UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended September 30, 2000

                                       OR

             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934

                        (Commission File Number 1-11965)
                            ICG COMMUNICATIONS, INC.
                        (Commission File Number 1-11052)
                            ICG HOLDINGS (CANADA) CO.
                        (Commission File Number 33-96540)
                               ICG HOLDINGS, INC.
         (Exact names of registrants as specified in their charters)


--------------------------------------------------------------------------------
Delaware                                   84-1342022
Nova Scotia                                Not Applicable
Colorado                                   84-1158866
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)
--------------------------------------------------------------------------------
161 Inverness Drive West                   Not applicable
Englewood, Colorado 80112
161 Inverness Drive West                   c/o ICG Communications, Inc.
Englewood, Colorado 80112                  161 Inverness Drive West
                                           Englewood, Colorado 80112

161 Inverness Drive West                   Not applicable
Englewood, Colorado 80112
(Address of principal executive offices)   (Address of U.S. agent for service)
--------------------------------------------------------------------------------
Registrants' telephone numbers, including area codes: (888) 424-1144 or (303)
414-5000

      Indicate by check mark whether the  registrants (1) have 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
registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past 90 days. Yes |X| No __

     The number of  registrants'  outstanding  common  shares as of November 17,
2000  were  52,045,443,   31,931,588  and  1,918,  respectively.   ICG  Canadian
Acquisition,  Inc., a wholly owned subsidiary of ICG Communications,  Inc., owns
all of the issued and outstanding common shares of ICG Holdings (Canada) Co. ICG
Holdings  (Canada)  Co.  owns all of the  issued and  outstanding  shares of ICG
Holdings, Inc.

<PAGE>


                                TABLE OF CONTENTS




PART I ....................................................................... 3
      ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ................... 3
               Consolidated Balance Sheets as of December 31, 1999 and
                September 30, 2000 (unaudited)................................ 3
               Consolidated Statements of Operations for the Three and Nine
                Months Ended September 30, 1999 and 2000 (unaudited).......... 5
               Consolidated Statement of Stockholders' Deficit for the Nine
                Months Ended September 30, 2000 (unaudited)................... 7
               Consolidated Statements of Cash Flows for the Nine Months Ended
                September 30, 1999 and 2000 (unaudited)....................... 8
               Notes to Consolidated Financial Statements(unaudited)..........10
      ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS .....................................20
      ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ....36

PART II ......................................................................37
      ITEM 1.  LEGAL PROCEEDINGS .............................................37
      ITEM 2.  CHANGES IN SECURITIES .........................................37
      ITEM 3.  DEFAULTS UPON SENIOR SECURITIES ...............................37
      ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS .........37
      ITEM 5.  OTHER INFORMATION .............................................37
      ITEM 6.  EXHIBITS AND REPORT ON FORM 8-K .............................. 38
               Exhibits ......................................................38
               Reports on Form 8-K ...........................................38



                                       2
<PAGE>


                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

                           Consolidated Balance Sheets
                                   (unaudited)

                                                  December 31,     September 30,
                                                      1999             2000
                                                ---------------   --------------
                                                          (in thousands)

Assets

Current assets:
   Cash and cash equivalents                       $ 103,288            216,714

   Short-term investments available for sale          22,219             17,536

   Receivables:
     Trade, net of allowance of $78.7 million
      and $73.7 million at December 31, 1999
      and September 30, 2000, respectively
      (notes 4 and 9)                                167,273            190,349
     Other                                             1,458              3,291
                                                ---------------   --------------
       Total net receivables                         168,731            193,640

   Prepaid expenses, deposits and inventory           11,388             19,839
                                                ---------------   --------------

       Total current assets                          305,626            447,729
                                                ---------------   --------------

Property and equipment                             1,805,378          2,650,813

  Less accumulated depreciation                     (279,698)          (457,363)
                                                ---------------   --------------
    Net property and equipment (note 5)            1,525,680          2,193,450
                                                ---------------   --------------

Restricted cash                                       12,537              7,721
Investments                                           28,939             15,652
Other assets, net of accumulated amortization:
  Goodwill                                            95,187             73,099
  Deferred financing costs                            35,884             32,252
  Other, net                                          16,768             20,024
                                                ---------------   --------------
                                                     147,839            125,375
                                                ---------------   --------------

   Total Assets (notes 1 and 3)                   $2,020,621          2,789,927
                                                ===============   ==============
                                                                   (continued)


                                       3
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

              Consolidated Balance Sheets (unaudited), Continued

                                                     December 31,  September 30,
                                                         1999          2000
                                                     ------------   ------------
                                                           (in thousands)

Liabilities and Stockholders' Deficit

Current liabilities:
  Accounts payable                                    $  112,291        108,465
  Payable pursuant to IRU agreement                      135,322         53,826
  Accrued liabilities (note 6)                            85,709        206,611
  Deferred revenue (note 9)                               25,175        172,843
  Deferred gain on sale                                    5,475              -
  Current portion of capital lease obligations             8,090         55,761
  Current portion of long-term debt (note 7)                 796            796
  Current liabilities of discontinued operations             529            198
                                                      ------------  ------------
   Total current liabilities                             373,387        598,500
                                                      ------------  ------------

Capital lease obligations, less current portion           63,348        139,377
Long-term debt, net of discount, less current
  portion (note 7)                                     1,905,901      2,068,672
Other long-term liabilities                                2,526          3,247
                                                      ------------  ------------

   Total liabilities                                   2,345,162      2,809,796

Redeemable preferred stock of subsidiary ($397.9
  million and $441.7 million liquidation value at
  December 31, 1999 and September 30, 2000,
  respectively) (note 8)                                 390,895        435,337

Company-obligated mandatorily redeemable preferred
  securities of subsidiary  limited  liability
  company which holds solely  Company  preferred
  stock ($133.4 million liquidation value at
  December 31, 1999 and September 30, 2000,
  respectively)                                          128,428        128,719

8% Series A Convertible Preferred Stock ($781.7
  million liquidation value at September 30, 2000)
  (note 8)                                                     -        658,840

Stockholders' deficit:
  Common stock, $0.01 par value, 100,000,000 and
   200,000,000 shares authorized at  December 31,
   1999 and September 30, 2000, respectively;
   47,761,337 and 52,045,443 shares issued and
   outstanding at December 31, 1999 and September
   30, 2000, respectively                                     478           520
  Additional paid-in capital                              599,282       882,142
  Accumulated deficit                                  (1,443,624)   (2,116,802)
  Accumulated other comprehensive loss                          -        (8,625)
                                                      ------------  ------------
      Total stockholders' deficit                        (843,864)   (1,242,765)
                                                      ------------  ------------

Commitments and contingencies (note 9)

   Total Liabilities and Stockholders' Deficit
     (note 1)                                         $ 2,020,621     2,789,927
                                                      ============  ============

         See accompanying notes to consolidated financial statements.


                                       4
<PAGE>


                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

           Consolidated Statements of Operations Three Months and Nine
              months ended September 30, 1999 and 2000 (unaudited)

<TABLE>
<CAPTION>
                                                Three months ended  Nine months ended
                                                  September 30,       September 30,
                                               ----------------------------------------
                                                 1999      2000      1999       2000
                                               ---------  --------  --------  ---------
                                                (in thousands, except per share data)

<S>                                            <C>       <C>       <C>        <C>
Revenue                                        $115,166   144,801   337,151    477,778

Operating costs and expenses:
  Operating costs                                66,284   118,711   179,391    304,202
  Selling, general and administrative
   expenses                                      94,558    84,183   180,341    188,947
  Depreciation and amortization                  45,079    99,023   126,137    236,514
  Provision for impairment of long-lived
   assets (note 3)                                    -         -    29,300          -
  Net loss on disposal of long-lived assets         195     2,022      (771)     2,566
  Other, net                                        431       431       862      1,692
                                               ---------  --------  --------  ---------
   Total operating costs and expenses           206,547   304,370   515,260    733,921
                                               ---------  --------  --------  ---------

Operating loss                                  (91,381) (159,569) (178,109)  (256,143)

Other income (expense):
  Interest expense                              (52,891)  (66,014) (151,637)  (195,406)
  Interest income                                 3,772     5,898    11,669     20,437
  Other expense, net                               (333)     (352)   (2,676)      (349)
                                               ---------  --------  --------  ---------
                                                (49,452)  (60,468) (142,644)  (175,318)
                                               ---------  --------  --------  ---------
Loss from continuing operations before
 income taxes, preferred dividends
 and extraordinary gain                        (140,833) (220,037) (320,753)  (431,461)
Income tax expense                                    -       (10)        -        (10)
Accretion and preferred dividends on
 preferred securities of subsidiaries           (15,694)  (17,655)  (45,739)   (51,428)
                                               ---------  --------  --------  ---------

Loss from continuing operations before         (156,527) (237,702) (366,492)  (482,899)
extraordinary gain

Income (loss) on disposal and operation of
  discontinued operations                           748         -   (8,014)        736
                                               ---------  --------  --------  ---------

Extraordinary gain on sales of operations
 of NETCOM, net of income taxes of $6.4
 million                                              -         -   193,029          -
                                               ---------  --------  --------  ---------

   Net loss                                    (155,779)  (237,702) (181,477) (482,163)

Accretion and dividends of 8% Series A
 Convertible Preferred Stock to liquidation
 value (note 8)                                       -    (17,274)        -   (31,736)

Charge for beneficial conversion feature of
 8% Series A Convertible Preferred Stock
 (note 8)                                             -         -         -   (159,279)
                                               ---------  --------  --------  ---------

   Net loss attributable to common
   stockholders                                $(155,779) (254,976) (181,477) (673,178)
                                               =========  ========  ========  =========
</TABLE>


                                       5
<PAGE>


                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

         Consolidated Statements of Operations (unaudited), Continued
<TABLE>
<CAPTION>
                                             Three months ended    Nine months ended
                                                September 30,        September 30,
                                            ----------------------------------------
                                               1999       2000      1999      2000
                                            ----------  --------  --------  --------
                                             (in thousands, except per share data)

Other comprehensive loss:
<S>                                         <C>         <C>       <C>       <C>
  Unrealized loss on long-term investments          -   (8,625)         -   (8,625)
available for sale
                                            ----------  --------  --------  --------
   Comprehensive loss                       $(155,779)  (263,601) (181,477) (681,803)
                                            ==========  ========  ========  ========

Net loss per share - basic and diluted:
  Net loss attributable to common
   stockholders, before net income
   (loss) from discontinued operations
   and extraordinary gain                   $   (3.31)    (4.92)    (7.81)   (13.60)
  Net income (loss) from discontinued
   operations                                    0.02         -     (0.17)     0.02
  Extraordinary gain on sales of
   operations of NETCOM                             -         -      4.11         -
                                            ----------  --------  --------  --------
    Net loss per share - basic and diluted  $   (3.29)    (4.92)    (3.87)   (13.58)
                                            ==========  ========  ========  ========

Weighted average number of shares
 outstanding - basic and diluted               47,320    51,782    46,948    49,564
                                            ==========  ========  ========  ========
</TABLE>

         See accompanying notes to consolidated financial statements.


