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 ended December 31, 1998
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.
(10) Amendment to the ICG Communications, Inc. Employee Savings Plan,
dated June 30, 1999.
(23) Consent of KPMG LLP.
<PAGE>
EXHIBIT 10
Amendment to the ICG Communications, Inc. Employee Savings Plan, dated
June 30, 1999.
<PAGE>
AMENDMENT
TO THE
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
THIS AMENDMENT is approved and adopted by ICG Communications, Inc. on this
30th day of June, 1999.
RECITALS
A. ICG Communications, Inc. (the "Company") maintains the ICG
Communications, Inc. Employee Savings Plan (the "Plan"), which is a prototype
plan evidenced by an Adoption Agreement under The Charles Schwab Prototype
401(k) Profit Sharing Plan and Trust.
B. Section 11.2 of the base plan document for the Plan provides in part as
follows:
"The Employer may amend the Employer's choice of
options in the Adoption Agreement..."
C. The Company now desires to amend the Adoption Agreement for the Plan.
AMENDMENT
NOW THEREFORE, the Company hereby amends the Adoption Agreement for the
Plan as follows:
1. The Vesting Schedule reflected in Item C(5)I.a. of the Adoption
Agreement hereby is amended by the following, which shall appear as an Addendum
to the Adoption Agreement:
ADDENDUM TO ADOPTION AGREEMENT
VESTING SCHEDULE PROVISIONS
Item C(5)I.a. of the Adoption Agreement (and, by reference, Item
C(5)II.a.1. of the Adoption Agreement) is modified as follows:
<PAGE>
(i) Vesting for Netcom Employees: Solely for Employees who were employed by
Netcom On-Line Communications Services, Inc. ("Netcom") in 1997 and who
commenced participation in this Plan as a direct result of the transactions
contemplated by the Agreement and Plan of Merger Dated October 12, 1997, Among
ICG Communications, Inc. and Netcom On-Line Communications Services, Inc. (the
"Netcom Employees"), the following vesting schedule will apply for Netcom
Employee accounts transferred from the Netcom On-Line Communication Services,
Inc. (401(k) Profit Sharing Plan to this Plan):
Years of Service Vested Percentage
---------------- -----------------
Less than 1 0%
1 25%
2 50%
3 75%
4 or more 100%
All Years of Service with Netcom will be counted in determining the vested
percentage of any Netcom Employee under this Plan.
(ii) Vesting for CBG Employees: Solely for Employees who were employed by
Communications Buying Group, Inc. ("CBG") in 1997 and who commenced
participation in this Plan as a direct result of the transactions contemplated
by the Stock Purchase Agreement Among ICG Telecom Group, Inc. and The
Shareholders of Communications Buying Group, Inc. Dated as of September 5, 1997,
(the "CBG Employees"), the following vesting schedule will apply for CBG
Employee accounts transferred from the CBG, Inc. 401(k) Plan to this Plan:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 0%
1 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
All Years of Service with CBG will be counted in determining the vested
percentage of any CBG Employee under this Plan.
2. This amendment will be effective July 1, 1998.
3. Any inconsistent provision of the Plan shall be read consistent with
this amendment.
4. Except as amended above, the Company hereby affirms and readopts each
and every other provision of the Plan.
<PAGE>
IN WITNESS WHEREOF, the Company has executed this amendment as of the date
first mentioned above.
ICG COMMUNICATIONS, INC.
By: /s/ H. Don Teague
Title: Executive Vice President, General
Counsel and Secretary
<PAGE>
EXHIBIT 23
Consent of KPMG 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, 1998 and 1997, 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, 1998 annual report on Form 11-K of the
ICG Communications, Inc. Employee Savings Plan.
KPMG LLP
Denver, Colorado
June 29, 1999
<PAGE>
SIGNATURE
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, 1999 By: /s/ Carla Wolin
----------------------------------------
Carla Wolin
Plan Trustee
<PAGE>
ICG Communications, Inc.
Employee Savings Plan
Financial Statements and Schedules
December 31, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
Table of Contents
Independent Auditors' Report .............................................. 1
Statements of Net Assets Available for Plan Benefits -
December 31, 1998 and 1997 .......................................... 2
Statements of Changes in Net Assets Available for Plan Benefits -
Years Ended December 31, 1998 and 1997............................... 3
Notes to Financial Statements ............................................. 4
Supplemental Schedules
1 Line 27a - Schedule of Assets Held for Investment Purposes -
December 31, 1998 ........................................ 12
2 Line 27d - Schedule of Reportable Transactions -
Year Ended December 31, 1998 ............................. 13
<PAGE>
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, 1998 and 1997, 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, 1998 and 1997, 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.
