                                                                     ----------------------
                                                                          For the Period from
                                       Year Ended December 31,            April 1, 1998 (date
                                                                         operations commenced)    For the Period from   Year Ended
                                                                            to December 31,        January 1, 1998 to   December 31,
                                2001 (1)       2000 (2)       1999 (3)         1998 (4)              May 31, 1998          1997
                                ----           ----           ----             ----                  ------------          ----
                                                              (in thousands, except per share data)
<S>                           <C>              <C>           <C>            <C>                      <C>                   <C>
Income statement data:
Revenues                         $293,207       $132,122        $58,151       $  6,713                 $  1,452         $  3,579
Operating expenses                905,840        431,449        161,376         25,139                    4,234            7,954
(Loss) before
  extraordinary item             (659,088)      (313,811)      (103,524)       (16,255)                  (2,782)          (4,379)
Gain on early
  extinguishment of debt           39,498              -              -              -                        -                -
Net (loss)                       (619,590)      (313,811)      (103,524)       (16,255)                  (2,782)          (4,379)
Net (loss) per common
  share basic and diluted (5):
(Loss) before extraordinary item    (6.77)         (6.73)         (3.03)          (.55)                    (.09)            (.15)
Gain on early extinguishment
  of debt                            0.39              -              -              -                        -                -
Net (loss)                          (6.38)         (6.73)         (3.03)          (.55)                    (.09)            (.15)
Weighted average number of
  common shares basic and
  diluted (5):                    100,669         47,480         34,189         29,678                   29,664           29,419
</TABLE>


<TABLE>
<CAPTION>

                                                                                                The Predecessor (OCOM)
                                                                                                ----------------------
                                                                            December 31,
                                                 2001 (1)        2000 (2)        1999 (3)       1998 (4)      1997
                                                 --------        ----            ----           ----          ----
                                                                           (in thousands)
<S>                                           <C>             <C>            <C>            <C>             <C>
Balance sheet data:
Working capital (deficiency)                    $(25,545)      $(123,642)      $121,292      $133,899         $(950)
Fixed assets, net                                    146         179,651         90,619         3,582         1,269
Total assets                                      12,423         909,763        392,103       176,526         1,731
Long-term debt                                   261,624         358,624        179,318           283            --
Notes payable to affiliates                           --          16,170             --            --            --
Other noncurrent liabilities                          --           2,693         14,564           218            --
Shareholders' equity (deficiency)               (274,900)        316,278        126,926       169,297            --
Parent's investment                                   --              --             --            --           321
</TABLE>

                                                            29
<PAGE>


(1)  In 2001, we borrowed $65 million under the senior secured credit
     facility and we issued $25 million aggregate principal amount of
     unsecured convertible notes. In addition, we completed the first phase
     of the Holdco recapitalization. Please refer to Item 1, Business.

     We reduced the carrying value of fixed assets, goodwill and other
     intangibles by $368.3 million, we recorded non-cash compensation
     expense of $8.7 million as a result of the Holdco recapitalization,
     and we recorded reorganization and other charges of $39.5 million. We
     also recorded an extraordinary gain on the extinguishment of debt of
     $39.5 million, of which $23.0 million is related to the Holdco
     recapitalization.

(2)  In 2000, we acquired Voyager.net, Inc. and ATX Telecommunications
     Services, Inc. In addition, we borrowed $91.1 million under a senior
     secured credit facility, issued $108.7 million aggregate principal
     amount of senior unsecured notes and issued $16.1 million aggregate
     principal amount of senior unsecured convertible notes.

     Also in 2000, we reduced the carrying amount of goodwill and other
     intangibles by $35.9 million, we recorded non-cash compensation
     expense of $43.4 million and we recorded reorganization and other
     charges of $12.7 million.

(3)  In 1999, we acquired 100% of the stock of MegsINet Inc. and the CLEC
     assets of USN Communications, Inc. In addition, we issued $175 million
     principal amount of 6% Convertible Subordinated Notes due 2006.

(4)  During the period from April 1, 1998, the date operations commenced,
     to December 31, 1998, CCPR made the following contributions to
     CoreComm Limited prior to the spin-off: (a) a cash contribution of
     $150 million, (b) businesses acquired by CCPR in April and June 1998
     and (c) the subsidiary that owns various LMDS licenses in Ohio that
     were acquired for an aggregate of $25,241,000.

(5)  After giving retroactive effect to the 3-for-2 stock split by way of
     stock dividend paid in September 1999 and the 3-for-2 stock split by
     way of stock dividend paid in February 2000. The weighted average
     number of common shares prior to September 1998 are equivalent to
     CCPR's historical weighted average shares, since CCPR stockholders
     received one share of the Company for each CCPR shared owned.

     CoreComm Limited has never declared or paid any cash dividends.

                                    30

<PAGE>



Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
         FINANCIAL CONDITION

CRITICAL ACCOUNTING POLICIES

         The consolidated financial statements of CoreComm Limited and
related financial information are based on the application of generally
accepted accounting principles, referred to as GAAP. GAAP requires the use
of estimates, assumptions, judgments and subjective interpretations of
accounting principles that have an impact on the assets, liabilities,
revenue and expense amounts reported, as well as disclosures about
contingencies, risk and financial condition. The following critical
accounting policies have the potential to have a more significant impact on
CoreComm Limited's financial statements, either because of the significance
of the financial statement item to which they relate, or because they
require more judgment and estimation due to the uncertainty involved in
measuring, at a specific point in time, transactions which are continuous
in nature.

         o  CoreComm Limited, through its ownership of CoreComm Holdco,
            maintains an allowance for doubtful accounts receivable for
            estimated losses resulting from the potential inability of its
            customers to make payments. The allowance for doubtful accounts
            is estimated based on the current aging of receivables and
            prior collection experience. If the financial condition of our
            customers were to deteriorate resulting in an impairment in
            their ability to make payments, additions to the allowance may
            be required.
         o  CoreComm Limited's and CoreComm Holdco's determination of the
            treatment of contingent liabilities in the financial statements
            is based on a view of the expected outcome of the applicable
            contingency. Legal counsel is consulted on matters related to
            litigation. Experts both within and outside the company are
            consulted with respect to other matters that arise in the
            ordinary course of business. Examples of such matters that are
            based on assumptions, judgments and estimates are the amount to
            be paid to terminate certain agreements included in
            reorganization costs, the amounts to be paid to settle certain
            toll and interconnection liabilities, the amount to be paid as
            a result of certain sales and use tax audits and potential
            liabilities arising from other sales tax matters. A liability
            is accrued if the likelihood of an adverse outcome is probable
            of occurrence and the amount is estimable.
         o  CoreComm Limited and CoreComm Holdco review long-lived assets
            and goodwill for impairment as described in the Notes to
            Consolidated Financial Statements. In analyzing potential
            impairments, projections of future cash flows from the asset
            are used. The projections are based on assumptions, judgments
            and estimates of growth rates for the related business,
            anticipated future economic, regulatory and political
            conditions, the assignment of discount rates relative to risk
            and estimates of terminal values. Changes to these variables in
            the future may necessitate impairment charges to reduce the
            carrying value to fair value.
         o  Fixed assets and intangible assets are assigned useful lives
            which impacts the annual depreciation and amortization expense.
            The assignment of useful lives involves significant judgments
            and the use of estimates. Changes in technology or changes in
            intended use of these assets may cause the estimated useful
            life to change.
         o  In 2001, reorganization charges were recorded as a result of
            additional actions to reorganize, re-size and reduce operating
            costs and create greater efficiency in various areas. These
            charges, for both severance and exit costs, required the use of
            estimates. Actual results could differ from those estimated for
            reorganization.

LIQUIDITY AND CAPITAL RESOURCES

         As a result of the first phase of the Holdco recapitalization,
CoreComm Limited, which formerly owned 100% of CoreComm Holdco's
outstanding capital stock, now owns only approximately 13% of CoreComm
Holdco's outstanding capital stock. CoreComm Holdco owns 100% of the
business operations which CoreComm Limited formerly owned indirectly
through CoreComm Holdco. However, CoreComm Limited remains a party liable
under the $156.1 million senior secured credit facility and has no right to
withdraw any additional money under that facility. In addition, as of
December 31, 2001, CoreComm Limited had obligations of approximately $586
million of debt and preferred securities now held by CoreComm Holdco, the
$4.75

                                    31

<PAGE>

million principal amount of public notes that are not held by
CoreComm Holdco, and other liabilities. In addition, the senior secured
credit facility does not allow CoreComm Holdco to pay any dividends or
distribute assets to CoreComm Limited. As a result of these financial
conditions, CoreComm Limited currently lacks the resources to meet its
obligations as they become due.

         The auditors of CoreComm Limited have included a going concern
explanatory paragraph in their audit report for CoreComm Limited for the
year ended December 31, 2001, which states that these conditions raise
substantial doubt about CoreComm Limited's ability to continue as a going
concern. The audit report of CoreComm Holdco does not contain such a
paragraph as it is anticipated that CoreComm Holdco will be able to meet
its obligations as they become due with cash on hand and funds from
operations during 2002.

         CoreComm Limited does not contemplate raising any additional
financing in the foreseeable future.

         As a result of the first phase of the Holdco recapitalization,
CoreComm Holdco holds $160 million principal amount of CoreComm Limited's
public notes, approximately $105.7 million principal amount of CoreComm
Limited's Senior Unsecured Notes and all of CoreComm Limited's outstanding
preferred stock. CoreComm Limited does not have the financial resources to
meet the obligations under these notes and preferred stock if CoreComm
Holdco requires it to do so. Limited has agreed that it will surrender to
Holdco the number of shares of Holdco common stock that Holdco issues in
the exchange offers and the merger. Therefore, if the merger is completed,
Limited will own no common stock of Holdco, and thus will own no material
assets, since Holdco common stock is Limited's only material asset. In
exchange for Limited surrendering such shares of Holdco common stock,
Limited and CoreComm Holdco have agreed to waivers and amendments to delay
Limited from having to make any payments with respect to these securities.

         Under the exchange offers, those stockholders and noteholders who
exchange their shares and notes, respectively, will receive shares of
CoreComm Holdco, and would no longer hold securities of CoreComm Limited.

         CoreComm Limited may lack the resources to meet the obligations of
the remaining $4.75 million in principal amount of public notes that are
not held by CoreComm Holdco. CoreComm Limited did not pay any interest that
was due on the public notes on October 1, 2001 until December 2001 at which
time it paid such interest to the parties that entered into public note
agreements in connection with the first phase of the Holdco
recapitalization. On March 28, 2002, the October 1, 2001 interest payment,
together with interest accrued thereon, was paid on the $4.75 million in
principal amount of public notes that did not receive the October 1, 2001
interest payment in December 2001. The April 1, 2002 interest payment on
the public notes has not yet been paid. The cash consideration component of
CoreComm Holdco's exchange offer for public notes is equivalent to the
April 1, 2002 interest payment and will be made with respect to those
public notes that Holdco accepts in the exchange offer.

         On February 14, 2002, CoreComm Limited received written
notification from Nasdaq indicating that CoreComm Limited failed to comply
with the minimum market value of publicly held shares and minimum bid price
requirements for continued listing on the Nasdaq National Market and that
CoreComm Limited would have until May 15, 2002 to regain compliance. If the
Holdco recapitalization is not successfully completed and CoreComm Limited
does not regain compliance by this date, Nasdaq stated that it will then
provide CoreComm Limited with written notification that its common stock
will be delisted from the Nasdaq National Market. CoreComm Limited has not
yet determined what action it will take if it receives this written
notification. If CoreComm Limited common stock is delisted from the Nasdaq
National Market, shares may trade in the Nasdaq Small Cap Market or the
over-the-counter market and price quotations may be reported by other
sources. The extent of the public market for the shares of CoreComm Limited
common stock and the availability of quotations for shares of CoreComm
Limited common stock would, however, depend upon the number of holders of
shares remaining at that time, the interest in maintaining a market in
shares of CoreComm Limited common stock on the part of securities firms,
the possible termination of registration of the shares under the Securities
Exchange Act of 1934, as described below, and other factors.


                                    32

<PAGE>


         On January 22, 2002, the Securities and Exchange Commission issued
FR-61, Commission Statement about Management's Discussion and Analysis of
Financial Condition and Results of Operations. The release sets forth
certain views of the Securities and Exchange Commission regarding
disclosure that should be considered by registrants. CoreComm Limited's
contractual obligations and commercial commitments are summarized below,
and are fully disclosed in the Notes to Consolidated Financial Statements.

         The following table includes aggregate information about CoreComm
Limited's contractual obligations as of December 31, 2001 and the periods
in which payments are due:

<TABLE>
<CAPTION>

                                                                   Payments Due by Period
Contractual                                            Less than 1             1-3               4-5           After 5
Obligations                            Total               Year               Years             Years           Years
---------------------------------- --------------- --------------------- ----------------- ----------------- -------------
                                                      (in thousands)
<S>                             <C>                        <C>               <C>           <C>                <C>
Long-Term Debt (1)                 $270,429                   $  -              $105,679      $164,750           $  -

Capital Lease
   Obligations                       none

Operating Leases                     none

Unconditional
   Purchase Obligations              none

Other Long-Term
   Obligations                       none

Total Contractual
   Cash Obligations                 $270,429                 $  -               $105,679      $164,750          $  -
</TABLE>


         The following table includes aggregate information about CoreComm
Limited's commercial commitments as of December 31, 2001. Commercial
commitments are items that CoreComm Limited could be obligated to pay in
the future. They are not required to be included in the consolidated
balance sheet.

<TABLE>
<CAPTION>

                                                                             Amount of Commitment
                                                                            Expiration Per Period

    Other Commercial          Total Amounts         Less than 1             1 - 3               4 - 5              Over 5
       Commitments              Committed              year                 years               years              years
-------------------------- -------------------- -------------------- -------------------- ------------------- -----------------
                                                  (in thousands)
<S>                       <C>                    <C>                  <C>                 <C>                <C>
Guarantees (2)               $172,274               $  -                 $11,700             $76,050            $84,524
Lines of Credit                  none

Standby Letters of
Credit                           none


Standby Repurchase
Obligations
                                 none

Other Commercial
Commitments                      none

Total Commercial
Commitments                   $172,274             $  -                  $11,700              $76,050             $84,524
</TABLE>


(1)  Long-term debt includes $164,750,000 principal amount of 6%
     Convertible Subordinated Notes and $105,679,000 principal amount of
     Senior Unsecured Notes due 2003, before unamortized discount of
     $8,805,000.


                                    33
<PAGE>


(2)  Guarantees include CoreComm Holdco's senior secured credit facility of
     $156,100,000, which is unconditionally guaranteed by CoreComm Limited
     and CoreComm Holdco, and CoreComm Holdco's 10.75% Unsecured
     Convertible PIK Notes due April 2011 of $16,174,000 including accrued
     PIK interest for which CoreComm Limited and CoreComm Holdco are
     co-obligors.

Consolidated Statement of Cash Flows

         For the year ended December 31, 2001, cash used in operating
activities decreased to $67,349,000 from $131,002,000 in the year ended
December 31, 2000 primarily due to significant efforts to reduce expenses
and other efforts to improve cash flow.

         For the year ended December 31, 2001, cash used to purchase fixed
assets decreased to $5,231,000 from $65,321,000 in the year ended December
31, 2000 which reflected the modifications to CoreComm Limited's business
plan and the efforts to improve cash flow.

         Cash used in investing activities includes a decrease in cash of
$24,966,000, which represents the cash of CoreComm Holdco at the time of
its deconsolidation.

         Proceeds from borrowings, net of financing costs, of $88,679,000
was from the borrowings under the senior secured credit facility in January
and April 2001 and the issuance of the 10.75% Unsecured Convertible PIK
Notes due 2011 in April 2001.


                                    34

<PAGE>

Results Of Operations

         The first phase of the Holdco recapitalization was completed on
December 28, 2001. As a result of the completion of the first phase of the
Holdco recapitalization, CoreComm Limited's only material asset is its
ownership of approximately 13% of the outstanding capital stock of CoreComm
Holdco. The operating results of CoreComm Limited discussed herein include
CoreComm Holdco for all periods prior to its deconsolidation. After
December 28, 2001, CoreComm Limited accounts for all of CoreComm Holdco's
operations using the equity method. CoreComm Limited does not have any
significant operations of its own.

         CoreComm Limited's original business plan included construction of
facilities-based network in numerous markets and expansion through
acquisitions. CoreComm Limited commenced providing telephone service on a
resale basis while its network construction was in process. CoreComm
Limited also incurred significant advertising and marketing costs in order
to create name recognition and significant other operating and
administrative costs used in establishing the business. All of these
activities required cash expenditures which is reflected in the
approximately $1.1 billion deficit at December 31, 2001, CoreComm Limited's
history of operating and net losses, cash used in operating activities of
$216 million from April 1, 1998 (date operations commenced) to December 31,
2000 and cash used for purchases of fixed assets of $88 million from April
1, 1998 (date operations commenced) to December 31, 2000.

         In July 2001, CoreComm Limited finalized the streamlining of its
operating structure to focus on CoreComm Holdco's two most successful and
promising lines of business. The first is integrated communications
products and other high bandwidth/data/web-oriented services for the
business market and the second is bundled local telephony and Internet
products efficiently sold, serviced and provisioned via Internet-centric
interfaces to the residential market.

         CoreComm Limited engaged in significant efforts to reduce expenses
in all areas of its business, while maintaining its revenue initiatives.
These plans were implemented through a variety of means, including facility
consolidation, headcount reduction, efficiency improvements, vendor
negotiations and network optimization.

         CoreComm Limited has also engaged in significant efforts to
capitalize on more profitable UNE, UNE-P and enhanced extended loop
provisioning and pricing to reduce existing network costs and capital
expenditures, and enhance gross margins going forward. A large portion of
CoreComm Limited's business and residential local access lines have been
converted to these more profitable services, resulting in improved
operating results on a going forward basis.

         In addition, CoreComm Limited has made significant progress in
improving the operating efficiency of its networks, while also reducing
network costs. The associated cost savings and product enhancements have
come from increased overall efficiency, improved pricing terms, as well as
the elimination of duplicative or unneeded network facilities.

Years Ended December 31, 2001 and 2000

         As a result of the completion of the acquisitions of ATX and
Voyager in September 2000, CoreComm Limited consolidated the results of
operations of these businesses from the dates of acquisition. The results
of these businesses are not included in the 2000 results prior to October
1, 2000.

         The increase in revenues to $293,207,000 from $132,122,000 is due
to acquisitions in 2000, which accounted for $166,737,000 of the increase.
This increase is offset by a decline in revenue attributed to the customer
base associated with the USN assets to $21,340,000 from $28,174,000. The
revenues from the USN customer based peaked in the third quarter of 1999
after CoreComm Limited's acquisition in May 1999 and, as expected, declined
thereafter. USN Communications, Inc. was a CLEC that operated on a resale
basis. The underlying operations, customer relationships and future revenue
streams of the resale CLEC business have

                                    35

<PAGE>

declined since CoreComm Limited's acquisition. CoreComm Holdco has
substantially reduced its resale business to focus on more profitable
services.

         Operating costs include direct cost of sales, network costs and
salaries and related expenses of network personnel. Operating costs
increased to $224,807,000 from $142,323,000 due to acquisitions in 2000,
which amounted to $111,878,000 of the increase. This increase is offset by
a decrease in costs of $29,394,000 in 2001 primarily as a result of the
implementation of CoreComm Limited's modified business plan as described
above.

         Selling, general and administrative expenses decreased to
$97,759,000 from $111,010,000 primarily as a result of the implementation
of CoreComm Limited's modified business plan as described above. These
expenses decreased by $65,699,000 in 2001 after adjusting for the increase
due to acquisitions in 2000, which amounted to $52,448,000.

         Corporate expenses include the costs of CoreComm Limited's
officers and headquarters staff, the costs of operating the headquarters
and costs incurred for strategic planning and evaluation of business
opportunities. Corporate expenses decreased to $8,335,000 from $12,884,000
primarily as a result of the implementation of CoreComm Limited's modified
business plan as described above.

         In accordance with APB Opinion No. 25, "Accounting for Stock
Issued to Employees," in April 2000, CoreComm Limited recorded a non-cash
compensation expense of approximately $29.0 million and a non-cash deferred
expense of approximately $31.3 million due to the issuance of options to
employees in 2000 at an exercise price of $14.55 which was less than the
fair value of Limited's common stock on the date of the grant. From April
2000 to December 31, 2001, the deferred non-cash compensation was charged
to expense, including $21.6 million and $9.7 million in the years ended
December 31, 2001 and 2000, respectively. Also in 2000, non-cash
compensation includes $4.7 million related to option rescissions.

         Other charges in 2001 include reorganization charges of
$37,372,000 and an adjustment to the reserve for notes receivable from
former officers of an acquired business of $2,142,000. The reorganization
charges relate to the Company's announcements in May and July 2001 that it
was taking additional actions to reorganize, re-size and reduce operating
costs and create greater efficiency in various areas of the Company. An
aggregate of $21,386,000 of these costs are for equipment and other assets
that did not and will not require any future cash outlays. The employee
severance and related costs in 2001 are for approximately 630 employees to
be terminated, none of whom were still employed by the Company as of
December 31, 2001. The major actions involved in the 2001 reorganization
included: (1) consolidation of functions such as network operations,
customer service and finance, (2) initiatives to increase gross margins and
(3) agreements with vendors to reduce or eliminate purchase commitments.
The consolidation of functions resulted in employee terminations and the
closing of offices. Employee severance and related costs, lease exit costs
and fixed assets and prepayment write-downs include charges related to
these actions. Initiatives to increase gross margins resulted in
consolidation of network assets and elimination of redundant and less
profitable facilities. Charges for these actions include lease exit costs
and fixed assets and prepayment write-downs. Finally, reductions or
elimination of purchase commitments resulted in agreement termination
charges. All of these actions are expected to be completed by June 30,
2002. Fixed assets and prepayments written-off include $5.3 million related
to vacated offices, $13.4 million for network assets in abandoned markets
and $2.7 million for prepayments in respect of ILEC facilities in abandoned
markets.

         Other charges in 2000 include a reserve of $8,700,000 for notes
receivable from former officers of an acquired business, and reorganization
charges of $4,006,000. The employee severance and related costs in 2000
were for approximately 250 employees to be terminated, none of whom were
still employed by CoreComm Limited as of December 31, 2000.


                                    36
<PAGE>

<TABLE>
<CAPTION>

         The following table summarizes the reorganization charges incurred
and utilized in 2000 and 2001:

                                           Employee                                                  Fixed
                                          Severance            Lease                                Assets
                                         And Related            Exit            Agreement             And
                                            Costs              Costs           Terminations       Prepayments         Total
                                      -------------------------------------------------------------------------------------------
                                                                        (in thousands)
<S>                                      <C>                     <C>                    <C>                <C>       <C>
Charged to expense                       $2,089                  $1,917                 $-                 $-        $4,006
Utilized                                   (775)                 (1,396)                 -                  -        (2,171)
                                      -------------------------------------------------------------------------------------------
Balance, December 31, 2000                 1,314                    521                  -                  -         1,835
Charged to expense                         3,409                  6,928              6,572             21,772        38,681
Adjustments                                 (996)                    73                  -               (386)       (1,309)
Utilized                                  (3,218)                (4,416)            (2,914)           (21,386)      (31,934)
Deconsolidation of CoreComm Holdco          (509)                (3,106)            (3,658)                 -        (7,273)
                                      -------------------------------------------------------------------------------------------
Balance, December 31, 2001                   $-                      $-                 $-                 $-            $-
                                      ===========================================================================================
</TABLE>


         CoreComm Holdco performed a review of the recoverability of its
goodwill and long-lived assets, which indicated that the carrying value of
certain assets would not be recoverable. During 1999 and 2000, acquisitions
were made against a background of increasing consolidation and record
valuations in the telecommunications industry. Asset impairments in 2001
include a write-down of goodwill of $186,160,000 and a write-down of fixed
assets of $14,529,000 in the fourth quarter of 2001 prior to the
deconsolidation as a result of this evaluation. In addition, at March 31,
2001, CoreComm Limited reduced the carrying amount of goodwill related to
the Voyager and MegsINet acquisitions by $167,599,000. In connection with
the reevaluation of its business plan and the decision to sell its non-CLEC
assets and businesses, CoreComm Limited was required to report all
long-lived assets and identifiable intangibles to be disposed of at the
lower of carrying amount or estimated fair value less cost to sell. The
carrying amount of goodwill related to these acquisitions is eliminated
before reducing the carrying amounts of the other assets. The estimated
fair value of these businesses was determined based on information provided
by the investment bank retained for the purpose of conducting this sale.

         At December 31, 2000, CoreComm Limited wrote-off the carrying
amount of intangible assets from certain business combinations, and reduced
the carrying amount of its LMDS licenses. Asset impairments in 2000 include
goodwill of $6,690,000, workforce of $577,000 and customer lists of
$7,517,000. These assets were primarily related to the Company's resale
CLEC business, which was acquired in 1999. The underlying operations,
customer relationships and future revenue streams had deteriorated
significantly since the acquisition. These were indicators that the
carrying amount of the resale-related assets was not recoverable. The
Company estimated that the fair value of these assets was zero due to the
lack of potential buyers, the overall deterioration of the resale CLEC
business environment and because of the negative cash flow of these resale
businesses for the foreseeable future. Also at December 31, 2000, in
connection with the reevaluation of its business plan announced in April
2001, the Company reduced the carrying amount of its LMDS licenses by
$21,136,000 to reflect their estimated fair value. The estimated fair value
was determined based on an analysis of sales of other LMDS licenses.

         Depreciation expense increased to $48,110,000 from $30,746,000
primarily as a result of an increase in fixed assets due to acquisitions in
2000.

         Amortization expense increased to $97,389,000 from $42,420,000 due
to the amortization of goodwill from the acquisitions in 2000.

         Interest income and other, net, decreased to $1,957,000 from
$6,223,000 primarily due to the reduction of interest income resulting from
lower cash balances in 2001.


                                    37

<PAGE>

         Interest expense increased to $48,314,000 from $20,457,000
primarily due to increased borrowings to fund CoreComm Limited's
acquisitions and operations.

         The income tax provision of $98,000 in 2001 and $250,000 in 2000
are for state and local income tax.

         Extraordinary gains in 2001 of $39,498,000 relate to the
completion of the first phase of the Holdco recapitalization, as well as
the successful settlement of various equipment and working capital notes,
capital leases and other liabilities for less than the outstanding balance.

Years Ended December 31, 2000 and 1999

         As a result of the completion of the acquisitions of ATX and
Voyager in September 2000, CoreComm Limited consolidated the results of
operations of these businesses from the dates of acquisition. The results
of these businesses are not included in the 1999 results.

         The increase in revenues to $132,122,000 from $58,151,000 is
primarily due to acquisitions in 2000, which accounted for $59,164,000 of
the increase. The remainder of the increase is primarily due to an increase
in CLEC and ISP revenues from an increase in customers. The revenues from
the USN customer base peaked in the third quarter of 1999 after CoreComm
Limited's acquisition in May 1999 and declined thereafter. Additionally,
prepaid cellular debit card and cellular long distance revenues declined as
a result of CoreComm Limited's termination of these services in the third
quarter of 1999. CoreComm Limited had revenues of $2,379,000 in 1999 from
the provision of these services.

         Operating costs include direct cost of sales, network costs and
salaries and related expenses of network personnel. Operating costs
increased to $142,323,000 from $58,561,000 primarily due to acquisitions in
2000, which accounted for $41,650,000 of the increase. The remainder of the
increase is primarily due to an increase in the fixed component of
operating expenses due to CoreComm Limited's migration to a
facilities-based infrastructure. In 1999, operating costs included
$2,211,000 related to the prepaid cellular debit card and cellular long
distance services.

         Selling, general and administrative expenses increased to
$111,010,000 from $74,185,000 primarily due to acquisitions in 2000, which
accounted for $21,432,000 of the increase. The remainder of the increase is
a result of increased selling and marketing costs and increased customer
service costs.

     Corporate expenses include the costs of CoreComm Limited's officers
and headquarters staff, the costs of operating the headquarters and costs
incurred for strategic planning and evaluation of business opportunities.
Corporate expenses increased to $12,884,000 from $7,996,000 primarily due
to increased strategic planning activities.

         Non-cash compensation in 2000 of $43,440,000 includes $38,652,000
from the grant of options at an exercise price below fair market value, and
$4,788,000 from the rescission of stock option exercises. In accordance
with APB Opinion No. 25, "Accounting for Stock Issued to Employees," in
April 2000, CoreComm Limited recorded a non-cash compensation expense of
approximately $29.0 million and a non-cash deferred expense of
approximately $31.3 million due to the issuance of options to employees in
2000 at an exercise price of $14.55 which was less than the fair value of
Limited's common stock on the date of the grant. From April 2000 to
December 31, 2000, $9.7 million of the deferred non-cash compensation was
charged to expense. In November 2000, CoreComm Limited's Board of Directors
approved the rescission of previously exercised employee stock options.
CoreComm Limited issued notes to employees for the repurchase of the
671,000 shares of common stock for an aggregate of $6,803,000, which
exceeded the fair market value of its common stock on the date of
repurchase. The notes earned interest at a rate of 4.5% and were redeemed
in December 2000. CoreComm Limited recorded non-cash compensation of $4.7
million from these transactions.

         The non-cash compensation charge of $1,056,000 in 1999 was
recorded in accordance with APB Opinion No. 25, related to a change in
employee stock option agreements.

                                    38

<PAGE>


         Other charges of $12,706,000 in 2000 include a reserve of
$8,700,000 for notes receivable, and reorganization charges of $4,006,000.
The reorganization charges relate to CoreComm Limited's announcements in
March and December 2000 of reorganizations of CoreComm Limited's
operations. The charge consisted of employee severance and related costs of
$2,089,000 for approximately 250 employees to be terminated and lease exit
costs of $1,917,000. As of December 31, 2000, $2,171,000 of these
provisions had been used, including $775,000 for employee severance and
related costs and $1,396,000 for lease exit costs. As of December 31, 2000,
none of the employees to be terminated were still employed by CoreComm
Limited.

         Asset impairments in 2000 of $35,920,000 is comprised of
write-offs of intangible assets including goodwill of $6,690,000, workforce
of $577,000 and customer lists of $7,517,000, as well as a reduction in the
carrying amount of the LMDS licenses at December 31, 2000 of $21,136,000 to
reflect their estimated fair value.

         Depreciation expense increased to $30,746,000 from $10,945,000
primarily as a result of an increase in fixed assets.

         Amortization expense increased to $42,420,000 from $8,633,000 due
to the amortization of goodwill from the acquisitions in 2000.

         Interest income and other, net, increased to $6,223,000 from
$5,773,000 primarily due to interest income on CoreComm Limited's cash,
cash equivalents and marketable securities.

         Interest expense increased to $20,457,000 from $5,341,000
primarily due to interest on the 6% Convertible Subordinated Notes issued
in October 1999, the senior secured credit facility beginning in September
2000, the Senior Unsecured Notes due 2003 issued in September 2000 and the
10.75% Senior Unsecured Convertible PIK Notes due 2010 issued in December
2000.

         The income tax provisions of $250,000 in 2000 and $731,000 in 1999
are for state and local income tax.

Recent Accounting Pronouncements

         In August 2001, the Financial Accounting Standards Board, referred
to as FASB, issued Statement of Financial Accounting Standards, referred to
as SFAS, No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," effective for CoreComm Limited on January 1, 2002. This Statement
supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" and other related
accounting guidance. The adoption of this new standard had no significant
effect on the results of operations, financial condition or cash flows of
the company.

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," effective for CoreComm Limited on January 1, 2003.
This Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible fixed assets and the associated
asset retirement costs. CoreComm Limited is in the process of evaluating
the financial statement impact of the adoption of SFAS No. 143.

         In June 2001, the FASB issued SFAS No. 141, "Business
Combinations," and No. 142, "Goodwill and Other Intangible Assets." SFAS
No. 141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. Use of the
pooling-of-interests method is no longer permitted. SFAS No. 141 also
includes guidance on the initial recognition and measurement of goodwill
and other intangible assets acquired in a business combination that is
completed after June 30, 2001. SFAS No. 142 ends the amortization of
goodwill and indefinite-lived intangible assets. Instead, these assets must
be reviewed annually, or more frequently under some conditions, for
impairment in accordance with this statement. This impairment test uses a
fair value approach rather than the undiscounted cash flow approach
previously required by SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." CoreComm
Limited adopted SFAS No. 142 on January 1, 2002. The adoption of this new

                                    39

<PAGE>


standard had no significant effect on the results of operations, financial
condition or cash flows of CoreComm Limited.

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The SEC's rule related to market risk disclosure requires that
CoreComm Limited describe and quantify its potential losses from market
risk sensitive instruments attributable to reasonably possible market
changes. Market risk sensitive instruments include all financial or
commodity instruments and other financial instruments, such as investments
and debt, that are sensitive to future changes in interest rates, currency
exchange rates, commodity prices or other market factors. CoreComm Limited
is not exposed to market risks from changes in foreign currency exchange
rates or commodity prices. CoreComm Limited does not hold derivative
financial instruments nor does CoreComm Limited hold securities for trading
or speculative purposes. Under CoreComm Limited's current policies, it does
not use interest rate derivative instruments to manage its exposure to
interest rate changes.

         The fair market value of long-term fixed interest rate debt is
subject to interest rate risk. Generally the fair market value of fixed
interest rate debt will increase as interest rates fall and decrease as
interest rates rise. In the following table, the fair value of CoreComm
Limited's 6% Convertible Subordinated Notes due 2006 and the Senior
Unsecured Notes due 2003 is based on the fair value of $2.9392 per share
for the shares issued by CoreComm Holdco in exchange for the notes. The
carrying amount of the variable rate senior secured credit facility
approximates the fair value.

<TABLE>
<CAPTION>

                                              Interest Rate Sensitivity
                                               As of December 31, 2001
                                         Principal Amount by Expected Maturity
                                                Average Interest Rate

                                             For the Years Ending December 31,                                     Fair Value
                        ----------------------------------------------------------------------------              -------------
                            2002         2003         2004         2005         2006     Thereafter     Total       12/31/01
                        ------------- ----------- ------------- ------------ ----------- ------------ ----------- -------------

Long-term debt,
  including current
  Portion
<S>                     <C>           <C>        <C>           <C>          <C>         <C>            <C>          <C>

Fixed rate              $        -     $105,679   $        -    $       -    $ 164,750   $       -      $270,429       $6,088
Average interest rate                     6.47%                                   6.00%

</TABLE>

                                                              40

<PAGE>



Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The Financial Statements are included herein commencing on page F-1.

The following is a summary of the unaudited quarterly results of operations
for the years ended December 31, 2001 and 2000.

