UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year end December 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Commission File Number 1-11965)
ICG COMMUNICATIONS, INC. EMPLOYEE SAVINGS PLAN
(full title of the plan)
ICG COMMUNICATIONS, INC.
(Name of issuer of the securities held pursuant to the plan)
161 Inverness Drive West
Englewood, Colorado 80112
(Address of principal executive office)
<PAGE>
REQUIRED INFORMATION
Audited financial statements and schedules for the ICG Communications, Inc.
Employee Savings Plan (the "Plan") as prepared in accordance with the financial
reporting requirements of the Employee Retirement Income Security Act of 1974,
as amended, are filed herewith in lieu of an audited statement of financial
condition as of the latest two fiscal years of the plan and an audited statement
of income and changes in plan equity for each of the latest three fiscal years
of the plan.
FINANCIAL STATEMENTS
(A) Financial Statements. The financial statements and schedules referred
to above are filed as part of this annual report and appear immediately
after the signature page hereof.
(B) Exhibit.
(23) Consent of KPMG Peat Marwick LLP.
<PAGE>
ICG Communications, Inc.
Employee Savings Plan
Financial Statements and Schedules
December 31, 1997 and 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Table of Contents
Independent Auditors' Report ........................................ 1
Statements of Net Assets Available for Plan Benefits -
December 31, 1997 and 1996 .................................... 2
Statements of Changes in Net Assets Available for Plan Benefits -
Years Ended December 31, 1997 and 1996......................... 3
Notes to Financial Statements ....................................... 4
Supplemental Schedules
1 Item 27a - Schedule of Assets Held for Investment Purposes -
December 31, 1997 .................................. 13
2 Item 27d - Schedule of Reportable Transactions -
Year Ended December 31, 1997 ......................... 14
<PAGE>
1
Independent Auditors' Report
The Plan Administrators
ICG Communications, Inc. Employee Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the ICG Communications, Inc. Employee Savings Plan (the Plan) as of
December 31, 1997 and 1996, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1997 and 1996, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Denver, Colorado
June 8, 1998
<PAGE>
2
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets 1997 1996
- ------
--------------------- ---------------------
<S> <C> <C>
Investment securities, at fair value (note 5):
Money market funds $ 1,306,255 1,499,913
Mutual funds 8,486,590 4,485,447
Annuity funds - 78,252
ICG common stock 9,402,449 3,179,998
Participant loans 245,608 12,572
--------------------- ---------------------
Total investments 19,440,902 9,256,182
--------------------- ---------------------
Receivables:
Employer contributions (notes 7 and 8) 558,313 414,209
Participant contributions 228,705 91,498
Other 450 -
--------------------- ---------------------
787,468 505,707
--------------------- ---------------------
Total assets 20,228,370 9,761,889
--------------------- ---------------------
Liability
Refunds payable to participants (note 7) - 76,559
--------------------- ---------------------
Net assets available for plan benefits $ 20,228,370 9,685,330
===================== =====================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
3
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years Ended December 31, 1997 and 1996
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---------------------- --------------------
<S> <C> <C>
Additions to net assets attributed to:
Participant contributions $ 5,626,454 2,360,497
Employer contributions 2,922,434 1,357,423
Transfers from affiliated plan (note 3) - 1,562,543
---------------------- --------------------
8,548,888 5,280,463
---------------------- --------------------
Investment income:
Net appreciation of investments, including
realized gains and losses 3,908,252 599,360
Interest and dividends 634,471 177,391
---------------------- --------------------
Net investment income 4,542,723 776,751
---------------------- --------------------
Total additions 13,091,611 6,057,214
Distributions to participants (note 7) (2,548,571) (650,525)
---------------------- --------------------
Net increase in net assets available for plan benefits 10,543,040 5,406,689
Net assets available for plan benefits:
Beginning of year 9,685,330 4,278,641
---------------------- --------------------
End of year $ 20,228,370 9,685,330
====================== ====================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
4
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
(1) Summary of Significant Accounting Policies
(a) General
The ICG Communications, Inc. Employee Savings Plan (the "Plan") was
formed on November 1, 1996 and is intended to be a qualified plan
under the Internal Revenue Code. The Plan was established for the
benefit of employees of ICG Communications, Inc. and subsidiaries
(collectively, "ICG," the "Employer" or the "Company"). The
predecessor plan, IntelCom Group (U.S.A.), Inc. 401(k) Employee
Protection and Savings Plan, was formed on October 1, 1990 and was
merged into the Plan effective November 1, 1996. Contributions to the
Plan by the employer, hereafter referred to as "ICG Common Stock,"
were made in IntelCom Group Inc. common stock, traded on the American
Stock Exchange ("AMEX") and the Vancouver Stock Exchange, through
August 2, 1996 and in ICG Communications, Inc. common stock, traded on
the AMEX, from August 5, 1996 through March 24, 1997. On March 25,
1997, ICG Common Stock ceased trading on the AMEX and began trading on
the Nasdaq National Market System.
