UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2000

Commission file number: 0-30900

XO Communications, Inc.
XO Capital, Inc.

---

|           |  |           
|---------- |  | ----------
|Delaware   |  | 54-1983517
|          
|          
|          
|          
|Washington |  | 91-1716062

---

|(State or other jurisdiction of |  | (I.R.S. Employer   
|------------------------------- |  | -------------------
|                               
|                               
|                               
|                               
|incorporation or organization)  |  | Identification No.)

|                                    |       | 
|----------------------------------- | ----- | 
|11111 Sunset Hills Road, Reston, VA | 20190 | 

---

|(Address of principal executive offices) | (Zip Code)
|---------------------------------------- | ----------

(703) 547-2000

---

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 __ .

As of November 8, 2000, the number of shares of Class A and Class B common
stock of XO Communications, Inc. issued and outstanding was 260,277,105 and
105,414,226, respectively, and there were 1,000 shares of common stock of XO
Capital, Inc., all of which 1,000 shares were held by XO Communications, Inc.

XO Capital, Inc. meets the conditions set forth in General Instruction H(1)(a)
and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format.





---



PART I. FINANCIAL INFORMATION

Item 1(a). Financial Statements

XO Communications, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except for per share amounts)
(Amounts as of September 30, 2000 are unaudited)

|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |            |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | --------- | ------------- | --------- | ------------ | --------- | ---------- | --------- | -
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           | September 30, |           | December 31,
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           | 2000          |           | 1999        
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |             
|ASSETS                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Current assets:                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                              |                                                      | $         | 985,527       |           |              | $         | 868,463    |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Marketable securities                                                                                                                                                                                                                                                                                                                                                                                                  |                                                      |           | 1,724,643     |           |              |           | 1,013,301  |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Accounts receivable, net of allowance for
doubtful accounts of $15,310    and $7,215,
respectively                                                                                                                                                                                                                                                                                                                     |                                                      |           | 164,142       |           |              |           | 80,746     |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Other current assets                                                                                                                                                                                                                                                                                                                                                                                                   |                                                      |           | 36,382        |           |              |           | 24,498     |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Pledged securities                                                                                                                                                                                                                                                                                                                                                                                                     |                                                      |           | 26,465        |           |              |           | 40,759     |          
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |           
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        | Total current assets                                 |           |               | 2,937,159 |              |           |            | 2,027,767 |  
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Property and equipment, net of accumulated
depreciation of $309,398      and $174,134, respectively                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      | 2,088,819 |               |           |              | 1,180,021 |           
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Investment in fixed wireless licenses, net                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      | 986,980   |               |           |              | 933,128   |           
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Goodwill and other intangibles, net                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      | 3,077,103 |               |           |              | 91,428    |           
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Other assets, net                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      | 251,866   |               |           |              | 364,764   |           
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |           
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        | Total assets                                         |           | $             | 9,341,927 |              |           | $          | 4,597,108 |  
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |           
|                                                                                                                                                                                                                                                                                                                                     
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Current liabilities:                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Accounts payable                                                                                                                                                                                                                                                                                                                                                                                                       |                                                      | $         | 202,859       |           |              | $         | 81,841     |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Other accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                              |                                                      |           | 223,547       |           |              |           | 119,795    |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Accrued interest payable                                                                                                                                                                                                                                                                                                                                                                                               |                                                      |           | 105,554       |           |              |           | 45,578     |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Current portion of long-term obligations                                                                                                                                                                                                                                                                                                                                                                               |                                                      |           | 12,687        |           |              |           | 2,003      |          
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |           
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        | Total current liabilities                            |           |               | 544,647   |              |           |            | 249,217   |  
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Long-term debt                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      | 4,365,996 |               |           |              | 3,733,342 |           
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Other long-term liabilities                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      | 31,359    |               |           |              | 15,319    |           
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |           
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        | Total liabilities                                    |           |               | 4,942,002 |              |           |            | 3,997,878 |  
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Redeemable preferred stock, par value $0.01 per
share, 25,000,000   shares authorized: 13,073,900 and 12,324,796 shares issued and   outstanding on September
30, 2000 and December 31, 1999,   respectively;
aggregate liquidation preference of $2,086,878 and
  $625,952 on September 30, 2000 and December 31, 1999,
respectively |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      | 2,071,401 |               |           |              | 612,352   |           
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|Stockholders equity (deficit):                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Common Stock, par value $0.02 per share, stated
at amounts paid in;
    Class A, 1,000,000,000
shares authorized, 258,932,392 and
    150,457,264
shares issued and outstanding on September 30,
2000
    and December 31, 1999, respectively; Class
B, 120,000,000 shares
    authorized, 105,414,226
and 117,485,100 shares issued and
    outstanding
on September 30, 2000 and December 31, 1999,
    respectively |                                                      |           | 4,402,782     |           |              |           | 1,139,232  |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Deferred compensation                                                                                                                                                                                                                                                                                                                                                                                                  |                                                      |           | (83,853       | )         |              |           | (85,489    | )        
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Accumulated other comprehensive income                                                                                                                                                                                                                                                                                                                                                                                 |                                                      |           | (55,665       | )         |              |           | 150,634    |          
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                      | Accumulated deficit                                                                                                                                                                                                                                                                                                                                                                                                    |                                                      |           | (1,934,740    | )         |              |           | (1,217,499 | )        
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |           
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        | Total stockholders equity (deficit)                 |           |               | 2,328,524 |              |           |            | (13,122   | )
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |           
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        | Total liabilities and stockholders
equity (deficit) |           | $             | 9,341,927 |              |           | $          | 4,597,108 |  
|                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |           |               |           |              |           |           

See accompanying notes to unaudited interim consolidated financial statements.





---



XO Communications, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except for per share amounts)
(Unaudited)

|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |         |         | 
|----------------------------------------------------------------------------------- | ----------------------------------- | ------------------------ | ----------- | ------------------ | ------- | ----------------- | ----------- | ------ | ------- | ---- | ----------- | ------- | --------- | - | ----------- | ------- | ------- | 
|                                                                                    |                                     |                          |             | Three Months Ended |         | Nine Months Ended
|                                                                                    |                                     |                          |             | September 30,      |         | September 30,    
|                                                                                    |                                     |                          |             |                    |         |                  
|                                                                                    |                                     |                          |             | 2000               |         | 1999              |             | 2000   |         | 1999
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |     
|Revenue                                                                             |                                     | $                        | 224,254     |                    |         | $                 | 75,059      |        |         | $    | 470,753     |         |           | $ | 184,302     |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Costs and expenses:                                                                
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Operating                           |                          |             | 144,107            |         |                   |             | 59,328 |         |      |             | 317,015 |           |   |             | 156,395 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Selling, general and administrative |                          |             | 169,082            |         |                   |             | 71,322 |         |      |             | 374,452 |           |   |             | 182,755 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Stock-based compensation            |                          |             | 13,396             |         |                   |             | 2,535  |         |      |             | 39,609  |           |   |             | 4,711   |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Depreciation                        |                          |             | 58,731             |         |                   |             | 25,290 |         |      |             | 139,984 |           |   |             | 67,429  |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Amortization                        |                          |             | 175,634            |         |                   |             | 3,166  |         |      |             | 216,788 |           |   |             | 11,177  |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | In-process research and development |                          |             |                   |         |                   |             |       |         |      |             | 36,166  |           |   |             |        |        
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |        
|                                                                                    |                                     | Total costs and expenses |             |                    | 560,950 |                   |             |        | 161,641 |      |             |         | 1,124,014 |   |             |         | 422,467 | 
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |        
|                                                                                   
|Loss from operations                                                                |                                     |                          | (336,696    | )                  |         |                   | (86,582     | )      |         |      | (653,261    | )       |           |   | (238,165    | )      
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Interest income                                                                     |                                     |                          | 50,248      |                    |         |                   | 24,428      |        |         |      | 141,347     |         |           |   | 61,713      |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Interest expense                                                                    |                                     |                          | (108,893    | )                  |         |                   | (79,419     | )      |         |      | (324,557    | )       |           |   | (190,172    | )      
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Other income and expense, net                                                       |                                     |                          | 1,160       |                    |         |                   |            |        |         |      | 226,735     |         |           |   |            |        
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |        
|                                                                                   
|Net loss                                                                            |                                     | $                        | (394,181    | )                  |         | $                 | (141,573    | )      |         | $    | (609,736    | )       |           | $ | (366,624    | )      
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |        
|                                                                                   
|Preferred stock dividends and accretion of
preferred stock    redemption obligation |                                     |                          | (42,306     | )                  |         |                   | (17,525     | )      |         |      | (107,505    | )       |           |   | (51,179     | )      
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |        
|Loss applicable to common shares                                                    |                                     | $                        | (436,487    | )                  |         | $                 | (159,098    | )      |         | $    | (717,241    | )       |           | $ | (417,803    | )      
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |        
|                                                                                   
|Loss per common share (basic and diluted)                                           |                                     | $                        | (1.20       | )                  |         | $                 | (0.63       | )      |         | $    | (2.33       | )       |           | $ | (1.71       | )      
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |        
|Weighted average shares (basic and diluted)                                         |                                     |                          | 362,802,391 |                    |         |                   | 250,753,388 |        |         |      | 307,774,101 |         |           |   | 244,714,684 |        
|                                                                                    |                                     |                          |             |                    |         |                   |             |        |         |      |             |         |           |   |             |        

See accompanying notes to unaudited interim consolidated financial statements.





---



XO Communications, Inc.
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)

|                                                                            |                                                |   |                   |          |      |   |            |         |  
|--------------------------------------------------------------------------- | ---------------------------------------------- | - | ----------------- | -------- | ---- | - | ---------- | ------- | -
|                                                                            |                                                |   | Nine Months Ended
|                                                                            |                                                |   | September 30,    
|                                                                            |                                                |   |                  
|                                                                            |                                                |   | 2000              |          | 1999
|                                                                            |                                                |   |                   |          |     
|OPERATING ACTIVITIES:                                                      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Net loss                                                                    |                                                | $ | (609,736          | )        |      | $ | (366,624   | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Adjustments to reconcile net loss to net cash used in operating activities:
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Stock-based compensation                       |   |                   | 39,609   |      |   |            | 4,711   |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Equity in loss of affiliates                   |   |                   | 2,755    |      |   |            | 5,185   |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Gain on sale of investments                    |   |                   | (226,539 | )    |   |            |        |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Depreciation and amortization                  |   |                   | 356,772  |      |   |            | 78,606  |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Accretion of interest on senior discount notes |   |                   | 87,608   |      |   |            | 43,875  |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | In-process research and development            |   |                   | 36,166   |      |   |            |        |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Changes in assets and liabilities:                                         
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Accounts receivable                            |   |                   | (47,540  | )    |   |            | (27,339 | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Other assets                                   |   |                   | (14,590  | )    |   |            | (16,708 | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Accounts payable                               |   |                   | 37,621   |      |   |            | (21,461 | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Accrued expenses and other liabilities         |   |                   | 99,311   |      |   |            | 68,211  |  
|                                                                            |                                                |   |                   |          |      |   |            |        
|Net cash used in operating activities                                       |                                                |   | (238,563          | )        |      |   | (231,544   | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|INVESTING ACTIVITIES:                                                      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Purchase of property and equipment                                          |                                                |   | (853,710          | )        |      |   | (395,953   | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Investment in fixed wireless licenses                                       |                                                |   | (37,302           | )        |      |   | (488,490   | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Maturity of pledged securities                                              |                                                |   | 24,335            |          |      |   | 21,135     |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Purchase of marketable securities                                           |                                                |   | (14,028,863       | )        |      |   | (2,545,574 | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Maturity of marketable securities                                           |                                                |   | 13,382,089        |          |      |   | 2,521,135  |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Proceeds from the sale of equity investment                                 |                                                |   | 245,112           |          |      |   |           |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash acquired in acquisition, net                                           |                                                |   | 46,940            |          |      |   |           |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Investments in unconsolidated entities                                      |                                                |   | (43,264           | )        |      |   |           |        
|                                                                            |                                                |   |                   |          |      |   |            |        
|Net cash used in investing activities                                       |                                                |   | (1,264,663        | )        |      |   | (887,747   | )      

Continued 





---



XO Communications, Inc.
Consolidated Statements of Cash Flows (Contd)
(Dollars in thousands)
(Unaudited)

|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |         | 
|--------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ----------------- | --------- | ---- | - | --------- | ------- | 
|                                                                      |                                                                                                                                                                    |   | Nine Months Ended
|                                                                      |                                                                                                                                                                    |   | September 30,    
|                                                                      |                                                                                                                                                                    |   |                  
|                                                                      |                                                                                                                                                                    |   | 2000              |           | 1999
|                                                                      |                                                                                                                                                                    |   |                   |           |     
|FINANCING ACTIVITIES:                                                
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Net proceeds from issuance of redeemable preferred stock              |                                                                                                                                                                    | $ | 1,248,901         |           |      | $ |          |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Repayment of capital leases and other obligations                     |                                                                                                                                                                    |   | (14,452           | )         |      |   | (2,925    | )      
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Proceeds from issuance of common stock through employee benefit plans |                                                                                                                                                                    |   | 65,967            |           |      |   | 20,356    |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Dividends paid on convertible preferred stock                         |                                                                                                                                                                    |   | (36,749           | )         |      |   | (9,750    | )      
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Proceeds from issuance of senior notes, net of discount               |                                                                                                                                                                    |   |                  |           |      |   | 1,000,000 |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Proceeds from sale of common stock                                    |                                                                                                                                                                    |   |                  |           |      |   | 310,533   |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Costs incurred in connection with financing                           |                                                                                                                                                                    |   | (17,100           | )         |      |   | (20,500   | )      
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Proceeds from draws on credit facility                                |                                                                                                                                                                    |   | 375,000           |           |      |   |          |        
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        
|Net cash provided by financing activities                             |                                                                                                                                                                    |   | 1,621,567         |           |      |   | 1,297,714 |        
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        
|                                                                     
|Effect of exchange rate changes on cash                               |                                                                                                                                                                    |   | (1,277            | )         |      |   |          |        
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        
|                                                                     
|Net increase in cash and cash equivalents                             |                                                                                                                                                                    |   | 117,064           |           |      |   | 178,423   |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Cash and cash equivalents, beginning of period                        |                                                                                                                                                                    |   | 868,463           |           |      |   | 319,496   |        
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        
|                                                                     
|Cash and cash equivalents, end of period                              |                                                                                                                                                                    | $ | 985,527           |           |      | $ | 497,919   |        
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        
|                                                                     
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                  
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Noncash financing and investing activities:                          
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Redeemable preferred stock dividends, paid in redeemable
preferred   shares                                                                                        |   | $                 | 52,496    |      |   | $         | 39,436  | 
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        
|                                                                      | Accrued redeemable preferred stock dividends, payable in
redeemable    preferred shares, and accretion of preferred stock
redemption    obligation and issue costs |   | $                 | 4,816     |      |   | $         | 1,993   | 
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        
|                                                                      | Common stock, options and warrants issued
or assumed in acquisitions                                                                                               |   | $                 | 3,032,849 |      |   | $         | 350,648 | 
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        
|Cash paid for interest                                                |                                                                                                                                                                    | $ | 186,014           |           |      | $ | 100,683   |        
|                                                                      |                                                                                                                                                                    |   |                   |           |      |   |           |        

See accompanying notes to unaudited interim consolidated financial statements.





