<PAGE>

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                   FORM 10-Q

                                   (MARK ONE)

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

                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                       OR

           [_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
           FOR THE TRANSITION PERIOD FROM             TO
                                         ------------    -----------

                        COMMISSION FILE NUMBER 000-26827

                            SPLITROCK SERVICES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              DELAWARE                              76-0529757
   (STATE OR OTHER JURISDICTION OF       (IRS EMPLOYER IDENTIFICATION NO.)
   INCORPORATION OR ORGANIZATION)

               9012 NEW TRAILS DRIVE, THE WOODLANDS, TEXAS 77381
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)  (ZIP CODE)

       Registrant's telephone number, including area code: (281) 465-1200

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

                                Yes [X]   No [_]

The number of shares of Common Stock, par value $.001 per share, of the
Registrant outstanding at April 25, 2000 was 100.
<PAGE>

                            SPLITROCK SERVICES, INC.
            FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                     INDEX

<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                ----

<S>                                                                                                             <C>
Part I -- Financial Information

 Item 1 -- Financial Statements

       Condensed Consolidated Balance Sheets as of March 31, 2000 (unaudited) and December 31, 1999............   2

       Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months
       Ended March 31, 2000 and 1999 (unaudited)...............................................................   3

       Condensed Consolidated Statements of Cash Flows for the Three Months Ended
       March 31, 2000 and 1999 (unaudited).....................................................................   4

       Notes to Condensed Consolidated Financial Statements (unaudited)........................................   5

 Item 2 -- Management's Discussion and Analysis of
       Financial Condition and Results of Operations...........................................................   8

 Item 3 -- Quantitative and Qualitative Disclosures About Market Risk..........................................  16

Part II -- Other Information

 Item 1 -- Legal Proceedings...................................................................................  17

 Item 2 -- Changes in Securities and Use of Proceeds...........................................................  18

 Item 4 -- Submission of Matters to a Vote of Security Holders.................................................  19

 Item 5 -- Other Information...................................................................................  20

 Item 6 -- Exhibits and Reports on Form 8-K....................................................................  20

Signatures.....................................................................................................  21
</TABLE>


                                       1
<PAGE>

                            SPLITROCK SERVICES, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                                                                                   MARCH 31,         DECEMBER 31,
                                                                                                     2000               1999
                                                                                                  (UNAUDITED)
                                                                                                ----------------    --------------
<S>                                                                                             <C>                 <C>
                                             ASSETS
Current assets:
      Cash and cash equivalents.......................................................           $   39,187           $   92,593
Unrestricted investments -- short term................................................                   80                5,441
Restricted investments -- short term..................................................               19,102               33,646
Accounts receivable, net..............................................................               12,276               11,292
Prepaid expenses and other current assets.............................................                2,058                2,975
                                                                                                -----------          -----------
                Total current assets..................................................               72,703              145,947
Restricted investments -- long term...................................................                   22                  140
Property and equipment, net...........................................................              150,393              124,371
Intangibles, net......................................................................                8,125                8,577
Due from affiliates, net..............................................................                2,312                   --
Other assets..........................................................................               33,700               22,251
                                                                                                -----------          -----------

                                                                                                  $ 267,255            $ 301,286
                                                                                                ===========          ===========
                        LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
      Current maturities of capital lease obligations.................................           $   16,186           $   21,089
      Accounts payable................................................................                5,725                2,906
      Accrued interest payable........................................................                6,474               14,141
Accrued liabilities...................................................................               28,588               31,013
      Senior notes payable, current portion...........................................                  100                   --
                                                                                                -----------          -----------
                Total current liabilities.............................................               57,073               69,149
Senior notes payable ($260,900 face value net of
      unamortized discount)...........................................................              258,332              258,387
Capital lease obligations.............................................................               10,252               18,934
                                                                                                -----------          -----------
                Total liabilities.....................................................              325,657              346,470
Stockholders' deficit:
      Common stock,  $.001 par value,  1,000 and 150,000,000  shares authorized,
           respectively, 100 and 57,030,590 shares issued and outstanding as
           of March 31, 2000, and December 31, 1999, respectively.....................                   --                   57
Common stock warrants.................................................................                   --                1,750
Additional paid-in capital............................................................              150,213              124,461
Accumulated other comprehensive loss..................................................                 (144)                (180)
Accumulated deficit...................................................................             (208,471)            (171,272)
                                                                                                -----------          -----------
          Total stockholders' deficit.................................................              (58,402)             (45,184)
                                                                                                -----------          -----------
                                                                                                  $ 267,255            $ 301,286
                                                                                                ===========          ===========
</TABLE>

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


                                      2
<PAGE>

                            SPLITROCK SERVICES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (in thousands)
                                  (unaudited)
<TABLE>
<CAPTION>

                                                 THREE MONTHS     THREE MONTHS
                                                     ENDED            ENDED
                                                MARCH 31, 2000   MARCH 31, 1999
                                                ---------------  ---------------
<S>                                             <C>              <C>

Revenues....................................        $ 35,037         $ 16,352
Operating expenses:
   Splitrock network costs..................          41,155           16,022
   Legacy network costs.....................           1,425           13,029
   Selling, general and administrative......          10,012            2,570
   Depreciation and amortization............          12,470            4,635
   Other....................................             872               --
                                                    --------         --------
     Total operating expenses...............          65,934           36,256
                                                    --------         --------
Loss from operations........................         (30,897)         (19,904)
Other income (expense):
   Interest income..........................           1,960            2,604
   Interest expense.........................          (8,262)          (8,191)
                                                    --------         --------
Net loss....................................         (37,199)         (25,491)
                                                    --------         --------
Other comprehensive income (loss):
   Unrealized income (loss) on securities...              36             (242)
                                                    --------         --------

Comprehensive net loss......................        $(37,163)        $(25,733)
                                                    ========         ========
</TABLE>




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


                                       3
<PAGE>

                            SPLITROCK SERVICES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                     THREE MONTHS     THREE MONTHS
                                                                                         ENDED            ENDED
                                                                                    MARCH 31, 2000   MARCH 31, 1999
                                                                                    ---------------  ---------------
<S>                                                                                 <C>              <C>