(b) Basis of Accounting
The accompanying financial statements have been prepared using the
accrual basis of accounting.
(c) Investments
Mutual funds and ICG Common Stock are recorded at quoted market value.
Annuity funds are recorded at contract value, which represents cost
plus accumulated interest less withdrawals, and approximates fair
value. Money market funds are recorded at cost plus accumulated
interest, which approximates fair value.
Investment transactions are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an arrual basis.
(d) Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000
and to a maximum equal to the lessor of $50,000 or 50 percent of their
vested account balance. Loan terms range from one to five years. The
loans are secured by the balance in the participant's account and bear
interest equal to the Prime Rate upon
<PAGE>
5
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- ------------------------------------------------------------------------------
(1) Summary of Significant Accounting Policies (continued)
the inception of the loan plus one percent. Loans are paid through
bi-weekly payroll deductions.
(e) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
(2) Plan Description
The following brief description of the Plan is provided for general
information purposes only. Participants should refer to the plan document
for more complete information.
(a) Eligibility and Contributions
Employees become eligible to participate in the Plan following 30 days
of employment with the Company and the attainment of age 21. The
normal retirement age is the later of age 65 or the fourth anniversary
of the first day of the Plan year in which the participant commenced
participation in the Plan upon full vesting. Employees covered by
collective bargaining agreements, employees who are nonresident aliens
and temporary employees are not eligible for participation in the
Plan. Participants may contribute between 1% and 15% of eligible
compensation up to the maximum amount allowable under the Internal
Revenue Code ($9,500 in 1997 and 1996). At the election of the
participant, employee accounts are invested in a variety of investment
options managed by the Plan's trustee. The Company makes matching
contributions in ICG Common Stock on the amounts employees contribute
up to 6% of their salary.
<PAGE>
6
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- ------------------------------------------------------------------------------
(2) Plan Description (continued)
(b) Vesting
Employees are 100% vested in their contributions at all times.
Employer contributions and earnings are vested in accordance with the
following schedule:
Years of service Vesting percentage
-------------------- --------------------
Less than 2 -
2 50%
3 75%
4 100%
(c) Distributions and Forfeitures
Participants (or their beneficiaries) can withdraw all or a portion of
their vested account balances upon death, disability, termination of
employment, attainment of age 59-1/2, or termination of the Plan.
Distributions are recorded when paid and are made on a lump sum basis.
Forfeitures due to the participants' withdrawal prior to full vesting
of employer contributions are used to reduce the Company's
contributions.
(d) Administrative Expenses
Administrative expenses of the Plan are paid by the Company.
(e) Plan Trustee and Administrator
Charles Schwab & Co., Inc. is the Plan's trustee and administrator.
(3) Affiliated Plans
During 1996, Fiber Optic Technologies, Inc. ("FOTI"), a subsidiary of the
Company, merged its 401(k) Employee Protection and Savings Plan into the
Company's plan. As the trustee and the investment options for the FOTI plan
were the same as the Company's plan, no changes were made to the allocation
of contributions by FOTI participants upon the merger.
During 1995, Datacom Integration Services Corporation ("DISC"), an
affiliate of the Company, merged its 401(k) Employee Protection and Savings
Plan into the Company's plan. Subsequent to the merger, contributions by
DISC participants were allocated to the
<PAGE>
7
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- ------------------------------------------------------------------------------
(3) Affiliated Plans (continued)
various investment options within the IntelCom Group (U.S.A.), Inc. plan.
