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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-Q
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998

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

FOR THE TRANSITION PERIOD FROM ___________ TO ___________.

COMMISSION FILE NUMBER 0-20803

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IXC COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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DELAWARE 75-2644120
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1122 CAPITAL OF TEXAS HIGHWAY SOUTH, 78746-6426
AUSTIN, TEXAS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) (512) 328-1112

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

The number of shares of Common Stock, $.01 par value, outstanding (the only
class of common stock of the Company outstanding) was 31,798,006 on May 8, 1998.

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IXC COMMUNICATIONS, INC. AND SUBSIDIARIES

QUARTER ENDED MARCH 31, 1998

TABLE OF CONTENTS

PAGE
----

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of March 31, 1998
and December 31, 1997....................................... 3
Condensed Consolidated Statements of Operations for the
Three Months Ended March 31, 1998 and 1997.................. 4
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1998 and 1997.................. 5
Notes to Condensed Consolidated Financial Statements........ 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 10
Item 3. Quantitative and Qualitative Disclosures About Market
Risk........................................................ 12

PART II. OTHER INFORMATION

Item 1. Legal Proceedings........................................... 13
Item 2. Changes in Securities....................................... 13
Item 3. Defaults Upon Senior Securities............................. 14
Item 4. Submission of Matters to a Vote of Security Holders......... 14
Item 5. Other Information........................................... 14
Item 6. Exhibits and Reports on Form 8-K............................ 14

SIGNATURE............................................................ 19

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IXC COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)

ASSETS
Cash and cash equivalents................................... $ 199,647 $152,720
Accounts and other receivables, net of allowance for
doubtful accounts of $13,905 at March 31, 1998 and $14,403
at December 31, 1997...................................... 92,179 93,286
Other current assets........................................ 4,811 3,500
---------- --------
Total current assets.............................. 296,637 249,506
Property and equipment...................................... 781,450 724,588
Less: accumulated depreciation.............................. (131,307) (115,651)
---------- --------
650,143 608,937
Investment in unconsolidated subsidiaries................... 128,010 17,497
Deferred charges and other non-current assets............... 38,305 41,155
---------- --------
Total assets...................................... $1,113,095 $917,095
========== ========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable-trade...................................... $ 43,177 $ 81,679
Accrued service cost........................................ 40,391 44,705
Accrued liabilities......................................... 62,091 43,122
Current portion of long-term debt and capital lease
obligations............................................... 11,958 12,171
---------- --------
Total current liabilities......................... 157,617 181,677
Long-term debt and capital lease obligations, less current
portion................................................... 315,766 308,124
Unearned fiber usage revenue -- noncurrent.................. 167,436 60,957
Other noncurrent liabilities................................ 5,387 10,924
7 1/4% Junior Convertible Preferred Stock; $.01 par value;
authorized -- 3,000,000 shares of all classes of Preferred
Stock; 1,074,500 shares issued and outstanding (aggregate
liquidation preference of $107,450 at March 31, 1998 and
$105,537 and December 31, 1997)........................... 103,232 101,239
12 1/2% Junior Exchangeable Preferred Stock; $.01 par value;
authorized -- 3,000,000 shares of all classes of Preferred
Stock authorized; 318,614 shares issued and outstanding
(aggregate liquidation preference of $323,592 at March 31,
1998 and $313,786 at December 31, 1997, including accrued
dividends of $4,978 at March 31, 1998 and $4,828 at
December 31, 1997)........................................ 312,187 302,129
Stockholders' equity (deficit):
10% Junior Series 3 Cumulative Preferred Stock, $.01 par
value; authorized -- 3,000,000 shares of all classes of
Preferred Stock; no shares issued and outstanding at
March 31, 1998 and 414 shares issued and outstanding at
December 31, 1997 (aggregate liquidation preference of
$692 at December 31, 1997)............................. -- 1
6 3/4% Cumulative Convertible Preferred Stock, $.01 par
value; authorized -- 3,000,000 shares of all classes of
Preferred Stock authorized; 135,000 shares issued and
outstanding at March 31, 1998 (aggregate liquidation
preference of $135,000 at March 31, 1998).............. 2 --
Common Stock, $.01 par value; 100,000,000 shares
authorized:
shares issued and outstanding 31,735,926 at March 31,
1998 and 31,559,691
at December 31, 1997................................... 317 316
Additional paid-in capital................................ 225,379 106,559
Accumulated deficit....................................... (174,228) (154,831)
---------- --------
Total stockholders' equity (deficit).............. 51,470 (47,955)
---------- --------
Total liabilities, redeemable preferred stock and
stockholders' equity (deficit).................. $1,113,095 $917,095
========== ========

See accompanying notes.
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IXC COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

THREE MONTHS
ENDED MARCH 31,
--------------------
1998 1997
-------- --------

Net operating revenue:
Private line.............................................. $ 43,815 $ 30,869
Long distance switched services........................... 85,369 53,041
-------- --------
129,184 83,910
Operating expenses:
Cost of services.......................................... 87,298 68,982
Operations and administration............................. 23,584 16,567
Depreciation and amortization............................. 19,070 10,002
-------- --------
Operating loss.................................... (768) (11,641)
Interest income............................................. 1,585 1,076
Interest income on escrow under Senior Notes................ -- 203
Interest expense............................................ (6,271) (7,746)
Equity in net loss of unconsolidated subsidiaries........... (11,265) (1,819)
Other, net.................................................. 140 --
-------- --------
Loss before (provision) benefit for income taxes and
minority interest......................................... (16,579) (19,927)
(Provision) benefit for income taxes........................ (2,645) 252
Minority interest........................................... (173) (203)
-------- --------
Net loss.................................................... (19,397) (19,878)
Dividends applicable to preferred stock..................... (11,736) (470)
-------- --------
Net loss applicable to common stockholders.................. $(31,133) $(20,348)
-------- --------
Basic and diluted loss per share............................ $ (0.98) $ (0.66)
======== ========
Weighted average basic and diluted shares................... 31,626 30,799
======== ========