OPERATING ACTIVITIES:
   Net loss.....................................................................        $(37,199)        $(25,491)
   Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization............................................          12,470            4,635
       Amortization of debt discount and deferred financing costs...............             373              277
   Changes in operating assets and liabilities:
       Accounts receivable, net.................................................            (984)            (929)
       Prepaid expenses and other current assets................................             916              161
       Accounts payable and accrued liabilities.................................             394           (3,805)
       Accrued interest payable.................................................          (7,667)          (6,900)
                                                                                        --------         --------

           Net cash used in operating activities................................         (31,697)         (32,052)
                                                                                        --------         --------

INVESTING ACTIVITIES:
   Purchases of property and equipment..........................................         (28,066)         (15,292)
   Liquidation of unrestricted investments......................................           5,360           32,664
   Use of restricted investments, net...........................................          14,698           13,897
   Increase in intangible and other assets......................................          (2,340)          (1,504)
                                                                                        --------         --------

           Net cash (used in) or provided by investing activities...............         (10,348)          29,765
                                                                                        --------         --------

FINANCING ACTIVITIES:
   Costs to be reimbursed by affiliates, net....................................          (2,312)              --
   Proceeds (payments of taxes) from exercise of stock options, net.............            (366)              99
   Principal payments on capital lease obligations..............................          (8,683)          (2,777)
                                                                                        --------         --------

           Net cash used in financing activities................................         (11,361)          (2,678)
                                                                                        --------         --------

NET DECREASE IN CASH AND CASH EQUIVALENTS.......................................         (53,406)          (4,965)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................................          92,593           28,330
                                                                                        --------         --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD......................................        $ 39,187         $ 23,365
                                                                                        ========         ========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
   Acquisition of equipment through a capital contribution......................        $ 24,312               --
   Acquisition of property and equipment through capital leases.................           1,220               --

</TABLE>
    The accompanying notes are an integral part of these unaudited condensed
                      consolidated financial statements.


                                       4
<PAGE>

                            SPLITROCK SERVICES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                  (UNAUDITED)

1.  BASIS OF PRESENTATION

   The accompanying unaudited condensed consolidated financial statements of
Splitrock Services, Inc. have been prepared in accordance with generally
accepted accounting principles and the Securities and Exchange Commission's
rules and regulations for reporting interim financial information.  Certain
amounts previously reported have been reclassified in order to ensure
comparability among the periods reported.

   The accompanying unaudited interim condensed consolidated financial
statements reflect all adjustments (consisting of normal recurring adjustments)
which, in the opinion of management, are necessary for a fair presentation of
the results for the interim periods presented.  Accordingly, they do not include
all information and notes required by generally accepted accounting principles
for complete financial statements.  The results for the interim period ended
March 31, 2000, are not necessarily indicative of results to be expected for the
entire year ending December 31, 2000, or future operating results.

   On October 29, 1999 the Company formed Splitrock Leasing, LLC, a wholly owned
subsidiary.  The accompanying consolidated financial statements include
operations of Splitrock Leasing, LLC.  Significant intercompany accounts and
transactions have been eliminated in these consolidated financial statements.

   The consolidated financial statements should be read in conjunction with the
Company's annual audited financials statements for the year ended December 31,
1999 as filed with the Securities and Exchange Commission on Form 10-K.

2. MERGER

   On March 30, 2000, the Company was acquired by a wholly owned subsidiary of
McLeodUSA Incorporated ("McLeodUSA") pursuant to the Amended Plan of Merger
dated February 11, 2000. The acquisition of Splitrock Services by McLeodUSA was
effected through two separate but related transactions:

 .  a holding company reorganization, in which Splitrock Services, Inc. became a
   wholly owned subsidiary of its former subsidiary, Splitrock Holdings,
   resulting in reductions to the number of authorized shares and the number of
   shares issued and outstanding; and

 .  a merger of Southside Acquisition Corporation, a Delaware corporation and
   wholly owned subsidiary of McLeodUSA, with and into Splitrock Holdings in
   which Splitrock Holdings was the surviving corporation and became a wholly
   owned subsidiary of McLeodUSA.

   Pursuant to these transactions, each of the Company's shareholders ultimately
received 0.5347 shares of McLeodUSA Class A common stock in exchange for each
share of Splitrock common stock owned.  A substantial portion of the Company's
outstanding stock options became fully vested upon the merger pursuant to a
change of control provision in the Company's stock option plans.  At the time of
the merger, each right to purchase a share of the Company's common stock
pursuant to an outstanding option or warrant


                                       5
<PAGE>

was converted into an option or warrant with a right to purchase 0.5347 of a
share of McLeodUSA Class A common stock.

   In connection with the acquisition of the Company's stock by McLeodUSA, the
common stock of Splitrock Services, Inc. was delisted from The Nasdaq Stock
Market.

   Push down accounting has not been applied to the Company's financial
statements.  Therefore, the net assets of the Company have not been adjusted to
reflect an allocation of the fair value of the McLeodUSA common stock paid by
McLeodUSA in exchange for 100% of the outstanding common stock of the Company.
The fair market values will be recorded on the consolidated financial statements
of McLeodUSA.

   Direct costs incurred in connection with the acquisition will be paid and
recorded on the McLeodUSA consolidated financial statements.  Such direct costs
paid by the Company are reimbursable by McLeodUSA and have been reflected as
part of the net due from affiliates on the Company's balance sheet.  Costs
incurred by the Company to dispose of assets in connection with the plan of
acquisition are reflected  in other expenses in the Company's Condensed
Consolidated Statement of Operations.

3.  INDEBTEDNESS

  The merger constituted a change of control as defined in the Indenture for the
Senior Notes payable.  Therefore, the Company was required under the Indenture
to make an offer within 30 days of the change of control to repurchase all of
the Senior Notes properly tendered at a price equal to 101% of the principal
amount plus accrued and unpaid interest to the date of repurchase.  On April 12,
2000 the Company mailed the appropriate notice to the holders of the Senior
Notes.  The note holders had until May 12, 2000 to exercise their rights under
this notice and have until May 16, 2000 to revoke any such election. Security
holders with a principal amount of $100,000 exercised their option rights under
this notice.