Participant account balances at the date of the merger remained invested in
the investment options offered under the DISC plan and were transferred to
investment options offered under the Company's plan in 1997.
On January 21, 1998, the Company completed a merger with NETCOM On-Line
Communication Services, Inc. ("NETCOM"). Effective July 1, 1998, NETCOM's
existing 401(k) employee savings plan will be merged into the Company's
plan. Balances of the NETCOM plan participants prior to the plan merger and
contributions made by the NETCOM plan participants subsequent to the plan
merger will be allocated among the investment options currently available
within the Plan.
(4) Income Taxes
The Internal Revenue Service issued a favorable determination letter dated
May 17, 1995 qualifying the Plan under the provisions of Section 401(k) of
the Internal Revenue Code and exempting the trust from federal income
taxes. The Plan sponsor believes that the Plan is currently designed and is
being operated in compliance with the applicable requirements of the
Internal Revenue Code.
(5) Investments
Investments representing 5% or more of net assets available for plan
benefits at December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Fair value at
December 31,
1997 1996
---------------- ------------------
<S> <C> <C>
Janus Worldwide Fund $ 2,126,988 $ 959,665
PBHG Growth Fund 1,962,816 1,306,098
Janus Fund 1,407,797 683,008
Schwab 1000 Index Fund 1,236,012 -
ICG Common Stock 9,402,449 3,179,998
Schwab Institutional Advantage Money Fund - 1,467,493
</TABLE>
<PAGE>
8
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- ------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (Continued)
<TABLE>
<CAPTION>
Schwab
Maxim Schwab U.S. Institutional Twentieth
Money Treasury Schwab Money Advantage Century
Cash Market Fund Money Fund Market Fund Money Fund Ultra
Investors
Fund
------------- ------------- ------------- -------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 $ 57,828 46,099 - - - 355,669
Additions to net assets attributed to:
Participant contributions - 31,292 88,202 - 37,144 206,377
Employer contributions - - - - - - -
Transfers from affiliated plan - - (4,277) - 500,707 -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized gains
and losses - 1,814 - - - 73,210
Interest and dividends - - - - - - -
Distributions to participants - (17,619) - - (2,850) (84,258)
Net transfers between funds (57,828) (61,586) (51,505) - 932,492 (550,998)
------------- ------------- ------------- -------------- -------------------------
Net increase (decrease) in net assets
available for plan benefits (57,828) (46,099) 32,420 - 1,467,493 (355,669)
------------- ------------- ------------- -------------- -------------------------
Net assets available for plan benefits at
December 31, 1996 $ - - 32,420 - 1,467,493 -
------------- ------------- ------------- -------------- -------------------------
Additions to net assets attributed to:
Participant contributions - - 741,764 - 160,500 -
Employer contributions - - 2,722,175 - - -
Loan repayments - - 3,878 - 1,774 -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized gains
and losses - - - - - -
Interest and dividends - - 3,049 8,049 64,179 -
Distributions to participants - - 105,941 - (638,368) -
Net transfers between funds - - (3,608,877) 402,125 (159,847) -
------------- ------------- ------------- -------------- -------------------------
Net increase (decrease) in net assets
available for plan benefits - - (32,070) 410,174 (571,762) -
------------- ------------- ------------- -------------- -------------------------
Net assets available for plan benefits at
December 31, 1997 $ - - 350 410,174 895,731 -
============= ============= ============= ============== =========================
(Continued)
</TABLE>
<PAGE>
8 (Continued)
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- ------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (Continued)
<TABLE>
<CAPTION>
Maxim
Maxim Maxim U.S. Investment
AIM Maxim Maxim Small-Cap Government Grade
Constellation Small-Cap Growth Aggressive Mortgage Corporate
Fund Index Fund Index Fund Growth Fund Securities Bond Fund
Fund
------------- -------------- ------------- ------------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 311,321 24,839 40,592 29,367 67,398 40,526
Additions to net assets attributed to:
Participant contributions 169,609 20,041 45,357 23,968 15,537 13,619
Employer contributions - - - - - -
Transfers from affiliated plan - - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 60,293 2,916 14,072 8,532 1,896 1,428
Interest and dividends - - - - - -
Distributions to participants (41,000) (4,748) (939) (1,257) (15,138) (3,852)
Net transfers between funds (500,223) (43,048) (99,082) (60,610) (69,693) (51,721)