<TABLE>
<CAPTION>

                                                              2001
                                                       Three Months Ended
                                                       ------------------
                                     March 31         June 30       September 30       December 31
                                     --------         -------       ------------       -----------
                                                (in thousands, except per share data)
                                                             (1)
<S>                                    <C>              <C>            <C>               <C>
Revenues                               $72,937          $73,243        $74,307           $72,720
Operating (loss)                      (240,584)         (80,712)       (41,460)         (249,877)
(Loss) before extraordinary
   item                               (249,661)         (92,096)       (54,161)         (263,170)
Gain on extinguishment of debt               -                -          2,216            37,282
Net (loss)                            (249,661)         (92,096)       (51,945)         (225,888)
Net (loss) per common
  Share - basic and diluted:
(Loss) before extraordinary
   item                                  (3.58)           (1.04)         (0.59)            (1.92)
Gain on extinguishment of debt               -                -            .02              0.27
Net (loss)                               (3.58)           (1.04)         (0.57)            (1.65)
</TABLE>


<TABLE>
<CAPTION>

                                                              2000
                                                       Three Months Ended
                                                       ------------------
                                     March 31       June 30       September 30       December 31
                                     --------       -------       ------------       -----------
                                                (in thousands, except per share data)
                                                           (2)
<S>                                     <C>           <C>            <C>               <C>
Revenues                                $18,959       $19,397        $18,263           $75,503
Operating loss                          (38,026)      (81,079)       (47,826)         (132,396)
Net (loss)                              (39,871)      (83,190)       (50,149)         (140,601)
Net (loss) per common
  Share - basic and diluted               (1.02)        (2.08)         (1.24)            (2.08)
----------------------------------
</TABLE>

(1) We reduced the carrying value of fixed assets, goodwill and other
    intangibles by $368.3 million, of which $200.7 million was recorded in
    the fourth quarter of 2001 and $167.6 million was recorded in the first
    quarter of 2001. We recorded non-cash compensation expense of $21.6
    million, of which $11.9 million was recorded in the fourth quarter of
    2001 and $3.2 million was recorded in each of the first three quarters
    of 2001. We recorded reorganization and other charges of $39.5 million,
    of which $0.1 million was recorded in the first quarter of 2001, $33.4
    million was recorded in the second quarter of 2001, $3.9 million was
    recorded in the third quarter of 2001 and $2.1 million was recorded in
    the fourth quarter of 2001. We also recorded extraordinary gains on the
    extinguishment of debt of $39.5 million, of which $37.3 million was
    recorded in the fourth quarter of 2001 and $2.2 million was recorded in
    the third quarter of 2001.

(2) In September 2000, we acquired ATX and Voyager. We consolidated the
    results of operations of ATX and Voyager from the date of acquisition.
    In addition, we borrowed $91.1 million under the senior secured credit
    facility and issued $108.7 million aggregate principal amount of Senior
    Unsecured Notes due 2003 in September 2000 and issued $16.1 million
    aggregate principal amount of 10.75% Senior Unsecured Convertible PIK
    Notes due 2010 in December 2000.

                                    41

<PAGE>


    Also, in the fourth quarter of 2000, we reduced the carrying amount of
    goodwill and other intangibles by $35.9 million, we recorded non-cash
    compensation expense of $4.8 million from the rescission of option
    exercises and we recorded reorganization and other charges of $12.7
    million.

    We recorded non-cash compensation expense from the grant of options at
    an exercise price below fair market value as follows: $32.2 million in
    the second quarter of 2000, $3.2 million in the third quarter of 2000
    and $3.2 million in the fourth quarter of 2000.

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

Not applicable.


                                    42

<PAGE>


                                  PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The information required by this Item 10 is incorporated by
reference from Limited's definitive proxy statement involving the election
of directors which Limited expects to file, pursuant to Regulation 14A,
within 120 days following the end of its fiscal year.

Item 11.  EXECUTIVE COMPENSATION.

         The information required by this Item 11 is incorporated by
reference from Limited's definitive proxy statement involving the election
of directors which Limited expects to file, pursuant to Regulation 14A,
within 120 days following the end of its fiscal year.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED SECURITY HOLDERS.

         The information required by this Item 12 is incorporated by
reference from Limited's definitive proxy statement involving the election
of directors which Limited expects to file, pursuant to Regulation 14A,
within 120 days following the end of its fiscal year.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information required by this Item 13 is incorporated by
reference from Limited's definitive proxy statement involving the election
of directors which Limited expects to file, pursuant to Regulation 14A,
within 120 days following the end of its fiscal year.


Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

      (a)         (1)      Financial Statements--See list of Financial
                           Statements on page F-1.
                  (2)      Financial Statement Schedules--See list of
                           Financial Statement Schedules on page S-1.
                  (3)      Exhibits--See Exhibit Index on page E-1.

      (b)         Reports on Form 8-K:

During the quarter ended December 31, 2001, the Company filed the following
reports on Form 8-K:

                  (1)      Report dated October 2, 2001, reporting under
                           Item 5, Other Events, CoreComm issued a press
                           release announcing that it received oral
                           confirmation from the Nasdaq staff indicating
                           that the Company was no longer being considered
                           for delisting.
                  (2)      Report dated November 1, 2001, reporting under
                           Item 5, Other Events, CoreComm issued a press
                           release which announced that it has signed
                           binding agreements for transactions that would
                           allow the Company to retire approximately $146
                           million of its 6% Convertible Subordinated
                           Notes.
                  (3)      Report dated November 14, 2001, reporting under
                           Item 5, Other Events, CoreComm Limited announced
                           its operating results for the three months ended
                           September 30, 2001.
                  (4)      Report dated December 18, 2001, reporting under
                           Item 5, Other Events, CoreComm Limited issued a
                           press release announcing a recapitalization in
                           which it has signed binding agreements for
                           transactions that would allow the Company to
                           exchange a total of approximately $600 million
                           of its debt and preferred stock.

                                    43

<PAGE>


                  No financial statements were filed on Form 8-K.

      (c)         Exhibits-the response to Item 14(c) is submitted as a
                  separate section of this report.

      (d)         The CoreComm Holdco, Inc. and subsidiaries consolidated
                  financial statements and schedules are included in Item
                  14(d)--see list of Financial Statements and Financial
                  Statement Schedules on page S-1.

                  Financial Statement Schedules--see list of Financial
                  Statement Schedules on page F-1.

                                    44
<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 under signed thereunto duly authorized.

Dated: April 4, 2002

                                                   CORECOMM LIMITED

                                                   By: /s/ MICHAEL A. PETERSON
                                                   --------------------------
                                                   Michael A. Peterson
                                                   Executive Vice President,
                                                   Chief Operating Officer and
                                                   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 in the capacities and on the date indicated.

<TABLE>
<CAPTION>

          Signature                                              Title                                        Date
          ---------                                              -----                                        ----
<S>                                                 <C>                                                  <C>
/s/ GEORGE S. BLUMENTHAL                             Chairman Emeritus and Director                        April 4, 2002
------------------------
George S. Blumenthal

/s/ BARCLAY KNAPP                                    Chairman of the Board                                 April 4, 2002
---------------------
Barclay Knapp

/s/ THOMAS J. GRAVINA                                President and Chief Executive Officer                 April 4, 2002
---------------------
Thomas J. Gravina

/s/ MICHAEL A. PETERSON                              Executive Vice President, Chief Operating             April 4, 2002
-----------------------
Michael A. Peterson                                  Officer and Chief Financial Officer

/s/ GREGG N. GORELICK                                Senior Vice President -                               April 4, 2002
---------------------
Gregg N. Gorelick                                    Controller and Treasurer

/s/ ALAN J. PATRICOF                                 Director                                              April 4, 2002
--------------------
Alan J. Patricof

/s/ WARREN POTASH                                    Director                                              April 4, 2002
-----------------
Warren Potash
</TABLE>

                                            45
<PAGE>



                               EXHIBIT INDEX
                               -------------

EXHIBITS                     DESCRIPTION
--------                     -----------
2.1      Exchange Agreement, dated as of December 14, 2001, by and among
         CoreComm Holdco, Inc., CoreComm Limited and each of the parties
         set forth under the heading "Security Holders" on the signature
         pages thereto (incorporated by reference to Exhibit 2.1 to
         CoreComm Holdco, Inc.'s registration statement on Form S-1, file
         no. 333-82402)
2.2      Agreement and Plan of Merger by and among CoreComm Limited,
         CoreComm Group Sub I, Inc., and Voyager.net, Inc., dated as of
         March 12, 2000 (incorporated by reference to Exhibit 2.1 to
         CoreComm Limited's registration statement on Form S-4, file no.
         333-44028)
2.3      Amendment No. 1 to Agreement and Plan of Merger by and among
         CoreComm Limited, CoreComm Group Sub I, Inc. and Voyager.net,
         Inc., dated as of August 10, 2000 (incorporated by reference to
         Exhibit 2.2 to CoreComm Limited's registration statement on Form
         S-4, file no. 333-44028)
2.4      Recapitalization Agreement and Plan of Merger by and among ATX
         Telecommunications Services, Inc., Thomas Gravina, Debra
         Buruchian, Michael Karp, The Florence Karp Trust and CoreComm
         Limited, dated as of March 9, 2000 (incorporated by reference to
         Exhibit 2.3 to CoreComm Limited's registration statement on Form
         S-4, file no. 333-44028)
2.5      Amendment No. 1 to Recapitalization Agreement and Plan of Merger
         by and among ATX Telecommunications Services, Inc., Thomas
         Gravina, Debra Buruchian, Michael Karp, The Florence Karp Trust,
         CoreComm Limited, ATX Merger Sub, Inc. and CoreComm Merger Sub,
         Inc., dated as of April 10, 2000 (incorporated by reference to
         Exhibit 2.4 to CoreComm Limited's registration statement on Form
         S-4, file no. 333-44028)
2.6      Amendment No. 2 to Recapitalization Agreement and Plan of Merger
         by and among ATX Telecommunications Services, Inc., Thomas
         Gravina, Debra Buruchian, Michael Karp, The Florence Karp Trust,
         CoreComm Limited, ATX Merger Sub, Inc. and CoreComm Merger Sub,
         Inc., dated as of July 10, 2000 (incorporated by reference to
         Exhibit 2.5 to CoreComm Limited's registration statement on Form
         S-4, file no. 333-44028)
2.7      Amendment No. 3 to Recapitalization Agreement and Plan of Merger
         by and among ATX Telecommunications Services, Inc., Thomas
         Gravina, Debra Buruchian, Michael Karp, The Florence Karp Trust,
         CoreComm Limited, ATX Merger Sub, Inc. and CoreComm Merger Sub,
         Inc., dated as of July 31, 2000 (incorporated by reference to
         Exhibit 2.6 to CoreComm Limited's registration statement on Form
         S-4, file no. 333-44028)
2.8      Agreement and Plan of Merger by and among CoreComm Limited,
         CoreComm Acquisition Sub, Inc., and MegsINet Inc., dated as of
         February 17, 1999 (incorporated by reference to Exhibit 99.1 to
         CoreComm Limited's, a Bermuda corporation and predecessor to
         CoreComm Limited, report on Form 8-K, filed on February 24, 1999)
2.9      First Amendment to Agreement and Plan of Merger by and among
         CoreComm Limited, CoreComm Acquisition Sub, Inc., and MegsINet
         Inc., dated as of May 3, 1999 (incorporated by reference to
         Exhibit 2.1 to CoreComm Limited's, a Bermuda corporation and
         predecessor to CoreComm Limited, registration statement on S-4/A,
         file no. 333-74801)
2.10     Asset Purchase Agreement by and among CoreComm Limited, USN
         Communications, Inc. and several subsidiaries of USN
         Communications, Inc., dated as of February 19, 1999 (incorporated
         by reference to Exhibit 99.3 to CoreComm Limited's, a Bermuda
         corporation and predecessor to CoreComm Limited, report on Form
         8-K, filed on February 24, 1999)
2.11     Stock Exchange Agreement by and among Voyager Holdings, Inc. and
         the stockholders listed on Schedule A thereto, dated as of
         September 23, 1998 (incorporated by reference to Exhibit 2.1 to
         Voyager.net, Inc.'s registration statement on Form S-1, file no.
         333-77917)
2.12     Stock Purchase Agreement by and among Voyager Holdings, Inc. and
         the investors listed on Exhibit A thereto, dated as of September
         23, 1998 (incorporated by reference to Exhibit 2.2 to Voyager.net,
         Inc.'s registration statement on Form S-1, file no. 333-77917)
3.1      Restated Certificate of Incorporation of CoreComm Limited
         (incorporated by reference to Exhibit 4.1 to CoreComm Limited's
         registration statement on Form 8A-12G, file no. 000-31359)


                                    E-1

<PAGE>


3.2      Certificate of Amendment to the Restated Certificate of
         Incorporation of CoreComm Limited filed with the Secretary of
         State of the State of Delaware on April 12, 2001 (incorporated by
         reference to Exhibit 3.1 to CoreComm Limited's Form 8-K, filed
         April 13, 2001)
3.3      Certificate of Designation of CoreComm Limited in respect of the
         Series C Junior Participating Preferred Stock (incorporated by
         reference to Exhibit 4.4 to CoreComm Limited's registration
         statement on Form S-1/A, file no. 333-47984)
3.4      Certificate of Designation of CoreComm Limited in respect of the
         8.5% Senior Convertible Preferred Stock, Series A-1, filed with
         the Secretary of State of the State of Delaware on January 2, 2001
         (incorporated by reference to Exhibit 3.3 to CoreComm Limited's
         annual report filed on Form 10-K for the year ended December 31,
         2000, file no. 000-31359)
3.5      Certificate of Amendment to the Certificate of Designation
         governing the 8.5% Senior Convertible Preferred Stock, Series A-1
         of CoreComm Limited filed with the Secretary of State of the State
         of Delaware on April 12, 2001 (incorporated by reference to
         Exhibit 3.2 to CoreComm Limited's Form 8-K, filed April 13, 2001)
3.6      By-laws of CoreComm Limited (incorporated by reference to Exhibit
         3.2 to CoreComm Limited's registration statement on Form S-1, file
         no. 333-47984)
4.1      Specimen CoreComm Limited common stock certificate (incorporated
         by reference to Exhibit 4.1 to CoreComm Limited's registration
         statement on Form S-1/A, file no. 333-47984)
4.2      Specimen CoreComm Limited 8.5% Senior Convertible Preferred Stock
         certificate (incorporated by reference to Exhibit 3.3 to CoreComm
         Limited's annual report filed on Form 10-K for the year ended
         December 31, 2000, file no. 000-31359)
4.3      Specimen CoreComm Limited Series B Senior Convertible Exchangeable
         Preferred Stock certificate (incorporated by reference to Exhibit
         4.2 to CoreComm Limited's registration statement on Form S-1/A,
         file no. 333-47984)
4.4      Specimen CoreComm Limited Series C Junior Participating Preferred
         Stock certificate (incorporated by reference to Exhibit 4.3 to
         CoreComm Limited's registration statement on Form S-1/A, file no.
         333-47984)
4.5      Registration Rights Agreement by and among CoreComm Limited,
         Michael Karp, Debra Buruchian, Thomas Gravina and The Florence
         Karp Trust, dated as of September 29, 2000 (incorporated by
         reference to Exhibit 4.5 to CoreComm Limited's registration
         statement on Form S-1/A, file no. 333-47984)
4.6      Indenture by and between CoreComm Limited and The Chase Manhattan
         Bank, as Trustee, with respect to the 6% convertible subordinated
         notes due 2006, dated as of October 6, 1999 (incorporated by
         reference to Exhibit 4.3 to CoreComm's Limited's, a Bermuda
         corporation and predecessor to CoreComm Limited, registration
         statement on Form S-3, file no. 333-90113)
4.7      Registration Rights Agreement by and among CoreComm Limited and
         the Initial Purchasers of the 6% convertible subordinated notes
         due 2006, dated October 6, 1999 (incorporated by reference to
         Exhibit 4.4 to CoreComm's Limited's, a Bermuda corporation and
         predecessor to CoreComm Limited, registration statement on Form
         S-3, file no. 333-90113)
4.8      Registration Rights Agreement by and among CoreComm Limited and
         the stockholders listed on Schedule 1 thereto, dated as of
         September 29, 2000 (incorporated by reference to Exhibit 4.8 to
         CoreComm Limited's registration statement on Form S-1/A, file no.
         333-47984)
4.9      Registration Rights Agreement by and between CoreComm Limited and
         Booth American Company, dated as of September 28, 2000
         (incorporated by reference to Exhibit 4.9 to CoreComm Limited's
         annual report filed on Form 10-K for the year ended December 31,
         2000, file no. 000-31359)
4.10     Amendment No. 1, dated as of April 12, 2001, to the Registration
         Rights Agreement by and between CoreComm Limited and Booth
         American Company, dated as of September 28, 2000 (incorporated by
         reference to Exhibit 4.2 to CoreComm Limited's Form 8-K, filed
         April 13, 2001)
4.11     Registration Rights Agreement by and between CoreComm Limited and
         Chase Securities Inc., dated as of December 15, 2000 (incorporated
         by reference to Exhibit 4.10 to CoreComm Limited's annual report
         filed on Form 10-K for the year ended December 31, 2000, file no.
         000-31359)
4.12     Amended and Restated Registration Rights Agreement by and between
         CoreComm Limited and Chase Securities Inc., dated as of December
         15, 2000, as amended and restated as of April 12, 2001
         (incorporated by reference to Exhibit 4.1 to CoreComm Limited's
         Form 8-K, filed April 13, 2001)


                                    E-2

<PAGE>

4.13     Registration Rights Agreement by and between CoreComm Limited and
         NTL Incorporated, dated as of April 12, 2001 (incorporated by
         reference to Exhibit 4.3 to CoreComm Limited's Form 8-K, filed
         April 13, 2001)
4.14     Registration Rights Agreement by and between CoreComm Limited and
         Morgan Stanley Senior Funding Inc., dated as of January 25, 2001
         (incorporated by reference to Exhibit 4.11 to CoreComm Limited's
         annual report filed on Form 10-K for the year ended December 31,
         2000, file no. 000-31359)
4.15     Warrant of CoreComm Limited, dated December 15, 2001, issued to
         Chase Securities Inc. (incorporated by reference to Exhibit 4.12
         to CoreComm Limited's annual report filed on Form 10-K for the
         year ended December 31, 2000, file no. 000-31359)
4.16     Warrant of CoreComm Limited, dated January 25, 2001, issued to
         Morgan Stanley Senior Funding Inc. (incorporated by reference to
         Exhibit 4.13 to CoreComm Limited's annual report filed on Form
         10-K for the year ended December 31, 2000, file no. 000-31359)
4.17     Warrant No. CCL-2A of CoreComm Limited, dated April 12, 2001,
         issued to Morgan Stanley Senior Funding, Inc.
4.18     Warrant No. CCL-3A of CoreComm Limited, dated July 13, 2001,
         issued to America Online, Inc.
4.19     Warrant No. CCL-3B of CoreComm Limited, dated July 13, 2001,
         issued to America Online, Inc.
4.20     Warrant No. CCL-4A of CoreComm Limited, dated July 13, 2001,
         issued to NTL Incorporated
4.21     Warrant of CoreComm Limited, dated as of May 26, 1999, issued to
         USN Communications
4.22     Warrant of CoreComm Limited, dated as of May 26, 1999, issued to
         USN Communications
4.23     Rights Agreement, dated as of September 29, 2000, by and between
         CoreComm Limited and Continental Stock Transfer & Trust Company,
         including form of rights certificate (incorporated by reference to
         Exhibit 4.3 to CoreComm Limited's registration statement on Form
         8A-12G, file no. 000-31359)
4.24     Amendment No. 1, dated as of April 12, 2001, to the Rights
         Agreement by and between CoreComm Limited and Continental Stock
         Transfer & Trust Company, dated as of September 29, 2000
         (incorporated by reference to Exhibit 4.4 to CoreComm Limited's
         Form 8-K, filed April 13, 2001)
4.25     Supplemental Indenture by and between CoreComm Merger Sub, Inc.
         and The Chase Manhattan Bank, as Trustee, with respect to the 6%
         convertible subordinated notes due 2006, dated as of September 29,
         2000 (incorporated by reference to Exhibit 4.10 to CoreComm
         Limited's registration statement on Form S-1/A, file no.
         333-47984)
4.26     Supplemental Indenture by and between CoreComm Limited and The
         Chase Manhattan Bank, as Trustee, with respect to the 6%
         convertible subordinated notes due 2006, dated as of September 29,
         2000 (incorporated by reference to Exhibit 4.11 to CoreComm
         Limited's registration statement on Form S-1/A, file no.
         333-47984)
4.27     Supplemental Indenture by and between CoreComm Limited and HSBC
         Bank USA, as Successor Trustee, with respect to the 6% convertible
         subordinated notes due 2006, dated as of December 17, 2001
         (incorporated by reference to Exhibit 4.12 to CoreComm Limited's
         Post-Effective Amendment No. 2, filed January 3, 2002, to CoreComm
         Limited's registration statement on Form S-1, file no. 333-47984)
9.1      Voting Agreement by and among CoreComm Limited and the
         stockholders listed on Schedule A thereto, dated as of March 12,
         2000 (incorporated by reference to Exhibit 9.1 to CoreComm
         Limited's registration statement on Form S-4, file no. 333-44028)
10.1     Lease Agreement by and between Monument Road Associates and ATX
         Telecommunications Services, Inc., dated as of January 18, 1994
         (incorporated by reference to Exhibit 10.2 to CoreComm Limited's
         registration statement on Form S-4, file no. 333-44028)
10.2     Addendum, dated as of January 25, 1996, to Lease Agreement, dated
         as of January 18, 1994, by and between Monument Road Associates
         and ATX Telecommunications Services, Inc. (incorporated by
         reference to Exhibit 10.3 to CoreComm Limited's registration
         statement on Form S-4, file no. 333-44028)
10.3     Addendum, dated as of January 1, 1998, to Lease Agreement, dated
         as of January 18, 1994, by and between Monument Road Associates
         and ATX Telecommunications Services, Inc. (incorporated by
         reference to Exhibit 10.4 to CoreComm Limited's registration
         statement on Form S-4, file no. 333-44028)
10.4     Addendum, dated as of October 1, 1998, to Lease Agreement, dated
         as of January 18, 1994, by and between Monument Road Associates
         and ATX Telecommunications Services, Inc. (incorporated by


                                    E-3

<PAGE>


         reference to Exhibit 10.5 to CoreComm Limited's registration
         statement on Form S-4, file no. 333-44028)
10.5     Addendum, dated as of November 1, 1999, to Lease Agreement, dated
         as of January 18, 1994, by and between Monument Road Associates
         and ATX Telecommunications Services, Inc. (incorporated by
         reference to Exhibit 10.6 to CoreComm Limited's registration
         statement on Form S-4, file no. 333-44028)
10.6     Lease Agreement by and between Walnut Bridge Associates and ATX
         Telecommunications Services, Inc., dated as of January 2, 1993
         (incorporated by reference to Exhibit 10.7 to CoreComm Limited's
         registration statement on Form S-4, file no. 333-44028)
10.7     Addendum, dated as of July 1, 1995, to Lease Agreement, dated as
         of January 2, 1993, by and between Walnut Bridge Associates and
         ATX Telecommunications Services, Inc. (incorporated by reference
         to Exhibit 10.8 to CoreComm Limited's registration statement on
         Form S-4, file no. 333-44028)
10.8     Addendum, dated as of November 1, 1999, to Lease Agreement, dated
         as of January 2, 1993, by and between Walnut Bridge Associates and
         ATX Telecommunications Services, Inc. (incorporated by reference
         to Exhibit 10.9 to CoreComm Limited's registration statement on
         Form S-4, file no. 333-44028)
10.9     Addendum, dated as of March 1, 2000, to Lease Agreement, dated as
         of January 2, 1993, by and between Walnut Bridge Associates and
         ATX Telecommunications Services, Inc. (incorporated by reference
         to Exhibit 10.10 to CoreComm Limited's registration statement on
         Form S-4, file no. 333-44028)
10.10    Letter of Credit, dated July 30, 1993 (incorporated by reference
         to Exhibit 10.11 to CoreComm Limited's registration statement on
         Form S-4, file no. 333-44028)
10.11    Letter of Credit, dated October 14, 1997 (incorporated by
         reference to Exhibit 10.12 to CoreComm Limited's registration
         statement on Form S-4, file no. 333-44028)
10.12    Letter of Credit, dated October 19, 1999 (incorporated by
         reference to Exhibit 10.13 to CoreComm Limited's registration
         statement on Form S-4, file no. 333-44028)
10.13    Letter of Credit, dated October 30, 1998 (incorporated by
         reference to Exhibit 10.14 to CoreComm Limited's registration
         statement on Form S-4, file no. 333-44028)
10.14    Summary of loan by ATX Telecommunications Services, Inc. to Thomas
         Gravina and Debra Buruchian (incorporated by reference to Exhibit
         10.15 to CoreComm Limited's registration statement on Form S-4,
         file no. 333-44028)
10.15    Summary of indebtedness of ATX Telecommunications Services, Inc.
         to Michael Karp (incorporated by reference to Exhibit 10.16 to
         CoreComm Limited's registration statement on Form S-4, file no.
         333-44028)
10.16    Summary of provision of services to ATX Telecommunications
         Services, Inc. by University City Housing (incorporated by
         reference to Exhibit 10.17 to CoreComm Limited's registration
         statement on Form S-4, file no. 333-44028)
10.17    Form of Tax Disaffiliation Agreement by and between CoreComm
         Incorporated and CoreComm Limited (incorporated by reference to
         Exhibit 10.1 to CoreComm Limited's, a Bermuda corporation and
         predecessor to CoreComm Limited, registration statement on Form
         10-12G/A, file no. 000-24521)
10.18    CoreComm Limited 1998 Stock Option Plan (incorporated by reference
         to Exhibit 10.2 to CoreComm Limited's, a Bermuda corporation and
         predecessor to CoreComm Limited, registration statement on Form
         10-12G/A, file no. 000-24521)
10.19    CoreComm Limited Non-Employee Director Stock Option Plan
         (incorporated by reference to Exhibit 10.3 to CoreComm Limited's,
         a Bermuda corporation and predecessor to CoreComm Limited,
         registration statement on Form 10-12G/A, file no. 000-24521)
10.20    CoreComm Ohio Limited 1999 Stock Option Plan (incorporated by
         reference to Exhibit 10.3 to CoreComm Limited's, a Bermuda
         corporation and predecessor to CoreComm Limited, annual report on
         Form 10-K, filed on March 22, 1999)
10.21    CoreComm Limited 1999 Stock Option Plan (incorporated by reference
         to Exhibit 10.5 to CoreComm Limited's, a Bermuda corporation and
         predecessor to CoreComm Limited, annual report on Form 10-K, filed
         on March 22, 1999)
10.22    Amended and Restated Promissory Note made by Voyager.net, Inc. in
         favor of Horizon Cable I Limited Partnership, dated as of
         September 23, 1998 (incorporated by reference to Exhibit 10.3 to
         Voyager.net,

                                    E-4

<PAGE>

         Inc.'s registration statement on Form S-1, file no. 333-77917)
10.23    Asset Purchase Agreement by and between Voyager Information
         Networks, Inc. and Freeway, Inc. (n/k/a Offline, Inc.), dated as
         of July 27, 1998 (incorporated by reference to Exhibit 10.4 to
         Voyager.net, Inc.'s registration statement on Form S-1, file no.
         333-77917)
10.24    Asset Purchase Agreement by and among Voyager Information
         Networks, Inc., EXEC-PC, Inc. (n/k/a The Mahoney Group), Robert J.
         Mahoney and Tracey Mahoney, dated as of September 23, 1998,
         (incorporated by reference to Exhibit 10.5 to Voyager.net, Inc.'s
         registration statement on Form S-1, file no. 333-77917)
10.25    Asset Purchase Agreement by and among Voyager Information
         Networks, Inc., NetLinks Systems, L.L.C., David Shires,
         Christopher Michaels and Edwin Quinones, made as of September 26,
         1998 (incorporated by reference to Exhibit 10.6 to Voyager.net,
         Inc.'s registration statement on Form S-1/A, file no. 333-77917)
10.26    Reseller Agreement by and between Voyager Information Networks,
         Inc. and Millennium Digital Media Systems, L.L.C., dated as of
         April 13, 1999 (incorporated by reference to Exhibit 10.7 to
         Voyager.net, Inc.'s registration statement on Form S-1/A, file no.
         333-77917)
10.27    Employment Agreement by and between Voyager Information Networks,
         Inc. and Christopher Torto, dated as of February 20, 1998
         (incorporated by reference to Exhibit 10.8 to Voyager.net, Inc.'s
         registration statement on Form S-1/A, file no. 333-77917)
10.28    Employment Agreement by and between Voyager Information Networks,
         Inc. and Michael Williams, dated as of January 15, 1999
         (incorporated by reference to Exhibit 10.9 to Voyager.net, Inc.'s
         registration statement on Form S-1, file no. 333-77917)
10.29    Employment Agreement by and between Voyager Information Networks,
         Inc. and Christopher Michaels, made as of October 2, 1998,
         effective September 30, 1998 (incorporated by reference to Exhibit
         10.10 to Voyager.net, Inc.'s registration statement on Form S-1/A,
         file no. 333-77917)
10.30    Employment Agreement by and between Voyager Information Networks,
         Inc. and David Shires, made as of October 2, 1998, effective
         September 30, 1998 (incorporated by reference to Exhibit 10.11 to
         Voyager.net, Inc.'s registration statement on Form S-1, file no.
         333-77917)
10.31    Employment Agreement by and between Voyager Information Networks,
         Inc. and Osvaldo deFaria, made as of January 11, 1999
         (incorporated by reference to Exhibit 10.12 to Voyager.net, Inc.'s
         registration statement on Form S-1, file no. 333-77917)
10.32    Employment Agreement by and between Voyager Information Networks,
         Inc. and Dennis Stepaniak, dated as of March 18, 1999
         (incorporated by reference to Exhibit 10.13 to Voyager.net, Inc.'s
         registration statement on Form S-1, file no. 333-77917)
10.33    Agreement Regarding Inventions, Non-competition and
         Confidentiality by and between Voyager Information Networks, Inc.
         and Christopher Torto, dated as of February 20, 1998 (incorporated
         by reference to Exhibit 10.14 to Voyager.net, Inc.'s registration
         statement on Form S-1, file no. 333-77917)
10.34    Agreement Regarding Inventions, Non-competition and
         Confidentiality by and between Voyager Information Networks, Inc.
         and Michael Williams, dated as of October 15, 1997 (incorporated
         by reference to Exhibit 10.15 to Voyager.net, Inc.'s registration
         statement on Form S-1, file no. 333-77917)
10.35    Agreement Regarding Inventions, Non-competition and
         Confidentiality by and between Voyager Information Networks, Inc.
         and Osvaldo deFaria, dated as of November 11, 1998 (incorporated
         by reference to Exhibit 10.16 to Voyager.net, Inc.'s registration
         statement on Form S-1, file no. 333-77917)
10.36    Agreement Regarding Inventions, Non-competition and
         Confidentiality by and between Voyager Information Networks, Inc.
         and Dennis Stepaniak, dated as of March 18, 1998 (incorporated by
         reference to Exhibit 10.17 to Voyager.net, Inc.'s registration
         statement on Form S-1, file no. 333-77917)
10.37    Employee Non-Competition Agreement by and between Voyager
         Information Networks, Inc. and Christopher Michaels, dated as of
         October 2, 1998 (incorporated by reference to Exhibit 10.18 to
         Voyager.net, Inc.'s registration statement on Form S-1, file no.
         333-7917)
10.38    Employee Non-Competition Agreement by and between Voyager
         Information Networks, Inc. and David Shires, dated as of October
         2, 1998 (incorporated by reference to Exhibit 10.19 to
         Voyager.net, Inc.'s registration statement on Form S-1, file no.
         333-77917)
10.39    Employee Agreement by and between Voyager Information Networks,
         Inc. and Anthony Paalz, made as of September 15, 1999
         (incorporated by reference to Exhibit 10.34 to Voyager.net, Inc.'s
         quarterly report on Form 10-Q for the quarter ended September 30,
         1999)

                                    E-5

<PAGE>

10.40    Agreement Regarding Inventions, Non-competition and
         Confidentiality by and between Voyager Information Networks, Inc.
         and Anthony Paalz, dated as of September 15, 1999 (incorporated by
         reference to Exhibit 10.35 to Voyager.net, Inc.'s quarterly report
         on Form 10-Q for the quarter ended September 30, 1999)
10.41    Promissory Note made by Osvaldo deFaria, dated January 11, 1999,
         in favor of Voyager.net, Inc. (incorporated by reference to
         Exhibit 10.23 to Voyager.net, Inc.'s registration statement on
         Form S-1/A, file no. 333-77917)
10.42    Promissory Note made by Glenn Friedly, dated January 11, 1999, in
         favor of Voyager.net, Inc. (incorporated by reference to Exhibit
         10.24 to Voyager.net, Inc.'s registration statement on Form S-1/A,
         file no. 333-77917)
10.43    Promissory Note made by Christopher Torto, dated April 13, 1999,
         in favor of Voyager.net, Inc. (incorporated by reference to
         Exhibit 10.25 to Voyager.net, Inc.'s registration statement on
         Form S-1, file no. 333-77917)
10.44    Voyager.net, Inc. Form of Director Indemnification Agreement
         (incorporated by reference to Exhibit 10.26 of Voyager.net, Inc.'s
         registration statement on Form S-1, file no. 333-77917)
10.45    Planet Direct Internet Service Provider Agreement by and between
         Planet Direct Corporation and Voyager Information Networks, Inc.,
         dated as of March 17, 1997 (incorporated by reference to Exhibit
         10.28 to Voyager.net, Inc.'s registration statement on Form S-1/A,
         file no. 333-77917)
10.46    Stock Purchase Agreement by and among Voyager Information
         Networks, Inc., GDR Enterprises, Inc. and each of Ronald M. Rose,
         Luke A. Gain and Stephen L. Dona, dated as of May 7, 1999
         (incorporated by reference to Exhibit 10.30 to Voyager.net, Inc.'s
         registration statement on Form S-1/A, file no. 333-77917)
10.47    Form of Promissory Note made by Christopher Torto, dated June
         1999, in favor of Voyager.net, Inc. (incorporated by reference to
         Exhibit 10.31 to Voyager.net, Inc.'s registration statement on
         Form S-1/A, file no. 333-77917)
10.48    CoreComm Limited 2000 Stock Option Plan (incorporated by reference
         to Annex B to CoreComm Limited's Definitive Proxy Statement on
         Schedule 14A for its Annual Meeting of Shareholders filed on April
         27, 2000)
10.49    CoreComm Limited 2000 Special Stock Option Plan (incorporated by
         reference to Exhibit 4.5 to CoreComm Limited's, a Bermuda
         corporation and predecessor to CoreComm Limited, registration
         statement on Form S-8, file no. 333-33970)
10.50    CoreComm Limited 2000 Special ATX Stock Option Plan (incorporated
         by reference to Exhibit 10.50 to CoreComm Limited's registration
         statement on Form S-1/A, file no. 333-47984)
10.51    CoreComm Limited 2000 Special Voyager Stock Option Plan
         (incorporated by reference to Exhibit 10.51 to CoreComm Limited's
         registration statement on Form S-1/A, file no. 333-47984)
10.52    Credit Agreement, dated as of September 28, 2000, as amended and
         restated on April 11, 2001, among CoreComm Communications, Inc.,
         CoreComm Limited, CoreComm Holdco, Inc., the lenders party thereto
         and The Chase Manhattan Bank, as Administrative Agent and
         Collateral Agent (incorporated by reference to Exhibit 10.1 to
         CoreComm Limited's Form 8-K, filed April 13, 2001)
10.53    First Amendment and Waiver dated as of October 31, 2001 to the
         Credit Agreement, dated as of September 28, 2000, as amended and
         restated on April 11, 2001, among CoreComm Limited, CoreComm
         Communications, Inc., CoreComm Holdco, Inc., the lenders party
         thereto and JP Morgan Chase Bank, as Administrative Agent and
         Collateral Agent (incorporated by reference to Exhibit 10.4 to
         CoreComm Holdco, Inc.'s registration statement on Form S-1, file
         no. 333-82402)
10.54    Second Amendment dated as of December 14, 2001 to the Credit
         Agreement, dated as of September 28, 2000, as amended and restated
         on April 11, 2001, and amended by the First Amendment and Waiver
         dated as of October 31, 2001, among CoreComm Limited, CoreComm
         Communications, Inc., CoreComm Holdco, Inc., the lenders party
         thereto and JP Morgan Chase Bank, as Administrative Agent and
         Collateral Agent (incorporated by reference to Exhibit 10.5 to
         CoreComm Holdco, Inc.'s registration statement on Form S-1, file
         no. 333-82402)
10.55    Third Amendment dated as of March 29, 2002 to the Credit
         Agreement, dated as of September 28, 2000, as amended and restated
         on April 11, 2001, and amended by the First Amendment and Waiver
         dated as of October 31, 2001 and by the Second Amendment dated as
         of December 14, 2001, among

                                    E-6

<PAGE>


         CoreComm Limited, CoreComm Communications, Inc., CoreComm Holdco,
         Inc., the lenders party thereto and JP Morgan Chase Bank, as
         Administrative Agent and Collateral Agent
10.56    Senior Unsecured Note due September 29, 2003 of CoreComm Limited,
         dated September 29, 2000 issued to Debra Buruchian (incorporated
         by reference to Exhibit 10.53 to CoreComm Limited's registration
         statement on Form S-1/A, file no. 333-47984)
10.57    Senior Unsecured Note due September 29, 2003 of CoreComm Limited,
         dated September 29, 2000 issued to Michael Karp (incorporated by
         reference to Exhibit 10.54 to CoreComm Limited's registration
         statement on Form S-1/A, file no. 333-47984)
10.58    Senior Unsecured Note due September 29, 2003 of CoreComm Limited,
         dated September 29, 2000 issued to The Florence Karp Trust
         (incorporated by reference to Exhibit 10.55 to CoreComm Limited's
         registration statement on Form S-1/A, file no. 333-47984)
10.59    Senior Unsecured Note due September 29, 2003 of CoreComm Limited,
         dated September 29, 2000 issued to Thomas Gravina (incorporated by
         reference to Exhibit 10.56 to CoreComm Limited's registration
         statement on Form S-1/A, file no. 333-47984)
10.60    Note Purchase Agreement by and among CoreComm Limited, Michael
         Karp, Debra Buruchian, Thomas Gravina and The Florence Karp Trust,
         dated September 29, 2000 (incorporated by reference to Exhibit
         10.57 to CoreComm Limited's registration statement on Form S-1/A,
         file no. 333-47984)
10.61    10.75% Unsecured Convertible PIK Note due 2011, dated as of April
         12, 2001, issued to NTL Incorporated and made jointly by CoreComm
         Holdco, Inc. and CoreComm Limited (incorporated by reference to
         Exhibit 10.3 to CoreComm Limited's Form 8-K, filed April 13, 2001)
10.62    Exchange Agreement, dated as of December 14, 2001, by and between
         CoreComm Holdco, Inc. and CoreComm Limited (incorporated by
         reference to Exhibit 10.2 to CoreComm Holdco, Inc.'s registration
         statement on Form S-1, file no. 333-82402)
10.63    First Amendment to Exchange Agreement, entered into as of April 5,
         2002, by and between CoreComm Limited and CoreComm Holdco, Inc.
11.1     Statement re computation of per share earnings
12.1     Statement re computation of ratios
20.1     Letter sent to holders of CoreComm Limited common stock disclosing
         CoreComm Limited's reliance on financial viability exception to
         stockholder approval requirements under Nasdaq Marketplace Rule
         4350(i)(2) (incorporated by reference to Exhibit 20.1 to CoreComm
         Holdco, Inc.'s registration statement on Form S-1, file no.
         333-82402)
21.1     Subsidiaries of CoreComm Limited
23.1     Consent of Ernst & Young, LLP

                                    E-7

<PAGE>

                     Form 10-K-- Item 14(a)(1) and (2)

                     CoreComm Limited and Subsidiaries

                 Index to Consolidated Financial Statements
                     and Financial Statement Schedules



The following consolidated financial statements of CoreComm Limited and
Subsidiaries are included in Item 8:
<TABLE>
<CAPTION>

<S>                                                                                                           <C>
Reports of Independent Auditors ............................................................................   F-2
Consolidated Balance Sheets - December 31, 2001 and 2000 ...................................................   F-3
Consolidated Statements of Operations - Years Ended December 31, 2001, 2000 and
    1999 ...................................................................................................   F-4
Consolidated Statement of Shareholders' Equity (Deficiency) - Years Ended
     December 31, 2001, 2000 and 1999 ......................................................................   F-5
Consolidated Statements of Cash Flows - Years Ended December 31, 2001, 2000
     and 1999...............................................................................................   F-6
Notes to Consolidated Financial Statements .................................................................   F-8

The following consolidated financial statement schedule of CoreComm Limited
and Subsidiaries is included in Item 14(d):

Schedule II - Valuation and Qualifying Accounts ............................................................  F-38
</TABLE>

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore
have been omitted.


