-----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, HeEbiQZFHgCtQ2lQPQocSraYnbCmQK9zRDb24MwS+2z+SVfIHqMBjXx+XxD6Dbqh 2ZxvKT6tmXy/GvQAuA2txA== 0000950120-99-000080.txt : 19990301 0000950120-99-000080.hdr.sgml : 19990301 ACCESSION NUMBER: 0000950120-99-000080 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990223 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG HOLDINGS CANADA CO CENTRAL INDEX KEY: 0001013240 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841342022 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11965 FILM NUMBER: 99552091 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: PO BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 8004145000 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O OX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80112 FORMER COMPANY: FORMER CONFORMED NAME: ICG COMMUNICATIONS INC DATE OF NAME CHANGE: 19960430 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: 99552092 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 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG HOLDINGS INC CENTRAL INDEX KEY: 0001001131 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: 033-96540 FILM NUMBER: 99552093 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80155-6742 BUSINESS PHONE: 3034145000 MAIL ADDRESS: STREET 1: P O BOX 6742 STREET 2: SUITE 1610 CITY: ENGLEWOOD STATE: CO ZIP: 80155-6742 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG FUNDING LLC CENTRAL INDEX KEY: 0001049902 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 841434980 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-40495-01 FILM NUMBER: 99552094 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P.O. BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3034145000 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O BOX 6742 CITY: ENGELWOOD STATE: CO ZIP: 80155-6742 8-K 1 FORM 8-K 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) February 26, 1999 ----------------- (February 23, 1999) ------------------- ICG COMMUNICATIONS, INC. ----------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 1-11965 84-1342022 ----------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) 161 Inverness Drive West, Englewood, Colorado 80112 ----------------------------------------------------------------- (Address of principal executive offices) ICG HOLDINGS (CANADA) CO. ---------------------------------------------------------------- (Exact name of registrant as specified in charter) Canada 1-11052 Not Applicable ---------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) 161 Inverness Drive West, Englewood, Colorado 80112 ----------------------------------------------------------------- (Address of principal executive offices) ICG HOLDINGS (CANADA), INC. 1710-1177 West Hastings Street, Vancouver, British Columbia V6E 2L3 ------------------------------------------------------------------- (Former name and former address, if changed since last report.) 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) ICG FUNDING, LLC ----------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 333-40495 84-1434980 ----------------------------------------------------------------- (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 and (303) 414-5000 --------------------------------- ITEM 5. OTHER EVENTS. ------ ------------ In a press release dated February 23, 1999, ICG Communications, Inc., a Delaware corporation (the "Corporation"), announced its earnings information and results of operations for the Corporation's 1998 fourth quarter and year end. A copy of the press release is attached. ITEM 7. EXHIBITS. ------ -------- (c) Exhibits -------- 99.1 Press Release, dated February 23, 1999. 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 hereunto duly authorized. Dated: February 25, 1999 ICG COMMUNICATIONS, INC. By:/s/ H. Don Teague ------------------------------ H. Don Teague Executive Vice President, General Counsel and Secretary ICG HOLDINGS (CANADA) CO. 