UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Commission File Number 333-40495)
ICG FUNDING, LLC
(Exact name of registrant as specified in its charter)
Delaware 84-1434980
(State or other jurisdiction (I.R.S. Employer Identification No.)
of organization)
161 Inverness Drive West
Englewood, Colorado 80112
(888) 424-1144 or (303) 414-5000
(Address of principal executive offices and registrant's telephone numbers,
including area codes)
ICG Funding, LLC has no securities registered pursuant to Sections
12(b) or 12(g) of the Act.
Indicate by check mark whether the registrant:(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [|X| ]
All of the issued and outstanding common securities of ICG Funding, LLC
are owned by ICG Communications, Inc.
<PAGE>
TABLE OF CONTENTS
PART I .......................................................................3
ITEM 1. BUSINESS ................................................3
ITEM 2. PROPERTIES ..............................................3
ITEM 3. LEGAL PROCEEDINGS ......................................4
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ......4
PART II ......................................................................5
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SECURITYHOLDER MATTERS ..................................5
ITEM 6. SELECTED FINANCIAL DATA .................................6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ............7
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK ............................................13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ............13
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES ...................13
PART III .....................................................................14
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT .........14
ITEM 11. EXECUTIVE COMPENSATION .................................14
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT .............................................14
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .........14
PART IV ......................................................................15
ITEM 14. EXHIBITS AND REPORT ON FORM 8-K ........................15
Financial Statements ........................................15
Report on Form 8-K ..........................................16
Exhibits ....................................................16
FINANCIAL STATEMENTS ......................................................F-1
2
<PAGE>
PART I
ITEM 1. BUSINESS
ICG Funding, LLC (the "Company") is a special purpose limited liability
company formed on September 17, 1997 under the laws of the State of Delaware.
The Company's principal executive offices are located at 161 Inverness Drive
West, Englewood, Colorado 80112.
Pursuant to the terms of the Limited Liability Company Agreement of the
Company, as amended and restated, dated as of September 23, 1997 (the "LLC
Agreement"), the Company was formed solely for the purposes of: (i) issuing
common and preferred interests in the Company; (ii) using at least 85% of the
net proceeds of such issuances and related capital contributions (the "Net
Proceeds") to purchase shares of preferred stock of ICG Communications, Inc.
("ICG") ("ICG Preferred Stock") in a private placement; (iii) investing a
portion of the remaining Net Proceeds in U.S. Treasury securities, to be held in
escrow in an amount sufficient to fund the cash payments of the first thirteen
quarterly dividends on the Company's preferred interests (the "Redeemable
Preferred Securities"); and (iv) purchasing U.S. Treasury securities pending the
purchase of shares of ICG Preferred Stock. Unless previously dissolved, the
Company's term will continue until December 31, 2050.
ICG is the sole common member of the Company. ICG is also the manager
of the Company pursuant to the LLC Agreement and as such, manages the business
and affairs of the Company. ICG does not receive any compensation for performing
such management services. Additionally, all of the Company's administrative
expenses, which are insignificant, are paid by ICG.
The Company does not manufacture or sell any products, does not provide
any services to any party and does not intend to enter into any business, other
than complying with its obligations under the Redeemable Preferred Securities
and effecting the purposes as set forth in the LLC Agreement. The Company does
not have any employees.
For discussion of significant transactions affecting the Company's
business occurring prior to January 1, 1999, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Company Overview and
Description of Significant Transactions." For financial information about the
Company, see the financial statements included in response to Items 6 and 8 of
Part II of this Annual Report on Form 10-K.
ITEM 2. PROPERTIES
At December 31, 1999, the Company's property consisted of: (i) U.S.
Treasury securities in the amount of approximately $8.7 million held in escrow
to pay quarterly cash dividends on the Redeemable Preferred Securities; and (ii)
a receivable for preferred dividends earned on the ICG Preferred Stock of
approximately $0.9 million. The Company does not own any real or tangible
property.
3
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Effective November 11, 1999, ICG, Sole Common Member and Manager of the
Company, caused the Company to declare a cash dividend in the amount of $0.84
per Redeemable Preferred Security to holders of record at the close of business
on November 1, 1999, which was paid on November 15, 1999.
4
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SECURITYHOLDER MATTERS
The one issued and outstanding common security of the Company is held
by ICG. There exists no established public trading market for the Company's
common securities ("Common Securities"). ICG purchased one share of Common
Securities on September 17, 1997 in a private placement pursuant to Section 4(2)
of the Securities Act of 1933, as amended (the "1933 Act"). No underwriters were
involved in the placement and the Company did not offer to or solicit offers
from any other parties to purchase the Common Securities. Since the formation of
the Company and ICG's initial capital investment for the Common Securities,
there have been no sales or transfers of Common Securities of the Company. No
cash dividends have been declared on the Common Securities of the Company.
On September 24 and October 3, 1997, the Company completed a private
placement of 2,645,000 shares of Exchangeable Limited Liability Company
Preferred Securities Mandatorily Redeemable 2009 (the "Redeemable Preferred
Securities") for an aggregate gross cash offering price of $132.25 million. All
of the Redeemable Preferred Securities were sold to Morgan Stanley Dean Witter
and Deutsche Morgan Grenfell (collectively, the "Placement Agents") pursuant to
Section 4(2) of the 1933 Act in a negotiated, private placement. For a
discussion of the use of proceeds from the offering, see "Business."
The Placement Agents thereafter resold the Redeemable Preferred
Securities pursuant to Rule 144A promulgated under the 1933 Act to Qualified
Institutional Buyers (as that term is defined in Rule 144A) and Institutional
Accredited Investors. Each purchaser of the Redeemable Preferred Securities from
the Placement Agents made certain representations and warranties to the
Placement Agents that they were qualified to purchase the unregistered
Redeemable Preferred Securities. The Company did not receive any of the proceeds
from the resale of the Redeemable Preferred Securities by the Placement Agents.