                                    F-1
<PAGE>



                       Report of Independent Auditors





Shareholders and Board of Directors
CoreComm Limited

We have audited the consolidated balance sheets of CoreComm Limited and
Subsidiaries as of December 31, 2001 and 2000, and the related consolidated
statements of operations, shareholders' equity and cash flows for each of
the three years in the period ended December 31, 2001. Our audits also
included the financial statement schedule listed in the Index at Item
14(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of CoreComm Limited and Subsidiaries at December 31, 2001 and
2000, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.

The accompanying consolidated financial statements have been prepared
assuming that CoreComm Limited will continue as a going concern. As
discussed in Note 1 to the consolidated financial statements, CoreComm
Limited may not be able to meet its obligations as they become due which
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regards to this matter are also described in Note 1.
The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.



                                           /s/ ERNST & YOUNG LLP



New York, New York
March 29, 2002

                                    F-2
<PAGE>



<TABLE>
<CAPTION>

                     CoreComm Limited and Subsidiaries

                        Consolidated Balance Sheets

                                                                                                        December 31,
                                                                                                   2001               2000
                                                                                            ------------------- ------------------

<S>                                                                                        <C>                    <C>
Assets:
Current assets:
   Cash and cash equivalents                                                                $         109,000       $  25,802,000
   Marketable securities                                                                                    -           4,715,000
   Accounts receivable-trade, less allowance for doubtful accounts
     of $11,034,000 (2000)                                                                                  -          34,344,000
   Due from NTL Incorporated                                                                                -          17,206,000
   Other                                                                                               45,000          10,289,000
                                                                                            ------------------- ------------------
Total current assets                                                                                  154,000          92,356,000

Fixed assets, net                                                                                     146,000         179,651,000
Investment in CoreComm Holdco                                                                       3,863,000                   -
Goodwill, net of accumulated amortization of $42,028,000 (2000)                                             -         600,859,000
Intangible assets, net                                                                                      -           6,092,000
Other, net of accumulated amortization of $2,251,000 (2001) and $1,480,000 (2000)                   8,260,000          30,805,000
                                                                                            ------------------- ------------------
                                                                                                  $12,423,000        $909,763,000
                                                                                            =================== ==================
Liabilities and shareholders' equity (deficiency)
Current liabilities:
  Accounts payable                                                                          $         959,000       $  73,133,000
  Accrued expenses                                                                                    419,000          90,243,000
  Due to NTL Incorporated                                                                             209,000                   -
  Due to CoreComm Holdco                                                                           24,112,000                   -
  Current portion of long-term debt and capital lease obligations                                           -          22,921,000
  Deferred revenue                                                                                          -          29,701,000
                                                                                            ------------------- ------------------
Total current liabilities                                                                          25,699,000         215,998,000

Long-term debt, including $256,874,000 (2001) due to CoreComm Holdco                              261,624,000         358,624,000
Notes payable to related parties                                                                            -          16,170,000
Capital lease obligations                                                                                   -           2,693,000
Commitments and contingent liabilities

Shareholders' equity (deficiency):
  Series preferred stock - $.01 par value, authorized 5,000,000 shares:
     Series A, liquidation preference $55,569,000; issued and outstanding 51,000 shares                     -                   -
     Series B, liquidation preference $264,855,000; issued and outstanding 250,000 shares               3,000               3,000
     Series C, none issued or outstanding                                                                   -                   -
  Common stock - $.01 par value; authorized 600,000,000 shares; issued and
      outstanding 141,655,000 (2001) and 72,029,000 (2000) shares                                   1,417,000             720,000
  Additional paid-in capital                                                                      787,434,000         781,357,000
  Deferred non-cash compensation                                                                            -         (21,638,000)
  (Deficit)                                                                                    (1,053,180,000)       (433,590,000)
                                                                                            ------------------- ------------------
                                                                                                 (264,326,000)        326,852,000
  Treasury stock at cost, 1,329,000 shares                                                        (10,574,000)        (10,574,000)
                                                                                            ------------------- ------------------
                                                                                                 (274,900,000)        316,278,000
                                                                                            ------------------- ------------------
See accompanying notes                                                                            $12,423,000        $909,763,000
                                                                                            =================== ==================
</TABLE>
                                    F-3
<PAGE>



<TABLE>
<CAPTION>

                                                     CoreComm Limited and Subsidiaries

                                                   Consolidated Statements of Operations

                                                                       Year Ended December 31,
                                                        2001                 2000                    1999
                                                  ------------------ --------------------- -------------------------

<S>                                                     <C>             <C>                   <C>
Revenues                                                $293,207,000    $   132,122,000       $   58,151,000

Costs and expenses
Operating                                                224,807,000        142,323,000           58,561,000
Selling, general and administrative                       97,759,000        111,010,000           74,185,000
Corporate                                                  8,335,000         12,884,000            7,996,000
Non-cash compensation                                     21,638,000         43,440,000            1,056,000
Other charges                                             39,514,000         12,706,000                   -
Asset impairments                                        368,288,000         35,920,000                   -
Depreciation                                              48,110,000         30,746,000           10,945,000
Amortization                                              97,389,000         42,420,000            8,633,000
                                                  ------------------ --------------------- -------------------------
                                                         905,840,000        431,449,000          161,376,000
                                                  ------------------ --------------------- -------------------------
Operating (loss)                                        (612,633,000)      (299,327,000)        (103,225,000)

Other income (expense)
Interest income and other, net                             1,957,000          6,223,000            5,773,000
Interest expense                                         (48,314,000)       (20,457,000)          (5,341,000)
                                                  ------------------ --------------------- -------------------------
(Loss) before income taxes
   and extraordinary item                               (658,990,000)      (313,561,000)        (102,793,000)
Income tax (provision)                                       (98,000)          (250,000)            (731,000)
                                                  ------------------ --------------------- -------------------------
(Loss) before extraordinary item                        (659,088,000)      (313,811,000)        (103,524,000)
Gain from extinguishment of debt                          39,498,000                -                     -
                                                  ------------------ --------------------- -------------------------
Net (loss)                                             $(619,590,000)     $(313,811,000)       $(103,524,000)
                                                  ================== ===================== =========================

Basic and diluted net (loss) per share:
   (Loss) before extraordinary item                           $(6.77)            $(6.73)              $(3.03)
   Extraordinary item                                           0.39                 -                    -
                                                  ------------------ --------------------- -------------------------
   Net (loss)                                                 $(6.38)            $(6.73)              $(3.03)
                                                  ================== ===================== =========================
</TABLE>



In the year ended December 31, 2001, non-cash compensation expense includes
$3.9 million that would have been included in operating expense, $13.4
million that would have been included in selling, general and
administrative expense and $4.3 million that would have been included in
corporate expense had the compensation been paid in cash. In the year ended
December 31, 2000, non-cash compensation expense includes $5.9 million that
would have been included in operating expense, $25.0 million that would
have been included in selling, general and administrative expense and $12.5
million that would have been included in corporate expense had the
compensation been paid in cash. In the year ended December 31, 1999,
non-cash compensation expense includes $345,000 that would have been
included in operating expense and $711,000 that would have been included in
selling, general and administrative expense had the compensation been paid
in cash.

See accompanying notes.

                                    F-4
<PAGE>


<TABLE>
<CAPTION>

                                           CoreComm Limited and Subsidiaries
                                 Consolidated Statement of Shareholders' Equity (Deficiency)

                                                   Series A          Series B                                Additional
                                               Preferred Stock    Preferred Stock        Common Stock          Paid-In
                                               ----------------- ------------------ -----------------------
                                               Shares     Par    Shares   Par         Shares     Par           Capital
                                               -------- -------- -------- --------- ------------ ---------- --------------

<S>                                                                                <C>          <C>        <C>
Balance, December 31, 1998                                                           29,697,000   $297,000   $185,255,000

Exercise of stock options                                                               804,000      8,000      5,232,000
Exercise of warrants                                                                  4,810,000     48,000     10,857,000
Common stock issued for acquisition                                                   3,245,000     33,000     30,792,000
Stock options issued for acquisition                                                                            4,027,000
Warrants issued for acquisition                                                                                 9,100,000
Non-cash compensation expense                                                                                   1,056,000
Net (loss) for the year ended December  31,
1999
                                               -------- -------- -------- --------- ------------ ---------- --------------
Balance, December 31,  1999                                                          38,556,000    386,000    246,319,000
                                               -------- -------- -------- --------- ------------ ---------- --------------

Exercise of stock options                                                             2,276,000     23,000     18,967,000
Exercise of warrants                                                                     35,000          -        276,000
Common stock issued for acquisitions                                                 31,833,000    318,000    333,049,000
Preferred stock issued for an acquisition                        250,000    $3,000                             67,295,000
Preferred stock issued for cash                 50,000      $ -                                                50,000,000
Accreted dividends on preferred stock                                                                          (4,491,000)
Preferred stock issued for dividends             1,000        -                                                 1,086,000
Deferred non-cash compensation                                                                                  60,290,000
Non-cash compensation  expense
Repurchase of common stock underlying
rescinded Options                                                                      (671,000)    (7,000)     (6,796,000)
Expense from rescission of stock options                                                                         4,788,000
Common stock issued for acquisition and
returned to Treasury, at cost                                                                                   10,574,000
Net (loss) for the year ended December 31,
  2000
                                               -------- -------- -------- --------- ------------ ---------- --------------
Balance, December 31, 2000                      51,000        -  250,000     3,000   72,029,000    720,000     781,357,000
                                               -------- -------- -------- --------- ------------ ---------- --------------

Exercise of stock options                                                                 3,000          -           4,000
Common stock issued for dividend on                                                     542,000      6,000       1,869,000
  preferred stock
Accreted dividends on preferred stock                                                                          (17,808,000)
Common stock issued for interest on senior
   unsecured notes                                                                   68,936,000    689,000       6,351,000
Conversion of 6% convertible subordinated                                               374,000      4,000      10,246,000
  notes
Warrants issued in connection with financing                                                                     5,451,000
Common stock cancelled as payment for notes
   receivable                                                                         (229,000)    (2,000)         (36,000)
Non-cash compensation expense
Net (loss) for the year ended December 31,
  2001
                                               -------- -------- -------- --------- ------------ ---------- --------------
Balance, December 31, 2001                      51,000      $ -  250,000    $3,000  141,655,000  $1,417,000   $787,434,000
                                               ======== ======== ======== ========= ============ ========== ==============
</TABLE>


(Chart Continued)

<TABLE>
<CAPTION>

                                                 Deferred
                                                 Non-Cash                          Treasury Stock
                                                                              -------------------------
                                               Compensation     (Deficit)       Shares       Amount
                                              --------------- --------------- ----------- -------------

<S>                                          <C>              <C>             <C>         <C>
Balance, December 31, 1998                                      $(16,255,000)

Exercise of stock options
Exercise of warrants
Common stock issued for acquisition
Stock options issued for acquisition
Warrants issued for acquisition
Non-cash compensation expense
Net (loss) for the year ended December  31,                     (103,524,000)
1999
                                              --------------- --------------- ----------- -------------
Balance, December 31,  1999                                     (119,779,000)
                                              --------------- --------------- ----------- -------------

Exercise of stock options
Exercise of warrants
Common stock issued for acquisitions
Preferred stock issued for an acquisition
Preferred stock issued for cash
Accreted dividends on preferred stock
Preferred stock issued for dividends
Deferred non-cash compensation                 $(31,338,000)
Non-cash compensation  expense                    9,700,000
Repurchase of common stock underlying
rescinded
  Options
Expense from rescission of stock options
Common stock issued for acquisition and
returned to Treasury, at cost                                                 (1,329,000) $(10,574,000)

Net (loss) for the year ended December 31,                      (313,811,000)
2000
                                              --------------- --------------- ----------- -------------
Balance, December 31, 2000                      (21,638,000)    (433,590,000) (1,329,000) (10,574,000)
                                              --------------- --------------- ----------- -------------

Exercise of stock options
Common stock issued for dividend on
preferred stock
Accreted dividends on preferred stock
Common stock issued for interest on senior
   unsecured notes
Conversion of 6% convertible subordinated
notes
Warrants issued in connection with financing
Common stock cancelled as payment for notes
   receivable
Non-cash compensation expense                    21,638,000
Net (loss) for the year ended December 31,                      (619,590,000)
2001
                                              --------------- --------------- ----------- -------------
Balance, December 31, 2001                       $   -        $(1,053,180,000)(1,329,000) $(10,574,000)
                                              =============== =============== =========== =============
</TABLE>




The Consolidated Statement of Shareholders' Equity (Deficiency) reflects on
a retroactive basis the 3-for-2 stock split by way of a stock dividend paid
on September 2, 1999 and the 3-for-2 stock split by way of a stock dividend
paid on February 2, 2000.

See accompanying notes.

                                    F-5
<PAGE>


<TABLE>
<CAPTION>

                                               CoreComm Limited and Subsidiaries

                                             Consolidated Statements of Cash Flows


                                                                          Year Ended December 31,
                                                              2001                2000                  1999
                                                      ----------------------------------------------------------------
<S>                                                      <C>                 <C>                  <C>
Operating activities
  Net (loss)                                               $(619,590,000)      $(313,811,000)       $(103,524,000)
  Adjustments to reconcile net (loss) to
    net cash (used in) operating activities:
    Depreciation and amortization                            145,499,000          73,166,000           19,578,000
    Gain from extinguishment of debt                         (39,498,000)                -                    -
    Reorganization charges                                    26,932,000                 -                    -
    Non-cash compensation                                     21,638,000          43,440,000            1,056,000
    Amortization of original issue discount                   10,883,000           1,221,000                  -
    Provision for losses on accounts receivable                7,143,000           7,130,000            3,241,000
    Asset impairments                                        368,288,000          35,920,000                  -
    Accretion of interest on marketable securities               (60,000)         (2,440,000)          (3,053,000)
    Other                                                     (1,461,000)          2,043,000              239,000
    Changes in operating assets and liabilities, net
       of effect from deconsolidation and business
       acquisitions:
     Accounts receivable                                      (4,979,000)         (7,383,000)           3,115,000
     Due from affiliates                                      16,191,000         (17,011,000)           1,759,000
     Other current assets                                      3,541,000             (70,000)          (3,488,000)
     Other assets                                             14,738,000          (2,238,000)          (2,783,000)
     Accounts payable                                        (22,862,000)         17,716,000            5,390,000
     Accrued expenses                                          6,297,000          14,097,000            6,114,000
     Deferred revenue                                            (49,000)         17,218,000              (61,000)
                                                      ----------------------------------------------------------------
  Net cash (used in) operating activities                    (67,349,000)       (131,002,000)         (72,417,000)

  Investing activities
  Purchase of fixed assets                                    (5,231,000)        (65,321,000)         (20,575,000)
  Cash of deconsolidated subsidiaries                        (24,966,000)                -                    -
  Acquisitions, net of cash acquired                                 -           (98,613,000)         (47,056,000)
  Purchase of marketable securities                                  -           (38,730,000)        (142,922,000)
  Proceeds from sale of marketable securities                  4,775,000         128,496,000          164,652,000
                                                      ----------------------------------------------------------------
  Net cash (used in) investing activities                    (25,422,000)        (74,168,000)         (45,901,000)
</TABLE>


                                                               F-6

<PAGE>



<TABLE>
<CAPTION>

                                                  CoreComm Limited and Subsidiaries
                                            Consolidated Statements of Cash Flows (continued)



                                                                         Year Ended December 31,
                                                            2001                 2000                  1999
                                                      ------------------ --------------------- ----------------------
<S>                                                  <C>                 <C>                   <C>
Financing activities
Proceeds from borrowings, net of
  financing costs                                           88,679,000        103,328,000           168,545,000
Proceeds from issuance of preferred
  stock                                                              -         50,000,000                     -
Proceeds from exercise of stock options
  and warrants                                                   4,000         12,463,000            16,145,000
Principal payments                                         (13,498,000)        (5,936,000)           (3,469,000)
Principal payments of capital lease
  obligations                                               (8,107,000)       (15,568,000)           (2,379,000)
                                                      ------------------ --------------------- ----------------------
Net cash provided by financing activities                   67,078,000        144,287,000           178,842,000
                                                      ------------------ --------------------- ----------------------
(Decrease) increase in cash and cash
  equivalents                                              (25,693,000)       (60,883,000)           60,524,000
Cash and cash equivalents at beginning
 of period                                                  25,802,000         86,685,000            26,161,000
                                                      ------------------ --------------------- ----------------------
Cash and cash equivalents at end of
  period                                                      $109,000      $  25,802,000         $  86,685,000
                                                      ================== ===================== ======================

Supplemental disclosure of cash flow
   information
Cash paid for interest                                     $23,273,000      $  14,362,000          $  2,032,000
Income taxes paid                                                    -            369,000             1,421,000

Supplemental schedule of non-cash
   investing activities
Liabilities incurred to acquire fixed
  assets                                                    $6,595,000        $35,626,000           $19,621,000
Common stock, preferred stock, stock
  options and warrants issued for acquisitions                       -        400,665,000            43,952,000
Notes issued for acquisition, net
  of discount                                                        -         94,015,000                     -
Supplemental schedule of non-cash
   financing activities
Common stock issued for dividend on    preferred
   stock                                                    $1,875,000                 $-                    $-
Common stock issued for interest on senior
   unsecured notes                                           7,040,000                  -                     -
Conversion of convertible notes                             10,250,000                  -                     -
Warrants issued in connection with financing                 5,451,000                  -                     -

See accompanying notes.
</TABLE>

                                                      F-7
<PAGE>



                     CoreComm Limited and Subsidiaries

                 Notes to Consolidated Financial Statements

1.  Organization and Business

    Organization

    CoreComm Limited, referred to as the Company, formerly a wholly-owned
    subsidiary of Cellular Communications of Puerto Rico, Inc., referred to
    as CCPR, was formed in March 1998 in order to succeed to the businesses
    and assets that were operated by OCOM Corporation. Operations commenced
    in April 1998. In September 1998, CCPR made a cash contribution to the
    Company of $150,000,000 and distributed 100% of the outstanding shares
    of the Company on a one-for-one basis to CCPR's shareholders.

    In September 2000, the Company, a Bermuda corporation, merged with and
    into its newly-formed, wholly-owned Delaware corporate subsidiary. The
    Delaware corporation then merged into ATX Telecommunications Services,
    Inc., referred to as ATX, with ATX being the surviving corporation and
    changing its name to CoreComm Limited. For accounting purposes, the
    Company's predecessor is CoreComm Limited, the Bermuda corporation.

    Business

    The Company's only material asset is its ownership of approximately 13%
    of the outstanding capital stock of CoreComm Holdco, Inc., referred to
    as CoreComm Holdco. The Company owned 100% of the outstanding capital
    stock of CoreComm Holdco until the consummation of transactions as
    part of the Holdco recapitalization in December 2001. CoreComm Holdco
    provides integrated local and toll-related telephone, Internet and
    high-speed data services to business and residential customers located
    principally in Pennsylvania, Ohio, New Jersey, Michigan, Wisconsin,
    Maryland, Illinois, New York, Virginia, Delaware, Massachusetts,
    Washington, D.C. and Indiana.

    Basis of Preparation

    Effective with the completion of the first phase of the Holdco
    recapitalization on December 28, 2001, the Company began accounting for
    its ownership of approximately 13% of the outstanding shares of
    CoreComm Holdco using the equity method. The Company consolidated
    CoreComm Holdco prior to that date. This transition from consolidation
    to equity method accounting is referred to as the deconsolidation in
    the consolidated financial statements. As a result of the
    deconsolidation, the assets and liabilities of CoreComm Holdco are not
    included in the Company's consolidated balance sheet at December 31,
    2001. In addition, the results of operations and cash flows of CoreComm
    Holdco, which represent substantially all of the Company's operations
    and cash flows, will not be included in the Company's consolidated
    statement of operations and statement of cash flows beginning January
    1, 2002. CoreComm Holdco's result of operations and cash flows for the
    period from December 28, 2001 to December 31, 2001 were not material.

    Liquidity

    As a result of the first phase of the Holdco recapitalization, the
    Company, which formerly owned 100% of CoreComm Holdco's outstanding
    capital stock, now owns only approximately 13% of CoreComm Holdco's
    outstanding capital stock. CoreComm Holdco owns 100% of the business
    operations which the Company formerly owned indirectly through CoreComm
    Holdco. However, the Company remains a party liable under the $156.1
    million senior secured credit facility and has no right to withdraw any
    additional money under that facility. In addition, the Company has
    obligations of approximately $600 million in debt and preferred
    securities now held by CoreComm Holdco, the $4.75 million principal
    amount of 6% Convertible Subordinated Notes that are not held by
    CoreComm Holdco and other liabilities. As a result of its condition,
    the Company currently lacks the resources to meet its obligations as
    they become due.

                                    F-8
<PAGE>



    The Company's liquidity problem raises substantial doubt about its
    ability to continue as a going concern. The Company intends to resolve
    its liquidity problem through the completion of the Holdco
    recapitalization exchange offers whereby the Company will exchange the
    shares of CoreComm Holdco common stock it presently owns for its shares
    held by the Company's stockholders and for the Company's 6% Convertible
    Subordinated Notes held by third parties. If the exchange offers are
    successfully completed, the Company will become a subsidiary of
    CoreComm Holdco. There can be no assurance that the exchange offers
    will be completed.

2.  Holdco Recapitalization

    In April 2001, the Company completed a reevaluation of its business
    plan in light of current market conditions and made significant
    modifications to its plans. The Company streamlined its strategy and
    operations to focus on its two most successful and promising lines of
    business. The first is integrated communications products and other
    high bandwidth/data/web-oriented services for the business market. The
    second is bundled local telephony and Internet products efficiently
    sold, serviced and provisioned via Internet-centric interfaces to the
    residential market.

    Also in April 2001, the Company commenced a process to potentially sell
    its assets and businesses that are not directly related to its
    competitive local exchange carrier, referred to as CLEC, business, and
    retained advisors for the purpose of conducting this sale. At the time,
    the Company's CLEC assets and businesses were CoreComm Holdco's local
    and toll-related telephone services that compete with the incumbent
    local exchange carrier, referred to as ILEC.

    In October 2001, the Company and CoreComm Holdco commenced the Holdco
    recapitalization. The Company entered into agreements with numerous
    holders of its 6% Convertible Subordinated Notes Due 2006 whereby the
    holders agreed, among other things, to exchange their notes for the
    amount of the October 1, 2001 interest payment of $4.8 million in the
    aggregate in cash and shares of CoreComm Holdco common stock. The
    exchange was completed in December 2001, including the payment of the
    $4.8 million by the Company.

    On December 28, 2001, CoreComm Holdco completed the first phase of the
    Holdco recapitalization, which was the exchange of shares of its common
    stock for substantial amounts of the outstanding indebtedness of
    CoreComm Holdco, substantial amounts of the outstanding indebtedness of
    the Company and CoreComm Holdco as co-obligors and all of the
    outstanding preferred stock of the Company.


                                    F-9
<PAGE>


The following summarizes the indebtedness and preferred stock that was
exchanged for shares of CoreComm Holdco's common stock in December 2001:
<TABLE>
<CAPTION>

---------------------------------------------- ----------------------- ------------------------ --------------------------------
                                                                                                      Principal Amount or
                 Description                        Date Issued                Issuer              Stated Value when Issued

---------------------------------------------- ----------------------- ------------------------ --------------------------------
<S>                                           <C>                      <C>                      <C>
10.75%  Unsecured Convertible PIK Notes                                CoreComm Holdco and
   due 2011                                    April 2001              the Company              $10.0 million
---------------------------------------------- ----------------------- ------------------------ --------------------------------
10.75% Senior Unsecured Convertible PIK                                CoreComm Holdco and
   Notes Due 2010                              December 2000           the Company              $16.1 million
---------------------------------------------- ----------------------- ------------------------ --------------------------------
Senior Unsecured Notes Due
   September 29, 2003                          September 2000          The Company              $108.7 million
---------------------------------------------- ----------------------- ------------------------ --------------------------------
6% Convertible Subordinated Notes
   Due 2006                                    October 1999            The Company              $175.0 million (1)
---------------------------------------------- ----------------------- ------------------------ --------------------------------
Series A and Series A-1 Preferred Stock        September 2000          The Company              $51.1 million
---------------------------------------------- ----------------------- ------------------------ --------------------------------
Series B Preferred Stock                       September 2000          The Company              $250.0 million
---------------------------------------------- ----------------------- ------------------------ --------------------------------

(1)      $164.75 million was outstanding as of December 2001, of which $160 million was exchanged.
</TABLE>

    As indicated above, CoreComm Holdco exchanged the approximately $10.8
    million principal and accrued interest of 10.75% Unsecured Convertible
    PIK Notes Due 2011 and the approximately $18.0 million principal and
    accrued interest of 10.75% Senior Unsecured Convertible PIK Notes Due
    2010 for shares of its common stock. CoreComm Holdco recorded an
    extraordinary gain of $25.7 million from the extinguishment of these
    notes, and incurred costs of $2.7 million in connection with the Holdco
    recapitalization. This gain is based on the fair value of $2.9392 per
    share for the shares issued by CoreComm Holdco in exchange for the
    notes.

    As a result of the completed exchanges in December 2001, approximately
    87% of CoreComm Holdco's outstanding shares, or 8,685,602 shares, are
    owned by the former holders of indebtedness of the Company and CoreComm
    Holdco and the former holders of preferred stock of the Company, and
    approximately 13% of CoreComm Holdco's outstanding shares, or 1,314,416
    shares, continue to be held by the Company.

    As part of the second phase of the Holdco recapitalization, on February
    8, 2002, CoreComm Holdco launched registered public exchange offers
    whereby it is offering to exchange shares of CoreComm Holdco common
    stock which will have been registered under the Securities Act of 1933,
    as amended, pursuant to a Form S-4 registration statement to all
    holders of the Company's common stock and all remaining holders of the
    Company's 6% Convertible Subordinated Notes due 2006 for their shares
    of the Company's common stock and their notes, respectively. As soon as
    practicable after accepting at least 90% of the oustanding shares of
    the Company's common stock in the exchange offers, CoreComm Holdco
    plans to transfer all such shares to a newly formed, wholly-owned
    subsidiary and to merge this subsidiary into the Company with the
    Company surviving the merger as a wholly-owned subsidiary of CoreComm
    Holdco.


                                   F-10
<PAGE>


    As a result of the first phase of the Holdco recapitalization, CoreComm
    Holdco holds $160 million principal amount of the Company's 6%
    Convertible Subordinated Notes, approximately $105.7 million principal
    amount of the Company's Senior Unsecured Notes and all of the Company's
    outstanding preferred stock. The Company has agreed that it will
    surrender to CoreComm Holdco the number of shares of CoreComm Holdco
    common stock that CoreComm Holdco issues in the exchange offers and the
    merger. (Therefore, if the merger is completed, the Company will own no
    common stock of CoreComm Holdco, and thus will own no material assets,
    since CoreComm Holdco common stock is the Company's only material
    asset.) In exchange for the Company surrendering such shares of
    CoreComm Holdco common stock, the Company and CoreComm Holdco have
    agreed to waivers and amendments to delay the Company from having to
    make any payments with respect to these securities. If such a merger
    does not occur, the Company does not anticipate that it will have the
    financial resources to meet the obligations under its notes and
    preferred stock if CoreComm Holdco requires it to do so.

    Under the exchange offers, those shareholders and noteholders who
    exchange their shares and notes, respectively, will receive shares of
    CoreComm Holdco, and would no longer have securities of the Company.

    The Company may lack the resources to meet the obligations of the
    remaining $4.75 million principal amount of 6% Convertible Subordinated
    Notes that are not held by CoreComm Holdco.

    On December 17, 2001, Nasdaq granted the Company an exception to
    Nasdaq's stockholder approval requirements permitting the Holdco
    recapitalization to proceed without a vote of the Company's
    stockholders because requiring a stockholder vote would seriously
    jeopardize the Company's financial viability. Pursuant to conversations
    with Nasdaq, the Company and CoreComm Holdco intend to transfer the
    Company's current listing to CoreComm Holdco following successful
    completion of the exchange offers. The Company cannot predict whether
    remaining shares of the Company's common stock will continue to trade
    publicly thereafter.

    On February 14, 2002, the Company received written notification from
    Nasdaq indicating that it failed to comply with the minimum market
    value of publicly held shares and minimum bid price requirements for
    continued listing on the Nasdaq National Market. The Company has until
    May 15, 2002 to regain compliance. If the Holdco recapitalization is
    not successfully completed and the Company does not regain compliance
    by this date, Nasdaq stated that it will then provide the Company
    written notification that its common stock will be delisted from the
    Nasdaq National Market.

3.  Significant Accounting Policies

    Use of Estimates

    The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates
    and assumptions that affect the amounts reported in the financial
    statements and accompanying notes. Such estimates and assumptions
    impact, among others, the following: the amount of uncollectible
    accounts receivable, the amount to be paid to terminate certain
    agreements included in reorganization costs, the amount to be paid to
    settle certain toll and interconnection liabilities, the amount to be
    paid as a result of certain sales and use tax audits, potential
    liabilities arising from other sales tax matters and estimates related
    to the value of long-lived assets, goodwill and other intangible
    assets. Actual results could differ from those estimates.

                                   F-11
<PAGE>


    Principles of Consolidation

    The consolidated financial statements include the accounts of the
    Company, its wholly-owned subsidiaries and those entities where the
    Company's interest is greater than 50%. Significant intercompany
    accounts and transactions have been eliminated in consolidation.

    Equity Method Investments

    All investments in which the Company has the ability to exercise
    significant influence over the investee, but less than a controlling
    voting interest, are accounted for using the equity method. Equity
    method investments are recorded at original cost and adjusted
    periodically to recognize the Company's proportionate share of the
    investees' net income or losses after the date of the investment,
    additional contributions made and dividends received. The Company
    evaluates the carrying value of its equity method investments and tests
    for impairment in accordance with APB Opinion No. 18.

    Cash Equivalents

    Cash equivalents are short-term highly liquid investments purchased
    with a maturity of three months or less. Cash equivalents were none and
    approximately $25.5 million at December 31, 2001 and 2000,
    respectively, and consisted of corporate commercial paper.

    Marketable Securities

    Marketable securities are classified as available-for-sale, which are
    carried at fair value. Unrealized holding gains and losses on
    securities, net of tax, are carried as a separate component of
    shareholders' equity. The amortized cost of debt securities is adjusted
    for amortization of premiums and accretion of discounts to maturity.
    Such amortization is included in interest income. Realized gains and
    losses and declines in value judged to be other than temporary will be
    included in interest income. The cost of securities sold or matured is
    based on the specific identification method. Interest on securities is
    included in interest income.

    Marketable securities at December 31, 2000 consisted of corporate
    commercial paper. During the years ended December 31, 2001, 2000 and
    1999, there were no realized gains or losses on sales of securities.