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 ICG FUNDING, LLC By:/s/ H. Don Teague ------------------------------ H. Don Teague Executive Vice President, General Counsel and Secretary EXHIBIT INDEX ------------- Exhibit ------- 99.1 Press Release, dated February 23, 1999. EX-99 2 EXHIBIT 99.1 Exhibit 99.1 [ICG LOGO] FOR IMMEDIATE RELEASE For more information, contact: MEDIA CONTACT: INVESTOR CONTACT: Mark Stutz Steve Smith (303) 414-5529 (303) 414-5350 mark_stutz@icgcomm.com investor_relations@icgcomm.com ICG COMMUNICATIONS, INC. REPORTS POSITIVE EBITDA FOR FOURTH QUARTER AND YEAR END 1998 RESULTS: $4.1 Million Fourth Quarter EBITDA 63,499 Fourth Quarter Lines Added ENGLEWOOD, CO. (FEB. 23, 1999) - ICG Communications, Inc. (Nasdaq: ICGX) ("ICG") today announced, that for the three months ended December 31, 1998, total consolidated EBITDA was $4.1 million, compared to a deficit of $28.1 million reported in the corresponding period in 1997. ICG's consolidated EBITDA deficit for the twelve-month period ended December 31, 1998 was $40.8 million compared to a deficit of $121.2 million for 1997. (EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and non-recurring charges.) Total revenue for the three months and twelve months ended December 31, 1998 was $121.6 million and $397.6 million, respectively, compared to $71.0 million and $245.0 million reported in 1997. For the current quarter, ICG's revenue increased 71 percent when compared to the fourth quarter of 1997. "We are pleased to report that ICG achieved its goal of reaching the positive EBITDA milestone before year end," said J. Shelby Bryan, ICG's president and chief executive officer. "Our ability to focus on our core business, to better utilize our facilities-based infrastructure, and to control expenses enabled ICG to attain positive EBITDA. We are confident that ICG is positioned to produce sustainable EBITDA profitability throughout 1999 and beyond as we continue to build relationships with small and medium-sized businesses and Internet service providers." ICG press release, 2/23/99, page 2 At December 31, 1998, ICG had 354,482 local lines in service, an increase of 63,499 lines compared to September 30, 1998. During the fourth quarter ICG provisioned 58,146 local lines and added 5,353 local lines with the Texas-based ChoiceCom partnership rollup. ICG's business strategy is to provide high-quality local, long distance and enhanced telephony and data services to small and medium-sized businesses in California, Colorado, Ohio, Texas, and parts of the southeastern United States. The company also provides high-speed network services to Internet service providers (ISPs) using its nationwide data network with 236 points of presence (POPs). REVENUE COMPONENTS: ICG's Telecom services revenue grew 106 percent to $98.0 million for the three months ended December 31, 1998, compared to $47.7 million recorded during the corresponding period in 1997. Telecom services revenue increased $15.5 million sequentially, or 19 percent, compared to the prior quarter's revenue of $82.6 million. Local services revenue for the three months ended December 31, 1998 was $60.5 million, an increase of $43.5 million, or 257 percent, compared to the same period in 1997. Local services revenue increased $16.4 million, or 37 percent, compared to $44.1 million recorded in the prior quarter. Long distance revenue for the current quarter was $5.2 million and decreased sequentially $1.5 million, primarily due to a revenue reclassification and resale line terminations. Special access service (dedicated transport) revenue was $20.6 million for the quarter ended December 31, 1998, an increase of 33 percent, or $5.1 million, over the same period last year. Switched terminating access (terminating long distance) revenue was $11.8 million for the three months ended December 31, 1998, compared to $15.3 million for the corresponding period in 1997. This decrease, as expected, was the result of the company's initiatives to raise prices. ICG press release, 2/23/99, page 3 TELECOM SERVICES REVENUE COMPONENTS ($ IN MILLIONS) - ----------------------- ---------- -------- ---------- --------- ----------- THREE MONTHS ENDED 12/31/98 9/30/98 6/30/98 3/31/98 TOTAL 1998 - ----------------------- ---------- -------- ---------- --------- ----------- LOCAL SERVICES $60.5 44.1 29.5 23.1 157.2 LONG DISTANCE 5.2 6.7 5.8 5.1 22.7 SPECIAL ACCESS 20.6 20.2 17.5 16.1 74.4 SWITCHED TERMINATION 11.8 11.6 11.4 14.2 49.0 - ----------------------- ---------- -------- ---------- --------- ----------- TOTAL