---



PART II. OTHER INFORMATION

XO Communications, Inc.
Notes to Interim Consolidated Financial Statements
(Unaudited)

1.    Basis of Presentation

The consolidated financial statements include XO
Communications, Inc., formerly known as NEXTLINK Communications, Inc., a
Delaware corporation, and its majority-owned subsidiaries (together with its
predecessors, referred to, collectively, as the Company). The Company, through
predecessor entities, was formed in September 1994 and, through its
subsidiaries, provides competitive local, long distance and enhanced
telecommunications and data transmission and related services in selected
markets in the United States. The Company is majority controlled by Craig O.
McCaw through shares of Class A and Class B common stock held by Eagle River
Investments, LLC, an entity controlled by Mr. McCaw, and other shares of the
Companys Class A and Class B common stock owned by Mr. McCaw or over which he
has voting control.

The Companys financial statements include 100% of the assets, liabilities
and results of operations of subsidiaries of which the Company has control. The
Companys investments in unconsolidated companies in which it has a less than
majority interest but exercises significant influence are accounted
for using the
equity method and are included in other assets. Investments in entities in
which the Company has no significant influence are accounted for
using the cost
method and are also included in other assets. All significant intercompany
accounts and transactions have been eliminated.

The interim financial statements are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States have been condensed or omitted pursuant
to such rules and regulations. These condensed consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Companys Annual Report
on Form 10-K for the year ended December 31, 1999, as filed with the Securities
and Exchange Commission on March 30, 2000.

The financial information included herein reflects all adjustments
(consisting only of normal recurring adjustments) which, in the opinion of
management, are necessary for a fair presentation of the results for interim
periods. The results of operations for the three-month and nine-month periods
ended September 30, 2000 are not necessarily indicative of the results to be
expected for the full year.

On June 15, 2000, the Company effected a two-for-one stock split in the
form of a 100% stock dividend to holders of its common stock as of the June 1,
2000 record date. Share and per share data has been adjusted to reflect the
stock dividend.

2.    Significant Transactions

On June 16, 2000, the Company merged with Concentric Network Corporation
(Concentric), a provider of high-speed digital subscriber line, or DSL, web
hosting, e-commerce, and other Internet and data transmission services. In the
merger (the Concentric merger), the Company issued shares of the Companys
Class A common stock and assumed liabilities of Concentric. The aggregate value
of the common stock and the assumed liabilities was approximately $3.6 billion.

The Concentric merger was acccounted for using the purchase method of
accounting. The consideration and purchase price allocation were as follows (in
thousands):

|                                          |  |   |           | 
|----------------------------------------- |  | - | --------- | 
|Stock issued                              |  | $ | 2,542,356 | 
|                                         
|                                         
|                                         
|                                         
|Liabilities, warrants and options assumed |  |   | 1,050,476 | 
|                                          |  |   |           | 
|Consideration                             |  | $ | 3,592,832 | 
|                                          |  |   |           | 
|                                         
|In-process technology                     |  |   | 36,166    | 
|                                         
|                                         
|                                         
|                                         
|Fair value of intangible assets acquired  |  |   | 246,234   | 
|                                         
|                                         
|                                         
|                                         
|Fair value of tangible assets             |  |   | 384,861   | 
|                                         
|                                         
|                                         
|                                         
|Goodwill                                  |  |   | 2,925,571 | 
|                                          |  |   |           | 
|                                          |  | $ | 3,592,832 | 
|                                          |  |   |           | 





---



As a result of the Concentric merger, each issued and outstanding share of
Concentric common stock was converted into 1.2868 shares of the Companys Class
A common stock. Approximately 68 million shares of the Companys
Class A common stock were issued to Concentric common stockholders. The Company
assumed all obligations under Concentrics $150.0 million of 12 3/4% senior notes
due 2007 outstanding at the time of the merger. The 12 3/4% senior notes rank pari
passu with the Companys other outstanding senior notes. Additionally,
outstanding shares of Concentrics preferred stock were converted into 195,079
shares of the Companys 13 1/2% Series E senior redeemable exchangeable preferred
stock due 2010, and 53,296 shares of the Companys 7% Series F convertible
redeemable preferred stock due 2010. The 7% Series F preferred stock is
convertible into an aggregate of 1.7 million shares of the Companys Class A
common stock.

In connection with the Concentric merger, outstanding warrants to purchase
Concentric common stock were converted into warrants to acquire shares of the
Companys Class A common stock based on the 1.2868 exchange ratio applicable to
the Concentric common stock. Also, the Company assumed certain Concentric
employee stock option and other benefit plans. As a result of the Concentric
merger, holders of Concentric options and warrants outstanding at the time of
the merger received the right to acquire approximately 17.6 million shares of
the Companys Class A common stock in the aggregate.

The results of operations of Concentric have been included in the
accompanying condensed consolidated statements of operations of the Company
from June 16, 2000, the date of acquisition. The accompanying condensed
consolidated financial statements also reflect the allocation of the purchase
price, which is subject to adjustment. The goodwill of $2.9 billion is being
amortized on a straight-line basis over five years. Other acquired intangible
assets which include developed technology, customer lists, work force and trade
names are being amortized on a straight-line basis over four years.

Of the $3.6 billion purchase price, $36.2 million was allocated to
in-process technology. The Company retained professional appraisal consultants
to assist the Company with the assessment and allocation of a portion of the
purchase price to the in-process technology. These allocations represent the
estimated fair value based on risk-adjusted future cash flows related to the
incomplete projects. At the date of the Concentric merger, the development of
these projects had not yet reached technological feasibility and the technology
had no alternative future uses. As such, the entire $36.2 million of in-process
technology acquired was expensed as of the acquisition date.

The pro forma operating results of the Company and Concentric for the nine
months ended September 30, 2000 and 1999 have been prepared assuming the merger
occurred on January 1, 1999 (dollars in thousands).

|                                               |  |                    |            |                    |  |   |          |   | 
|---------------------------------------------- |  | ------------------ | ---------- | ------------------ |  | - | -------- | - | 
|                                               |  | Nine Months Ended 
|                                               |  | September 30, 2000 |            | September 30, 1999
|                                               |  |                    |            |                   
|Pro forma revenue                              |  | $                  | 577,134    |                    |  | $ | 285,477  |  
|                                              
|                                              
|                                              
|                                              
|Pro forma net loss applicable to common shares |  | $                  | (1,060,018 | )                  |  | $ | (967,333 | )
|                                              
|                                              
|                                              
|                                              
|Pro forma loss per share                       |  | $                  | (3.04      | )                  |  | $ | (3.09    | )

The pro forma results do not purport to represent what the Companys
results of operations would have actually been had the merger occurred on the
date indicated and are not indicative of future results.

On June 16, 2000, the Company acquired Craig O. McCaws 50% interest in
LHP, L.L.C. which owns 100% of INTERNEXT, L.L.C., in exchange for approximately
6.8 million shares of the Companys Class A common stock and the assumption of
$9.9 million in liabilities. As a result of the transaction, the Company now
owns 100% of INTERNEXT L.L.C., which owns exclusive rights to multiple dark
fibers and empty conduits in the 16,000 mile, 50 city North American inter-city
broadband network that is currently being constructed. The transaction was
accounted for as a reorganization of entities under common control and,
accordingly, was recorded by the Company at Mr. McCaws historical cost.

3.    Long Term Debt Financing

In February 2000, the Company and certain of its subsidiaries, as
guarantors, entered into a $1.0 billion secured credit facility (the facility)
with various lenders. The facility is comprised of a $387.5 million senior
secured multi-draw term loan A, a $225.0 million senior secured term loan B,
and a $387.5 million revolving credit facility. At closing, the Company
borrowed $150.0 million of the term loan A and the entire $225.0 million of the
term loan B. As of September 30, 2000, no additional borrowings have been drawn
under the facility.





---



The security for the facility consists of all of the assets purchased with
the proceeds of the facility, the stock of certain of the Companys direct
subsidiaries, all assets of the Company and, to the extent of $125.0 million of
guaranteed debt, all assets of certain of the Companys subsidiaries.

Amounts drawn under the facility will bear interest, at the option of the
Company, at an alternate base rate or reserve-adjusted LIBOR plus, in each
case, applicable margins. Initially, the applicable margins for the term loan A
and the revolving credit facility are 175 basis points over the alternate base
rate and 275 basis points over LIBOR. After June 30, 2003, the applicable
margins for the term loan A and the revolving credit facility range from 62 1/2 to
150 basis points over the alternate base rate and from 162 1/2 to 250 basis points
over LIBOR, based on the ratio of the Companys consolidated total debt to
annualized consolidated EBITDA, as defined in the agreements relating to the
credit facility. The
applicable margin for the term loan B is fixed at 250 basis points over the
alternate base rate and 350 basis points over LIBOR. Specific rates are
determined by actual borrowings under each facility. Interest on the term loans
and the revolving credit facility is payable on the earlier of the last day of
each interest period, or each successive date three months after the first day
of such interest period.

The term loan A and the revolving credit facility mature on December 31,
2006, and the term loan B matures on June 30, 2007. In each case, the maturity
dates are subject to acceleration to October 31, 2005 if the Company has not
refinanced its 12 1/2% Senior Notes due 2006 by April 15, 2005. The term loans A
and B and the revolving credit facility provide for automatic and permanent
quarterly reductions of the amount available for borrowing under those
facilities, beginning on March 31, 2004. The term loan B contains nominal
amortization provisions beginning March 31, 2004 until maturity.

The facility contains certain covenants, which, among other things, limit
additional indebtedness, certain investments and other transactions, and
dividend payments.

4.    Redeemable Preferred Stock

In July 2000, the Company sold 268,750 shares of Series G cumulative
convertible participating preferred stock and 131,250 shares of Series H
convertible participating preferred stock to several investment funds
controlled by Forstmann Little & Co. Each share of Series G and Series H stock
has a liquidation preference of $1,000 per share plus accrued and unpaid
dividends. The sale generated gross proceeds of $400.0 million. The Series G
and Series H stock are convertible into shares of the Companys Class A common
stock at a conversion rate of $31.625 per share, and provide for a 3.75% annual
dividend that is payable quarterly. The holders may convert the preferred stock
into Class A common stock at any time after January 20, 2001.

Shares of issued and outstanding preferred stock, redeemable in amounts
equal to their respective aggregate liquidation preferences, are summarized in
the table below (dollars in thousands):

|                                                                               |  |                                   |            |                                        |  |                    |            |                   |  |   |           |  |  |   |         | 
|------------------------------------------------------------------------------ |  | --------------------------------- | ---------- | -------------------------------------- |  | ------------------ | ---------- | ----------------- |  | - | --------- |  |  | - | ------- | 
|                                                                               |  | Shares Issued & Outstanding as of |            | Aggregate Liquidation Preference as of
|                                                                               |  | September 30, 2000                |            | December 31, 1999                      |  | September 30, 2000 |            | December 31, 1999
|                                                                               |  |                                   |            |                                       
|Series A 14% Senior Exchangeable
    Redeemable Preferred Shares(1)            |  |                                   | 9,445,213  |                                        |  |                    | 8,324,796  |                   |  | $ | 472,261   |  |  | $ | 425,952 | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Series B 6.5% Cumulative
    Convertible Preferred Stock(2)                    |  |                                   | 2,122,795  |                                        |  |                    | 4,000,000  |                   |  |   | 106,140   |  |  |   | 200,000 | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Series C 3.75% Cumulative
    Convertible Participating
    Preferred Stock(3) |  |                                   | 584,375    |                                        |  |                    |           |                   |  |   | 584,375   |  |  |   |        | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Series D 3.75% Convertible
    Participating Preferred Stock(3)                |  |                                   | 265,625    |                                        |  |                    |           |                   |  |   | 265,625   |  |  |   |        | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Series E 13.5% Senior Redeemable
    Exchangeable Preferred Stock(4)           |  |                                   | 201,663    |                                        |  |                    |           |                   |  |   | 203,932   |  |  |   |        | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Series F 7% Convertible
    Redeemable Preferred Stock(5)                      |  |                                   | 54,229     |                                        |  |                    |           |                   |  |   | 54,545    |  |  |   |        | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Series G 3.75% Cumulative
    Convertible Participating
    Preferred Stock(6) |  |                                   | 268,750    |                                        |  |                    |           |                   |  |   | 268,750   |  |  |   |        | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Series H 3.75% Convertible
    Participating Preferred Stock(6)                |  |                                   | 131,250    |                                        |  |                    |           |                   |  |   | 131,250   |  |  |   |        | 
|                                                                               |  |                                   |            |                                        |  |                    |            |                  
|Total                                                                          |  |                                   | 13,073,900 |                                        |  |                    | 12,324,796 |                   |  | $ | 2,086,878 |  |  | $ | 625,952 | 
|                                                                               |  |                                   |            |                                        |  |                    |            |                  