------------- -------------- ------------- ------------- ------------- -----------
Net increase (decrease) in net assets
available for plan benefits (311,321) (24,839) (40,592) (29,367) (67,398) (40,526)
------------- -------------- ------------- ------------- ------------- -----------
Net assets available for plan benefits at
December 31, 1996 - - - - - -
------------- -------------- ------------- ------------- ------------- -----------
Additions to net assets attributed to:
Participant contributions - - - - - -
Employer contributions - - - - - -
Loan repayments - - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses - - - - - -
Interest and dividends - - - - - -
Distributions to participants - - - - - -
Net transfers between funds - - - - - -
------------- -------------- ------------- ------------- ------------- -----------
Net increase (decrease) in net assets
available for plan benefits - - - - - -
------------- -------------- ------------- ------------- ------------- -----------
Net assets available for plan benefits at
December 31, 1997 - - - - - -
============= ============== ============= ============= ============= ===========
(Continued)
</TABLE>
<PAGE>
8 (Continued)
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- ------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (Continued)
<TABLE>
<CAPTION>
Putnam
Maxim Global Twentieth
Corporate Governmental Century
Bond Fund Income Fund Select Fund
------------- -------------- -------------
<S> <C> <C>
Net assets available for plan benefits at
December 31, 1995 29,045 16,150 -
Additions to net assets attributed to:
Participant contributions 14,025 6,652 1,430
Employer contributions - - -
Transfers from affiliated plan - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 3,893 2,011 30
Interest and dividends - - -
Distributions to participants (2,649) (336) -
Net transfers between funds (44,314) (24,477) (1,460)
------------- --------------- ------------
Net increase (decrease) in net assets
available for plan benefits (29,045) (16,150) -
------------- --------------- ------------
Net assets available for plan benefits at
December 31, 1996 - - -
------------- --------------- ------------
Additions to net assets attributed to:
Participant contributions - - -
Employer contributions - - -
Loan repayments - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses - - -
Interest and dividends - - -
Distributions to participants - - -
Net transfers between funds - - -
------------- ----------------------------
Net increase (decrease) in net assets
available for plan benefits - - -
------------- ----------------------------
Net assets available for plan benefits at
December 31, 1997 - - -
============= ============================
(Continued)
</TABLE>
<PAGE>
9
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (continued)
<TABLE>
<CAPTION>
Fidelity
Advisor
Growth Maxim AIM Maxim Maxim
Opportunities Stock Index Weingarten Small-Cap Total AIM
Fund Fund Fund Value Fund Return Fund Charter
Fund
------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 $ 175,960 96,862 112,666 4,611 90,731 113,067
Additions to net assets attributed to:
Participant contributions 66,899 56,741 63,857 3,006 32,441 61,644
Employer contributions - - - - - -
Transfers from affiliated plan - - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 30,847 24,159 25,226 639 9,553 24,390
Interest and dividends - - - - - -
Distributions to participants (41,255) (14,349) (7,077) (454) (16,154) (10,549)
Net transfers between funds (232,451) (163,413) (194,672) (7,802) (116,571) (188,552)
------------- ------------- ------------- ------------- ------------- ------------
Net increase (decrease) in net assets
available for plan benefits (175,960) (96,862) (112,666) (4,611) (90,731) (113,067)
------------- ------------- ------------- ------------- ------------- ------------
Net assets available for plan benefits at
December 31, 1996 $ - - - - - -
------------- ------------- ------------- ------------- ------------- ------------
Additions to net assets attributed to:
Participant contributions - - - - - -
Employer contributions - - - - - -
Loan repayments - - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses - - - - - -
Interest and dividends - - - - - -
Distributions to participants - - - - - -
Net transfers between funds - - - - - -
------------- ------------- ------------- ------------- ------------- ------------
Net increase (decrease) in net assets
available for plan benefits - - - - - -
------------- ------------- ------------- ------------- ------------- ------------
Net assets available for plan benefits at
December 31, 1997 $ - - - - - -
============= ============= ============= ============= ============= ============
(Continued)
</TABLE>
<PAGE>
9 (Continued)
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (continued)
<TABLE>
<CAPTION>