The Redeemable Preferred Securities are mandatorily redeemable by the
Company on November 15, 2009 at the liquidation preference of $50.00 per
security, plus accrued and unpaid dividends. Dividends on the Redeemable
Preferred Securities are cumulative at the rate of 6 3/4% per annum and are
payable in cash through November 15, 2000 and, thereafter, in cash or shares of
ICG Common Stock, at the option of the Company. The Redeemable Preferred
Securities are exchangeable, at the option of the holder, into ICG Common Stock
at an exchange price of $24.025 per share, subject to adjustment. The Company
may, at its option, redeem the Redeemable Preferred Securities at any time on or
after November 18, 2000. Prior to that time, the Company may redeem the
Redeemable Preferred Securities if the current market value of ICG Common Stock
equals or exceeds the exchange price by 150%, for at least 20 days of any
consecutive 30-day trading period, through November 15, 2000.
Effective January 10, 1998, all of the shares of the Redeemable
Preferred Securities and the ICG Common Stock issuable upon exchange of such
securities were registered for resale under the 1933 Act.
5
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data for the period from September 17, 1997
(inception) to December 31, 1997 and the years ended December 31, 1998 and 1999
has been derived from and should be read in conjunction with the audited
financial statements of the Company and the notes thereto included elsewhere in
this Annual Report. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
<TABLE>
<CAPTION>
Period from
September 17, 1997 Years Ended
(inception) December 31,
to December 31, ------------------------------------------------
1997 1998 1999
----------------------- ----------------------- ---------------------
(in thousands)
<S> <C> <C> <C>
Statement of Operations Data:
Interest income $ 1,949 1,908 712
Dividend income - 5,969 7,207
----------------------- ----------------------- ---------------------
Net income 1,949 7,877 7,919
----------------------- ----------------------- ---------------------
Preferred dividends on redeemable preferred
securities, including accretion of offering
costs (2,460) (9,314) (9,314)
----------------------- ----------------------- ---------------------
Net loss available to common member $ (511) (1,437) (1,395)
======================= ======================= =====================
Other Data:
Net cash provided by operating activities $ 1,949 1,908 712
Net cash (used in) provided by investing
activities (132,959) 3,634 8,215
Net cash provided by (used in) financing
activities 131,010 (5,542) (8,927)
</TABLE>
<TABLE>
<CAPTION>
At December 31,
---------------------------------------------------------------------------
1997 1998 1999
----------------------- ----------------------- ---------------------
(in thousands)
<S> <C> <C> <C>
Balance Sheet Data:
Short-term investments available for sale $ 108,310 - -
Dividends receivable - 875 927
Restricted cash 24,649 16,912 8,697
Investment in ICG Preferred Stock - 117,507 124,661
----------------------- ----------------------- ---------------------
Total assets 132,959 135,294 134,285
Dividends payable 1,116 1,116 1,116
Due to ICG 4,699 4,699 4,699
Redeemable preferred securities 127,655 128,042 128,428
Member's (deficit) equity (511) 1,437 42
</TABLE>
6
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion includes certain forward-looking statements
which are affected by important factors including, but not limited to, market
conditions affecting the price of ICG Common Stock, redemption of the Redeemable
Preferred Securities by ICG, exchange into ICG Common Stock by the Redeemable
Preferred Securityholders, the declaration and payment of preferred stock
dividends to the Company by ICG and the ability of ICG to pay the administrative
expenses of the Company, that could cause actual results to differ materially
from the forward-looking statements. The results for the period from September
17, 1997 (inception) to December 31, 1997 and the years ended December 31, 1998
and 1999 have been derived from the Company's audited financial statements
included elsewhere herein.
Company Overview and Description of Significant Transactions
The Company was formed on September 17, 1997 as a special purpose
limited liability company existing for the exclusive purposes of: (i) issuing
common and preferred interests in the Company; (ii) using at least 85% of the
Net Proceeds of such issuances and related capital contributions to purchase
shares of ICG Preferred Stock in a private placement; (iii) investing a portion
of the remaining Net Proceeds in U.S. Treasury securities, to be held in escrow
in an amount sufficient to fund the cash payments of the first thirteen
quarterly dividends on the Company's Redeemable Preferred Securities; and (iv)
purchasing U.S. Treasury Securities pending the purchase of shares of ICG
Preferred Stock.
On September 24 and October 3, 1997, the Company completed a private
placement of 6 3/4% Exchangeable Limited Liability Company Preferred Securities
Mandatorily Redeemable 2009 for gross proceeds of $132.25 million. Net proceeds
from the private placement, after offering costs of approximately $4.7 million
advanced by ICG, were approximately $127.6 million. Restricted cash at December
31, 1999 of $8.7 million consists of the remaining proceeds from the private
placement and are designated for the payment of cash dividends on the Redeemable
Preferred Securities through November 15, 2000.
The Redeemable Preferred Securities consist of 2,645,000 exchangeable
preferred securities of the Company that bear a cumulative dividend at the rate
of 6 3/4% per annum. The dividend is paid quarterly in arrears each February 15,
May 15, August 15 and November 15, and commenced November 15, 1997. The dividend
is payable in cash through November 15, 2000 and, thereafter, in cash or shares
of ICG Common Stock, at the option of the Company. The Redeemable Preferred
Securities are exchangeable, at the option of the holder, at any time prior to
November 15, 2009 into shares of ICG Common Stock at a rate of 2.0812 shares of
ICG Common Stock per preferred security, or $24.025 per share, subject to
adjustment. The Company may, at its option, redeem the Redeemable Preferred
Securities at any time on or after November 18, 2000. Prior to that time, the
Company may redeem the Redeemable Preferred Securities if the current market
value of ICG Common Stock equals or exceeds the exchange price by 150%, for at
least 20 days of any consecutive 30-day trading period, through November 15,
2000. The Redeemable Preferred Securities are subject to mandatory redemption on
November 15, 2009.