---





|(1) |  | The Company is required to redeem all of the Series A shares outstanding
on February 1, 2009 at a redemption price equal to 100% of the liquidation
preference thereof, plus accumulated and unpaid dividends to the date of
redemption.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The Company is required to redeem all of the Series B shares outstanding
on March 31, 2010 at a redemption price equal to 100% of the liquidation
preference thereof, plus accumulated and unpaid dividends to the date of
redemption. The Company may redeem the Series B shares any time after
April 16, 2006 at a redemption price equal to 100% of the liquidation
preference. In May 2000, certain holders of the 6 1/2% preferred stock
converted their shares into approximately 8.1 million shares of the
Companys Class A common stock, based on the then current conversion rate
of 4.58 shares of Class A common stock for each share of 6 1/2% preferred
stock converted, in consideration for a cash payment by the Company of
approximately $4.7 million, which has been reported as a preferred stock
dividend in the second quarter of 2000.
|   
|(3) |  | Holders of the Series C and Series D shares may require the Company to
redeem those shares during the 180-day period commencing January 20, 2010.
The Company may redeem the Series C and Series D shares at any time after
the later of January 20, 2005 and the date when the Company has redeemed
its 12 1/2% Senior Notes due 2006 in full.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(4) |  | The Company is required to redeem the Series E shares at their
liquidation preference, plus accumulated and unpaid dividends on June 1,
2010. The Company may redeem the Series E shares, in whole or in part, at
any time on or after June 1, 2003, at redemption rates (expressed as a
percentage of the liquidation preference) commencing with 106.75% on June
1, 2003 and declining to 100% on June 1, 2008, plus accumulated and unpaid
dividends to the date of redemption. In addition, prior to June 1, 2001,
the Company may, at its option, redeem up to a maximum of 35% of the
initially issued Concentric Series B Preferred from the net proceeds of
one or more public equity offerings or the sale of common stock to a
strategic investor.                                                                                                 
|   
|(5) |  | The Company is required to redeem the Series F shares at their
liquidation preference, plus accumulated and unpaid dividends, on
September 1, 2010. The Company may redeem the Series F shares, in whole or
in part, at any time on or after June 1, 2003 at redemption rates
commencing with 105.125% declining to 100% on June 1, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(6) |  | Holders of the preferred stock will also have the option of requiring
redemption of the preferred stock during the 180-day period commencing on
July 6, 2010. The Company may redeem the preferred stock at any time after
the later of July 6, 2005 and the date when the Company has redeemed its
12 1/2% Senior Notes due 2006 in full.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

The Companys authorized capital stock also includes 7,045,000 shares of
preferred stock, net of shares designated as redeemable preferred stock set
forth above, as to which the rights and terms have not yet been designated. The
Company may issue shares of preferred stock in one or more series upon
authorization by its Board of Directors. Under the Companys Certificate of
Incorporation, the Board of Directors has the authority to fix the rights and
terms, conversion rights, voting rights, redemption rights and terms,
liquidation preferences and any other rights, preferences, privileges and
restrictions applicable to each series of preferred stock.

5.    Reclassifications

Certain reclassifications have been made to prior period amounts in order
to conform to the current presentation.

6.    Reportable Segments

Following the Concentric merger, the Company instituted an integration
plan such that the Company operates its business as one communications segment.
The Companys communications segment includes all of our products and services including
data, voice and other services. These services have similar network operations
and technology requirements and are sold through similar sales channels to a
similar targeted customer base. Therefore, the Company manages these services
as a single segment that is divided into profit centers that are
focused on geographic areas, or markets,
within the United States and Europe, or that are focused on customers
with a presence across geographical markets.





---



7.    Comprehensive Income

Comprehensive income includes the Companys net income, as well as changes
in equity from other sources. The following table reflects the Companys
calculation of comprehensive income for the three and nine-month periods ended
September 30, 2000 and 1999 (in thousands):

|                                                        |                                                                                                        |   |                    |         |                   |   |          |         |      |   |          |          |   |   |          |         | 
|------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | - | ------------------ | ------- | ----------------- | - | -------- | ------- | ---- | - | -------- | -------- | - | - | -------- | ------- | 
|                                                        |                                                                                                        |   | Three Months Ended |         | Nine months Ended
|                                                        |                                                                                                        |   | September 30,      |         | September 30,    
|                                                        |                                                                                                        |   |                    |         |                  
|                                                        |                                                                                                        |   | 2000               |         | 1999              |   | 2000     |         | 1999
|                                                        |                                                                                                        |   |                    |         |                   |   |          |         |     
|Loss applicable to common stockholders                  |                                                                                                        | $ | (436,487           | )       |                   | $ | (159,098 | )       |      | $ | (717,241 | )        |   | $ | (417,803 | )      
|                                                       
|                                                       
|                                                       
|                                                       
|Other comprehensive income (loss):                     
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Unrealized holding gains (losses)
and foreign
   currency translation
adjustments during the
   period |   |                    | (50,325 | )                 |   |          | (37,951 | )    |   |          | 51,724   |   |   |          | 110,347 | 
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Less: Realized gains transferred
to current period
   earnings                                         |   |                    |        |                   |   |          |        |      |   |          | (258,023 | ) |   |          |        | 
|                                                        |                                                                                                        |   |                    |         |                   |   |          |         |      |   |          |          |   |   |          |        
|                                                        | Other comprehensive (loss) income                                                                      |   |                    | (50,325 | )                 |   |          | (37,951 | )    |   |          | (206,299 | ) |   |          | 110,347 | 
|                                                       
|                                                       
|                                                       
|                                                       
|Comprehensive loss applicable to
common
   stockholders |                                                                                                        | $ | (486,812           | )       |                   | $ | (197,049 | )       |      | $ | (923,540 | )        |   | $ | (307,456 | )      
|                                                        |                                                                                                        |   |                    |         |                   |   |          |         |      |   |          |          |   |   |          |        

The Companys changes in other comprehensive (loss) income, includes
unrealized gains and losses on available-for-sale investments and it also
includes foreign currency translation adjustments relating to the Companys
foreign operations. Realized gains transferred to current period earnings in
the nine-month period ending September 30, 2000, relate to the sale of an
equity investment.





---



PART I.      FINANCIAL INFORMATION

Item 1(b)     Financial Statements

XO Capital, Inc.
Balance Sheets
(Amounts as of September 30, 2000 are unaudited)

|                                                                               |  |               |     |              |  |   |     | 
|------------------------------------------------------------------------------ |  | ------------- | --- | ------------ |  | - | --- | 
|                                                                               |  | September 30, |     | December 31,
|                                                                               |  | 2000          |     | 1999        
|                                                                               |  |               |     |             
|ASSETS                                                                        
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Cash                                                                           |  | $             |    |              |  | $ | 100 | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Receivable from parent                                                         |  |               | 100 |              |  |   |    | 
|                                                                               |  |               |     |              |  |   |     | 
|                                                                              
|SHAREHOLDERS EQUITY                                                          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Common stock, no par value, 1,000
shares authorized, issued and
   outstanding |  | $             | 100 |              |  | $ | 100 | 
|                                                                               |  |               |     |              |  |   |     | 

Notes to Balance Sheets

1.    Description

XO Capital, Inc. (XO Capital) is a Washington corporation and a wholly
owned subsidiary of XO Communications, Inc. (XO). XO Capital was formed for the
sole purpose of obtaining financing from external sources and is a joint
obligor on the 12 1/2% Senior Notes due April 15, 2006 of XO and XO Capital. XO
Capital was initially funded with a $100 contribution from a predecessor of XO
and has had no operations to date. XO Capitals sole source for the repayment
of the 12 1/2% Senior Notes will be from the operations of XO. Therefore, these
balance sheets should be read in conjunction with the consolidated financial
statements of XO.

2.    Basis of Presentation

The interim financial statements are unaudited and have been prepared,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with accounting principles
generally accepted in the U.S. have been condensed or omitted pursuant to such
rules and regulations. These condensed consolidated financial statements should
be read in conjunction with XO Capitals audited consolidated financial
statements and notes thereto included in the Companys Annual Report on Form
10-K for the year ended December 31, 1999, as filed with the Securities and
Exchange Commission on March 30, 2000.





---



PART I.       FINANCIAL INFORMATION

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation

OVERVIEW

Our Business and Assets

Since 1996, we have provided high-quality bundled local and long distance,
as well as dedicated voice telecommunications services to the rapidly growing
business market. We have expanded our services, through our acquisition of
Concentric Network Corporation on June 16, 2000, to offer a
complete, single source communications solution to our customers by combining
our data and voice services. Our data services include the following:





To complement these service offerings, in September 2000, we introduced
revolutionary flat rate service packages throughout all of our 53 domestic
markets. These convenient packages combine local, long distance, Internet
Access and web hosting (including e-mail and domain registration) services
designed specifically for small and medium-sized businesses.

We believe that increasing usage of both telephone service and newer data
application and information services will continue to increase demand for
telecommunications capacity, and for new telecommunications services and
applications. To serve our customers broad and expanding telecommunications
needs, we have assembled a unique collection of high-bandwidth, local and
inter-city network assets, both in North America and Europe. We intend to
integrate these assets with advanced communications technologies and services
to become one of the leading global providers of comprehensive communications services.

To accomplish this, we have:









---







Our local and inter-city networks employ fiber optic technology, which
uses light waves to transmit signals over cables consisting of many glass fiber
strands. Fiber optic strands have enough capacity to carry tens of thousands
times more traffic than traditionally-configured copper wire. In our newer
markets, we install as many as 400 advanced fiber strands in each network, with
built-in capacity for future growth. Our North American inter-city network will
consist of 24 of the most advanced fiber strands and an empty conduit through
which we can deploy numerous additional fiber strands. Recent advances in
transmission technology, notably dense wave division multiplexing, or DWDM,
have substantially increased the effective capacity of advanced fiber strands.

Our goal is to own our networks or control them through the acquisition of
dark fiber, which we believe will enable us to deliver higher quality and new
services at a lower cost, thereby increasing our operating margins. Ownership
of networks or rights to dark fiber gives us the flexibility to deploy optical
transmission equipment designed to support a variety of communications
technologies, enabling us to maximize our networks capacity and performance.
This flexibility will allow us to offer our customers a wide range of
technology options to meet their changing needs and introduce new technologies
as they become available.

We have recently begun the first phase of an expansive migration to
packet-based switching technology, which is expected to deliver the full range
of traditional and enhanced local and long distance services and to increase
our ability to efficiently handle an increasing amount of ISP traffic. We
plan to deploy an Internet Protocol (IP)-based next-generation
telecommunications switching platform, including soft-switch
technology, throughout our North American fiber optic network over the next 18 months.
Soft-switch technology is expected to allow us to realize cost savings both in
reduced equipment cost and reduced physical co-location space needs.
Additionally, switches using soft-switch technology are expected to be quickly
scaleable and have capabilities to launch new and enhanced services.

Another key component of our strategy is to own or control the physical
connection for the short distance between our customers facilities and our
networks. To make this connection, today we frequently lease the existing
copper telephone wires from the dominant local telephone company. To reduce our
reliance on these leased connections, we intend to increase the number of
customers connected directly to our networks. In some cases, we will make this
direct connection by constructing a new fiber optic extension from our network
to the customers premises. In other cases, using our fixed wireless spectrum,
we will deploy a high-bandwidth wireless connection between an antenna on the
roof of the customers premises and an antenna attached to our fiber rings.
These wireless connections offer high-quality broadband capacity and, in many
cases, cost less than fiber to install. We have deployed wireless direct
connections to our networks in 17 markets, and plan to have them deployed in a
total of 25 markets by the end of 2000.

We are also deploying DSL technology to meet the high bandwidth needs of
those customers whose connection to our network remains over copper wire. DSL
technology increases the effective capacity of existing copper





---



telephone wires. We are installing DSL equipment to provide these services
ourselves, and we also resell other providers DSL services.

2000 Transactions and Developments



| |            
| | -----------
| | Name Change

In September 2000, in connection with the launch of our flat rate service
packages, we announced that the XO Communications name would replace the
NEXTLINK and Concentric brands in the marketplace, which is reflective of our
core business strengths and signifies our transformation into a full-service,
integrated broadband communications provider offering services that are both
simple to use and understand. We began trading under the new ticker symbol
(NASDAQ:XOXO) on Tuesday, September 26, 2000.



| |                                  
| | ---------------------------------
| | Acquisition of Concentric Network

On June 16, 2000, we consummated the acquisition of Concentric. In the
merger and after giving effect to the June 15, 2000 two-for-one split,
approximately 68 million shares of our Class A common stock were issued to
Concentric common stockholders. In connection with the Concentric merger, we
assumed Concentrics outstanding warrants and employee stock option and other
benefit plans and, to the extent such warrants and plans provided for the
issuance or purchase of Concentric common stock, they now provide for the
issuance or purchase of shares of our Class A common stock.

In the merger, each issued and outstanding share of preferred stock of
Concentric was converted into a share of a corresponding series of our
preferred stock, with substantially identical terms as the corresponding series
of preferred stock of Concentric (giving effect to amendments approved by the
holders of those shares). Additionally, as a result of the merger, we have
assumed the payment obligations and all other covenants required to be
performed or observed by Concentric with respect to its 12 3/4% senior notes due
2007.



| |                                                             
| | ------------------------------------------------------------
| | Acquisition of Interest in North American Inter-City Network

On June 16, 2000, Craig O. McCaw contributed to us his interest in the
joint venture with us that owns exclusive interests in multiple dark fibers
and empty conduits in a North American inter-city telecommunications network
currently under construction. We now own all of these exclusive interests. In
exchange for his interest, Mr. McCaw received approximately 6.8 million shares
of our Class A common stock and we assumed $9.9 million in liabilities. In
connection with this acquisition, we granted Mr. McCaw certain registration
rights with respect to the Class A common stock issued to Mr. McCaw in the
exchange. Mr. McCaw is a member of our board of directors and controls Eagle
River Investments, L.L.C., our largest stockholder.