  In April 2000, the Company terminated the Credit Agreement signed on January
6, 2000 with Citibank USA, Inc.  The conditions precedent to the initial
borrowings under the Credit Agreement were never satisfied.

4.  PRODIGY AGREEMENT

  In February 2000, the Company revised its agreement with Prodigy to convert
the pricing formula from a subscriber based arrangement to a fixed hourly fee
for usage effective January 1, 2000.  As part of this amendment, the term of the
contract was extended to December 31, 2001.

5.  COMMITMENTS & CONTINGENCIES

   During March 2000, the Company settled its contract dispute with Ericsson,
Inc.


6. RELATED PARTY TRANSACTIONS

   On January 6, 2000, Splitrock entered into a Master Services Agreement with
McLeodUSA for Internet dial-access services (the "Master Services Agreement")
and a Letter of Intent to sell bandwidth capacity (the

                                       6
<PAGE>

"Bandwidth Capacity Letter") to McLeodUSA.

   Under the Master Services Agreement, Splitrock agreed to provide wholesale
Internet dial-access services to McLeodUSA over a two year term for a minimum
total of $15 million.  As of March 31, 2000 no services had been provided and no
amounts paid under this agreement.

   Under the Bandwidth Capacity Letter, it is contemplated that Splitrock will
provide McLeodUSA with DS-3 miles of capacity on Splitrock's fiber network over
a twenty year term for total consideration of $90 million. As of March 31, 2000
a definitive agreement had not been executed.

  McLeodUSA has several wholly owned subsidiaries that provide the Company
access line capacity pursuant to written agreements executed prior to merger
discussions. During the quarter ended March 31, 2000 the Company had recorded
expenses of $0.6 million related to these contracts of which $0.2 million
remains unpaid as of March 31, 2000.

   On March 31, 2000 a wholly owned subsidiary of McLeodUSA purchased, on behalf
of Splitrock, approximately $24 million of Nortel dial access equipment pursuant
to the Company's purchase commitment agreement with Nortel Networks, Inc.
("Nortel").  In turn, McLeodUSA contributed the equipment to the Company as a
capital contribution.  This transaction is recorded on the face of the Company's
Cash Flow Statement as a non-cash acquisition of equipment through a capital
contribution.

7. STOCK WARRANTS

  On March 29, 2000, the Company issued 792,235 shares of its common stock
representing the shares underlying the common stock warrants outstanding as of
that date. These shares were issued to the warrant agent to be held in reserve
until the warrants are exercised by the warrant holders.  Upon issuance of the
shares, the Company recorded the value of the warrants as common stock and
additional paid in capital. Upon merger these shares converted to McLeodUSA
Class A common stock based on the 0.5347 exchange ratio.  In connection with the
merger and conversion, McLeodUSA assumed the Company's obligations under the
Warrant Agreement dated July 24, 1998, as amended.  As of March 31, 2000, the
Company had no warrants outstanding.

                                       7
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

FORWARD-LOOKING STATEMENTS

   All references to "we", "us", "Splitrock", or "our" refer to Splitrock
Services, Inc. This section contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act, which are intended to be covered by safe harbors created thereby.
Investors are cautioned that all forward-looking statements involve risks and
uncertainty, including, without limitation, the changes that may result from the
review and evaluation of business plans by several new executives and as a
recent addition to the McLeodUSA enterprise, our ability to continue building
the Splitrock network, our ability to diversify our services and customers, the
ability to obtain necessary supplies, the ability to make projected capital
expenditures, and the ability to achieve projected quarterly results, as well as
general market conditions, competition, and pricing.  All statements, other than
statements of historical facts, included or incorporated by reference in this
report that address activities, events or developments that we expect or
anticipate will or may occur in the future, including such things as future
capital expenditures (including the amount and nature hereof), business strategy
and measures to implement such strategy, competitive strengths, goals, expansion
and growth of Splitrock's business and operations, plans, references to future
success as well as other statements which include words such as "anticipate,"
"believe," "plan," "estimate," "expect," and "intend" and other similar
expressions, constitute forward-looking statements.  Although we believe that
the assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and the inclusion of
such information should not be regarded as a representation by us or any other
person that our objectives and plans will be achieved.

Overview

  We are a facilities-based provider of advanced data communications services.
The 340 active broadband access POPs comprising our network gave us a physical
presence in all 50 states, and allowed us to target 90% of U.S. businesses and
87% of U.S. households with a local call. We market our services to Internet
service providers, telecommunications carriers and other businesses throughout
the United States. The combination of the flexibility inherent in the design of
our existing broadband access network with our acquisition of significant fiber
optic facilities positions us to deliver a broad range of end-to-end data
communications services on our network, including:

  .  dial and dedicated Internet access

  .  Internet access for higher bandwidth services, such as digital subscriber
     line and cable modem

  .  value-added services such as virtual Internet services, virtual private
     networks and web hosting

  .  bandwidth leasing and colocation services.


  We were founded in March 1997.  In July 1997, we acquired the legacy network
infrastructure of Prodigy Communications Corporation ("Prodigy"), and agreed to
build and operate a nationwide

                                       8
<PAGE>

communications network and to provide network services for Prodigy customers. By
late 1999, we had successfully completed a state-of-the-art nationwide
communication network and completely decommissioned the Prodigy legacy network
POPs.

  In April 1999, we agreed to acquire indefeasible rights to use four dark fiber
strands of the fiber optic network currently under construction by Level 3
Communications, LLC ("Level 3") with an option to acquire up to 12 additional
fibers.  The date by which we need to exercise our option to use any of the 12
additional fibers has been extended from April 26, 2000 to June 30, 2000, and
the total planned route miles has been increased from approximately 15,000 route
miles to approximately 16,000 route miles.  Segments will be delivered as they
become available, currently anticipated through the first quarter of 2001.
Combining this fiber optic backbone with our broadband access network positions
us to:

  .  deliver, on our own facilities, a broad array of end-to-end data
     communications services at the high level of quality and reliability
     increasingly demanded by customers

  .  reduce significantly our network costs as a percentage of revenues as we
     substitute the acquired bandwidth for existing leased circuit arrangements
     with various telecommunications carriers

  .  expand our service offerings by providing bandwidth leasing services on a
     stand alone basis or bundled with our other services

  .  increase the reliability and redundancy of our network

  .  increase the variety of service options and speeds available to customers

  In connection with the fiber optic network deployment, we committed in October
1999 to purchase a minimum of approximately $50 million of fiber optronics
equipment, associated network management systems, and installation services from
Nortel.  The equipment and services are expected to be delivered as the dark
fiber network is available for our use.