See accompanying notes.
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IXC COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------
1998 1997
-------- --------

Net cash used in operating activities....................... $(16,405) $(11,077)
Investing activities
Release of funds from escrow under Senior Notes........... -- 51,588
Deposit into escrow under Senior Notes.................... -- (18,152)
Purchase of property and equipment........................ (64,383) (68,743)
Investment in unconsolidated subsidiaries................. (7,880) (7,233)
-------- --------
Net cash used in investing activities....................... (72,263) (42,540)
Financing activities
Net proceeds from sale of convertible preferred stock..... 128,000 --
Principal payments on long-term debt and capital lease
obligations............................................ (2,043) (3,257)
Proceeds from new debt.................................... 9,016 --
Exercise of stock options................................. 1,370 14
Other financing activities................................ (748) (86)
-------- --------
Net cash provided by (used in) financing activities......... 135,595 (3,329)
-------- --------
Net increase (decrease) in cash and cash equivalents........ 46,927 (56,946)
Cash and cash equivalents at beginning of period............ 152,720 61,340
-------- --------
Cash and cash equivalents at end of period.................. $199,647 $ 4,394
======== ========
Supplemental disclosure of cash flow information:
Cash paid for:
Interest............................................... $ 922 $ 291
======== ========
Taxes.................................................. $ 280 $ 70
======== ========

See accompanying notes.
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IXC COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited Condensed Consolidated Financial Statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation for
the periods indicated have been included. Operating results for the three month
period ended March 31, 1998 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1998. The Balance Sheet at
December 31, 1997 has been derived from the audited financial statements at that
date, but does not include all of the information and notes required by
generally accepted accounting principles for complete financial statements. The
accompanying financial statements should be read in conjunction with the audited
consolidated financial statements (including the notes thereto) for the year
ended December 31, 1997. Certain amounts shown in the 1997 financial statements
have been reclassified to conform to the 1998 presentation.

2. BASIC AND DILUTED LOSS PER SHARE

In 1997, the Financial Accounting Standards Board ("FASB") issued Statement
No. 128, "Earnings per Share" ("SFAS No. 128"). Statement No. 128 replaced the
calculation of primary and fully diluted earnings per share with basic and
diluted earnings per share. Unlike primary earnings per share, basic earnings
per share exclude any dilutive effects of options, warrants and convertible
securities. Diluted earnings per share are very similar to the previously
reported fully diluted earnings per share. All earnings per share amounts for
all periods have been presented, and where appropriate, restated to conform to
the Statement No. 128 requirements.

3. INCOME TAXES

Income tax expense during interim periods is calculated by using an annual
effective tax rate. For 1998, the effective tax rate includes the impact of
gains from the transactions with PSINet Inc. ("PSINet") (see Note 10) and other
indefeasible rights to use ("IRU") transactions that will occur later in the
year. The Company has determined that a valuation allowance should be applied
against the deferred tax assets arising during the first quarter of 1998 due to
the uncertainty of realizability.

4. COMMITMENTS AND CONTINGENCIES

During 1998, the Company has made and will continue to make material
commitments related to the expansion of its network.

During 1997 and 1998, the Company entered into several agreements with
major long distance carriers for the sale of dark fiber and capacity usage.
Although these agreements provide for certain penalties if the Company does not
complete construction of the defined routes within the time frame specified in
the agreements, management does not anticipate that the Company will incur any
substantial penalties under these provisions.

From time to time the Company is involved in various legal proceedings
arising in the ordinary course of business, some of which are covered by
insurance. In the opinion of the Company's management, none of the claims
relating to such proceedings will have a material effect on the financial
condition or results of operations of the Company.

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IXC COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

5. STOCK OPTIONS

During the quarter ended March 31, 1998, the Company granted 597,000 stock
options under the 1996 Stock Plan. At March 31, 1998 stock options covering
3,289,317 shares of common stock were outstanding.

6. FINANCIAL ACCOUNTING STANDARDS

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"). SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components in a full set of
general-purpose financial statements. SFAS No. 130 is effective for fiscal years
beginning after December 15, 1997. Due to the Company having no items of other
comprehensive income in any of the periods presented, the adoption of SFAS No.
130 had no impact on the Company's reporting or display of financial information
at March 31, 1998.

Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS No. 131"). SFAS No.
131 establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders. SFAS No. 131 is effective for
financial statements for fiscal years beginning after December 15, 1997. Interim
period reporting of segment information is not required in the first year of
adoption. The adoption of SFAS No. 131 will have no impact on the Company's
consolidated results of operations, financial position or cash flows but will
affect the disclosure of segment information.

7. 1998 CONVERTIBLE PREFERRED STOCK

On March 30, 1998, the Company sold $135.0 million of 6 3/4% Cumulative
Convertible Preferred Stock ("1998 Convertible Preferred Stock") issued in the
form of depositary shares (2,700,000 depositary shares at $50 per share; each
depositary share representing 1/20 of a share of 1998 Convertible Preferred
Stock at $1,000 per share ) to qualified institutional buyers under Rule 144A of
the Securities Act. The net proceeds of approximately $128.0 million from the
offering are being used to fund capital expenditures, including a portion of the
network expansion, and for general corporate purposes, including acquisitions of
related businesses or interests therein and joint ventures. The 1998 Convertible
Preferred Stock can be converted at the option of the holder thereof into shares
of Common Stock, par value $.01 per share, of the Company at any time unless
previously redeemed or repurchased, at a conversion rate of 0.6874 shares of
common stock per depositary share (13.748 shares of Common Stock per share of
the 1998 Convertible Preferred Stock). Dividends on the 1998 Convertible
Preferred Stock are payable quarterly in arrears in cash or Common Stock, under
certain circumstances, on January 1, April 1, July 1 and October 1 of each year,
commencing on July 1, 1998. (See Footnote 12.)