RESULTS OF OPERATIONS



|                                | 
|------------------------------- | 
|Comparison of Financial Results | 

Revenue grew 198.8% to $224.3 million during the third quarter of 2000
from $75.1 million in the same period in 1999. Year to date revenue of $470.8
million represented a 155.4% increase from the $184.3 million in revenue for
the comparable period in 1999. In June 2000, we consummated a merger with
Concentric which contributed to the increase in revenue over the comparable
periods in 1999. Revenue reported consisted of the following components (in
thousands):

|               |  |                     |         |      |  |          |        |                     |  |      |       |          |  |   |         |  |  |   |         |  |  |  |       |   
|-------------- |  | ------------------- | ------- | ---- |  | -------- | ------ | ------------------- |  | ---- | ----- | -------- |  | - | ------- |  |  | - | ------- |  |  |  | ----- | --
|               |  | Three Months        |         |      |  |          |        | Nine months        
|               |  | Ended September 30, |         |      |  |          |        | Ended September 30,
|               |  |                     |         |      |  |          |        |                    
|               |  | 2000                |         | 1999 |  | % Change |        | 2000                |  | 1999 |       | % Change
|               |  |                     |         |     
|              
|              
|              
|              
|Data services  |  | $                   | 117,940 |      |  | $        | 13,838 |                     |  |      | 752.3 | %        |  | $ | 194,114 |  |  | $ | 32,094  |  |  |  | 504.8 | % 
|Voice services |  |                     | 103,943 |      |  |          | 58,365 |                     |  |      | 78.1  | %        |  |   | 273,888 |  |  |   | 149,030 |  |  |  | 83.8  | % 
|              
|              
|              
|              
|Other services |  |                     | 2,371   |      |  |          | 2,856  |                     |  |      | (17.0 | %)       |  |   | 2,751   |  |  |   | 3,178   |  |  |  | (13.4 | %)
|               |  |                     |         |      |  |          |        |                     |  |      |       |          |  |   |         |  |  |   |         | 
|Total revenue  |  | $                   | 224,254 |      |  | $        | 75,059 |                     |  |      | 198.8 | %        |  | $ | 470,753 |  |  | $ | 184,302 |  |  |  | 155.4 | % 

Data services includes revenue from Internet access, network access, and
web hosting. Internet access services include services marketed to enterprise
customers, such as dedicated access facilities and DSL services, and
residential and small business dial-up access services which offers access at
speeds up to 56 kbps across the United States and Canada. Network access
services include primarily dedicated and VPN services, which enable customers to deploy tailored,
IP-based business applications for internal enterprise, business-to-business
and business-to-customer data communications on the private network while also
affording high-speed access to the Internet. Applications hosting services
include sophisticated high-end hosting and Web site traffic management
solutions for Internet-centric businesses, in addition to web hosting,
e-commerce and streamed media services designed for small-to-medium sized
businesses. At September 30, 2000, we had 23,140 DSL lines in service. With
respect to dedicated web hosting services, we had 2,582 managed servers
residing in our 8 data centers. Hosted websites over shared servers totaled
212,327.

Voice services revenue, consisting of bundled local and long distance,
prepaid call processing, and other voice services including shared tenant
services, interactive voice response, or IVR, and stand-alone long distance
services, grew 78.1% to $103.9 million for the third quarter of 2000 from $58.4
million in the same period of 1999. For the nine months ended September 30,
2000, voice services revenue grew 83.8% to $273.9 million from $149.0 million



---



for the comparable period in 1999. This revenue growth can be attributed
primarily to an increase in customer access lines installed, which was driven
by growth in our existing markets as well as by new markets launched. At
September 30, 2000, access lines in service totaled 737,433 compared to 349,154
as of September 30, 1999, an increase of 111.2%. Access line installations grew
69.3% to 110,271 and 76.8% to 309,398 for the three and nine months ended
September 30, 2000 compared to 65,133 and 174,972 for the same periods of 1999.

The table below provides expenses by classification and as a percentage of
revenue (dollars in thousands):

|                    |                                   |  |                    |         |                    |  |                    |      |              |  |   |        |  |  |  |      |  
|------------------- | --------------------------------- |  | ------------------ | ------- | ------------------ |  | ------------------ | ---- | ------------ |  | - | ------ |  |  |  | ---- | -
|                    |                                   |  |                    |         |                    |  | Three Months Ended
|                    |                                   |  | September 30, 2000 |         | September 30, 1999
|                    |                                   |  |                    |         |                   
|                    |                                   |  | Amount             |         | % of Revenue       |  | Amount             |      | % of Revenue
|                    |                                   |  |                    |         |                    |  |                    |      |             
|Costs and expenses:
|                   
|                   
|                   
|                   
|                    | Operating                         |  | $                  | 144,107 |                    |  |                    | 64.3 | %            |  | $ | 59,328 |  |  |  | 79.0 | %
|                   
|                   
|                   
|                   
|                    | Sales, general and administrative |  |                    | 169,082 |                    |  |                    | 75.4 | %            |  |   | 71,322 |  |  |  | 95.0 | %
|                   
|                   
|                   
|                   
|                    | Stock-based compensation          |  |                    | 13,396  |                    |  |                    | 6.0  | %            |  |   | 2,535  |  |  |  | 3.4  | %
|                   
|                   
|                   
|                   
|                    | Depreciation                      |  |                    | 58,731  |                    |  |                    | 26.2 | %            |  |   | 25,290 |  |  |  | 33.7 | %
|                   
|                   
|                   
|                   
|                    | Amortization                      |  |                    | 175,634 |                    |  |                    | 78.3 | %            |  |   | 3,166  |  |  |  | 4.2  | %

|                    |                                   |  |                    |         |                    |  |                   |      |              |  |   |         |  |  |  |      |  
|------------------- | --------------------------------- |  | ------------------ | ------- | ------------------ |  | ----------------- | ---- | ------------ |  | - | ------- |  |  |  | ---- | -
|                    |                                   |  |                    |         |                    |  | Nine Months Ended
|                    |                                   |  | September 30, 2000 |         | September 30, 1999
|                    |                                   |  |                    |         |                   
|                    |                                   |  | Amount             |         | % of Revenue       |  | Amount            |      | % of Revenue
|                    |                                   |  |                    |         |                    |  |                   |      |             
|Costs and expenses:
|                   
|                   
|                   
|                   
|                    | Operating                         |  | $                  | 317,015 |                    |  |                   | 67.3 | %            |  | $ | 156,395 |  |  |  | 84.9 | %
|                   
|                   
|                   
|                   
|                    | Sales, general and administrative |  |                    | 374,452 |                    |  |                   | 79.5 | %            |  |   | 182,755 |  |  |  | 99.2 | %
|                   
|                   
|                   
|                   
|                    | Stock-based compensation          |  |                    | 39,609  |                    |  |                   | 8.4  | %            |  |   | 4,711   |  |  |  | 2.6  | %
|                   
|                   
|                   
|                   
|                    | Depreciation                      |  |                    | 139,984 |                    |  |                   | 29.7 | %            |  |   | 67,429  |  |  |  | 36.6 | %
|                   
|                   
|                   
|                   
|                    | Amortization                      |  |                    | 216,788 |                    |  |                   | 46.1 | %            |  |   | 11,177  |  |  |  | 6.1  | %

Operating expenses consist of costs directly related to providing
facilities-based network and enhanced communications services,and also include
salaries, benefits and related costs of operations and engineering personnel.
Operating expenses increased 142.9% in the third quarter of 2000 to $144.1
million, an increase of $84.8 million over the same period in 1999. For the
nine months ended September 30, 2000, operating expenses increased 102.7% to
$317.0 million from $156.4 million over the same period in 1999. The increase
was attributable to increased network costs related to provisioning higher
volumes of local, long distance and enhanced communications services, an
increase in employees, and an increase in other related costs primarily to
expand our switched local and long distance service businesses in existing and
planned markets as well as the inclusion of Concentric operating expenses from
June 16, 2000, the date the Concentric merger was completed.We expect
operating expenses to continue to increase in future periods in connection with
our growth and expansion plans, but to decrease as a percentage of revenue.

Selling, general and administrative, or SG&A, expenses include salaries,
benefits and related personnel costs for non-operating and non-engineering
personnel, facilities expenses, sales and marketing, information systems costs,
consulting and legal fees. SG&A increased 137.1% to $169.1 million in the third
quarter of 2000 from $71.3 million in the third quarter of 1999. For the nine
months ended September 30, 2000, SG&A increased 104.9% to $374.5 million from
$182.8 million in the same period of 1999. Consistent with the cost drivers of
our operating expenses,





---



the increase was primarily due to an increase in the number of our
employees, and other costs associated with the expansion of our local and long
distance service businesses in our existing and planned markets, as well as the
inclusion of Concentric SG&A expenses from the merger date. We expect SG&A to
continue to increase in future periods in connection with growth and expansion
plans.

Stock-based compensation expense was recorded in connection with
compensatory stock options granted to employees and also includes the cost
associated with restricted stock granted to certain key Concentric officers and
employees in connection with the Concentric merger. Compensation expense is
recognized over the vesting periods of compensatory stock options based on the
excess of the fair value of the stock options at the date of grant over the
exercise price. Stock-based compensation expense increased $10.9 million in the
third quarter of 2000 to $13.4 million relative to $2.5 million in the third
quarter of 1999. For the nine months ended September 30, 2000, stock-based
compensation expense increased $34.9 million to $39.6 million from $4.7 million
in the same period of 1999. The increase was due to the issuance of
compensatory stock options to senior executives during the latter half of 1999
and in the first half of 2000 and the issuance and accrual for issuance of
restricted stock to Concentric employees in association with
the Concentric merger.

Depreciation expense increased 132.2% to $58.7 million from $25.3 million
in the third quarter of 1999. For the nine months ended September 30, 2000,
depreciation expense increased 107.6% to $140.0 million from $67.4 million in
the same period of 1999. The increase was primarily due to placement in service
of additional telecommunications network assets, including switches, fiber
optic cable, network electronics and related equipment and the impact of
Concentrics depreciation expense included from the merger date. We expect
depreciation expense to continue to increase as we expand our networks and
install additional equipment associated with data and voice technologies.

Amortization expense increased $172.5 million to $175.6 million in the
third quarter of 2000 and $205.6 million to $216.8 million for the nine months
ended September 30, 2000 due to amortization of additional goodwill and
intangible assets arising from the Concentric merger.

Interest expense increased 37.1% to $108.9 million from $79.4 million in
the third quarter of 1999. For the nine months ended September 30, 2000,
interest expense increased 70.7% to $324.6 million from $190.2 million in the
same period of 1999. The increase was primarily due to an increase in our
average outstanding indebtedness over the respective periods, resulting, to a
large extent, from the issuance of senior notes in June 1999 and November 1999,
a $375.0 million draw on our senior secured credit facility in the first
quarter of 2000, and the inclusion of interest expense associated with
Concentrics senior notes, from the merger date. For more information, see
Liquidity and Capital Resources.

Interest income increased 105.7% to $50.2 million from $24.4 million in
the third quarter of 1999. For the nine months ended September 30, 2000,
interest income increased 129.0% to $141.3 million from $61.7 million in the
same period of 1999. The increase in interest income corresponds with the
increase in our cash and investment balances.

We reported a net loss of $394.2 million for the third quarter of 2000
compared to a net loss of $141.6 million for the same quarter of 1999. The
increased loss is a result of increases in costs associated with the expansion
of our business through internal growth and acquisition of new businesses. For
the nine months ended September 30, 2000, we reported a net loss of $609.7
million compared to a net loss of $366.6 million for the nine months ended
September 30, 1999. The net loss for the nine month period ended September 30,
2000, takes into account our $226.5 million gain on sale of investment.





---





|                     | 
|-------------------- | 
|Other Operating Data

The table below summarizes EBITDA, both in amount and as a percentage of
revenue. EBITDA is our operating loss adjusted for stock based compensation,
depreciation, amortization and in-process technology write-offs for the periods
noted (dollars in thousands):

|       |  |                    |         |                    |  |                    |       |                    |  |        |         |              |  |        |       |                   |  |   |          |   |  |  |       |    |  |   |          |   |  |  |       |   
|------ |  | ------------------ | ------- | ------------------ |  | ------------------ | ----- | ------------------ |  | ------ | ------- | ------------ |  | ------ | ----- | ----------------- |  | - | -------- | - |  |  | ----- | -- |  | - | -------- | - |  |  | ----- | --
|       |  |                    |         |                    |  | Three Months Ended |       |                    |  |        |         |              |  |        |       | Nine months Ended
|       |  | September 30, 2000 |         | September 30, 1999 |  | September 30, 2000 |       | September 30, 1999
|       |  |                    |         |                    |  |                    |       |                   
|       |  | Amount             |         | % of Revenue       |  | Amount             |       | % or Revenue       |  | Amount |         | % of Revenue |  | Amount |       | % or Revenue     
|       |  |                    |         |                    |  |                    |       |                    |  |        |         |              |  |        |       |                  
|EBITDA |  | $                  | (88,935 | )                  |  |                    | (39.7 | %)                 |  | $      | (55,591 | )            |  |        | (74.1 | %)                |  | $ | (220,714 | ) |  |  | (46.9 | %) |  | $ | (154,848 | ) |  |  | (84.0 | %)

EBITDA is not a generally accepted accounting principle measure but rather
a measure employed by management to view operating results adjusted for major
non-cash items. EBITDA has been consistently improving as a percentage of
revenue due to revenue growth and the decrease in operating and SG&A as a
percentage of revenue as indicated above. In absolute dollars, our EBITDA loss
has increased due to business expansion costs as discussed above.