    Allowance for Doubtful Accounts

    The Company records an estimate of uncollectible accounts receivable
    based on the current aging of its receivables and its prior collection
    experience.

    Fixed Assets

    Fixed assets are stated at cost. Depreciation is computed by the
    straight-line method over the estimated useful lives of the assets.
    Estimated useful lives are as follows: operating equipment - 3 to 15
    years, computer hardware and software - 3 or 5 years and other
    equipment - 2 to 7 years, except for leasehold improvements for which
    the estimated useful lives are the term of the lease.

    Long-lived assets are reviewed for impairment whenever events or
    changes in circumstances indicate that the carrying amount may not be
    recoverable. If the sum of the expected future undiscounted cash flows
    is less than the carrying amount of the asset, a loss is recognized for
    the difference between the fair value and carrying value of the asset.

                                   F-12

<PAGE>


    Goodwill

    Goodwill is the excess of the purchase price over the fair value of net
    assets acquired in business combinations accounted for as purchases.
    Goodwill is amortized on a straight-line basis over the period
    benefited, which is estimated to be 5 or 7 years. The Company
    continually evaluates whether events and circumstances warrant revised
    estimates of useful lives or recognition of a charge-off of carrying
    amounts. The Company continually reviews the recoverability of
    goodwill, including enterprise level goodwill. The recoverability of
    goodwill is assessed by determining whether the amortization of the
    goodwill balance over its remaining life can be recovered through
    undiscounted cash flows. The carrying value of goodwill is adjusted to
    the present value of the future operating cash flows if the
    undiscounted cash flow analysis indicates it cannot be recovered over
    its remaining life. The present value of the future operating cash
    flows is calculated using a discount rate that is equivalent to the
    rate that would be required for a similar investment with like risks.
    If a portion or separable group of assets of an acquired company is
    being disposed of, goodwill is allocated to the asset to be disposed of
    based on the relative fair values of those assets at the date of
    acquisition, unless another method of allocation is more appropriate.

    LMDS License Costs

    The costs incurred to acquire the Local Multipoint Distribution
    Service, referred to as LMDS, licenses from the Federal Communications
    Commission, referred to as the FCC, were deferred and will be amortized
    on a straight-line basis over the term of the licenses upon the
    commencement of operations. The Company continually reviews the
    recoverability of the carrying value of LMDS licenses using the same
    methodology that it uses for the evaluation of its other long-lived
    assets.

    Intangible Assets

    Intangible assets include workforce and customer lists. These are
    acquisition-related assets which are stated at their estimated fair
    value as of the date acquired in a business combination accounted for
    as a purchase, less accumulated amortization. Amortization is recorded
    on a straight-line basis over estimated useful lives of 2 and 7 years.
    The Company continually reviews the recoverability of the carrying
    value of the intangible assets using the same methodology that it uses
    for the evaluation of its other long-lived assets.

    Other Assets

    Other assets include deferred financing costs and included notes
    receivable from former officers of an acquired business. Deferred
    financing costs were incurred in connection with the issuance of debt
    and are charged to interest expense over the term of the related debt.
    The notes receivable earned interest at 5% per annum and are due in
    2002 and 2003.

    Net (Loss) Per Share

    The Company reports its basic and diluted net (loss) per share in
    accordance with Financial Accounting Standards Board, referred to as
    FASB, Statement of Financial Accounting Standards, referred to as SFAS,
    No. 128, "Earnings Per Share."

                                   F-13
<PAGE>


    Revenue Recognition and Certain Cost Classifications

    Revenues are recognized at the time the service is rendered to the
    customer or the performance of the service has been completed. Charges
    for services that are billed in advance are deferred and recognized
    when earned.

    Operating costs includes direct costs of sales and network costs.
    Direct cost of sales includes the costs directly incurred primarily
    with other telecommunications carriers in order to render services to
    customers. Network costs include the costs of fiber and access, points
    of presence, repairs and maintenance, rent, utilities and property
    taxes of the telephone, Internet and data network, as well as salaries
    and related expenses of network personnel.

    Advertising Expense

    The Company charges the cost of advertising to expense as incurred.
    Advertising costs for the years ended December 31, 2001, 2000 and 1999,
    were $3,581,000, $8,683,000 and $4,407,000, respectively.

    Stock-Based Compensation

    The Company has adopted the disclosure-only provisions of SFAS No. 123,
    "Accounting for Stock-Based Compensation." The Company applies APB
    Opinion No. 25, "Accounting for Stock Issued to Employees" and related
    interpretations in accounting for its stock option plans.

    Reclassifications

    Certain prior year amounts have been reclassified to conform to the
    current year presentation.

4.  Recent Accounting Pronouncements

    In August 2001, the FASB issued SFAS No. 144, "Accounting for the
    Impairment or Disposal of Long-Lived Assets," effective for the Company
    on January 1, 2002. This Statement supercedes SFAS No. 121, "Accounting
    for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
    Disposed Of" and other related accounting guidance. The adoption of
    this new standard had no significant effect on the results of
    operations, financial condition or cash flows of the company.

    In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
    Retirement Obligations," effective for the Company on January 1, 2003.
    This Statement addresses financial accounting and reporting for
    obligations associated with the retirement of tangible fixed assets and
    the associated asset retirement costs. The Company is in the process of
    evaluating the financial statement impact of the adoption of SFAS No.
    143.

    In June 2001, the FASB issued SFAS No. 141, "Business Combinations,"
    and No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141
    requires that the purchase method of accounting be used for all
    business combinations initiated after June 30, 2001. Use of the
    pooling-of-interests method is no longer permitted. SFAS No. 141 also
    includes guidance on the initial recognition and measurement of
    goodwill and other intangible assets

                                   F-14

<PAGE>

    acquired in a business combination that is completed after June 30,
    2001. SFAS No. 142 ends the amortization of goodwill and
    indefinite-lived intangible assets. Instead, these assets must be
    reviewed annually (or more frequently under certain conditions) for
    impairment in accordance with this statement. This impairment test uses
    a fair value approach rather than the undiscounted cash flow approach
    previously required by SFAS No. 121, "Accounting for the Impairment of
    Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The
    Company adopted SFAS No. 142 on January 1, 2002. The adoption of this
    new standard had no significant effect on the results of operations,
    financial condition or cash flows of the Company.


5.  Revenues
<TABLE>
<CAPTION>

    The following is the revenues from external customers for each of the
    Company's communication services:

                                                         Year Ended December 31,
                                              2001               2000                 1999
                                       -------------------------------------------------------------
<S>                                         <C>                <C>                <C>
       Local Exchange Services              $95,272,000        $62,960,000        $40,463,000
       Toll-related Telephony
         Services                            77,169,000         27,952,000          6,110,000
       Internet Data and
        Web-related                          93,997,000         34,157,000          6,996,000
        Services
       Other (a)                             26,769,000          7,053,000          4,582,000
                                       -------------------------------------------------------------
                                           $293,207,000       $132,122,000        $58,151,000
                                       =============================================================

(a)      Other includes wireless, paging and information services.
</TABLE>

6.  Asset Impairments

    CoreComm Holdco performed a review of the recoverability of its
    goodwill and long-lived assets which indicated that the carrying value
    of certain assets would not be recoverable. CoreComm Holdco recorded a
    write-down of goodwill of $186,160,000 and a write-down of fixed assets
    of $14,529,000 in the fourth quarter of 2001 prior to the
    deconsolidation as result of this analysis and review.

    At March 31, 2001, the Company reduced the carrying amount of goodwill
    related to two of its acquisitions by $167,599,000. In connection with
    the reevaluation of its business plan and the decision to sell its
    non-CLEC assets and business announced in April 2001, the Company was
    required to report all long-lived assets and identifiable intangibles
    to be disposed of at the lower of carrying amount or estimated fair
    value less cost to sell. The carrying amount of goodwill related to
    these acquisitions was eliminated before reducing the carrying amounts
    of other assets. The estimated fair value of these businesses was
    determined based on information provided by the investment bank
    retained for the purpose of conducting this sale.


                                   F-15

<PAGE>

    At December 31, 2000, the Company wrote-off the carrying amount of
    intangible assets from certain business combinations. The aggregate
    write-off of $14,784,000 included goodwill of $6,690,000, workforce of
    $577,000 and customer lists of $7,517,000. These assets were primarily
    related to the Company's resale CLEC business, which was acquired in
    1999. The underlying operations, customer relationships and future
    revenue streams had deteriorated significantly since the acquisition.
    These were indicators that the carrying amount of the resale-related
    assets was not recoverable. The Company estimated that the fair value
    of these assets was zero due to the lack of potential buyers, the
    overall deterioration of the resale CLEC business environment and
    because of the negative cash flow of these resale businesses for the
    foreseeable future. The goodwill had useful lives of 5 and 10 years,
    and the other intangibles had useful lives of 3 and 5 years.

    Also at December 31, 2000, in connection with the reevaluation of its
    business plan announced in April 2001, the Company reduced the carrying
    amount of its LMDS licenses by $21,136,000 to reflect their estimated
    fair value. The estimated fair value was determined based on an
    analysis of sales of other LMDS licenses.

7.  Acquisitions

    On September 29, 2000, the Company completed two significant
    acquisitions. The Company acquired ATX, a CLEC providing integrated
    voice and high-speed data services, including long distance, local,
    wireless and network services through the use of telephone switching
    equipment and other physical facilities in the New York - Virginia
    corridor. ATX was acquired for approximately $39.4 million in cash,
    approximately $108.7 million principal amount of the Company's senior
    unsecured notes due 2003, 12,398,000 shares of the Company's common
    stock and 250,000 shares of the Company's Series B preferred stock with
    a stated value of $250.0 million. The common stock was valued at $178.7
    million, the fair value at the time of the third amendment to the ATX
    merger agreement on July 31, 2000. The senior unsecured notes and the
    Series B preferred stock were valued at $94.0 million and $67.3
    million, respectively, the fair value on the date of issuance. In
    addition, the Company incurred acquisition related costs of
    approximately $9.7 million.

    The Company also acquired Voyager.net, Inc., referred to as Voyager, a
    large independent Internet communications company focused on the
    Midwestern United States. Voyager was acquired for approximately $36.1
    million in cash and 19,435,000 shares of the Company's common stock.
    The common stock was valued at $154.6 million, the fair value at the
    time of the closing of the transaction. In addition, the Company
    incurred acquisition related costs of approximately $9.4 million and
    repaid approximately $24.0 million of Voyager debt including accrued
    interest.

    The assets of ATX and Voyager were contributed to subsidiaries of
    CoreComm Holdco.

    These acquisitions have been accounted for as purchases, and,
    accordingly the net assets and results of operations of the acquired
    businesses have been included in the consolidated financial statements
    from the date of acquisition. The aggregate purchase price of $613.2
    million exceeded the estimated fair value of net tangible assets
    acquired by $585.8 million, which was allocated to goodwill.

    The pro forma unaudited consolidated results of operations for the year
    ended December 31, 2000 assuming consummation of these acquisitions as
    of January 1, 2000 is as follows:


  Total revenue                                              $298,446,000
  Net (loss)                                                 (403,846,000)
  Basic and diluted net (loss) per share                            (6.06)

                                   F-16

<PAGE>

    In May 1999, the Company acquired 100% of the stock of MegsINet Inc., a
    national Internet Service Provider, referred to as ISP, in Chicago for
    a total consideration of $16.8 million in cash and 3,245,000 shares of
    the Company's common stock. In addition, the Company exchanged MegsINet
    stock options for options to purchase 444,000 shares of the Company's
    common stock, repaid $2.0 million of MegsINet debt and incurred
    acquisition related costs of $1.2 million. The common stock portion of
    the consideration was valued at $30.8 million, the fair value on the
    date prior to the announcement. The stock options were valued at $4.0
    million using the Black-Scholes option pricing model.

    Also in May 1999, the Company acquired the wireline assets of USN
    Communications, Inc., which was a CLEC that operated on a resale basis,
    for a cash payment of $26.4 million, warrants to purchase 563,000
    shares of the Company's common stock at a price of $13.33 per share and
    225,000 shares at a price of $22.22 per share, and a potential
    contingent cash payment which was capped at $58.6 million. The
    contingent payment was payable only if the USN assets met or exceeded
    operating performance thresholds. A contingent payment is not expected
    to be required. The warrants were valued at $9.1 million, the fair
    value on the date of issuance. In addition, the Company incurred
    acquisition related costs of $1.0 million.

    The assets of MegsINet and USN were contributed to subsidiaries of
    CoreComm Holdco.

    These acquisitions have been accounted for as purchases, and,
    accordingly, the net assets and results of operations of the acquired
    businesses were included in the consolidated financial statements from
    the dates of acquisition. The aggregate purchase price of $91.3 million
    exceeded the fair value of the net tangible assets acquired by $75.6
    million, which was allocated as follows: $13.3 million to customer
    lists, $1.5 million to workforce and $60.8 million to goodwill.

8.  Equity Method Investments

    Effective with the completion of the first phase of the Holdco
    recapitalization on December 28, 2001, the Company began accounting for
    its ownership of approximately 13% of the outstanding shares of
    CoreComm Holdco using the equity method. The Company consolidated
    CoreComm Holdco prior to that date.

    Following is the condensed financial information of CoreComm Holdco and
    subsidiaries as of December 31, 2001 and 2000 and for the years ended
    December 31, 2001, 2000 and 1999:

<TABLE>
<CAPTION>

                                        Condensed Consolidated Balance Sheets

                                                                           December 31,        December 31,
                                                                               2001                2000
                                                                         ------------------ -------------------
<S>                                                                     <C>                  <C>
Assets
Current assets                                                               $ 61,556,000       $ 86,628,000
Fixed assets, net                                                              86,722,000        179,379,000
Intangible assets, net                                                        165,140,000        606,951,000
Other assets, net                                                              33,865,000         23,648,000
                                                                         ------------------ -------------------
                                                                             $347,283,000       $896,606,000
                                                                         ================== ===================
Liabilities and shareholders' equity
Current liabilities                                                          $145,350,000       $187,312,000
Long-term debt and capital lease obligations                                  172,541,000        109,990,000
Shareholders' equity                                                           29,392,000        599,304,000
                                                                         ------------------ -------------------
                                                                             $347,283,000       $896,606,000
                                                                         ================== ===================
</TABLE>

                                                     F-17
<PAGE>


<TABLE>
<CAPTION>

                                                 Condensed Consolidated Statements of Operations

                                                                  Year Ended             Year Ended            Year Ended
                                                                 December 31,           December 31,          December 31,
                                                                     2001                   2000                  1999
                                                            ----------------------- --------------------- ----------------------

<S>                                                            <C>                     <C>                    <C>
        Revenues                                               $   292,681,000         $   131,526,000        $   57,151,000

        Costs and expenses
        Operating                                                  224,807,000             142,323,000            57,551,000
        Selling, general and administrative                         96,854,000             109,197,000            72,821,000
        Corporate                                                    5,648,000              11,224,000             6,686,000
        Non-cash compensation                                       21,638,000              43,440,000             1,056,000
        Other charges                                               39,553,000              12,706,000                     -
        Asset impairments                                          368,288,000              35,920,000                     -
        Depreciation and amortization                              145,364,000              73,037,000            19,546,000
                                                            ----------------------- --------------------- ----------------------
                                                                   902,152,000             427,847,000           157,660,000
                                                            ----------------------- --------------------- ----------------------
        Operating (loss)                                          (609,471,000)           (296,321,000)         (100,509,000)

        Other income (expense)
        Interest income and other, net                               1,799,000               1,134,000                55,000
        Interest expense                                           (25,647,000)             (5,929,000)           (2,624,000)
                                                            ----------------------- --------------------- ----------------------
        (Loss) before income taxes and extraordinary item         (633,319,000)           (301,116,000)         (103,078,000)
        Income tax provision                                           (94,000)               (125,000)             (102,000)
                                                            ----------------------- --------------------- ----------------------
        (Loss) before extraordinary item                          (633,413,000)           (301,241,000)         (103,180,000)
        Gain from extinguishment of debt                            39,498,000                       -                     -
                                                            ----------------------- --------------------- ----------------------
        Net (loss)                                               $(593,915,000)          $(301,241,000)        $(103,180,000)
                                                            ======================= ===================== ======================
</TABLE>

                                                                   F-18
<PAGE>


9.  Intangible Assets

    Intangible assets consist of:
<TABLE>
<CAPTION>

                                                                                              December 31,
                                                                                        2001                 2000
                                                                                --------------------- --------------------

<S>                                                                                     <C>            <C>
LMDS license costs                                                                         $   -          $    4,230,000
Workforce, net of accumulated amortization of none and $198,000 (2000)                         -                  52,000
Customer lists, net of accumulated amortization of none and $530,000 (2000)                    -               1,810,000
                                                                                --------------------- --------------------
                                                                                           $   -              $6,092,000
                                                                                ===================== ====================
</TABLE>

10. Fixed Assets

    Fixed assets consist of:
<TABLE>
<CAPTION>

                                                                                      December 31,
                                                                                2001                    2000
                                                                      ---------------------------------------------

<S>                                                                         <C>               <C>
  Operating equipment                                                            $   -             $124,335,000
  Computer hardware and software                                                386,000              53,471,000
  Other equipment                                                                10,000              21,192,000
  Construction-in-progress                                                           -               22,097,000
                                                                      ---------------------------------------------
                                                                                396,000             221,095,000
  Accumulated depreciation                                                     (250,000)            (41,444,000)
                                                                      ---------------------------------------------
                                                                               $146,000            $179,651,000
                                                                      =============================================

11. Accrued Expenses

    Accrued expenses consist of:

                                                                                      December 31,
                                                                                2001                    2000
                                                                      ---------------------------------------------

  Payroll and related                                                               $-               $5,032,000
  Professional fees                                                                  -                2,995,000
  Taxes, including income taxes                                                 205,000              14,829,000
  Accrued equipment purchases                                                        -               14,460,000
  Toll and interconnect                                                              -               20,628,000
  Interest                                                                      214,000               4,495,000
  Dividends                                                                          -                3,405,000
  Acquisition costs                                                                  -               16,090,000
  Other                                                                              -                8,309,000
                                                                      ---------------------------------------------
                                                                               $419,000             $90,243,000
                                                                      =============================================
</TABLE>

                                                                        F-19
<PAGE>

12. Long-Term Debt

    Long-term debt consists of:
<TABLE>
<CAPTION>

                                                                                       December 31,
                                                                                 2001                 2000
                                                                         --------------------- --------------------

<S>                                                                            <C>                   <C>
  6% Convertible Subordinated Notes                                            $164,750,000          $175,000,000
  Senior unsecured notes due 2003, less unamortized
     discount of $8,805,000 (2001) and $13,433,000 (2000)                        96,874,000            95,236,000
  Senior secured credit facility                                                        -              91,100,000
  Working capital promissory note, interest at 8.5%                                     -               1,496,000
  Note payable for equipment, interest at 12.75%                                        -               3,331,000
  Other                                                                                 -                 160,000
                                                                         --------------------- --------------------
                                                                               261,624,000            366,323,000
  Less current portion                                                                  -               7,699,000
                                                                         --------------------- --------------------
                                                                               $261,624,000          $358,624,000
                                                                         ===================== ====================
</TABLE>


    At December 31, 2001, all of the senior unsecured notes due 2003 and
    $160,000,000 aggregate principal amount of the 6% Convertible
    Subordinated Notes were held by CoreComm Holdco.

    In October 1999, the Company issued $175,000,000 principal amount of 6%
    Convertible Subordinated Notes due October 1, 2006, referred to as the
    Convertible Notes. Interest on the Convertible Notes is payable
    semiannually on April 1 and October 1 of each year, which commenced on
    April 1, 2000. The Convertible Notes are unsecured obligations
    convertible into common stock prior to maturity at a conversion price
    of $27.39 per share, subject to adjustment. There are approximately
    6,015,000 shares of common stock reserved for issuance upon conversion
    of the Convertible Notes. The Convertible Notes are redeemable, in
    whole or in part, at the option of the Company, at any time on or after
    October 1, 2002, at a redemption price of 103.429% that declines
    annually to 100% in 2006, in each case together with accrued and unpaid
    interest to the redemption date. The Company incurred $7,040,000 in
    fees and expenses in connection with the issuance of the Convertible
    Notes, which is included in deferred financing costs. In April 2001,
    $10,250,000 aggregate principal amount of the 6% Convertible
    Subordinated Notes were converted into approximately 374,000 shares of
    the Company's common stock.

    In September 2000, the Company issued approximately $108,669,000
    aggregate principal amount of senior unsecured notes to the former
    stockholders of ATX. The senior unsecured notes mature on September 29,
    2003. Interest on the notes is at an annual rate of 6.47% payable in
    either cash or common stock, at the Company's election, on October 1
    and April 1 of each year, which commenced on April 1, 2001. In 2001,
    the Company made principal payments of $2,990,000.

    In September 2000, subsidiaries of CoreComm Holdco entered into a
    senior secured credit facility with The Chase Manhattan Bank as lender,
    administrative agent and collateral agent. The Company has
    unconditionally guaranteed payment under the facility. The facility was
    amended and restated in April 2001. The senior secured credit facility
    provides for both a term loan facility and a revolving credit facility.
    The aggregate amount available was amended to $156.1 million of which
    the term loan facility is $106.1 million and the revolving credit
    facility is $50 million. As of April 2001, the entire amount available
    under the senior secured credit facility had been borrowed.

                                   F-20

<PAGE>

    The term loan facility will amortize in quarterly installments of
    principal commencing on December 31, 2003 with a final maturity on
    September 22, 2008. The revolving credit facility shall be
    automatically and permanently reduced in increasing quarterly
    installments of principal commencing on December 31, 2003 with a
    termination date on September 22, 2008. In the event the remaining
    $4.75 million principal amount Convertible Notes held by third parties
    have not been converted or refinanced on or prior to April 1, 2006,
    then the facilities become payable in full on April 1, 2006.

    The interest rate on both the term loan facility and the revolving
    credit facility was initially, at the Company's option, either 3.25%
    per annum plus the base rate, which is the higher of the prime rate or
    the federal funds effective rate plus 0.5% per annum; or the
    reserve-adjusted London Interbank Offered Rate plus 4.25% per annum. In
    April 2001, the interest rate was amended to, at the Company's option,
    either 3.5% per annum plus the base rate, which is the higher of the
    prime rate or the federal funds effective rate plus 0.5% per annum, or
    the reserve-adjusted London Interbank Offered Rate plus 4.5% per annum.
    Interest is payable at least quarterly. The unused portion of the
    facility is subject to a commitment fee equal to 1.25% per annum
    payable quarterly, subject to reduction to 1.00% per annum based upon
    the amount borrowed under the facility. At December 31, 2001 and 2000,
    the effective interest rate on the amounts outstanding was 6.86% and
    10.982%, respectively. The rate at December 31, 2001 is in effect
    through April 12, 2002.

    America Online, Inc., referred to as AOL, is a lender in the amended
    credit facility. In connection with the financing in April 2001, the
    Company entered into a marketing agreement with AOL to market a joint
    CoreComm/AOL bundled package in the Company's market areas. In
    addition, in connection with the financing in April 2001, the Company
    issued warrants to purchase shares of its common stock. The estimated
    value of the warrants plus the excess of the advertising commitment
    over its estimated fair value to the Company aggregating $12,454,000
    was recorded as a debt discount in April 2001.

    In 1998, MegsINet entered into a working capital promissory note and a
    note payable for operating equipment. MegsINet was required to make
    monthly principal and interest payments through January 2002 for the
    working capital note and through September 2001 for the equipment note.
    In 2001, the holders of these notes agreed to accept cash of $400,000
    and $800,000 in full settlement of all amounts due under the working
    capital note and certain capital leases and the equipment note,
    respectively. Extraordinary gains aggregating $4,067,000 were recorded
    as a result of these settlements.

    In May 2001, the Company entered into an agreement with one of its
    equipment vendors whereby $17,166,000 due to the vendor would be paid
    in three payments in January, May and August 2002. In December 2001,
    the Company and the vendor agreed to a modification of this arrangement
    in which the Company paid $2,000,000 and returned certain of the
    equipment in full settlement of the amount due. The Company recorded an
    extraordinary gain of $7,628,000 as a result of this transaction.

    In April 2001, the Company and CoreComm Holdco as co-obligators issued
    to Booth American Company $10 million aggregate principal amount of
    10.75% Unsecured Convertible PIK Notes Due April 2011. Interest on the
    notes was at an annual rate of 10.75% payable semiannually on October
    15 and April 15 of each year, commencing October 15, 2001. The interest
    was payable in kind by the issuance of additional 10.75% Unsecured
    Convertible PIK Notes due April 2011 in such principal amount as shall
    equal the interest payment that was then due. The notes were
    convertible into the Company's common stock prior to maturity at a
    conversion price of $1.00 per share, subject to adjustment. Additional
    notes issued for interest had an initial conversion price equal to 120%
    of the weighted average closing price of the Company's common stock for
    a specified period. All of these outstanding 10.75% Unsecured Convertible
    PIK Notes Due April 2011 were exchanged for shares of CoreComm Holdco
    in December 2001.

                                   F-21

<PAGE>

    CoreComm Holdco exchanged the approximately $10.8 million principal and
    accrued interest of 10.75% Unsecured Convertible PIK Notes Due 2011 and
    the approximately $18.0 million principal and accrued interest of
    10.75% Senior Unsecured Convertible PIK Notes Due 2010 (that were
    included in notes payable to related parties) for shares of its common
    stock. CoreComm Holdco recorded an extraordinary gain of $25,677,000
    from the extinguishment of these notes. Costs of $2,655,000 were
    incurred in connection with the Holdco recapitalization which are
    included as an offset to the extraordinary gain. In addition, CoreComm
    Holdco recorded an extraordinary gain of $4,781,000 related to the
    settlement of other liabilities.

13. Other Charges

    Other charges in 2001 include reorganization charges of $37,372,000 and
    an adjustment to the reserve for notes receivable from former offices
    of Voyager of $2,142,000. The reorganization charges relate to the
    Company's announcements in May and July 2001 that it was taking
    additional actions to reorganize, re-size and reduce operating costs
    and create greater efficiency in various areas of the Company. A total
    of $21,386,000 of these costs are for equipment and other assets that
    did not require any future cash outlays. The employee severance and
    related costs in 2001 were for approximately 630 employees to be
    terminated, none of whom were still employed by the Company as of
    December 31, 2001. The major actions involved in the 2001
    reorganization included: (1) consolidation of functions such as network
    operations, customer service and finance, (2) initiatives to increase
    gross margins and (3) agreements with vendors to reduce or eliminate
    purchase commitments. The consolidation of functions resulted in
    employee terminations and the closing of offices. Employee severance
    and related costs, lease exit costs and fixed assets and prepayment
    write-downs include charges related to these actions. Initiatives to
    increase gross margins resulted in consolidation of network assets and
    elimination of redundant and less profitable facilities. Charges for
    these actions include lease exit costs and fixed assets and prepayment
    write-downs. Finally, reductions or elimination of purchase commitments
    resulted in agreement termination charges. All of these actions are
    expected to be completed by June 30, 2002. Fixed assets and prepayments
    written-off include $5.3 million related to vacated offices, $13.4
    million for network assets in abandoned markets and $2.7 million for
    prepayments in respect of ILEC facilities in abandoned markets.

    Other charges in 2000 include a reserve of $8,700,000 for notes
    receivable from former officers of Voyager, and reorganization charges
    of $4,006,000. The employee severance and related costs in 2000 were
    for approximately 250 employees to be terminated, none of whom were
    still employed by the Company as of December 31, 2000.

    The following table summarizes the reorganization charges incurred and
    utilized in 2000 and 2001:

<TABLE>
<CAPTION>
                                              Employee                                               Fixed
                                             Severance           Lease                              Assets
                                            And Related           Exit          Agreement             And
                                               Costs             Costs         Terminations       Prepayments         Total
                                        -----------------------------------------------------------------------------------------
                                                                        (in thousands)

<S>                                        <C>                     <C>                  <C>                <C>      <C>
Charged to expense                         $2,089                  $1,917               $-                 $-        $4,006
Utilized                                     (775)                 (1,396)               -                  -        (2,171)
                                        -----------------------------------------------------------------------------------------
Balance, December 31, 2000                   1,314                    521                -                  -         1,835
Charged to expense                           3,409                  6,928            6,572             21,772        38,681
Adjustments                                   (996)                    73                -               (386)       (1,309)
Utilized                                    (3,218)                (4,416)          (2,914)           (21,386)      (31,934)
Deconsolidation of CoreComm Holdco            (509)                (3,106)          (3,658)                 -        (7,273)
                                        -----------------------------------------------------------------------------------------
Balance, December 31, 2001                     $-                      $-               $-                 $-            $-
                                        =========================================================================================
</TABLE>

                                                                        F-22
<PAGE>

14. Fair Values of Financial Instruments

    The following methods and assumptions were used by the Company in
    estimating its fair value disclosures for financial instruments:

    Cash and cash equivalents: The carrying amounts reported in the
    consolidated balance sheets approximate fair value.

    Long-term debt: The fair value of the Company's convertible notes is
    based on the quoted market price. The carrying amount of the variable
    rate senior secured credit facility approximates the fair value. The
    fair value of the Company's other notes payable are estimated using
    discounted cash flow analyses, based on the Company's current
    incremental borrowing rates for similar types of borrowing
    arrangements. The fair value at December 31, 2001 is based on the fair
    value of $2.9392 per share for the shares issued by CoreComm Holdco in
    exchange for the notes.

    The carrying amounts and fair values of the Company's financial
    instruments are as follows:

<TABLE>
<CAPTION>
                                                          December 31, 2001                 December 31, 2000
                                                  ---------------------------------- ---------------------------------
                                                      Carrying           Fair           Carrying           Fair
                                                       Amount            Value           Amount            Value
                                                  ----------------- ---------------- ---------------- ----------------
                                                                            (in thousands)

<S>                                                           <C>              <C>          <C>             <C>
Cash and cash equivalents                                     $109             $109         $  25,802       $  25,802
Long-term debt:
  Convertible notes                                        164,750           1,427            175,000          55,125
  Working capital promissory note                                -               -              1,496           1,392
  Equipment note                                                 -               -              3,331           2,496
  Senior secured credit facility                                 -               -             91,100          91,100
  Senior unsecured notes due 2003                           96,874            4,661            95,236          95,236
  Notes payable to related parties                               -               -             16,170          15,355
  Other                                                          -               -                160             138
</TABLE>



15. Leases

    CoreComm Holdco has capital leases for certain of its operating
    equipment. Leased property included in operating equipment consisted
    of:

<TABLE>
<CAPTION>

                                                                        December 31,
                                                                2001                    2000
                                                       ----------------------- -----------------------

<S>                                                           <C>          <C>
                Operating equipment                               $   -        $41,859,000
                Accumulated depreciation                              -        14,699,000
                                                       ----------------------- -----------------------
                                                                  $   -        $27,160,000
                                                       ======================= =======================
</TABLE>

    As of December 31, 2001, the Company no longer has any operating
    leases. CoreComm Holdco has leases for office space and equipment which
    extend through 2013. Total rent expense for the years ended December
    31, 2001, 2000 and 1999 under operating leases was $8,791,000,
    $7,764,000 and $5,151,000, respectively.


                                   F-23
<PAGE>

16. Related Party Transactions

    The due to CoreComm Holdco balance at December 31, 2001 includes 6%
    Convertible Subordinated Notes and Senior Unsecured Notes Due 2003
    interest payable of $4,128,000 and preferred stock dividends payable of
    $19,338,000.

    In December 2000, CoreComm Holdco issued $16.1 million aggregate
    principal amount of 10.75% Senior Unsecured Convertible PIK Notes Due
    December 2010, which were a joint obligation of the Company and
    CoreComm Holdco, to officers and directors of the Company and CoreComm
    Holdco. Interest on the notes was at an annual rate of 10.75% payable
    semiannually on January 1 and July 1 of each year, which commenced on
    July 1, 2001. The interest was payable in kind by the issuance of
    additional Senior Unsecured Convertible PIK Notes Due December 2010 in
    such principal amount equal to the interest payment that was then due.
    The notes were convertible into common stock prior to maturity at a
    conversion price of $5.00 per share, subject to adjustment. The
    additional notes issued for interest had an initial conversion price
    equal to 120% of the weighted average closing price of the Company's
    common stock for a specified period. All of the outstanding 10.75%
    Senior Unsecured Convertible PIK Notes Due December 2010 were exchanged
    for shares of CoreComm Holdco common stock in December 2001.

    Some of the officers and directors of the Company are also officers or
    directors of NTL Incorporated, referred to as NTL. In April 2001, the
    Company and CoreComm Holdco as co-obligors issued to NTL $15 million
    aggregate principal amount of 10.75% Unsecured Convertible PIK Notes
    Due April 2011. In addition, in April 2001, the Company issued warrants
    to NTL, and the Company and CoreComm Holdco entered into a network and
    software agreement with NTL. The estimated value of the warrants of
    $397,000 was recorded as a debt discount in April 2001. Pursuant to the
    network and software agreement with NTL, CoreComm Holdco will provide
    U.S. network access for U.K. Internet traffic from NTL's U.K. customers
    for three years, as well as a royalty free license to use certain
    provisioning software and know-how.

    At December 31, 2001, CoreComm Holdco's liability for the 10.75%
    Unsecured Convertible PIK Notes Due April 2011 was $16,174,000.
    Interest on the 10.75% Unsecured Convertible PIK Notes Due April 2011
    is at an annual rate of 10.75% payable semiannually on October 15 and
    April 15 of each year, which commenced on October 15, 2001. The
    interest is payable in kind by the issuance of additional 10.75%
    Unsecured Convertible PIK Notes Due April 2011 in such principal amount
    equal to the interest payment that is then due. Additional notes issued
    for interest will have an initial conversion price equal to 120% of the
    weighted average closing price of the Company's common stock for a
    specified period. The notes are convertible into the Company's common
    stock prior to maturity at a conversion price of $1.00 per share,
    subject to adjustment. However, NTL and the Company and CoreComm Holdco
    have entered into an agreement relating to the conversion feature of
    the notes following the Holdco recapitalization. Through that
    agreement, consistent with the original terms of the notes, the Company
    and CoreComm Holdco have agreed to exercise their right under the notes
    such that, following the successful completion of the exchange offer to
    the holders of the Company's common stock to exchange their shares for
    shares of CoreComm Holdco common stock, the convertibility feature of
    the notes will be altered so that rather than the note being
    convertible into shares of the Company's common stock, the notes will
    become convertible into shares of CoreComm Holdco common stock. At that
    time, the conversion price of $1.00 per share will be equitably
    adjusted by applying the exchange ratio in the exchange offer, which
    results in a new conversion price of $116.70 per share of CoreComm
    Holdco common stock. NTL has agreed not to exercise its rights to
    convert into the Company's common stock for six months from February 5,
    2002 (unless that right has previously ceased as a result of the
    completion of the exchange offer and the change in the convertibility
    feature). In the event that the exchange offer is not completed, the
    conversion feature would remain into the Company's common stock. These
    notes are redeemable, in whole or in part, at the Company's option, at
    any time on or after April 12, 2003 at a redemption price of 103.429%
    that declines annually to 100% in April 2007, in each case together
    with accrued and unpaid interest to the redemption date.