8. SERIES 3 REDEMPTION

On March 31, 1998, the Company redeemed the remaining 414 shares of its 10%
Junior Series 3 Cumulative Redeemable Preferred Stock (the "Series 3 Preferred
Stock") outstanding for approximately $0.7 million in cash ($1,000 per share,
plus $0.3 million of accrued and unpaid dividends). Proceeds from the exercise
of employee stock options were used to redeem such shares.

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IXC COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

9. LOSS PER SHARE

Loss per share data for the quarters ended March 31, 1998 and 1997 are as
follows:

INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
(IN THOUSANDS, EXCEPT PER-SHARE DATA)

For the quarter ended March 31, 1998:
Net loss..................................... $(19,397)
Less: Preferred stock dividends.............. (11,736)
--------
Basic and diluted loss per share............. $(31,133) 31,626 $(0.98)
======== ====== ======

Options to purchase 3,289,317 shares of common stock, 1,074,500 shares of
7 1/4% Convertible Preferred Stock (each share convertible into 4.263 shares of
common stock) and 135,000 shares of the 1998 Convertible Preferred Stock (each
share convertible into 13.748 shares of common stock) were outstanding at March
31, 1998, but were not included in the computation of diluted loss per share
because they would have been anti-dilutive due to the Company's net loss.

INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
(IN THOUSANDS, EXCEPT PER-SHARE DATA)

For the quarter ended March 31, 1997:
Net loss..................................... $(19,878)
Less: Preferred stock dividends.............. (470)
--------
Basic and diluted loss per share............. $(20,348) 30,799 $(0.66)
======== ====== ======

Options to purchase 1,696,026 shares of common stock were outstanding at
March 31, 1997, but were not included in the computation of diluted loss per
share because they would have been anti-dilutive due to the Company's net loss.

10. ACQUISITIONS

On February 25, 1998, the Company consummated the agreements with PSINet
which allow each party to market and sell the products and services of the other
party. Under the terms of the agreements, the Company will provide PSINet with
an IRU 10,000 miles of OC-48 transmission capacity on its network over a 20-year
period in exchange for approximately 10.2 million shares representing just under
20% (post-issuance) of PSINet common stock. If the value of the PSINet common
stock received by the Company is less than $240.0 million at the earlier of one
year after the final delivery of the transmission capacity (scheduled for
late-1999) or four years after the transaction's closing, PSINet will pay the
Company, at its option, cash and/or deliver additional PSINet common stock to
increase the value of the cash and common stock paid by PSINet to $240.0
million. At March 31, 1998 the Company's investment in PSINet was approximately
$110.5 million. Upon delivery of the transmission capacity to PSINet, the
Company will begin to receive a maintenance fee which, as the full capacity has
been delivered, should increase to approximately $11.5 million per year. Revenue
from the IRU will be recognized over its term of 20 years as the capacity is
utilized.

On March 20, 1998, the Company acquired Network Evolutions, Inc. ("NEI")
for approximately $2.25 million by issuing 42,056 shares of the Company's Common
Stock to the former stockholder of NEI. NEI, a technology consulting and
services company that specializes in enterprise-wide IP internetworking and
network management, will provide the Company with strategic technical support
for its nationwide IP and Internet business strategy. The NEI acquisition is
being accounted for as a purchase.

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IXC COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

11. INVESTMENT IN UNCONSOLIDATED SUBSIDIARY

As of March 31, 1998, the Company indirectly owned 24.5% of Marca-Tel S.A.
de C.V. ("Marca-Tel") through its ownership of 50% of Progress International LLC
("Progress International"), which owned 49% of Marca-Tel. The remaining 51% of
Marca-Tel is owned by a Mexican individual and Formento Radio Beep, S.A. de C.V.
The other 50% of Progress International is owned by Westel International, Inc.

The following is summarized financial information for Marca-Tel for the
quarters ending March 31, 1998 and 1997:

1998 1997
------- -------
(IN THOUSANDS)

Income Statement Data:
Net Revenue.............................................. $ 3,271 $ 78
Gross loss............................................... (692) (323)
Net loss from continuing operations...................... (4,516) (2,400)
Net loss................................................. $(7,116) (3,352)

Marca-Tel is included in the financial statements of the Company as of and
for the quarters ended March 31, 1998 and 1997 as follows:

1998 1997
----- -----
(IN MILLIONS)

Investment in unconsolidated subsidiaries................... $10.4 $10.9
Equity in net income (loss) of unconsolidated
subsidiaries.............................................. $(6.5) $(1.7)

12. SUBSEQUENT EVENTS

On April 14, 1998, the Company issued and sold an additional 20,250 shares
($20.25 million) of its 1998 Convertible Preferred Stock (405,000 depositary
shares at $50 per share) in connection with an overallotment option granted to
the initial purchasers of the 1998 Convertible Preferred Stock. The net proceeds
of $19.25 million will be used to fund capital expenditures and for general
corporate purposes.

On April 21, 1998, the Company issued $450.0 million of 9% Senior
Subordinated Notes due 2008 (the "New Notes"). In connection with the sale of
the New Notes, the Company completed its tender offer to purchase for cash all
of its outstanding 12 1/2% Senior Notes Due 2005 (the "Senior Notes"). Pursuant
to the terms of the tender offer, $284.2 million (out of $285.0 million) in
aggregate principal amount of the Senior Notes were tendered and accepted for
payment by the Company. The Company used approximately $342.7 million of the
estimated $435.6 million net proceeds of the New Notes offering to pay the
tender offer price for the Senior Notes. With the early extinguishment of the
Senior Notes, a charge of approximately $73.2 million will be recorded as an
extraordinary item in the second quarter. The remaining proceeds of the offering
will be used to fund capital expenditures and for general corporate purposes.
The New Notes are general unsecured obligations of the Company and will be
subordinate in right of payment to all existing and future senior indebtedness
of the Company and other liabilities of the Company's subsidiaries. In
connection with the consummation of the tender offer, the Senior Notes were
amended to eliminate substantially all of the restrictive covenants therein and
all guarantees given thereunder.