                                       6
<PAGE>


                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

               Consolidated Statement of Stockholders' Deficit
               Nine Months Ended September 30, 2000 (unaudited)


<TABLE>
<CAPTION>
                                                                    Accumulated
                                Common Stock  Additional               other         Total
                                -------------  paid-in  Accumulated comprehensive stockholders'
                                Shares Amount  capital   deficit       loss         Deficit
                                ------ ------ --------- ----------- ------------- -------------
                                                     (in thousands)
<S>                             <C>     <C>    <C>      <C>           <C>           <C>
Balances at January 1, 2000     47,761  $478   599,282  (1,443,624)            -      (843,864)

Shares issued for cash in
 connection with the exercise
 of options and warrants           936     9    14,366           -             -        14,375

Shares issued for cash in
 connection with the employee
 stock purchase plan               174     1     2,728           -             -         2,729
Shares issued as contribution
 to 401(k) plan                    178     2     4,296           -             -         4,298
Shares issued in exchange for
 long-term investment            2,996    30    21,595           -             -        21,625
Warrants issued in connection
 with 8% Series A Convertible
 Preferred Stock                     -     -    80,596           -             -        80,596
Value ascribed to beneficial
 conversion feature of 8% Series
 A Convertible Preferred Stock       -     -   159,279    (159,279)            -             -
Accretion and dividends of 8%
 Series A Convertible Preferred
 Stock                               -     -         -     (31,736)            -       (31,736)
Unrealized loss on long-term
 investment available for sale      -      -         -           -        (8,625)       (8,625)
Net loss                            -      -         -    (482,163)            -      (482,163)
                                 ------ ------ --------- -----------  -----------     ---------
Balances at September  30, 2000  52,045 $ 520   882,142  (2,116,802)      (8,625)   (1,242,765)
                                 ====== ====== ========= ===========  ===========   ===========
</TABLE>

         See accompanying notes to consolidated financial statements.


                                       7
<PAGE>


                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
          Nine Months Ended September 30, 1999 and 2000 (unaudited)

                                                             Nine months ended
                                                               September 30,
                                                            --------------------
                                                            ---------- ---------
                                                               1999      2000
                                                            ---------- ---------
                                                               (in thousands)

Cash flows from operating activities:
  Net loss                                                  $(181,477) (482,163)
  Net (income) loss from discontinued operations                8,014      (736)
  Extraordinary gain on sales of discontinued operations     (193,029)        -
  Adjustments to reconcile net loss to net cash used by
    operating activities:
      Recognition of deferred gain                            (17,376)   (6,239)
      Accretion and preferred dividends on preferred           45,739    51,428
       securities of subsidiaries
      Depreciation and amortization                           126,137   236,514
      Provision for impairment of long-lived assets            29,300         -
      Deferred compensation                                       862     1,294
      Net loss (gain) on disposal of long-lived assets           (771)    2,566
      Gain on sale of securities                                    -      (634)
      Provision for uncollectible accounts                     56,193    31,688
      Interest expense deferred and included in
       long-term debt, net of amounts capitalized
       on assets under construction                           134,709   151,535
      Interest expense deferred and included in capital         3,968     3,776
       lease obligations
      Amortization of deferred financing costs included in      3,541     3,933
       interest expense
      Contribution to 401(k) plan through issuance of           4,138     4,298
       common stock
      Other noncash expenses                                        -       301
      Change in operating assets and liabilities, excluding
       the effects of dispositions and noncash transactions:
         Receivables                                          (87,556)  (56,596)
         Prepaid expenses, deposits and inventory               3,147    (3,738)
         Accounts payable and accrued liabilities             (12,931)   52,188
         Deferred revenue                                      29,197   149,748
                                                            ---------- ---------
           Net cash provided (used) by operating activities   (48,195)  139,163
                                                            ---------- ---------
Cash flows from investing activities:
  Acquisition of property and equipment                      (368,134) (649,096)
  Change in accounts payable and accrued liabilities for
   purchase of long-term assets                                 3,288    50,682
  Proceeds from sales of operations of NETCOM, net of         252,881         -
   cash included in sale
  Proceeds from disposition of property, equipment and
   other assets                                                 4,302        20
  Proceeds from sales of short-term investments available
   for sale                                                    30,517    22,368
  Proceeds from sale of marketable securities                  30,000    10,634
  Decrease in restricted cash                                   5,098     4,818
  Purchase of investments                                     (28,489)   (1,400)
  Purchase of minority interest in subsidiary                  (6,039)        -
                                                            ---------- ---------
    Net cash used by investing activities                     (76,576) (561,974)
                                                            ---------- ---------
                                                                  (continued)

                                       8
<PAGE>


                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

         Consolidated Statements of Cash Flows (unaudited), Continued

                                                             Nine months ended
                                                                September 30,
                                                          ----------------------
                                                             1999        2000
                                                          ----------  ----------
                                                               (in thousands)

Cash flows from financing activities:
  Proceeds from issuance of common stock:
   Exercise of options and warrants                       $  10,761      14,375
   Employee stock purchase plan                               2,688       2,729
  Proceeds of  8% Series A Convertible Preferred
   Stock, net of issuance costs                                   -     720,330
  Proceeds from issuance of long-term  debt                  80,000      95,000
  Principal payments on capital lease obligations           (12,720)    (19,790)
  Payments on IRU agreement                                       -    (179,497)
  Principal payments on long-term debt                         (255)    (90,317)
  Payments of preferred dividends                            (6,695)     (6,695)
  Deferred debt issuance costs                               (4,777)       (304)
                                                          ----------  ----------
   Net cash provided by financing activities              $  69,002     535,831
                                                          ----------  ----------

   Net increase (decrease) in cash and cash equivalents     (55,769)    113,020
   Net cash provided (used) by discontinued operations       (5,362)        406
Cash and cash equivalents, beginning of period              210,307     103,288
                                                          ----------  ----------
Cash and cash equivalents end of period                 $   149,176     216,714
                                                          ==========  ==========

Supplemental disclosure of cash flows information of
 continuing operations:
  Cash paid for interest                                  $   9,419      30,614
                                                          ==========  ==========
                                                          ==========  ==========
  Cash paid for income taxes                              $   1,140         281
                                                          ==========  ==========

Supplemental schedule of noncash investing activities
 of continuing operations:
  Acquisition of corporate headquarters assets through
   the issuance of long-term debt and conversion of
   security deposit                                       $  33,077           -
                                                          ==========  ==========

  Shares issued in exchange for long-term investment       $      -      21,625
                                                          ==========  ==========

  Assets acquired pursuant to IRU agreement                $      -      96,903
  Assets acquired under capital leases                        6,190     135,578
                                                          ----------  ----------
   Total                                                  $   6,190     232,481
                                                          ==========  ==========

         See accompanying notes to consolidated financial statements.


                                       9
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements
                 December 31, 1999 and June 30, 2000 (unaudited)

(1)  Bankruptcy Proceedings

     During  the  quarter  ended  September  30,  2000  and  subsequent  to  the
     quarter-end,  a series  of  financial  and  operational  events  materially
     impacted  ICG  Communications,  Inc.  and its  subsidiaries  ("ICG"  or the
     "Company").  These events reduced the Company's  expected  revenue and cash
     flow  generation  for  the  remainder  of  2000  and  2001,  which  in turn
     jeopardized  the  Company's  ability  to comply  with its  existing  senior
     secured credit facility.  On November 14, 2000 (the "Petition  Date"),  ICG
     and most of its subsidiaries filed voluntary petitions for protection under
     Chapter 11 of the United States  Bankruptcy Code in the Federal District of
     Delaware  in  order  to  facilitate  the  restructuring  of  the  Company's
     long-term debt, trade  liabilities and other  obligations.  The Company and
     its  bankruptcy  filing  subsidiaries   (collectively  the  "Debtors")  are
     currently operating as  debtors-in-possession  under the supervision of the
     United States  District Court for the District of Delaware.  The bankruptcy
     petitions  were filed in order to preserve cash and to give the Debtors the
     opportunity to restructure their debt.

     Under the  Bankruptcy  Code,  the  rights  and  treatment  of  pre-petition
     creditors and shareholders are expected to be substantially  altered.  As a
     result of these  bankruptcy  proceedings,  substantially  all  liabilities,
     litigation and claims against the Debtors in existence at the Petition Date
     are  stayed  unless  the stay is  modified  or lifted or  payment  has been
     otherwise  authorized  by the  Bankruptcy  Court.  At this time,  it is not
     possible  to predict  the outcome of the Chapter 11 cases in general or the
     effects of such cases on the  Company's  business,  or on the  interest  of
     creditors and shareholders.  As a result of the bankruptcy  filing,  all of
     the Company's  liabilities  incurred prior to the Petition Date,  including
     certain secured debt, are subject to compromise.  No assurance can be given
     that the Company will be successful in reorganizing  its affairs within the
     Chapter 11 bankruptcy proceedings.

     Further,  due to the  bankruptcy  filing and  related  events,  there is no
     assurance  that the  carrying  amounts of assets  will be  realized or that
     liabilities  will be  liquidated  or settled for the amounts  recorded.  In
     addition, a plan of reorganization,  or rejection thereof, could change the
     amounts  reported  in the  financial  statements.  As a  result,  there  is
     substantial  doubt  about the  Company's  ability  to  continue  as a going
     concern.  The  ability of the  Company to  continue  as a going  concern is
     dependent upon, but not limited to, formulation, approval, and confirmation
     of a plan of  reorganization,  adequate  sources of capital,  customer  and
     employee  retention,  the ability to provide high quality  services and the
     ability to sustain positive results of operations and cash flows sufficient
     to continue to operate.

(2)  Organization and Basis of Presentation

     The  Company  is  a  facilities-based  communications  provider  and  local
     exchange   carrier.   The   Company   primarily   offers   voice  and  data
     communications  services,  including  local,  long  distance  and  enhanced
     telephony,  to small- to medium-sized business customers and offers network
     facilities and data management to ISP customers.  The Company also provides
     interexchange  services such as special access and switched access services
     to long distance carriers and other customers.  The Company began marketing
     competitive local dial-tone  services to business  customers in early 1997,
     subsequent  to the  passage of the  Telecommunications  Act of 1996,  which
     permitted  competitive  interstate and intrastate  telephone services.  The
     Company   began   offering    network    services   to   ISPs   and   other
     telecommunications providers in February 1999.

(3)  Significant Accounting Policies

     (a)  Basis of Presentation

          The Company's financial  statements should be read in conjunction with
          ICG's Annual Report on Form 10-K for the year ended December 31, 1999,
          as certain  information  and note  disclosures  normally  included  in
          financial  statements  prepared in accordance with generally  accepted
          accounting  principles have been condensed or omitted  pursuant to the
          rules and  regulations  of the United States  Securities  and Exchange
          Commission. The interim financial statements reflect all adjustments

                                       10
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(3)   Significant Accounting Policies (continued)

      (a) Basis of Presentation (continued)

          which  are,  in  the  opinion  of  management,  necessary  for a  fair
          presentation  of financial  position,  results of operations  and cash
          flows as of and for the interim periods  presented.  Such  adjustments
          are of a  normal  recurring  nature.  Operating  results  for the nine
          months ended September 30, 2000 are not necessarily  indicative of the
          results that may be expected  for the fiscal year ending  December 31,
          2000.