                                   F-24

<PAGE>


    NTL provides CoreComm Holdco with management, financial, legal and
    technical services, access to office space and equipment and use of
    supplies. Amounts charged to CoreComm Holdco by NTL consist of salaries
    and direct costs allocated to the Company where identifiable, and a
    percentage of the portion of NTL's corporate overhead which cannot be
    specifically allocated to NTL. Effective January 1, 2001, the
    percentage used to allocate corporate overhead was reduced. It is not
    practicable to determine the amounts of these expenses that would have
    been incurred had CoreComm Holdco operated as an unaffiliated entity.
    In the opinion of management, this allocation method is reasonable. For
    the years ended December 31, 2001, 2000 and 1999, NTL charged the
    Company $446,000, $1,186,000 and $2,330,000, respectively, which is
    included in corporate expenses.

    CoreComm Holdco provided NTL with access to office space and equipment
    and the use of supplies until August 2001. In the fourth quarter of
    1999, CoreComm Holdco began charging NTL a percentage of the Company's
    office rent and supplies expense. It is not practicable to determine
    the amounts of these expenses that would have been incurred had
    CoreComm Holdco operated as an unaffiliated entity. In the opinion of
    management, this allocation method is reasonable. In 2001, 2000 and
    1999, CoreComm Holdco charged NTL $121,000, $267,000 and $62,000,
    respectively, which reduced corporate expenses.

    CoreComm Holdco provides billing and software development services to
    subsidiaries of NTL. General and administrative expenses were reduced
    by $1,883,000, $1,400,000 and $800,000 for the years ended December 31,
    2001, 2000 and 1999, respectively, as a result of these charges.

    In 2001, CoreComm Holdco and NTL entered into a license agreement
    whereby NTL was granted an exclusive, irrevocable, perpetual license to
    certain billing software developed by CoreComm Holdco for telephony
    rating, digital television events rating, fraud management and other
    tasks. The sales price was cash of $9.8 million for the development
    costs expended by CoreComm Holdco plus a fixed amount of $3.0 million
    representing the one-time perpetual license fee. The billing software
    was being used by NTL at the time of this agreement, and was being
    maintained and modified by CoreComm Holdco under an ongoing software
    maintenance and development outsourcing arrangement between the
    companies. CoreComm Holdco recorded the aggregate $12.8 million as
    deferred revenue, of which $2.5 million was recognized in 2001.

    In March 2000, CoreComm Holdco and NTL announced that they had entered
    into an agreement to link their networks in order to create an
    international Internet backbone that commenced operations in February
    2001. The Company recognized revenue of $327,000 for the network usage
    in the year ended December 31, 2001.

    CoreComm Holdco leases office space from entities controlled by an
    individual who owns 32% of the outstanding CoreComm Holdco shares. Rent
    expense for these leases for the year ended December 31, 2001 was
    approximately $1.6 million.

                                   F-25
<PAGE>


17. Net Loss Per Common Share

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

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                  2001               2000                1999
                                                            ----------------------------------------------------------
<S>                                                          <C>               <C>                <C>
Numerator:
(Loss) before extraordinary item                               $(659,088,000)    $(313,811,000)     $(103,524,000)
Preferred stock dividend                                         (17,808,000)       (4,491,000)                 -
Preferred stock accretion to redemption value                     (4,579,000)       (1,099,000)                 -
                                                            ----------------------------------------------------------
(Loss) available to common shareholders before
   extraordinary item                                           (681,475,000)     (319,401,000)      (103,524,000)
Extraordinary item                                                39,498,000                -                   -
                                                            ----------------------------------------------------------
Net (loss) available to common shareholders                    $(641,977,000)    $(319,401,000)     $(103,524,000)
                                                            ----------------------------------------------------------

Denominator for basic net loss per common share                  100,669,000        47,480,000         34,189,000
Effect of dilutive securities                                              -                 -                  -
                                                            ----------------------------------------------------------
Denominator for diluted net loss per common share                100,669,000        47,480,000         34,189,000
                                                            ----------------------------------------------------------

Basic and diluted net loss per common share:
(Loss) before extraordinary item                                      $(6.77)           $(6.73)            $(3.03)
Extraordinary item                                                      0.39                 -                  -
                                                            ----------------------------------------------------------
Net (loss) per common share                                           $(6.38)           $(6.73)            $(3.03)
                                                            ==========================================================
</TABLE>

    The shares issuable upon the exercise of stock options and warrants and
    upon the conversion of convertible securities are excluded from the
    calculation of net loss per common share as their effect would be
    antidilutive. At December 31, 2001, 2000 and 1999, the Company had 94.3
    million, 41.7 million and 18.0 million shares, respectively, issuable
    upon the exercise of stock options and warrants and the conversion of
    convertible securities.

18. 401(k) Plan

    CoreComm Holdco sponsors a 401(k) Plan in which all full-time employees
    who have completed 90 days of employment and are 21 years of age may
    participate. CoreComm Holdco's matching contribution is determined
    annually by the Board of Directors. Participants may make salary
    deferral contributions of 1% to 15% of their compensation not to exceed
    the maximum allowed by law. The expense for the years ended December
    31, 2001, 2000 and 1999 was $380,000, $486,000 and $350,000,
    respectively.

19. Shareholders' Equity

    Stock Splits

    In August 1999, the Company declared a 3-for-2 stock split by way of a
    stock dividend, which was paid on September 2, 1999. In January 2000,
    the Company declared a 3-for-2 stock split by way of a stock dividend,
    which was paid on February 2, 2000. The consolidated financial
    statements and the notes thereto give retroactive effect to the stock
    splits.

                                   F-26

<PAGE>

    Preferred Stock

    In September 2000, the Company issued 50,000 shares of Series A
    preferred stock in exchange for cash of $50 million. The Series A
    preferred stock pays cumulative dividends at 8.5% per annum of the
    liquidation value of $1,000 per share, payable quarterly in arrears
    which commenced on December 31, 2000. At the Company's option,
    dividends may be paid either in cash, shares of common stock or
    additional shares of Series A preferred stock. The 50,000 shares of
    Series A preferred stock originally issued were convertible at any time
    at the option of the holder into shares of common stock at the stated
    liquidation value of $1,000 divided by the conversion price of $14.36.
    In connection with the issuance of 10.75% Unsecured Convertible PIK
    Notes in April 2001, the Company amended the conversion price of the
    Series A preferred stock to $1.75 from $14.36. Effective July 2001, the
    conversion price of the Series A preferred stock was reduced by 5% to
    $1.66 upon the Company's failure to declare and pay dividends on the
    Series A preferred stock for two consecutive periods. The conversion
    price will continue to be reduced by 5% for each succeeding period of
    two dividend periods as to which dividends shall not be declared and
    paid, up to an aggregate reduction of $1.00. Any additional shares of
    Series A preferred stock issued will have an initial conversion price
    equal to 120% of the volume weighted average sale price of the
    Company's common stock for a specified period. On September 29, 2010,
    the Company will be required to redeem any shares of Series A preferred
    stock outstanding for $1,000 per share plus accrued and unpaid
    dividends. At the Company's discretion, the redemption price may be
    paid either in cash or in shares of common stock. The Company may
    redeem the Series A preferred stock at a redemption price of $1,000 per
    share, together with accrued and unpaid dividends, payable either, at
    the Company's option in cash or in shares of common stock, or a
    combination of both, beginning on September 29, 2002 if the 25-day
    volume weighted average sale price of the Company's common stock
    exceeds certain targets. In addition, the Series A preferred stock may
    be redeemed by the Company at any time following September 29, 2005 at
    a redemption price of $1,010 per share, together with accrued and
    unpaid dividends, payable either in cash or in shares of common stock,
    or a combination of both. Except as provided by law, holders of the
    preferred stock are not entitled to vote on matters brought before the
    Company's stockholders.

    In September 2000, the Company issued 250,000 shares of Series B
    preferred stock in connection with the ATX acquisition. The Series B
    preferred stock pays cumulative dividends at an initial annual rate of
    $30 per share, payable quarterly in arrears, when, if and as declared
    by the Board of Directors, which commenced on December 31, 2000. At the
    Company's discretion, dividends may be paid either in cash or in shares
    of common stock. The annual dividend increased to $50 per share on
    September 29, 2001 as a result of Senior Unsecured Notes due 2003
    remaining outstanding on that date. The annual dividend will increase
    to $70 per share on March 29, 2002 if, by that date, any of the senior
    unsecured notes due 2003 remain unpaid. The Series B preferred stock
    has a liquidation preference of $1,000 per share, plus accumulated and
    unpaid dividends. The Series B preferred stock is convertible at any
    time at the option of the holder into shares of common stock at the
    stated liquidation preference of $1,000 divided by the conversion price
    of $32.11. On September 29, 2020, the Company will be required to
    redeem any shares of Series B preferred stock outstanding for $1,000
    per share plus accrued and unpaid dividends. At the Company's
    discretion, the redemption price may be paid either in cash or in
    shares of common stock. Except as provided by law, holders of the
    preferred stock are not entitled to vote on matters brought before the
    Company's stockholders.

    As of December 31, 2001, there were 38,561,000 shares of common stock
    reserved for issuance upon conversion of preferred stock.

    In December 2001, the holders of the Series A and Series B preferred
    stock exchanged all of the outstanding shares of the Company's
    preferred stock for shares of CoreComm Holdco common stock issued by
    CoreComm Holdco.

                                   F-27

<PAGE>

    Non-Cash Compensation

    In June 2001, the Company's Board of Directors approved the repricing
    of certain stock options granted to employees. George Blumenthal, the
    then Chairman of the Board, Barclay Knapp, the then President, and the
    members of the Board of Directors did not participate in the repricing.
    Options to purchase an aggregate of approximately 10.2 million shares
    of the Company's common stock with an average exercise price of $10.70
    per share were repriced to $.25, $.75 or $1.25 per share, depending
    upon the original exercise price. In accordance with APB No. 25 and
    related interpretations, the Company is accounting for the repriced
    options as a variable plan. CoreComm Holdco will recognize non-cash
    compensation expense for the difference between the quoted market price
    of the Company's common stock and the exercise price of the repriced
    options while the options remain outstanding. The Board of Directors
    has taken this action to continue to provide the appropriate
    performance incentives to those affected.

    In April 2000, the Compensation and Option Committee of the Board of
    Directors approved the issuance of options to purchase approximately
    2,747,000 shares of the Company's common stock to various employees at
    an exercise price of $14.55, which was less than the fair market value
    of the Company's common stock on the date of the grant. In accordance
    with APB Opinion No. 25, in April 2000, CoreComm Holdco recorded
    non-cash compensation expense of approximately $29.0 million and a
    non-cash deferred expense of approximately $31.3 million. From April
    2000 to December 31, 2000, $9.7 million of the deferred non-cash
    compensation was charged to expense. In 2001, the remaining $21.6
    million of the deferred non-cash compensation was charged to expense.

    In November 2000, the Board of Directors approved the rescission of
    certain previously exercised employee stock options. The Company issued
    notes to employees for the repurchase of the 671,000 shares of common
    stock for an aggregate of $6,803,000, which exceeded the fair market
    value of the Company's common stock on the date of repurchase. The
    notes earned interest at a rate of 4.5% and were redeemed by the
    Company in December 2000. The Company recorded non-cash compensation of
    $4.7 million from these transactions.

    The non-cash compensation charge of $1.1 million in 1999 was recorded
    in accordance with APB Opinion No. 25, related to a change in employee
    stock option agreements.

    Shareholder Rights Plan

    The Company adopted a shareholder rights plan in September 2000. In
    connection with the shareholder rights plan, the Board of Directors
    declared and paid a dividend of one preferred share purchase right for
    each share of common stock outstanding on October 16, 2000. Each right
    entitles the holder, under certain potential takeover events, to
    purchase from the Company one one-hundredth of a share of Series C
    Junior Participating Preferred Stock, referred to as Series C Preferred
    Stock, at an exercise price of $50.00, subject to adjustment. The
    rights expire in October 2010. There are 1,000,000 shares of Series C
    Preferred Stock authorized for issuance under the plan. No shares of
    Series C Preferred Stock are issued or outstanding.


                                   F-28

<PAGE>

    The Series C Preferred Stock will be entitled to a minimum preferential
    quarterly dividend payment of an amount equal to the greater of $.01
    per share or an aggregate dividend of 100 times the dividend, if any,
    declared per share of common stock. In the event of liquidation, the
    holders of Series C Preferred Stock will be entitled to a minimum
    preferential liquidation payment of $1 per share plus accrued and
    unpaid dividends and will be entitled to an aggregate payment of 100
    times the payment made per share of common stock. Each share of Series
    C Preferred Stock will have 100 votes and will vote together with the
    common stock. In the event of any merger, consolidation or other
    transaction in which shares of common stock are changed or exchanged,
    each share of Series C Preferred Stock will be entitled to receive 100
    times the amount received per share of common stock. The rights are
    protected by customary antidilution provisions.

    Warrants

    In connection with the amendment and restatement of the senior
    unsecured credit facility in April 2001, the Company issued to lenders
    warrants to purchase approximately 10.6 million shares of its common
    stock at an exercise price of $.01 per share that expire in April 2011.
    Warrants to purchase an aggregate of approximately 1.4 million shares
    of common stock issued in December 2000 and January 2001 were canceled
    upon the issuance of these new warrants.

    The Company had the following warrants outstanding as of December 31,
    2001: (1) warrants to purchase an aggregate of 29,000 shares of common
    stock at $13.75 per share issued in 1999 that expire in August 2008,
    (2) warrants to purchase an aggregate of 225,000 shares of common stock
    at $22.22 per share issued in 1999 that expire in May 2004, (3)
    warrants to purchase an aggregate of 563,000 shares of common stock at
    $13.33 per share issued in 1999 that expire in May 2002 and (4)
    warrants to purchase an aggregate of 10,580,000 shares of common stock
    at $0.01 per share issued in 2001 that expire in April 2011. None of
    these warrants were exercised in 2001 or 2000.

    CoreComm Holdco has offered its common stock to the Company's
    stockholders through a registered public exchange offer. If this
    exchange offer and the subsequent merger are consummated, the
    Company's warrants will be exercisable into common shares of CoreComm
    Holdco on an as-converted basis, subject to the exchange ratio in
    the exchange offer.

    Stock Options

    As of December 31, 2001, there were approximately 33,057,000 shares of
    common stock reserved for issuance under the Company stock option
    plans, referred to as the Plans, and there were approximately 8.4
    million shares available for issuance. The Plans provide that incentive
    stock options be granted at the fair market value of the Company's
    common stock on the date of grant, and nonqualified stock options be
    granted at a price determined by the Compensation and Option Committee.
    Options are generally exercisable as to 20% of the shares subject
    thereto on the date of grant and become exercisable as to an additional
    20% of the shares subject thereto on each January 1 thereafter, while
    the optionee remains an employee of the Company. Options will expire
    ten years after the date of the grant.

    In December 2001, the Company's Board of Directors, in connection with
    the Holdco recapitalization, accelerated all outstanding options to
    acquire shares of the Company's common stock so that all are presently
    fully vested and exercisable. The Company recognized $8.7 million of
    deferred non-cash compensation as a result of the acceleration of the
    vesting.


                                   F-29

<PAGE>

    The Company's options are not exercisable for shares of CoreComm
    Holdco's common stock. In the event that CoreComm Holdco is successful
    in consummating the exchange offers, the Company would become a
    subsidiary of CoreComm Holdco. Subsequent to that time, CoreComm Holdco
    and the Company intend to effect a merger between the Company and a
    subsidiary of CoreComm Holdco which would have the effect of converting
    holders of any remaining outstanding shares of the Company's common
    stock not owned by CoreComm Holdco into shares of CoreComm Holdco at an
    exchange ratio identical to that being offered in the exchange offers.
    Between now and that time, if holders of the Company's options exercise
    their options, they would, at the time of a merger, have the same
    rights as other holders of the Company's common stock to have their
    shares of the Company converted into shares of CoreComm Holdco at that
    exchange ratio. CoreComm Holdco may be required to record non-cash
    compensation upon the ultimate resolution of the Company's stock
    options.

    In connection with the distribution of the Company to CCPR's
    shareholders, the Company issued options to purchase approximately
    1,877,000 shares of the Company's common stock to holders of CCPR stock
    options who elected to receive options. In addition, the Company issued
    warrants to purchase 6,153,000 shares of common stock to holders of
    CCPR stock options who elected to receive warrants. These warrants are
    referred to as distribution warrants.

    Pro forma information regarding net loss and net loss per share is
    required by SFAS No. 123, and has been determined as if the Company had
    accounted for its employee warrants and stock options under the fair
    value method of that Statement. The fair value for these warrants and
    options was estimated at the date of grant using the Black-Scholes
    option pricing model with the following weighted-average assumptions
    for 2001, 2000 and 1999: risk-free interest rate of 4.47%, 5.30% and
    6.81%, respectively, dividend yield of 0%, volatility factor of the
    expected market price of the Company's common stock of 1.276, .804 and
    .465, respectively, and a weighted-average expected life of the
    warrants and options of 10 years.

    The Black-Scholes option valuation model was developed for use in
    estimating the fair value of traded options which have no vesting
    restrictions and are fully transferable. In addition, option valuation
    models require the input of highly subjective assumptions including the
    expected stock price volatility. Because the Company's distribution
    warrants and stock options have characteristics significantly different
    from those of traded options and because changes in the subjective
    input assumptions can materially affect the fair value estimate, in
    management's opinion, the existing models do not necessarily provide a
    reliable single measure of the fair value of its distribution warrants
    and stock options.

    For purposes of pro forma disclosures, the estimated fair value of the
    distribution warrants and options is amortized to expense over the
    options' vesting periods. Following is the Company's pro forma
    information:

<TABLE>
<CAPTION>

                                                                               Year Ended December 31,
                                                               2001                  2000                     1999
                                                        -------------------- --------------------- ----------------------------
<S>                                                          <C>                  <C>                <C>
Pro forma net (loss)                                         $(704,596,000)       $(389,127,000)     $(128,795,000)
Pro forma net (loss) per share - basic and                          $(7.22)              $(8.31)            $(3.77)
diluted
</TABLE>


                                                            F-30

<PAGE>

    A summary of the Company's distribution warrants and stock option
    activity and related information for the years ended December 31, 2001,
    2000 and 1999 follows:

<TABLE>
<CAPTION>
                                            2001                           2000                           1999
                                ------------------------------ ------------------------------ -----------------------------
                                  Number of      Weighted -      Number of      Weighted-       Number of    Weighted-Average
                                   Options        Average         Options        Average         Options       Exercise
                                               Exercise Price                 Exercise Price                     Price
                                -------------- --------------- -------------- --------------- -------------- --------------

<S>                             <C>                <C>          <C>              <C>           <C>             <C>
Outstanding - beginning
 of period                        19,349,000        $13.69       10,754,000        $15.37        9,765,000      $  5.51
Granted                           16,822,000          0.65       10,404,000         10.98        7,925,000        19.56
Exercised                              3,000          1.49        1,640,000          7.61        5,606,000         6.27
Forfeited                         13,971,000         12.16          169,000         14.09        1,330,000         6.27
                                                               --------------
                                --------------                                                --------------
Outstanding - end of
 Period                           22,197,000         $4.80       19,349,000        $13.69       10,754,000       $15.37
                                                                                              ==============
                                ==============                 ==============
Exercisable at end of
 Period                           22,197,000         $4.80       10,112,000        $12.51        3,438,000       $10.11
                                ==============                 ==============                 ==============
</TABLE>

    Weighted-average fair value of distribution warrants and options,
    calculated using the Black-Scholes option pricing model, granted during
    2001, 2000 and 1999 is $0.12, $14.04, and $14.28, respectively.

    The following table summarizes the status of the distribution warrants
    and stock options outstanding and exercisable at December 31, 2001:

<TABLE>
<CAPTION>
                                                                                                Warrants and
                             Warrants and Stock Options Outstanding                    Stock Options Exercisable
                      ------------------------------------------------------      -------------------------------------
        Range of           Number of        Weighted-        Weighted-               Number of         Weighted-
        Exercise            Options         Remaining         Average                 Options           Average
         Prices                         Contractual Life  Exercise Price                            Exercise Price
  ---------------------------------------------------------------------------------------------------------------------

<S>        <C>             <C>              <C>                <C>                     <C>              <C>
  $0.02 to $3.03           17,012,000       8.7 years          $   0.632               17,012,000       $   0.632
  $5.86 to $7.94              576,000       6.6 years          $   6.261                  576,000       $   6.261
  $12.96 to $14.55            299,000       8.3 years          $  13.909                  299,000       $  13.909
  $18.78 to $22.33          4,310,000       7.5 years          $  20.491                4,310,000       $  20.491
  ---------------------------------------------------------------------------------------------------------------------
         Total             22,197,000                                                  22,197,000
  =====================================================================================================================
</TABLE>

                                                     F-31
<PAGE>

20. Income Taxes

    The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                         Year Ended December 31,
                                      ---------------------------------------------------------------
                                             2001                 2000                  1999
                                      ------------------- --------------------- ---------------------
<S>                                    <C>                 <C>                   <C>
      Current:
          Federal                          $           -       $           -              $106,000
          State and local                         98,000             250,000               625,000
                                      ------------------- --------------------- ---------------------
      Total current                               98,000             250,000               731,000
                                      ------------------- --------------------- ---------------------

      Deferred:
          Federal                                      -                   -                     -
          State and local                              -                   -                     -
                                      ------------------- --------------------- ---------------------
       Total deferred                                  -                   -                     -
                                      ------------------- --------------------- ---------------------
                                                 $98,000            $250,000              $731,000
                                      =================== ===================== =====================
</TABLE>

    Deferred income taxes reflect the net tax effects of temporary
    differences between the carrying amounts of assets and liabilities for
    financial reporting purposes and the amounts used for income tax
    purposes. As a result of the Holdco recapitalization, the Company's
    only material asset at December 31, 2001 is its investment in CoreComm
    Holdco. The Company had no other deferred tax assets or liabilities at
    December 31, 2001. Significant components of the Company's deferred tax
    assets are as follows:

<TABLE>
<CAPTION>

                                                                                      December 31,
                                                                             2001                    2000
                                                                     ---------------------- ------------------------
<S>                                                                  <C>                    <C>

    Deferred tax assets:
         Investment in subsidiaries                                    $    209,000,000                 $    -
         Depreciation                                                                 -              1,226,000
         Net operating losses                                                         -            109,245,000
         Allowance for doubtful accounts                                              -              4,414,000
         Amortization of goodwill                                                     -              7,405,000
         Accrued expenses                                                             -             35,820,000
         Asset impairments                                                            -              8,546,000
         Other                                                                        -                174,000
                                                                     ---------------------- ------------------------
                                                                            209,000,000            166,830,000
    Valuation allowance for deferred tax assets                            (209,000,000)          (166,830,000)
                                                                     ---------------------- ------------------------
    Net deferred tax assets                                          $                -     $                -
                                                                     ====================== ========================
</TABLE>

    The deferred tax assets have been fully offset by a valuation allowance
    due to the uncertainty of realizing such tax benefit.


                                   F-32
<PAGE>


    Due to the completion of the debt cancellation in first phase of the
    Holdco recapitalization in December 2001, the Company realized for tax
    purposes approximately $265 million of income, most of which is not
    subject to tax as a result of an exception set forth in the Internal
    Revenue Code. To the extent that such amount is excluded from taxable
    income, the Company's tax attributes, consisting of net operating loss,
    referred to as NOL, carryforwards, including NOL carryforwards of
    subsidiaries which were part of the consolidated group, of which the
    Company was parent at the time of income realization, are subject to
    reduction. After reduction, the Company's NOL carryforwards are reduced
    to zero.

    The reconciliation of income taxes computed at U.S. federal statutory
    rates to income tax expense is as follows:

<TABLE>
<CAPTION>
                                                                                    December 31,
                                                            -------------------------------------------------------------
                                                                  2001                2000                  1999
                                                            ------------------ -------------------- ---------------------
<S>                                                          <C>                <C>                    <C>
      Benefit at federal statutory rate (35%)                   $(216,822,000)     $(109,746,000)         $(35,978,000)
      State and local income taxes                                     98,000            250,000               625,000
      Expenses not deductible for tax purposes                    135,311,000         34,429,000             2,160,000
      Foreign income not subject to U.S. tax                                -                  -              (399,000)
      U.S. losses with no benefit                                  81,511,000         75,317,000            34,323,000
                                                            ------------------ -------------------  ------------------
                                                              $        98,000   $        250,000         $     731,000
                                                            ================== ==================== =====================
</TABLE>


21. Commitments and Contingent Liabilities

    Fiberstream, Inc., a wholly-owned subsidiary of the Company, has an
    obligation under an agreement with the City of New York to pay an
    annual franchise fee in the amount of the greater of (a) 5% of gross
    revenue (as defined in the agreement) or (b) $200,000. Estimated
    quarterly payments begin on the earlier of (a) the date that
    Fiberstream completes construction of its initial backbone or (b)
    November 2002. Additionally, Fiberstream has an obligation to provide
    equipment, cash or services to the City of New York with a value of not
    more than $100,000 over 15 years.

    The Company is involved in various disputes, arising in the ordinary
    course of its business, which may result in pending or threatened
    litigation. None of these matters are expected to have a material
    adverse effect on the Company's financial position, results of
    operations or cash flows. However, certain of these matters, if
    resolved unfavorably to us, could have a material adverse effect on the
    Company's business, financial condition and/or results of operations:

    o    CoreComm Newco, Inc., an indirect, wholly-owned subsidiary of
         CoreComm Holdco referred to as CoreComm Newco, is currently in
         litigation with Ameritech Ohio, a supplier from whom it purchases
         telecommunications products and services, over the adequacy of
         Ameritech's performance under a 1998 contract between CoreComm
         Newco and Ameritech, and related issues. This litigation began in
         June 2001 when Ameritech threatened to stop processing new orders
         following CoreComm Newco's exercise of its right under the
         contract to withhold payments for Ameritech's performance
         failures. In response to this threat, CoreComm Newco sought and
         received an order from an official of the Public Utilities
         Commission of Ohio, referred to as the PUCO, barring Ameritech
         from refusing to process new CoreComm orders. Ameritech has
         appealed that order to the PUCO and the appeal is still pending.

                                   F-33

<PAGE>

         On July 5, 2001, Ameritech filed a claim with the PUCO seeking
         payment from CoreComm Newco of approximately $8,600,000 allegedly
         owed under the contract. On August 8, 2001, Ameritech filed a
         second claim against CoreComm Newco in Ohio state court, seeking
         an additional approximately $4,300,000 in allegedly improperly
         withheld amounts. These claims were subsequently consolidated in
         the United States District Court, with an amended complaint from
         Ameritech seeking a total of approximately $14,400,000.

         On December 26, 2001, CoreComm Newco filed its answer to
         Ameritech's amended complaint and simultaneously filed three
         counterclaims against Ameritech and some of its affiliates,
         alleging breach of contract, antitrust violations, and fraudulent
         or negligent misrepresentation. In lieu of filing an answer to
         CoreComm Newco's counterclaims, Ameritech filed a series of
         motions on March 25, 2002, asking the Court to dismiss certain of
         CoreComm Newco's counterclaims. CoreComm Newco's response to those
         motions is currently due on April 17, 2002 and it intends to
         oppose Ameritech's requests for dismissal vigorously.

         The Company believes that CoreComm Newco has meritorious defenses
         to Ameritech's amended complaint, and that the amount currently in
         dispute is substantially less than the $14,400,000 claimed in
         Ameritech's amended complaint. For example, the figure specified
         in Ameritech's complaint does not account for (a) more than $4.1
         million in refunds that Ameritech contends it has already credited
         to CoreComm Newco's accounts since the filing its complaint, and
         (b) payments that were made by CoreComm Newco in the ordinary
         course after the time of Ameritech's submission. However, the
         Company cannot be certain how the matter will be resolved. The
         Company also believes that, to the extent Ameritech prevails with
         respect to any of its claims, Ameritech's award may be offset in
         whole or in part by amounts that CoreComm Newco is seeking to
         obtain from Ameritech under its counterclaims. However, it is
         impossible at this time to predict the outcome of the litigation.

    o    Certain operating subsidiaries of CoreComm Holdco are currently
         involved in litigation with certain subsidiaries of Verizon
         Communications, Inc., referred to as Verizon, relating to the
         timeliness and accuracy of Verizon's wholesale billing processes,
         the legitimacy of various charges that have been levied by
         Verizon, and the propriety of Verizon's effort to collect those
         charges by threatening to implement an account embargo and service
         suspension on the ability of CoreComm Holdco's subsidiaries to
         process new and pending service orders unless payment is made on
         the amounts demanded.

         On or about January 31, 2002, the subsidiaries of CoreComm Holdco
         operating in Delaware, District of Columbia, Maryland,
         Massachusetts, New York, Pennsylvania and received correspondence
         from Verizon claiming that Verizon was owed a total of
         approximately $14 million for services allegedly provided in those
         states and threatening to activate embargo procedures on their
         accounts if payment of the alleged amounts was not received. In
         response, the subsidiaries challenged the accuracy of Verizon's
         figures and provided formal written notice to Verizon disputing
         its claims and reiterating their several prior requests that
         Verizon provide additional information to support its contentions
         and resolve a variety of apparently systemic problems with its
         wholesale billing systems. Additionally, the subsidiaries in
         Pennsylvania, New York and Massachusetts proceeded to initiate
         litigation against Verizon before the appropriate regulatory
         authorities and/or in civil court.

         After further discussions and agreements between the parties, on
         February 28, 2002 Verizon withdrew its embargo threats in all
         states except Massachusetts. In Massachusetts, Verizon filed an
         answer to the complaint along with counterclaims seeking
         approximately $1.4 million in payment for allegedly past due
         charges. CoreComm Massachusetts is currently preparing an answer
         to these counterclaims that will dispute the accuracy of Verizon's
         contentions and discussions regarding a mutually agreeable
         resolution of the matter are continuing between the parties.

                                   F-34

<PAGE>

         In Pennsylvania, litigation between ATX Telecommunications and
         Verizon is continuing. In the meantime, on March 4, 2002 ATX
         received a letter from Verizon asserting that Verizon is owed
         approximately $5.7 million in allegedly past due charges and
         threatening to implement a service embargo. ATX is currently
         reviewing Verizon's claims against its own billing records and
         believes that the amount at issue could be substantially less than
         the amount claimed by Verizon when taking into account (a)
         Verizon's historical billing errors, (b) payments that have been
         or will be made in the ordinary course, and (c) unresolved
         disputes over prior charges. Accordingly, on March 29, 2002, ATX
         filed a petition with the Hearing Examiner in its complaint case
         advising that the $5.7 million figure alleged in Verizon's embargo
         letter has been placed into dispute by ATX due to Verizon's
         billing errors, that approximately $3 million of erroneous charges
         have already been found which ATX believes should be deducted from
         the claimed amount, and asking the Hearing Examiner to issue an
         order that would prevent Verizon from implementing a service
         embargo during the pendancy of the complaint proceeding. ATX
         intends to vigorously litigate its complaint regarding Verizon's
         billing errors, including the longstanding, apparently systemic
         problems that ATX has experienced with Verizon's billing systems,
         and pursue all available claims, counterclaims and offsets,
         including defending against any effort to implement any embargo or
         service suspension. However, it cannot presently predict how the
         matter will be resolved and if Verizon were to prevail on its
         claims and/or activate an account embargo or service suspension,
         it could have a material adverse affect on our business, financial
         condition and/or results of operations.

    o    On December 3, 2001, General Electric Capital Corp. filed a
         lawsuit in the Circuit Court of Cook County, Illinois against
         CoreComm Limited and MegsINet, Inc., an indirect subsidiary of
         CoreComm Holdco, seeking approximately $8 million in allegedly
         past due amounts under a capital equipment lease agreement between
         Ascend and MegsINet. GECC is seeking all amounts allegedly owed
         under the lease as well as repossession of the equipment. On
         February 19, 2002, the defendants filed a motion to dismiss
         certain of GECC's claims. GECC's response to the motion is
         currently due on April 9, 2002, defendants' reply is presently due
         on April 26, 2002 and oral argument on the motions is presently
         scheduled for May 13, 2002. CoreComm Holdco is currently in
         settlement discussions with GECC regarding these claims.

    o    On May 25, 2001, KMC Telecom, Inc. and some of its operating
         subsidiaries filed an action in the Supreme Court of New York for
         New York County against CoreComm Limited, Cellular Communications
         of Puerto Rico, Inc., CoreComm New York, Inc. and MegsINet, Inc.
         On that same date, KMC filed the same cause of action in the
         Circuit Court of Cook County, IL. Upon defendant's Motion to Stay
         the New York action, KMC voluntarily dismissed the Illinois
         litigation and the matter is currently proceeding in New York. KMC
         contends that it is owed approximately $2 million, primarily in
         respect of alleged early termination liabilities, under a services
         agreement and a collocation agreement with MegsINet. The
         defendants have denied KMC's claims and have asserted that the
         contracts at issue were signed without proper authorization, that
         KMC failed to perform under the alleged contracts, and that the
         termination penalties are not enforceable. The defendants have
         served discovery and intend to defend themselves in coordination
         with one of their insurance carriers.

    o    On July 6, 2001, MCI initiated a compulsory arbitration action
         against CoreComm Holdco's subsidiary CoreComm Communications, Inc.
         in connection with a dispute arising under a carrier services
         agreement between the parties. The arbitration demand contends
         that MCI is owed in excess of $1.9 million for circuits that were
         allegedly ordered by CoreComm Communications, Inc. under a carrier
         agreement. MCI has subsequently asserted that under one theory of
         the case premised on its reading of provisions relating to alleged
         early termination penalties, its claims could exceed $10 million,
         and under another theory involving a different computation its
         claims could exceed $4.5 million. The defendant has denied MCI's
         claims, asserting that the circuits were never ordered under the
         contract and have been improperly billed by MCI, and the defendant
         does not agree with MCI's various damages theories. MCI has
         admitted that there are no signed written orders for a substantial
         majority of the circuits, and the contract states that all orders
         must be submitted in writing signed by


                                   F-35
<PAGE>


         the ordering party. Discovery in this matter has been completed,
         and the case is currently scheduled for trial before the
         arbitrator in April 2002. The defendant is litigating the suit
         vigorously and pursuing all available claims and defenses.

    o    The Company received correspondence from a law firm on behalf of
         Weston Telecommunications, L.L.C., referred to as Weston,
         asserting that Weston is the assignee of certain rights of Easton
         Telecom Services, Inc., referred to as Easton, under an asset
         purchase agreement approved as part of the bankruptcy disposition
         of Teligent, Inc., and demanding payment of approximately $4.9
         million for telecommunications services purportedly provided under
         alleged contracts between Easton and MegsINet, Inc. On March 1,
         2002, Easton Telecom Services, LLC., formerly known as Weston,
         initiated litigation in the Northern District of Ohio against
         CoreComm Internet Group, Inc. asserting the claims discussed
         above. The defendant has investigated Weston's claims and does not
         believe that they have merit. Defendant's answer to Easton's
         complaint is presently due on April 24, 2001 and the Company
         intends to defend itself vigorously and pursue all available
         claims and defenses, including multiple defenses to the validity
         of the alleged contracts at issue.

    o    Fiberstream, Inc., a direct subsidiary of CoreComm Limited, has
         been in communications with Metromedia Fiber Networks, Inc.,
         referred to as MFN, regarding a dispute between the parties under
         a General Agreement dated September 29, 2000 and a related Product
         Order of the same date. The dispute centers around the accuracy of
         certain statements that were made by MFN concerning the nature of
         its network at the time of contracting, the timeliness of the
         installation of the circuits by MFN under the agreement, and
         Fiberstream's obligation, if any, to make payments in respect of
         those circuits. MFN has indicated that unless payment is made for
         the circuits, it may initiate arbitration under the agreement and
         seek early termination penalties in excess of approximately $1.1
         million. Fiberstream has rejected MFN's demands and has advised
         that it will defend itself vigorously and pursue all available
         counterclaims, including claims for fraudulent inducement relating
         to the execution of the contract and damages arising from MFN's
         alleged failure to perform under the contract. The parties have
         discussed the prospect of settling their respective claims without
         resort to litigation and those discussions are presently ongoing.