  In July 1998, we raised $261 million through the issuance of our 11  3/4%
senior notes and warrants to purchase common stock, principally to finance
capital expenditures related to the construction and installation of our
broadband access network.  In August 1999, we completed our initial public
offering, which resulted in net proceeds of $88.4 million after deducting
commissions and other fees and expenses.

  On March 30, 2000, we were acquired by a wholly owned subsidiary of McLeodUSA
pursuant to an Amended Plan of Merger dated February 11, 2000.  In connection
with the merger, the Company's common stock was delisted from The Nasdaq Stock
Market.



Revenues

  Our current services provided include Internet dial access, Internet dedicated
services, virtual private network services (VPN) and virtual Internet services
(VIS).  Internet dial access services represented 99% of our revenues for the
quarter ended March 31, 2000 as compared to 100% of our revenues for the quarter


                                       9
<PAGE>

ended March 31, 1999.

  We are currently building our first web hosting data center in Houston, Texas
to offer web hosting services.  We are focusing our current VPN efforts on dial
VPN services for corporations with remote offices or business travel users.  In
future periods we expect to expand our VPN offerings to include dedicated access
services such as frame relay and asynchronous transfer mode ("ATM").

  Currently, Splitrock provides Internet dial access and related services to
Prodigy, which is one of the largest Internet service providers in the United
States.  Splitrock is currently Prodigy's primary provider of dial access
services.  Effective January 1, 2000, the Company revised its agreement with
Prodigy to convert the pricing formula from a subscriber based arrangement to a
fixed hourly rate for usage.  As part of the amendment, the term of the contract
was extended to December 31, 2001.  Revenue from Prodigy declined by 7.9% from
the prior quarter.  For the quarter and the month ended March 31, 2000, Prodigy
accounted for 64.4% and 62.0% of our revenue, respectively.  For the year ended
December 31, 1999, Prodigy accounted for 85.5% of our revenues.  While we expect
revenues from Prodigy to continue to decrease as a percentage of our total
revenues in future periods, we believe that Prodigy will continue to account for
a significant portion of our revenues.

  In addition to the revenue derived from Prodigy, four other customers
represented approximately 35% of our revenue in the first quarter of 2000.  As
the usage of the existing customer base increases and if our competitors
increase their capacity, we may be forced to change our pricing to be more
competitive.  We can not assure you that this will not have a negative impact on
future operating results.

Splitrock Network Costs

  Our Splitrock network costs include all expenses incurred in connection with
operating our network.  These costs primarily include leased telecommunication
line charges for connecting our POPs to local central offices and for backbone
transmission, personnel expenses, and operating expenses related to network
operations, maintenance, field operations and facility management.  Increases in
Splitrock network operating costs relate to the increase in our network
facilities and line charges incurred in connection with the migration of
Prodigy's subscribers to our network and the growth in total subscriber usage.

  We are increasing our network operating expenditures to significantly expand
our broadband access network and backbone capacity in anticipation of expected
increases in dial access and other services.  We incur expenditures to increase
our capacity to serve customers in advance of entering into new customer
relationships.


  During the first quarter of 2000 we acquired our first dark fiber segment from
Level 3 and began installing equipment to utilize that segment of our planned
16,000 route mile fiber optic network.  In connection with the construction and
installation of our fiber optic network, operating expenses such as maintenance
and colocation costs will increase prior to the Company recognizing any revenue
from such facilities.  However, we expect our network operating costs to
decrease as a percentage of revenues when we are able to substitute our
completed fiber optic backbone network for existing leased circuit arrangements
with various telecommunications carriers.


                                      10
<PAGE>

Legacy Network Costs

  Legacy network costs include all expenses incurred in connection with
operating and decommissioning the Prodigy legacy network, including the AT&T
network, and legacy network costs of servicing the InfiNet legacy network until
we transition the InfiNet traffic to our network.

  Legacy network costs declined throughout 1999 and the first quarter of 2000.
The largest component of our legacy network costs were paid to AT&T for usage
incurred on their network (formerly IBM's Global Services Network).  We have
migrated all of the traffic from the AT&T network and substantially all of the
traffic from InfiNet's legacy network to our network.  We do not expect to incur
any significant legacy network costs in the future.

Selling, General and Administrative Expenses

  Selling, general and administrative expenses consist of personnel and
operating costs relating to executive management, accounting and finance,
information systems, human resources, sales and marketing, customer support,
network planning, development, and administrative employees.

  We expect to continue to invest in our sales and marketing programs, our back
office systems and infrastructure to achieve and properly support the intended
expansion of our services and our customer base. We expect to incur these costs
prior to recognizing revenues from these activities.

  As of March 31, 2000 our sales and marketing staff totaled 98 professionals,
the majority of whom comprised the direct sales force.  We are also utilizing
alternate distribution channels, such as agents, resellers and wholesalers, to
market our services.  We cannot assure you that we will be successful in our
marketing plan.

Depreciation and Amortization

  Depreciation and amortization expense consists primarily of depreciation of
network equipment.  We anticipate that our depreciation and amortization
expenses will increase significantly as we deploy our fiber optic network and
expand the capacity of our broadband dial access network.



Interest Expense

  Interest expense represents interest on our 11.75% Senior Notes and interest
at various rates on our capital leases.

Net Losses

  We have incurred net losses since our inception in March 1997.  We anticipate
that we will continue to incur net losses while we complete the construction and
installation of our fiber optic network and until we significantly increase our
customer and revenue base.  The extent to which we continue to incur net


                                      11
<PAGE>

losses is largely dependent upon the timely deployment of the fiber optic
network, the rate at which we can expand our customer and revenue base and our
ability to maximize use of our nationwide network.

