-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gtw+TabLY3eOTqibFQ5oT2ZFV4BKXUKruEqK2mxg9h/oOPzDa6nL1rKQtRcNDtDt tVoVMJlFKj9icqc6XzLFkg== 0000786343-98-000005.txt : 19981109 0000786343-98-000005.hdr.sgml : 19981109 ACCESSION NUMBER: 0000786343-98-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 ITEM INFORMATION: FILED AS OF DATE: 19981106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG HOLDINGS CANADA INC CENTRAL INDEX KEY: 0000786343 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841128866 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11052 FILM NUMBER: 98738903 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80155-6742 BUSINESS PHONE: 3034145431 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE STREET 2: PO BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80155-6742 FORMER COMPANY: FORMER CONFORMED NAME: INTERTEL COMMUNICATIONS INC DATE OF NAME CHANGE: 19930107 8-K 1 EARNINGS RELEASE SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) November 5, 1998 (November 4, 1998) ICG COMMUNICATIONS, INC. ----------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 1-11965 84-1342022 ----------------------------------------------------------------- (State of (Commission (IRS Employer Incorporation) File Number) Identification No.) 161 Inverness Drive West, Englewood, Colorado 80112 --------------------------------------------------- (Address of principal executive offices) ICG HOLDINGS (CANADA), INC. ---------------------------------------------------------------- (Exact name of registrant as specified in charter) Canada 1-11052 Not Applicable ---------------------------------------------------------------- (State of Incorporation) Commission (IRS Employer File Number) Identification No.) 1710-1177 West Hastings Street, Vancouver, British Columbia V6E 2L3 ------------------------------------------- (Address of principal executive offices) ICG HOLDINGS, INC. ---------------------------------------------------------------- (Exact name of registrant as specified in charter) Colorado 33-96540 84-1158866 ---------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) 161 Inverness Drive West, Englewood, Colorado 80112 --------------------------------------------------- (Address of principal executive offices) Registrants' telephone numbers, including area codes (888) 424-1144 or (303) 414-5000 N/A ----------- (Former name or former address, if changed since last report.) ITEM 5. OTHER EVENTS. - ------ ------------ In a press release dated November 4, 1998, ICG Communications, Inc., a Delaware corporation (the "Corporation"), announced its earnings information and results of operations for the Corporation's third quarter of 1998. A copy of the press release is attached as an Exhibit hereto. ITEM 7. EXHIBITS. - ------ -------- (c) Exhibits -------- 99.1 Press Release, dated November 4, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each of the Registrants have duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: November 5, 1998 ICG COMMUNICATIONS, INC. By: /s/ H. Don Teague -------------------------- H. Don Teague Executive Vice President, General Counsel and Secretary ICG HOLDINGS (CANADA), INC. By: /s/ H. Don Teague --------------------------- H. Don Teague Executive Vice President, General Counsel and Secretary ICG HOLDINGS, INC. By: /s/ H. Don Teague --------------------------- H. Don Teague Executive Vice President, General Counsel and Secretary EXHIBIT INDEX Exhibit Description ------- ----------- 99.1 Press release, dated November 4, 1998 FOR IMMEDIATE RELEASE For more information, contact: Heathere Evans Steve Smith Public Relations Manager Director of Investor Relations 303 414-5388 303 414-5350 heathere_evans@icgcomm.com investor_relations@icgcomm.com ICG Communications, Inc. Reports Third Quarter 1998 Results: Positive EBITDA for Telecom Services Consolidated EBITDA Deficit Narrowed to $3.6 Million 42 Percent Telecom Services' Gross Margin to Revenue Ratio 53,525 New Local Dial Tone Lines In Service ENGLEWOOD, CO. (Nov. 4, 1998) - ICG Communications, Inc. (Nasdaq: ICGX) ("ICG") today reported that its Telecom Services business segment generated $681,000 of positive EBITDA (earnings before interest, taxes, depreciation and amortization, and before nonrecurring charges) for the third quarter of 1998. The company also reported that its consolidated EBITDA deficit narrowed to $3.6 million for the three months ended September 30, 1998, compared to an EBITDA deficit of $31.2 million recorded for same period in 1997. Total consolidated revenue for the three months ended September 30, 1998 was $106.5 million, compared to $60.6 million reported for the third quarter of 1997. "Telecom Services achieved a significant milestone by reaching positive EBITDA for the third quarter," said J. Shelby Bryan, ICG's president and chief executive officer. "Delivering high margin competitive telecommunications services to small and medium-sized business customers is fundamental to ICG's strategy. I am confident that the continued execution of this strategy will translate into positive EBITDA for the fourth quarter of 1998, and throughout 1999." ICG's continued EBITDA improvement is primarily related to increases in local dial tone lines in service. At September 30, 1998, ICG had 290,983 local dial tone lines in service, an increase of 53,525 lines compared to June 30, 1998. Ninety-eight percent of the lines installed during the third quarter of 1998 were "on-switch." ICG also reported that it sold 55,792 dial tone lines for the three months ended September 30, 1998. - more - ICG NETCOM 3rd Quarter 1998 Results Page - 2 - Telecom Services' revenue for the quarter ended September 30, 1998, was $82.6 million, compared to $36.5 million for the three months ended September 30, 1997, a 126 percent increase. Telecom Services had gross operating margins of $34.4 million for the third quarter of 1998, which was 42 percent of this business unit's total revenue.