         On October 9, 2001, Enavis Networks, Inc. filed an action in the
         Circuit Court of Pinellas County, Florida against CoreComm Limited
         asserting that Enavis is owed approximately $420,000 relating to
         the alleged sale and installation of telecommunications equipment
         by Enavis. The Company filed a motion to dismiss this action for
         lack of personal jurisdiction over the Company in Florida and this
         motion is still pending. Upon resolution of the motion to dismiss
         in Florida and assuming that the matter proceeds in litigation,
         the Company intends to defend this action vigorously and assert
         counterclaims against Enavis arising from Enavis' failure to
         provide equipment complying with CoreComm's specifications.

                                   F-36

<PAGE>

    o    On or about September 14, 2001, a lawsuit was filed by WXIII/Far
         Yale Gen-Par, LLC, as General Partner of WXIII/Far Yale Real
         Estate Limited Partnership, referred to as Yale, against CoreComm
         Communications, Inc., a direct, wholly-owned subsidiary of
         CoreComm Holdco, and CoreComm Limited seeking approximately
         $172,500 in unpaid rent, interest and other charges allegedly owed
         under a commercial real estate lease between Yale and CoreComm
         Communications as to which CoreComm Limited is the guarantor. On
         or about February 5, 2002, Yale filed a motion with the court
         requesting permission to amend the complaint to specify a revised
         figure of $404,290.87 as the amount allegedly due under the lease
         and to add an additional count asking the court to issue a
         preliminary injunction preventing the defendants from
         transferring, selling, assigning, encumbering or otherwise
         hypothecating any of their assets, including any debt or equity
         interests in their subsidiaries, except for usual and ordinary
         expenses paid in the usual and ordinary course of business. On
         February 27, 2002, Yale's motion for a preliminary injunction was
         denied subject to the substitution of CoreComm Holdco for CoreComm
         Limited as guarantor on the lease and Yale's motion to specify the
         revised figure of $404, 290.87 was granted. The defendants are
         currently proceeding to make the substitution relating to the
         guarantee and are litigating the matter vigorously.

                                   F-37

<PAGE>



<TABLE>
<CAPTION>

                     CoreComm Limited and Subsidiaries


              Schedule II - Valuation and Qualifying Accounts





                Col. A                     Col. B                 Col. C                  Col. D            Col. E
---------------------------------------------------------------------------------------------------------------------------
                                                                 Additions
                                                      --------------------------------
                                                            (1)             (2)
                                                      --------------------------------

                                                                        Charged to
                                         Balance at      Charged to        Other                           Balance at End
                                        Beginning of     Costs and       Accounts-     Deductions -           of Period
             Description                   Period         Expenses       Describe        Describe
---------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>               <C>             <C>       <C>                       <C>
Year ended December 31, 2001:
  Allowance for doubtful accounts        $11,034,000      $7,143,000        $  -     $ (18,177,000)   (a)        $  -
Year ended December 31, 2000:
  Allowance for doubtful accounts        $ 3,949,000      $7,130,000        $  -         $ (45,000)   (b)      $11,034,000
Year ended December 31, 1999:
  Allowance for doubtful accounts        $   742,000      $3,241,000        $  -         $ (34,000)   (c)      $ 3,949,000
</TABLE>

(a)      Uncollectible accounts written-off, net of recoveries, of
         $8,418,000 and deconsolidation of $9,759,000 of allowance for
         doubtful accounts of CoreComm Holdco.

(b)      Uncollectible accounts written-off, net of recoveries, of
         $9,269,000 offset by $9,224,000 allowance for doubtful accounts as
         of acquisition date from business combinations.

(c)      Uncollectible accounts written-off, net of recoveries, of
         $24,688,000 offset by $24,654,000 allowance for doubtful accounts
         as of acquisition date from business combinations.



                                   F-38

<PAGE>


                   CORECOMM HOLDCO, INC. AND SUBSIDIARIES

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>

The following consolidated financial statements of CoreComm Holdco, Inc.
and Subsidiaries are included in Item 14(d):

<S>                                                                                                          <C>
Reports of Independent Auditors ...............................................................................S-2
Consolidated Balance Sheets -  December 31, 2001 and 2000  ....................................................S-3
Consolidated Statements of Operations - Years Ended December 31, 2001, 2000 and 1999  .........................S-4
Consolidated Statement of Shareholders' Equity - Years Ended December 31, 2001, 2000 and 1999 .................S-5
Consolidated Statements of Cash Flows - Years Ended December 31, 2001, 2000 and 1999 ..........................S-6
Notes to Consolidated Financial Statements ....................................................................S-8

The following consolidated financial statement schedules of CoreComm
Holdco, Inc. and Subsidiaries are included in Item 14(d):

Schedule I - Condensed Financial Information of Registrant  ..................................................S-34
Schedule II - Valuation and Qualifying Accounts ............................................................. S-39

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore
have been omitted.
</TABLE>

                                    S-1
<PAGE>


                       Report of Independent Auditors





Shareholders and Board of Directors
CoreComm Holdco, Inc.

We have audited the consolidated balance sheets of CoreComm Holdco, Inc.
and Subsidiaries as of December 31, 2001 and 2000, and the related
consolidated statements of operations, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 2001. Our
audits also included the financial statement schedules listed in the Index
at Item 14(d). These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of CoreComm Holdco, Inc. and Subsidiaries at December 31, 2001 and
2000, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 2001, in
conformity with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a
whole, present fairly in all material respects the information set forth
therein.



                                         /s/ ERNST & YOUNG LLP



New York, New York
March 29, 2002


                                    S-2
<PAGE>

<TABLE>
<CAPTION>
                                            CORECOMM HOLDCO, INC. AND SUBSIDIARIES
                                                   CONSOLIDATED BALANCE SHEETS

                                                                                     December 31,
                                                                               2001               2000
                                                                         ------------------ ------------------
<S>                                                                      <C>                   <C>
Assets
Current assets:
   Cash and cash equivalents                                                  $24,966,000        $22,773,000
   Marketable securities                                                                -          2,686,000
   Accounts receivable-trade, less allowance for doubtful accounts of
     $9,759,000 (2001) and $11,034,000 (2000)                                  32,261,000         34,148,000
   Due from CoreComm Limited                                                      646,000            638,000
   Due from NTL Incorporated                                                            -         17,345,000
   Other                                                                        3,683,000          9,038,000
                                                                         ------------------ ------------------
Total current assets                                                           61,556,000         86,628,000

Fixed assets, net                                                              86,722,000        179,379,000
Investment in CoreComm Limited                                                 22,472,000                  -
Goodwill, net of accumulated amortization of none (2001) and
   $42,028,000 (2000)                                                         134,280,000        600,859,000
Intangible assets, net                                                         30,860,000          6,092,000
Other, net of accumulated amortization of none (2001) and $211,000
   (2000)                                                                      11,393,000         23,648,000
                                                                         ------------------ ------------------
                                                                             $347,283,000       $896,606,000
                                                                         ================== ==================
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable                                                            $37,348,000        $72,876,000
  Accrued expenses                                                             67,766,000         64,558,000
  Due to NTL Incorporated                                                         917,000                  -
  Current portion of long-term debt, notes payable and capital lease
     obligations                                                                9,667,000         20,182,000
  Deferred revenue                                                             29,652,000         29,696,000
                                                                         ------------------ ------------------
Total current liabilities                                                     145,350,000        187,312,000

Long-term debt                                                                156,100,000         91,127,000
Notes payable to related parties                                               16,174,000         16,170,000
Capital lease obligations                                                         267,000          2,693,000

Commitments and contingent liabilities

Shareholders' equity:
  Series preferred stock - $.01 par value, authorized 10,000,000
       shares; issued and outstanding none                                              -                  -
  Common stock - $.01 par value; authorized 250,000,000 shares; issued
     and outstanding 10,000,000 (2001) and 9,514,000 (2000) shares                100,000             95,000
  Additional paid-in capital                                                   29,292,000      1,039,083,000
  Deferred non-cash compensation                                                        -        (21,638,000)
  (Deficit)                                                                             -       (418,236,000)
                                                                         ------------------ ------------------
                                                                               29,392,000        599,304,000
                                                                         ------------------ ------------------
                                                                             $347,283,000       $896,606,000
                                                                         ================== ==================


See accompanying notes.
</TABLE>

                                                          S-3
<PAGE>

<TABLE>
<CAPTION>
                                            CORECOMM HOLDCO, INC. AND SUBSIDIARIES
                                             CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                 Year Ended December 31,
                                                      2001                 2000                 1999
                                               -------------------- -------------------- -------------------
<S>                                               <C>                  <C>                  <C>
Revenues                                          $   292,681,000      $   131,526,000      $   57,151,000

Costs and expenses
Operating                                             224,807,000          142,323,000          57,551,000
Selling, general and administrative                    96,854,000          109,197,000          72,821,000
Corporate                                               5,648,000           11,224,000           6,686,000
Non-cash compensation                                  21,638,000           43,440,000           1,056,000
Other charges                                          39,553,000           12,706,000                  -
Asset impairments                                     368,288,000           35,920,000                  -
Depreciation                                           47,976,000           30,641,000          10,916,000
Amortization                                           97,388,000           42,396,000           8,630,000
                                               -------------------- -------------------- -------------------
                                                      902,152,000          427,847,000         157,660,000
                                               -------------------- -------------------- -------------------
Operating (loss)                                     (609,471,000)        (296,321,000)       (100,509,000)

Other income (expense)
Interest income and other, net                          1,799,000            1,134,000              55,000
Interest expense                                      (25,647,000)          (5,929,000)         (2,624,000)
                                               -------------------- -------------------- -------------------
(Loss) before income taxes and extraordinary
   item                                              (633,319,000)        (301,116,000)       (103,078,000)
Income tax (provision)                                    (94,000)            (125,000)           (102,000)
                                               -------------------- -------------------- -------------------
(Loss) before extraordinary item                     (633,413,000)        (301,241,000)       (103,180,000)
Gain from extinguishment of debt                       39,498,000                  -                    -
                                               -------------------- -------------------- -------------------
Net (loss)                                          $(593,915,000)       $(301,241,000)      $(103,180,000)
                                               ==================== ==================== ===================

Basic and diluted net (loss) per share:
(Loss) before extraordinary item                        $(66.44)             $(31.66)             $(10.85)
Extraordinary item                                         4.14                    -                    -
                                               -------------------- -------------------- -------------------
Net (loss)                                              $(62.30)             $(31.66)             $(10.85)
                                               ==================== ==================== ===================

Weighted average number of shares                     9,533,000              9,514,000           9,514,000
                                               ==================== ==================== ===================
</TABLE>



In the year ended December 31, 2001, non-cash compensation expense includes
$3.9 million that would have been included in operating expense, $13.4
million that would have been included in selling, general and
administrative expense and $4.3 million that would have been included in
corporate expense had the compensation been paid in cash. In the year ended
December 31, 2000, non-cash compensation expense includes $5.9 million that
would have been included in operating expense, $25.0 million that would
have been included in selling, general and administrative expense and $12.5
million that would have been included in corporate expense had the
compensation been paid in cash. In the year ended December 31, 1999,
non-cash compensation expense includes $345,000 that would have been
included in operating expense and $711,000 that would have been included in
selling, general and administrative expense had the compensation been paid
in cash.

See accompanying notes.

                                    S-4

<PAGE>

<TABLE>
<CAPTION>

                                            CORECOMM HOLDCO, INC. AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY


                                               Common Stock                                      Deferred
                                         --------------------------       Additional             Non-Cash
                                            Shares         Par          Paid-In Capital         Compensation       (Deficit)
                                            ------         ---          ---------------         ------------       ---------
<S>                                      <C>           <C>              <C>                    <C>              <C>
Balance, December 31, 1998                 9,514,000     $95,000          $49,998,000                            $(13,815,000)
Capital contributions                                                     196,892,000
Net (loss) for the year ended December
   31, 1999                                                                                                      (103,180,000)
                                         ----------------------------------------------------------------------------------------
Balance, December 31, 1999                 9,514,000      95,000          246,890,000                            (116,995,000)

Capital contributions                                                     792,193,000
Deferred non-cash compensation                                                                 $(31,338,000)
Non-cash compensation expense                                                                     9,700,000
Net (loss) for the year ended December
   31, 2000                                                                                                         (301,241,000)
                                         ----------------------------------------------------------------------------------------
Balance, December 31, 2000                 9,514,000      95,000        1,039,083,000           (21,638,000)        (418,236,000)

Capital distributions                                                     (23,164,000)
Shares issued in Holdco
recapitalization                             486,000       5,000            1,423,000
Shares held by CoreComm Limited
issued in Holdco recapitalization                                                                24,101,000
Non-cash compensation expense                                                                    21,638,000
Net (loss) for the year ended December
  31, 2001                                                                                                          (593,915,000)
Effect of Holdco recapitalization
on shareholders' equity                                                (1,012,151,000)                             1,012,151,000
                                         ----------------------------------------------------------------------------------------
Balance, December 31, 2001                10,000,000    $100,000          $29,292,000            $-                $-
                                         ========================================================================================


See accompanying notes.
</TABLE>

                                                            S-5
<PAGE>



<TABLE>
<CAPTION>

                                            CORECOMM HOLDCO, INC. AND SUBSIDIARIES

                                             CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                         Year Ended December 31,
                                                             2001                2000                 1999
                                                      ---------------------------------------------------------------
<S>                                                      <C>                <C>                 <C>
Operating activities
  Net (loss)                                               $(593,915,000)     $(301,241,000)      $(103,180,000)
  Adjustments to reconcile net (loss) to
     net cash (used in) operating activities:
    Depreciation and amortization                            145,364,000         73,037,000          19,546,000
    Gain from extinguishment of debt                         (39,498,000)                 -                   -
    Reorganization charges                                    26,932,000                  -                   -
    Non-cash compensation                                     21,638,000         43,440,000           1,056,000
    Amortization of  original issue discount                   6,256,000                  -                   -
    Provision for losses on accounts receivable                7,143,000          7,130,000           3,241,000
    Asset impairments                                        368,288,000         35,920,000                   -
    Accretion of interest on marketable securities               (51,000)            24,000                   -
    Other                                                     (2,473,000)           996,000              19,000
    Changes in operating assets and  liabilities, net
     of effect from business acquisitions:
     Accounts receivable                                      (5,174,000)        (7,405,000)          3,333,000
     Due from affiliates                                      18,140,000        (17,349,000)          1,193,000
     Other current assets                                      2,369,000            576,000          (3,152,000)
     Other assets                                             12,773,000         (1,249,000)         (3,447,000)
     Accounts payable                                        (25,594,000)        17,574,000           5,275,000
     Accrued expenses                                         21,073,000         (5,078,000)          3,388,000
     Deferred revenue                                            (44,000)        17,213,000             (61,000)
                                                      ---------------------------------------------------------------
  Net cash (used in) operating activities                    (36,773,000)      (136,412,000)        (72,789,000)

  Investing activities
  Purchase of fixed assets                                    (5,221,000)       (65,211,000)        (20,296,000)
  Acquisitions, net of cash acquired                                   -        (98,613,000)        (47,056,000)
  Purchase of marketable securities                                    -         (2,710,000)                  -
  Proceeds from sale of marketable securities                  2,737,000                  -                   -
                                                      ---------------------------------------------------------------
  Net cash (used in) investing activities                     (2,484,000)      (166,534,000)        (67,352,000)
</TABLE>

                                                               S-6
<PAGE>


<TABLE>
<CAPTION>

                                            CORECOMM HOLDCO, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)



                                                                  Year Ended December 31,
                                                       2001              2000                 1999
                                                 ----------------- ------------------ ---------------------
<S>                                            <C>                    <C>               <C>
Financing activities
Capital contributions (distributions)                 (28,614,000)      232,472,000        151,885,000
Proceeds from borrowings, net of
    financing costs                                    88,679,000       103,503,000            480,000
Principal payments                                    (10,508,000)       (5,936,000)        (3,469,000)
Principal payments of capital lease
  obligations                                          (8,107,000)      (15,568,000)        (2,379,000)
                                                 ----------------- ------------------ ---------------------
Net cash provided by financing activities              41,450,000       314,471,000        146,517,000
                                                 ----------------- ------------------ ---------------------
Increase in cash and cash equivalents                   2,193,000        11,525,000          6,376,000
Cash and cash equivalents at beginning of
  period                                               22,773,000        11,248,000          4,872,000
                                                 ----------------- ------------------ ---------------------
Cash and cash equivalents at end of  period           $24,966,000       $22,773,000      $  11,248,000
                                                 ================= ================== =====================

Supplemental disclosure of cash flow
   information
Cash paid for interest                                $13,197,000        $4,008,000         $2,032,000
Income taxes paid                                               -           159,000            185,000

Supplemental schedule of non-cash
   investing activities
Capital contributions of non-cash net
  assets                                               $5,450,000      $559,721,000        $45,007,000
Liabilities incurred to acquire fixed
  assets                                                6,595,000        35,626,000         19,621,000
Supplemental schedule of non-cash
   financing activities
Shares issued in the Holdco recapitalization          $25,529,000            $    -              $   -






See accompanying notes.
</TABLE>

                                                       S-7

<PAGE>

                   CORECOMM HOLDCO, INC. AND SUBSIDIARIES

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  Organization and Business

    Organization

    CoreComm Holdco, Inc., referred to as the Company, was formed in May
    1998 as a Bermuda corporation. It was a wholly-owned subsidiary of
    CoreComm Limited until December 2001. In July 1999, the Company was
    domesticated under the laws of Delaware.

    CoreComm Limited, formerly a wholly-owned subsidiary of Cellular
    Communications of Puerto Rico, Inc., referred to as CCPR, was formed in
    March 1998 in order to succeed to the businesses and assets that were
    operated by OCOM Corporation. Operations commenced in April 1998. In
    September 1998, CCPR made a cash contribution to CoreComm Limited of
    $150,000,000 and distributed 100% of the outstanding shares of CoreComm
    Limited on a one-for-one basis to CCPR's shareholders.

    Business

    The Company provides integrated local and toll-related telephone,
    Internet and high-speed data services to business and residential
    customers located principally in Pennsylvania, Ohio, New Jersey,
    Michigan, Wisconsin, Maryland, Illinois, New York, Virginia, Delaware,
    Massachusetts, Washington, D.C. and Indiana.

    Basis of Preparation

    Effective with the completion of the first phase of the Holdco
    recapitalization on December 28, 2001, CoreComm Limited began
    accounting for its ownership of approximately 13% of the outstanding
    shares of the Company using the equity method. CoreComm Limited
    accounted for the Company as a consolidated subsidiary prior to that
    date. The Company accounted for the issuance of over 80% of its
    outstanding shares to new stockholders upon the completion of the first
    phase of the Holdco recapitalization as if a purchase business
    combination occurred. The Company adjusted the carrying value of its
    assets and liabilities to fair value as of December 31, 2001.

    Liquidity

    The Company anticipates that it will have sufficient cash to execute
    its revised business plan. However, there can be no assurance that: (1)
    actual costs will not exceed the amounts estimated or that additional
    funding will not be required, (2) the Company and its subsidiaries will
    be able to generate sufficient cash from operations to meet capital
    requirements, debt service and other obligations when required, (3) the
    Company will be able to access such cash flow, (4) the Company will be
    able to sell assets or businesses, or (5) the Company will not be
    adversely affected by interest rate fluctuations.

    The Company and its subsidiaries may not generate sufficient cash flow
    from operations to repay at maturity the entire principal amount of its
    outstanding indebtedness. Accordingly, the Company may be required to
    consider a number of measures, including: (1) refinancing all or a
    portion of such indebtedness, (2) seeking modifications to the terms of
    such indebtedness, (3) seeking additional debt financing, which may be
    subject to obtaining necessary lender consents, (4) seeking additional
    equity financing, (5) sales of assets or businesses or (6) a
    combination of the foregoing.

    The Company's ability to raise additional capital in the future will be
    dependent on a number of factors, such as general economic and market
    conditions, which are beyond its control. If the Company is unable to
    obtain additional financing or obtain it on favorable terms, it may be
    required to further reduce its operations, forego attractive business
    opportunities, or take other actions which could adversely affect its
    business, results of operations and financial condition.

                                    S-8

<PAGE>

2.  Holdco Recapitalization

    In April 2001, the Company and CoreComm Limited completed a
    reevaluation of their business plan in light of current market
    conditions and made significant modifications to the plans. The Company
    streamlined its strategy and operations to focus on its two most
    successful and promising lines of business. The first is integrated
    communications products and other high bandwidth/data/web-oriented
    services for the business market. The second is bundled local telephony
    and Internet products efficiently sold, serviced and provisioned via
    Internet-centric interfaces to the residential market.

    Also in April 2001, the Company and CoreComm Limited commenced a
    process to potentially sell their assets and businesses that are not
    directly related to their competitive local exchange carrier, referred
    to as CLEC, business, and retained advisors for the purpose of
    conducting this sale. The Company's CLEC assets and businesses include
    its local and toll-related telephone services that compete with the
    incumbent local exchange carrier, referred to as ILEC.

    In October 2001, the Company and CoreComm Limited commenced the Holdco
    recapitalization. CoreComm Limited entered into agreements with
    numerous holders of its 6% Convertible Subordinated Notes Due 2006
    whereby the holders agreed, among other things, to exchange their notes
    for the amount of the October 1, 2001 interest payment of $4.8 million
    in the aggregate in cash and shares of the Company's common stock. The
    exchange was completed in December 2001, including the payment of the
    $4.8 million by CoreComm Limited.

    On December 28, 2001, the Company completed the first phase of the
    Holdco recapitalization, which was the exchange of shares of its common
    stock for substantial amounts of the outstanding indebtedness of
    CoreComm Limited, substantial amounts of the outstanding indebtedness
    of the Company and CoreComm Limited as co-obligors and all of the
    outstanding preferred stock of CoreComm Limited.

    The following summarizes the indebtedness and preferred stock that was
    exchanged for shares of the Company's common stock in December 2001:
<TABLE>
<CAPTION>

------------------------------------------ ----------------------- ---------------------------- -------------------------------
                                                                                                     Principal Amount or
               Description                      Date Issued                  Issuer                Stated Value when Issued

------------------------------------------ ----------------------- ---------------------------- -------------------------------
<S>                                       <C>                      <C>                         <C>
10.75% Unsecured Convertible PIK Notes                             CoreComm Limited and the
   due 2011                                April 2001              Company                      $10.0 million
------------------------------------------ ----------------------- ---------------------------- -------------------------------
10.75% Senior Unsecured Convertible PIK                            CoreComm Limited and the
   Notes Due 2010                          December 2000           Company                      $16.1 million
------------------------------------------ ----------------------- ---------------------------- -------------------------------
Senior Unsecured Notes Due
   September 29, 2003                      September 2000          CoreComm Limited             $108.7 million
------------------------------------------ ----------------------- ---------------------------- -------------------------------
6% Convertible Subordinated
   Notes Due 2006                          October 1999            CoreComm Limited             $175.0 million (1)
------------------------------------------ ----------------------- ---------------------------- -------------------------------
Series A and Series A-1 Preferred Stock
                                           September 2000          CoreComm Limited             $51.1 million
------------------------------------------ ----------------------- ---------------------------- -------------------------------
Series B Preferred Stock                   September 2000          CoreComm Limited             $250.0 million
------------------------------------------ ----------------------- ---------------------------- -------------------------------

(1)      $164.75 million was outstanding as of December 31, 2001, of which $160 million was exchanged.
</TABLE>

                                                    S-9
<PAGE>


    As indicated above, the Company exchanged the approximately $10.8
    million principal and accrued interest of 10.75% Unsecured Convertible
    PIK Notes Due 2011 and the approximately $18.0 million principal and
    accrued interest of 10.75% Senior Unsecured Convertible PIK Notes Due
    2010 for shares of its common stock. The Company recorded an
    extraordinary gain of $25.7 million from the extinguishment of these
    notes, and incurred costs of $2.7 million in connection with the Holdco
    recapitalization. This gain is based on the fair value of $2.9392 per
    share for the shares issued by the Company in exchange for the notes.

    As a result of the completed exchanges in December 2001, approximately
    87% of the Company's outstanding shares, or 8,685,602 shares, are owned
    by the former holders of indebtedness of the Company and CoreComm
    Limited and the former holders of CoreComm Limited preferred stock, and
    approximately 13% of the Company's outstanding shares, or 1,314,416
    shares, continue to be held by CoreComm Limited.

    As part of the second phase of the Holdco recapitalization, on February
    8, 2002, the Company launched registered public exchange offers whereby
    it is offering to exchange its shares of common stock which will have
    been registered under the Securities Act of 1933, as amended, pursuant
    to a Form S-4 registration statement to all holders of CoreComm Limited
    common stock and all remaining holders of 6% Convertible Subordinated
    Notes due 2006 of CoreComm Limited for their CoreComm Limited common
    stock and their notes, respectively. As soon as practicable after
    accepting at least 90% of the oustanding shares of CoreComm Limited
    common stock in the exchange offers, the Company plans to transfer all
    such shares to a newly formed, wholly-owned subsidiary and to merge
    this subsidiary into CoreComm Limited with CoreComm Limited surviving
    the merger as a wholly-owned subsidiary of the Company.

    As a result of the first phase of the Holdco recapitalization, the
    Company holds $160 million principal amount of CoreComm Limited's
    6% Convertible Subordinated Notes, approximately $105.7 million
    principal amount of CoreComm Limited's Senior Unsecured Notes and all
    of CoreComm Limited's outstanding preferred stock. CoreComm Limited has
    agreed that it will surrender to the Company the number of shares of
    the Company's common stock that the Company issues in the exchange
    offers and the merger. Therefore, if the merger is completed, CoreComm
    Limited will own no common stock of the Company, and thus will own no
    material assets, since the common stock of the Company is CoreComm
    Limited's only material asset. In exchange for CoreComm Limited
    surrendering such shares of the Company's common stock, CoreComm
    Limited and the Company have agreed to waivers and amendments to delay
    CoreComm Limited from having to make any payments with respect to these
    securities. If such a merger does not occur, CoreComm Limited does not
    anticipate that it will have the financial resources to meet the
    obligations under its notes and preferred stock if the Company requires
    it to do so.

    Under the exchange offers, those shareholders and noteholders who
    exchange their shares and notes, respectively, will receive shares of
    the Company, and would no longer have securities of CoreComm Limited.

    CoreComm Limited may lack the resources to meet the obligations of the
    remaining $4.75 million principal amount of 6% Convertible Subordinated
    Notes that are not held by the Company. CoreComm Limited also remains a
    party liable under the $156.1 million senior secured credit facility,
    has no right to withdraw any additional money under that facility, and
    does not expect to be able to raise additional financing in the
    foreseeable future. CoreComm Limited has a liquidity problem that
    raises substantial doubt about its ability to continue as a going
    concern. CoreComm Limited intends to resolve its liquidity problem
    through the completion of the Holdco recapitalization exchange offers,
    however the exchange offers may not be completed.

                                   S-10

<PAGE>

    On December 17, 2001, Nasdaq granted CoreComm Limited an exception to
    Nasdaq's stockholder approval requirements permitting the Holdco
    recapitalization to proceed without a vote of CoreComm Limited's
    stockholders because requiring a stockholder vote would seriously
    jeopardize CoreComm Limited's financial viability. Pursuant to
    conversations with Nasdaq, the Company and CoreComm Limited intend to
    transfer CoreComm Limited's current listing to the Company following
    successful completion of the exchange offers. The Company expects to
    become the Nasdaq listed entity and to be subject to the continued
    inclusion requirements of the Nasdaq National Market.

    On February 14, 2002, CoreComm Limited received written notification
    from Nasdaq indicating that it failed to comply with the minimum market
    value of publicly held shares and minimum bid price requirements for
    continued listing on the Nasdaq National Market. CoreComm Limited has
    until May 15, 2002 to regain compliance. If the Holdco recapitalization
    is not successfully completed and CoreComm Limited does not regain
    compliance by this date, Nasdaq stated that it will then provide
    CoreComm Limited written notification that its common stock will be
    delisted from the Nasdaq National Market.

    The Company holds $160 million principal amount of CoreComm Limited's
    6% Convertible Subordinated Notes Due 2006, approximately $105.7
    million principal amount of CoreComm Limited's Senior Unsecured Notes
    due September 29, 2003, approximately 51,000 shares of CoreComm
    Limited's Series A preferred stock and 250,000 shares of CoreComm
    Limited's Series B preferred stock as a result of the exchanges. As of
    December 31, 2001, the Company's investment in CoreComm Limited notes
    and preferred stock was $22,472,000 and amounts due from CoreComm
    Limited were $646,000. The investment in CoreComm Limited balance is
    based on the fair value of $2.9392 per share for the shares issued by
    the Company in exchange for the notes and preferred stock.

3.  Significant Accounting Policies

    Use of Estimates

    The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates
    and assumptions that affect the amounts reported in the financial
    statements and accompanying notes. Such estimates and assumptions
    impact, among others, the following: the amount of uncollectible
    accounts receivable, the amount to be paid to terminate certain
    agreements included in reorganization costs, the amount to be paid to
    settle certain toll and interconnection liabilities, the amount to be
    paid as a result of certain sales and use tax audits, potential
    liabilities arising from other sales tax matters and estimates related
    to the value of long-lived assets, goodwill and other intangible
    assets. Actual results could differ from those estimates.

    Principles of Consolidation

    The consolidated financial statements include the accounts of the
    Company, its wholly-owned subsidiaries and those entities where the
    Company's interest is greater than 50%. Significant intercompany
    accounts and transactions have been eliminated in consolidation.

    Cash Equivalents

    Cash equivalents are short-term highly liquid investments purchased
    with a maturity of three months or less. Cash equivalents were
    approximately $24.3 million and $22 million at December 31, 2001 and
    2000, respectively, and consisted of corporate commercial paper.

                                   S-11

<PAGE>

    Marketable Securities

    Marketable securities are classified as available-for-sale, which are
    carried at fair value. Unrealized holding gains and losses on
    securities, net of tax, are carried as a separate component of
    shareholders' equity. The amortized cost of debt securities is adjusted
    for amortization of premiums and accretion of discounts to maturity.
    Such amortization is included in interest income. Realized gains and
    losses and declines in value judged to be other than temporary will be
    included in interest income. The cost of securities sold or matured is
    based on the specific identification method. Interest on securities is
    included in interest income.

    Marketable securities at December 31, 2000 consisted of corporate
    commercial paper. During the years ended December 31, 2001, 2000 and
    1999 there were no realized gains or losses on sales of securities.

    Allowance for Doubtful Accounts

    The Company records an estimate of uncollectible accounts receivable
    based on the current aging of its receivables and its prior collection
    experience.

    Fixed Assets

    Fixed assets are stated at cost. Depreciation is computed by the
    straight-line method over the estimated useful lives of the assets.
    Estimated useful lives are as follows: operating equipment - 3 to 15
    years, computer hardware and software - 3 or 5 years and other
    equipment - 2 to 7 years, except for leasehold improvements for which
    the estimated useful lives are the term of the lease.

    Long-lived assets are reviewed for impairment whenever events or
    changes in circumstances indicate that the carrying amount may not be
    recoverable. If the sum of the expected future undiscounted cash flows
    is less than the carrying amount of the asset, a loss is recognized for
    the difference between the fair value and carrying value of the asset.

    Goodwill

    Goodwill is the excess of the purchase price over the fair value of net
    assets acquired in business combinations accounted for as purchases.
    Goodwill is amortized on a straight-line basis over the period
    benefited, which is estimated to be 5 or 7 years. The Company
    continually evaluates whether events and circumstances warrant revised
    estimates of useful lives or recognition of a charge-off of carrying
    amounts. The Company continually reviews the recoverability of
    goodwill, including enterprise level goodwill. The recoverability of
    goodwill is assessed by determining whether the amortization of the
    goodwill balance over its remaining life can be recovered through
    undiscounted cash flows. The carrying value of goodwill is adjusted to
    the present value of the future operating cash flows if the
    undiscounted cash flows analysis indicates it cannot be recovered over
    its remaining life. The present value of the future operating cash
    flows is calculated using a discount rate that is equivalent to the
    rate that would be required for a similar investment with like risks.
    If a portion or separable group of assets of an acquired company is
    being disposed of, goodwill would be allocated to the assets to be
    disposed of based on the relative fair values of those assets at the
    date of acquisition, unless another method of allocation is more
    appropriate.

                                   S-12

<PAGE>

    LMDS License Costs

    The costs incurred to acquire the Local Multipoint Distribution
    Service, referred to as LMDS, licenses from the Federal Communications
    Commission, referred to as the FCC, were deferred and will be amortized
    on a straight-line basis over the term of the licenses upon the
    commencement of operations. The Company continually reviews the
    recoverability of the carrying value of LMDS licenses using the same
    methodology that it uses for the evaluation of its other long-lived
    assets.

    Intangible Assets

    Intangible assets include workforce and customer lists. These are
    acquisition-related assets which are stated at their estimated fair
    value as of the date acquired in a business combination accounted for
    as a purchase, less accumulated amortization. Amortization is recorded
    on a straight-line basis over estimated useful lives of 2 and 7 years.
    The Company continually reviews the recoverability of the carrying
    value of the intangible assets using the same methodology that it uses
    for the evaluation of its other long-lived assets.

    Other Assets

    Other assets include deferred financing costs and notes receivable from
    former officers of an acquired business. Deferred financing costs were
    incurred in connection with the issuance of debt and are charged to
    interest expense over the term of the related debt. The notes
    receivable earn interest at 5% per annum and are due in 2002 and 2003.

    Net (Loss) Per Share

    The Company reports its basic and diluted net (loss) per share in
    accordance with Financial Accounting Standards Board, referred to as
    FASB, Statement of Financial Accounting Standards, referred to as SFAS,
    No. 128, "Earnings Per Share." The weighted average shares used in the
    computation of net (loss) per share reflects the stock split in 2001 on
    a retroactive basis.

    Revenue Recognition and Certain Cost Classifications

    Revenues are recognized at the time the service is rendered to the
    customer or the performance of the service has been completed. Charges
    for services that are billed in advance are deferred and recognized
    when earned.

    Operating costs includes direct costs of sales and network costs.
    Direct cost of sales includes the costs directly incurred primarily
    with other telecommunications carriers in order to render services to
    customers. Network costs include the costs of fiber and access, points
    of presence, repairs and maintenance, rent, utilities and property
    taxes of the telephone, Internet and data network, as well as salaries
    and related expenses of network personnel.

    Advertising Expense

    The Company charges the cost of advertising to expense as incurred.
    Advertising costs for the years ended December 31, 2001, 2000 and 1999
    were $3,581,000, $8,683,000 and $4,407,000, respectively.

                                   S-13

<PAGE>

    Stock-Based Compensation

    The Company's employees participate in the CoreComm Limited stock
    option plans. CoreComm Limited has adopted the disclosure-only
    provisions of SFAS No. 123, "Accounting for Stock-Based Compensation".
    CoreComm Limited applies APB Opinion No. 25, "Accounting for Stock
    Issued to Employees" and related interpretations in accounting for its
    stock option plans. The Company's financial statements include amounts
    for stock-based compensation charged by CoreComm Limited to the
    Company.