On February 13, 1998, ICG made a capital contribution of 126,750 shares
of ICG Common Stock to the Company. Immediately thereafter, the Company sold the
7
<PAGE>
contributed shares to unrelated third parties for proceeds of approximately $3.4
million. The Company recorded the contribution of the ICG Common Stock as
additional paid-in capital at the then fair market value and, consequently, no
gain or loss was recorded by the Company on the subsequent sale of those shares.
Also, on February 13, 1998, the Company used the remaining proceeds
from the private placement of the Redeemable Preferred Securities, which were
not restricted for the payment of cash dividends, along with the proceeds from
the sale of the contributed ICG Common Stock to purchase approximately $112.4
million of ICG Preferred Stock which pays dividends each February 15, May 15,
August 15 and November 15 in additional shares of ICG Preferred Stock through
November 15, 2000. Subsequent to November 15, 2000, dividends on the ICG
Preferred Stock are payable in cash or shares of ICG Common Stock, at the option
of ICG. The ICG Preferred Stock is exchangeable, at the option of the Company,
at any time prior to November 15, 2009 into shares of ICG Common Stock at an
exchange rate based on the exchange rate of the Redeemable Preferred Securities.
The ICG Preferred Stock is subject to mandatory redemption on November 15, 2009.
Results of Operations
The following table presents the components of the Company's net income
and net loss available to common member for the period from September 17, 1997
(inception) to December 31, 1997 and the years ended December 31, 1998 and 1999.
<TABLE>
<CAPTION>
Period from
September 17,
1997 Years Ended
(inception) December 31,
to December 31, ------------------------------------------------
1997 1998 1999
----------------------- ----------------------- ---------------------
(in thousands)
<S> <C> <C> <C>
Statement of Operations Data:
Interest income $ 1,949 1,908 712
Dividend income - 5,969 7,207
----------------------- ----------------------- ---------------------
Net income 1,949 7,877 7,919
----------------------- ----------------------- ---------------------
Preferred dividends on redeemable preferred
securities, including accretion of offering
costs (2,460) (9,314) (9,314)
----------------------- ----------------------- ---------------------
Net loss available to common member $ (511) (1,437) (1,395)
======================= ======================= =====================
Other Data:
Net cash provided by operating activities $ 1,949 1,908 712
Net cash (used in) provided by investing
activities (132,959) 3,634 8,215
Net cash provided by (used in) financing
activities 131,010 (5,542) (8,927)
</TABLE>
8
<PAGE>
Year Ended December 31, 1999 Compared to the Year Ended December 31, 1998
Interest income. Interest income was $0.7 million and $1.9 million for the
years ended December 31, 1999 and 1998, respectively, and consists of income
earned on invested cash proceeds from the issuance of the Redeemable Preferred
Securities in September and October 1997. Interest income has and will continue
to decrease each period through November 15, 2000 due to the decrease in average
balances held in short-term investments as restricted cash balances are used to
pay cash dividends on the Redeemable Preferred Securities. On November, 15,
2000, the Company's restricted cash balances will be depleted.
Dividend income. Dividend income of $7.2 million and $6.0 million for the
years ended December 31, 1999 and 1998, respectively, consists of preferred
dividends earned on the ICG Preferred Stock beginning February 13, 1998, which
dividends were paid with additional shares of ICG Preferred Stock.
Net income. The Company's net income was $7.9 million for both the years
ended December 31, 1999 and 1998 and consists of interest income and dividend
income, as noted above.
Preferred dividends on redeemable preferred securities, including accretion
of offering costs. Preferred dividends on redeemable preferred securities,
including accretion of offering costs was $9.3 million for both the years ended
December 31, 1999 and 1998 and includes $8.9 million of preferred security
dividends paid and accrued and the accretion of offering costs from the private
placement of the Redeemable Preferred Securities of $0.4 million for both the
years ended December 31, 1999 and 1998.
Net loss available to common member. Net loss available to common member of
$1.4 million for both the years ended December 31, 1999 and 1998 is a result of
preferred dividends on redeemable preferred securities, offset by net income, as
noted above.
Year Ended December 31, 1998 Compared to the Period from September 17, 1997
(inception) to December 31, 1997
Interest income. Interest income was $1.9 million for both the year ended
December 31, 1998 and the period from September 17, 1997 (inception) through
December 31, 1997 and consists of income earned on invested cash proceeds from
the issuance of the Redeemable Preferred Securities in September and October
1997.
Dividend income. Dividend income of $6.0 million for the year ended
December 31, 1998 consists of preferred dividends earned on the ICG Preferred
Stock from February 13, 1998 through December 31, 1998, which dividends were
paid with additional shares of ICG Preferred Stock.
Net income. The Company's net income of $7.9 million and $1.9 million for
the year ended December 31, 1998 and the period from September 17, 1997
(inception) through December 31, 1997, respectively, consists of interest income
and dividend income, as noted above.
9
<PAGE>
Preferred dividends on redeemable preferred securities, including accretion
of offering costs. Preferred dividends on redeemable preferred securities,
including accretion of offering costs was $9.3 million for the year ended
December 31, 1998 and includes approximately $8.9 million of preferred security
dividends paid and accrued during the year ended December 31, 1998 and the
accretion of offering costs from the private placement of the Redeemable
Preferred Securities of approximately $0.4 million for the year ended December
31, 1998. Preferred dividends on redeemable preferred securities, including
accretion of offering costs was $2.5 million for the period from September 17,
1997 (inception) to December 31, 1997 and includes approximately $1.3 million of
preferred security dividends paid on November 15, 1997, the accrual of the
preferred security dividends for the period from November 16, 1997 through
December 31, 1997 of approximately $1.1 million and the accretion of offering
costs from the private placement of the Redeemable Preferred Securities of
approximately $0.1 million.