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

Except for the historical information contained below, the matters
discussed in this item are forward-looking statements that involve a number of
risks and uncertainties. The Company's actual liquidity needs, capital resources
and results may differ materially from the discussion set forth in the
forward-looking statements. For a discussion of important factors that may cause
the actual results, performance or achievements of the Company to be materially
different from those expressed or implied by the forward-looking statements, see
"Business -- Risk Factors" in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997. In light of such risks and uncertainties,
there can be no assurance that the forward-looking information contained in this
item will in fact transpire.

THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
1997

Net operating revenue for the first quarter of 1998 increased by 54.0% over
the comparable 1997 period. The majority of the increase was due to the
Company's switched long distance business which increased $32.3 million, or
60.9% over first quarter 1997. Billable minutes of use ("MOUs") for the quarter
increased over 1997 by 70.4% to 1,031 million minutes. The remainder of the
revenue growth during first quarter 1998 resulted from private line revenue
increases of $12.9 million, or 41.9% over the comparable 1997 quarter, due to
increased demand for capacity and the availability of additional capacity
resulting from the Company's network expansion.

Cost of services consists primarily of access charges paid to Local
Exchange Carriers ("LECs") and transmission lease payments to, and exchanges
with, other carriers. These costs increased 26.6% for the quarter over 1997 due
to additional leases supporting the Company's private line and switched long
distance businesses, MOUs obtained from other carriers and access charges paid
to LECs in connection with the switched services business. In July 1997, the FCC
mandated rate reductions for the connection charges paid by the long distance
carriers to LECs. The favorable impact of these rate reductions for first
quarter 1998 are reflected in the financial statements. These rate reductions
and a favorable dispute settlement contributed to the Company's year over year
gross margin percentage improvement.

Operations and administration expenses for the first quarter 1998 increased
42.4% over 1997 primarily as the result of employee costs and other operating
expenses associated with the growth in the Company's network. The Company
anticipates that as it expands, its long distance switched services business and
its fiber network, operations and administration expenses will increase, but
will decline as a percentage of revenue.

Depreciation and amortization for the 1998 quarter increased 90.7% over the
comparable 1997 period due to the increase in depreciable assets as a result of
the Company's network expansion. Depreciation and amortization will continue to
increase in conjunction with spending on capital assets to increase network
capacity.

Interest income for the 1998 quarter increased over 1997 by $.3 million
primarily due to the remaining proceeds from the Company's sale in August 1997
of $300.0 million of the Company's 12 1/2% Junior Exchangeable Preferred Stock
Due 2009 (the "1997 Exchangeable Preferred Stock").

Interest expense for the 1998 quarter decreased over the comparable quarter
in 1997 by $1.5 million. The decrease is primarily the result of additional
capitalization of interest related to the fiber network construction.

Equity in net loss of unconsolidated subsidiaries increased by $9.4 million
for first quarter 1998 over first quarter 1997. These losses primarily relate to
the Company's share of losses in the Mexican joint venture, which is
constructing a fiber network in Mexico and began operations during the first
quarter of 1997. Additionally, losses were recorded from recent acquisitions and
joint ventures entered into at the end of 1997 or during first quarter 1998.

At March 31, 1998, the Company's net carrying value in its investment in
the Mexican joint venture was $10.4 million. In February 1998, Marca-Tel
announced that it was putting further investment in new fiber routes on hold,
awaiting more suitable regulatory and market conditions. At the present time,
the Company does not anticipate significant additional funding to Progress
International for investment in Marca-Tel until

10
11

the regulatory and market conditions in Mexico improve. The Company is not
obligated to continue to fund Progress International, however failure to provide
significant funding to Progress International is likely to result in a default
under Marca-Tel's financing arrangements and could result in the foreclosure of
a third party's security interest in Progress International's interest in
Marca-Tel. The Company's interest in Progress International, and thus its
indirect interest in Marca-Tel, therefore could be diluted or lost entirely. The
Company is currently in discussions with vendors, investors and investment
bankers to refinance Marca-Tel.

The income tax provision for first quarter 1998 was $2.6 million compared
to an income tax benefit of $0.3 million for the comparable quarter in 1997. The
1998 provision relates to gains recognized for income tax purposes relating to
the PSINet transactions and other IRU transactions which are expected to occur
later in the year. The deferred tax assets relating to these transactions has
been fully reserved due to the uncertainty of their realizability.

The Company experienced a net loss applicable to common stockholders of
$31.1 million for the quarter ended March 31, 1998 as compared to a net loss of
$20.3 million for the quarter ended March 31, 1997 as a result of the factors
discussed above and the increase in preferred stock dividends. The issuance of
the Company's 7 1/4% Junior Convertible Preferred Stock Due 2007 (the "1997
Convertible Preferred Stock") in April 1997, the 1997 Exchangeable Preferred
Stock in August 1997 and the payments of in-kind dividends thereon, resulted in
an increase of preferred stock dividends of $11.3 million.

LIQUIDITY AND CAPITAL RESOURCES

The Company's private line operations have historically provided positive
cash flow from operations, which have provided adequate liquidity to meet the
Company's operational needs. However, the Company's capital expenditures and,
since the issuance of the Company's 12 1/2% Senior Notes due 2005 (the "Senior
Notes") in the fourth quarter of 1995, its interest expense have been financed
with the proceeds of debt and equity securities.

Cash used in operating activities was $16.4 million for the quarter ended
March 31, 1998 compared to $11.1 million in the comparable period of 1997,
primarily as a result of operational expenses associated with the continued
development of the Company's switched long distance services business. The
Company's switched services business is expected to require cash to meet
operating expenses until sufficient traffic can be routed over the Company's
owned network.

Cash used in investing activities for the quarter ended March 31, 1998 was
$72.3 million compared to $42.5 million for the comparable period of 1997. The
increase is primarily due to escrow funding activity from the Company's senior
debt which offset cash used in investing activities by $33.4 million during the
first quarter of 1997.