TELECOM REV. 98.0 82.6 64.2 58.5 303.3 ======================= ========== ======== ========== ========= =========== TELECOM SERVICES REVENUE COMPONENTS ($ IN MILLIONS) - ----------------------- ------------- THREE MONTHS ENDED Total 1997 - ----------------------- ------------- LOCAL SERVICES 21.3 LONG DISTANCE -- SPECIAL ACCESS 55.4 SWITCHED TERMINATION 72.7 - ----------------------- ------------- TOTAL TELECOM REV. 149.4 ======================= ============= ICG's Network services generated $13.1 million of revenue while the company's Satellite services business contributed revenue of $10.5 million for the quarter ended December 31, 1998. IMPROVING CORE TELECOM OPERATING MARGINS: Telecom services gross operating margins (revenue less operating costs) continued to improve throughout 1998. ICG's core telephone business generated $47.9 million of gross operating margins for the three months ended December 31, 1998. The improvement in gross operating margin was attributable to increases in higher margin revenue and better network utilization. TELECOM SERVICES GROSS OPERATING MARGINS: ($ in millions) - ---------------------- ----------- ----------- ---------- ---------- ----------- THREE MONTHS ENDED 12/31/98 9/30/98 6/30/98 3/31/98 12/31/97 - ---------------------- ----------- ----------- ---------- ---------- ----------- Revenue $98.0 82.6 64.2 58.5 47.7 Operating costs (50.1) (48.1) (43.3) (45.7) (43.2) ----------- ----------- ---------- ---------- ----------- Gross margin 47.9 34.5 20.9 12.8 4.5 % of revenue 49% 42% 33% 22% 9% - ---------------------- ----------- ----------- ---------- ---------- ----------- TOTAL OPERATING COSTS AND SG&A: Total operating costs for the quarter ended December 31, 1998 were $66.7 million, compared to $61.0 million recorded for the corresponding quarter last year. ICG's gross operating margin for the current quarter was $54.9 million, or 45 percent of total revenue compared to 14 percent for the fourth quarter of 1997. ICG press release, 2/23/99, page 4 Selling, general and administrative ("SG&A") expenses for the three months ended December 31, 1998 were $50.8 million, compared to $38.1 million recorded for the same three-month period in 1997. SG&A as a percentage of total revenue was under 42 percent for the fourth quarter of 1998, compared to 54 percent last year. NET LOSSES: Depreciation and amortization for the three and twelve months ended December 31, 1998 was $40.2 million and $101.5 million, respectively. Interest expense for the three and twelve months ended December 31, 1998 was $48.2 million and $170.1 million, respectively. Net loss for the three and twelve months ended December 31, 1998, was $118.8 million and $418.0 million, respectively, compared to net losses of $111.1 million and $360.7 million recorded for the corresponding periods in 1997. Net loss from continuing operations for the three and twelve months ended December 31, 1998, was $99.2 million and $350.3 million, respectively, compared to net losses of $99.9 million and $321.3 recorded for the same periods in 1997. Loss per share for the quarter and year ended December 31, 1998 was $2.58 and $9.25, respectively. Loss per share from continuing operations for the quarter and year ended December 31, 1998 was $2.16 and $7.75, respectively. RESOURCES AND CAPITAL EXPENDITURES: ICG had $262.8 million in cash, cash equivalents and short-term investments at December 31, 1998. ICG recently announced the sale of its Netcom subsidiary's U.S. and international operational assets for approximately $245 million and $40 million, respectively. On February 17, 1999, the company closed the U.S. sale and anticipates closing the international transaction prior to the end of the first quarter of 1999. The company's capital expenditures for the quarter ended December 31, 1998 were $108.9 million. Total capital expenditures for the twelve months ended December 31, 1998 were $368.9 million. ICG press release, 2/23/99, page 5 OPERATIONS: At December 31, 1998, ICG had 4,255 operational fiber route miles (with another 625 miles under construction), compared to 3,043 miles at December 31, 1997. The company increased its buildings connected 71 percent, reaching 5,397 buildings at the end of 1998, compared