Telecom Services: ($ in millions) - ---------------------------- ---------------- --------------- --------------- ---------------- -------------- --------------- Three months ended 9/30/98 6/30/98 3/31/98 12/31/97 9/30/97 6/30/97 - ---------------------------- ---------------- --------------- --------------- ---------------- -------------- --------------- Revenue $82.6 $64.2 58.5 47.7 36.5 34.4 Operating costs (48.2) (43.3) (45.7) (43.2) (35.2) (35.0) - ---------------------------- ---------------- --------------- --------------- ---------------- -------------- --------------- Gross margin 34.4 20.9 12.8 4.5 1.3 (0.6) % of revenue 42% 33% 22% 9% 4% (2%) Lines in service 290,983 237,458 186,156 141,035* 50,551 20,108 - ---------------------------- ---------------- --------------- --------------- ---------------- -------------- --------------- * Includes 48,256 lines acquired.
Revenue Components: Telecom Services' local services revenue for the three months ended September 30, 1998, was $44.1 million, an increase of $41.0 million compared to $3.1 million recorded for the same period in 1997, and compared to $29.5 million recorded for the prior quarter. Long distance revenue for the quarter ended September 30, 1998 was $6.7 million, an increase of $0.9 million compared to $5.8 million recorded in the second quarter of 1998. There is no comparable long distance revenue in 1997, as the company had not launched this service in the corresponding quarter last year. Special access service (dedicated transport) revenue was $20.2 million for the quarter ended September 30, 1998, an increase of $5.9 million over the same period last year. Telecom Services' local, long distance, and special access revenue combined, were $71.0 million for the current quarter, compared to $17.4 million for the same period last year for a $53.6 million increase. On a sequential basis this combination of core Telecom revenue increased $18.2 million from $52.8 million for the three months ended June 30, 1998, a 34 percent increase. - more - ICG NETCOM 3rd Quarter 1998 Results Page - 3 - Switched terminating (terminating long distance) access revenue was $11.6 million for the three months ended September 30, 1998, compared to $19.1 million for the corresponding period in 1997. When compared sequentially to the second quarter of 1998, switched terminating access revenue was relatively flat, compared to $11.4 million reported for the three months ended June 30, 1998. The company anticipates reductions in revenue from switched terminating access due to initiatives to raise prices and free up switch port capacity for higher margin dial tone services.