Net loss available to common member. Net loss available to common member of
$1.4 million and $0.5 million for the year ended December 31, 1998 and the
period from September 17, 1997 (inception) to December 31, 1997, respectively,
is a result of preferred dividends on redeemable preferred securities, offset by
net income, as noted above.
Quarterly Results
The following table presents selected unaudited operating results for
three-month quarterly periods during the years ended December 31, 1998 and 1999.
The Company believes that the amounts stated below present fairly the quarterly
results when read in conjunction with the Company's audited financial statements
and related notes included elsewhere in this Annual Report. Results of
operations are not necessarily indicative of results of operations for a full
year or predictive of future periods.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
----------------------------------------------- -----------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31,
1998 1998 1998 1998 1999 1999 1999 1999
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(in thousands)
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Interest income $ 1,056 312 285 255 221 193 164 134
Dividend income 837 1,685 1,711 1,736 1,762 1,788 1,815 1,842
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income 1,893 1,997 1,996 1,991 1,983 1,981 1,979 1,976
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Preferred dividends on
redeemable preferred
securities, including
accretion of offering costs (2,327) (2,329) (2,328) (2,330) (2,327) (2,329) (2,328) (2,330)
---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net loss available
to common memeber $ (434) (332) (332) (339) (344) (348) (349) (354)
=========== =========== =========== =========== =========== =========== =========== ===========
Other Data:
Net cash provided by operating
activities $ 1,056 312 285 255 221 193 164 134
Net cash (used in) provided
by investing activities (2,209) 1,920 1,946 1,977 2,011 2,039 2,067 2,098
Net cash provided by (used in)
financing activities 1,153 (2,232) (2,231) (2,232) (2,232) (2,232) (2,231) (2,232)
</TABLE>
10
<PAGE>
Liquidity and Capital Resources
The Company's operations consist entirely of effecting the transactions
required by the terms of the Redeemable Preferred Securities issued in
September and October 1997. To date, the Company's operations have been funded
through the proceeds from the issuance of the Redeemable Preferred Securities
and the sale of ICG Common Stock which was contributed to the Company by ICG.
As of December 31, 1999, the Company has assets of approximately $134.3 million
which consist of the Company's investment in ICG Preferred Stock of
approximately $124.7 million, restricted cash invested in U.S. Treasury
securities of approximately $8.7 million for the payment of cash dividends
through November 15, 2000 on the Redeemable Preferred Securities and a
receivable for preferred dividends earned on the ICG Preferred Stock of
approximately $0.9 million. The Company's liabilities at December 31, 1999
include approximately $1.1 million in preferred dividends accrued on the
Redeemable Preferred Securities and approximately $4.7 million due to ICG for
advances for the offering costs associated with the issuance of the Redeemable
Preferred Securities.
The Company is dependent upon ICG to declare and pay preferred
dividends on the ICG Preferred Stock in order to pay dividends on, and the
redemption price of, the Redeemable Preferred Securities. ICG is a Delaware
corporation that files annual, quarterly and current reports with the Securities
and Exchange Commission. Its Commission File Number is 1-11965.
Net Cash Provided By Operating Activities
Net cash provided by operating activities was $1.9 million, $1.9
million and $0.7 million for the period from September 17, 1997 (inception) to
December 31, 1997 and the years ended December 31, 1998 and 1999, respectively,
and consists of interest income earned on restricted cash invested in U.S.
Treasury securities.
Net Cash (Used In) Provided By Investing Activities
The Company's investing activities used $133.0 million for the period
from September 17, 1997 (inception) to December 31, 1997 and provided
approximately $3.6 million and $8.2 million for the years ended December 31,
1998 and 1999, respectively. Net cash used in investing activities for the
period from September 17, 1997 (inception) to December 31, 1997 consists of the
establishment of restricted cash balances for cash dividends payable through
November 15, 2000 on the Redeemable Preferred Securities and also consists of
the purchase of short-term investments. Net cash provided by investing
activities for the year ended December 31, 1998 consists of the purchase of the
ICG Preferred Stock for $112.4 million, offset by the proceeds from the sale of
U.S. Treasury securities of $108.3 million and the decrease in restricted cash
of $7.7 million. Net cash provided by investing activities for the year ended
December 31, 1999 consists solely of the decrease in restricted cash.
Net Cash Provided By (Used In) Financing Activities
Financing activities provided $131.0 million for the period from
September 17, 1997 (inception) to December 31, 1997 and used approximately $5.5
million and $8.9 million for the years ended December 31, 1998 and 1999,
respectively. Net cash provided by financing activities for the period from
September 17, 1997 (inception) to December 31, 1997 includes the net proceeds
from the issuance of the Redeemable Preferred Securities of $127.6 million and
11
<PAGE>
$4.7 million advanced from ICG for the offering costs associated with the
issuance of the Redeemable Preferred Securities, offset by payments of cash
dividends on the Redeemable Preferred Securities of $1.3 million. Net cash used
in financing activities for the year ended December 31, 1998 includes the
payments of cash dividends on the Redeemable Preferred Securities of $8.9
million, offset by the proceeds from the sale of the contributed ICG Common
Stock of $3.4 million. Net cash used in financing activities for the year ended
December 31, 1999 consists solely of payments of cash dividends on the
Redeemable Preferred Securities. The Company expects cash used by financing
activities in future periods to include only payments of cash dividends on, and
the redemption price of, the Redeemable Preferred Securities.
Cash Commitments
The Redeemable Preferred Securities require payments of dividends to
be made in cash and are being paid currently through November 15, 2000. At
December 31, 1999, the Company has remaining cash dividend obligations on the
Redeemable Preferred Securities of $8.9 million to be paid in 2000. The
Redeemable Preferred Securities have a liquidation preference of $50 per
security, plus accrued and unpaid dividends, and are mandatorily redeemable in
2009. The Company's management believes it has sufficient resources to meet
these future cash requirements provided that ICG's board of directors continues
to declare and pay dividends on the ICG Preferred Stock.