Cash provided by financing activities increased to $135.6 million for the
first quarter of 1998 versus a use of cash of $3.3 million for the comparable
period in 1997. Increased funding during the first quarter of 1998 was primarily
the result of the Company issuing its 6 3/4% Cumulative Convertible Preferred
Stock ("1998 Convertible Preferred Stock") with net proceeds of $128.0 million
and the Company borrowing $9.0 million under the Company's secured equipment
facility of $28.0 million with NTFC Capital Corporation and Export Development
Corporation.

As of March 31, 1998, the Company had $199.6 million in cash. The Company
expects that its primary sources for cash over the next twelve months will be
cash on hand, cash generated by operations, proceeds of fiber use sales and the
proceeds from any additional debt, vendor and working capital financing the
Company may seek.

The Company has been significantly recapitalized since the beginning of
1998. As of May 1, 1998, the Company has incurred additional equity and debt
financing through the issuance of its 1998 Convertible Preferred Stock for net
proceeds of $147.25 million (including proceeds from exercise of the
overallotment option in April 1998) and issuance of its 9% Senior Subordinated
Notes Due 2008 ("9% Senior Subordinated Notes") for net proceeds, after
tendering for the Senior Notes, of $93.4 million. The Company is in discussions
with various investment bankers, vendors and lending institutions regarding
substantial additional
11
12

debt financing for 1998 and beyond. The Company seeks to obtain sufficient
funding from these sources plus cash receipts from fiber use sales and
operations for the following major uses of cash: (i) the network expansion and
other capital expenditures; (ii) debt service; (iii) lease payments; (iv)
funding joint ventures; and (v) working capital. Capital spending in 1998 is
projected to be over $525.0 million, of which $64.4 million has been spent
through March 31, 1998. After 1998, capital expenditures are expected to be
reduced, but continue to be substantial. There can be no assurance that the
Company will be successful in obtaining the necessary financing to meet its
needs. A failure to raise cash would delay or prevent such capital expenditures
and the construction of the network expansion. Also, the foregoing capital
expenditure and cash requirements for 1998 do not take into account any
acquisitions.

The Company is required to make annual interest payments in the amount of
$40.6 million on the 9% Senior Subordinated Notes and the remaining Senior Notes
each year. The Company is also required to make principal payments of
approximately $4.0 million on other debt in 1998 including quarterly principal
payments of $560,000 from March 31, 1998 through December 31, 1999. The Company
is also required (except in certain circumstances when the dividend payment can
be a payment in kind) to pay quarterly cash dividends on the 1997 Convertible
Preferred Stock at an annual rate of 7 1/4%, on the 1998 Convertible Preferred
Stock at an annual rate of 6 3/4% and on the 1997 Exchangeable Preferred Stock
at an annual rate of 12 1/2%. The Company anticipates that such debt and equity
service payments during 1998 will be made from cash on hand.

The Company is required to make minimum annual lease payments for
facilities, equipment and transmission capacity used in its operations. In 1998,
1999, and 2000 the Company is currently required to make payments of
approximately $10.7 million, $10.7 million and $9.3 million, respectively, on
capital leases and $32.6 million, $8.7 million and $6.3 million, respectively,
on operating leases. The Company expects to incur additional operating and
capital lease costs in connection with the network expansion.

In connection with its network expansion, the Company has entered into
various construction and installation agreements with contractors.

The forward-looking statements set forth above with respect to the
estimated cash requirements relating to capital expenditures, the Company's
ability to meet such cash requirements and the Company's ability to service its
debt are based on certain assumptions as to future events. Important
assumptions, which if not met, could adversely affect the Company's ability to
achieve satisfactory results include that: (i) there will be no significant
delays or cost overruns with respect to the network expansion; (ii) the
Company's contractors and partners in cost-saving arrangements will perform
their obligations; (iii) rights-of-way can be obtained in a timely,
cost-effective basis; (iv) the routes of the network expansion are substantially
completed on schedule; (v) the Company will continue to increase traffic on its
network; and (vi) the Company can obtain vendor financing.

YEAR 2000 RISKS

The Company has reviewed its software for Year 2000 compliance. In
conjunction with that review, the Company has determined that its current
software is either Year 2000 compliant, or there are projects planned to either
upgrade or replace the existing software prior to 2000. In accordance with the
Emerging Issues Task Force of the Financial Accounting Standards Board, the
projected costs associated with upgrading or revising the Company's software to
be Year 2000 compliant will be recorded as an expense of the period rather than
capitalized. The Company currently estimates that the costs associated with such
upgrades projects will not be material to its operating results.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

12
13

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. CHANGES IN SECURITIES

On March 30, 1998, the Company issued and sold 135,000 shares of its 1998
Convertible Preferred Stock in the form of Depositary Shares (each representing
1/20 of a share of 1998 Convertible Preferred Stock) for an aggregate offering
price of $135.0 million, in a private placement pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act") to Credit Suisse First
Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated and NationsBanc Montgomery Securities LLC (the
"Initial Purchasers"), who subsequently sold the shares to "qualified
institutional buyers" (as defined in the Securities Act) pursuant to Section
144A of the Securities Act. The Initial Purchasers received aggregate
commissions of $1.75 per Depositary Share ($4.725 million for 2,700,000
Depositary Shares). The 1998 Convertible Preferred Stock is convertible at the
option of the holders, unless previously redeemed or repurchased, at any time
into shares of the Company's common stock (the "Common Stock") at a rate
(subject to adjustment in certain events) of 13.748 shares of Common Stock for
each share of 1998 Convertible Preferred Stock. Dividends on the 1998
Convertible Preferred Stock are payable quarterly and accrue at a rate per annum
of 6 3/4% per share on the liquidation preference thereof of $1,000 per share
($67.50 per annum per share). Dividends may, at the option of the Company, be
paid in Common Stock if, and only if, the documents governing the Company's
indebtedness that existed as of the date of issuance of the 1998 Convertible
Preferred Stock then prohibit the payment of such dividends in cash. The 1998
Convertible Preferred Stock is redeemable after April 5, 2000 subject to certain
conditions with respect to the closing price of the Common Stock in the case of
redemptions prior to April 1, 2002. The registration rights agreement entered
into by the Company with the initial purchasers of the 1998 Convertible
Preferred Stock requires that the Company file a shelf registration statement,
with the Securities Exchange Commission ("Commission") for the benefit of the
holders of the 1998 Convertible Preferred Stock, with respect to the Depositary
Shares, the 1998 Convertible Preferred Stock and the shares of Common Stock that
may be issued upon conversion thereof. The 1998 Convertible Preferred Stock
ranks pari passu with the Company's 1997 Convertible Preferred Stock and the
Company's 1997 Exchangeable Preferred Stock and senior to the Common Stock with
respect to payment of dividends and amounts upon liquidation, dissolution and
winding up.