Results of Operations

   Three Months Ended March 31, 2000 Compared to Three Months Ended March 31,
1999

  Revenues.  Revenues for the three months ended March 31, 2000 totaled $35.0
million, an increase of $18.6 million from revenues of $16.4 million for the
three months ended March 31, 1999.  This 113.4% net increase was due primarily
to increased Prodigy revenue as a result of their subscriber growth and an
increase in revenue from our expanding customer base, offset somewhat by a price
reduction which became effective January 1, 2000 in connection with our
amendment to the Prodigy contract.

  Splitrock Network Costs.  Splitrock network costs for the three months ended
March 31, 2000 were $41.2 million compared to $16.0 million for the three months
ended March 31, 1999.  This $25.2 million increase was due to the growth in the
size of our network from 190 operational POPs as of March 31, 1999 to 340
operational POPs as of March 31, 2000 and the migration of traffic from the
legacy networks to our network.  As a percentage of revenues, Splitrock network
costs increased to 117.5% of revenue for the three months ended March 31, 2000
from 98.0% of revenues for the three months ended March 31, 1999.

  Legacy Network Costs.  Legacy network costs for the three months ended March
31, 2000 were $1.4 million compared to $13.0 million for the three months ended
March 31, 1999.  This $11.6 million or 89.1% decrease was primarily attributable
to a decrease in access charges incurred for use of the AT&T network as traffic
from the legacy networks was migrated to our network.  As a percentage of
revenues, legacy network costs decreased to 4.1% of revenue for the three months
ended March 31, 2000 from 79.7% of revenues for the three months ended March 31,
1999.

  Selling, General and Administrative Expenses.  Selling, general and
administrative expenses for the three months ended March 31, 2000 were $10.0
million compared to $2.6 million for the three months ended March 31, 1999.  The
majority of this increase was due to personnel costs incurred in building our
direct sales force beginning in the second quarter of 1999 and the increase in
personnel and facilities to support the growth in the size of our company.  As a
percentage of revenues, selling, general and administrative expenses increased
to 28.6% of revenue for the three months ended March 31, 2000 from 15.7% of
revenues for the three months ended March 31, 1999.

  Depreciation and Amortization.  Depreciation and amortization was $12.5
million for the three months ended March 31, 2000 compared to $4.6 million for
the three months ended March 31, 1999.  This increase was due to the increase in
equipment and facilities placed in service between the two periods.

  Interest Expense.  Interest expense was $8.3 million for the three months
ended March 31, 2000, compared to $8.2 million for the three months ended March
31, 1999.

  Interest Income.  Interest income relates to the interest earned on
investments of cash on hand in investment grade commercial paper and money
market accounts.  Interest income was $2.0 million for the


                                      12
<PAGE>

three months ended March 31, 2000, compared to $2.6 million for the three months
ended March 31, 1999. This decrease is due to the decrease in the cash balances
between the two periods.

Liquidity and Capital Resources

  Our operations have required funding of substantial operating losses and
capital investment for the purchase of communications equipment and the design
and development of our network.

  Since our inception, we have satisfied our cash requirements primarily through
the issuance of equity or debt securities.  As of March 31, 2000, we had raised
approximately $446.1 million, including:

    .  $34.9 million through private sales of our equity securities;

    .  $263.3 million through the issuance of debt;

    .  $88.4 million in net proceeds from the Company's initial public offering;
       and

    .  $59.5 million in equipment financing primarily from equipment vendors and
       leasing companies.

  We expect our future liquidity and capital requirements to relate primarily
to:

    .  the acquisition of rights to use dark fiber;

    .  capital expenditures;

    .  operating losses;

    .  debt service payments; and

    .  working capital and other corporate purposes.

  Net cash used in operating activities was $31.7 million during the three
months ended March 31, 2000.  The net cash used in operating activities in this
period was primarily attributable to the Company's net losses.  Net cash used in
operating activities was $32.1 million for the three months ended March 31,
1999.

  Net cash used in investing activities for the three months ended March 31,
2000 was $10.3 million and consisted primarily of payments of $12.4 million made
to Level 3 to acquire dark fiber, $15.6 million in equipment purchases, and $2.3
million increase in intangible assets, offset by the use of restricted and
unrestricted investments of $20.0 million.  Net cash provided by investing
activities during the three months ended March 31, 1999 was $29.8 million.  This
consisted primarily of net proceeds of $46.6 million from the liquidation of
restricted and unrestricted investments, offset by $15.3 million used for
purchases of property and equipment, and $1.5 million due to increases in
intangible and other assets.

  Net cash used in financing activities for the three months ended March 31,
2000 was $11.4 million,



                                      13
<PAGE>

which was derived primarily from principal payments of $8.7 million on capital
lease obligations, $2.3 million of payments for which we will be reimbursed from
McLeodUSA and $0.4 million of taxes paid, in excess of cash proceeds, related to
employee stock option exercises. Net cash used in financing activities for the
three months ended March 31, 1999 was $2.7 million and consisted primarily of
principal payments on capital leases.

  The principal amount of our 11.75% Senior Notes ($260.9 million) is payable in
2008 subject to early redemption upon the occurrence of a change of control,
which would require the Company to tender an offer to repurchase all Senior
Notes at a price equal to 101% of the principal plus accrued interest.  The
merger with McLeodUSA constituted a change in control.  Therefore, the Company
was required to make an offer, within 30 days of the merger, to repurchase all
of the Senior Notes properly tendered at a price equal to 101% of the principal
amount plus accrued and unpaid interest to the date of repurchase.  On April 12,
2000, the Company mailed a notice to the holders of the Senior Notes and they
had until May 12, 2000 to exercise their rights for repurchase and have until
May 16, 2000 to revoke any such election. Security holders with a principal
amount of $100,000 exercised their option rights under this notice.  Interest
payments on the notes are due semi annually. The payment in January was funded,
and the July 2000 payment will be funded, by certain of the proceeds, together
with interest thereon, escrowed in connection with the issuance of the 11.75%
Senior Notes which provided for the first four interest payments of the senior
notes.  The remaining escrow amount is recorded as part of our restricted
investments at March 31, 2000.  Beginning in January 2001, the interest payments
will be funded from our cash and unrestricted investments.