to 3,153 buildings on December 31, 1997. ICG continued to add switching capacity to its network and had 44 switches at the end of the fourth quarter in 1998, of which 28 were voice switches and 16 were data switches. This compares to 34 switches (19 voice and 15 data) at the end of 1997. ABOUT ICG COMMUNICATIONS: ICG Communications, Inc. (NASDAQ: ICGX), headquartered in Englewood, Colorado, is a leading integrated communications provider (ICP) offering high-quality telecommunications services (local, long distance and enhanced telephony and data services) to small and medium-sized businesses in California, Colorado, Ohio, Texas, and parts of the southeastern United States. ICG also provides high-speed network services to Internet Service Providers (ISPs) using its nationwide data network. At December 31, 1998, ICG had 3,415 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, 1998, JUNE 30, 1998 AND SEPTEMBER 30, 1998; AND FORM 10-K TO BE FILED FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998. Attachments: Key Operating Statistics Consolidated Statements of Operations Consolidated Balance Sheet ICG press release, 2/23/99, page 6 [ICG LOGO] KEY OPERATING STATISTICS - ------------------------ ---------- ----------- ---------- ---------- --------- AS OF, DEC. 31, SEPT 30, JUNE 30, MARCH 31, DEC. 31, TELECOM SERVICES 1998 1998 1998 1998 1997 - ------------------------ ---------- ----------- ---------- ---------- --------- DIAL TONE LINES IN SERVICE 354,482 290,983 237,458 186,156 141,035 - ------------------------ ---------- ----------- ---------- ----------- --------- FIBER ROUTE MILES Operational 4,255 3,995 3,812 3,194 3,043 Under construction 625 -- -- -- -- - ------------------------ ---------- ----------- ---------- ----------- --------- FIBER STRAND MILES Operational 134,152 127,756 124,642 118,074 111,435 Under construction 15,284 -- -- -- -- - ------------------------ ---------- ----------- ---------- ----------- --------- BUILDINGS CONNECTED On network 777 684 665 637 626 Hybrid 4,620 4,217 3,733 3,294 2,527 ---------- ----------- ---------- ----------- --------- Total buildings connected 5,397 4,901 4,398 3,931 3,153 - ------------------------ ---------- ----------- ---------- ----------- --------- SWITCHES Voice 28 21 20 20 19 Data 16 15 15 15 15 ---------- ----------- ---------- ----------- --------- Total switches 44 36 35 35 34 - ------------------------ ---------- ----------- ---------- ----------- --------- CO-LOCATIONS WITH ILECS 59 47 45 35 32 - ------------------------ ---------- ----------- ---------- ----------- --------- SATELLITE SERVICES - ------------------------ ---------- ----------- ---------- ----------- --------- C-BAND INSTALLATIONS 76 69 66 59 57 - ------------------------ ---------- ----------- ---------- ----------- --------- * Based on three-month periods. ICG Press Release, 2/23/99, Page 7 (ICG LOGO) CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands except per share data) THREE MONTHS ENDED, TWELVE MONTHS ENDED, ----------------------- -------------------- Revenue 31-Dec-98 31-Dec-97 % Change 31-Dec-98 31-Dec-97 ---------- --------- --------- --------- ---------- Telecom services Local services $ 60,457 16,957 256.5% $ 157,094 21,252 Long distance 5,160 - NA 22,694 - Special access 20,606 15,500 32.9% 74,489 55,435 Switched terminating access 11,825 15,264 (22.5%) 49,040 72,671 ---------- --------- ---------- --------- Total Telecom services 98,048 47,721 105.5% 303,317 149,358 Network services (FOTI) 13,111 15,619 (16.1%) 53,851 65,678 Satellite services 10,469 7,680 36.3% 40,451 29,986 ---------- --------- ---------- --------- TOTAL REVENUE 121,628 71,020 71.3% 397,619 245,022 Operating costs Telecom services (50,147) (43,203) 16.1% (187,260) (147,338) Network services (FOTI) (11,689) (13,342) (12.4%) (47,321) (53,911) Satellite services (4,889) (4,489) 8.9% (20,108) (16,678) ---------- --------- ---------- ---------- Total operating costs (66,725) (61,034) 9.3% (254,689) (217,927) Selling, general and administrative (50,766) (38,071) 33.3% (183,683) (148,254) ---------- --------- ---------- ---------- EBITDA (before nonrecurring charges) 4,137 (28,085) (114.7%) (40,753) (121,159) Depreciation and amortization (40,224) (19,303) 108.4% (101,545) (56,501) Net