On April 14, 1998, the Company issued and sold an additional $20.25 million
of its 1998 Convertible Preferred Stock (405,000 Depositary Shares at $50 per
share) in connection with an overallotment option granted to the Initial
Purchasers of the 1998 Convertible Preferred Stock pursuant to the same
exemptions from registration as the initial issuance. The Initial Purchasers
received aggregate commissions of $1.75 per Depositary Share ($.709 million for
405,000 Depositary Shares).

On March 20, 1998, the Company issued and sold 42,056 shares of its Common
Stock to the former stockholder of Network Evolutions, Incorporated pursuant to
Section 4(2) of the Securities Act. No underwriter or placement agent was
employed in connection with such issuance of Common Stock.

The sales and issuances of the 1998 Convertible Preferred Stock and the
Common Stock described above were deemed to be exempt from registration under
the Securities Act in reliance upon Section 4(2) thereof, as transactions not
involving a public offering. The purchasers in such private offerings of stock
represented their intention to acquire the securities for investment only and
not with a view to the distribution thereof. Appropriate legends were affixed to
the certificates representing the securities issued in such transactions. All
purchasers had adequate access, through their relationship with the Company or
otherwise, to sufficient information about the Company to make an informed
investment decision.

On March 31, 1998, the Company redeemed its 414 outstanding shares of its
10% Junior Series 3 Cumulative Redeemable Preferred Stock, par value $.01 per
share, at a per share redemption price of $1,711.71.

13
14

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

None.

ITEM 5. OTHER INFORMATION

On April 21, 1998, the Company sold $450.0 million in aggregate principal
amount of its 9% Senior Subordinated Notes. Concurrently with the sale of such
notes, the Company consummated its tender offer for cash for all its Senior
Notes. Pursuant to the terms of the tender offer, approximately $284.2 million
(out of $285.0 million) in aggregate principal amount of the Senior Notes were
tendered and accepted for payment by the Company. The Company used approximately
$342.7 million of the estimated $435.6 million net proceeds from the 9% Senior
Subordinated Notes to pay the tender offer price for the Senior Notes. In
connection with the consummation of the tender offer, the Senior Notes were
amended to eliminate substantially all of the restrictive covenants therein and
all guarantees given thereunder.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

EXHIBIT
NUMBER DESCRIPTION
------- -----------

3.1 Restated Certificate of Incorporation of IXC Communications,
Inc., as amended (incorporated by reference to Exhibit 3.1
of IXC Communications, Inc.'s Amendment No. 1 to
Registration Statement on Form S-4 (File No. 333-48079)
filed with the Commission on April 15, 1998).
3.2 Bylaws of IXC Communications, Inc., as amended (incorporated
by reference to Exhibit 3.2 of IXC Communications, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, filed with the Commission on November
14, 1998).
4.1 Indenture dated as of October 5, 1995, by and among IXC
Communications, Inc., on its behalf and as
successor-in-interest to I-Link Holdings, Inc. and IXC
Carrier Group, Inc., each of IXC Carrier, Inc., on its
behalf and as successor-in-interest to I-Link, Inc., CTI
Investments, Inc., Texas Microwave Inc. and WTM Microwave
Inc., Atlantic States Microwave Transmission Company,
Central States Microwave Transmission Company, Telcom
Engineering, Inc., on its behalf and as
successor-in-interest to SWTT Company and Microwave Network,
Inc., Tower Communication Systems Corp., West Texas
Microwave Company, Western States Microwave Transmission
Company, Rio Grande Transmission, Inc., IXC Long Distance,
Inc., Link Net International, Inc. (collectively, the
"Guarantors"), and IBJ Schroder Bank & Trust Company, as
Trustee (the "Trustee), with respect to the 12 1/2% Series A
and Series B Senior Notes due 2005 (incorporated by
reference to Exhibit 4.1 of IXC Communications, Inc.'s and
each of the Guarantor's Registration Statement on Form S-4
filed with the Commission on April 1, 1996 (File No.
333-2936) (the "S-4")).
4.2 Form of 12 1/2% Series A Senior Notes due 2005 (incorporated
by reference to Exhibit 4.6 of the S-4).
4.3 Form of 12 1/2% Series B Senior Notes due 2005 and
Subsidiary Guarantee (incorporated by reference to Exhibit
4.8 of IXC Communications, Inc.'s Amendment No. 1 to
Registration Statement on Form S-1 filed with the Commission
on June 13, 1996 (File No. 333-4061) (the "S-1 Amendment")).