The table below provides selected additional key operating data:

|                                |  |                     |         |              |  |                |         |         |  |        |         |  |  |  |         |  |  |  |         | 
|------------------------------- |  | ------------------- | ------- | ------------ |  | -------------- | ------- | ------- |  | ------ | ------- |  |  |  | ------- |  |  |  | ------- | 
|                                |  | As of September 30, |         | Yr. Over Yr. |  | As of Dec. 31, |         | 9 month
|                                |  | 2000                |         | 1999         |  | Change         |         | 1999    |  | Change
|                                |  |                     |         |              |  |                |         |         |  |       
|Operating data (1):            
|                               
|                               
|                               
|                               
|Route miles (2)                 |  |                     | 8,677   |              |  |                | 3,905   |         |  |        | 4,772   |  |  |  | 4,285   |  |  |  | 4,392   | 
|                               
|                               
|                               
|                               
|Fiber miles (3)                 |  |                     | 572,674 |              |  |                | 338,705 |         |  |        | 233,969 |  |  |  | 378,200 |  |  |  | 194,474 | 
|                               
|                               
|                               
|                               
|On-net buildings connected (4)  |  |                     | 1,761   |              |  |                | 1,163   |         |  |        | 598     |  |  |  | 1,320   |  |  |  | 441     | 
|                               
|                               
|                               
|                               
|Off-net buildings connected (5) |  |                     | 47,221  |              |  |                | 20,047  |         |  |        | 27,174  |  |  |  | 28,656  |  |  |  | 18,565  | 
|                               
|                               
|                               
|                               
|Voice switches operational      |  |                     | 34      |              |  |                | 28      |         |  |        | 6       |  |  |  | 32      |  |  |  | 2       | 
|                               
|                               
|                               
|                               
|ATM switches operational        |  |                     | 46      |              |  |                |        |         |  |        | 46      |  |  |  |        |  |  |  | 46      | 
|                               
|                               
|                               
|                               
|Access lines in service (6)     |  |                     | 737,433 |              |  |                | 349,154 |         |  |        | 388,279 |  |  |  | 428,035 |  |  |  | 309,398 | 
|                               
|                               
|                               
|                               
|DSL lines in service (7)        |  |                     | 23,140  |              |  |                |        |         |  |        | 23,140  |  |  |  |        |  |  |  | 23,140  | 
|                               
|                               
|                               
|                               
|Managed servers (8)             |  |                     | 2,582   |              |  |                |        |         |  |        | 2,582   |  |  |  |        |  |  |  | 2,582   | 
|                               
|                               
|                               
|                               
|Hosted shared websites (9)      |  |                     | 212,327 |              |  |                |        |         |  |        | 212,327 |  |  |  |        |  |  |  | 212,327 | 
|                               
|                               
|                               
|                               
|Data centers operational        |  |                     | 8       |              |  |                |        |         |  |        | 8       |  |  |  |        |  |  |  | 8       | 
|                               
|                               
|                               
|                               
|Employees                       |  |                     | 6,757   |              |  |                | 3,254   |         |  |        | 3,503   |  |  |  | 3,500   |  |  |  | 3,257   | 



|(1) |  | The operating data for all periods presented include the statistics of
the Las Vegas network, which we manage and in which we have a 40%
membership interest.                                                                                                                                                                                                                                                                                                                                              
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Route miles refers to the number of operational miles of the
telecommunications path in which leased or Company-owned fiber optic
cables are installed. These include metro and intercity miles.                                                                                                                                                                                                                                                                                                           
|   
|(3) |  | Fiber miles refers to the number of operational route miles installed
along a telecommunications path, multiplied by our estimate of the number
of fibers along that path. These include metro and intercity miles.                                                                                                                                                                                                                                                                                        
|   
|(4) |  | Represents buildings physically connected to our networks, excluding
those connected by unbundled incumbent local exchange carrier facilities.                                                                                                                                                                                                                                                                                                                                                             
|   
|(5) |  | Represents buildings connected to our networks through leased or
unbundled incumbent carriers facilities.                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(6) |  | Represents the number of access lines in service for which we are billing
services. We define an access line as a telephone connection between a
customer purchasing local telephone services and our network. This
connection does not include the concept of access line equivalents, or
ALEs, and is a one-for-one relationship with no multipliers used for trunk
ratios, except for those trunks over which primary rate interface, or PRI,
service is provided, which are counted as 23 access lines.
|   
|(7) |  | The number of digital subscriber lines for which the Company is billing
service. DSL is dedicated access technology that allows high speed digital
service over regular telephone lines via modems.                                                                                                                                                                                                                                                                                                        
|   
|(8) |  | The number of Company or customer owned servers that are dedicated to
hosting a single customers websites which reside in our data centers.                                                                                                                                                                                                                                                                                                                                                               
|   
|(9) |  | The number of websites that are hosted for multiple customers on shared
servers.                                                                                                                                                                                                                                                                                                                                                                                                                           

LIQUIDITY AND CAPITAL RESOURCES

Our business is capital-intensive and, as such, has required and will
continue to require substantial capital investment. We build high capacity
networks with broad market coverage, a strategy that initially increases our
level of capital expenditures and operating losses and requires us to make a
substantial portion of our capital investments before we realize any revenue
from them. These capital expenditures, together with the associated early
operating





---



expenses, will continue to result in negative cash flow unless and until
we are able to establish an adequate customer base. We believe, however, that
over the long term this strategy will enhance our financial performance by
increasing the capacity of, and traffic flow over, our networks.

Capital Uses

During the first nine months of 2000, cash used in operating activities
was $238.6 million, compared to $231.5 million used in the same period in the
prior year. The increase in cash used was primarily due to the timing of
expenditures and customer receipts.

During the first nine months of 2000, cash used in investing activities
was $1,264.7 million, compared to $887.7 million used in the same period in the
prior year. Our investment in property and equipment increased from $396.0
million for the first nine months of 1999 to $853.7 million for the same period
of 2000. This increase was offset by a decrease in investments in
fixed wireless licenses year-over-year from $488.5 million invested in the
first nine months of 1999 to $37.3 million for the nine months ended September
30, 2000. The increase in cash used in investing activities for the first nine
months of 2000 also was offset partially due to the receipt of $245.1 million
from the sale of an equity investment and $46.9 million of net cash acquired in
the Concentric merger.

We expect that our business will continue to require substantial amounts
of cash expenditures to fund operations and capital expenditures in 2000 and
beyond relating to our existing and planned network development and operations.
These funds are expected to relate to:





Our strategic plan also calls for expansion into additional market areas.
This expansion will require significant additional capital for:





Acquired Debt and Redeemable Preferred Stock

In connection with the Concentric merger, we assumed the payment
obligations and all other covenants required to be performed or observed by
Concentric with respect to the $150 million of Concentrics 12 3/4% senior notes
due 2007 outstanding at the time of the merger. The 12 3/4% senior notes rank pari
passu with our other outstanding senior notes. With the consent of the holders
of Concentrics 12 3/4% senior notes due 2007, and in consideration for the
payment of a consent fee of approximately $3.0 million, we conformed certain
covenants contained in the indenture relating to Concentrics senior notes to
corresponding covenants in our 10 1/2% senior notes due 2009. We may redeem the
12 3/4% senior notes, in whole or in part, at any time on or after December 15,
2002, at redemption rates (expressed as a percentage of the principal amount)
commencing with 106.375% on December 15, 2002, and declining to 100.0% on
December 15, 2005, plus accrued and unpaid interest to the date of redemption.



---



As a result of the Concentric merger, the 195,079 shares of Concentrics
13 1/2% senior redeemable exchangeable preferred stock due 2010 outstanding at the
time of the merger were converted into an equal number of shares of our 13 1/2%
Series E senior redeemable exchangeable preferred stock, which has
substantially identical terms as the Concentric 13 1/2% preferred stock. With the
consent of the holders of Concentrics 13 1/2% preferred stock, and in
consideration for the payment of a consent fee of approximately $3.8 million,
we conformed certain covenants contained in the certificate of designations
relating to Concentrics preferred stock to corresponding covenants in our 10 1/2%
senior notes due 2009. Each share has a liquidation preference of $1,000 per
share. The Company may redeem the Series E shares, in whole or in part, at any
time on or after June 1, 2003, at redemption rates (expressed as a percentage
of the liquidation preference) commencing with 106.75% on June 1, 2003 and
declining to 100% on June 1, 2008, plus accumulated and unpaid dividends to the
date of redemption. The Company is required to redeem the Series E shares at
their liquidation preference, plus accumulated and unpaid dividends on June 1,
2010. On any scheduled dividend payment date, the Company may, at its option,
exchange in whole, but not in part, the then outstanding Series E shares for
13 1/2% senior subordinated debentures due 2010 with a principal amount equal to
the aggregate liquidation preference of the exchanged Series E shares.
Dividends on the 13 1/2% preferred stock accrue at a rate of 13 1/2% per annum of the
liquidation preference thereof and are payable quarterly in arrears. Dividends
are payable in cash, except that on each dividend payment date occurring on or
prior to June 1, 2003, dividends may be paid, at our option, by the issuance of
additional shares of Series E preferred stock having an aggregate liquidation
preference equal to the amount of such dividends.

In addition, as a result of the Concentric merger, 53,296 shares of
Concentric 7% convertible redeemable preferred stock outstanding at the time of
the merger were converted into an equal number of shares of our 7% Series F
convertible redeemable preferred stock, which has substantially identical terms
to Concentrics 7% preferred stock. Each share of 7% preferred stock has a
liquidation preference of $1,000 per share. The Company may redeem the Series F
shares, in whole or in part, at any time on or after June 1, 2003 at redemption
rates commencing with 105.125% declining to 100% on June 1, 2010. The Company
is required to redeem the Series F shares at their liquidation preference, plus
accumulated and unpaid dividends, on September 1, 2010. Dividends on the 7%
preferred stock accrue at the rate of 7% per annum of the liquidation
preference thereof and are payable quarterly in arrears. Dividends are payable
in cash, except that on each dividend payment date dividends may be paid, at
our option, by the issuance of additional shares of Series F preferred stock
having an aggregate liquidation preference equal to the amount of such
dividends. The holder of shares of Series F preferred stock has the right, at
its option, to convert at any time any shares of Series F preferred stock into
shares of our Class A common stock at the conversion price of $31.0258.

Capital Resources

As of September 30, 2000, we had unrestricted cash and marketable
securities of $2,710.2 million. During the first nine months of 2000, cash
provided by financing activities was $1,621.6 million, compared to $1,297.7
million in the same period in the prior year. We received $1,248.9 million, net
of financing fees, from the issuance of preferred stock to Forstmann Little &
Co. and $375.0 million from the draws on credit facility in the first nine
months of 2000. During the same period in 1999, we received $1,000.0 million
from a public offering of senior notes and $310.5 million from a public
offering of our Class A common stock.

Secured Credit Facility. In February 2000, we and certain of our
subsidiaries, as guarantors, entered into a $1.0 billion secured credit
facility with various lenders. The security for the facility consists of all of
the assets purchased with the proceeds thereof, the stock of certain of our
subsidiaries, all assets of the Company and, to the extent of $125.0 million of
guaranteed debt, all assets of certain of our subsidiaries. A portion of the
facility is available to provide working capital and for other general
corporate purposes with the remainder available to provide financing for the
construction, acquisition or improvement of telecommunication assets. The
facility consists of a $387.5 million multi-draw term loan A, a $225.0 million
term loan B, and a $387.5 million revolving facility. In addition, the facility
may be increased by up to an additional $1.0 billion under certain
circumstances. At closing, we borrowed $150.0 million of the term loan A and
the entire $225.0 million of the term loan B. As of September 30, 2000, no
additional borrowings had been made under the facility.

The revolving credit facility and the term loan A mature on December 31,
2006, and the term loan B matures on June 30, 2007. The maturity date for each
of the facilities may be accelerated to October 31, 2005 unless we have
refinanced our $350 million 12 1/2% Senior Notes by April 15, 2005. Amounts drawn
under the revolving credit facility and the term loans bear interest, at our
option, at the alternate base rate or reserve-adjusted London Interbank Offered
Rate (LIBOR) plus, in each case, applicable margins.





---



Forstmann Little Investments. In December 1999, several investment funds
controlled by Forstmann Little & Co. agreed to invest $850.0 million in the
Company, to be used to expand our networks and services, introduce new
technologies and fund our business plan. The investment was completed in
January 2000. Forstmann Little & Co. invested an additional $400.0 million in
the Company in July 2000 increasing their total investment to $1.25 billion. In
the transactions, the investors acquired shares of four series of convertible
preferred stock that together are convertible into Class A common stock at a
conversion price of $31.625 per share and provide for a 3.75% dividend payable
quarterly. The holders of these preferred shares may convert the preferred
stock into Class A common stock at any time after January 20, 2001. We may
redeem the Series C and Series D preferred stock at any time after the later of
January 20, 2005 or the date we have redeemed our 12 1/2% Senior Notes due 2006
in full, and may redeem the Series G and Series H preferred stock at any time
after the later of July 6, 2005 or the date when we have redeemed our 12 1/2%
Senior Notes due 2006 in full. The holders of the Series C and Series D
preferred shares will also have the option of requiring redemption of the
preferred stock during the 180-day period commencing January 20, 2010. The
holders of the Series G and Series H preferred shares will also have the option
of requiring redemption of the preferred stock during the 180-day period
commencing on July 6, 2010.

Liquidity Assessment

We believe that the amounts available under the secured credit facility,
cash and marketable securities on hand at September 30, 2000, and revenues from
operations will provide sufficient funds for us to expand our business as
planned and to fund operating losses into the latter half of 2001. However, the
amount of future funding requirements will depend on a number of factors,
including the success of our business, the dates at which we further expand our
network, the types of services we offer, staffing levels, acquisitions and
customer growth, as well as other factors that are not within our control
including competitive conditions, government regulatory developments and
capital costs. In the event our plan or assumptions change or prove to be
inaccurate, or available borrowings under the secured credit facility, cash and
investments on hand and cash generated from operations prove to be insufficient
to fund our growth in the manner and at the rate currently anticipated, we may
be required to delay or abandon some or all of our development and expansion
plans or we may be required to seek additional sources of financing earlier
than currently anticipated. In the event we are required to seek additional
financing, there can be no assurance that such financing will be available on
acceptable terms or at all.

INFORMATION REGARDING FORWARD LOOKING STATEMENTS

Some statements and information contained in this report are not
historical facts, but are forward-looking statements, as such term is defined
in the Private Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by the use of forward-looking terminology, such as
believes, expects, plans, may, will, would, could, should, or
anticipates or the negative of these words or other variations of these words
or other comparable words, or by discussions of strategy that involve risks and
uncertainties. Such forward-looking statements include, but are not limited to,
statements regarding:





All such forward-looking statements are qualified by the inherent risks
and uncertainties surrounding expectations generally, and also may materially
differ from our actual experience involving any one or more of these matters
and subject areas. The operation and results of our business also may be
subject to the effect of other risks and uncertainties in addition to the
relevant qualifying factors identified in this report and in the Risk Factors
section of our Annual Report on Form 10-K for the year ended December 31, 1999,
filed with the Securities and Exchange Commission on March 30, 2000, including,
but not limited to:









---







NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133 Accounting for Derivative Instruments and Hedging Activities, which
establishes accounting and reporting standards for derivative instruments and
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The standard was initially proposed to be effective for all
fiscal quarters of all fiscal years beginning after June 15, 1999, however the
FASB issued SFAS 137 Accounting for Derivative Instruments and Hedging
Activities  Deferral of the Effective Date of FASB Statement No. 133, and the
effective date of this SFAS has been deferred until issuance by the FASB.
Management believes that the adoption of SFAS 133 will not materially impact
the Companys results of operations or financial position.