4.  Recent Accounting Pronouncements

    In August 2001, the FASB issued SFAS No. 144, "Accounting for the
    Impairment or Disposal of Long-Lived Assets," effective for the Company
    on January 1, 2002. This Statement supercedes SFAS No. 121, "Accounting
    for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
    Disposed Of" and other related accounting guidance. The adoption of
    this new standard had no significant effect on the results of
    operations, financial condition or cash flows of the company.

    In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
    Retirement Obligations," effective for the Company on January 1, 2003.
    This Statement addresses financial accounting and reporting for
    obligations associated with the retirement of tangible fixed assets and
    the associated asset retirement costs. The Company is in the process of
    evaluating the financial statement impact of the adoption of SFAS No.
    143.

    In June 2001, the FASB issued SFAS No. 141, "Business Combinations,"
    and No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141
    requires that the purchase method of accounting be used for all
    business combinations initiated after June 30, 2001. Use of the
    pooling-of-interests method is no longer permitted. SFAS No. 141 also
    includes guidance on the initial recognition and measurement of
    goodwill and other intangible assets acquired in a business combination
    that is completed after June 30, 2001. SFAS No. 142 ends the
    amortization of goodwill and indefinite-lived intangible assets.
    Instead, these assets must be reviewed annually (or more frequently
    under certain conditions) for impairment in accordance with this
    statement. This impairment test uses a fair value approach rather than
    the undiscounted cash flow approach previously required by SFAS No.
    121, "Accounting for the Impairment of Long-Lived Assets and for
    Long-Lived Assets to Be Disposed Of." The Company adopted SFAS No. 142
    on January 1, 2002. The adoption of this new standard will have no
    effect on the results of operations, financial condition or cash flows
    of the Company, other than amortization of goodwill will cease as of
    January 1, 2002.

                                   S-14

<PAGE>

5.  Certain Risks and Uncertainties

    The Company's performance is affected by, among other things, its
    ability to implement expanded interconnection and collocation with the
    facilities of ILECs and develop efficient and effective working
    relationships with the ILECs and other carriers. The Company has
    installed its own switches and related equipment in certain of its
    markets. The Company will continue to lease the unbundled local loop
    needed to connect its customers to its switches. The Company purchases
    capacity from the ILECs on a wholesale basis pursuant to contracts and
    sells it at retail rates to its customers. The Company depends upon the
    ILECs to maintain the quality of their service to the Company's
    customers. Also, the Company depends upon the ILECs for accurate and
    prompt billing information in order for the Company to bill certain of
    its customers.

    The Company's business is highly competitive which results in pricing
    pressure and increasing customer acquisition costs. The competition in
    the local exchange business includes the larger, better capitalized
    ILECs as well as other CLECs, other providers of telecommunications
    services and cable television companies. The competition in the
    Internet services market includes established online services, such as
    AOL and the Microsoft Network, the ILECs, cable television companies
    and other local, regional and national Internet service providers. The
    competitive environment may result in price reductions in the Company's
    fees for services, increased spending on marketing and product
    development, a reduction in the Company's ability to increase revenues
    and gross margin from its core businesses, a limit on the Company's
    ability to grow its customer base or attrition in the Company's
    customer base. The Company's operating results and cash flows would be
    negatively impacted by any of these events.

6.  Revenues

<TABLE>
<CAPTION>

                                                 Year Ended December 31,
                                       2001                2000                1999
                              ---------------------------------------------------------------

<S>                                <C>                   <C>                <C>
  Local Exchange Services          $95,272,000           $62,960,000        $40,463,000
  Toll-related Telephony
   Services                         77,169,000            27,952,000          6,110,000
  Internet, Data and
   Web-related Services             93,997,000            34,157,000          6,996,000
  Other (a)                         26,243,000             6,457,000          3,582,000
                              ---------------------------------------------------------------
                                  $292,681,000          $131,526,000        $57,151,000
                              ===============================================================
</TABLE>

    (a) Other includes wireless, paging and information services.

7.  Asset Impairments

    The Company performed a review of the recoverability of its goodwill
    and long-lived assets which indicated that the carrying value of
    certain assets would not be recoverable. The Company recorded a
    write-down of goodwill of $186,160,000 and a write-down of fixed assets
    of $14,529,000 in the fourth quarter of 2001 as result of this analysis
    and review.

                                   S-15

<PAGE>

    At March 31, 2001, the Company reduced the carrying amount of goodwill
    related to two of its acquisitions by $167,599,000. In connection with
    the reevaluation of its business plan and the decision to sell its
    non-CLEC assets and business announced in April 2001, the Company was
    required to report all long-lived assets and identifiable intangibles
    to be disposed of at the lower of carrying amount or estimated fair
    value less cost to sell. The carrying amount of goodwill related to
    these acquisitions was eliminated before reducing the carrying amounts
    of other assets. The estimated fair value of these businesses was
    determined based on information provided by the investment bank
    retained for the purpose of conducting this sale.

    At December 31, 2000, the Company wrote-off the carrying amount of
    intangible assets from certain business combinations. The aggregate
    write-off of $14,784,000 included goodwill of $6,690,000, workforce of
    $577,000 and customer lists of $7,517,000. These assets were primarily
    related to the Company's resale CLEC business, which was acquired in
    1999. The underlying operations, customer relationships and future
    revenue streams had deteriorated significantly since the acquisition.
    These were indicators that the carrying amount of the resale-related
    assets was not recoverable. The Company estimated that the fair value
    of these assets was zero due to the lack of potential buyers, the
    overall deterioration of the resale CLEC business environment and
    because of the negative cash flow of these resale businesses for the
    foreseeable future. The goodwill had useful lives of 5 and 10 years,
    and the other intangibles had useful lives of 3 and 5 years.

    Also at December 31, 2000, in connection with the reevaluation of its
    business plan announced in April 2001, the Company reduced the carrying
    amount of its LMDS licenses by $21,136,000 to reflect their estimated
    fair value. The estimated fair value was determined based on an
    analysis of sales of other LMDS licenses.

8.  Acquisitions

    On September 29, 2000, CoreComm Limited completed two significant
    acquisitions. CoreComm Limited acquired ATX Telecommunications
    Services, Inc., referred to as ATX, a CLEC providing integrated voice
    and high-speed data services, including long distance, local, wireless
    and network services through the use of telephone switching equipment
    and other physical facilities in the New York - Virginia corridor. ATX
    was acquired for approximately $39.4 million in cash, approximately
    $108.7 million principal amount of CoreComm Limited's senior unsecured
    notes due 2003, 12,398,000 shares of CoreComm Limited's common stock
    and 250,000 shares of CoreComm Limited's Series B preferred stock with
    a stated value of $250.0 million. The common stock was valued at $178.7
    million, the fair value at the time of the third amendment to the ATX
    merger agreement on July 31, 2000. The senior unsecured notes and the
    Series B preferred stock were valued at $94.0 million and $67.3
    million, respectively, the fair value on the date of issuance. In
    addition, CoreComm Limited incurred acquisition related costs of
    approximately $9.7 million.

    CoreComm Limited also acquired Voyager.net, Inc., referred to as
    Voyager, a large independent Internet communications company focused on
    the Midwestern United States. Voyager was acquired for approximately
    $36.1 million in cash and 19,435,000 shares of CoreComm Limited's
    common stock. The common stock was valued at $154.6 million, the fair
    value at the time of the closing of the transaction. In addition,
    CoreComm Limited incurred acquisition related costs of approximately
    $9.4 million and repaid approximately $24.0 million of Voyager debt
    including accrued interest.

    The assets of ATX and Voyager were contributed to subsidiaries of the
    Company.

    These acquisitions have been accounted for as purchases, and,
    accordingly the net assets and results of operations of the acquired
    businesses have been included in the consolidated financial statements
    from the date of acquisition. The aggregate purchase price of $613.2
    million exceeded the estimated fair value of net tangible assets
    acquired by $585.8 million, which was allocated to goodwill.

                                   S-16

<PAGE>

    The pro forma unaudited consolidated results of operations for the year
    ended December 31, 2000 assuming consummation of the acquisitions as of
    January 1, 2000 is as follows:

      Total revenue                                          $297,850,000
      Net (loss)                                             (391,276,000)
      Basic and diluted net (loss) per share                       (41.13)


    In May 1999, CoreComm Limited acquired 100% of the stock of MegsINet
    Inc., a national Internet Service Provider, referred to as ISP, in
    Chicago for a total consideration of $16.8 million in cash and
    3,245,000 shares of CoreComm Limited's common stock. In addition,
    CoreComm Limited exchanged MegsINet stock options for options to
    purchase 444,000 shares of CoreComm Limited's common stock, repaid $2.0
    million of MegsINet debt and incurred acquisition related costs of $1.2
    million. The common stock portion of the consideration was valued at
    $30.8 million, the fair value on the date prior to the announcement.
    The stock options were valued at $4.0 million using the Black-Scholes
    option pricing model.

    Also in May 1999, CoreComm Limited acquired the wireline assets of USN
    Communications, Inc., which was a CLEC that operated on a resale basis,
    for a cash payment of $26.4 million, warrants to purchase 563,000
    shares of CoreComm Limited's common stock at a price of $13.33 per
    share and 225,000 shares at a price of $22.22 per share, and a
    potential contingent cash payment which was capped at $58.6 million.
    The contingent payment was payable only if the USN assets met or
    exceeded operating performance thresholds. A contingent payment is not
    expected to be required. The warrants were valued at $9.1 million, the
    fair value on the date of issuance. In addition, CoreComm Limited
    incurred acquisition related costs of $1.0 million.

    The assets of MegsINet and USN were contributed to subsidiaries of the
    Company.

    These acquisitions have been accounted for as purchases, and,
    accordingly, the net assets and results of operations of the acquired
    businesses have been included in the consolidated financial statements
    from the dates of acquisition. The aggregate purchase price of $91.3
    million exceeded the fair value of the net tangible assets acquired by
    $75.6 million, which was allocated as follows: $13.3 million to
    customer lists, $1.5 million to workforce and $60.8 million to
    goodwill.

9.  Intangible Assets

<TABLE>
<CAPTION>

    Intangible assets consist of:

                                                                               December 31,
                                                                         2001                2000
                                                                  ------------------- --------------------
<S>                                                                       <C>             <C>
LMDS license costs                                                        $4,230,000      $    4,230,000
Workforce, net of accumulated amortization of
    $198,000 (2000)                                                              -                52,000
Customer lists, net of accumulated amortization of
    None (2001) and $530,000 (2000)                                       26,630,000           1,810,000
                                                                  ------------------- --------------------
                                                                         $30,860,000          $6,092,000
                                                                  =================== ====================
</TABLE>

The Company accounted for the issuance of over 80% of its outstanding
shares to new stockholders upon the completion of the first phase of the
Holdco recapitalization as if a purchase business combination occurred. The
Company adjusted the carrying value of its assets and liabilities to fair
value as of December 31, 2001, including the value of LMDS licenses and
customer lists.
7
<PAGE>

10. Fixed Assets
<TABLE>
<CAPTION>

    Fixed assets consist of:


                                                           December 31,
                                                  2001                       2000
                                        -------------------------------------------------------

<S>                                           <C>                       <C>
Operating equipment                           $35,388,000               $124,335,000
Computer hardware and software                 33,692,000                 53,092,000
Other equipment                                17,642,000                 21,182,000
Construction-in-progress                                -                 22,097,000
                                        -------------------------------------------------------
                                               86,722,000                220,706,000
Accumulated depreciation                                -                (41,327,000)
                                        -------------------------------------------------------
                                              $86,722,000               $179,379,000
                                        =======================================================
</TABLE>


    The change in the fixed asset balance from December 31, 2000 to
    December 31, 2001 is partially due to the 2001 reorganization, the
    settlement of certain liabilities, the review of the recoverability of
    long-lived assets and the adjustment to the carrying value of assets
    and liabilities as if a purchase business combination occurred. The
    2001 reorganization included fixed asset write-offs related to vacated
    offices of $5.3 million and network assets in abandoned markets of
    $13.4 million. The settlement of amounts due to one of the Company's
    equipment vendors included the return of certain equipment with a net
    book value of $6.8 million. The Company performed a review of the
    recoverability of its long-lived assets including fixed assets that
    indicated that the $14.5 million carrying value of certain fixed assets
    would not be recoverable. Finally, the Company accounted for the
    issuance of over 80% of its outstanding shares to new stockholders upon
    the completion of the first phase of the Holdco recapitalization as if
    a purchase business combination occurred. The Company adjusted the
    carrying value of its assets and liabilities to fair value as of
    December 31, 2001, including the value of its fixed assets.

11. Accrued Expenses

<TABLE>
<CAPTION>

         Accrued expenses consist of:
                                                        December 31,
                                                  2001                  2000
                                         --------------------------------------------

<S>                                            <C>                    <C>
  Payroll and related                          $7,517,000             $5,032,000
  Professional fees                               935,000              2,331,000
  Taxes, including income taxes                16,534,000             13,730,000
  Accrued equipment purchases                     385,000             14,460,000
  Toll and interconnect                        28,668,000             20,628,000
  Reorganization costs                          7,273,000              1,835,000
  Other                                         6,454,000              6,542,000
                                         --------------------------------------------
                                              $67,766,000            $64,558,000
                                         ============================================
</TABLE>

                                   S-18
<PAGE>

12. Long-Term Debt
<TABLE>
<CAPTION>

    Long-term debt consists of:

                                                                         December 31,
                                                                   2001                2000
                                                            -------------------- ------------------

<S>                                                              <C>                    <C>
Senior secured credit facility                                   $156,100,000           $91,100,000
Working capital promissory note, interest at 8.5%                           -             1,496,000
Note payable for equipment, interest at 12.75%                              -             3,331,000
Other                                                                   33,000              160,000
                                                            -------------------- ------------------
                                                                   156,133,000           96,087,000
Less current portion                                                    33,000            4,960,000
                                                            -------------------- ------------------
                                                                  $156,100,000          $91,127,000
                                                            ==================== ==================
</TABLE>


    In September 2000, subsidiaries of the Company entered into a senior
    secured credit facility with The Chase Manhattan Bank as lender,
    administrative agent and collateral agent. CoreComm Limited and the
    Company have unconditionally guaranteed payment under the facility. The
    facility was amended and restated in April 2001. The senior secured
    credit facility provides for both a term loan facility and a revolving
    credit facility. The aggregate amount available was amended to $156.1
    million of which the term loan facility is $106.1 million and the
    revolving credit facility is $50 million. As of April 2001, the entire
    amount available under the senior secured credit facility had been
    borrowed.

    The term loan facility will amortize in quarterly installments of
    principal commencing on December 31, 2003 with a final maturity on
    September 22, 2008. The revolving credit facility shall be
    automatically and permanently reduced in increasing quarterly
    installments of principal commencing on December 31, 2003 with a
    termination date on September 22, 2008. In the event CoreComm Limited's
    remaining approximately $4.75 million principal amount of 6%
    Convertible Subordinated Notes have not been converted or refinanced on
    or prior to April 1, 2006, then the facilities become payable in full
    on April 1, 2006.

    The interest rate on both the term loan facility and the revolving
    credit facility was initially, at the Company's option, either 3.25%
    per annum plus the base rate, which is the higher of the prime rate or
    the federal funds effective rate plus 0.5% per annum; or the
    reserve-adjusted London Interbank Offered Rate plus 4.25% per annum. In
    April 2001 the interest rate was amend to, at the Company's option,
    either 3.5% per annum plus the base rate, which is the higher of the
    prime rate or the federal funds effective rate plus 0.5% per annum, or
    the reserve-adjusted London Interbank Offered Rate plus 4.5% per annum.
    Interest is payable at least quarterly. The unused portion of the
    facility is subject to a commitment fee equal to 1.25% per annum
    payable quarterly, subject to reduction to 1.00% per annum based upon
    the amount borrowed under the facility. At December 31, 2001 and 2000,
    the effective interest rate on the amounts outstanding was 6.86% and
    10.982%, respectively. The rate at December 31, 2001 is in effect
    through April 12, 2002.

    America Online, Inc., referred to as AOL, is a lender in the amended
    credit facility. In connection with the financing in April 2001, the
    Company entered into a marketing agreement with AOL to market a joint
    CoreComm/AOL bundled package in the Company's market areas. In
    addition, in connection with the financing in April 2001, CoreComm
    Limited issued warrants to purchase shares of its common stock. The
    estimated value of the warrants plus the excess of the advertising
    commitment over its estimated fair value to the Company aggregating
    $12,454,000 was recorded as a debt discount in April 2001. The
    unamortized debt discount of $11,687,000 was reduced to zero as part of
    the adjustment of the carrying value of assets and liabilities to fair
    value as of December 31, 2001.

                                   S-19

<PAGE>

    In 1998, MegsINet entered into a working capital promissory note and a
    note payable for operating equipment. MegsINet was required to make
    monthly principal and interest payments through January 2002 for the
    working capital note and through September 2001 for the equipment note.
    In 2001, the holders of these notes agreed to accept cash of $400,000
    and $800,000 in full settlement of all amounts due under the working
    capital note and certain capital leases and the equipment note,
    respectively. Extraordinary gains aggregating $4,067,000 were recorded
    as a result of these settlements.

    In May 2001, the Company entered into an agreement with one of its
    equipment vendors whereby $17,166,000 due to the vendor would be paid
    in three payments in January, May and August 2002. In December 2001,
    the Company and the vendor agreed to a modification of this arrangement
    in which the Company paid $2,000,000 and returned certain of the
    equipment in full settlement of the amount due. The Company recorded an
    extraordinary gain of $7,628,000 as a result of this transaction.

    In April 2001, the Company and CoreComm Limited as co-obligators issued
    to Booth American Company $10 million aggregate principal amount of
    10.75% Unsecured Convertible PIK Notes Due April 2011. Interest on the
    notes was at an annual rate of 10.75% payable semiannually on October
    15 and April 15 of each year, commencing October 15, 2001. The interest
    was payable in kind by the issuance of additional 10.75% Unsecured
    Convertible PIK Notes due April 2011 in such principal amount as shall
    equal the interest payment that was then due. The notes were
    convertible into CoreComm Limited's common stock prior to maturity at a
    conversion price of $1.00 per share, subject to adjustment. Additional
    notes issued for interest had an initial conversion price equal to 120%
    of the weighted average closing price of CoreComm Limited's common
    stock for a specified period. All of these outstanding 10.75% Unsecured
    Convertible PIK Notes Due April 2011 were exchanged for shares of the
    Company in December 2001.

    The Company exchanged the approximately $10.8 million principal and
    accrued interest of 10.75% Unsecured Convertible PIK Notes Due 2011 and
    the approximately $18.0 million principal and accrued interest of
    10.75% Senior Unsecured Convertible PIK Notes Due 2010 (that were
    included in notes payable to related parties) for shares of its common
    stock. The Company recorded an extraordinary gain of $25,677,000 from
    the extinguishment of these notes. Costs of $2,655,000 were incurred in
    connection with the Holdco recapitalization which are included as an
    offset to the extraordinary gain. In addition, the Company recorded an
    extraordinary gain of $4,781,000 related to the settlement of other
    liabilities.

    The senior secured credit facility restricts the payment of cash
    dividends and loans to the Company. At December 31, 2001, restricted
    net assets were approximately $29 million.

    As of December 31, 2001, the aggregate principal amounts of long-term
    debt scheduled for repayment are as follows:

         Year Ending December 31,
                   2002                          $33,000
                   2003                        1,950,000
                   2004                        9,750,000
                   2005                       25,350,000
                   2006                       50,700,000
                Thereafter                    68,350,000
                                       -------------------
                                            $156,133,000
                                       ===================

                                   S-20
<PAGE>

13. Other Charges

    Other charges in 2001 include reorganization charges of $37,372,000 and
    an adjustment to the reserve for notes receivable from former officers
    of Voyager of $2,181,000. The reorganization charges relate to the
    Company's announcements in May and July 2001 that it was taking
    additional actions to reorganize, re-size and reduce operating costs
    and create greater efficiency in various areas of the Company. A total
    of $21,386,000 of these costs are for equipment and other assets that
    will not require any future cash outlays. The employee severance and
    related costs in 2001 were for approximately 630 employees to be
    terminated, none of whom are still employed by the Company as of
    December 31, 2001. The major actions involved in the 2001
    reorganization included: (1) consolidation of functions such as network
    operations, customer service and finance, (2) initiatives to increase
    gross margins and (3) agreements with vendors to reduce or eliminate
    purchase commitments. The consolidation of functions resulted in
    employee terminations and the closing of offices. Employee severance
    and related costs, lease exit costs and fixed assets and prepayment
    write-downs include charges related to these actions. Initiatives to
    increase gross margins resulted in consolidation of network assets and
    elimination of redundant and less profitable facilities. Charges for
    these actions include lease exit costs and fixed assets and prepayment
    write-downs. Finally, reductions or elimination of purchase commitments
    resulted in agreement termination charges. All of these actions are
    expected to be completed by June 30, 2002. Fixed assets and prepayments
    written-off include $5.3 million related to vacated offices, $13.4
    million for network assets in abandoned markets and $2.7 million for
    prepayments in respect of ILEC facilities in abandoned markets.

    Other charges in 2000 include a reserve of $8,700,000 for notes
    receivable from former officers of Voyager, and reorganization charges
    of $4,006,000. The employee severance and related costs in 2000 were
    for approximately 250 employees to be terminated, none of whom were
    still employed by the Company as of December 31, 2000.

    The following table summarizes the reorganization charges incurred and
    utilized in 2000 and 2001:

<TABLE>
<CAPTION>

                                         Employee                                                Fixed
                                        Severance           Lease                                Assets
                                       And Related           Exit           Agreement             And
                                          Costs             Costs          Terminations       Prepayments        Total
                                     -------------------------------------------------------------------------------------
                                                                          (in thousands)
<S>                                      <C>                  <C>                    <C>               <C>       <C>
Charged to expense                       $2,089               $1,917                 $-                $-        $4,006
Utilized                                   (775)              (1,396)                 -                 -        (2,171)
                                     -------------------------------------------------------------------------------------
Balance, December 31, 2000                1,314                  521                  -                 -         1,835
Charged to expense                        3,409                6,928              6,572            21,772        38,681
Adjustments                                (996)                  73                  -              (386)       (1,309)
Utilized                                 (3,218)              (4,416)            (2,914)          (21,386)      (31,934)
                                     -------------------------------------------------------------------------------------
Balance, December 31, 2001                 $509               $3,106             $3,658                $-        $7,273
                                     =====================================================================================
</TABLE>


                                                           S-21
<PAGE>

14. Fair Values of Financial Instruments

    The following methods and assumptions were used by the Company in
    estimating its fair value disclosures for financial instruments:

    Cash and cash equivalents: The carrying amounts reported in the
    consolidated balance sheets approximate fair value.

    Long-term debt: The carrying amount of the variable rate senior secured
    credit facility approximates the fair value. The fair value of the
    Company's other notes payable are estimated using discounted cash flow
    analyses, based on the Company's incremental borrowing rates for
    similar types of borrowing arrangements.

    The carrying amounts and fair values of the Company's financial
    instruments are as follows:

<TABLE>
<CAPTION>
                                                          December 31, 2001                 December 31, 2000
                                                  ---------------------------------- ---------------------------------
                                                      Carrying           Fair           Carrying           Fair
                                                       Amount            Value           Amount            Value
                                                  ----------------- ---------------- ---------------- ----------------
                                                                            (in thousands)

<S>                                                      <C>             <C>                <C>            <C>
Cash and cash equivalents                                $  24,966       $  24,966          $  22,773      $  22,773
Long-term debt:
  Working capital promissory note                                -               -              1,496          1,392
  Equipment note                                                 -               -              3,331          2,496
  Senior secured credit facility                           156,100         156,100             91,100         91,100
  Notes payable to related parties                          16,174          16,174             16,170         15,355
  Other                                                         33              33                160            138
</TABLE>

15. Leases

    The Company has capital leases for certain of its operating equipment.
    Leased property included in operating equipment consists of:

                                                        December 31,
                                                  2001              2000
                                            -----------------  ----------------
        Operating equipment                   $14,145,000        $41,859,000
        Accumulated depreciation                        -         14,699,000
                                            -----------------  ----------------
                                              $14,145,000        $27,160,000
                                            =================  ================


<TABLE>
<CAPTION>

    Future minimum annual payments under these leases at December 31, 2001
    are as follows:

Year Ending December 31,

<S>    <C>                                                                                  <C>
       2002                                                                                 $11,008,000
       2003                                                                                     266,000
                                                                                         ------------------
       Total minimum lease payments                                                          11,274,000
       Less amount representing interest (at rates ranging from 8.5% to 26.44%)               1,373,000
                                                                                         ------------------
       Present value of net minimum obligations                                               9,901,000
       Current portion                                                                        9,634,000
                                                                                         ------------------
                                                                                            $   267,000
                                                                                         ==================
</TABLE>

    As of December 31, 2001, the Company had leases for office space and
    equipment which extend through 2013. Total rent expense for the years
    ended December 31, 2001, 2000 and 1999 under operating leases was
    $8,791,000, $7,764,000 and $5,151,000, respectively.

                                   S-22

<PAGE>

    Future minimum annual lease payments under noncancellable operating
    leases at December 31, 2001 are as follows: $7,704,000 (2002);
    $6,794,000 (2003); $4,675,000 (2004); $3,652,000 (2005) $2,469,000
    (2006) and $6,122,000 thereafter.

16. Related Party Transactions

    Notes payable to related parties consists of:

                                                          December 31,
                                                    2001               2000
                                                --------------    --------------
  10.75% Senior Unsecured Convertible
     PIK Notes Due December 2010, plus
     accrued interest                             $         -       $16,170,000

  10.75% Unsecured Convertible PIK Notes
     Due April 2011, plus accrued interest         16,174,000                 -
                                                --------------    --------------
                                                  $16,174,000       $16,170,000
                                                ==============    ==============


    In December 2000, the Company issued $16.1 million aggregate principal
    amount of 10.75% Senior Unsecured Convertible PIK Notes Due December
    2010, which were a joint obligation of CoreComm Limited and the
    Company, to officers and directors of CoreComm Limited and the Company.
    Interest on the notes was at an annual rate of 10.75% payable
    semiannually on January 1 and July 1 of each year, which commenced on
    July 1, 2001. The interest was payable in kind by the issuance of
    additional Senior Unsecured Convertible PIK Notes Due December 2010 in
    such principal amount equal the interest payment that was then due. The
    notes were convertible into CoreComm Limited common stock prior to
    maturity at a conversion price of $5.00 per share, subject to
    adjustment. The additional notes issued for interest had an initial
    conversion price equal to 120% of the weighted average closing price of
    CoreComm Limited's common stock for a specified period. All of the
    outstanding 10.75% Senior Unsecured Convertible PIK Notes Due December
    2010 were exchanged for shares of the Company's common stock in
    December 2001.

    Some of the officers and directors of the Company are also officers or
    directors of NTL Incorporated, referred to as NTL. In April 2001,
    CoreComm Limited and the Company as co-obligors issued to NTL $15
    million aggregate principal amount of 10.75% Unsecured Convertible PIK
    Notes Due April 2011. In addition, in April 2001, CoreComm Limited
    issued warrants to NTL, and CoreComm Limited and the Company entered
    into a network and software agreement with NTL. The estimated value of
    the warrants of $397,000 was recorded as a debt discount in April 2001.
    The unamortized debt discount of $367,000 was reduced to zero as part
    of the adjustment of the carrying value of assets and liabilities to
    fair value as of December 31, 2001. Pursuant to the network and
    software agreement with NTL, the Company will provide U.S. network
    access for U.K. Internet traffic from NTL's U.K. customers for three
    years, as well as a royalty free license to use certain provisioning
    software and know-how.

    Interest on the 10.75% Unsecured Convertible PIK Notes Due April 2011
    is at an annual rate of 10.75% payable semiannually on October 15 and
    April 15 of each year, which commenced on October 15, 2001. The
    interest is payable in kind by the issuance of additional 10.75%
    Unsecured Convertible PIK Notes Due April 2011 in such principal amount
    as shall equal the interest payment that is then due. Additional notes
    issued for interest will have an initial conversion price equal to 120%
    of the weighted average closing price of CoreComm Limited's common
    stock for a specified period. The notes are convertible into shares of
    CoreComm Limited's common stock prior to maturity at a conversion price
    of $1.00 per share, subject to adjustment. However, NTL and

                                   S-23

<PAGE>


    CoreComm Limited and the Company have entered into an agreement
    relating to the conversion feature of the notes following the Holdco
    recapitalization. Through that agreement, consistent with the original
    terms of the notes, CoreComm Limited and the Company have agreed to
    exercise their right under the notes such that, following the
    successful completion of the exchange offer to the holders of CoreComm
    Limited's common stock to exchange their shares for shares of the
    Company's common stock, the convertibility feature of the notes will be
    altered so that rather than the notes being convertible into shares of
    CoreComm Limited common stock, the notes will become convertible into
    shares of the Company's common stock. At that time, the conversion
    price of $1.00 will be equitably adjusted by applying the exchange
    ratio in the exchange offer, which results in a new conversion price of
    $116.70 per share of the Company's common stock. NTL has agreed not to
    exercise its rights to convert into CoreComm Limited common stock for
    six months from February 5, 2002 (unless that right has previously
    ceased as a result of the completion of the exchange offer and the
    change in the convertibility feature). In the event that the exchange
    offer is not completed, the conversion feature would remain into
    CoreComm Limited common stock. These notes are redeemable, in whole or
    in part, at the Company's option, at any time on or after April 12,
    2003, at a redemption price of 103.429% that declines annually to 100%
    in April 2007, in each case together with accrued and unpaid interest
    to the redemption date.

    NTL provides the Company with management, financial, legal and
    technical services, access to office space and equipment and use of
    supplies. Amounts charged to the Company by NTL consist of salaries and
    direct costs allocated to the Company where identifiable, and a
    percentage of the portion of NTL's corporate overhead which cannot be
    specifically allocated to NTL. Effective January 1, 2001, the
    percentage used to allocate corporate overhead was reduced. It is not
    practicable to determine the amounts of these expenses that would have
    been incurred had the Company operated as an unaffiliated entity. In
    the opinion of management, this allocation method is reasonable. For
    the years ended December 31, 2001, 2000 and 1999, NTL charged the
    Company $446,000, $1,186,000 and $2,330,000, respectively, which is
    included in corporate expenses.

    The Company provided NTL with access to office space and equipment and
    the use of supplies until August 2001. In the fourth quarter of 1999,
    the Company began charging NTL a percentage of the Company's office
    rent and supplies expense. It is not practicable to determine the
    amounts of these expenses that would have been incurred had the Company
    operated as an unaffiliated entity. In the opinion of management, this
    allocation method is reasonable. In 2001, 2000 and 1999, the Company
    charged NTL $121,000, $267,000 and $62,000, respectively, which reduced
    corporate expenses.

    A subsidiary of the Company provides billing and software development
    services to subsidiaries of NTL. General and administrative expenses
    were reduced by $1,883,000, $1,400,000 and $800,000 for the years ended
    December 31, 2001, 2000 and 1999, respectively, as a result of these
    charges.

    In 2001, the Company and NTL entered into a license agreement whereby
    NTL was granted an exclusive, irrevocable, perpetual license to certain
    billing software developed by the Company for telephony rating, digital
    television events rating, fraud management and other tasks. The sales
    price was cash of $9.8 million for the development costs expended by
    the Company plus a fixed amount of $3.0 million representing the
    one-time perpetual license fee. The billing software was being used by
    NTL at the time of this agreement, and was being maintained and
    modified by the Company under an ongoing software maintenance and
    development outsourcing arrangement between the companies. The Company
    recorded the aggregate $12.8 million as deferred revenue, of which $2.5
    million was recognized in 2001.


                                   S-24

<PAGE>

    In March 2000, the Company and NTL announced that they had entered into
    an agreement to link their networks in order to create an international
    Internet backbone that commenced operations in February 2001. The
    Company recognized revenue of $327,000 for the network usage in the
    year ended December 31, 2001.

    The Company leases office space from entities controlled by an
    individual who owns 32% of the outstanding shares of the Company's
    common stock. Rent expense for these leases for the year ended December
    31, 2001 was approximately $1.6 million.

17. 401(k) Plan

    The Company sponsors a 401(k) Plan in which all full-time employees who
    have completed 90 days of employment and are 21 years of age may
    participate. The Company's matching contribution is determined annually
    by the Board of Directors. Participants may make salary deferral
    contributions of 1% to 15% of their compensation not to exceed the
    maximum allowed by law. The expense for the years ended December 31,
    2001, 2000 and 1999 was $380,000, $486,000 and $350,000, respectively.

18. Shareholders' Equity

    Stock Split

    The Company declared a 6,342.944 to 1 stock split which was effective
    on December 17, 2001. The Company's outstanding shares increased from
    1,500 to 9,514,416 as a result of this stock split. The consolidated
    financial statements and the notes thereto give retroactive effect to
    the stock split.

    Non-Cash Compensation

    In June 2001, CoreComm Limited's Board of Directors approved the
    repricing of certain CoreComm Limited stock options granted to
    employees of the Company. George Blumenthal, the then Chairman of the
    Board of Directors of CoreComm Limited, Barclay Knapp, the then
    President of CoreComm Limited, and the members of the Board of
    Directors of CoreComm Limited did not participate in the repricing.
    Options to purchase an aggregate of approximately 10.2 million shares
    of CoreComm Limited's common stock with an average exercise price of
    $10.70 per share were repriced to $.25, $.75 or $1.25 per share,
    depending upon the original exercise price. In accordance with APB No.
    25 and related interpretations, CoreComm Limited and the Company are
    accounting for the repriced options as a variable plan. The Company
    will recognize non-cash compensation expense for the difference between
    the quoted market price of the common stock and the exercise price of
    the repriced options while the options remain outstanding. The CoreComm
    Limited Board of Directors has taken this action to continue to
    provide the appropriate performance incentives to those affected.

    In April 2000, the compensation and option committee of the CoreComm
    Limited Board of Directors approved the issuance of options to purchase
    approximately 2,747,000 shares of CoreComm Limited's common stock to
    employees of the Company at an exercise price of $14.55, which was less
    than the fair market value of CoreComm Limited's common stock on the
    date of the grant. In accordance with APB Opinion No. 25, in April
    2000, the Company recorded non-cash compensation expense of
    approximately $29.0 million and a non-cash deferred expense of
    approximately $31.3 million. From April 2000 to December 31, 2000, $9.7
    million of the deferred non-cash compensation was charged to expense.
    In 2001, the remaining $21.6 million of the deferred non-cash
    compensation was charged to expense.

                                   S-25

<PAGE>

    In November 2000, the Board of Directors of CoreComm Limited approved
    the rescission of certain previously exercised employee stock options.
    CoreComm Limited issued notes to employees of the Company for the
    repurchase of the 671,000 shares of CoreComm Limited's common stock for
    an aggregate of $6,803,000, which exceeded the fair market value of
    CoreComm Limited's common stock on the date of repurchase. The notes
    earned interest at a rate of 4.5% and were redeemed by CoreComm Limited
    in December 2000. The Company recorded non-cash compensation of $4.7
    million from these transactions.

    The non-cash compensation charge of $1.1 million in 1999 was recorded
    in accordance with APB Opinion No. 25, related to a change in CoreComm
    Limited stock option agreements granted to certain of the Company's
    employees.