Putnam Fidelity
Fund for Advisor Maxim Fidelity
Maxim Value Growth and Equity Putnam Foreign Advisor
Index Fund Income Income Global Equity Fund Overseas
Fund Growth Fund Fund
------------- ------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 31,311 132,412 2,835 159,512 79,902 -
Additions to net assets attributed to:
Participant contributions 16,982 51,656 16,115 66,715 21,043 5,488
Employer contributions - - - - - -
Transfers from affiliated plan - - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 7,184 30,682 1,507 25,837 4,825 242
Interest and dividends - - - - - -
Distributions to participants (1,307) (2,257) (881) (29,726) (15,695) -
Net transfers between funds (54,170) (212,493) (19,576) (222,338) (90,075) (5,730)
------------- ------------- ------------- ------------- ------------- -----------
Net increase (decrease) in net assets
available for plan benefits (31,311) (132,412) (2,835) (159,512) (79,902) -
------------- ------------- ------------- ------------- ------------- -----------
Net assets available for plan benefits at
December 31, 1996 - - - - - -
------------- ------------- ------------- ------------- ------------- -----------
Additions to net assets attributed to:
Participant contributions - - - - - -
Employer contributions - - - - - -
Loan repayments - - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses - - - - - -
Interest and dividends - - - - - -
Distributions to participants - - - - - -
Net transfers between funds - - - - - -
------------- ------------- ------------- ------------- ------------- -----------
Net increase (decrease) in net assets
available for plan benefits - - - - - -
------------- ------------- ------------- ------------- ------------- -----------
Net assets available for plan benefits at
December 31, 1997 - - - - - -
============= ============= ============= ============= ============= ===========
(Continued)
</TABLE>
<PAGE>
9 (Continued)
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (continued)
<TABLE>
<CAPTION>
Profile Profile Profile
Series Series Series
1 2 3
------------- ------------- --------------
<S> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 143,739 194,843 145,891
Additions to net assets attributed to:
Participant contributions 143,998 181,081 107,833
Employer contributions - - -
Transfers from affiliated plan - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 35,521 39,612 24,397
Interest and dividends - - -
Distributions to participants (5,956) (10,607) (12,521)
Net transfers between funds (317,302) (404,929) (265,600)
------------- ------------- --------------
Net increase (decrease) in net assets
available for plan benefits (143,739) (194,843) (145,891)
------------- ------------- --------------
Net assets available for plan benefits at
December 31, 1996 - - -
------------- ------------- --------------
Additions to net assets attributed to:
Participant contributions - - -
Employer contributions - - -
Loan repayments - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses - - -
Interest and dividends - - -
Distributions to participants - - -
Net transfers between funds - - -
-------------- ------------- -------------
Net increase (decrease) in net assets
available for plan benefits - - -
-------------- ------------- -------------
Net assets available for plan benefits at
December 31, 1997 - - -
============== ============= =============
(Continued)
</TABLE>
<PAGE>
10
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (continued)
<TABLE>
<CAPTION>
Retirement Global
Profile Profile Bankers Preservation Allocation
Series Series Trust Fund Trust Fund Capital Fund Fund
4 5
------------ --------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 $ 49,808 53,218 32,537 5,977 20,809 57,918
Additions to net assets attributed to:
Participant contributions 29,128 9,173 - - - -
Employer contributions - - - - - -
Transfers from affiliated plan - - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 5,073 4,388 103,249 - (223) 2,847
Interest and dividends - - 1,882 191 - -
Distributions to participants (12,632) (2,957) (85,196) (3,478) (16,604) (26,440)
Net transfers between funds (71,377) (63,822) - - - -
------------ --------------- -------------- ------------- -------------- -------------
Net increase (decrease) in net assets
available for plan benefits (49,808) (53,218) 19,935 (3,287) (16,827) (23,593)
------------ --------------- -------------- ------------- -------------- -------------
Net assets available for plan benefits at
December 31, 1996 $ - - 52,472 2,690 3,982 34,325
------------ --------------- -------------- ------------- -------------- -------------
Additions to net assets attributed to:
Participant contributions - - - - - -
Employer contributions - - - - - -
Loan repayments - - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses - - - - 556 3,586