gain (loss) on disposal of long-lived assets (4,371) 792 (651.9%) (4,055) (243) Restructuring costs (1,786) - NA (2,339) - Provision for impairment of long-lived assets - (9,261) (100.0%) - (9,261) ---------- --------- ---------- ---------- Operating loss (42,244) (55,857) (24.4%) (148,692) (187,164) Interest expense (48,153) (35,230) 36.7% (170,127) (117,520) Interest income 6,226 4,623 34.7% 28,414 21,907 Other, net (624) (322) 93.8% (4,652) (358) ---------- --------- ---------- ---------- Loss before income taxes, minority interest and share of losses (84,795) (86,786) (2.3%) (295,057) (283,135) Income tax expense (45) - NA (90) - Minority interest & preferred dividends on preferred securities of subsidiaries (14,409) (13,136) 9.7% (55,183) (38,117) ---------- --------- ---------- ---------- Loss from continuing operations (99,249) (99,922) (0.7%) (350,330) (321,252) Discontinued operations Loss from discontinued operations (18,965) (11,198) 69.4% (65,938) (39,483) Loss on disposal of discontinued operations (576) - NA (1,777) - ---------- --------- ---------- --------- Net loss (118,790) (111,120) 6.9% (418,045) (360,735) ========== ========= ========== ========= Net loss per share from continuing operations - basic and diluted (2.16) (2.29) -5.7% (7.75) (7.56) Net loss per share from discontinued operations - basic and diluted (0.42) (0.26) 61.5% (1.50) (0.93) ---------- --------- ---------- --------- Net loss per share - basic and diluted (2.58) (2.55) 1.2% (9.25) (8.49) ========== ========= ========== ========= Weighted average number 46,010 43,553 45,194 42,508 of shares outstanding CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands except per share data) Revenue % Change -------- Telecom services Local services 639.2% Long distance NA Special access 34.4% Switched terminating access (32.5%) Total Telecom services 103.1% Network services (FOTI) (18.0%) Satellite services 34.9% TOTAL REVENUE 62.3% Operating costs Telecom services 27.1% Network services (FOTI) (12.2%) Satellite services 20.6% Total operating costs 16.9% Selling, general and administrative 23.9% EBITDA (before nonrecurring charges) (66.4%) Depreciation and amortization 79.7% Net gain (loss) on disposal of long-lived assets 1568.7% Restructuring costs NA Provision for impairment of long-lived assets (100.0%) Operating loss (20.6%) Interest expense 44.8% Interest income 29.7% Other, net 1199.4% Loss before income taxes, minority interest and share of losses 4.2% Income tax expense NA Minority interest & preferred dividends on preferred securities of subsidiaries 44.8% Loss from continuing operations 9.1% Discontinued operations Loss from discontinued operations 67.0% Loss on disposal of discontinued operations NA Net loss 15.9% Net loss per share from continuing operations - basic and diluted 2.5% Net loss per share from discontinued operations - basic and diluted 61.3% Net loss per share - basic and diluted 9.0% Weighted average number of shares outstanding ICG Press Release, 2/23/99, Page 8 CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands except per share data) THREE MONTHS ENDED, ------------------------------------------------ 31-Dec-98 30-Sep-98 30-Jun-98 31-Mar-98 ----------- ------------ ----------- ------------ Revenue Telecom services Local services $ 60,457 44,068 29,507 23,062 Long distance 5,160 6,675 5,761 5,098 Special access 20,606 20,213 17,543 16,127 Switched terminating access 11,825 11,611 11,404 14,200 ----------- ------------ ----------- ------------ Total Telecom services 98,048 82,567 64,215 58,487 Network services (FOTI) 13,111 14,550 14,759 11,431 Satellite services 10,469 9,350 11,683 8,949 ----------- ------------ ----------- ------------ TOTAL REVENUE 121,628 106,467 90,657 78,867 Operating costs Telecom services (50,147) (48,145) (43,310) (45,658) Network services (FOTI) (11,689) (12,177) (12,590) (10,865) Satellite services (4,889) (4,358) (5,869) (4,992) ----------- ------------ ----------- ------------ Total operating costs (66,725) (64,680) (61,769) (61,515) Selling, general and administrative (50,766) (45,435) (45,156) (42,326) ----------- ------------ ----------- ------------ EBITDA 4,137 (3,648) (16,268) (24,974) Depreciation and amortization (40,224) (24,883) (22,835) (13,603) Net