KPMG LLP
Denver, Colorado
June 18, 1999
1
<PAGE>
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1998 and 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets 1998 1997
- ------ -------------------- --------------------
<S> <C> <C>
Cash $ 4,072 -
Investment securities, at fair value (note 5):
Money market funds 2,851,197 1,306,255
Mutual funds 19,310,797 8,486,590
ICG Common Stock 10,897,263 9,402,449
-------------------- --------------------
33,059,257 19,195,294
Participant loans 570,221 245,608
-------------------- --------------------
Total investments 33,633,550 19,440,902
-------------------- --------------------
Receivables:
Employer contributions (notes 7 and 8) 1,464,800 558,313
Participant contributions 148,934 228,705
Other 5,857 450
-------------------- --------------------
1,619,591 787,468
-------------------- --------------------
Net assets available for plan benefits $ 35,253,141 20,228,370
==================== ====================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years Ended December 31, 1998 and 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
---------------------- --------------------
Additions to net assets attributed to:
<S> <C> <C>
Participant contributions $ 8,108,925 5,626,454
Employer contributions in ICG Common Stock 5,088,295 2,922,434
Transfers from affiliated plans (note 3) 6,428,561 -
---------------------- --------------------
19,625,781 8,548,888
---------------------- --------------------
Investment income:
Net (depreciation) appreciation of investments,
including realized gains and losses (294,133) 3,908,252
Interest and dividends 526,071 634,471
---------------------- --------------------
Net investment income 231,938 4,542,723
---------------------- --------------------
Total additions 19,857,719 13,091,611
Distributions to participants (4,832,948) (2,548,571)
---------------------- --------------------
Net increase in net assets available for plan benefits 15,024,771 10,543,040
Net assets available for plan benefits:
Beginning of year 20,228,370 9,685,330
---------------------- --------------------
End of year $ 35,253,141 20,228,370
====================== ====================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
- --------------------------------------------------------------------------------
(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. Money market funds are recorded at cost plus accumulated
interest, which approximates fair value. Changes in market value
after the plan year end are not reflected in the accompanying
financial statements.
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 accrual basis.
(d) Participant Loans
Participants may borrow from their fund accounts a minimum of
$1,000 and up to a maximum equal to the lesser of $50,000 or 50%
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 U.S. Bank
4
<PAGE>
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- --------------------------------------------------------------------------------
(1) Summary of Significant Accounting Policies (continued)
prime rate upon the inception of the loan plus 1%. Loans are
repaid through 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 and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases to
plan assets 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 on January
1, April 1, July 1 or October 1 following 30 days of employment
with the Company and the attainment of age 21. Participants are
eligible for normal retirement upon attainment of age 65 or, if
later, after four years of participation in the Plan.
Participants are always 100% vested upon attainment of normal
retirement. 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 ($10,000 and $9,500 in 1998 and 1997,
respectively). 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.
5
<PAGE>
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.
In 1998, the plans of NETCOM On-Line Communication Services, Inc.
("NETCOM") and Communications Buying Group, Inc. ("CBG") were
merged with and into the Company's plan (see note 3). The
participants of the former NETCOM and CBG plans retained the
vesting schedules under the terms of those plans and,
accordingly, employer contributions and earnings thereon of
participants in the former NETCOM and CBG plans are vested in
accordance with the following schedules:
Years of service Vesting percentage
------------------ -------------------------------------
NETCOM CBG
1 25% -
2 50% 20%
3 75% 40%
4 100% 60%
5 100% 80%
6 100% 100%
For all other participants, employer contributions and earnings
thereon are vested in accordance with the following schedule:
Years of service Vesting percentage
------------------ --------------------
Less than 2 -
2 50%
3 75%
4 100%
6
<PAGE>
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- --------------------------------------------------------------------------------
(2) Plan Description (continued)
(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 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 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.
Effective July 1, 1998, the existing NETCOM plan was merged with and 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 were allocated among the investment options
available within the Plan.
On March 24, 1998, the Company purchased the remaining interest in CBG
and merged its plan with and into the Company's plan. Balances of the CBG
plan participants prior to the plan merger and contributions made by the
CBG plan participants subsequent to the plan merger were allocated among
the investment options available within the Plan.
7
<PAGE>
ICG COMMUNICATIONS, INC.