Interest and dividends - - 25,553 - - -
Distributions to participants - - (2,104) - - -
Net transfers between funds - - (75,921) (2,690) (4,538) (37,911)
------------ --------------- -------------- ------------- -------------- -------------
Net increase (decrease) in net assets
available for plan benefits - - (52,472) (2,690) (3,982) (34,325)
------------ --------------- -------------- ------------- -------------- -------------
Net assets available for plan benefits at
December 31, 1997 $ - - - - - -
============ =============== ============== ============= ============== =============
(Continued)
</TABLE>
<PAGE>
10 (Continued)
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (continued)
<TABLE>
<CAPTION>
Vanguard Janus
Basic Volume PBHG International Worldwide
Phoenix Fund Fund Growth Fund Growth Fund Fund
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 139,454 51,855 - - -
Additions to net assets attributed to:
Participant contributions - - 189,917 38,734 155,161
Employer contributions - - - - -
Transfers from affiliated plan - - 271,339 35,830 181,548
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 3,506 4,424 (1,819) (8,911) (55,965)
Interest and dividends - - - 9,157 58,079
Distributions to participants (14,156) (12,489) - - (1,109)
Net transfers between funds - - 846,661 150,924 621,951
-------------- -------------- -------------- -------------- --------------
Net increase (decrease) in net assets
available for plan benefits (10,650) (8,065) 1,306,098 225,734 959,665
-------------- -------------- -------------- -------------- --------------
Net assets available for plan benefits at
December 31, 1996 128,804 43,790 1,306,098 225,734 959,665
-------------- -------------- -------------- -------------- --------------
Additions to net assets attributed to:
Participant contributions - - 1,119,906 283,957 1,086,522
Employer contributions - - - - -
Loan repayments - - 13,492 867 11,681
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 5,923 9,450 (24,338) (16,959) 106,777
Interest and dividends - - 2,380 19,450 146,249
Distributions to participants - - (361,599) (74,119) (342,534)
Net transfers between funds (134,727) (53,240) (93,123) 19,151 158,628
-------------- -------------- -------------- -------------- --------------
Net increase (decrease) in net assets
available for plan benefits (128,804) (43,790) 656,718 232,347 1,167,323
-------------- -------------- -------------- -------------- --------------
Net assets available for plan benefits at
December 31, 1997 - - 1,962,816 458,081 2,126,988
============== ============== ============== ============== ==============
(Continued)
</TABLE>
<PAGE>
10 (Continued)
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (continued)
<TABLE>
<CAPTION>
Schwab Invesco
Founders Janus 1000 Index Industrial
Special Fund Fund Fund Income Fund
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 - - - -
Additions to net assets attributed to:
Participant contributions 26,613 103,988 70,069 35,141
Employer contributions - - - -
Transfers from affiliated plan 25,493 93,546 57,176 33,285
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses (9,971) (78,754) (7,919) (15,853)
Interest and dividends 9,645 76,760 5,081 14,909
Distributions to participants - (1,081) - -
Net transfers between funds 126,739 488,549 284,443 149,159
-------------- -------------- -------------- -------------
Net increase (decrease) in net assets
available for plan benefits 178,519 683,008 408,850 216,641
-------------- -------------- -------------- -------------
Net assets available for plan benefits at
December 31, 1996 178,519 683,008 408,850 216,641
-------------- -------------- -------------- -------------
Additions to net assets attributed to:
Participant contributions 163,285 670,082 683,531 230,792
Employer contributions - - - -
Loan repayments 1,037 3,286 6,686 542
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses (5,848) (23,449) 192,068 20,599
Interest and dividends 44,618 231,638 13,101 54,044
Distributions to participants (33,061) (159,810) (222,012) (55,974)
Net transfers between funds (200) 3,042 153,788 (6,832)
-------------- -------------- -------------- -------------
Net increase (decrease) in net assets
available for plan benefits 169,831 724,789 827,162 243,171
-------------- -------------- -------------- -------------
Net assets available for plan benefits at
December 31, 1997 348,350 1,407,797 1,236,012 459,812
============== ============== ============== =============
(Continued)
</TABLE>
<PAGE>
11
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (continued)
<TABLE>
<CAPTION>
General General General
Account Account Account
Strong Guaranteed Guaranteed Guaranteed
Government MFS Certificate Certificate Certificate
Securities Annuity Fund Fund Fund ICG Common