gain (loss) on disposal of long-lived assets (4,371) 814 7 (505) Restructuring costs (1,786) - (553) - ----------- ------------ ----------- ------------ Operating loss (42,244) (27,717) (39,649) (39,082) Interest expense (48,153) (45,982) (41,521) (34,471) Interest income 6,226 8,196 8,490 5,502 Other, net (624) (547) (3,160) (321) ----------- ------------ ----------- ------------ Loss before income taxes, minority interest and share of losses (84,795) (66,050) (75,840) (68,372) Income tax expense (45) (45) - - Minority interest & preferred dividends on preferred securities of subsidiaries (14,409) (13,987) (13,595) (13,192) ----------- ------------ ----------- ------------ Loss from continuing operations (99,249) (80,082) (89,435) (81,564) Loss from discontinued operations (18,965) (15,381) (11,401) (20,191) Loss on disposal of discontinued operations (576) (1,201) - - =========== ============ =========== ============ Net loss (118,790) (96,664) (100,836) (101,755) =========== ============ =========== ============ Net loss per share from continuing operations - basic and diluted (2.16) (1.76) (1.99) (1.84) Net loss per share from discontinued operations - basic and diluted (0.42) (0.36) (0.26) (0.46) =========== ============ =========== ============ Net loss per share - basic and diluted (2.58) (2.12) (2.25) (2.30) =========== ============ =========== ============ Weighted average number of shares outstanding 46,010 45,588 44,865 44,311 CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands except per share data) YTD 1998 ------------- Revenue Telecom services Local services $157,094 Long distance 22,694 Special access 74,489 Switched terminating access 49,040 ---------- Total Telecom services 303,317 Network services (FOTI) 53,851 Satellite services 40,451 ---------- TOTAL REVENUE 397,619 Operating costs Telecom services (187,260) Network services (FOTI) (47,321) Satellite services (20,108) ---------- Total operating costs (254,689) Selling, general and administrative (183,683) ---------- EBITDA (40,753) Depreciation and amortization (101,545) Net gain (loss) on disposal of long-lived assets (4,055) Restructuring costs (2,339) ---------- Operating loss (148,692) Interest expense (170,127) Interest income 28,414 Other, net (4,652) ---------- Loss before income taxes, minority interest and share of losses (295,057) Income tax expense (90) Minority interest & preferred dividends on preferred securities of subsidiaries (55,183) ---------- Loss from continuing operations (350,330) Loss from discontinued operations (65,938) Loss on disposal of discontinued operations (1,777) ========== Net loss (418,045) ========== Net loss per share from continuing operations - basic and diluted (7.75) Net loss per share from discontinued operations - basic and diluted (1.50) ========== Net loss per share - basic and diluted (9.25) ========== Weighted average number of shares outstanding 45,194 ICG Press Release, 2/23/99, Page 9 (ICG LOGO) CONSOLIDATED BALANCE SHEETS (unaudited) ($ in thousands) DECEMBER 31, DECEMBER 31, ASSETS: 1998 1997 - ------------- ------------ -------------- Cash, cash equivalents and short-term investments $ 262,831 230,850 Receivables, net 145,138 76,842 Property and equipment, net 930,901 631,454 Other assets, net 286,555 278,294 ------------ ------------ Total assets $1,625,425 $1,217,440 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIT: - --------------------------------------- Accounts payable and accrued liabilities $ 99,490 89,324 Debt 1,599,043 892,352 Capital leases 68,445 72,576 Net current liabilities of discontinued operations 23,272 - ------------ ------------ Total liabilities 1,790,250 1,054,252 ------------ ------------ Redeemable preferred securities of subsidiaries 466,352 420,171 Stockholders' deficit: Common stock 584 749 Additional paid-in capital 577,820 533,541 Accumulated deficit (1,209,462) (791,417) Accumulated other comprehensive (loss) income (119) 144 ------------ ------------ Total stockholders' deficit (631,177) (256,983) ------------ ------------ Total liabilities and stockholders' defici $1,625,425 $1,217,440 ============ ============ Diluted shares (treasury stock method, in thousands) 56,183 43,119 -----END PRIVACY-ENHANCED MESSAGE-----