In December 1999, the Securities and Exchange Commission (the SEC)
issued Staff Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements (SAB No. 101) that provides guidance for applying generally
accepted accounting principles to revenue recognition, presentation, and
disclosure in financial statements. Subsequently, the SEC has amended the
implementation date so that the Company is required to adopt the provisions of
SAB No. 101 in the fourth fiscal quarter of 2000. We believe that the bulletin
will not materially impact the Companys results of operations or financial
position.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

We currently have instruments sensitive to market risks relating to
exposure to changing interest rates. As disclosed in the consolidated financial
statements, we had $4,366.0 million in fixed rate debt and $2,071.4 million in
fixed rate redeemable preferred stock as of September 30, 2000. We do not have
significant cash flow exposure to changing interest rates on our long term debt
and redeemable preferred stock because the interest rates are fixed. However,
the estimated fair values of the fixed-rate debt and redeemable preferred stock
are subject to market risk.

We also maintain an investment portfolio consisting of U.S. government and
other securities with an average maturity of less than one year. These
securities are classified as available for sale. If interest rates were to
increase or decrease immediately, it could have a material impact on the fair
value of these financial instruments. However, changes in interest rates would
not likely have a material impact on interest earned on our investment
portfolio. We do not currently hedge these interest rate exposures.

There have been no material changes in market risk since December 31, 1999.

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

The Company, as successor to Concentric in the Concentric merger, is a
defendant in a lawsuit filed in New Jersey state court on November 1, 1999. The
complaint seeks statutory damages, treble damages, and injunctive relief under
the Telephone Consumer Protection Act of 1991 and alleges that, in or about
March and June 1999, 9Net Avenue, Inc. (9Net Avenue) transmitted unsolicited
facsimiles advertising its services. Although Concentric purchased only the
assets of 9Net Avenue and did not assume any liabilities related to 9Net
Avenues activities prior to the October 1999 asset purchase, plaintiff
contends that Concentric succeeded to any liability 9Net Avenue incurred in
connection with the alleged faxes. The suit has been brought as a purported
class action on behalf of all recipients of the allegedly unsolicited faxes. In
October 2000, the trial judge in the case ruled that the requirements for a
class action were not met. In October 2000, the plaintiffs representing the
purported class filed an appeal of the class certification decision, which the
New Jersey Court of Appeals has agreed to consider.





---



Item 2.    Changes in Securities and Use of Proceeds

The initial public offering (IPO) of our Class A common stock took place
in October 1997 (File No. 333-32001). The net proceeds we received from the
offering totaled approximately $226.8 million. As of December 31, 1999,
proceeds from the IPO remain available for future network build out and working
capital requirements. We have raised additional funding from debt and
additional equity offerings in 1998 through 2000. The proceeds from these
recent offerings have been applied first in funding the expansion of our
network and other working capital requirements.

Item 3.    Defaults Upon Senior Securities



| |      
| | -----
| | None.

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

On September 11, 2000, our Board of Directors approved an amendment to our
certificate of incorporation to change the name of the company to the XO
Communications, Inc. This amendment also was approved by two of our
stockholders, Eagle River Investments, L.L.C. and Wendy P. McCaw, by a written
consent in lieu of stockholder meeting, dated September 11, 2000, pursuant to
Section 228(a) of the Delaware General Corporation Law. As of September 11,
2000, Eagle River and Mrs. McCaw together held shares of our Class A and Class
B common stock that represent shares with a majority of the total number of
votes attributable to all shares of outstanding capital stock entitled to vote
for the amendment. Because we are a corporation organized under the laws of the
State of Delaware, our stockholders may take action by written consent without
a meeting. The Board has not solicited any proxies or consents from any other
stockholders in connection with this action. The amendments became effective on
October 25, 2000, 20 days following the date on which we mailed an information
statement with respect to the amendment to stockholders of XO, in accordance
with rules of the Securities and Exchange Commission.

Item 5.    Other Information

None.

Item 6.    Exhibits and Reports on Form 8-K

(a)  Exhibits

|      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|----- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1.1 |  |  |  | Amended and Restated Certificate of Incorporation of XO
Communications, Inc. (f/k/a NM Acquisition Corp.)
(Incorporated herein by reference to exhibit 3.1.1 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                                                                                                                                    
|     
|     
|     
|     
|     
|3.1.2 |  |  |  | Certificate of Amendment of Certificate of Incorporation
of XO Communications, Inc. (f/k/a NM Acquisition Corp.)
(Incorporated herein by reference to exhibit 3.1.2 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                                                                                                                             
|     
|     
|     
|     
|     
|3.1.3 |  |  |  | Certificate of Amendment of Certificate of Incorporation
of XO Communications, Inc. (f/k/a NEXTLINK Communications,
Inc.) (Incorporated herein by reference to exhibit 3.1.3
filed with the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 of XO Communications,
Inc. (f/k/a NEXTLINK Communications, Inc.) and XO Capital,
Inc. (f/k/a NEXTLINK Capital, Inc.))                                                                                                                    
|     
|     
|     
|     
|     
|3.1.4 |  |  |  | Certificate of Amendment of Certificate of Incorporation
of XO Communications, Inc. (f/k/a NEXTLINK Communications,
Inc.)                                                                                                                                                                                                                                                                                                                                                                                       
|     
|     
|     
|     
|     
|3.2.1 |  |  |  | Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 14% Series A Senior Exchangeable Redeemable Preferred
Shares and Qualifications, Limitations and Restrictions
Thereof (Incorporated herein by reference to exhibit 3.1.4
filed with the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 of XO Communications,
Inc. (f/k/a NEXTLINK Communications, Inc.) and XO Capital,
Inc. (f/k/a NEXTLINK Capital, Inc.))





---



|      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|     
|     
|     
|3.2.2 |  |  |  | Certificate of Designation of Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 6 1/2% Series B Cumulative Convertible Preferred Stock and
Qualifications, Limitations and Restrictions Thereof
(Incorporated herein by reference to exhibit 3.1.5 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                            
|     
|     
|     
|     
|     
|3.2.3 |  |  |  | Certificate of Designation of Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Series C Cumulative Convertible Participating Preferred
Stock and Qualifications, Limitations and Restrictions
Thereof (Incorporated herein by reference to exhibit 3.1.6
filed with the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 of XO Communications,
Inc. (f/k/a NEXTLINK Communications, Inc.) and XO Capital,
Inc. (f/k/a NEXTLINK Capital, Inc.))                     
|     
|     
|     
|     
|     
|3.2.4 |  |  |  | Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Series D Convertible Participating Preferred Stock and
Qualifications, Limitations and Restrictions Thereof
(Incorporated herein by reference to exhibit 3.1.7 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                            
|     
|     
|     
|     
|     
|3.2.5 |  |  |  | Certificate of Designation of Voting Power, Designation
Preferences and Relative, Participating, Optional and
Other Special Rights and Qualifications, Limitations and
Restrictions of 13 1/2% Series E Senior Redeemable
Exchangeable Preferred Stock Due 2010 (Incorporated herein
by reference to exhibit 3.1.8 filed with the Quarterly
Report on Form 10-Q for the quarterly period ended June
30, 2000 of XO Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) and XO Capital, Inc. (f/k/a NEXTLINK
Capital, Inc.))
|     
|     
|     
|     
|     
|3.2.6 |  |  |  | Certificate of Designation of Voting Power, Designation
Preferences and Relative, Participating, Optional and
Other Special Rights and Qualifications, Limitations and
Restrictions of 7% Series F Convertible Redeemable
Preferred Stock Due 2010 (Incorporated herein by reference
to exhibit 3.1.9 filed with the Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2000 of XO
Communications, Inc. (f/k/a NEXTLINK Communications, Inc.)
and XO Capital, Inc. (f/k/a NEXTLINK Capital, Inc.))             
|     
|     
|     
|     
|     
|3.2.7 |  |  |  | Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Series G Cumulative Convertible Participating Preferred
Stock and Qualifications, Limitation and Restrictions
Thereof (Incorporated herein by reference to exhibit
3.1.10 filed with the Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2000 of XO
Communications, Inc. (f/k/a NEXTLINK Communications, Inc.)
and XO Capital, Inc. (f/k/a NEXTLINK Capital, Inc.))                 
|     
|     
|     
|     
|     
|3.2.8 |  |  |  | Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Series H Convertible Participating Preferred Stock and
Qualifications, Limitation and Restrictions Thereof
(Incorporated herein by reference to exhibit 3.1.11 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                            
|     
|     
|     
|     
|     
|3.3   |  |  |  | Restated By-laws of XO Communications, Inc. (f/k/a NM
Acquisition Corp.) (Incorporated herein by reference to
exhibit 3.2 filed with the Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2000 of XO
Communications, Inc. (f/k/a NEXTLINK Communications, Inc.)
and XO Capital, Inc. (f/k/a NEXTLINK Capital, Inc.))                                                                                                                                                                                         
|     
|     
|     
|     
|     
|3.4   |  |  |  | Articles of Incorporation of XO Capital, Inc. (f/k/a
NEXTLINK Capital, Inc.) (Incorporated herein by reference
to exhibit 3.3 filed with the Registration Statement on
Form S-4 of NEXTLINK Communications, L.L.C. and NEXTLINK
Capital, Inc. (Commission File No. 333-4603))                                                                                                                                                                                                                                                     
|     
|     
|     
|     
|     
|3.5   |  |  |  | By-laws of XO Capital, Inc. (f/k/a NEXTLINK Capital, Inc.)
(Incorporated herein by reference to exhibit 3.4 filed
with the Registration Statement on Form S-4 of NEXTLINK
Communications, L.L.C. and NEXTLINK Capital, Inc.
(Commission File No. 333-4603))                                                                                                                                                                                                                                                                       
|     
|     
|     
|     
|     
|4.1.1 |  |  |  | Form of stock certificate of 14% Senior Exchangeable
Redeemable Preferred Shares (Incorporated herein by
reference to exhibit 4.4 filed with the Annual Report on
Form 10-KSB for the year ended December 31, 1996 of
NEXTLINK Communications, Inc. and NEXTLINK Capital, Inc.)                                                                                                                                                                                                                                                   





---



|      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|     
|     
|     
|4.1.2 |  |  |  | Form of stock certificate of Class A common stock
(Incorporated herein by reference to exhibit 4.4 filed
with the Registration Statement on Form S-1 of NEXTLINK
Communications, Inc. (Commission File No. 333-32001))                                                                                                                                                                                                                                                                                                                                                                                                                        
|     
|     
|     
|     
|     
|4.1.3 |  |  |  | Form of stock certificate of 6 1/2% Cumulative Convertible
Preferred Stock (Incorporated herein by reference to
exhibit 4.1.3 filed with the Annual Report on Form 10-K
for the year ended December 31, 1999 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc.)                                                                                                                                                                                                                                                                                                                                                                     
|     
|     
|     
|     
|     
|4.1.4 |  |  |  | Form of stock certificate of Series C Cumulative
Convertible Participating Preferred Stock (Incorporated
herein by reference to exhibit 4.1.4 filed with the Annual
Report on Form 10-K for the year ended December 31, 1999
of NEXTLINK Communications, Inc. and NEXTLINK Capital,
Inc.)                                                                                                                                                                                                                                                                                                                                                     
|     
|     
|     
|     
|     
|4.1.5 |  |  |  | Form of stock certificate of Series D Convertible
Participating Preferred Stock (Incorporated herein by
reference to exhibit 4.1.5 filed with the Annual Report on
Form 10-K for the year ended December 31, 1999 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc.)                                                                                                                                                                                                                                                                                                                                                                
|     
|     
|     
|     
|     
|4.1.6 |  |  |  | Form of stock certificate of 13 1/2% Series E Senior
Redeemable Exchangeable Preferred Stock Due 2010
(Incorporated herein by reference to exhibit 4.3 filed
with the Registration Statement on Form S-4 of Concentric
Network Corporation (Commission File No. 333-58641))                                                                                                                                                                                                                                                                                                                                                                   
|     
|     
|     
|     
|     
|4.1.7 |  |  |  | Form of stock certificate of 7% Series F Convertible
Redeemable Preferred Stock Due 2010 (Incorporated herein
by reference to exhibit 4.1.7 filed with the Quarterly
Report on Form 10-Q for the quarterly period ended June
30, 2000 of XO Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) and XO Capital, Inc. (f/k/a NEXTLINK
Capital, Inc.))                                                                                                                                                                                                                                                                                   
|     
|     
|     
|     
|     
|4.1.8 |  |  |  | Form of stock certificate of Series G Cumulative
Convertible Participating Preferred Stock (Incorporated
herein by reference to exhibit 4.1.8 filed with the
Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2000 of XO Communications, Inc. (f/k/a
NEXTLINK Communications, Inc.) and XO Capital, Inc. (f/k/a
NEXTLINK Capital, Inc.))                                                                                                                                                                                                                                                                                 
|     
|     
|     
|     
|     
|4.1.9 |  |  |  | Form of stock certificate of Series H Convertible
Participating Preferred Stock (Incorporated herein by
reference to exhibit 4.1.9 filed with the Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 2000
of XO Communications, Inc. (f/k/a NEXTLINK Communications,
Inc.) and XO Capital, Inc. (f/k/a NEXTLINK Capital, Inc.))                                                                                                                                                                                                                                                                                            
|     
|     
|     
|     
|     
|4.2.1 |  |  |  | Indenture, dated as of April 25, 1996, by and among
NEXTLINK Communications, Inc. (predecessor to XO
Communications, Inc.), NEXTLINK Capital, Inc. and United
States Trust Company of New York, as Trustee, relating to
12 1/2% Senior Notes due April 15, 2006, including form of
global note (Incorporated herein by reference to exhibit
4.1 filed with the Registration Statement on Form S-4 of
NEXTLINK Communications, L.L.C. and NEXTLINK Capital, Inc.
(Commission File No. 333-4603))                                                                                                                                               
|     
|     
|     
|     
|     
|4.2.2 |  |  |  | First Supplemental Indenture, dated as of January 31,
1997, by and among NEXTLINK Communications, Inc.
(predecessor to XO Communications, Inc.), NEXTLINK
Communications, L.L.C. (predecessor to XO Communications,
Inc.), NEXTLINK Capital, Inc. and United States Trust
Company of New York, as Trustee (Incorporated herein by
reference to exhibit 4.6 filed with the Annual Report on
Form 10-KSB for the year ended December 31, 1996 of
NEXTLINK Communications, Inc. and NEXTLINK Capital, Inc.)                                                                                                                                      
|     
|     
|     
|     
|     
|4.2.3 |  |  |  | Second Supplemental Indenture, dated June 3, 1998,
amending Indenture dated April 25, 1996, by and among
NEXTLINK Communications, Inc. (predecessor to XO
Communications, Inc.), NEXTLINK Capital, Inc. and United
States Trust Company of New York, as Trustee (Incorporated
herein by reference to exhibit 4.10 filed with the
Registration Statement on Form S-4 of NEXTLINK
Communications, Inc. (Commission File No. 333-53975))                                                                                                                                                                                                         
|     
|     
|     
|     
|     
|4.2.4 |  |  |  | Third Supplemental Indenture, dated as of June 15, 2000,
amending Indenture dated April 25, 1996, by and among
NEXTLINK Communications, Inc., as Issuer and predecessor
to NM Acquisition Corp., NEXTLINK Capital, Inc., XO
Communications, Inc., f/k/a NM Acquisition Corp. and
successor by merger to the Issuer, and United States Trust
Company of New York, as Trustee (Incorporated herein by
reference to exhibit 4.2.4 filed with the Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 2000
of XO Communications, Inc. (f/k/a NEXTLINK Communications,
Inc.) and XO Capital, Inc. (f/k/a NEXTLINK Capital, Inc.))