Telecom Services Revenue Components ($ in millions) - --------------------------------------- ---------------- ------------- -------------- --------------- Three months ended 9/30/98 9/30/97 $ (CHANGE) % (CHANGE) - --------------------------------------- ---------------- ------------- -------------- --------------- Local $44.1 3.1 $41.0 1,323% - --------------------------------------- ---------------- ------------- -------------- Long distance 6.7 -- 6.7 NA - --------------------------------------- ---------------- ------------- -------------- Special access 20.2 14.3 5.9 41% - --------------------------------------- ---------------- ------------- -------------- Core Telecom revenue 71.0 17.4 53.6 308% - --------------------------------------- ---------------- ------------- -------------- Switched terminating access 11.6 19.1 (7.5) (39%) - --------------------------------------- ---------------- ------------- -------------- Total Telecom revenue 82.6 36.5 46.1 126% - --------------------------------------- ---------------- ------------- -------------- ---------------
ICG's Network Services' revenue was $14.6 million for the third quarter of 1998, compared to $16.4 million reported for the same quarter last year. The company's Satellite Services business generated revenue of $9.4 million for the three months ended September 30, 1998, compared to $7.6 million reported for the third quarter last year. Satellite Services' MarineSat Communications, Inc. (mobile satellite communications) was recently sold and the company expects the sale of Nova-Net Communications, Inc. (VSAT) to close during the fourth quarter of 1998. - more - ICG NETCOM 3rd Quarter Results Page - 4 - Total Operating Costs and SG&A Expenses: Total operating costs for the quarter ended September 30, 1998 were $64.7 million, compared to $52.6 million recorded for the corresponding quarter last year. The increase in these costs was primarily attributable to the increase in local services and the addition of network operating costs. Selling, general and administrative ("SG&A") expenses for the three months ended September 30, 1998 were $45.4 million, compared to $39.2 million reported for the same three-month period in 1997. As a percentage of total revenue, the company's SG&A expenses for the current reported quarter were 43 percent, compared to 50 percent for the prior quarter, and 65 percent for the third quarter of 1997. ICG anticipates that this relationship of total SG&A expenses to total revenue will continue to improve. Discontinued Operations: The company's "800/888/900" inbound service bureau business (Zycom) announced plans to wind down and ultimately discontinue operations, primarily due to the loss of a major customer. For the current quarter, Zycom generated a net loss of $1.5 million, compared to a net loss of $0.7 million for the three months ended September 30, 1997. During the third quarter, the company took steps to become better focused on its core business strategy - delivering a wide range of competitive telecommunications solutions to small and medium-sized business end users. The company has initiated plans to discontinue certain operations not associated with this strategy. Today, ICG is announcing plans to dispose of Netcom's businesses and non-core assets which will not be used in future Telecom operations. The company's plan of disposal consists of the sale of these businesses and assets to one or more third parties in one or more transactions over the next twelve months. ICG expects to record a gain on the sale, and has commenced an active plan to locate a buyer. - more - ICG NETCOM 3rd Quarter 1998 Results Page - 5 - Netcom's total revenue increased $0.4 million to $40.8 million, compared to $40.4 million posted for the second quarter of 1998. This marked Netcom's first sequential revenue increase in 1998. Netcom generated a net loss of $13.9 million for the three months ended September 30, 1998, compared to a net loss of $6.8 million for the third quarter of 1997, and a net loss of $10.6 million for the prior quarter (second quarter 1998). At the end of the third quarter 1998, Netcom provided Internet services to 501,631 subscribers, compared to 511,806 subscribers at the end of the second quarter of 1998. The decline in dial-up subscribers accounted for this reduction. During the third quarter Netcom began marketing initiatives intended to stabilize and then grow its dial-up customer base. The second-to-third quarter (1998) sequential rate of dial-up subscriber reductions improved to 3 percent, compared to a 4 percent first-to-second quarter sequential dial-up subscriber decline. In accordance with Generally Accepted Accounting Principles ("GAAP"), ICG has reclassified its financial statements to present the operations of Zycom and Netcom as discontinued for all historical