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements, Continued
- --------------------------------------------------------------------------------
(4) Income Taxes
The Internal Revenue Service issued a favorable determination letter
dated April 14, 1999 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, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
Fair value at
December 31,
-------------------------------
1998 1997
-------------- -------------
<S> <C> <C>
Schwab Institutional Advantage Money Fund $ 2,845,385 -
Janus Fund 3,952,589 1,407,797
Janus Worldwide Fund 4,144,165 2,126,988
PBHG Growth Fund 2,912,355 1,962,816
Schwab 1000 Index Fund 4,222,199 1,236,012
ICG Common Stock 10,897,263 9,402,449
</TABLE>
8
<PAGE>
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, 1998 and 1997
<TABLE>
<CAPTION>
Schwab
Institutional Schwab Schwab U.S. Invesco
Advantage Money Treasury Founders Industrial
Cash Money Fund Market Fund Money Fund Special Fund Income Fund
------------- ------------- ------------- -------------- ------------- --------------
Net assets available for plan benefits at
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996 $ - 1,467,493 - 32,420 178,519 216,641
Additions to net assets attributed to:
Participant contributions - 160,500 - 741,764 163,285 230,792
Employer contributions - - - 2,722,175 - -
Loan repayments - 1,774 - 3,878 1,037 542
Investment income (loss):
Net (depreciation) appreciation of
investments, including realized
gains and losses - - - - (5,848) 20,599
Interest and dividends - 64,179 8,049 3,049 44,618 54,044
Distributions to participants - (638,368) - 105,941 (33,061) (55,974)
Net transfers between funds - (159,847) 402,125 (3,608,877) (200) (6,832)
------------- ------------- ------------- -------------- ------------- --------------
Net increase (decrease) in net assets
available for plan benefits - (571,762) 410,174 (32,070) 169,831 243,171
------------- ------------- ------------- -------------- ------------- --------------
Net assets available for plan benefits at $ - 895,731 410,174 350 348,350 459,812
December 31, 1997 ------------- ------------- ------------- -------------- ------------- --------------
Additions to net assets attributed to:
Participant contributions - 231,328 - 1,098,919 357,009 386,543
Employer contributions - - - 3,962,606 - -
Transfers from affiliated plans - 2,312,223 (452,479) 188,327 343,814 303,156
Loan repayments - 9,883 - 25,155 12,467 13,315
Investment income (loss):
Net (depreciation) appreciation of
investments, including realized
gains and losses - - - - 39,947 (704)
Interest and dividends - 89,098 42,305 4,339 18,670 114,725
Distributions to participants - (697,348) - 620 (120,049) (134,925)
Net transfers between funds 4,072 4,470 - (5,274,504) (62,653) (75,730)
------------- ------------- ------------- -------------- ------------- --------------
Net increase (decrease) in net assets
available for plan benefits 4,072 1,949,654 (410,174) 5,462 589,205 606,380
------------- ------------- ------------- -------------- ------------- --------------
Net assets available for plan benefits at $ 4,072 2,845,385 - 5,812 937,555 1,066,192
December 31, 1998 ============= ============= ============= ============== ============= ==============
(Continued)
</TABLE>
9
<PAGE>
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, 1998 and 1997 (continued)
<TABLE>
<CAPTION>
Schwab
Strong
Janus Schwab Government Vanguard
Janus Worldwide PBHG 1000 Index Securities International
Fund Fund Growth Fund Fund Fund Growth Fund
------------- ------------- --------------- ------------- -------------- -------------
Net assets available for plan benefits at
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996 $ 683,008 959,665 1,306,098 408,850 240,869 225,734
Additions to net assets attributed to:
Participant contributions 670,082 1,086,522 1,119,906 683,531 257,410 283,957
Employer contributions - - - - - -
Loan repayments 3,286 11,681 13,492 6,686 386 867
Investment income (loss):
Net (depreciation) appreciation of
investments, including realized
gains and losses (23,449) 106,777 (24,338) 192,068 10,063 (16,959)
Interest and dividends 231,638 146,249 2,380 13,101 21,711 19,450
Distributions to participants (159,810) (342,534) (361,599) (222,012) (75,909) (74,119)
Net transfers between funds 3,042 158,628 (93,123) 153,788 32,204 19,151
------------- ------------- --------------- ------------- -------------- -------------
Net increase (decrease) in net assets
available for plan benefits 724,789 1,167,323 656,718 827,162 245,865 232,347
------------- ------------- --------------- ------------- -------------- -------------
Net assets available for plan benefits at $ 1,407,797 2,126,988 1,962,816 1,236,012 486,734 458,081
December 31, 1997 ------------- ------------- --------------- ------------- -------------- -------------
Additions to net assets attributed to:
Participant contributions 1,115,895 1,377,881 1,245,783 1,490,208 468,111 381,829
Employer contributions - - - - - -
Transfers from affiliated plans 680,299 682,836 517,680 1,129,828 390,908 146,686
Loan repayments 35,756 46,458 23,527 40,997 3,535 3,416
Investment income (loss):
Net (depreciation) appreciation of
investments, including realized