          Due to the event described in note 1, the Company is considering if an
          impairment  of  assets  has  occurred  under  Statement  of  Financial
          Accounting  Standards  "Accounting  for the  Impairment  of Long-Lived
          Assets and for Long-Lived  Assets to be Disposed of" ("SFAS 121").  As
          the Company is currently  undergoing a reorganization,  there is not a
          definitive  business  plan in  place  with  which to  determine  if an
          impairment has occurred or, if an impairment has occurred,  the amount
          of such  impairment.  As a result,  the  Company  has not  reduced the
          carrying  values  of  its  assets  in  the  accompanying  consolidated
          financial statements.

          All  significant  intercompany  accounts  and  transactions  have been
          eliminated in consolidation.

      (b) Recent Accounting Pronouncements

          In March 2000,  the  Financial  Accounting  Standards  Board  ("FASB")
          issued FASB Interpretation No. 44 "Accounting for Certain Transactions
          involving Stock  Compensation - and  interpretation of APB Opinion No.
          25" ("FIN 44"). This opinion  provides  guidance on the accounting for
          certain stock option  transactions and subsequent  amendments to stock
          option  transactions.  FIN 44 is effective  July 1, 2000,  but certain
          conclusions cover specific events that occur after either December 15,
          1998 or January  12,  2000.  To the extent  that FIN 44 covers  events
          occurring  during the period  from  December  15, 1998 and January 12,
          2000,   but  before  July  1,  2000,  the  effects  of  applying  this
          Interpretation  are  to be  recognized  on a  prospective  basis.  The
          adoption  of FIN 44 did not have a  material  effect on the  Company's
          financial position or results of operation.

          In December  1999,  the  Securities  and Exchange  Commission  ("SEC")
          released  Staff  Accounting   Bulletin   ("SAB")  No.  101,   "Revenue
          Recognition in Financial  Statements",  which provides guidance on the
          recognition,  presentation  and  disclosure  of revenue  in  financial
          statements  filed with the SEC.  Subsequently,  the SEC  released  SAB
          101B, which delayed the implementation date of SAB 101 for the Company
          until the quarter ending  December 31, 2000. The Company has completed
          its  assessment  of the  impact of SAB 101 and the  impact  will be to
          defer  and  amortize  installation  revenue  over the  customer  term,
          resulting in an increase in accumulated deficit at January, 1, 2000 of
          approximately  $12.7 million, an increase in revenue recognized in the
          three months ended  September 30, 2000 of  approximately  $0.1 million
          and a  reduction  in  revenue  recognized  in the  nine  months  ended
          September 30, 2000 of approximately $1.1 million.

          In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
          Instruments and Hedging Activities".  SFAS 133 establishes  accounting
          and  reporting  standards  for  derivative   instruments  and  hedging
          activities.  As amended by SFAS No. 137,  "Accounting  for  Derivative
          Instruments and Hedging  Activities-Deferral of Effective Date of FASB
          Statement  No.  133",  and  SFAS  No.  138   "Accounting  for  Certain
          Derivative Instruments and Certain Hedging Activities, an Amendment of
          FASB  Statement  No.133"  ("SFAS  138").  SFAS  133 and  SFAS  138 are
          effective for all quarters and fiscal years  beginning  after June 15,
          2000.  The Company  will adopt SFAS 133 and SFAS 138  effective at the
          beginning  of its fiscal year end 2001.  The Company  does not believe
          that the adoption of SFAS 133 and SFAS 138 will have a material effect
          on the Company's financial position or results of operations.

      (c) Reclassifications

          Certain 1999 amounts have been  reclassified  to conform with the 2000
          presentation.


                                       11
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(4)  Accounts Receivable

     The Company  experienced  network  performance  problems  which  caused the
     Company's  network  performance to drop below certain service levels agreed
     upon  between  the  Company and certain  Internet  remote  access  services
     ("IRAS")  customers.  Based on the Company's  inability to quickly  resolve
     these  problems,  the  Company  issued  credits,  in  accordance  with  the
     provisions of the customer  agreements,  for  approximately $8 million.

     During the quarter  ended  September  30,  2000,  the Company  reviewed the
     adequacy  of the  reserve  for bad debts  related to its  Internet  service
     provider ("ISP") customers as the Company had concerns about the ability of
     certain of these customers to continue operating and attract future capital
     given  current  market  conditions,  as well as  concerns  associated  with
     certain  contract  disputes.  Revenue  generated  from  the  Company's  ISP
     customers,  including related reciprocal compensation revenue,  represented
     approximately 50% of total revenue for the three months ended September 30,
     2000.  As a  result,  the  Company  recorded  an  additional  provision  of
     approximately  $16 million.  In  addition,  a provision  for  uncollectible
     accounts  in the  approximate  amount of $4 million  was  provided  for the
     receivable  from  one  incumbent  local  exchange   carrier   ("ILEC")  for
     termination of local ISP traffic deemed uncollectible because of changes in
     the regulatory environment.

(5)  Property and Equipment

      Property and equipment,  including  assets held under capital  leases,  is
      comprised of the following:

                                                   December 31,    September 30,
                                                       1999            2000
                                                   ------------    -------------
                                                          (in thousands)

      Land                                           $    11,503    $    15,436
      Buildings and improvements                          38,502         38,727
      Furniture, fixtures and office equipment           108,024        125,105
      Internal-use software costs                         14,797         71,688
      Machinery and equipment                             32,884         44,588
      Fiber optic equipment                              401,676        510,076
      Switch equipment                                   319,398        501,752
      Fiber optic network                                428,195        325,582
      Site improvements                                   37,814         55,944
      Service installation costs                          52,649         92,751
      Construction in progress                           359,936        869,164
                                                     ------------   ------------
                                                       1,805,378      2,650,813
      Less accumulated depreciation                     (279,698)      (457,363)
                                                     ------------   ------------
                                                     $ 1,525,680    $ 2,193,450
                                                    ============    ============

      Property and equipment  includes  approximately  $869 million of equipment
      which  has  not  been  placed  in  service  at  September  30,  2000,  and
      accordingly,  is not being depreciated.  Due to the bankruptcy proceedings
      discussed in note 1, there is substantial  uncertainty about the Company's
      ability to complete and place in service these assets.

(6)   Accrued Liabilities

      The Company accrues for property and equipment that has been received, but
      which has not been  invoiced.  Such balances are reflected in property and
      equipment and accrued liabilities in the accompanying consolidated balance
      sheet. As of September 30, 2000, accrued liabilities includes $156 million
      of such liabilities.

                                       12
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(7)   Long-term Debt

      Long-term debt is summarized as follows:

                                                     December 31,  September 30,
                                                         1999           2000
                                                    -------------  -------------
                                                           (in thousands)

      Senior Facility due on scheduled maturity
        dates, secured by substantially all of the
        assets of ICG Equipment and NetAhead with
        weighted average interest rates ranging from
        9.26% to 10.06% for the nine months ended
        September  30, 2000 (a)                           $  79,625      84,362
      9 7/8% Senior discount notes of ICG Services,
        net of discount                                     293,925     315,931
      10% Senior discount notes of ICG Services,
        net of discount                                     361,290     388,724
      11 5/8% Senior discount notes of Holdings,
        net of discount                                     137,185     149,279
      12 1/2% Senior discount notes of Holdings,
        net of discount                                     468,344     512,848
      13 1/2% Senior discount notes of Holdings,
        net of discount                                     532,252     584,301
      Mortgage loan payable with interest at 8 1/2%,
        due monthly into 2009, secured by building              999         946
      Mortgage loan payable with variable rate of
        interest (15.21% at September 30, 2000) due
        monthly into 2013, secured by corporate
        headquarters                                         33,077      33,077
                                                         -----------  ----------
                                                          1,906,697   2,069,468
        Less current portion                                   (796)       (796)
                                                         -----------  ----------
                                                         $1,905,901   2,068,672
                                                         ===========  ==========

      As a result of filing for  bankruptcy,  all due dates on the various  debt
      issuances have been  accelerated in accordance with the terms of the debt.
      However,  due  to  the  nature  of  the  bankruptcy  proceedings  and  the
      uncertainty   surrounding  any  potential  debt   settlements   under  the
      bankruptcy proceedings,  the Company has not at this time reclassified any
      amounts to current.

               On September 18, 2000, the Company  announced that lower expected
               financial  results  would put the  Company  in breach of its $200
               million Senior Facility,  absent obtaining  appropriate  covenant
               waivers. On September 29, 2000, the Company announced that it had
               reached  agreement with its senior lenders to receive  waivers on
               potential  defaults  under the  Senior  Facility.  The  Company's
               lenders  allowed  a  sixty  day  waiver,  and  as  part  of  this
               agreement,  required  payment of 50%,  or $89.7  million,  of the
               outstanding  balance of the Senior  Facility as of September  30,
               2000.

               On November 14, 2000, the Company  announced that it had obtained
               a   commitment    letter   which   will   provide   the   Company
               debtor-in-possession  ("DIP")  financing  for a  minimum  of $200
               million  and the  potential  for an  additional  $150  million if
               certain  criteria  are met.  This DIP  financing  is  subject  to
               customary   pre-closing   conditions   and  is  contingent   upon
               Bankruptcy  Court approval.  The DIP financing terms require that
               the  Senior  Facility  be paid off at the time of the first  draw
               under the DIP financing.


                                       13
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(8)   Redeemable Preferred Stock of Subsidiary and Mandatorily Redeemable 8%
      Series A Convertible Preferred Stock

      Redeemable preferred stock of subsidiary is summarized as follows:

                                                    December 31,   September 30,
                                                        1999           2000
                                                   --------------  -------------
                                                           (in thousands)
      14% Exchangeable preferred stock of
        Holdings, mandatorily redeemable in 2008   $   144,144         160,411
      14 1/4% Exchangeable preferred stock of
        Holdings, mandatorily redeemable in 2007       246,751         274,926
                                                   --------------  -------------
                                                   $   390,895         435,337
                                                   ==============  =============

      Mandatorily Redeemable 8% Series A Convertible Preferred Stock

      On  April  10,  2000,  the  Company  sold  75,000  shares  of  mandatorily
      redeemable 8% Series A-1, A-2 and A-3  Convertible  Preferred Stock of ICG
      (the "8% Series A Convertible Preferred Stock") and 10,000,000 warrants to
      purchase  ICG Common  Stock to  affiliates  of Liberty  Media  Corporation
      ("Liberty Media"),  Hicks, Muse, Tate & Furst Incorporated  ("Hicks Muse")
      and Gleacher Capital Partners  ("Gleacher  Capital")  (collectively,  "the
      Investors").  The sale of the 8%  Series  A  Convertible  Preferred  Stock
      resulted in net proceeds to the Company of $720.3  million.  Each share of
      8%  Series  A  Convertible  Preferred  Stock  has an  initial  liquidation
      preference of $10,000 per share and bears a cumulative dividend rate of 8%
      per  annum,   compounded  daily.  Dividends  accrete  to  the  liquidation
      preference on a daily basis for five years and are  thereafter  payable in
      cash or additional liquidation preference.