periods. Net Losses: Loss from discontinued operations, including an accrual of $1.2 million for the estimated loss on disposal of Zycom, was $16.6 million for the three months ended September 30, 1998, compared to a net loss of $7.5 million for the corresponding period in 1997. Depreciation and amortization for the three months ended September 30, 1998 was $24.9 million, an increase of $11.4 million compared to the same period in 1997. The increase in depreciation and amortization expense is primarily attributable to increased capital expenditures. Interest expense and interest income for the three months ended September 30, 1998 were $46.0 million and $8.2 million, respectively, compared to $28.8 million and $5.4 million for the same period last year. Minority interest and preferred dividends were $14.0 million for the three months ended September 30, 1998, compared to $10.1 million recorded in the third quarter of 1997. - more - ICG NETCOM 3rd Quarter 1998 Results Page - 6 - ICG reported a net loss of $96.7 million for the three months ended September 30, 1998, compared to a net loss of $86.9 million recorded for the corresponding period in 1997. The company's loss from continuing operations was $80.1 million for the current quarter, compared to a $79.4 million loss recorded for the third quarter of 1997. Net loss per share for the quarters ended September 30, 1998 and 1997 was $2.12 and $2.05, respectively. Net loss per share from continuing operations for the third quarter of 1998 was $1.76, compared to $1.87 for the corresponding period in 1997. Resources and Capital Expenditures: ICG had $470.4 million in cash, cash equivalents and short-term investments at September 30, 1998. The company also had $18.9 million of restricted cash at September 30, 1998. The company's capital expenditures of continuing operations for the three months and nine months ended September 30, 1998 were $107.1 million and $260.0 million, respectively. Total capital expenditures (including discontinued operations) for the three months and nine months ended September 30, 1998, were $112.1 million and $280.3 million, respectively. Operations: At September 30, 1998, the company was co-located in 47 central ILEC offices, compared to 32 central offices at the end of 1997. At September 30, 1998, ICG had 3,995 operational fiber route miles (with another 406 miles under construction), compared to 3,043 miles at December 31, 1997. ICG had 36 operational switches at the end of the third quarter of 1998, of which 21 were voice switches and 15 were data switches. The company also increased its buildings connected, reaching 4,901 buildings at the end of the current quarter, compared to 2,321 buildings at December 31, 1997. About ICG Netcom: ICG Netcom is the brand name for products and services from ICG Communications, Inc. (NASDAQ: ICGX) and ICG's subsidiary, NETCOM On-Line Communication Services, Inc. The combined entity is a leading integrated communications provider (ICP) offering high-quality - more - ICG NETCOM 3rd Quarter 1998 Results Page - 7 - telecommunications services. Headquartered in Englewood, CO., ICG has extensive switched fiber-optic networks and offers local, long distance and enhanced telephony and data services in its primary markets: California, Ohio, Colorado, its southeastern markets (Louisville, KY; Nashville, TN; Birmingham, AL; Charlotte, NC; and Atlanta, GA); and, in Texas through its strategic alliance with CSW/ICG ChoiceCom L. P. which the company recently announced an agreement to purchase 100 percent of the partnership's interest in San Antonio, Dallas, Austin, Houston and Corpus Christi. At September 30, 1998, ICG had 3,251 full time employees. ### Information and statements contained in this press release contain, expressed or implied, forward-looking disclosures that are based on the beliefs of management as well as assumptions made based on information currently available to management. These forward-looking statements and information involve risks and uncertainty, including, but not limited to, future demand for the company's services, general economic conditions, government regulations, competition and customer strategies, capital deployment, the impact of pricing and other risks and uncertainties. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. These risks are detailed from time to time in various reports filed by ICG with the SEC, including Form 10-K filed by ICG for the fiscal year ended December 31, 1997, Forms 10-Q filed for the quarters ended March 31 and June 30, 1998, and Form 10-Q to be filed for the current quarter ended September 30, 1998. Attachments: Key Operating Statistics Consolidated Statements of Operations Consolidated Balance Sheet ICG NETCOM 3rd Quarter 1998 Results Page - 8 - Key Operating Statistics
- ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- As of, Sept 30, June 30, March 31, Dec. 31, Sept 30, June 30, Telecom Services 1998 1998 1998 1997 1997 1997 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Dial tone lines in service 290,983 237,458 186,156 141,035 50,551 20,108 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Fiber route miles Operational 3,995 3,812 3,194 3,043 3,021 2,898 Under construction 406 -- -- -- -- -- - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Fiber strand miles Operational 127,756 124,642 118,074 111,435 109,510 101,788 Under construction 13,930 -- -- -- -- -- - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Wireless miles 415 511 511 511 511 511 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Buildings connected * On network 684 665 637 596 590 560 Hybrid 4,217 3,733 3,294 1,725 1,726 1,704 --------------- -------------- --------------- ------------- ------------- ------------- Total buildings connected 4,901 4,398 3,931 2,321 2,316 2,264 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Customer circuits in service(VGEs) 1,331,510 1,250,479 1,171,801 1,111,697 1,006,916 917,656 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Switches Voice 21 20 20 19 18 17 Data 15 15 15 15 15 15 --------------- -------------- --------------- ------------- ------------- ------------- Total switches 36 35 35 34 33 32 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Switched minutes of use 513 516 639 660 788 742 (MOU) (in millions)** - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Internet Services - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Web hosting/dedicated subs 23,089 18,638 14,976 12,275 10,630 9,070 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Ave. mo. revenue per sub $26.52 25.87 25.12 25.01 24.24 23.95 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- Satellite Services - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- VSATs 966 928 921 957 934 895 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- ------------- C-Band installations 69 66 59 57 54 57 - ---------------------------------- --------------- -------------- --------------- ------------- ------------- -------------
* Beginning in the first quarter of 1998, buildings connected represents both dial tone and special access connectivity. ** Based on three-month periods. ICG Netcom 3rd Quarter 1998 Results Page -9- 11/14/98 Press release attachment CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands except per share data) Year-over-year comparison --------------------------------- THREE MONTHS ENDED, -------------------- Revenue 30-Sep-98 30-Sep-97 % Change -------- --------- ---------- Telecom services Local services $ 44,068 3,125 1310% Long distance 6,675 - NA Special access 20,213 14,355 41% Switched terminating access 11,611 19,063 (39%) ------- ------- Total Telecom services 82,567 36,543 126% Network services (FOTI) 14,550 16,432 (11%) Satellite services 9,350 7,640 22% ------- ------- Total revenue 106,467 60,615 76% Operating costs Telecom services (48,145) (35,215) 37% Network services (FOTI) (12,177) (13,151) (7%) Satellite services (4,358) (4,236) 3% ------- ------- Total operating costs (64,680) (52,602) 23% Selling, general and administrative (45,435) (39,187) 16% ------- ------- EBITDA (before nonrecurring charges) (3,648) (31,174) (88%) Depreciation and amortization (24,883) (13,517) 84% Net gain (loss) on disposal of long-lived assets 814 (1,354) (160%) Restructuring costs - - NA ------- ------- Operating loss (27,717) (46,045) (40%) Interest expense (45,982) (28,834) 59% Interest income 8,196 5,382 52% Other, net (547) 237 (331%) ------- ------- Loss from continuing operations before income taxes and minority interest (66,050) (69,260) (5%) Income tax expense (45) - NA Minority interest & preferred dividends on preferred securities of subsidiaries (13,987) (10,112) 38% ------- ------- Loss from continuing operations (80,082) (79,372) 1% Loss from discontinued operations (16,582) (7,502) 121% ------- ------- Net loss (96,664) (86,874) 11% ======= ======= Net loss per share from continuing operations - basic and diluted (1.76) (1.87) (6%) ======= ======== Net loss per share - basic and diluted (2.12) (2.05) 3% ======= ======== Weighted average number of shares outstanding - basic and diluted 45,588 42,359 CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands except per share data) Sequential quarter comparison --------------------------------- THREE MONTHS ENDED, -------------------- Revenue 30-Sep-98 30-Jun-98 % Change -------- --------- ---------- Telecom services Local services $ 44,068 29,507 49% Long Distance 6,675 5,761 16% Special access 20,213 17,543 15% Switched terminating access 11,611 11,404 2% ------- ------- Total Telecom services 82,567 64,215 29% Network services (FOTI) 14,550 14,759 (1%) Satellite services 