Fund Funds (36 month) (60 month) (84 month) Stock
------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 $ - 74,586 30,793 1,610 2,029 1,031,220
Additions to net assets attributed to:
Participant contributions 39,874 - 5,549 565 846 -
Employer contributions - - - - - 1,203,222
Transfers from affiliated plan 70,162 - - - - 297,734
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses (1,663) 15,975 - - - 186,260
Interest and dividends 264 - 1,272 49 102 -
Distributions to participants - (12,309) (3,913) (1,189) - (99,958)
Net transfers between funds 132,232 - (33,701) (1,035) (2,977) 561,520
------------- ------------- ------------- ------------- ------------- ------------
Net increase (decrease) in net assets
available for plan benefits 240,869 3,666 (30,793) (1,610) (2,029) 2,148,778
------------- ------------- ------------- ------------- ------------- ------------
Net assets available for plan benefits at
December 31, 1996 $ 240,869 78,252 - - - 3,179,998
------------- ------------- ------------- ------------- ------------- ------------
Additions to net assets attributed to:
Participant contributions 257,410 - - - - -
Employer contributions - - - - - (358,054)
Loan repayments 386 - - - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses 10,063 14,846 - - - 3,614,978
Interest and dividends 21,711 - - - - -
Distributions to participants (75,909) - - - - (1,042,246)
Net transfers between funds 32,204 (93,098) - - - 4,007,773
------------- ------------- ------------- ------------- ------------- ------------
Net increase (decrease) in net assets
available for plan benefits 245,865 (78,252) - - - 6,222,451
------------- ------------- ------------- ------------- ------------- ------------
Net assets available for plan benefits at
December 31, 1997 $ 486,734 - - - - 9,402,449
============= ============= ============= ============= ============= ============
</TABLE>
<PAGE>
11 (Continued)
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(6) Changes in Net Assets Available for Plan Benefits by Investment Alternative
for the Years Ended December 31, 1997 and 1996 (continued)
<TABLE>
<CAPTION>
Unallocated
Unallocated refunds
Participant contributions payable to
loans receivable participants Total
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net assets available for plan benefits at
December 31, 1995 13,499 274,058 (63,906) 4,278,641
Additions to net assets attributed to:
Participant contributions - 86,987 - 2,360,497
Employer contributions - 154,201 - 1,357,423
Transfers from affiliated plan - - - 1,562,543
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses - - - 599,360
Interest and dividends - - - 177,391
Distributions to participants (927) - (12,653) (650,525)
Net transfers between funds - (9,539) - -
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
available for plan benefits (927) 231,649 (12,653) 5,406,689
------------- ------------- ------------- -------------
Net assets available for plan benefits at
December 31, 1996 12,572 505,707 (76,559) 9,685,330
------------- ------------- ------------- -------------
Additions to net assets attributed to:
Participant contributions - 228,705 - 5,626,454
Employer contributions - 558,313 - 2,922,434
Loan repayments (43,629) - - -
Investment income (loss):
Net appreciation (depreciation) of
investments, including realized
gains and losses - - - 3,908,252
Interest and dividends - 450 - 634,471
Distributions to participants 276,665 - 76,559 (2,548,571)
Net transfers between funds - (505,707) - -
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
available for plan benefits 233,036 281,761 76,559 10,543,040
------------- ------------- ------------- -------------
Net assets available for plan benefits at
December 31, 1997 245,608 787,468 - 20,228,370
============= ============= ============= =============
</TABLE>
<PAGE>
12
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- ------------------------------------------------------------------
(7) Refunds Payable to Participants and Employer
In order for the Plan to be qualified and the trust to be exempt from taxes
under the Internal Revenue Code, the Plan must be in compliance with
various non-discrimination tests. The Plan was in compliance with these
tests for 1997. The Plan was not in compliance with certain of these tests
for 1996 and was required to refund employee contributions and vested
employer contributions, as well as related earnings, to highly compensated
employees of $76,559, as defined. For 1996, the Plan was also required to
refund corresponding unvested matching contributions, as well as related
earnings, to the employer of $43,495, which has been recorded in the
financial statements as a reduction of the employer contribution
receivable. The refunds were paid to participants subsequent to December
31, 1996.