      The 8% Series A Convertible  Preferred  Stock is  immediately  convertible
      into shares of ICG Common Stock at a conversion  rate of $28.00 per share,
      subject  to  adjustment,  and will  have  voting  rights  with the  common
      stockholders on an as-converted  basis.  The holders of the Series A-1 and
      A-2 8% Series A Convertible  Preferred Stock  collectively are entitled to
      elect up to three  directors  to the  Company's  Board of  Directors.  The
      Company may redeem the 8% Series A Convertible Preferred Stock at any time
      after  five  years  from  the date of  issuance  through  their  mandatory
      redemption on June 15, 2015. The warrants to purchase ICG Common Stock are
      immediately  convertible  into shares of ICG Common  Stock at a conversion
      rate of  $34.00  per  share  and  expire  in five  years  from the date of
      issuance. The affiliates of Liberty Media, Hicks Muse and Gleacher Capital
      purchased $500.0 million, $230.0 million and $20.0 million,  respectively,
      in 8% Series A Convertible  Preferred Stock and received a ratable portion
      of the total 10,000,000 warrants.  The value allocated to the warrants was
      $80.6 million at the time of the transaction.

      In accordance  with Emerging  Issues Task Force ("EITF") 98-5  "Accounting
      for  Convertible   Securities  with  Beneficial   Conversion  Features  or
      Contingently  Adjustable  Conversion Ratios", the Company allocated $159.3
      million of the proceeds  from the issuance of the 8% Series A  Convertible
      Preferred  Stock  to  the  intrinsic  value  of  the  embedded  beneficial
      conversion feature of the convertible  preferred  securities to additional
      paid-in  capital.  As the 8%  Series  A  Convertible  Preferred  Stock  is
      immediately  convertible  into shares of ICG common stock,  the beneficial
      conversion   feature  was   recognized   as  a  return  to  the  preferred
      shareholders and included as an element of net loss attributable to common
      shareholders  during  the nine  months  ended  September  30,  2000 in the
      accompanying consolidated statement of operations.


                                       14
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(9)   Commitments and Contingencies

      As a  result  of the  Company's  filing  for  bankruptcy  protection,  all
      commitments and contingencies  could be substantially  modified during the
      Company's bankruptcy restructuring process.

      (a) Network Capacity and Construction

          In January 2000, Qwest  Communications  Corporation  ("Qwest") and the
          Company  signed an agreement,  whereby the Company will  provide,  for
          $126.5  million over the initial  six-year term of the  agreement,  an
          indefeasible  right of use  ("IRU")  for  designated  portions  of the
          Company's  local  fiber optic  network.  The  Company  will  recognize
          revenue  ratably  over  the  term  of the  agreement,  as the  network
          capacity is available for use. The agreement was amended in March 2000
          to include additional capacity for proceeds of $53.8 million, of which
          $21.5  million has not been paid as of September  2000.  Qwest may, at
          its option, extend the initial term of the agreement for an additional
          four-year  period and an  additional  10-year  period for  incremental
          payment  at the time  the  option  exercises.  In the  event  that the
          Company  fails to deliver  any of the  network  capacity  by March 31,
          2001,  Qwest is entitled to cancel any  undelivered  network  capacity
          segments and receive  immediate  refund of any amounts already paid to
          the Company for such segments.  The Company  recognized  approximately
          $1.0 million and $2.0 million of revenue  related to this agreement in
          the three and nine months  ended  September  30,  2000,  respectively.
          Given  limitations  on future  capital  expenditures  of the  Company,
          $156.8 million of deferred  revenue  related to the future delivery of
          services  pursuant  to  this  agreement  is  reflected  as  a  current
          liability in the accompanying balance sheet.

      (b) Telecommunications and Line Purchase Commitments

          Effective  September  1998,  the  Company  entered  into  two  service
          agreements with three-year terms with WorldCom Network Services,  Inc.
          ("WorldCom"). Under the Telecom Services Agreement, WorldCom provides,
          at designated rates,  switched  telecommunications  services and other
          related  services  to the  Company,  including  termination  services,
          toll-free  origination,  switched access,  dedicated access and travel
          card services. Under the Carrier Digital Services Agreement,  WorldCom
          provides the Company,  at designated  rates, with the installation and
          operation  of  dedicated  digital   telecommunications   interexchange
          services,  local access and other related services,  which the Company
          believes  expedites  service  availability  to  its  customers.   Both
          agreements  require  that the Company  provide  WorldCom  with certain
          minimum  monthly  revenue,  which if not met, would require payment by
          the Company for the difference  between the minimum commitment and the
          actual  monthly  revenue.  Additionally,  both  agreements  limit  the
          Company's  ability to utilize  vendors other than WorldCom for certain
          telecommunications  services specified in the agreements.  The Company
          met all minimum revenue commitments to WorldCom under these agreements
          through September 30, 2000.

      (c) Other Commitments

          The Company has  entered  into  various  equipment  and line  purchase
          agreements with certain of its vendors. Under these agreements, if the
          Company does not meet a minimum  purchase level in any given year, the
          vendor may discontinue  certain  discounts,  allowances and incentives
          otherwise provided to the Company. In addition,  the agreements may be
          terminated  by either the  Company or the  vendor  upon prior  written
          notice.

          Additionally,  the Company has entered  into  certain  commitments  to
          purchase   capital   assets  with  an  aggregate   purchase  price  of
          approximately $94 million at September 30, 2000.

          Due to the current economic uncertainty of the Company's  construction
          in progress assets,  the Company may decide not to continue with these
          projects and incur additional termination costs.

      (d) Transport and Termination Charges

          ICG records revenue earned under interconnection agreements with ILECs
          as an element of its local  services  revenue.  Many of the ILECs have
          not paid all of the amounts  that the Company has  recorded as revenue
          and have disputed these charges based on the belief that dial-up calls


                                       15
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(9)   Commitments and Contingencies (continued)

      (d) Transport and Termination Charges (continued)

          to ISPs are not local traffic as defined by the various agreements and
          not subject to payment of  transport  and  termination  charges  under
          state and federal law and public  policies.  In addition,  some ILECs,
          while paying a portion of local  reciprocal  compensation  due to ICG,
          have  disputed  other  portions  of  the  charges   related  to  local
          reciprocal compensation.

          ICG has, as of September 30, 2000, a net  receivable  for  terminating
          local traffic in the approximate amount of $66 million,  approximately
          $29 million of which is due and payable, pursuant to the terms of
          executed agreements with several ILECs, when regulatory  approval of
          the amendments to the parties' interconnection agreements is obtained.
          ICG has received  cash of  approximately  $11 million and $94 million,
          during the three  months and nine months  ended  September  30,  2000,
          respectively, from certain ILECs for terminating local traffic.

          The  following  table   represents  the  amount  of  revenue  ICG  has
          recognized for terminating local traffic during the respective periods
          ($ in millions):


                     Three months ended            Nine months ended
                        September 30,                September 30,
                      1999          2000            1999         2000
                  ------------  ------------    -----------  ------------
                      $ 25          $ 26            $ 95        $ 100

          Revenue  for  the  nine  months  ended  September  30,  1999  includes
          approximately   $22  million  for  the  tandem  switching  and  common
          transport  rate  elements.   ICG  ceased,   effective  July  1,  1999,
          recognition  of these rate elements as revenue until cash receipts are
          either  received or the  uncertainty of receipt has been removed (such
          as the  execution of a binding  agreement).  ICG has continued to bill
          and  vigorously  pursue  collection  of  all  amounts  due  under  the
          agreements.

          Revenue  for  the  nine  months  ended  September  30,  2000  includes
          approximately  $13 million  derived from the  resolution of previously
          disputed issues not related to the period and approximately $4 million
          of revenue from rates earned pursuant to the previous  interconnection
          agreement, neither of which will recur in subsequent periods.

          The Company  determined  in the three months ended  September 30, 2000
          that approximately $4 million of the revenue previously recognized for
          terminating  ISP traffic for one ILEC may not be collectible  due to a
          changing regulatory environment and has therefore provided a provision
          for uncollectible accounts.

          During the quarter,  the Colorado  Public Utility  Commission  ("PUC")
          issued a ruling in an ICG  arbitration  decision that,  subject to the
          outcome of judicial appellate  proceedings,  denies ICG the ability to
          collect reciprocal compensation for ISP-bound traffic initiated on the
          incumbent  network and  connected on ICG's  network in Colorado when a
          new  interconnection  agreement  between ICG and Qwest  Communications
          (formerly  US  West)  becomes  effective.  ICG  believes  that the new
          interconnection  agreement  will  become  effective  during the fourth
          quarter,  after the parties  execute and receive PUC approval of a new
          interconnection   agreement   that   complies  with  the  PUC's  final
          arbitration decision.  Once effective,  the terms in the new agreement
          concerning  compensation  for  terminating  ISP  traffic  will then be
          applied retroactively beginning 45 days prior to the effective date of
          the new agreement.  In prior periods, the impacted traffic represented
          approximately 15% of the Company's applicable terminating traffic.

                                       16
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(9)   Commitments and Contingencies (continued)

      (e) Litigation

          During the third  quarter  2000,  the  Company  was served  with seven
          lawsuits filed by various  shareholders in the Federal  District Court
          for the  District of Colorado  (Case  numbers:  00-S-1864,  00-S-1910,
          00-S-1908, 00-S-1945, 00-S-1963, 00-S-1957, and 00-S-1919). All of the
          suits name as defendants  the Company,  the  Company's  former CEO, J.
          Shelby  Bryan  and  the  Company's   former   President,   John  Kane.
          Additionally,  one of  the  complaints  names  the  Company's  current
          President, William S. Beans, Jr., as a defendant.

          All of the complaints seek unspecified  damages for alleged violations
          of Rules 10(b) and 20(a) of the  Securities  Exchange Act of 1934. The
          complaints  seek class action  certification  for  similarly  situated
          shareholders. It is anticipated that the lawsuits will be consolidated
          and that a lead  plaintiff's  counsel will be chosen by the Court. The
          Company has retained the law firm of Skadden,  Arps, Slate,  Meagher &
          Flom LLP to vigorously  defend it against these lawsuits.  The Company
          has also  tendered  these claims to the  Company's  insurers.  At this
          time, it is  anticipated  that the claims  against the Company will be
          stayed  pursuant  to  the  Company's  filing  for  bankruptcy.  It  is
          uncertain  at  this  time  whether  these  lawsuits  will   materially
          adversely effect the Company's financial or operational stability.

          On April 4, 1997,  certain  shareholders  of Zycom filed a shareholder
          derivative suit and class action  complaint for  unspecified  damages,
          purportedly on behalf of all of the minority shareholders of Zycom, in
          the District Court of Harris County, Texas (Case No. 97-17777) against
          the Company, Zycom and certain of their subsidiaries.  In this action,
          the   plaintiffs   alleged   that  the  Company  and  certain  of  its
          subsidiaries breached certain fiduciary duties owed to the plaintiffs.
          The Company  denied all such  allegations.  The  Company has  recently
          finalized a settlement agreement with these shareholders.

          The Company is a party to certain other litigation which has arisen in
          the ordinary  course of business.  In the opinion of  management,  the
          ultimate  resolution of these matters will not have a material adverse
          effect on the Company's financial condition,  results of operations or
          cash flows.

(10)  Summarized Financial Information of ICG Holdings, Inc.

      The 11 5/8% Senior Discount Notes due 2007 (the "11 5/8% Notes") issued by
      Holdings  during 1997 are  guaranteed by ICG. The 12 1/2% Senior  Discount
      Notes due 2006 (the "12 1/2% Notes") and the 13 1/2% Senior Discount Notes
      due 2005 (the "13 1/2%  Notes")  issued by Holdings  during 1996 and 1995,
      respectively, are guaranteed by ICG and Holdings-Canada.