14
15

EXHIBIT
NUMBER DESCRIPTION
------- -----------

4.4 Amendment No. 1 to Indenture and Subsidiary Guarantee dated
as of June 4, 1996, by and among IXC Communications, Inc.,
the Guarantors and the Trustee (incorporated by reference to
Exhibit 4.11 of the S-1 Amendment).
4.5 Purchase Agreement dated as of March 25, 1997, by and among
IXC Communications, Inc., Credit Suisse First Boston
Corporation ("CS First Boston") and Dillon Read & Co. Inc.
("Dillon Read") (incorporated by reference to Exhibit 4.12
of IXC Communications, Inc.'s Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997, filed with the
Commission on May 15, 1997 (the "March 31, 1997 10-Q"))
4.6 Registration Rights Agreement dated as of March 25, 1997, by
and among IXC Communications, Inc., CS First Boston and
Dillon Read (incorporated by reference to Exhibit 4.13 of
the March 31, 1997 10-Q).
4.7 Amendment to Registration Rights Agreement dated as of March
25, 1997, by and between IXC Communications, Inc. and
Trustees of General Election Pension Trust (incorporated by
reference to Exhibit 4.14 of March 31, 1997 10-Q).
4.8 Registration Rights Agreement dated as of July 8, 1997,
among IXC Communications, Inc. and each of William G. Rodi,
Gordon Hutchins, Jr. and William F. Linsmeier (incorporated
by reference to Exhibit 4.15 of IXC Communications, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997, as filed with the Commission on August 6, 1997 (the
"June 30, 1997 10-Q")).
4.9 Registration Rights Agreement dated as of July 8, 1997,
among IXC Communications, Inc. and each of William G. Rodi,
Gordon Hutchins, Jr. and William F. Linsmeier (incorporated
by reference to Exhibit 4.16 of the June 30, 1997 10-Q).
4.10 Indenture dated as of August 15, 1997, between IXC
Communications, Inc. and The Bank of New York (incorporated
by reference to Exhibit 4.2 of IXC Communications, Inc.'s
Current Report on Form 8-K dated August 20, 1997, and filed
with the Commission on August 28, 1997 (the "8-K")).
4.11 First Supplemental Indenture dated as of October 23, 1997,
among IXC Communications, Inc., the Guarantors, IXC
International, Inc. and IBJ Schroder Bank & Trust Company
(incorporated by reference to Exhibit 4.13 of IXC
Communications, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1997, and filed with the Commission
on March 16, 1998 (the "1997 10-K")).
4.12 Second Supplemental Indenture dated as of December 22, 1997,
among IXC Communications, Inc., the Guarantors, IXC Internet
Services, Inc., IXC International, Inc. and IBJ Schroder
Bank & Trust Company (incorporated by reference to Exhibit
4.14 of the 1997 10-K).
4.13 Third Supplemental Indenture dated as of January 6, 1998,
among IXC Communications, Inc., the Guarantors, IXC Internet
Services, Inc., IXC International, Inc. and IBJ Schroder
Bank & Trust Company (incorporated by reference to Exhibit
4.15 of the 1997 10-K).
4.14 Fourth Supplemental Indenture dated as of April 3, 1998,
among IXC Communications, Inc., the Guarantors, IXC Internet
Services, Inc., IXC International, Inc., and IBJ Schroder
Bank & Trust Company (incorporated by reference to Exhibit
4.15 of IXC Communications, Inc.'s Registration Statement on
Form S-3 filed with the Commission on May 12, 1998 (File No.
333-52433)).

15
16

EXHIBIT
NUMBER DESCRIPTION
------- -----------

4.15 Purchase Agreement dated as of March 25, 1998, among IXC
Communications, Inc., Goldman Sachs & Co. ("Goldman"), CS
First Boston, Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill") and Morgan Stanley & Co.
Incorporated ("Morgan Stanley") (incorporated by reference
to Exhibit 4.1 IXC Communications, Inc.'s Current Report on
Form 8-K dated March 30, 1998, and filed with the Commission
on April 7, 1998 (the "April 7, 1998 8-K")).
4.16 Registration Rights Agreement dated as of March 30, 1998,
among IXC Communications, Inc., Goldman, CS First Boston,
Merrill and Morgan Stanley (incorporated by reference to
Exhibit 4.2 of the April 7, 1998 8-K).
4.17 Deposit Agreement dated as of March 30, 1998, between IXC
Communications, Inc. and BankBoston N.A. (incorporated by
reference from Exhibit 4.3 of the April 7, 1998 8-K).
4.18 Certificate of Designation of Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 6 3/4% Cumulative Convertible Preferred Stock and
Qualifications, Limitations and Restrictions Thereof
(incorporated by reference to Exhibit 4.4 of the April 7,
1998 8-K).
4.19 Purchase Agreement dated as of April 16, 1998, by and among
IXC Communications, Inc., CS First Boston, Merrill, Morgan
and Nationsbanc Montgomery Securities LLC (incorporated by
reference to Exhibit 4.1 of IXC Communications, Inc.'s
Current Report on Form 8-K dated April 21, 1998, and filed
with the Commission on April 22, 1998 (the "April 22, 1998
8-K").
4.20 Registration Rights Agreement dated April 16, 1998, by and
among IXC Communications, Inc., Credit Suisse First Boston
Corporation, Merrill, Morgan and Nationsbanc Montgomery
Securities LLC (incorporated by reference to Exhibit 4.2 of
the April 22, 1998 8-K).
4.21 Indenture dated as of April 21, 1998, between IXC
Communications, Inc. and IBJ Schroder Bank & Trust Company,
as Trustee (incorporated by reference to Exhibit 4.3 of the
April 22, 1998 8-K).
10.1 Office Lease dated June 21, 1989 with USAA Real Estate
Company, as amended (incorporated by reference to Exhibit
10.1 of the S-4).
10.2 Equipment Lease dated as of December 1, 1994, by and between
DSC Finance Corporation and Switched Services
Communications, L.L.C.; Assignment Agreement dated as of
December 1, 1994, by and between Switched Services
Communications, L.L.C. and DSC Finance Corporation; and
Guaranty dated December 1, 1994, made in favor of DSC
Finance Corporation by IXC Communications, Inc.
(incorporated by reference to Exhibit 10.2 of the S-4).
10.3 Amended and Restated 1994 Stock Plan of IXC Communications,
Inc., as amended (incorporated by reference to Exhibit 10.3
of the June 30, 1997 10-Q).
10.4 Form of Non-Qualified Stock Option Agreement under the 1994
Stock Plan of IXC Communications, Inc. (incorporated by
reference to Exhibit 10.4 of the S-4).
10.5 Amended and Restated Development Agreement by and between
Intertech Management Group, Inc. and IXC Long Distance, Inc.
(incorporated by reference to Exhibit 10.7 of IXC
Communications, Inc.'s and the Guarantors' Amendment No. 1
to Registration Statement on Form S-4 filed with the
Commission on May 20, 1996 (File No. 333-2936) ("Amendment
No. 1 to S-4")).
10.6+* Third Amended and Restated Service Agreement dated as of
April 16, 1998, among IXC Long Distance, Inc., IXC Carrier,
Inc., IXC Broadband, Inc. and Excel Telecommunications, Inc.