Year 2000 Compliance
As a wholly owned subsidiary of ICG, the Company's Year 2000 compliance
plan has been embedded within ICG's plan for its consolidated operations.
Accordingly, it is not practicable to address the compliance costs or ongoing
risks for any legal entity of ICG on a stand-alone basis, as ICG's plan was
designed to resolve Year 2000 compliance issues for all entities combined, which
is deemed to be the most cost-effective manner. Moreover, as a result of the
Company's and ICG's shared management and administrative personnel and the
Company's dependence upon the successful operations of ICG in order that ICG's
board of directors will continue to declare and pay dividends on the ICG
Preferred Stock, evaluating the Company's performance with regard to Year 2000
compliance is not meaningful.
ICG has experienced no significant reported failures in any of its
computer systems, software applications or other electronics which may have
resulted from a failure of date-sensitive embedded technology. ICG will continue
with its Year 2000 compliance plan to address any issues that subsequently
arise. ICG is a Delaware corporation that files annual, quarterly and current
reports with the Securities and Exchange Commission. Its Commission File Number
is 1-11965.
12
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's restricted cash balances are invested in fixed income
U.S. Treasury securities with staggered maturities matching the dividend payment
dates of the Redeemable Preferred Securities. Accordingly, changes in market
interest rates have no effect on the Company's liquidity, financial condition or
results of operations.
At December 31, 1999, the Company had $124.7 million of ICG Preferred
Stock, which is exchangeable into shares of ICG Common Stock, at an exchange
rate based on the exchange rate of the Redeemable Preferred Securities. There
exists no established public trading market for the ICG Preferred Stock. The
risk of changes in the fair market value of the underlying ICG Common Stock,
which is listed and trades on the Nasdaq National Market, is eliminated by the
adjustable rate of exchange of shares of ICG Preferred Stock. The ICG Preferred
Stock pays dividends in cash or additional shares of ICG Preferred Stock
sufficient to meet the dividend requirements on the Redeemable Preferred
Securities. Although changes in the fair market value of ICG Common Stock have
no effect on the Company's financial condition or results of operations, such
changes may influence the Company's decision to redeem the Redeemable Preferred
Securities or a Redeemable Preferred Securityholder's decision to exchange those
securities for ICG Common Stock.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Company appear on page F-1 of this Annual
Report. Selected quarterly financial data required under this Item is included
under Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
13
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
The Company has no directors or executive officers. Its business
affairs are managed by ICG, as the manager of the Company, pursuant to the LLC
Agreement. ICG is a Delaware corporation that files annual, quarterly and
current reports with the Securities and Exchange Commission. Its Commission File
Number is 1-11965.
ITEM 11. EXECUTIVE COMPENSATION
The Company has no executive officers. Its business affairs are managed
by ICG, as the manager of the Company, pursuant to the LLC Agreement. ICG does
not receive any fees or compensation as manager of the Company.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Ownership of Class
- -------------- ------------------- ----------------------- --------
Common ICG Communications, Inc. 1 Common Security 100%
Securities 161 Inverness Drive West owned beneficially
Englewood, Colorado 80112 with sole voting power
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 13, 1998, ICG made a capital contribution of 126,750 shares
of ICG Common Stock to the Company. Immediately thereafter, the Company sold the
contributed shares to unrelated third parties for proceeds of approximately $3.4
million. The Company recorded the contribution of the ICG Common Stock as
additional paid-in capital at the then fair market value and, consequently, no
gain or loss was recorded by the Company on the subsequent sale of those shares.
Also on February 13, 1998, the Company used the remaining proceeds from
the private placement of the Redeemable Preferred Securities, which were not
restricted for the payment of cash dividends, along with the proceeds from the
sale of the contributed ICG Common Stock to purchase approximately $112.4
million of ICG Preferred Stock.
All of the Company's administrative expenses, which are insignificant,
are paid by ICG. Additionally, ICG advanced approximately $4.7 million to the
Company during the period from September 17, 1997 (inception) through December
31, 1997 for the offering costs associated with the issuance of the Redeemable
Preferred Securities.
14
<PAGE>
PART IV
ITEM 14. EXHIBITS AND REPORT ON FORM 8-K
(A) (1) Financial Statements. The following financial statements are
included in Item 8 of Part II:
Page
Independent Auditors' Report ..............................F-2
Balance Sheets, December 31, 1998 and 1999 ................F-3
Statements of Operations, Period from September 17,
1997 (inception) to December 31, 1997 and Years
Ended December 31, 1998 and 1999 ....................F-4
Statements of Member's (Deficit) Equity, Period from
September 17, 1997 (inception) to December 31, 1997
and Years Ended December 31, 1998 and 1999 ...........F-5
Statements of Cash Flows, Period from September 17, 1997
(inception) to December 31, 1997 and Years Ended
December 31, 1998 and 1999 ..........................F-6
Notes to Financial Statements ............................F-7
(2) Financial Statement Schedule.
Not Applicable.
(3) List of Exhibits.
(3) Corporate Organization.
3.1: Certificate of Formation of ICG Funding, LLC
filed September 17, 1997 with the Secretary
of State of the State of Delaware
[Incorporated by reference to Exhibit 4.3 to
Registration Statement on Form S-3, File
Number 333-40495].
3.2: Amended and Restated Limited Liability
Company Agreement of ICG Funding, LLC, dated
September 23, 1997 [Incorporated by
reference to Exhibit 4.4 to Registration
Statement on Form S-3, File Number
333-40495].
(4) Instruments Defining the Rights of Security Holders,
Including Indentures.
4.1: Registration Rights Agreement, dated
September 24, 1997, among ICG Communications
Inc., ICG Funding, LLC, Morgan Stanley & Co.
Incorporated and Deutsche Morgan Grenfell,
Inc. with respect to the 6 3/4% Exchangeable
Limited Liability Company Preferred
Securities [Incorporated by reference to
Exhibit 4.5 to Registration Statement on
Form S-3, File Number 333-40495].