      The  separate  complete  financial  statements  of Holdings  have not been
      included  herein because such  disclosure is not considered to be material
      to the  holders  of the 11 5/8%  Notes,  the 12 1/2% Notes and the 13 1/2%
      Notes.

                                       17
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(10) Summarized Financial Information of ICG Holdings, Inc. (continued)

     However,  summarized  combined  financial  information for Holdings and its
     subsidiaries is as follows:

              Summarized Consolidated Balance Sheet Information

                                                   December 31,    September 30,
                                                       1999             2000
                                                  -------------    -------------
                                                          (in thousands)
                                                  ------------------------------

     Current assets                                $   263,870          408,348
     Property and equipment, net                       675,613          903,171
     Other non-current assets, net                     128,489          107,311
                                                  -------------    -------------
     Total assets                                  $ 1,067,972        1,418,830
                                                  =============    =============

     Current liabilities                           $   148,042          381,355
     Long-term debt, less current portion            1,138,734        1,247,328
     Capital lease obligations, less
       current portion                                  57,564           50,953
     Other long-term liabilities                         1,233              659
     Due to ICG Communications, Inc.                   190,320          945,078
     Due to parent                                      14,001           14,001
     Due to (from) ICG Services                        128,893         (197,358)
     Redeemable preferred stock                        390,895          435,337
     Stockholder's deficit                          (1,001,710)      (1,458,523)
                                                  -------------    -------------
     Total liabilities and stockholders' deficit   $ 1,067,972        1,418,830
                                                  =============    =============

            Summarized Consolidated Statement of Operations Information

                                    Three months ended       Nine months ended
                                       September 30,           September 30,
                                  ------------------------  --------------------
                                    1999          2000       1999       2000
                                  ----------   ----------- ---------  ----------
                                                 (in thousands)

      Total revenue                 112,190      140,310     336,949    452,210
      Total operating costs and
        expenses                    156,556      294,182     476,170    771,102
                                  ----------   ----------- ---------- ----------
      Operating loss                (44,366)    (153,872)   (139,221)  (318,892)
                                  ==========   =========== ========== ==========
      Loss from continuing
        operations                 (125,816)    (213,593)   (294,567)  (411,635)
                                  ==========   =========== ========== ==========
      Net loss                      (97,619)    (213,212)   (302,581)  (456,813)
                                  ==========   =========== ========== ==========

                                       18
<PAGE>

                  ICG COMMUNICATIONS, INC. AND SUBSIDIARIES

            Notes to Consolidated Financial Statements, Continued

(11)  Condensed Financial Information of ICG Holdings (Canada) Co.

      Condensed financial information for Holdings-Canada only is as follows:

                       Condensed Balance Sheet Information

                                             December 31,      September 30,
                                                 1999              2000
                                            -------------     -------------
                                                     (in thousands)

        Current assets                      $        82               82
        Advances to subsidiaries                 14,001           14,001
                                            --------------   -------------
                Total assets                $    14,083           14,083
                                            ==============   =============

        Current liabilities                 $        73               73
        Due to parent                             2,442            2,454
        Share of losses of subsidiaries       1,001,710        1,458,523
        Shareholders' deficit                  (990,142)      (1,446,967)
                                            --------------   -------------
               Total liabilities and
                shareholders' deficit       $    14,083           14,083
                                            ==============   =============

                    Condensed Statement of Operations Information

                                      Three months ended     Nine months ended
                                         September 30,         September 30,
                                      --------------------  --------------------
                                        1999       2000       1999       2000
                                      ---------- ---------- ---------  ---------
                                                   (in thousands)

      Total revenue                          -          -          -          -
      Total operating costs and            604          -      1,810         12
      expenses
                                      ---------- ---------  ---------  ---------
                                      ---------- ---------  ---------  ---------
      Operating loss                      (604)         -     (1,810)       (12)
      Losses of subsidiaries           (97,619)  (214,704)  (302,581)  (456,813)
                                      ---------- ---------  ---------  ---------
      Net loss attributable to
      common shareholders              (98,223)  (214,704)  (304,391)  (456,825)
                                      ========== =========  =========  =========

(12) Condensed  Financial  Information  of  ICG  Communications,   Inc.  (Parent
     Company)

     The primary assets of ICG are its  investments in ICG Services,  ICG Tevis,
     ICG Funding and Holdings-Canada,  including advances to those subsidiaries.
     Certain  corporate  expenses of the parent  company  are  included in ICG's
     statement  of  operations  and were  approximately  $1.4  million  and $2.3
     million for the three  months and nine months  ended  September  30,  1999,
     respectively,  and $0.5  million and $1.5  million for the three months and
     nine months ended September 30, 2000,  respectively.  ICG has no operations
     other than those of ICG Services, ICG Funding and Holdings-Canada and their
     subsidiaries.


                                       19
<PAGE>

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
         RESULTS OF OPERATIONS

      The following discussion includes certain  forward-looking  statements and
information  that is based on the beliefs of management  as well as  assumptions
made by management based on information currently available to the Company. When
used in  this  document,  the  words  "anticipate",  "believe",  "estimate"  and
"expect"  and  similar  expressions,  as  they  relate  to  the  Company  or its
management,   are  intended  to  identify  forward-looking   statements.   These
forward-looking  statements  are  intended  to  qualify  as  safe  harbors  from
liability as  established  by the Private  Securities  Litigation  Reform Act of
1995. Such  statements  reflect the current views of the Company with respect to
future events and are subject to certain risks,  uncertainties  and assumptions.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially from
those described in this document. These forward-looking  statements are affected
by important factors, including, but not limited to, the following:


o     The  uncertainty  of the  Company's  future as a result  of  filing  for
      protection under bankruptcy law;
o     The significant  amount of indebtedness  incurred by the Company and the
      Company's ability to successfully restructure this indebtedness;
o     The  expectation  of  continued  operating  losses  for the  foreseeable
      future;
o     The Company's ability to successfully maintain commercial  relationships
      with its critical vendors and suppliers;
o     The Company's ability to retain its major customers on profitable terms;
o     The  availability  and  terms  of  the  significant  additional  capital
      required to fund the Company's  continued  operations;
o     The extensive competition the Company will face; o The Company's ability
      to attract and retain qualified management and employees;
o     The  Company's  ability  to access  markets  and  obtain  any  required
      governmental  authorizations,  franchises  and  permits,  in  a  timely
      manner,  at reasonable costs and on satisfactory  terms and conditions;
      and
o     Changes  in,  or the  Company's  inability  to  comply  with,  existing
      government regulations.

      These  forward-looking  statements  speak  only  as of the  date  of  this
Quarterly  Report.  The Company does not undertake  any  obligation to update or
revise  publicly  any  forward-looking  statements,  whether  as a result of new
information,  future events or otherwise. Although the Company believes that its
plans,   intentions   and   expectations   reflected  in  or  suggested  by  the
forward-looking  statements made in this Quarterly Report are reasonable,  there
is no assurance that such plans, intentions or expectations will be achieved.

      The results of  operations  for the three and nine months ended  September
30, 1999 and 2000 represent the consolidated  operating  results of the Company.
(See the  unaudited  consolidated  financial  statements  of the Company for the
three and nine months ended September 30, 2000 included  elsewhere  herein.) The
Company's  consolidated  financial  statements reflect the operations of Network
Services,  Satellite Services,  Zycom and NETCOM as discontinued for all periods
presented.  The terms  "fiscal" and "fiscal year" refer to the Company's  fiscal
year ending December 31. All dollar amounts are in U.S. dollars.

COMPANY OVERVIEW

General

      ICG  Communications  Inc.  ("ICG" or the "Company") is a  facilities-based
communications   provider.   The  Company   primarily   offers  voice  and  data
communication  services directly to small- to medium-sized  business  customers,
and data access,  transport and  management to ISP customers.  In addition,  the
Company  offers  special access and switched  access  services to  long-distance
companies and other customers.

      ICG's  business  has been  transformed  over the  past  few  years  from a
regional  competitive  access provider  primarily  providing  access services to
interexchange  carriers  and medium- to  large-sized  business  customers,  to a
competitive  local exchange carrier with a nationwide  backbone  providing voice
and data  services  to small- to  medium-sized  business  customers,  as well as
network facilities and data management to ISP customers.  The Company's business

                                       20
<PAGE>

transformation  was initially  driven by the deregulation of the local telephony
markets  in 1996 and  subsequently  by  changing  technology  and  growth of the
Internet.

Bankruptcy Proceedings

     During  the  quarter  ended  September  30,  2000  and  subsequent  to  the
quarter-end,  a series of financial and operational  events materially  impacted
ICG  Communications,  Inc.  and  its  subsidiaries  ("ICG"  or  the  "Company").
Specifically,  these events reduced the Company's expected revenue and cash flow
generation  for the remainder of 2000 and 2001,  which in turn  jeopardized  the
Company's ability to comply with its existing senior secured credit facility. On
November 14, 2000 (the "Petition Date"),  ICG and most of its subsidiaries filed
voluntary  petitions  for  protection  under  Chapter  11 of the  United  States
Bankruptcy  Code in the Federal  District of Delaware in order to facilitate the
restructuring  of the Company's  long-term  debt,  trade  liabilities  and other
obligations.  The Company and its bankruptcy filing  subsidiaries  (collectively
the  "Debtors")  are  currently  operating  as  debtors-in-possession  under the
supervision  of the United States  District  Court for the District of Delaware.
The  bankruptcy  petitions  were filed in order to preserve cash and to give the
Debtors the opportunity to restructure their debt.

     Under the  Bankruptcy  Code,  the  rights  and  treatment  of  pre-petition
creditors and shareholders are expected to be substantially altered. As a result
of these bankruptcy proceedings,  substantially all liabilities,  litigation and
claims  against the Debtors in existence at the Petition  Date are stayed unless
the stay is modified or lifted or payment has been  otherwise  authorized by the
Bankruptcy Court. At this time, it is not possible to predict the outcome of the
Chapter  11 cases in  general  or the  effects  of such  cases on the  Company's
business,  or on the interest of creditors and shareholders.  As a result of the
bankruptcy  filing,  all of the  Company's  liabilities  incurred  prior  to the
Petition Date,  including  certain  secured debt, are subject to compromise.  No
assurance can be given that the Company will be successful in  reorganizing  its
affairs within the Chapter 11 bankruptcy proceedings.

     Further,  due to the  bankruptcy  filing and  related  events,  there is no
assurance  that  the  carrying  amounts  of  assets  will  be  realized  or that
liabilities will be liquidated or settled for the amounts recorded. In addition,
a plan of  reorganization,  or  rejection  thereof,  could  change  the  amounts
reported in the financial  statements.  As a result,  there is substantial doubt
about the Company's  ability to continue as a going concern.  The ability of the
Company to continue as a going  concern is dependent  upon,  but not limited to,
formulation,  approval,  and confirmation of a plan of reorganization,  adequate
sources of capital, customer and employee retention, the ability to provide high
quality  services and the ability to sustain  positive results of operations and
cash flows sufficient to continue to operate.