16
17

EXHIBIT
NUMBER DESCRIPTION
------- -----------

10.7 Equipment Purchase Agreement dated as of January 16, 1996,
by and between Siecor Corporation and IXC Carrier, Inc.
(incorporated by reference to Exhibit 10.9 of the S-4).
10.8 1996 Stock Plan of IXC Communications, Inc., as amended
(incorporated by reference to Exhibit 10.10 of the IXC
Communications, Inc. Annual Report on Form 10-K for the year
ended December 31, 1996 and filed with the Commission on
March 28, 1997 (the "1996 10-K").
10.9 IRU Agreement dated as of November 1995 between WorldCom,
Inc. and IXC Carrier, Inc. (incorporated by reference to
Exhibit 10.11 of Amendment No. 1 to the S-4).
10.10 Outside Directors' Phantom Stock Plan of IXC Communications,
Inc., as amended (incorporated by reference to Exhibit 10.12
of the 1996 10-K).
10.11+ Business Consultant and Management Agreement dated as of
March 1, 1998, by and between IXC Communications, Inc. and
Culp Communications Associates.
10.12 Employment Agreement dated December 28, 1995, by and between
IXC Communications, Inc. and James F. Guthrie (incorporated
by reference to Exhibit 10.14 of the S-1 Amendment).
10.13 Employment Agreement dated August 28, 1995, by and between
IXC Communications, Inc. and David J. Thomas (incorporated
by reference to Exhibit 10.15 of the S-1 Amendment).
10.14 Special Stock Plan of IXC Communications, Inc. (incorporated
by reference to Exhibit 10.16 of the 1996 10-K).
10.15 Lease dated as of June 4, 1997, between IXC Communications,
Inc. and Carramerca Realty, L.P. (incorporated by reference
to Exhibit 10.17 of the June 30, 1997 10-Q).
10.16 Loan and Security Agreement dated as of July 18, 1997, among
IXC Communications, Inc., IXC Carrier, Inc. and NTFC Capital
Corporation ("NTFC") (incorporated by reference to Exhibit
10.18 of the June 30, 1997 10-Q).
10.17 IRU and Stock Purchase Agreement dated as of July 22, 1997,
between IXC Internet Services, Inc. and PSINet Inc.
(incorporated by reference to Exhibit 10.19 of IXC
Communications, Inc.'s Amendment No. 1 to Form 10-Q/A for
the quarter ended September 30, 1997 filed with the
Commission on December 12, 1997 (the "September 30, 1997
10-Q/A")).
10.18 Joint Marketing and Services Agreement dated July 22, 1997,
between IXC Internet Services, Inc. and PSINet Inc.
(incorporated by reference to Exhibit 10.20 of the September
30, 1997 10-Q/A).
10.19 Employment Agreement dated as of September 9, 1997, between
Benjamin L. Scott and IXC Communications, Inc. (incorporated
by reference to Exhibit 10.21 of IXC Communication Inc.'s
Amendment No. 1 to Registration Statement on S-4 filed with
the Commission on December 15, 1997 (File No. 333-37157)
("Amendment No. 1 to the EPS S-4")).
10.20 IXC Communications, Inc. 1997 Special Executive Stock Plan
(incorporated by reference to Exhibit 10.22 of Amendment No.
1 to the EPS S-4).
10.21 First Amendment to Loan and Security Agreement dated as of
December 23, 1997, among IXC Communications, Inc., IXC
Carrier, Inc., NTFC and Export Development Corporation
("EDC") (incorporated by reference to Exhibit 10.21 of the
1997 10-K).

17
18

EXHIBIT
NUMBER DESCRIPTION
------- -----------

10.22 Second Amendment to Loan and Security Agreement dated as of
January 21, 1998, among IXC Communications, Inc., IXC
Carrier, Inc., NTFC and EDC (incorporated by reference to
Exhibit 10.22 of the 1997 10-K).
11.1+ Statement of computation of earnings per share.
27.1+ Financial Data Schedule.

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

+ Filed herewith.
* Certain portions of this exhibit have been omitted from this Form 10-Q and
have been filed separately, together with an application to obtain
confidential treatment with respect thereto.

(b) Reports on Form 8-K.

(1) Form 8-K dated January 8, 1998, and filed with the Commission on January 9,
1998, with respect to a press release reporting a fiber exchange agreement
between the Company and GST Telecommunications, Inc.

(2) Form 8-K dated January 30, 1998, and filed with the Commission on February
2, 1998, with respect to a press release announcing the consummation of the
Company's registered exchange offer to exchange shares of its 12 1/2% Series
B Junior Exchangeable Preferred Stock Due 2009 for all outstanding shares of
its 12 1/2% Junior Exchangeable Preferred Stock Due 2009.

(3) Form 8-K dated February 12, 1998, and filed with the Commission on February
13, 1998, with respect to a press release reporting the Company's results of
operations for the fourth quarter of 1997.

(4) Form 8-K dated March 2, 1998, and filed with the Commission on March 4,
1998, with respect to a press release announcing the closing of a
transaction with PSINet Inc.

(5) Form 8-K dated March 18, 1998, and filed with the Commission on March 18,
1998, with respect to a press release announcing the commencement of the
Company's tender offer to purchase for cash all of its outstanding 12 1/2%
Senior Notes due 2005.

18
19

SIGNATURE

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

IXC COMMUNICATIONS, INC.,
a Delaware corporation

May 13, 1998 By: /s/ JAMES F. GUTHRIE
----------------------------------
James F. Guthrie
Executive Vice President and Chief
Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)