15
<PAGE>
4.2: Guarantee Agreement, dated September 24,
1997, between ICG Communications, Inc. and
ICG Funding, LLC [Incorporated by reference
to Exhibit 4.6 to Registration Statement on
Form S-3, File Number 333-40495].
4.3: Written Action of the Manager of ICG
Funding, LLC, dated as of September 24,
1997, with respect to the terms of the 6
3/4% Exchangeable Limited Liability Company
Preferred Securities [Incorporated by
reference to Exhibit 4.8 to Registration
Statement on Form S-3, File Number
333-40495].
4.4: Escrow and Security Agreement, dated
September 24, 1997, among ICG
Communications, Inc., ICG Funding, LLC and
Norwest Bank Colorado, National Association
[Incorporated by reference to Exhibit 4.7 to
Registration Statement on Form S-3, File
Number 333-40495].
(10) Material Contracts.
10.1: Certificate of Designation, Rights and
Preferences of the Preferred Stock
Mandatorily Redeemable 2009 of ICG
Communications, Inc., filed with the
Secretary of State of the State of Delaware
on September 25, 1997 [Incorporated by
reference to Exhibit 4.9 to Registration
Statement on Form S-3, File Number
333-40495].
(23) Consent.
23.1: Consent of Independent Auditors.
(27) Financial Data Schedule.
27.1: Financial Data Schedule of ICG Funding, LLC
for the Year Ended December 31, 1999.
(B) Report on Form 8-K.
(i) Current Report on Form 8-K dated November 1, 1999, regarding
the announcement of earnings information and results of
operations for the quarter ended September 30, 1999 of ICG
Communications, Inc.
(C) Exhibits. The exhibits required by this Item are listed under
Item 14(A)(3).
16
<PAGE>
FINANCIAL STATEMENTS
Page
Independent Auditors' Report ...............................................F-2
Balance Sheets, December 31, 1998 and 1999 .................................F-3
Statements of Operations, Period from September 17, 1997 (inception) to
December 31, 1997 and Years Ended December 31, 1998 and 1999 ............F-4
Statements of Member's (Deficit) Equity, Period from September 17, 1997
(inception) to December 31, 1997 and Years Ended December 31, 1998
and 1999 ................................................................F-5
Statements of Cash Flows, Period from September 17, 1997 (inception) to
December 31, 1997 and Years Ended December 31, 1998 and 1999 ............F-6
Notes to Financial Statements ..............................................F-7
F-1
<PAGE>
Independent Auditors' Report
The Common Member and Manager
ICG Funding, LLC:
We have audited the accompanying balance sheets of ICG Funding, LLC as of
December 31, 1998 and 1999 and the related statements of operations, member's
(deficit) equity, and cash flows for the period from September 17, 1997
(inception) to December 31, 1997 and for each of the years in the two-year
period ended December 31, 1999. These financial statements are the
responsibility of the Company'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 financial position of ICG Funding, LLC as of December
31, 1998 and 1999, and the results of its operations and its cash flows for the
period from September 17, 1997 (inception) to December 31, 1997 and for each of
the years in the two-year period ended December 31, 1999, in conformity with
generally accepted accounting principles.
KPMG LLP
Denver, Colorado
February 2, 2000
F-2
<PAGE>
ICG FUNDING, LLC
Balance Sheets
December 31, 1998 and 1999
<TABLE>
<CAPTION>
December 31,
---------------------------------------------------------
1998 1999
------------------------ -------------------------
(in thousands)
<S> <C> <C>
Assets
Current assets:
Dividends receivable from ICG $ 875 927
Restricted cash (note 3) 8,693 8,697
------------------------ -------------------------
Total current assets 9,568 9,624
------------------------ -------------------------
Investment in ICG Preferred Stock (notes 4
and 5) 117,507 124,661
Restricted cash (note 3) 8,219 -
------------------------ -------------------------
Total assets $ 135,294 134,285
======================== =========================
Liabilities and Member's Equity
Current liability - dividends payable $ 1,116 1,116
Due to ICG (note 3) 4,699 4,699
------------------------ -------------------------
Total liabilities 5,815 5,815
------------------------ -------------------------
Redeemable preferred securities ($133.4 million
liquidation value at December 31, 1998 and
1999)(note 3) 128,042 128,428
Member's equity:
Additional paid-in capital (note 4) 3,385 3,385
Accumulated deficit (1,948) (3,343)
------------------------ -------------------------
Total member's equity 1,437 42
------------------------ -------------------------
Commitments and contingencies (notes 3
and 4)
Total liabilities and member's equity $ 135,294 134,285
======================== =========================
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
ICG FUNDING, LLC
Statements of Operations
Period from September 17, 1997 (inception) to December 31, 1997
and Years Ended December 31, 1998 and 1999
<TABLE>
<CAPTION>
Period from Years ended
September 17, December 31,
1997 (inception) to -----------------------------------------------
December 31, 1997 1998 1999
------------------------ ----------------------- -----------------------
(in thousands)
<S> <C> <C> <C>
Interest income $ 1,949 1,908 712
Dividend income from ICG - 5,969 7,207
------------------------ ----------------------- -----------------------
Net income $ 1,949 7,877 7,919
------------------------ ----------------------- -----------------------
Preferred dividends on redeemable preferred
securities, including accretion of offering
costs (note 3) (2,460) (9,314) (9,314)
------------------------ ----------------------- -----------------------
Net loss available to common
member $ (511) (1,437) (1,395)
======================== ======================= =======================
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
ICG FUNDING, LLC
Statements of Member's (Deficit) Equity
Period from September 17, 1997 (inception) to December 31, 1997
and Years Ended December 31, 1998 and 1999
<TABLE>
<CAPTION>
Additional Accumulated Total member's
paid-in capital deficit (deficit) equity
---------------------- ---------------------- ----------------------
(in thousands)
<S> <C> <C> <C>
Balances at September 17, 1997 (inception) $ - - -