Summary of Third Quarter and Subsequent Events

      Chronology of Events

     During  the third  quarter,  the  Company  significantly  lowered  expected
revenue  and cash flow  derived  from  terminating  local ISP  traffic  based on
several significant regulatory and operational developments.  Specifically,  the
Company announced long-term agreements with several ILECs that guaranteed future
revenue,  albeit at a lower rate.  Second,  a decision from the Colorado  Public
Utility  Commission  ("PUC")  made  in  August  2000  denied   compensation  for
Internet-bound  traffic.  Finally, as the Company increased the number of resold
lines,  reciprocal  compensation  was  reduced,  as  these  resold  lines do not
generate reciprocal compensation.

      In August 2000,  ICG  received  letters from two,  large  Internet  remote
access  service  ("IRAS")  customers  indicating  that ICG's service and network
performance  did not meet  standards  contractually  agreed  upon.  Absent quick
resolution of these issues, the customers stated they either were considering or
intended to terminate contractual arrangements.

     On August 22, 2000, ICG's Chairman and Chief Executive  Officer,  J. Shelby
Bryan resigned each of these  positions and the Board of Directors  elected Carl
E. Vogel to the position of Chairman and Chief Executive Officer.  Mr. Vogel, of
Liberty Media Group, invested $500 million in ICG through the purchase of Series
A  Convertible  Preferred  Stock in April  2000.  Mr.  Vogel is also Senior Vice
President of Liberty Media Corp and Chief Executive Officer of Liberty Satellite
and Technology.

      The  combination  of lower  reciprocal  compensation  and the reduction in
revenue  earned  from  IRAS   customers  for  the  third  and  fourth   quarters
substantially  reduced  expected  revenue and EBITDA for the  second-half  2000.
Further,  reduced line commitments for the installation of IRAS products lowered
expected IRAS revenue and EBITDA for 2001. Therefore, on September 18, 2000, the

                                       21
<PAGE>

Company  announced  that lower than  expected  financial  results based on these
events would, absent obtaining  appropriate covenant waivers, put the Company in
breach of its $200 million senior secured  credit  facility.  Also at this time,
the Company announced that it had a revised business plan,  required  additional
funding and was exploring all strategic options involving the Company.

     On the  evening of  September  18,  2000,  Carl Vogel,  Chairman  and Chief
Executive  Officer  resigned  from his  position  as CEO and  from the  Board of
Directors.  In  addition,  Mr. Gary Howard  representing  Liberty  Media and Mr.
Thomas Hicks representing Hicks Muse resigned as directors.

     On September 19, 2000,  the Board of Directors  ratified the formation of a
Special Executive Committee to address the current events affecting the Company.
The Special  Executive  Committee is comprised of Mr. William Laggett,  Mr. John
Moorhead, Mr. Leontis Teryazos and Mr. Walter Threadgill.

     On September 26, 2000 the ICG Board of Directors  appointed  Randall Curran
as Chief Executive Officer. In addition, the Company hired Wasserstein Perella &
Co., independent financial advisors, Zolfo Cooper, LLC, advisors that specialize
in  company  turnarounds  and  restructuring,  and  Gleacher  &  Co.,  financial
advisors.

     On September 29, 2000, the Company  announced that it had reached agreement
with its senior  lenders to receive  waivers  on  potential  defaults  under its
senior secured credit facility.  The Company's  lenders allowed a 60-day waiver,
and as part of this agreement, required payment of 50%, or $89.7 million, of the
outstanding balance of the facility as of September 30, 2000.

      During the third quarter and subsequent thereto,  the Company attempted to
obtain  additional  funding while at the same time cutting capital  expenditures
and minimizing  operating  expenditures in order to maximize cash flow. However,
consistent  with the  capital  markets  reluctance  to  provide  funding  to the
telecommunications  industry, the capital markets previously open to the Company
withdrew  interest.  Primarily  as a result of these  events and in  response to
announcements  made by the  Company,  the value of ICG's  equity and public debt
dramatically  deteriorated  in price during the third quarter.  In  combination,
sources of available capital quickly diminished.

      On November 14, 2000, the Company filed for Chapter 11 protection. Also on
this day, the Company  announced that it had obtained a commitment  letter which
will provide the Company  debtor-in-possession  financing  for a minimum of $200
million and the potential for an additional $150 million if certain criteria are
met.  This  debtor-in-possession  financing is subject to customary  pre-closing
conditions and is contingent upon Bankruptcy Court approval.  As of mid-November
2000,   ICG  is  continuing   operations   and   developing  a  formal  plan  of
reorganization.

      Details Relating to Compensation for Terminating Local ISP Traffic

     As noted above, expectations for revenue derived from terminating local ISP
traffic  were  lowered  during the third  quarter.  This  reduction  in forecast
revenue  was a result of three  events.  First,  the Company  signed  multi-year
contacts  with  major  ILECs  during  the six  months  ended  June 30,  bringing
certainty  of future  revenue that  historically  and  collectively  represented
approximately  75% of applicable  terminating  traffic,  albeit at a lower rate.
Second,  the Colorado PUC voted to deny compensation for terminating  traffic in
the state of Colorado,  a market that  accounted  for  approximately  15% of the
Company's  generated  minutes of use. In  addition,  as the Company  pursued its
strategy of rapid  national  expansion,  demand was met in new  markets  through
temporarily  reselling ILEC lines until the Company's  owned  facilities were in
place.  These resale lines made up an  increasing  percentage  of total lines of
service, and these lines do not generate reciprocal  compensation revenue. These
events were estimated to reduce revenue for the remainder of 2000 and in 2001.

      Details Relating to Network Performance

     In late 1999 and early 2000, the Company experienced significant demand for
its IRAS product, well in excess of expectations.  As such, aggressive build-out
targets were set to meet this demand. The Company,  however,  experienced delays
and unexpected  difficulties  associated with new  technologies  and scaling its
network and operating systems. These factors,  among others,  contributed to the
Company's  network  performance  dropping  below the agreed upon service  levels
between the Company and certain IRAS  customers.  These issues do not pertain to
the fiber or dial-tone networks,  or impact the Company's PRI, RAS or commercial
telephone products.


                                       22
<PAGE>

      In August 2000, the Company received letters from two large IRAS customers
indicating that the Company's IRAS service and network  performance did not meet
standards contractually agreed upon. Based on the Company's inability to resolve
these issues,  the Company issued certain  billing  credits to these  customers.
Additionally, these customers have subsequently advised the Company that they do
not intend to accept their full future  commitments  for  additional  lines,  as
previously agreed.

     IRAS billing credits issued to customers  during the third quarter amounted
to approximately $8 million. In addition, revenue expected to be earned from ISP
customers  in  August  and   September  was   approximately   $9  million  below
expectations and the total commitment for IRAS line  installations  was reduced.
The lower expected line additions  further reduced expected revenue derived from
terminating local ISP traffic, as fewer minutes of use were generated over ICG's
network.  Moreover,  as IRAS services are considered a higher margin product,  a
lower  percentage  of IRAS lines reduced the  Company's  revenue,  and adversely
impacts the expected gross margin and EBITDA.

      In September,  one of the IRAS  customers who had  previously  been issued
credits,  terminated  its  contract  with  the  Company.  This  customer  had  a
commitment  for 200,000  IRAS ports of which  104,000  were  provisioned.  A new
customer,  however,  agreed to accept 150,000 of lines  primarily to be used for
RAS services, which is a lower margin product.

      Since early August, the Company has been diligently addressing its network
performance issues and has made cut-backs in its aggressive growth strategy.  At
this time,  the Company does not intend to expand its IRAS business  until it is
confident  that it can  capably  scale  to  customer  demand  while  maintaining
quality. As of mid-November 2000, the network  performance,  as measured by call
rejection rates, had substantially  improved over the levels measured in August,
and the Company is focused on achieving  high quality  performance  consistently
for all customers.

      Status of Operations and Reorganization Plan

      During  the  pendancy  of its  Chapter  11 case,  the  Company  expects to
continue to provide  on-going  service to its  customers  while  implementing  a
revised strategy intended to meet customer  commitments and maximize  short-term
cash flow.  Operations  are  expected  to focus on  existing  markets  where the
Company  has  capacity,  allowing  the  Company  to add  customers  for  nominal
incremental cost and earn a better return on existing assets.  In addition,  the
Company intends to focus on product sales that utilize  existing  infrastructure
to reduce capital required in the short-term. In general, the Company will scale
its  geographic  expansion  and  delivery of new  products  to better  match its
technical capabilities and capital availability. The Company's 22-city expansion
plan originally scheduled for completion at year-end 2000 will be postponed.

      Due to the  event  described  above,  the  Company  is  considering  if an
impairment  of assets  has  occurred  under  SFAS No.  121  "Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of". As
the Company is currently undergoing a reorganization,  there is not a definitive
business plan in place with which to determine if an impairment has occurred or,
if an impairment has occurred,  the amount of such impairment.  As a result, the
Company has not reduced the  carrying  values of its assets in the  accompanying
consolidated financial statements.

Network and Service Offerings

     ICG is a facilities-based  telecommunications  provider with network assets
and facilities in and connecting to 30 metropolitan  areas in the United States.
The Company  primarily offers data access,  transport and management to Internet
service  provider (ISP)  customers,  voice and data services to small and medium
sized  businesses,  and wholesale  services to long-distance and other carriers.
The Company connects its customers through its nationwide  Internet backbone and
voice  network  located in five major  regions  in the United  States  including
California, Colorado, Ohio, Texas and the Southeast.



                                       23
<PAGE>

      At  September  30,  2000 the  Company's  network and  facilities  included
approximately:

      * 47 voice and data switches
      * 24 ATM switches
      * 276 data POPs
      * 4,816 regional fiber route miles that represent 192,422 fiber strand
        miles
      * 18,000 route miles of long-haul  capacity  leased under IRU  agreements
      * Connection to 9,520 buildings, and
      * 188 collocations with ILECs and 40 ICG-owned collocation sites.

     As of the end of the third quarter 2000, ICG's current product offerings to
the ISP market include  dial-up  products as well as broadband  access  services
including T-1 and T-3 connections and DSL. Dial-up products include primary rate
interface (PRI),  remote access service (RAS) and Internet remote access service
(IRAS).  PRI is a  traditional  product  that  allows an ISP to  connect  to its
end-user  customers  using the  Company's  local  access  network.  RAS utilizes
ICG-owned  switches and modems to connect and send data to the ISP,  eliminating
the need for  individual  ISPs to deploy modem banks in each POP. IRAS connects,
sends and routes  data for the ISP  customer.  With  IRAS,  the  Company  offers
network  management,  routing  calls  intended for the Internet  directly to the
Internet rather than through the ISP. For business customers, the Company offers
local  telephone  service,  enhanced  telephone  features  such as  voice  mail,
long-distance  service,  dial-up and T-1 data  connections  as well as a bundled
service  offering named iConverge.  The Company's  wholesale  business  provides
major carriers with connectivity to each other, to incumbent telephone companies
and to large customers. ICG's wholesale products include special access, private
line/long-haul,  switched  access  and  signaling  system  7.  The  Company  has
transport  facilities in major markets  located in Colorado,  California,  Ohio,
Texas and the Southeast.