    Stockholder Rights Plan

    The Company adopted a stockholder rights plan in December 2001. In
    connection with the stockholder rights plan, the Board of Directors
    declared and paid a dividend of one preferred share purchase right for
    each share of common stock outstanding on December 17, 2001. Each right
    entitles the holder, under certain potential takeover events, to
    purchase from the Company one one-thousandth of a share of Series A
    Junior Participating Preferred Stock, referred to as Series A Preferred
    Stock, at an exercise price of initially four times the average closing
    price of the Company's common stock over the first five days of
    trading, subject to adjustment. The rights expire on December 17, 2011
    unless an exchange or redemption or a completion of a merger occurs
    first. There are 1,000,000 shares of Series A Preferred Stock
    authorized for issuance under the plan. No shares of Series A Preferred
    Stock are issued or outstanding.

    The Series A Preferred Stock will be entitled to a minimum preferential
    quarterly dividend payment of an amount equal to the greater of $.01
    per share or 1,000 times the aggregate per share amount of all
    dividends declared on the Company's common stock since the immediately
    preceding dividend payment date. In the event of liquidation, the
    holders of Series A Preferred Stock will be entitled to a liquidation
    payment of $1 per share plus accrued and unpaid dividends. Each share
    of Series A Preferred Stock will have 1,000 votes on all matters and
    will vote as a single class with the holders of the Company's common
    stock.

    Warrants

    In connection with the amendment and restatement of the senior secured
    credit facility in April 2001, CoreComm Limited issued to lenders
    warrants to purchase approximately 10.6 million shares of its common
    stock at an exercise price of $.01 per share that expire in April 2011.
    Warrants to purchase an aggregate of approximately 1.4 million shares
    of CoreComm Limited common stock issued in December 2000 and January
    2001 were canceled upon the issuance of these new warrants.

    CoreComm Limited had the following warrants outstanding as of December
    31, 2001: (1) warrants to purchase an aggregate of 29,000 shares of
    common stock at $13.75 per share issued in 1999 that expire in August
    2008, (2) warrants to purchase an aggregate of 225,000 shares of common
    stock at $22.22 per share issued in 1999 that expire in May 2004, (3)
    warrants to purchase an aggregate of 563,000 shares of common stock at
    $13.33 per share issued in 1999 that expire in May 2002 and (4)
    warrants to purchase an aggregate of 10,580,000 shares of common stock
    at $.01 per share issued in 2001 that expire in April 2011. None of
    these warrants were exercised in 2001 or 2000.

    The Company has offered its common stock to CoreComm Limited's
    stockholders through a registered public exchange offer. If this
    exchange offer and the subsequent merger are consummated, CoreComm
    Limited's warrants will be exercisable into common shares of the Company
    on an as-converted basis, subject to the exchange ratio in the
    exchange offer.

                                   S-26

<PAGE>


    Stock Options

    In December 2001, the Company adopted a new stock option plan for its
    employees. A total of 2.9 million shares of common stock were reserved
    for issuance under the plan, which represents 22.5% of the total fully
    diluted shares of the Company. In January 2002, the Board of Directors
    approved a grant of options to purchase an aggregate of approximately
    2.58 million shares of the Company's common stock, representing
    approximately 20% of the total fully diluted shares. The exercise price
    of these options is $3.00 per share. The number of shares available
    under the plan and the number of shares into which each option is
    exercisable are subject to adjustment in the event of stock splits and
    other similar transactions.

    The Company's option plan provides that incentive stock options be
    granted at the fair market value of the Company's common stock on the
    date of grant, and nonqualified stock options be granted at a price
    determined by the Compensation and Option Committee of the Company's
    Board of Directors. Options are generally exercisable as to 34% of the
    shares subject thereto on the date of grant and become exercisable as
    to an additional 33% of the shares subject thereto on each January 1
    thereafter, while the optionee remains an employee of the Company or
    its affiliates. Options will expire ten years after the date of the
    grant.

    As of December 31, 2001, there were approximately 33,057,000 shares of
    CoreComm Limited common stock reserved for issuance under the CoreComm
    Limited stock option plans, referred to as the Limited Plans, and there
    were approximately 8.4 million shares available for issuance. The
    Limited Plans provide that incentive stock options be granted at the
    fair market value of CoreComm Limited's common stock on the date of
    grant, and nonqualified stock options be granted at a price determined
    by the Compensation and Option Committee of the CoreComm Limited Board
    of Directors. Options are generally exercisable as to 20% of the shares
    subject thereto on the date of grant and become exercisable as to an
    additional 20% of the shares subject thereto on each January 1
    thereafter, while the optionee remains an employee of CoreComm Limited
    or its affiliates. Options will expire ten years after the date of the
    grant.

    In December 2001, the CoreComm Limited Board of Directors, in
    connection with the Holdco recapitalization, accelerated all
    outstanding options to acquire shares of CoreComm Limited common stock
    so that all are presently fully vested and exercisable. CoreComm
    Limited options are not exercisable for shares of the Company's common
    stock. In the event that the Company is successful in consummating the
    exchange offers, CoreComm Limited would become a subsidiary of the
    Company. Subsequent to that time, the Company and CoreComm Limited
    intend to effect a merger between CoreComm Limited and a subsidiary of
    the Company which would have the effect of converting holders of any
    remaining outstanding shares of CoreComm Limited common stock not owned
    by the Company into shares of the Company at an exchange ratio
    identical to that being offered in the exchange offers. Between now and
    that time, if holders of CoreComm Limited options exercise their
    options, they would, at the time of a merger, have the same rights as
    other holders of CoreComm Limited common stock to have their shares of
    CoreComm Limited converted to shares of the Company at that exchange
    ratio. The Company may be required to record non-cash compensation upon
    the ultimate resolution of the CoreComm Limited Stock options.

    In connection with the distribution of CoreComm Limited to CCPR's
    shareholders, CoreComm Limited issued options to purchase approximately
    1,877,000 shares of CoreComm Limited common stock to holders of CCPR
    stock options who elected to receive options. In addition, CoreComm
    Limited issued warrants to purchase 6,153,000 shares of its common
    stock to holders of CCPR stock options who elected to receive warrants.
    These warrants are referred to as distribution warrants.

                                   S-27

<PAGE>


    Pro forma information regarding net loss and net loss per share is
    required by SFAS No. 123, and has been determined as if CoreComm
    Limited had accounted for its employee warrants and stock options under
    the fair value method of that Statement. The fair value for these
    warrants and options was estimated at the date of grant using the
    Black-Scholes option pricing model with the following weighted-average
    assumptions for 2001, 2000 and 1999: risk-free interest rate of 4.47%,
    5.30% and 6.81%, respectively, dividend yield of 0%, volatility factor
    of the expected market price of CoreComm Limited's common stock of
    1.276, .804 and .465, respectively, and a weighted-average expected
    life of the warrants and options of 10 years.

    The Black-Scholes option valuation model was developed for use in
    estimating the fair value of traded options which have no vesting
    restrictions and are fully transferable. In addition, option valuation
    models require the input of highly subjective assumptions including the
    expected stock price volatility. Because CoreComm Limited's
    distribution warrants and stock options have characteristics
    significantly different from those of traded options and because
    changes in the subjective input assumptions can materially affect the
    fair value estimate, in management's opinion, the existing models do
    not necessarily provide a reliable single measure of the fair value of
    its distribution warrants and stock options.

    For purposes of pro forma disclosures, the estimated fair value of the
    distribution warrants and options is amortized to expense over the
    options' vesting periods. Following is the Company's pro forma
    information as if the Company and not CoreComm Limited had issued the
    distribution warrants and stock options:

<TABLE>
<CAPTION>

                                                                                      Year Ended December 31,
                                                                 2001               2000                  1999
                                                           ----------------- -------------------- ---------------------

<S>                                                            <C>                <C>                   <C>
Pro forma net (loss)                                           $(678,921,000)     $(376,557,000)        $(128,451,000)
Pro forma net (loss) per share - basic and diluted                   $(71.22)           $(39.58)              $(13.50)


</TABLE>

    A summary of CoreComm Limited's distribution warrants and stock option
    activity and related information, as if the Company and not CoreComm
    Limited had issued the distribution warrants and stock options, for the
    years ended December 31, 2001, 2000 and 1999 follows:

<TABLE>
<CAPTION>
                                            2001                           2000                           1999
                                ------------------------------ ------------------------------ -----------------------------
                                  Number of      Weighted-       Number of      Weighted-       Number of    Weighted-Average
                                   Options        Average         Options        Average         Options       Exercise
                                               Exercise Price                 Exercise Price                     Price
                                -------------- --------------- -------------- --------------- -------------- --------------
<S>                             <C>               <C>          <C>              <C>          <C>                <C>
Outstanding - beginning
 of period                        19,349,000        $13.69       10,754,000        $15.37        9,765,000        $5.51
Granted                           16,822,000           .65       10,404,000         10.98        7,925,000        19.56
Exercised                              3,000          1.49        1,640,000          7.61        5,606,000         6.27
Forfeited                          13,971,00         12.16          169,000         14.09        1,330,000         6.27
                                --------------                 --------------                 --------------
Outstanding - end of              22,197,000         $4.80       19,349,000        $13.69       10,754,000       $15.37
 period
                                ==============                 ==============                 ==============
Exercisable at end of             22,197,000         $4.80       10,112,000        $12.51        3,438,000       $10.11
 period
                                ==============                 ==============                 ==============

Weighted-average fair value of distribution warrants and options,
calculated using the Black-Scholes option pricing model, granted during
2001, 2000 and 1999 is $0.12, $14.04 and $14.28, respectively.
</TABLE>

                                   S-28

<PAGE>

    The following table summarizes the status of the CoreComm Limited
    distribution warrants and stock options outstanding and exercisable at
    December 31, 2001, as if the Company and not CoreComm Limited had
    issued the distribution warrants and stock options:

<TABLE>
<CAPTION>

                                                                                               Warrants and
                             Warrants and Stock Options Outstanding                    Stock Options Exercisable
                      ------------------------------------------------------      -------------------------------------
                                          Weighted-          Weighted-                                Weighted-
   Range of Exercise      Number of       Remaining          Average                Number of         Average
        Prices             Options     Contractual Life   Exercise Price             Options        Exercise Price

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

<S>                       <C>              <C>                <C>                     <C>              <C>
  $0.02 to $3.03           17,012,000       8.7 years           $  0.632               17,012,000        $  0.632
  $5.86 to $7.94              576,000       6.6 years           $  6.261                  576,000        $  6.261
  $12.96 to $14.55            299,000       8.3 years           $ 13.909                  299,000        $ 13.909
  $18.78 to $22.33          4,310,000       7.5 years           $ 20.491                4,310,000        $ 20.491
  ---------------------------------------------------------------------------------------------------------------------
         Total             22,197,000                                                  22,197,000
  =====================================================================================================================
</TABLE>


19. Income Taxes

<TABLE>
<CAPTION>

    The provision for income taxes consists of the following:

                                                        Year Ended December 31,
                                             2001                2000                  1999
                                      ------------------- -------------------- ---------------------
<S>                                 <C>                  <C>                  <C>
      Current:
          Federal                          $           -       $           -        $           -
          State and local                         94,000             125,000              102,000
                                      ------------------- -------------------- ---------------------
      Total current                               94,000             125,000              102,000
                                      ------------------- -------------------- ---------------------
      Deferred:
          Federal                                      -                   -                    -
          State and local                              -                   -                    -
                                      ------------------- -------------------- ---------------------
       Total deferred                                  -                   -                    -
                                      ------------------- -------------------- ---------------------
                                                $ 94,000            $125,000             $102,000
                                      =================== ==================== =====================
</TABLE>
                                                     S-29
<PAGE>


    Deferred income taxes reflect the net tax effects of temporary
    differences between the carrying amounts of assets and liabilities for
    financial reporting purposes and the amounts used for income tax
    purposes. Significant components of the Company's deferred tax assets
    are as follows:

<TABLE>
<CAPTION>

                                                                                      December 31,
                                                                             2001                    2000
                                                                     ---------------------- ------------------------

<S>                                                                   <C>                     <C>
    Deferred tax assets:
         Depreciation                                                    $    8,503,000         $    1,214,000
         Net operating losses                                                95,932,000            107,220,000
         Allowance for doubtful accounts                                      7,435,000              4,414,000
         Amortization of goodwill                                            11,140,000              7,405,000
         Accrued expenses                                                    17,336,000             35,820,000
         Asset impairments                                                   16,737,000              8,546,000
         Other                                                                  562,000                174,000
                                                                     ---------------------- ------------------------
                                                                            157,645,000            164,793,000
    Valuation allowance for deferred tax assets                            (157,645,000)          (164,793,000)
                                                                     ---------------------- ------------------------
    Net deferred tax assets                                          $                  -   $                 -
                                                                     ====================== ========================
</TABLE>


    The deferred tax assets have been fully offset by a valuation allowance
    due to the uncertainty of realizing such tax benefit. The deferred tax
    assets include $38 million which, if realized, would be accounted for
    as a reduction of goodwill or an increase in equity.

    Due to the completion of the debt cancellation in the first phase of
    the Holdco recapitalization in December 2001, CoreComm Limited realized
    for tax purposes approximately $265 million of income, most of which is
    not subject to tax as a result of an exception set forth in the
    Internal Revenue Code. To the extent that such amount is excluded from
    taxable income, taxable attributes of the Company and subsidiaries,
    consisting of net operating loss, referred to as NOL, carryforwards are
    subject to reduction. After reduction, NOL carryforwards at December
    31, 2001 are $230 million. Furthermore, the Holdco recapitalization
    caused an ownership change pursuant to section 382 of the Internal
    Revenue Code, which imposes an annual limitation on the utilization of
    NOL carryforwards. Utilization of the Company's remaining NOL
    carryforwards will be significantly restricted by the section 382
    limitation triggered by the ownership change.

    The reconciliation of income taxes computed at U.S. federal statutory
    rates to income tax expense is as follows:

<TABLE>
<CAPTION>

                                                                            Year Ended December 31,
                                                                 2001                  2000                 1999
                                                         --------------------- --------------------- --------------------

<S>                                                     <C>                   <C>                 <C>
      Benefit at federal statutory rate (35%)            $  (207,837,000)      $  (105,391,000)      $(36,077,000)
      State and local income taxes                                94,000               125,000            102,000
      Expenses not deductible for tax purposes               135,313,000            33,619,000          2,160,000
      Foreign income not subject to U.S. tax                           -                     -           (362,000)
      U.S. losses with no benefit                             72,524,000            71,772,000         34,279,000
                                                         --------------------- --------------------- ---------------------
                                                         $        94,000       $       125,000      $     102,000
                                                         ===================== ===================== ====================
</TABLE>
                                                             S-30

<PAGE>


20. Commitments and Contingent Liabilities

    As of December 31, 2001, the Company had purchase commitments of
    approximately $5,000,000 outstanding.

    The Company is involved in various disputes, arising in the ordinary
    course of its business, which may result in pending or threatened
    litigation. None of these matters are expected to have a material
    adverse effect on the Company's financial position, results of
    operations or cash flows. However, certain of these matters, if
    resolved unfavorably to us, could have a material adverse effect on the
    Company's business, financial condition and/or results of operations:

    o    CoreComm Newco, Inc., an indirect, wholly-owned subsidiary of
         CoreComm Holdco referred to as CoreComm Newco, is currently in
         litigation with Ameritech Ohio, a supplier from whom it purchases
         telecommunications products and services, over the adequacy of
         Ameritech's performance under a 1998 contract between CoreComm
         Newco and Ameritech, and related issues. This litigation began in
         June 2001 when Ameritech threatened to stop processing new orders
         following CoreComm Newco's exercise of its right under the
         contract to withhold payments for Ameritech's performance
         failures. In response to this threat, CoreComm Newco sought and
         received an order from an official of the Public Utilities
         Commission of Ohio, referred to as the PUCO, barring Ameritech
         from refusing to process new CoreComm orders. Ameritech has
         appealed that order to the PUCO and the appeal is still pending.

         On July 5, 2001, Ameritech filed a claim with the PUCO seeking
         payment from CoreComm Newco of approximately $8,600,000 allegedly
         owed under the contract. On August 8, 2001, Ameritech filed a
         second claim against CoreComm Newco in Ohio state court, seeking
         an additional approximately $4,300,000 in allegedly improperly
         withheld amounts. These claims were subsequently consolidated in
         the United States District Court, with an amended complaint from
         Ameritech seeking a total of approximately $14,400,000.

         On December 26, 2001, CoreComm Newco filed its answer to
         Ameritech's amended complaint and simultaneously filed three
         counterclaims against Ameritech and some of its affiliates,
         alleging breach of contract, antitrust violations, and fraudulent
         or negligent misrepresentation. In lieu of filing an answer to
         CoreComm Newco's counterclaims, Ameritech filed a series of
         motions on March 25, 2002, asking the Court to dismiss certain of
         CoreComm Newco's counterclaims. CoreComm Newco's response to those
         motions is currently due on April 17, 2002 and it intends to
         oppose Ameritech's requests for dismissal vigorously.

         The Company believes that CoreComm Newco has meritorious defenses
         to Ameritech's amended complaint, and that the amount currently in
         dispute is substantially less than the $14,400,000 claimed in
         Ameritech's amended complaint. For example, the figure specified
         in Ameritech's complaint does not account for (a) more than $4.1
         million in refunds that Ameritech contends it has already credited
         to CoreComm Newco's accounts since the filing its complaint, and
         (b) payments that were made by CoreComm Newco in the ordinary
         course after the time of Ameritech's submission. However, the
         Company cannot be certain how the matter will be resolved. The
         Company also believes that, to the extent Ameritech prevails with
         respect to any of its claims, Ameritech's award may be offset in
         whole or in part by amounts that CoreComm Newco is seeking to
         obtain from Ameritech under its counterclaims. However, it is
         impossible at this time to predict the outcome of the litigation.

    o    Certain operating subsidiaries of CoreComm Holdco are currently
         involved in litigation with certain subsidiaries of Verizon
         Communications, Inc., referred to as Verizon, relating to the
         timeliness and accuracy of Verizon's wholesale billing processes,
         the legitimacy of various charges that have been levied by
         Verizon, and the propriety of Verizon's effort to collect those
         charges by threatening to implement an account embargo and service
         suspension on the ability of CoreComm Holdco's subsidiaries to
         process new and pending service orders unless payment is made on
         the amounts demanded.

                                   S-31

<PAGE>

         On or about January 31, 2002, the subsidiaries of CoreComm Holdco
         operating in Delaware, District of Columbia, Maryland,
         Massachusetts, New York, Pennsylvania and received correspondence
         from Verizon claiming that Verizon was owed a total of
         approximately $14 million for services allegedly provided in those
         states and threatening to activate embargo procedures on their
         accounts if payment of the alleged amounts was not received. In
         response, the subsidiaries challenged the accuracy of Verizon's
         figures and provided formal written notice to Verizon disputing
         its claims and reiterating their several prior requests that
         Verizon provide additional information to support its contentions
         and resolve a variety of apparently systemic problems with its
         wholesale billing systems. Additionally, the subsidiaries in
         Pennsylvania, New York and Massachusetts proceeded to initiate
         litigation against Verizon before the appropriate regulatory
         authorities and/or in civil court.

         After further discussions and agreements between the parties, on
         February 28, 2002 Verizon withdrew its embargo threats in all
         states except Massachusetts. In Massachusetts, Verizon filed an
         answer to the complaint along with counterclaims seeking
         approximately $1.4 million in payment for allegedly past due
         charges. CoreComm Massachusetts is currently preparing an answer
         to these counterclaims that will dispute the accuracy of Verizon's
         contentions and discussions regarding a mutually agreeable
         resolution of the matter are continuing between the parties.

         In Pennsylvania, litigation between ATX Telecommunications and
         Verizon is continuing. In the meantime, on March 4, 2002 ATX
         received a letter from Verizon asserting that Verizon is owed
         approximately $5.7 million in allegedly past due charges and
         threatening to implement a service embargo. ATX is currently
         reviewing Verizon's claims against its own billing records and
         believes that the amount at issue could be substantially less than
         the amount claimed by Verizon when taking into account (a)
         Verizon's historical billing errors, (b) payments that have been
         or will be made in the ordinary course, and (c) unresolved
         disputes over prior charges. Accordingly, on March 29, 2002, ATX
         filed a petition with the Hearing Examiner in its complaint case
         advising that the $5.7 million figure alleged in Verizon's embargo
         letter has been placed into dispute by ATX due to Verizon's
         billing errors, that approximately $3 million of erroneous charges
         have already been found which ATX believes should be deducted from
         the claimed amount, and asking the Hearing Examiner to issue an
         order that would prevent Verizon from implementing a service
         embargo during the pendancy of the complaint proceeding. ATX
         intends to vigorously litigate its complaint regarding Verizon's
         billing errors, including the longstanding, apparently systemic
         problems that ATX has experienced with Verizon's billing systems,
         and pursue all available claims, counterclaims and offsets,
         including defending against any effort to implement any embargo or
         service suspension. However, it cannot presently predict how the
         matter will be resolved and if Verizon were to prevail on its
         claims and/or activate an account embargo or service suspension,
         it could have a material adverse affect on our business, financial
         condition and/or results of operations.

    o    On December 3, 2001, General Electric Capital Corp. filed a
         lawsuit in the Circuit Court of Cook County, Illinois against
         CoreComm Limited and MegsINet, Inc., an indirect subsidiary of
         CoreComm Holdco, seeking approximately $8 million in allegedly
         past due amounts under a capital equipment lease agreement between
         Ascend and MegsINet. GECC is seeking all amounts allegedly owed
         under the lease as well as repossession of the equipment. On
         February 19, 2002, the defendants filed a motion to dismiss
         certain of GECC's claims. GECC's response to the motion is
         currently due on April 9, 2002, defendants' reply is presently due
         on April 26, 2002 and oral argument on the motions is presently
         scheduled for May 13, 2002. CoreComm Holdco is currently in
         settlement discussions with GECC regarding these claims.

                                   S-32

<PAGE>

    o    On May 25, 2001, KMC Telecom, Inc. and some of its operating
         subsidiaries filed an action in the Supreme Court of New York for
         New York County against CoreComm Limited, Cellular Communications
         of Puerto Rico, Inc., CoreComm New York, Inc. and MegsINet, Inc.
         On that same date, KMC filed the same cause of action in the
         Circuit Court of Cook County, IL. Upon defendant's Motion to Stay
         the New York action, KMC voluntarily dismissed the Illinois
         litigation and the matter is currently proceeding in New York. KMC
         contends that it is owed approximately $2 million, primarily in
         respect of alleged early termination liabilities, under a services
         agreement and a collocation agreement with MegsINet. The
         defendants have denied KMC's claims and have asserted that the
         contracts at issue were signed without proper authorization, that
         KMC failed to perform under the alleged contracts, and that the
         termination penalties are not enforceable. The defendants have
         served discovery and intend to defend themselves in coordination
         with one of their insurance carriers.

    o    On July 6, 2001, MCI initiated a compulsory arbitration action
         against CoreComm Holdco's subsidiary CoreComm Communications, Inc.
         in connection with a dispute arising under a carrier services
         agreement between the parties. The arbitration demand contends
         that MCI is owed in excess of $1.9 million for circuits that were
         allegedly ordered by CoreComm Communications, Inc. under a carrier
         agreement. MCI has subsequently asserted that under one theory of
         the case premised on its reading of provisions relating to alleged
         early termination penalties, its claims could exceed $10 million,
         and under another theory involving a different computation its
         claims could exceed $4.5 million. The defendant has denied MCI's
         claims, asserting that the circuits were never ordered under the
         contract and have been improperly billed by MCI, and the defendant
         does not agree with MCI's various damages theories. MCI has
         admitted that there are no signed written orders for a substantial
         majority of the circuits, and the contract states that all orders
         must be submitted in writing signed by the ordering party.
         Discovery in this matter has been completed, and the case is
         currently scheduled for trial before the arbitrator in April 2002.
         The defendant is litigating the suit vigorously and pursuing all
         available claims and defenses.

    o    The Company received correspondence from a law firm on behalf of
         Weston Telecommunications, L.L.C., referred to as Weston,
         asserting that Weston is the assignee of certain rights of Easton
         Telecom Services, Inc., referred to as Easton, under an asset
         purchase agreement approved as part of the bankruptcy disposition
         of Teligent, Inc., and demanding payment of approximately $4.9
         million for telecommunications services purportedly provided under
         alleged contracts between Easton and MegsINet, Inc. On March 1,
         2002, Easton Telecom Services, LLC., formerly known as Weston,
         initiated litigation in the Northern District of Ohio against
         CoreComm Internet Group, Inc. asserting the claims discussed
         above. The defendant has investigated Weston's claims and does not
         believe that they have merit. Defendant's answer to Easton's
         complaint is presently due on April 24, 2001 and the Company
         intends to defend itself vigorously and pursue all available
         claims and defenses, including multiple defenses to the validity
         of the alleged contracts at issue.

                                   S-33
<PAGE>


<TABLE>
<CAPTION>

                           CoreComm Holdco, Inc.




         Schedule I - Condensed Financial Information of Registrant

                          Condensed Balance Sheets



                                                                                                   December 31,
                                                                                              2001                  2000
                                                                                     ----------------------- -------------------
<S>                                                                                  <C>                      <C>
Assets
Current assets:
   Cash and cash equivalents                                                                    $   -            $    6,198,000
   Marketable securities                                                                            -                 1,343,000
   Other                                                                                      476,000                 1,600,000
                                                                                     ----------------------- -------------------
Total current assets                                                                          476,000                 9,141,000

Investments in and loans to subsidiaries                                                   21,518,000               605,274,000
Investment in CoreComm Limited                                                             22,472,000                         -
Other                                                                                       1,100,000                 1,059,000
                                                                                     ----------------------- -------------------
                                                                                          $45,566,000              $615,474,000
                                                                                     ======================= ===================
Liabilities and shareholders' equity
Notes payable to related parties                                                          $16,174,000               $16,170,000

Commitments and contingent liabilities

Shareholders' equity:
   Common stock                                                                               100,000                    95,000
   Additional paid-in capital                                                              29,292,000             1,039,083,000
   Deferred non-cash compensation                                                                   -               (21,638,000)
   (Deficit)                                                                                        -              (418,236,000)
                                                                                     ----------------------- -------------------
                                                                                           29,392,000               599,304,000
                                                                                     ----------------------- -------------------
                                                                                          $45,566,000              $615,474,000
                                                                                     ======================= ===================

See accompanying notes
</TABLE>

                                                                         S-34
<PAGE>



<TABLE>
<CAPTION>

                                Schedule I - Condensed Financial Information of Registrant (continued)


                                                   Condensed Statements of Operations



                                                                                Year Ended December 31,
                                                                     2001                 2000                1999
                                                              -------------------- ------------------- --------------------

<S>                                                         <C>                   <C>                 <C>
  Costs and expenses
  Corporate expense                                           $                    $                    $
                                                                               -                    -             13,000
                                                              -------------------- ------------------- --------------------
    Operating (loss)                                                           -                    -             (13,000)

  Other income (expense)
  Interest income and other, net                                       4,025,000            2,787,000           1,638,000
  Interest expense                                                    (3,767,000)             (70,000)                  -
                                                              -------------------- ------------------- --------------------
  Income before income taxes, equity in net (loss) of
    subsidiaries and extraordinary item                                  258,000            2,717,000           1,625,000
  Income tax provision                                                         -                    -              (7,000)
                                                              -------------------- ------------------- --------------------
  Income before equity in net (loss) of subsidiaries and
    extraordinary item                                                   258,000            2,717,000           1,618,000
  Equity in net (loss) of  subsidiaries                             (619,850,000)        (303,958,000)       (104,798,000)
                                                              -------------------- ------------------- --------------------
  (Loss) before extraordinary item                                  (619,592,000)        (301,241,000)       (103,180,000)
  Gain from extinguishment of debt                                    25,677,000                    -                   -
                                                              -------------------- ------------------- --------------------
  Net (loss)                                                       $(593,915,000)       $(301,241,000)      $(103,180,000)
                                                              ==================== =================== ====================


See accompanying notes.
</TABLE>

                                                                   S-35

<PAGE>



<TABLE>
<CAPTION>

                                Schedule I - Condensed Financial Information of Registrant (continued)


                                                    Condensed Statements of Cash Flows


                                                                                     Year Ended December 31,
                                                                         2001                 2000                  1999
                                                                 -----------------------------------------------------------------

<S>                                                                   <C>                  <C>                 <C>
  Net cash provided by operating activities                           $  4,712,000         $     539,000       $    2,320,000

  Investing activities
  Acquisitions, net of cash acquired                                             -           (98,613,000)         (47,056,000)
  Purchase of marketable securities                                              -            (1,343,000)                   -
  Proceeds from sale of marketable securities                            1,343,000                     -                    -
  Increase in investments in and loans to subsidiaries                 (14,089,000)         (144,909,000)        (105,267,000)
                                                                 -----------------------------------------------------------------
  Net cash (used in) investing activities                              (12,746,000)         (244,865,000)        (152,323,000)

Financing activities
Capital contributions (distributions)                                  (23,164,000)          232,472,000          151,885,000
Proceeds from borrowings, net of financing costs                        25,000,000            16,170,000                    -
                                                                   -------------------- -------------------- ---------------------
Net cash provided by financing activities                                1,836,000           248,642,000          151,885,000
                                                                   -------------------- -------------------- ---------------------
Increase (decrease) in cash and cash equivalents                        (6,198,000)            4,316,000            1,882,000
Cash and cash equivalents at beginning of period                         6,198,000             1,882,000                    -
                                                                   -------------------- -------------------- ---------------------
Cash and cash equivalents at end of period                           $-                    $   6,198,000        $   1,882,000
                                                                   ==================== ==================== =====================


Supplemental schedule of non-cash investing activities
Capital contributions of non-cash net assets                         $-                     $559,721,000        $  45,007,000


See accompanying notes.
</TABLE>

                                                              S-36

<PAGE>


                           CoreComm Holdco, Inc.

    Schedule I - Condensed Financial Information of Registrant (continued)

                  Notes to Condensed Financial Statements

1.  Organization

    CoreComm Holdco, Inc., referred to as the Company, was formed in May
    1998 as a Bermuda corporation. It was a wholly-owned subsidiary of
    CoreComm Limited, referred to as CoreComm Limited or Limited, until
    December 2001. In July 1999, the Company was domesticated under the
    laws of Delaware.

2.  Basis of Presentation

    In the Company's condensed financial statements, the Company's
    investment in subsidiaries is stated at cost plus equity in the
    undistributed earnings of the subsidiaries. The Company's share of net
    loss of its subsidiaries is included in net loss using the equity
    method of accounting. The condensed financial statements should be read
    in conjunction with the Company's consolidated financial statements.

3.  Notes Payable to Related Parties

    In December 2000, the Company issued $16.1 million aggregate principal
    amount of 10.75% Senior Unsecured Convertible PIK Notes Due December
    2010, which were a joint obligation of CoreComm Limited and the
    Company, to officers and directors of CoreComm Limited and the Company.
    Interest on the notes was at an annual rate of 10.75% payable
    semiannually on January 1 and July 1 of each year, which commenced on
    July 1, 2001. The interest was payable in kind by the issuance of
    additional Senior Unsecured Convertible PIK Notes Due December 2010 in
    such principal amount equal to the interest payment that was then due.
    The notes were convertible into CoreComm Limited common stock prior to
    maturity at a conversion price of $5.00 per share, subject to
    adjustment. The additional notes issued for interest had an initial
    conversion price equal to 120% of the weighted average closing price of
    CoreComm Limited's common stock for a specified period. All of the
    outstanding 10.75% Senior Unsecured Convertible PIK Notes Due December
    2010 were exchanged for shares of the Company's common stock in
    December 2001.

    Some of the officers and directors of the Company are also officers or
    directors of NTL Incorporated, referred to as NTL,. In April 2001,
    CoreComm Limited and the Company as co-obligors issued to NTL $15
    million aggregate principal amount of 10.75% Unsecured Convertible PIK
    Notes Due April 2011. Interest on the notes is at an annual rate of
    10.75% payable semiannually on October 15 and April 15 of each year,
    which commenced on October 15, 2001. The interest is payable in kind by
    the issuance of additional 10.75% Unsecured Convertible PIK Notes Due
    April 2011 in such principal amount equal to the interest payment that
    is then due. Additional notes issued for interest will have an initial
    conversion price equal to 120% of the weighted average closing price of
    CoreComm Limited's common stock for a specified period. The notes are
    convertible into CoreComm Limited common stock prior to maturity at a
    conversion price of $1.00 per share, subject to adjustment. However,
    NTL and CoreComm Limited and the Company have entered into an agreement
    relating to the conversion feature of the notes following the Holdco
    recapitalization. Through that agreement, consistent with the original
    terms of the notes, CoreComm Limited and the Company have agreed to
    exercise their right under the notes such that, following the
    successful completion of the exchange offer to the holders of CoreComm
    Limited common stock to exchange their shares for shares of the
    Company's common stock, the convertibility feature of the notes will be
    altered so that rather than the notes being convertible into shares of
    CoreComm Limited common stock, the notes will become convertible into
    shares of the Company's common stock. At that time, the conversion
    price of $1.00 will be equitably adjusted by applying the exchange
    ratio in the exchange offers, which results in a new conversion price
    of $116.70 per share of the Company's common stock. NTL has agreed not
    to exercise its rights to convert into CoreComm Limited common stock
    for six months from February 5, 2002 (unless that right has previously
    ceased

                                   S-37

<PAGE>


    as a result of the completion of the exchange offer and the change in
    the convertibility feature). In the event that the exchange offer is
    not completed, the conversion feature would remain into CoreComm
    Limited common stock. These notes are redeemable, in whole or in part,
    at the Company's option, at any time on or after April 12, 2003, at a
    redemption price of 103.429% that declines annually to 100% in April
    2007, in each case together with accrued and unpaid interest to the
    redemption date.

4.  Guarantees of the Registrant


    In September 2000, subsidiaries of the Company entered into a senior
    secured credit facility with The Chase Manhattan Bank as lender,
    administrative agent and collateral agent. The facility was amended and
    restated in April 2001. As of April 2001, the entire amount available
    under the senior secured credit facility of $156.1 million has been
    borrowed. The Company has unconditionally guaranteed payment under the
    facility.

5.  Other

    No cash dividends were paid to the registrant by subsidiaries from
    January 1, 1999 through December 31, 2001.



                                   S-38

<PAGE>

<TABLE>
<CAPTION>
                                                 CoreComm Holdco, Inc. and Subsidiaries


                                           Schedule II - Valuation and Qualifying Accounts


                 Col. A                     Col. B                 Col. C                 Col. D            Col. E
                                                                  Additions
                                                       --------------------------------
                                                             (1)             (2)
                                                       --------------------------------

                                                                         Charged to
                                          Balance at      Charged to        Other                          Balance at End
                                         Beginning of     Costs and       Accounts-    Deductions -           of Period
              Description                   Period         Expenses       Describe       Describe
---------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>               <C>               <C>        <C>                    <C>
Year ended December 31, 2001:
  Allowance for doubtful accounts          $11,034,000     $7,143,000        $  -       $ (8,418,000) (a)       $9,759,000
Year ended December 31, 2000:
  Allowance for doubtful accounts           $3,949,000     $7,130,000        $  -          $ (45,000) (b)      $11,034,000
Year ended December 31, 1999:
  Allowance for doubtful accounts          $   742,000     $3,241,000        $  -          $ (34,000) (c)     $  3,949,000
</TABLE>

(a)      Uncollectible accounts written-off, net of recoveries.

(b)  Uncollectible accounts written-off, net of recoveries, of $9,269,000
     offset by $9,224,000 allowance for doubtful accounts as of acquisition
     date from business combinations.

(c)  Uncollectible accounts written-off, net of recoveries, of $24,688,000
     offset by $24,654,000 allowance for doubtful accounts as of
     acquisition date from business combinations.


                                   S-39

<PAGE>