  We have agreed to acquire indefeasible rights to use four dark fibers, with an
option to use up to 12 additional fibers, in the fiber optic network under
construction by Level 3.  We are required to pay for the dark fiber in segments
as they become available, which is expected to occur through the first quarter
of 2001.  The date by which we need to exercise our option to use any of the 12
additional fibers has been extended from April 26, 2000 to June 30, 2000, and
the total planned route miles has been increased from approximately 15,000 route
miles to approximately 16,000 route miles.

  Capital expenditures, including purchases under capital lease agreements and
equipment contributed by McLeodUSA, were $53.6 million and $15.3 million for the
three months ended March 31, 2000 and 1999, respectively.

  As of March 31, 2000, we estimate that our capital requirements through 2002
will be approximately $385.0 million, including capital expenditures for:

     .  an indefeasible right to use four strands of dark fiber under our
        agreement with Level 3;

     .  the purchase of fiber optronics equipment to utilize a portion of the
        dark fiber acquired;

     .  the enhancement of our network to provide additional value added
        services; and

     .  the improvement of our network management, billing and other back office
        systems.

  We are currently reviewing our business plans with new executives leading the
Company and with our parent company.  We can not assure you that our current
plans will not change as a result of those


                                      14
<PAGE>

discussions.

   As of March 31, 2000, we had an accumulated deficit of $208.5 million, cash
and cash equivalents and unrestricted investments of $39.3 million, and
restricted investments of $19.1 million.

  Our current sources of available cash resources are not sufficient to meet our
anticipated cash requirements for the foreseeable future.  Our parent company
may have access to funds to support our business plan.  However, we can not
assure you that our parent company will have or will provide the funds when
needed.  If the parent company does not provide funding, we will seek to obtain
financing through vendor financing, bank financing, strategic relationships or
some combination of the foregoing.  The terms of both our and McLeodUSA debt
securities restrict our ability to incur indebtedness and create liens and may
make it more difficult for us to raise capital needed to fully implement our
business plan.

  We cannot assure you that the additional financing needed will be available on
terms acceptable to us, or at all.  If we are unable to obtain the funds
necessary to finance our expected capital requirements, we may have to revise
our business plans and this may materially and adversely affect our financial
condition and results of operations.  Debt financing, if available, may involve
restrictive covenants, the grant of security interests and significant interest
expense.

Effects of New Accounting Standards

Accounting For Derivative Instruments and Hedging Activities

   Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities", as amended , is effective for
fiscal years beginning after June 15, 2000.  SFAS No. 133 establishes accounting
and reporting standards for derivative instruments and hedging activities by
requiring that entities recognize all derivatives as either assets or
liabilities at fair market value on the balance sheet.  Our management does not
expect the impact of the adoption of SFAS No. 133 to be material to its results
of operations as it does not currently hold any derivative instruments or engage
in hedging activities.

Revenue Recognition

   The effective date for Staff Accounting Bulletin ("SAB") No. 101, "Revenue
Recognition" has been delayed and is effective beginning in the second quarter
of 2000.  SAB No. 101 provides guidance on the recognition, presentation and
disclosure of revenue in financial statements.  Our management believes that
this statement will not have a material effect on results of operations and
financial position of the Company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

  The following discusses our exposure to market risk related to changes in
interest rates, equity prices and foreign currency exchange rates.  Market risk
generally represents the risk of loss that may result from the potential change
in the value of a financial instrument as a result of fluctuations in interest
rates and market prices.  We have not traded or otherwise bought and sold
derivatives nor do we expect to do so in the future.  We also do not invest in
market risk sensitive instruments for trading purposes.


                                      15
<PAGE>

  This discussion contains forward-looking statements that are subject to risks
and uncertainties.  Actual results could vary materially as a result of a number
of factors including those set forth under "Item 2. Management's Discussion and
Analysis of Financial Condition - Forward Looking Statements."

Interest Rate Risk

  We may be exposed to market risk related to changes in interest rates.  At
this time, we have not entered into any interest rate risk arrangements, and
while we may enter into interest rate risk hedging arrangements in the future,
we cannot assure you that we will be able to find commercially satisfactory
terms at that time.  Our investment policy is to manage our investment portfolio
to preserve principal and liquidity while maximizing the return on the
investment portfolio through the full investment of available funds.  We
diversify our marketable securities portfolio by investing in multiple types of
investment-grade securities.  Our investment portfolio is primarily invested in
short-term securities with at least an investment grade rating to minimize
interest rate and credit risk as well as to provide for an immediate source of
funds.  Although changes in interest rates may affect the fair value of the
investment portfolio and cause unrealized gains or losses, such gains or losses
would not be realized unless the investments are sold.

  Our Short-Term Investments.  As of March 31, 2000, we had unrestricted short-
term investments of $0.1 million and restricted short-term investments of $19.1
million.  These short-term investments are highly liquid investments with
original maturities at the date of purchase of between three and twelve months
and consist primarily of money market funds and high-grade securities such as
corporate notes, municipal securities and U.S. Treasury notes.  We value these
investments at fair market value.  These investments are subject to interest
rate risk and will fall in value if market interest rates increase.  A
hypothetical increase in market interest rates by 10% from levels at March 31,
2000 would cause the fair value of these short-term investments to decline by an
immaterial amount.  We have the ability to hold these investments until
maturity, and therefore would not expect the value of these investments to be
affected to any significant degree by the effect of a sudden change in market
interest rates.  Declines in interest rates over time will, however, reduce our
interest income, especially from money market funds whose rates change on a
daily basis.

  Our Long-Term Investments.  As of March 31, 2000, we maintained restricted
long-term investments totaling $22.0 thousand in connection with our 11.75%
Senior Notes due 2008.  These long-term investments consist of high-grade
securities such as corporate notes, municipal securities and U.S. Treasury
notes, all of which are considered liquid and available for sale.  These
securities will not be held to maturity.  A hypothetical increase in market
interest rates by 10% from levels at December 31, 1999 would cause the fair
value of these securities to decline by an immaterial amount.