9,350 11,683 (20%) ------- ------- Total revenue 106,467 90,657 17% Operating costs Telecom services (48,145) (43,310) 11% Network services (FOTI) (12,177) (12,590) (3%) Satellite services (4,358) (5,869) (26%) ------- ------- Total operating costs (64,680) (61,769) 5% Selling, general and administrative (45,435) (45,156) 1% ------- ------- EBITDA (before nonrecurring charges) (3,648) (16,268) (78%) Depreciation and amortization (24,883) (22,835) 9% Net gain (loss) on disposal of long-lived assets 814 7 11529% Restructuring costs - (553) (100%) ------- ------- Operating loss (27,717) (39,649) (30%) Interest expense (45,982) (41,521) 11% Interest income 8,196 8,490 (3%) Other, net (547) (3,160) (83%) ------- ------- Loss from continuing operations before income taxes and minority interest (66,050) (75,840) (13%) Income tax expense (45) - NA Minority interest & preferred dividends on preferred securities of subsidiaries (13,987) (13,595) 3% ------- ------- Loss from continuing operations (80,082) (89,435) (10%) Loss from discontinued operations (16,582) (11,401) 45% ------- ------- Net loss (96,664) (100,836) (4%) ======= ======= Net loss per share from continuing operations - basic and diluted (1.76) (1.99) (12%) ======= ======== Net loss per share - basic and diluted (2.12) (2.25) (6%) ======= ======== Weighted average number of shares outstanding - basic and diluted 45,588 44,865 ICG Netcom 3rd Quarter 1998 Results Page -10- 11/4/98 Press release attachment CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands except per share data) NINE MONTHS ENDED, -------------------- Revenue 30-Sep-98 30-Sep-97 % Change -------- --------- ---------- Telecom services Local services $ 96,637 4,295 2150% Long Distance 17,534 - NA Special access 53,883 39,935 35% Switched terminating access 37,215 57,407 (35%) ------- ------- Total Telecom services 205,269 101,637 102% Network services (FOTI) 40,740 50,059 (19%) Satellite services 29,982 22,306 34% ------- ------- Total revenue 275,991 174,002 59% Operating costs Telecom services (137,113) (104,135) 32% Network services (FOTI) (35,632) (40,569) (12%) Satellite services (15,219) (12,189) 25% ------- ------- Total operating costs (187,964) (156,893) 20% Selling, general and administrative (132,917) (110,183) 21% ------- ------- EBITDA (before nonrecurring charges) (44,890) (93,074) (52%) Depreciation and amortization (61,321) (37,198) 65% Net gain (loss) on disposal of long-lived assets 316 (1,035) (131%) Restructuring costs (553) - NA ------- ------- Operating loss (106,448) (131,307) (19%) Interest expense (121,974) (82,290) 48% Interest income 22,188 17,284 28% Other, net (4,028) (36) 11089% ------- ------- Loss from continuing operations before income taxes and minority interest (210,262) (196,349) 7% Income tax expense (45) - NA Minority interest & preferred dividends on preferred securities of subsidiaries (40,774) (24,981) 63% ------- ------- Loss from continuing operations (251,081) (221,330) 13% Loss from discontinued operations (48,174) (28,285) 70% ------- ------- Net loss (299,255) (249,615) 20% ======= ======= Net loss per share from continuing operations - basic and diluted (5.59) (5.25) 6% ======= ======== Net loss per share - basic and diluted (6.66) (5.92) 13% ======= ======== Weighted average number of shares outstanding - basic and diluted 44,922 42,159 ICG Netcom 3rd Quarter 1998 Results Page -11- 11/4/98 Press release attachment CONSOLIDATED BALANCE SHEETS (unaudited) ($ in thousands) SEPTEMBER 30, DECEMBER 31, ASSETS 1998 1997 ------------ ---------- ------------ Cash, cash equivalents and $ 470,418 294,483 short-term investments Receivables, net 125,017 81,118 Property and equipment 963,649 736,700 Accumulated depreciation (158,993) (105,584) ---------- ---------- Net property and equipment 804,656 631,116 Goodwill, net 109,960 77,562 Deferred financing costs, net 37,374 23,196 Restricted cash 18,889 24,649 Deposits and other assets, net 59,589 40,254 Net assets of discontinued operations held for sale 78,254 76,092 ---------- ---------- Total assets 1,704,157 1,248,470 ========== ========== LIABILITIES AND STOCKHOLDERS' DEFICIT: ------------------------------- Accounts payable and accrued liabilities $ 152,011 120,354 Capital leases 64,903 72,576 Debt 1,553,144 892,352 ---------- ---------- Total liabilities 1,770,058 1,085,282 ---------- ---------- Redeemable preferred securities of subsidiaries 454,192 420,171 Stockholders' deficit: Common stock 596 749 Additional paid-in capital 570,033 533,541 Accumulated deficit (1,090,672) (791,417) Accumulated other comprehensive income (loss) (50) 144 ---------- ---------- Total stockholders' deficit (520,093) (256,983) ---------- ---------- Total liabilities and stockholders' deficit $ 1,704,157 1,248,470 ========== ========== -----END PRIVACY-ENHANCED MESSAGE-----