Net income - 1,949 1,949
Preferred dividends on redeemable preferred
securities, including accretion of offering costs
- (2,460) (2,460)
---------------------- ---------------------- ----------------------
Balances at December 31, 1997 - (511) (511)
Contribution of ICG Common Stock (note 4) 3,385 - 3,385
Net income - 7,877 7,877
Preferred dividends on redeemable preferred
securities, including accretion of offering
costs - (9,314) (9,314)
---------------------- ---------------------- ----------------------
Balances at December 31, 1998 3,385 (1,948) 1,437
Net income - 7,919 7,919
Preferred dividends on redeemable preferred
securities, including accretion of offering
costs - (9,314) (9,314)
---------------------- ---------------------- ----------------------
Balances at December 31, 1999 $ 3,385 (3,343) 42
====================== ====================== ======================
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
ICG FUNDING, LLC
Statements of Cash Flows
Period from September 17, 1997 (inception) to December 31, 1997
and Years Ended December 31, 1998 and 1999
<TABLE>
<CAPTION>
Period from Years ended
September 17, 1997 December 31,
(inception) to -------------------------------------------
December 31, 1997 1998 1999
--------------------- -------------------- --------------------
(in thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 1,949 7,877 7,919
Adjustment to reconcile net income to net
cash provided by operating activities:
Non-cash preferred dividends earned
on ICG Preferred Stock - (5,969) (7,207)
--------------------- -------------------- --------------------
Net cash provided by operating activities 1,949 1,908 712
--------------------- -------------------- --------------------
Cash flows from investing activities:
(Purchase) sale of short-term investments
available for sale (108,310) 108,310 -
Purchase of ICG Preferred Stock - (112,413) -
(Increase) decrease in restricted cash (24,649) 7,737 8,215
--------------------- -------------------- --------------------
Net cash (used in) provided by investing
activities (132,959) 3,634 8,215
--------------------- -------------------- --------------------
Cash flows from financing activities:
Net proceeds from issuance of redeemable
preferred securities 127,551 - -
Advances from ICG 4,699 - -
Proceeds from sale of ICG Common Stock - 3,385 -
Payment of preferred dividends
on redeemable preferred securities (1,240) (8,927) (8,927)
--------------------- -------------------- --------------------
Net cash provided by (used in)
financing activities 131,010 (5,542) (8,927)
--------------------- -------------------- --------------------
Cash and cash equivalents at December 31,
1997, 1998 and 1999 $ - - -
===================== ==================== ====================
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
ICG FUNDING, LLC
Notes to Financial Statements
(1) Organization and Nature of Business
ICG Funding, LLC, a Delaware limited liability company (the "Company"),
was formed on September 17, 1997 as a special purpose limited liability
company existing for the exclusive purposes of: (i) issuing common and
preferred interests in the Company; (ii) using at least 85% of the net
proceeds of such issuances and related capital contributions (the "Net
Proceeds") to purchase shares of preferred stock of ICG Communications,
Inc. ("ICG") ("ICG Preferred Stock") in a private placement; and (iii)
investing a portion of the remaining Net Proceeds in U.S. Treasury
securities, to be held in escrow in an amount sufficient to fund the
cash payments of the first thirteen quarterly dividends on the
Company's preferred interests (the "Redeemable Preferred Securities").
Unless previously dissolved, the Company's term will continue until
December 31, 2050.
ICG is the sole common member of the Company. The business and affairs
of the Company are conducted by ICG and ICG pays all of the Company's
administrative expenses, which are insignificant.
ICG has guaranteed full payment to the Redeemable Preferred
Securityholders to the extent that such payment is limited to the
amount of funds held by the Company and that such payment does not
violate the contractual restrictions contained in the indentures of
ICG's high yield senior notes. These restrictions currently effectively
prohibit any cash payment on ICG's guarantee to the Redeemable
Preferred Securityholders.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles.
(b) Investment in ICG Preferred Stock
The Company carries its investment in ICG Preferred Stock at cost
plus dividends received. Income from dividends on the ICG
Preferred Stock is recorded in the Company's statement of
operations when earned.
F-7
<PAGE>
ICG FUNDING, LLC
Notes to Financial Statements, Continued
(2) Summary of Significant Accounting Policies (continued)
(c) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of income and loss during the reporting period.
Actual results could differ from those estimates.
(d) Income Taxes
The Company is a U.S. limited liability company which is treated
as a partnership for U.S. federal and state income tax purposes.
Accordingly, the Company is not subject to U.S. federal and state
income taxes. The Company's results of operations are allocated
and included in the individual income tax returns of the
securityholders.
(e) Net Loss Per Share
The Company's one issued and outstanding common limited liability
company security is owned directly by ICG. Accordingly, the
Company does not present net loss per share in its financial
statements as such disclosure is not considered to be meaningful.
(3) Redeemable Preferred Securities
On September 24 and October 3, 1997, the Company completed a private
placement of 6 3/4% Exchangeable Limited Liability Company Preferred
Securities Mandatorily Redeemable 2009 (the "Redeemable Preferred
Securities") for gross proceeds of $132.25 million. Net proceeds from
the private placement, after offering costs of approximately $4.7
million advanced by ICG, were approximately $127.6 million. Restricted
cash at December 31, 1998 and 1999 of $16.9 million and $8.7 million,
respectively, consists of the proceeds from the private placement which
are designated for the payment of cash dividends on the Redeemable
Preferred Securities through November 15, 2000.