  Outstanding Debt.  As of March 31, 2000, the carrying value of our outstanding
senior notes was approximately $258.4 million at a fixed interest rate of
113/4%.  In certain circumstances, we may redeem this long-term debt.  Because
the interest rates on these instruments are fixed, a hypothetical 10% decrease
in interest rates would not have a material impact on our financial condition,
revenues or operations.  Increases in interest rates could, however, increase
the interest expense associated with future borrowings, if any.  We do not hedge
against interest rate increases.



                                      16
<PAGE>

Equity Price Risk

  We do not own an equity stake or investment in another company or business
entity and therefore we do not believe that we have any direct equity price
risk.  We do not hedge against equity price changes.

Foreign Currency Exchange Rate Risk

  All of our revenues are realized in dollars and all of our revenues are from
customers in the United States.  Therefore, we do not believe that we have any
significant direct foreign currency exchange rate risk.  We do not hedge against
foreign currency exchange rate changes.

PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

   During March 2000, we settled the contract dispute with Ericsson Inc. that
was previously disclosed in our annual report on Form 10-K for 1999.  The amount
we paid Ericsson did not have a material adverse effect on our business.

   The background on the dispute is as follows: we entered into an agreement
with Ericsson, Inc. to construct 99 POP sites on a turnkey basis. By November
1998, the contractor had failed to meet construction milestones under our
agreement. As a result, we had to hire other service providers and suppliers in
addition to supervisory field and office personnel to complete the network on
schedule. We also incurred additional expenses to maintain POP sites on our
legacy network. We received invoices totaling $9.1 million from the contractor
and disputed the amount due. The contractor sought to secure payment of these
invoices. We argued that the amounts the contractor claimed were not owed
because of the contractor's failure to perform under the terms of our agreement
and the offsetting expenses we incurred to complete the work.  On November 4,
1999, Ericsson filed a Demand for Arbitration on the "contract dispute" pursuant
to the Commercial Arbitration Rules with the American Arbitration Association.
We filed a counterclaim and vigorously defended the dispute pursuant to state
tort and contract causes of action, including negligent misrepresentation, fraud
in the inducement, breach of contract, failure to timely perform, failure to
perform in a good and workmanlike manner, breach of the duty of good faith,
failure of consideration and failure of essential purpose.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

   On March 30, 2000, the stockholders of Splitrock and the stockholders of
McLeodUSA approved the merger agreement, dated February 11, 2000, between the
companies.  The acquisition of Splitrock Services by McLeodUSA was effected
through two separate but related transactions:

    .  a holding company reorganization (the "Reorganization"), in which
       Splitrock Services became a wholly owned subsidiary of its former
       subsidiary, Splitrock Holdings, resulting in changes to the number of
       authorized shares to 1,000 shares and the shares issued and outstanding
       to 100 shares; and

    .  a merger (the "Merger") of Southside Acquisition Corporation, a Delaware
       corporation and


                                      17
<PAGE>

       wholly owned subsidiary of McLeodUSA, with and into Splitrock Holdings in
       which Splitrock Holdings was the surviving corporation and became a
       wholly owned subsidiary of McLeodUSA.

   In the Reorganization, Splitrock Services became a wholly owned subsidiary of
Splitrock Holdings and continued its corporate existence under the laws of the
State of Delaware. At the effective time of the Reorganization, each outstanding
share of Splitrock Service common stock, par value $.001 per share, was
converted into the right to receive one share of Splitrock Holdings common
stock, par value $.001 per share.

   In the Merger, Southside merged with and into Splitrock Holdings with
Splitrock Holdings as the surviving corporation. As a result, Splitrock Holdings
became a direct wholly owned subsidiary of McLeodUSA and continued its corporate
existence under the laws of the State of Delaware under the name "Splitrock
Holdings, Inc."  Additionally, Splitrock Services, as a direct subsidiary of
Splitrock Holdings, continued its corporate existence under the laws of the
State of Delaware under the name "Splitrock Services, Inc." and became an
indirect wholly owned subsidiary of McLeodUSA. At the effective time of the
Merger, each right to receive one share of Splitrock Holdings Common Stock was
converted into the right to receive 0.5347 of a share of Class A common stock,
par value $.01 per share, of McLeodUSA and cash in lieu of fractional shares.

   Pursuant to these transactions, each of the Company's shareholders ultimately
received 0.5347 shares of McLeodUSA Class A common stock in exchange for each
share of Splitrock common stock owned.  A substantial portion of the Company's
outstanding stock options became fully vested upon the merger pursuant to a
change of control provision in the Company's stock option plans.  At the time of
the merger, each right to purchase a share of the Company's common stock
pursuant to an outstanding option or warrant was converted into an option or
warrant to purchase 0.5347 of a share of McLeodUSA Class A common stock.

   The merger with McLeodUSA constituted a change in control as defined in the
Indenture for the Senior Notes payable.  Therefore, the Company was required
under the Indenture to make an offer, within 30 days of the merger, to
repurchase all of the Senior Notes properly tendered at a price equal to 101% of
the principal amount plus accrued and unpaid interest to the date of repurchase.
On April 12, 2000, the Company mailed a notice to the holders of the Senior
Notes and they had until May 12, 2000 to exercise their rights for repurchase
and have until May 16, 2000 to revoke any such election. Security holders with a
principal amount of $100,000 exercised their option rights under this notice.

   On March 29, 2000, the Company issued 792,235 shares of its common stock
representing the shares underlying the common stock warrants outstanding as of
that date. These shares were issued to the warrant agent to be held in reserve
until the warrants are exercised by the warrant holders.  Upon issuance of the
shares, the Company recorded the value of the warrants as common stock and
additional paid in capital. Upon merger these shares converted to McLeodUSA
Class A common stock based on the 0.5347 exchange ratio.  In connection with the
merger and conversion, McLeodUSA assumed the Company's obligations under the
Warrant Agreement dated July 24, 1998, as amended.  As of March 31, 2000, the
Company had no warrants outstanding.

   In connection with the acquisition of the Company's stock by McLeodUSA, the
common stock of Splitrock Services, Inc. was delisted from The Nasdaq Stock
Market.