gains and losses 815,034 670,326 132,690 678,266 (8,255) 90,902
Interest and dividends 103,779 22,719 6,168 35,059 64,852 18,949
Distributions to participants (398,783) (685,862) (546,912) (607,891) (303,101) (163,022)
Net transfers between funds 192,812 (97,181) (429,397) 219,720 56,395 (20,278)
------------- -------------- -------------- ------------- -------------- -------------
Net increase (decrease) in net assets
available for plan benefits 2,544,792 2,017,177 949,539 2,986,187 672,445 458,482
------------- -------------- -------------- ------------- -------------- -------------
Net assets available for plan benefits at $ 3,952,589 4,144,165 2,912,355 4,222,199 1,159,179 916,563
December 31, 1998 ============= ============== ============== ============= ============== =============
(Continued)
</TABLE>
9 (continued)
<PAGE>
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, 1998 and 1997 (continued)
<TABLE>
<CAPTION>
Global Retirement
Bankers Basic Allocation Preservation
Trust Fund Volume Fund Capital Fund Fund Phoenix Fund Trust Fund
------------- ------------- -------------- -------------- -------------- --------------
Net assets available for plan benefits at
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996 $ 52,472 43,790 3,982 34,325 128,804 2,690
Additions to net assets attributed to:
Participant contributions - - - - - -
Employer contributions - - - - - -
Loan repayments - - - - - -
Investment income (loss):
Net (depreciation) appreciation of
investments, including realized
gains and losses - 9,450 556 3,586 5,923 -
Interest and dividends 25,553 - - - - -
Distributions to participants (2,104) - - - - -
Net transfers between funds (75,921) (53,240) (4,538) (37,911) (134,727) (2,690)
------------- ------------- -------------- -------------- --------------- -------------
Net increase (decrease) in net assets
available for plan benefits (52,472) (43,790) (3,982) (34,325) (128,804) (2,690)
------------- ------------- -------------- -------------- --------------- -------------
Net assets available for plan benefits at
December 31, 1997 $ - - - - -
------------- ------------- -------------- -------------- --------------- -------------
Additions to net assets attributed to: -
Participant contributions - - - - - -
Employer contributions - - - - - -
Transfers from affiliated plans - - - - - -
Loan repayments - - - - -
Investment income (loss):
Net (depreciation) appreciation 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, 1998 $ - - - - -
============= ============= =============== ============= ============== ==============
(Continued)
</TABLE>
10
<PAGE>
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, 1998 and 1997 (continued)
<TABLE>
<CAPTION>
Unallocated
MFS Unallocated refunds
Annuity ICG Common Participant contributions payable to
Funds Stock loans receivable participants Total
------------- ------------- --------------- ------------- --------------- -----------
Net assets available for plan benefits at
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996 $ 78,252 3,179,998 12,572 505,707 (76,559) 9,685,330
Additions to net assets attributed to:
Participant contributions - - - 228,705 - 5,626,454
Employer contributions - (358,054) - 558,313 - 2,922,434
Loan repayments - - (43,629) - - -
Investment income (loss):
Net (depreciation) appreciation of
investments, including realized
gains and losses 14,846 3,614,978 - - - 3,908,252
Interest and dividends - - - 450 - 634,471
Distributions to participants - (1,042,246) 276,665 - 76,559 (2,548,571)
Net transfers between funds (93,098) 4,007,773 - (505,707) - -
------------- -------------- -------------- ------------ -------------- -------------
Net increase (decrease) in net assets
available for plan benefits (78,252) 6,222,451 233,036 281,761 76,559 10,543,040
------------- -------------- -------------- ------------ -------------- -------------
Net assets available for plan benefits at
December 31, 1997 $ - 9,402,449 245,608 787,468 - 20,228,370
------------- -------------- -------------- ------------ -------------- -------------
Additions to net assets attributed to:
Participant contributions - 35,191 - (79,772) - 8,108,925
Employer contributions - 219,202 - 906,487 - 5,088,295
Transfers from affiliated plans - - 185,283 - - 6,428,561
Loan repayments - (20) (214,489) - - -
Investment income (loss):
Net (depreciation) appreciation of
investments, including realized
gain and losses - (2,712,339) - - - (294,133)
Interest and dividends - - - 5,408 - 526,071
Distributions to participants - (1,529,494) 353,819 - - (4,832,948)
Net transfers between funds - 5,482,274 - - - -
------------- ------------- --------------- ------------ -------------- -------------
Net increase (decrease) in net assets
available for plan benefits - 1,494,814 324,613 832,123 - 15,024,771
------------- ------------- --------------- ----------- -------------- -------------
Net assets available for plan benefits at
December 31, 1998 $ - 10,897,263 570,221 1,619,591 - 35,253,141
============= ============= =============== =========== ============== =============
</TABLE>
10 (continued)
<PAGE>
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 1998 and 1997 and, accordingly, no refunds to participants were
required to be paid as of the plan year end in 1998 or 1997.