                                       24
<PAGE>

RESULTS OF OPERATIONS

      The following  table provides a breakdown of revenue,  operating costs and
selling,  general and  administrative  expenses  for the Company for the periods
indicated.  The table also shows  certain  revenue,  expenses,  operating  loss,
EBITDA and EBITDA (before  nonrecurring  and noncash charges) as a percentage of
the Company's total revenue.
<TABLE>
<CAPTION>

                                        Three months ended               Nine months ended
                                           September 30,                    September 30,
                                ------------------------------------------------------------------
                                      1999              2000            1999            2000
                                ------------------------------------------------------------------
                                    $        %       $        %       $        %       $       %
                                -------- -------- --------- ------ -------- ------ --------- -----
                                                              (unaudited)
                                                             (in thousands)
Statement  of  Operations Data:
Revenue:
<S>                              <C>       <C>    <C>      <C>   <C>        <C>   <C>       <C>
   Local service (1)              70,593    61     102,228   71   214,762     64   332,324    70
   Special access (2)             29,415    26      30,139   21    75,415     22   103,896    22
   Switched access (3)            10,618     9       7,884    6    32,210     10    28,351     6
   Long  distance & other (4)      4,540     4       4,550    2    14,764      4    13,207     2
                                -------- ------ ----------- ---- ---------- ----- --------- ------
     Total revenue               115,156   100     144,801  100   337,151    100   477,778   100
Operating costs                   66,284    58     118,711   82   179,391     53   304,202    64
Selling, general and              94,558    82      84,183   58   180,341     54   188,947    40
  administrative
Depreciation and amortization     45,079    39      99,023   69   126,137     37   236,514    50
Provision for  impairment
  of long-lived assets                 -     -           -    -    29,300      9         -     -
Net loss on  disposal  of
  long-lived assets                  195     -       2,022    1      (771)     -     2,566     -
Other, net                           431     -         431    -       862      -     1,692     -
                                -------- ------ ----------- ---- ---------- ----- --------- -----
   Operating loss                (91,381)  (79)   (159,569)(110) (178,109)   (53) (256,143)  (54)

Other Data:
Net cash provided (used)
  by operating activities        (37,604)           36,084        (48,195)         139,163
Net cash used by
  investing activities          (116,065)         (186,516)       (76,576)        (561,974)
Net cash provided (used)
  by financing activities         73,848          (129,412)        69,002          535,831
EBITDA (5)                       (46,302)  (40)    (60,546)  (42) (51,972)   (15)  (19,629)   (4)
EBITDA (before nonrecurring
  and noncash charges) (5)       (45,676)  (40)    (58,093)  (40)  (22,581)   (7)  (15,371)   (3)
Capital expenditures of
  continuing operations (6)      138,387           324,701         374,324         881,577
Capital expenditures of
   discontinued operations (6)     4,970                 -          11,129               -
</TABLE>
                                                                    (Continued)

                                       25
<PAGE>
<TABLE>
<CAPTION>

                                September 30,  December 31,  March 31,   June 30,   September 30,
                                    1999          1999         2000        2000         2000
                                -------------  ------------ ---------- ----------   -------------
                                                      (unaudited)
Statistical Data (7):
<S>                                  <C>           <C>        <C>      <C>            <C>
Full time employees                    3,054         2,853      2,930      2,975          3,160
Access lines in service (8)          584,827       730,975    904,629  1,112,964      1,074,469
Buildings connected:
  On-net (9)                             939           963      1,046        924            936
  Hybrid (10)                          6,476         7,115      7,746      8,228          8,584
                                -------------  ------------ ---------- ----------   -------------
   Total buildings connected           7,415         8,078      8,792      9,152          9,520
Operational switches:
  Circuit                                 29            31         35         43             47
  ATM                                      -            24         24         24             24
  Frame Relay (11)                        16            16         16          -              -
                                -------------  ------------ ---------- ----------   -------------
   Total operational switches             45            71         75         67             71
Regional fiber route miles (12):
  Operational                          4,449         4,596      4,807      4,767          4,816
  Under construction                       -             -          -        495            508
Regional fiber strand miles (13):
  Operational                        167,067       174,644    177,103    184,064        192,422
  Under construction                       -             -          -     12,254         14,891
Long-haul broadband  route miles           -        18,000     18,000     18,000         18,000
Collocations with ILECs                  139           147        183        188            188
</TABLE>

(1) Local service  revenue  includes  revenue earned from providing  competitive
    voice and data  services to business  customers and network  facilities  and
    data  management  services to ISP  customers.  Local  service  revenue  also
    includes revenue earned from terminating local traffic under agreements with
    ILECs.

(2) Special  access  revenue  includes  revenue  earned  from  providing  direct
    intra-state  and  intra-city  private  line  broadband  connections  to long
    distance carriers, ISP and end user business customers.

(3) Switched  access  revenue   includes   revenue  earned  from  both  switched
    terminating access and SS7 gateway services.

    Switched  terminating access:  Switched  terminating access services provide
    long distance customers connectivity to the ILEC's local switched network.

    SS7 gateway  services:  SS7 gateway  services allow for rapid call setup via
    high-speed  circuit switched  connections.  ICG services include  nationwide
    signaling with access to SS7 networks in every LATA.

(4) Long distance  revenue includes revenue earned from providing voice services
    outside the customers local calling area.

(5) EBITDA  consists  of  earnings  (loss)  from  continuing  operations  before
    interest  expense,  income  taxes,  depreciation  and  amortization,   other
    expense,  net and accretion and preferred dividends on preferred  securities
    of subsidiaries,  or otherwise  defined as operating loss plus  depreciation
    and   amortization.   EBITDA  (before   nonrecurring  and  noncash  charges)
    represents EBITDA before certain  nonrecurring  charges such as the net loss
    (gain) on disposal of long-lived  assets and other,  net operating costs and
    expenses,  including  deferred  compensation.   EBITDA  and  EBITDA  (before
    nonrecurring  and noncash  charges) are  provided  because they are measures
    commonly used in the telecommunications  industry. EBITDA and EBITDA (before
    nonrecurring  and noncash charges) are presented to enhance an understanding
    of the Company's  operating  results and are not intended to represent  cash
    flows or  results  of  operations  in  accordance  with  generally  accepted
    accounting principles ("GAAP") for the periods indicated.  EBITDA and EBITDA
    (before  nonrecurring and noncash  charges) are not measurements  under GAAP
    and are not necessarily  comparable with similarly  titled measures of other
    companies. Net cash flows from operating, investing and financing activities
    of  continuing  operations as  determined  using GAAP are also  presented in
    Other Data.

(6) Capital  expenditures  include  assets  acquired  with cash,  under  capital
    leases, and pursuant to IRU agreement.  Capital expenditures of discontinued
    operations includes the capital expenditures of Network Services,  Satellite
    Services, Zycom and NETCOM combined for all periods presented.

(7)  Amounts  presented are for  three-month  periods ended, or as of the end of
     the period presented.

(8)  Access lines in service at September  30, 2000 includes  lines  provisioned
     through the Company's  switch and through resale and other  agreements with
     various local  exchange  carriers.  Resale lines  typically  generate lower
     margins and are used  primarily to obtain  customers.  Although the Company
     plans to migrate most lines from resale to higher margin  on-switch  lines,
     there  is no  assurance  that it  will  be  successful  in  executing  this
     strategy.

(9) Beginning in the three months ended June 30, 2000,  on-net buildings will be
    defined to exclude facilities used exclusively for ICG network operations.

(10)Hybrid buildings  connected  represent  buildings connected to the Company's
    network via another carrier's facilities.

(11)Frame  relay   switches   are  no  longer   included  in  switch   count  as
    functionality is now handled by ATM switches.

(12) Regional  fiber  route  miles  refers to the number of miles of fiber optic
     cable,  including  leased fiber.  As of September 30, 2000, the Company had
     approximately 4,816 regional fiber route miles.  Regional fiber route miles
     under construction  represents fiber under construction,  which is expected
     to be operational within six months.

(13) Regional  fiber strand  miles refers to the number of regional  fiber route
     miles,  including leased fiber, along a telecommunications  path multiplied
     by the number of fiber  strands  along that path. As of September 30, 2000,
     the Company had approximately 192,422 regional fiber strand miles. Regional
     fiber strand miles under construction  represents fiber under construction,
     which is expected to be operational within six months.


THREE MONTHS ENDED  SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 1999

                                    Three Months Ended September 30,
                                 ---------------------------------------
                                       1999                 2000
                                 ------------------  -------------------
                                    $         %         $          %
                                 --------  --------  ---------   -------
                                        ($ values in thousands)
Local service                     70,593      61       102,228      71
Special access                    29,415      26        30,139      21
Switched access                   10,618       9         7,884       6
Long distance & other              4,540       4         4,550       2
                                 --------  --------  ---------   -------
    Total Revenue                115,166     100       144,801     100
                                 ========  ========  =========   =======

Operating costs                   66,284      58       118,711      82
                                 ========  ========  =========   =======
Selling, general and
  administrative                  94,558      82        84,183      58
                                 ========  ========  =========   =======
Depreciation and amortization     45,079      39        99,023      68
                                 ========  ========  =========   =======

Revenue

      Most of ICG's  revenue  is earned  from  small- to  medium-sized  business
customers who purchase voice and data communications  services,  or by providing
network facilities and data management  services to ISPs.  However,  the Company
has a few large ISP customers which account for a significant portion of its ISP
revenue.  The Company also offers special access and switched access services to
long-distance  companies  and other  customers.  Total revenue  increased  $29.6
million or 26% from the three months ended September 30, 1999 to 2000.

      Local service  revenue  increased  from $70.6 million for the three months
ended  September  30, 1999 to $102.2  million for the same period in 2000, a 45%
annual  increase  primarily due to an increase in the average local access lines
offset by a reduction in revenue earned from IRAS  customers.  This reduction in
revenue per line is, in large part,  driven by a higher  percentage of ISP lines
in 2000, which typically earn lower revenue per line, a reduction in the percent
of total lines on-switch which do not earn reciprocal  compensation  and billing
credits  issued to  certain  IRAS  customers.  IRAS  billing  credits  issued to
customers  during  the third  quarter  amounted  to  approximately  $8  million.
Including  the billing  credits,  total  revenue  expected to be earned from ISP
customers  in  August  and  September  was   approximately   $17  million  below
expectations.  Local service revenue includes  approximately $25 million (or 22%
of  revenue)  and $26 million (or 18% of  revenue)  for the three  months  ended
September 30, 1999 and 2000,  respectively,  for terminating  local ISP traffic.
For further discussion on nonrecurring  reciprocal  compensation revenue earned,
see "Liquidity and Capital Resources - Transport and Termination Charges".

      Special access  revenue  increased from $29.4 million for the three months
ended  September  30,  1999 to $30.1  million  for the same  period in 2000,  an
increase  of 2%. The  increase in special  access  revenue is  primarily  due to
increased unit sales.

      Switched access revenue  decreased from $10.6 million for the three months
ended  September  30, 1999 to $7.9  million  for the same period in 2000,  a 26%
decrease. The decrease is due to the expected attrition of switch customers.
<PAGE>

      Revenue from long distance  services  remained  consistent at $4.5 million
for both the three months ended  September  30, 1999 and 2000.  ICG expects long
distance  revenue to decrease due to planned  attrition of resale  access lines,
which had high long distance service penetration rates as well as a reduction in
revenue per minute.