                                      18
<PAGE>

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

   On March 30, 2000, our stockholders approved and adopted at a special meeting
of stockholders the merger agreement dated as of February 11, 2000 between us,
Splitrock Holdings, Inc., Southside Acquisition Corporation, Splitrock Merger
Sub, Inc. and McLeodUSA.  The following is a tabulation of the voting on the
proposal:

                  Votes For           39,541,425
                  Votes Against              800
                  Votes Withheld           1,934
                  Broker Non-Votes             0

   The number of shares entitled to vote at the meeting were 57,202,170.  There
were 39,544,159 shareholders present at the meeting, in person or by proxy.



ITEM 5. OTHER INFORMATION

CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS

(a)  PREVIOUS INDEPENDENT ACCOUNTANTS

     (i)   On May 9, 2000, Splitrock Services, Inc. dismissed
           PricewaterhouseCoopers LLP as its independent accountants. The
           Registrant's Board of Directors participated in and approved the
           decision to change independent accountants.
     (ii)  The reports of PricewaterhouseCoopers LLP on the financial statements
           for the past two fiscal years contained no adverse opinion or
           disclaimer of opinion and were not qualified or modified as to
           uncertainty, audit scope or accounting principles.
     (iii) In connection with its audits for the most two recent fiscal years
           and through May 9, 2000, there have been no disagreements with
           PricewaterhouseCoopers LLP on any matter of accounting principles or
           practices, financial statement disclosure, or auditing scope or
           procedure, which disagreements if not resolved to the satisfaction of
           PricewaterhouseCoopers LLP would have caused them to make reference
           thereto in their report on the financial statements for such years.
     (iv)  During the two most recent fiscal years and through May 9, 2000,
           there have been no reportable events (as defined in Regulation S-K
           Item 304(a)(1)(v)).
     (v)   The Registrant has requested that PricewaterhouseCoopers LLP furnish
           it with a letter addressed to the SEC stating whether or not it
           agrees with the above statements. A copy of such letter, dated May
           12, 2000, is filed as Exhibit 16 to this Form 10-Q.

(b)  NEW INDEPENDENT ACCOUNTANTS

(i)  The Registrant engaged Arthur Andersen LLP as its new independent
     accountants as of May 9, 2000. During the two most recent fiscal years and
     through May 9, 2000, the Registrant has not


                                      19
<PAGE>

     consulted with Arthur Andersen LLP regarding either (i) the application of
     accounting principles to a specified transaction, either completed or
     proposed; or the type of audit opinion that might be rendered on the
     Registrant's financial statements, or (ii) any matter that was either the
     subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of
     regulation S-K and the related instructions to Item 304 of Regulation S-K,
     or a reportable event, as that term is defined in Item 304(a)(1)(v) of
     Regulation S-K.


MANAGEMENT CHANGES

Roy A. Wilkens now heads the national Data Network operation of McLeodUSA
Incorporated, which includes Splitrock as its core.  Former Splitrock officers
Kwok Li, Chairman, William R. Wilson, President and CEO, J. Robert Fugate,
Executive Vice President and Chief Financial Officer, and Patrick J. McGettigan,
Senior Vice President, Secretary and General Counsel, have departed the company
in connection with the acquisition of Splitrock by McLeodUSA.

Upon consummation of the acquisition, several McLeodUSA personel were elected
officers of Splitrock, including: Clark E. McLeod, Chairman; Roy A. Wilkens,
President and CEO; Stephen C. Gray, Vice President; J. Lyle Patrick, Vice
President and Chief Financial Officer; Joseph H. Ceryanec, Vice President and
Treasurer and Randall Rings, Vice President and Secretary.

Six new executives assembled by Roy Wilkens and named to the Data Network team
are joining us from leading telecommunications companies and share a common
experience:  each executive previously worked with Roy Wilkens as part of the
WilTel organization, founded in 1985 and purchased by MCI WorldCom in 1995.

Leading the team as Chief Operating Officer is John Barnett, Jr.  The following
Data Network executives join Barnett:

  .  David Boatner, Sales & Marketing
  .  Charles Emde, Information Systems
  .  Lawrence Littlefield, Jr., Finance & Accounting
  .  Edward Vendley, Human Resources
  .  Todd Wilkens, Engineering & Operations.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits:

     Exhibit Number            Description
     --------------            -----------

        10.21             Amended and Restated Full Service Agreement with
                          Prodigy Communications dated February 16, 2000 *
        10.22             Second Amendment to Cost Sharing National IRU
                          Agreement with Level 3 Communications, LLC dated
                          March 30, 2000 *
        10.23             Third Amendment to Cost Sharing National IRU
                          Agreement with Level 3 Communications, LLC dated
                          March 27, 2000 *
        16                Letter from PricewaterhouseCoopers LLP
        27.1              Financial data schedule
        27.2              Restated financial data schedule

-------------
* Confidential treatment has been requested.  The copy filed as an exhibit omits
the information subject to the confidential treatment request.

(b)  Reports on Form 8-K:

   On January 19, 2000 we filed a Current Report, which was subsequently amended
on February 22, 2000 in an Amended Current Report, announcing that we entered
into a definitive agreement and plan of merger with McLeodUSA.

   On February 18, 2000 we filed a Current Report to report the results of our
fourth quarter of 1999.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                            SPLITROCK SERVICES, INC.

Dated: May 15, 2000                    By: /s/ J. Lyle Patrick
       ----------------------          -----------------------------------------
                                       J. Lyle Patrick
                                       Chief Financial Officer


                                      20
<PAGE>

                                 Exhibit Index


Exhibit Number                Description
--------------                -----------

      10.21               Amended and Restated Full Service Agreement with
                          Prodigy Communications dated February 16, 2000 *
      10.22               Second Amendment to Cost Sharing National IRU
                          Agreement with Level 3 Communications, LLC dated
                          March 30, 2000 *
      10.23               Third Amendment to Cost Sharing National IRU
                          Agreement with Level 3 Communications, LLC dated
                          March 27, 2000 *
      16                  Letter from PricewaterhouseCoopers LLP
      27.1                Financial data schedule
      27.2                Restated financial data schedule

----------------
* Confidential treatment has been requested.  The copy filed as an exhibit omits
the information subject to the confidential treatment request.



                                      21