The Redeemable Preferred Securities consist of 2,645,000 exchangeable
preferred securities of the Company that bear a cumulative
dividend at the rate of 6 3/4% per annum. The dividend is
paid quarterly in arrears each February 15, May 15, August 15
F-8
<PAGE>
ICG FUNDING, LLC
Notes to Financial Statements, Continued
(3) Redeemable Preferred Securities (continued)
and November 15, and commenced November 15, 1997. The dividend is
payable in cash through November 15, 2000 and, thereafter, in cash or
shares of common stock of ICG ("ICG Common Stock"), at the option of
the Company. The Redeemable Preferred Securities are exchangeable, at
the option of the holder, at any time prior to November 15, 2009 into
shares of ICG Common Stock at a rate of 2.0812 shares of ICG Common
Stock per preferred security, or $24.025 per share, subject to
adjustment. The Company may, at its option, redeem the Redeemable
Preferred Securities at any time on or after November 18, 2000. Prior
to that time, the Company may redeem the Redeemable Preferred
Securities if the current market value of ICG Common Stock equals or
exceeds the exchange price by 150%, for at least 20 days of any
consecutive 30-day trading period, through November 15, 2000. The
Redeemable Preferred Securities are subject to mandatory redemption on
November 15, 2009.
Included in preferred dividends on redeemable preferred securities is
approximately $0.1 million, $0.4 million and $0.4 million for the
period from September 17, 1997 (inception) to December 31, 1997 and the
years ended December 31, 1998 and 1999, respectively, associated with
the accretion of offering costs from the private placement of the
Redeemable Preferred Securities.
(4) Contribution and Sale of ICG Common Stock and Purchase of ICG Preferred
Stock
On February 13, 1998, ICG made a capital contribution of 126,750 shares
of ICG Common Stock to the Company. Immediately thereafter, the Company
sold the contributed shares to unrelated third parties for proceeds of
approximately $3.4 million. The Company recorded the contribution of
the ICG Common Stock as additional paid-in capital at the then fair
market value and, consequently, no gain or loss was recorded by the
Company on the subsequent sale of those shares.
Also on February 13, 1998, the Company used the remaining proceeds from
the private placement of the Redeemable Preferred Securities, which
were not restricted for the payment of cash dividends, along with the
proceeds from the sale of the contributed ICG Common Stock to purchase
approximately $112.4 million of ICG Communications, Inc. Preferred
Stock ("ICG Preferred Stock") which pays dividends each February 15,
May 15, August 15 and November 15 in additional shares of ICG Preferred
Stock through November 15, 2000. Subsequent to November 15, 2000,
dividends on the ICG Preferred Stock are payable in cash or shares of
ICG Common Stock, at the option of ICG. The ICG Preferred Stock is
exchangeable, at the option of the Company, at any time prior to
F-9
<PAGE>
ICG FUNDING, LLC
Notes to Financial Statements, Continued
(4) Contribution and Sale of ICG Common Stock and Purchase of ICG Preferred
Stock (continued)
November 15, 2009 into shares of ICG Common Stock at an exchange rate
based on the exchange rate of the Redeemable Preferred Securities. The
ICG Preferred Stock is subject to mandatory redemption on November 15,
2009.
(5) Income Taxes
At December 31, 1998 and 1999, the book value of the Company's
investment in ICG Preferred Stock of $117.5 million and $124.7 million,
respectively, exceeds the Company's tax basis of $112.4 million. This
difference results from payment-in-kind preferred dividends which are
included in the book value of the investment in ICG Preferred Stock,
but not included in the tax basis.
F-10
<PAGE>
INDEX TO EXHIBITS
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
<PAGE>
EXHIBITS
23.1: Consent of Independent Auditors.
27.1: Financial Data Schedule of ICG Funding, LLC for the Year Ended
December 31, 1999.
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors.
<PAGE>
Consent of Independent Auditors
The Common Member and Manager
ICG Funding, LLC:
We consent to incorporation by reference in the registration statements Nos.
333-40495 and 333-40495-01 on Form S-3 of ICG Funding, LLC of our report dated
February 2, 2000, relating to the balance sheets of ICG Funding, LLC as of
December 31, 1998 and 1999, and the related statements of operations, member's
(deficit) equity, and cash flows for the period from September 17, 1997
(inception) to December 31, 1997 and for each of the years in the two-year
period ended December 31, 1999, which report appears in the December 31, 1999
Annual Report on Form 10-K of ICG Funding, LLC.
KPMG LLP
Denver, Colorado
February 24, 2000
<PAGE>
EXHIBIT 27.1
Financial Data Schedule of ICG Funding, LLC for the Year Ended
December 31, 1999.
<PAGE>
EXHIBIT-27.1
Summary Financial Information
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ICG Funding, LLC
By: ICG Communications, Inc.
Common Member and Manager
By: /s/ Harry R. Herbst
----------------------------
Harry R. Herbst
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: February 24, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ICG FUNDING, LLC FOR THE YEAR ENDED DECEMBER 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 8,697
<SECURITIES> 0 <F1>
<RECEIVABLES> 0 <F1>
<ALLOWANCES> 0 <F1>
<INVENTORY> 0 <F1>
<CURRENT-ASSETS> 9,621
<PP&E> 0 <F1>
<DEPRECIATION> 0 <F1>
<TOTAL-ASSETS> 134,285
<CURRENT-LIABILITIES> 1,116
<BONDS> 4,699
128,428
0 <F1>
<COMMON> 0 <F1>
<OTHER-SE> 42
<TOTAL-LIABILITY-AND-EQUITY> 134,285
<SALES> 0 <F1>
<TOTAL-REVENUES> 0 <F1>
<CGS> 0 <F1>
<TOTAL-COSTS> 0 <F1>
<OTHER-EXPENSES> 0 <F1>
<LOSS-PROVISION> 0 <F1>
<INTEREST-EXPENSE> (712)
<INCOME-PRETAX> 7,919
<INCOME-TAX> 0 <F1>
<INCOME-CONTINUING> 7,919
<DISCONTINUED> 0 <F1>
<EXTRAORDINARY> 0 <F1>
<CHANGES> 0 <F1>
<NET-INCOME> 7,919
<EPS-BASIC> 0 <F1>
<EPS-DILUTED> 0 <F1>
</TABLE>