---



|      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|----- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|     
|     
|     
|4.3.1 |  |  |  | Indenture dated September 25, 1997 between United States
Trust Company, as Trustee and NEXTLINK Communications,
Inc. (predecessor to XO Communications, Inc.), relating to
the 9?% Senior Notes due 2007 (Incorporated herein by
reference to exhibit 4.7 filed with the Registration
Statement on Form S-3 of NEXTLINK Communications, Inc.
(Commission File No. 333-77577))                                                                                                                                                                                                                                               
|     
|     
|     
|     
|     
|4.3.2 |  |  |  | First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated September 25, 1997, by and between
NEXTLINK Communications, Inc. (predecessor to XO
Communications, Inc.) and United States Trust Company of
New York, as Trustee (Incorporated herein by reference to
exhibit 4.11 filed with the Registration Statement on Form
S-4 of NEXTLINK Communications, Inc. (Commission File No.
333-53975))                                                                                                                                                                                                          
|     
|     
|     
|     
|     
|4.3.3 |  |  |  | Second Supplemental Indenture, dated as of June 15, 2000,
amending Indenture dated September 25, 1997, by and among
NEXTLINK Communications, Inc., as Issuer and predecessor
to NM Acquisition Corp., XO Communications, Inc., f/k/a NM
Acquisition Corp. and successor by merger to the Issuer,
and United States Trust Company of New York, as Trustee
(Incorporated herein by reference to exhibit 4.3.3 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.)) 
|     
|     
|     
|     
|     
|4.4.1 |  |  |  | Indenture, dated March 3, 1998, between United States
Trust Company, as Trustee and NEXTLINK Communications,
Inc. (predecessor to XO Communications, Inc.), relating to
the 9% Senior Notes due 2008 (Incorporated herein by
reference to exhibit 4.7 filed with the Annual Report on
Form 10-KSB for the year ended December 31, 1997 of
NEXTLINK Communications, Inc. and NEXTLINK Capital, Inc.)                                                                                                                                                                                                                         
|     
|     
|     
|     
|     
|4.4.2 |  |  |  | First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated March 3, 1998, by and between NEXTLINK
Communications, Inc. (predecessor to XO Communications,
Inc.) and United States Trust Company of New York, as
Trustee (Incorporated herein by reference to exhibit 4.12
filed with the Registration Statement on Form S-4 of
NEXTLINK Communications, Inc. (Commission File No.
333-53975))                                                                                                                                                                                                               
|     
|     
|     
|     
|     
|4.4.3 |  |  |  | Second Supplemental Indenture, dated as of June 15, 2000,
amending Indenture dated as of March 3, 1999, by and among
NEXTLINK Communications, Inc., as Issuer and predecessor
to NM Acquisition Corp., XO Communications, Inc., f/k/a NM
Acquisition Corp. and successor by merger to the Issuer,
and United States Trust Company of New York, as Trustee
(Incorporated herein by reference to exhibit 4.4.3 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))
|     
|     
|     
|     
|     
|4.5.1 |  |  |  | Indenture, dated April 1, 1998, between United States
Trust Company, as Trustee and NEXTLINK Communications,
Inc. (predecessor to XO Communications, Inc.), relating to
the 9.45% Senior Discount Notes due 2008 (Incorporated
herein by reference to exhibit 4.9 filed with the
quarterly report on Form 10-Q for the quarterly period
ended June 30, 1998 of NEXTLINK Communications, Inc. and
NEXTLINK Capital, Inc.)                                                                                                                                                                                                    
|     
|     
|     
|     
|     
|4.5.2 |  |  |  | First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated April 1, 1998, by and between NEXTLINK
Communications, Inc. (predecessor to XO Communications,
Inc.) and United States Trust Company of New York, as
Trustee (Incorporated herein by reference to exhibit 4.13
filed with the Registration Statement on Form S-4 of
NEXTLINK Communications, Inc. (Commission File No.
333-53975))                                                                                                                                                                                                               
|     
|     
|     
|     
|     
|4.5.3 |  |  |  | Second Supplemental Indenture, dated as of June 15, 2000,
amending Indenture dated as of April 1, 1998, by and among
NEXTLINK Communications, Inc., as Issuer and predecessor
to NM Acquisition Corp., XO Communications, Inc., f/k/a NM
Acquisition Corp. and successor by merger to the Issuer,
and United States Trust Company of New York, as Trustee
(Incorporated herein by reference to exhibit 4.5.3 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))





---



|       |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|4.6.1  |  |  |  | Indenture, dated November 12, 1998, by and among NEXTLINK
Communications, Inc. (predecessor to XO Communications,
Inc.) and United States Trust Company of New York, as
trustee relating to the 10 3/4% Senior Notes due 2008
(Incorporated herein by reference to exhibit 4.1 filed
with the Registration Statement on Form S-4 of NEXTLINK
Communications, Inc. (Commission File No. 333-71749))                                                                                                                                                                                                                             
|      
|      
|      
|      
|      
|4.6.2  |  |  |  | First Supplemental Indenture, dated as of June 15, 2000,
amending Indenture dated as of November 12, 1998, by and
among NEXTLINK Communications, Inc., as Issuer and
predecessor to NM Acquisition Corp., XO Communications,
Inc., f/k/a NM Acquisition Corp. and successor by merger
to the Issuer, and United States Trust Company of New
York, as Trustee (Incorporated herein by reference to
exhibit 4.6.2 filed with the Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2000 of XO
Communications, Inc. (f/k/a NEXTLINK Communications, Inc.)
and XO Capital, Inc. (f/k/a NEXTLINK Capital, Inc.))
|      
|      
|      
|      
|      
|4.7.1  |  |  |  | Indenture, dated June 1, 1999, by and among NEXTLINK
Communications, Inc. (predecessor to XO Communications,
Inc.) and United States Trust Company of New York, as
Trustee, relating to the 10 3/4% Senior Notes due 2009
(Incorporated herein by reference to exhibit 4.16 filed
with the quarterly report on Form 10-Q for the quarterly
period ended September 30, 1999 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc.)                                                                                                                                                                                        
|      
|      
|      
|      
|      
|4.7.2  |  |  |  | First Supplemental Indenture, dated as of June 15, 2000,
amending Indenture dated as of June 1, 1999, by and among
NEXTLINK Communications, Inc., as Issuer and predecessor
to NM Acquisition Corp., XO Communications, Inc., f/k/a NM
Acquisition Corp. and successor by merger to the Issuer,
and United States Trust Company of New York, as Trustee
(Incorporated herein by reference to exhibit 4.7.2 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))     
|      
|      
|      
|      
|      
|4.8.1  |  |  |  | Indenture, dated June 1, 1999, by and among NEXTLINK
Communications Inc. (predecessor to XO Communications,
Inc.) and United States Trust Company of Texas, as
Trustee, related to the 12 1/4% Senior Discount Notes due
2009 (Incorporated herein by reference to exhibit 4.17
filed with the quarterly report on Form 10-Q for the
quarterly period ended September 30, 1999 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc.)                                                                                                                                                                                    
|      
|      
|      
|      
|      
|4.8.2  |  |  |  | First Supplemental Indenture, dated as of June 15, 2000,
amending Indenture dated as of June 1, 1999, by and among
NEXTLINK Communications, Inc., as Issuer and predecessor
to NM Acquisition Corp., XO Communications, Inc., f/k/a NM
Acquisition Corp. and successor by merger to the Issuer,
and United States Trust Company of Texas, as Trustee
(Incorporated herein by reference to exhibit 4.8.2 filed
with the Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))        
|      
|      
|      
|      
|      
|4.9.1  |  |  |  | Indenture, dated November 17, 1999, by and among NEXTLINK
Communications, Inc. (predecessor to XO Communications,
Inc.) and United States Trust Company of New York, as
Trustee, relating to the 10 1/2% Senior Notes due 2009
(Incorporated herein by reference to exhibit 4.1(i) filed
with the Registration Statement on Form S-4 of NEXTLINK
Communications, Inc. (Commission File No. 333-30388))                                                                                                                                                                                                                         
|      
|      
|      
|      
|      
|4.9.2  |  |  |  | First Supplemental Indenture, dated as of June 15, 2000,
amending Indenture dated as of November 17, 1999, by and
among NEXTLINK Communications, Inc., as Issuer and
predecessor to NM Acquisition Corp., XO Communications,
Inc., f/k/a NM Acquisition Corp. and successor by merger
to the Issuer, and United States Trust Company of New
York, as Trustee (Incorporated herein by reference to
exhibit 4.9.2 filed with the Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2000 of XO
Communications, Inc. (f/k/a NEXTLINK Communications, Inc.)
and XO Capital, Inc. (f/k/a NEXTLINK Capital, Inc.))
|      
|      
|      
|      
|      
|4.10.1 |  |  |  | Indenture, dated November 17, 1999, by and among NEXTLINK
Communications, Inc. (predecessor to XO Communications,
Inc.) and United States Trust Company of Texas, as
Trustee, relating to the 12 1/8% Senior Discount Notes due
2009 (Incorporated herein by reference to exhibit 4.1(ii)
filed with                                                                                                                                                                                                                                                                                                                           





---



|       |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------ |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|       |  |   |  | the Registration Statement on Form S-4 of NEXTLINK Communications, Inc.
(Commission File No. 333-30388))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      
|      
|      
|      
|      
|4.10.2 |  |  |  | First Supplemental Indenture, dated as of
June 15, 2000, amending Indenture dated as
of November 17, 1999, by and among NEXTLINK
Communications, Inc., as Issuer and
predecessor to NM Acquisition Corp., XO
Communications, Inc., f/k/a NM Acquisition
Corp. and successor by merger to the Issuer,
and United States Trust Company of Texas, as
Trustee (Incorporated herein by reference to
exhibit 4.10.2 filed with the Quarterly
Report on Form 10-Q for the quarterly period
ended June 30, 2000 of XO Communications,
Inc. (f/k/a NEXTLINK Communications, Inc.)
and XO Capital, Inc. (f/k/a NEXTLINK
Capital, Inc.))                       
|      
|      
|      
|      
|      
|4.11.1 |  |  |  | Indenture, dated as of December 18, 1997,
between Concentric Network Corporation
(predecessor to XO Communications, Inc.), as
Issuer, and Chase Manhattan Bank and Trust
Company, National Association, as Trustee
(Incorporated herein by reference to exhibit
4.2 filed with the Registration Statement on
Form S-4 of Concentric Network Corporation
(Commission File No. 333-45055))                                                                                                                                                                                                                                                            
|      
|      
|      
|      
|      
|4.11.2 |  |  |  | First Supplemental Indenture, dated as of
June 15, 2000, amending Indenture dated
December 18, 1997, by and among Concentric
Network Corporation (predecessor to XO
Communications, Inc.), as Issuer, and Chase
Manhattan Bank and Trust Company, National
Association, as Trustee (Incorporated herein
by reference to exhibit 4.11.2 filed with
the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 of XO
Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                                                                                              
|      
|      
|      
|      
|      
|4.11.3 |  |  |  | Second Supplemental Indenture, dated as of
June 15, 2000, amending Indenture dated
December 18, 1997, by and among Concentric
Network Corporation, as Issuer and
predecessor to XO Communications, Inc., XO
Communications, Inc., f/k/a NM Acquisition
Corp. and successor by merger to the Issuer,
and Chase Manhattan Bank and Trust Company,
National Association, as Trustee
(Incorporated herein by reference to exhibit
4.11.3 filed with the Quarterly Report on
Form 10-Q for the quarterly period ended
June 30, 2000 of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.) and XO
Capital, Inc. (f/k/a NEXTLINK Capital,
Inc.))
|      
|      
|      
|      
|      
|4.12.1 |  |  |  | Note and Warrant Purchase Agreement, dated
June 19, 1997, by and between Concentric
Network Corporation (predecessor to XO
Communications, Inc.) and Williams
Communications Group, Inc. (Incorporated
herein by reference to exhibit 10.34 filed
with the Registration Statement on Form S-1
of Concentric Network Corporation
(Commission File No. 333-27241))                                                                                                                                                                                                                                                                                    
|      
|      
|      
|      
|      
|4.12.2 |  |  |  | Warrant Agreement, dated as of December 18,
1997, between Concentric Network Corporation
(predecessor to XO Communications, Inc.) and
Chase Manhattan Bank and Trust Company,
National Association, as warrant agent
(Incorporated herein by reference to exhibit
10.45 filed with the Registration Statement
on Form S-4 of Concentric Network
Corporation (Commission File No. 333-45055))                                                                                                                                                                                                                                                        
|      
|      
|      
|      
|      
|4.12.3 |  |  |  | Warrant Registration Rights Agreement, dated
as of December 18, 1997, between Concentric
Network Corporation (predecessor to XO
Communications, Inc.) and the Initial
Purchasers. (Incorporated herein by
reference to exhibit 10.46 filed with the
Registration Statement on Form S-4 of
Concentric Network Corporation (Commission
File No. 333-45055))                                                                                                                                                                                                                                                                                           
|      
|      
|      
|      
|      
|4.12.4 |  |  |  | Stock Purchase Agreement by and between
Concentric Network Corporation (predecessor
to XO Communications, Inc.) and Southwestern
Bell Internet Services, Inc., dated October
19, 1998 (Incorporated herein by reference
to exhibit 10.60 filed with the Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1998 of Concentric Network
Corporation)                                                                                                                                                                                                                                                                                   
|      
|      
|      
|      
|      
|4.12.5 |  |  |  | Common Stock Purchase Warrant, dated June
29, 1999, issued to Microsoft Corporation by
Concentric Network Corporation (predecessor
to XO Communications, Inc.) (Incorporated
herein by reference to exhibit 4.12.5 filed
with the Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2000 of
XO Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                                                                                                                                                                                                                  
|      
|      
|      
|      
|      
|10.1.1 |  |  |  | Stock Option Plan of XO Communications, Inc.
(f/k/a NEXTLINK Communications, Inc.)
(Incorporated herein by reference to exhibit
10.1.1 filed with the Quarterly Report on
Form 10-Q for                                                                                                                                                                                                                                                                                                                                                                                                                                                             