(8) Forfeitures
In 1997 and 1996, participants withdrawing from the Plan forfeited balances
of $60,383 and $9,583, respectively. These forfeitures have been recorded
in the financial statements as a reduction of the employer contribution
receivable for 1997 and 1996.
<PAGE>
13
ICG COMMUNICATIONS, INC. Schedule 1
EMPLOYEE SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
shares, face Fair
value or units Cost value
--------------------- ------------------- ----------------
<S> <C> <C> <C>
Money market funds:
Schwab U.S. Treasury Money Fund 350 $ 350 350
Schwab Money Market Fund 410,174 410,174 410,174
Schwab Institutional Advantage Money Fund 895,731 895,731 895,731
------------------- ----------------
1,306,255 1,306,255
------------------- ----------------
Mutual funds:
PBHG Growth Fund 77,307 1,975,624 1,962,816
Vanguard International Growth Fund 27,949 487,133 458,081
Janus Worldwide Fund 56,299 2,111,571 2,126,988
Founders Special Fund 45,123 365,650 348,350
Janus Fund 56,538 1,519,680 1,407,797
Schwab 1000 Index Fund 46,537 1,089,018 1,236,012
Invesco Industrial Income Fund 30,839 460,430 459,812
Strong Government Securities Fund 45,278 478,537 486,734
------------------- ----------------
8,487,643 8,486,590
------------------- ----------------
ICG Common Stock 344,500 6,176,362 9,402,449
Participant loans 245,608 245,608 245,608
------------------- ----------------
Total investments $ 16,215,868 19,440,902
=================== ================
</TABLE>
See accompanying independent auditors' report.
<PAGE>
14
ICG COMMUNICATIONS, INC. Schedule 2
EMPLOYEE SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1997
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Purchases Sales
------------------ -----------------------------------------------------
Cost/ Fair Net realized
Investment market value Cost value gain/(loss)
------------------ ------------------ ----------------------------------
<S> <C> <C> <C> <C>
Schwab U.S. Treasury Money Fund 1,082,843 1,092,935 1,092,935 -
Schwab Money Market Fund 410,174 - - -
Schwab Institutional Advantage Money Fund 495,939 1,075,091 1,075,091 -
PBHG Growth Fund 1,286,767 539,092 520,905 (18,187)
Vanguard International Growth Fund 361,578 89,511 92,503 2,992
Janus Worldwide Fund 1,486,066 360,598 390,578 29,980
Janus Fund 1,000,159 223,381 229,914 6,533
Schwab 1000 Index Fund 967,940 269,723 302,536 32,813
Invesco Industrial Income Fund 308,143 70,305 76,070 5,765
Strong Government Securities Fund 390,031 138,898 139,085 187
ICG Common Stock 1,078,465 660,664 841,339 180,675
</TABLE>
See accompanying independent auditors' report.
<PAGE>
EXHIBIT 23
Consent of KPMG Peat Marwick LLP.
<PAGE>
Consent of Independent Auditors
The Plan Administrators
ICG Communications, Inc. Employee Savings Plan:
We consent to incorporation by reference in the post-effective amendment No. 1
to the registration statement No. 333-25957 on Form S-8 of ICG Communications,
Inc. of our report relating to the statements of net assets available for plan
benefits of the ICG Communications, Inc. Employee Savings Plan as of December
31, 1997 and 1996, and the related statements of changes in net assets available
for plan benefits for the years then ended, and related supplemental schedules,
which report appears in the December 31, 1997 annual report on Form 11-K of the
ICG Communications, Inc. Employee Savings Plan.
KPMG Peat Marwick LLP
Denver, Colorado
June 26, 1998
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
ICG Communications, Inc.
Employee Savings Plan
Date: June 30, 1998 By: /s/James D. Grenfell
-------------------------------------------
James D. Grenfell
Trustee
Date: June 30, 1998 By: /s/Marc E. Maassen
-------------------------------------------
Marc E. Maassen
Trustee