(8) Forfeitures
In 1998 and 1997, participants withdrawing from the Plan forfeited
balances of $521,855 and $60,383, respectively. These forfeitures have
been recorded in the financial statements as a reduction of the employer
contribution receivable for 1998 and 1997.
(9) Year 2000 Compliance
Many computer systems, software applications and other elements currently
in use worldwide are programmed to accept only two digits in the portion
of the date field which designates the year. The "Year 2000 problem"
arises because these systems and products cannot properly distinguish
between a year that begins with "20" and the familiar "19." If these
systems and products are not modified or replaced, many will fail, create
erroneous results and/or may cause interfacing systems to fail.
The Plan is reliant on computer systems that are susceptible to systems
failures or processing errors resulting from those systems' inability to
properly recognize the Year 2000 date. Systems failures or processing
errors could cause a condition or event that would have a significant
adverse effect on the Plan either currently or within a reasonable period
of time. Failure of systems that are critical to Plan operations could
result in increased administrative expenses or financial penalties for
failure to be able to comply with the Department of Labor and/or the
Internal Revenue Service regulations for financial reporting.
11
<PAGE>
ICG COMMUNICATIONS, INC. Schedule 1
EMPLOYEE SAVINGS PLAN ----------
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of shares,
face value or Fair
units Cost value
------------------- ------------------ ------------------
<S> <C> <C> <C>
Cash - $ 4,072 4,072
Money market funds:
Schwab Institutional Advantage Money Fund 2,845,385 2,845,385 2,845,385
Schwab U.S. Treasury Money Fund 5,812 5,812 5,812
------------------ ------------------
2,851,197 2,851,197
------------------ ------------------
Mutual funds:
Founders Special Fund 126,015 905,159 937,555
Invesco Industrial Income Fund 70,796 1,071,118 1,066,192
Janus Fund 117,462 3,269,374 3,952,589
Janus Worldwide Fund 87,503 3,540,831 4,144,165
PBHG Growth Fund 114,031 2,758,473 2,912,355
Schwab 1000 Index Fund 125,998 3,485,547 4,222,199
Schwab Strong Government Securities Fund 107,730 1,164,779 1,159,179
Vanguard International Growth Fund 48,831 860,243 916,563
------------------ ------------------
17,055,524 19,310,797
------------------ ------------------
ICG Common Stock 506,849 10,858,948 10,897,263
Participant loans 570,221 570,221 570,221
------------------ ------------------
Total investments $ 31,339,962 33,633,550
================== ==================
</TABLE>
See accompanying independent auditors' report.
12
<PAGE>
ICG COMMUNICATIONS, INC. Schedule 2
EMPLOYEE SAVINGS PLAN ----------
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Purchases Sales
------------------ -----------------------------------------------------
Cost/ Fair Net realized
Investment market value Cost value (loss)/gain
------------------ ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Schwab Money Market Fund $ 6,354,493 6,756,618 6,756,618 -
Schwab Institutional Advantage Money Fund 2,958,124 922,804 922,804 -
Schwab U.S. Treasury Money Fund 5,916,399 5,903,557 5,903,557 -
Founders Special Fund 779,776 233,158 231,660 (1,498)
Invesco Industrial Income Fund 850,661 239,154 245,375 6,221
Janus Fund 2,268,956 490,741 541,400 50,659
Janus Worldwide Fund 2,304,540 868,889 960,269 91,380
PBHG Growth Fund 1,842,025 1,057,085 1,028,667 (28,418)
Schwab 1000 Index Fund 3,112,978 749,386 811,292 61,906
Schwab Strong Government Securities Fund 1,112,318 427,944 431,311 3,367
ICG Common Stock 7,081,650 3,412,012 3,493,072 81,060
</TABLE>
See accompanying independent auditors' report.
13