---



|       |  |   |  |                                                                                                                                                                                                                                                                                                                                                                              
|------ |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|       |  |   |  | the quarterly period ended June 30, 2000 of XO Communications, Inc. (f/k/a
NEXTLINK Communications, Inc.) and XO Capital, Inc. (f/k/a NEXTLINK Capital,
Inc.))                                                                                                                                                                                                               
|      
|      
|      
|      
|      
|10.1.2 |  |  |  | Employee Stock Purchase Plan of XO
Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) (Incorporated herein
by reference to exhibit 10.1.2 filed with
the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 of XO
Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))            
|      
|      
|      
|      
|      
|10.1.3 |  |  |  | Change of Control Retention Bonus and
Severance Pay Plan of XO Communications,
Inc. (f/k/a NEXTLINK Communications, Inc.)
(Incorporated herein by reference to exhibit
10.3 filed with the Annual Report on Form
10-K for the year ended December 31, 1999 of
NEXTLINK Communications, Inc. and NEXTLINK
Capital, Inc.)                                                      
|      
|      
|      
|      
|      
|10.1.4 |  |  |  | 1995 Stock Incentive Plan for Employees and
Consultants of Concentric Network
Corporation (predecessor to XO
Communications, Inc.) (Incorporated herein
by reference to exhibit 10.4 filed with the
Registration Statement on Form S-1 of
Concentric Network Corporation (Commission
File No. 333-27241))                                                                    
|      
|      
|      
|      
|      
|10.1.5 |  |  |  | Amended and Restated 1996 Stock Plan of
Concentric Network Corporation (predecessor
to XO Communications, Inc.) (Incorporated
herein by reference to exhibit 10.5 filed
with the Registration Statement on Form S-1
of Concentric Network Corporation
(Commission File No. 333-27241))                                                                                       
|      
|      
|      
|      
|      
|10.1.6 |  |  |  | 1997 Stock Plan of Concentric Network
Corporation (predecessor to XO
Communications, Inc.) (Incorporated herein
by reference to exhibit 10.6 filed with the
Registration Statement on Form S-1 of
Concentric Network Corporation (Commission
File No. 333-27241))                                                                                                            
|      
|      
|      
|      
|      
|10.1.7 |  |  |  | 1999 Non-Statutory Stock Option Plan of
Concentric Network Corporation (predecessor
to XO Communications, Inc.) (Incorporated
herein by reference to exhibit 10.50 filed
with the Annual Report on Form 10-KA for the
year ended December 31, 1998 of Concentric
Network Corporation)                                                                                        
|      
|      
|      
|      
|      
|10.2.1 |  |  |  | Registration Rights Agreement, dated as of
January 15, 1997, between NEXTLINK
Communications, Inc. (predecessor to XO
Communications, Inc. and the signatories
listed therein (Incorporated herein by
reference to exhibit 10.4 filed with the
Annual Report on Form 10-KSB for the year
ended December 31, 1996 of NEXTLINK
Communications, Inc. and NEXTLINK Capital,
Inc.)
|      
|      
|      
|      
|      
|10.2.2 |  |  |  | Registration Rights Agreement, dated as of
November 4, 1997, between NEXTLINK
Communications, Inc. (predecessor to XO
Communications, Inc.) and Wendy P. McCaw
(Incorporated herein by reference to exhibit
10.5 filed with the Annual Report on Form
10-K for the year ended December 31, 1999 of
NEXTLINK Communications, Inc. and NEXTLINK
Capital, Inc.)                 
|      
|      
|      
|      
|      
|10.2.3 |  |  |  | Registration Right Agreement, dated as of
June 30, 1999, between NEXTLINK
Communications, Inc. and Craig O. McCaw
(Incorporated herein by reference to exhibit
10.6 filed with the Annual Report on Form
10-K for the year ended December 31, 1999 of
NEXTLINK Communications, Inc. and NEXTLINK
Capital, Inc.)                                                              
|      
|      
|      
|      
|      
|10.2.4 |  |  |  | Amended and Restated Registration Rights
Agreement dated as of July 6, 2000, between
XO Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) and the purchasers
listed on the signature pages thereto,
relating to Class A common stock issuable
upon conversion of Series C, Series D,
Series G and Series H convertible preferred
stock                              
|      
|      
|      
|      
|      
|10.2.5 |  |  |  | Registration Rights Agreement, dated January
14, 1999, between NEXTLINK Communications,
Inc. (predecessor to XO Communications,
Inc.) and the Holders referred to therein.
(Incorporated herein by reference to exhibit
10.2 filed with the current report on Form
8-K filed on January 19, 1999 of NEXTLINK
Communications, Inc.)                                           
|      
|      
|      
|      
|      
|10.2.6 |  |  |  | Registration Right Agreement, dated as of
June 16, 2000, between XO Communications,
Inc. (f/k/a NM Acquisition Corp.) and Craig
O. McCaw (Incorporated herein by reference
to exhibit 99.4 filed with the Current
Report on Form 8-K filed on June 22, 2000 of
NEXTLINK Communications, Inc.)                                                                                
|      
|      
|      
|      
|      
|10.3.1 |  |  |  | Employment Agreement, effective September
21, 1999, by and between Daniel Akerson and
NEXTLINK Communications, Inc. (predecessor
to XO Communications, Inc.) (Incorporated
herein by                                                                                                                                                                                         





---



|       |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|       |  |   |  | reference to exhibit 10.11 filed with the quarterly report on Form 10-Q for the
quarterly period ended September 30, 1999 of NEXTLINK Communications, Inc. and
NEXTLINK Capital, Inc.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      
|      
|      
|      
|      
|10.3.2 |  |  |  | Letter agreement, dated June 9, 1998,
between NEXTLINK Communications, Inc.
(predecessor to XO Communications, Inc.) and
Jan Loichle (Incorporated herein by
reference to exhibit 10.10 filed with the
Annual Report on Form 10-K for the year
ended December 31, 1999 of NEXTLINK
Communications, Inc. and NEXTLINK Capital,
Inc.)                                                                                                                                                                                                                                                                                                                                                    
|      
|      
|      
|      
|      
|10.3.3 |  |  |  | Employment Agreement, dated as of January 3,
2000, by and between Nathaniel A. Davis and
NEXTLINK Communications, Inc. (Incorporated
herein by reference to exhibit 10.11 filed
with the Annual Report on Form 10-K for the
year ended December 31, 1999 of NEXTLINK
Communications, Inc. and NEXTLINK Capital,
Inc.)                                                                                                                                                                                                                                                                                                                                                                  
|      
|      
|      
|      
|      
|10.3.4 |  |  |  | Employment Agreement, dated as of June 16,
2000, by and between Henry R. Nothhaft and
XO Communications, Inc. (f/k/a NM
Acquisition Corp.) (Incorporated herein by
reference to exhibit 10.3.4 filed with the
Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 of XO
Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                                                                                                                                                                                                                                                                         
|      
|      
|      
|      
|      
|10.4.1 |  |  |  | Fiber Lease and Innerduct Use Agreement,
dated February 23, 1998, by and between
NEXTLINK Communications, Inc. (predecessor
to XO Communications, Inc.) and Metromedia
Fiber Network, Inc. (Incorporated herein by
reference to exhibit 10.5 filed with the
Annual Report on Form 10-KSB for the year
ended December 31, 1997 of NEXTLINK
Communications, Inc. and NEXTLINK Capital,
Inc.)                                                                                                                                                                                                                                                                                             
|      
|      
|      
|      
|      
|10.4.2 |  |  |  | Amendment No. 1 to Fiber Lease and Innerduct
Use Agreement, dated March 4, 1998, by and
between NEXTLINK Communications, Inc.
(predecessor to XO Communications, Inc.) and
Metromedia Fiber Network, Inc. (Incorporated
herein by reference to exhibit 10.6 filed
with the Annual Report on Form 10-KSB for
the year ended December 31, 1997 of NEXTLINK
Communications, Inc. and NEXTLINK Capital,
Inc.)                                                                                                                                                                                                                                                                              
|      
|      
|      
|      
|      
|10.5.1 |  |  |  | Cost sharing and IRU Agreement, dated July
18, 1998, between Level 3 Communications,
LLC and INTERNEXT LLC (Incorporated herein
by reference to exhibit 10.8 filed with the
quarterly report on Form 10-Q for the
quarterly period ended September 30, 1998 of
NEXTLINK Communications, Inc. and NEXTLINK
Capital, Inc.)                                                                                                                                                                                                                                                                                                                                                               
|      
|      
|      
|      
|      
|10.5.2 |  |  |  | Guaranty Agreement, dated July 18, 1998,
between NEXTLINK Communications, Inc.
(predecessor to XO Communications, Inc.) and
Level 3 Communications, LLC. (Incorporated
herein by reference to exhibit 10.7 filed
with the quarterly report on Form 10-Q for
the quarterly period ended September 30,
1998 of NEXTLINK Communications, Inc. and
NEXTLINK Capital, Inc.)                                                                                                                                                                                                                                                                                                                 
|      
|      
|      
|      
|      
|10.5.3 |  |  |  | Amendment of Guaranty Agreement, dated as of
June 16, 2000, between XO Communications,
Inc. (f/k/a NM Acquisition Corp.) and Level
3 Communications, L.L.C. (Incorporated
herein by reference to exhibit 10.5.3 filed
with the Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2000 of
XO Communications, Inc. (f/k/a NEXTLINK
Communications, Inc.) and XO Capital, Inc.
(f/k/a NEXTLINK Capital, Inc.))                                                                                                                                                                                                                                                        
|      
|      
|      
|      
|      
|10.6.1 |  |  |  | Credit and Guaranty Agreement, dated as of
February 3, 2000, among NEXTLINK
Communications, Inc. (predecessor to XO
Communications, Inc.), certain subsidiaries
of NEXTLINK Communications, Inc., as
guarantors, various lenders, Goldman Sachs
Credit Partners L.P., as syndication agent,
Toronto Dominion (Texas), Inc., as
administrative agent, Barclays Bank PLC, and
The Chase Manhattan Bank, as
co-documentation agents and Goldman Sachs
Credit Partners L.P., and TD Securities
(USA) Inc., as joint lead arrangers
(Incorporated herein by reference to exhibit
10.1 filed with the current report on Form
8-K filed on February 16, 2000 of NEXTLINK
Communications, Inc.)
|      
|      
|      
|      
|      
|21     |  |  |  | Subsidiaries of the Registrant (Incorporated
herein by reference to exhibit 21 filed with
the Annual Report on Form 10-K for the year
ended December 31, 1999 of XO
Communications, Inc. and XO Capital, Inc.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      
|      
|      
|      
|      
|27     |  |  |  | Financial Data Schedule                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      
|      
|      
|      
|      
|       |  |   |  | (b) Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                





---





| | (1) |  | Current Report on Form 8-K dated June 16, 2000
and filed on August 21, 2000 reporting under Item 7 to provide
the financial statements of Concentric Network Corporation and
pro forma combined condensed consolidated financial
information.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Current Report on Form 8-K dated July 6, 2000
reporting under Item 5 the closing of the previously announced
$400.0 million investment by Forstman Little & Co. in XO
Communications, Inc.                                                   





---



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.



|                        |  |                                                  
|----------------------- |  | -------------------------------------------------
|                        |  | XO Communications, Inc.                          
|                       
|                       
|Date: November 13, 2000 |  | By:/s/ Wayne M. Rehberger                        
|                       
|                       
|                       
|                       
|                        |  | Wayne M. Rehberger                               
|                       
|                       
|                       
|                       
|                        |  | Senior Vice President and Chief Financial Officer
|                       
|                       
|                       
|                       
|                        |  | (Principal financial and accounting officer)     
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                        |  | XO Capital, Inc.                                 
|                       
|                       
|                       
|                       
|                       
|                       
|Date: November 13, 2000 |  | By:/s/ Wayne M. Rehberger                        
|                       
|                       
|                       
|                       
|                        |  | Wayne M. Rehberger                               
|                       
|                       
|                       
|                       
|                        |  | Senior Vice President and Chief Financial Officer
|                       
|                       
|                       
|                       
|                        |  | (Principal financial and accounting officer)