Operating costs

     Total  operating  costs  increased  from $66.3 million for the three months
ended  September  30, 1999 to $118.7  million for the same period in 2000, a 79%
increase. Operating costs increased as a percentage of revenue from 58% for 1999
to 82% for 2000.  Operating costs consist primarily of payments to ILECs,  other
CLECs, and long distance  carriers for the use of network  facilities to support
local, special,  switched access services, and long distance services as well as
internal network  operating costs,  right of way fees and other operating costs.
Internal network  operating costs include the cost of engineering and operations
personnel dedicated to the operations and maintenance of the network.  Operating
costs have  increased as a percentage of revenue  partially due to the reduction
in revenue earned from IRAS customers,  as noted above.  During periods of rapid
market  expansion such as ICG has  experienced  in 2000,  backhaul and intracity
facilities  have  been  leased  on an  interim  basis  until  such time as owned
facilities  are in service,  resulting in an increase of  operating  expenses as
percent of revenue.  During the three  months  ended  September  30,  2000,  ICG
incurred  incremental  costs  associated with the advanced  deployment of leased
lines in expansion cities to accommodate customer  requirements.  The lines were
provisioned using either ILEC or other CLEC capacity to meet customer demand. It
was ICG's intent to complete  installation of these owned  facilities.  However,
due to the Company's bankruptcy  proceedings and capital limitations,  there can
be no  assurance  of when or if these owned  facilities  will be  completed  and
produce revenue. In addition,  due to the Company's curtailed capital deployment
plan and the reallocation of resources  normally assigned to capital  deployment
activities,  approximately  $12 million in operating  costs that would have been
capitalized under the Company's capitalization policies were expensed.

Selling, general and administrative expenses

      Total selling, general and administrative ("SG&A") expenses decreased from
$94.6 million for the three months ended September 30, 1999 to $84.2 million for
the  same  period  in  2000,  an 11%  decrease.  SG&A  expenses  decreased  as a
percentage  of  revenue  from  82% for 1999 to 58% for  2000.  The  decrease  in
absolute  dollars  and  as a  percentage  of  revenue  is  principally  due to a
provision of $45.2 million  recorded during the three months ended September 30,
1999 for  accounts  receivable  related to certain  elements  of  transport  and
termination   services  provided  to  ILECs,  which  the  Company  believed  was
uncollectible.  This  decrease  was  partially  offset by an increase in average
staff levels and increased salary and benefits per employee  attributable to the
new  compensation  plan  implemented  in  2000  to  remain  competitive  in  the
marketplace. The number of full time employees increased from 3,054 at September
30, 1999 to 3,160 at September 30, 2000. The Company also incurred  increases in
facilities  costs for new office space as well as  increased  sales and property
taxes, legal and professional fees. During the quarter ended September 30, 2000,
the Company  reviewed the  adequacy of the reserve for bad debts  related to its
ISP customers as the Company had concerns  about the ability of certain of these
customers to continue  operating and attract future capital given current market
conditions,  as well as concerns associated with certain contract disputes. As a
result,  the Company  recorded an additional  provision of  approximately  $16.0
million. In addition, a provision for uncollectible  accounts in the approximate
amount  of $4  million  was  provided  for the  receivable  from  one  ILEC  for
termination of local ISP traffic deemed uncollectible  because of changes in the
regulatory environment.

Depreciation and amortization

      Depreciation and  amortization  increased from $45.1 million for the three
months ended  September  30, 1999 to $99.0  million for the same period in 2000.
The increase is primarily  due to increased  investment  in  depreciable  assets
resulting from the expansion of the Company's networks and services,  as well as
a reduction in the overall weighted-average useful life of depreciable assets in
service as ICG invests a larger  portion of its  capital in assets with  shorter
lives such as routers and computers.

Net loss on disposal of long-lived assets
      Net loss on disposal of  long-lived  assets of $2.0  million for the three
months ended  September 30, 2000 relates to the write-off of certain frame relay
switches no longer in operation.
<PAGE>

Interest expense

     Interest  expense  increased  from $52.9 million for the three months ended
September  30, 1999 to $66.0  million  for the same period in 2000.  Included in
interest  expense for the three  months  ended  September  30, 1999 and 2000 was
$49.5  million and $54.5  million of noncash  interest,  respectively.  Interest
expense  also  increased  due to the  increase in debt  issued  under the senior
secured financing  facility.  Additionally,  interest expense is net of interest
capitalized related to construction in progress of $2.3 million and $3.0 million
during the three months ended September 30, 1999 and 2000, respectively.

Interest income

      Interest  income  increased  from $3.8  million for the three months ended
September 30, 1999 to $5.9 million for the same period in 2000.  The increase is
attributable  to  the  increase  in  cash,   cash   equivalents  and  short-term
investments  resulting  from the cash proceeds to the Company of the 8% Series A
Convertible Preferred Stock.

Accretion and preferred dividends on preferred securities of subsidiaries

     Accretion  of costs and  preferred  dividends on  preferred  securities  of
subsidiaries  increased from $15.7 million for the three months ended  September
30,  1999 to $17.7  million  for the same  period in 2000.  The  increase is due
primarily to the periodic payment of dividends on the 14% Exchangeable Preferred
Stock  Mandatorily  Redeemable 2008 (the "14% Preferred  Stock") and the 14 1/4%
Exchangeable Preferred Stock Mandatorily Redeemable 2009 (the "14 1/4% Preferred
Stock") in  additional  shares of 14%  Preferred  Stock and 14 1/4% of Preferred
Stock. Accretion and preferred dividends on preferred securities of subsidiaries
recorded  during the three  months  ended  September  30,  2000  consists of the
accretion  of  issuance  costs  and  the  accrual  of the  preferred  securities
dividends  associated with the 6 3/4%  Exchangeable  Limited  Liability  Company
Preferred  Securities   Mandatorily  Redeemable  2009  (the  "6  3/4%  Preferred
Securities"), the 14% Preferred Stock and the 14 1/4% Preferred Stock.

Loss from continuing operations

      Loss from  continuing  operations  increased  from $156.5  million for the
three months ended  September 30, 1999 to $237.7 million for same period in 2000
due to the  increases in operating  costs,  SG&A expenses and  depreciation  and
amortization, partially offset by an increase in revenue, as noted above.

Income(loss) on disposal and operation of discontinued operations

     Income (loss)from  discontinued  operations was $0.7 million income for the
three  months  ended  September  30, 1999 and  consists of net income of Network
Services

Accretion and dividends of 8% Series A Convertible Preferred Stock to
liquidation value

      Accretion  and  dividends of 8% Series A  Convertible  Preferred  Stock to
liquidation value is comprised of the dividends and the accretion to liquidation
value of the 8% Series A Convertible Preferred Stock of $17.3 million during the
three months ended September 30, 2000.

NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1999

                                    Nine Months Ended September 30,
                                 ---------------------------------------
                                       1999                 2000
                                 ------------------  -------------------
                                    $         %         $          %
                                 --------  --------  ---------   -------
                                        ($ values in thousands)
Local service                     214,762     64       332,324      70
Special access                     75,415     22       103,896      22
Switched access                    32,210     10        28,351       6
Long distance & other              14,764      4        13,207       2
                                 --------  --------  ---------   -------
    Total Revenue                 337,151    100       477,778     100
                                 ========  ========  =========   =======

Operating costs                   179,391     53       304,202      63
                                 ========  ========  =========   =======
Selling, general and
administrative                    180,341     54       188,947      40
                                 ========  ========  =========   =======
Depreciation and amortization     126,137     37       236,514      50
                                 ========  ========  =========   =======

<PAGE>

Revenue

      Most of ICG's  revenue  is earned  from  small- to  medium-sized  business
customers who purchase voice and data communications  services,  or by providing
network facilities and data management  services to ISPs.  However,  the Company
has a few large ISP customers which account for a significant portion of its ISP
revenue.  The Company also offers special access and switched access services to
long-distance  companies and other  customers.  Total revenue  increased  $140.6
million or 42% from the nine months ended September 30, 1999 to 2000.

     Local service  revenue  increased  from $214.8  million for the nine months
ended  September  30, 1999 to $332.3  million for the same period in 2000, a 55%
annual  increase  primarily due to an increase in the average local access lines
offset by a reduction in the average revenue per line. This reduction in revenue
per line is, in large part,  driven by a higher percentage of ISP lines in 2000,
which typically earn lower revenue per line, a reduction in the percent of total
lines on-switch which do not earn  reciprocal  compensation  and billing credits
issued to certain  IRAS  customers.  IRAS  billing  credits  issued to customers
during the third quarter  amounted to  approximately  $8 million.  Including the
billing  credits,  total  revenue  expected to be earned from ISP  customers  in
August and September was  approximately  $17 million below  expectations.  Local
service revenue includes  approximately $95 million (or 28% of revenue) and $100
million (or 21% of revenue)  for the nine months  ended  September  30, 1999 and
2000,  respectively,  for terminating local ISP traffic. Revenue for terminating
local ISP  traffic  for the nine  months  ended  September  30,  2000,  includes
approximately  $13 million  derived from the  resolution of previously  disputed
issues not  related to the  respective  period and  approximately  $4 million of
revenues from rates earned pursuant to the previous  interconnection  agreement,
neither of which will recur in subsequent periods.  Additionally,  approximately
$3 million  recognized  in the nine months ended  September  30, 2000 relates to
nonrecurring  elements of terminating other traffic,  which is also for services
not  provided  within  the  period.   For  further  discussion  on  nonrecurring
reciprocal  compensation  revenue earned, see "Liquidity and Capital Resources -
Transport and Termination Charges" below.

      Special  access  revenue  increased from $75.4 million for the nine months
ended  September  30, 1999 to $103.9  million  for the same  period in 2000,  an
increase of 38%. The increase in special access revenue is due to increased unit
sales as well as $12.5  million of  revenue  recognized  during the nine  months
ended  September  30, 2000 under ICG's fiber optic  sales- type lease  agreement
with a major interexchange carrier.

      Switched  access revenue  decreased from $32.2 million for the nine months
ended  September  30, 1999 to $28.4  million for the same period in 2000,  a 12%
decrease. The decrease is due to the expected attrition of switch customers.

      Revenue from long distance  services  decreased from $14.8 million for the
nine months  ended  September  30, 1999 to $13.2  million for the same period in
2000,  an 11%  decline.  ICG's long  distance  revenue for the nine months ended
September  30, 2000 was impacted by planned  attrition of resale  access  lines,
which had high long distance service penetration rates as well as a reduction in
revenue per minute.

Operating costs

     Total  operating  costs  increased  from $179.4 million for the nine months
ended  September  30, 1999 to $304.2  million for the same period in 2000, a 70%
increase. Operating costs increased as a percentage of revenue from 53% for 1999
to 63% for 2000.  Operating  costs have  increased  as a  percentage  of revenue
partially due to the reduction in revenue earned from IRAS  customers,  as noted
above. During periods of rapid market expansion,  such as ICG has experienced in
2000,  backhaul and  intracity  facilities  are leased on an interim basis until
such time as owned  facilities  are in  service,  resulting  in an  increase  of
operating  expenses  as a percent of  revenue.  It was ICG's  intent to complete
installation of these owned facilities. However, due to the Company's bankruptcy
proceedings  and capital  limitations,  there can be no  assurance of when or if
these owned facilities will be completed and produce revenue.  In addition,  due
to the Company's  curtailed  capital  deployment  plan and the  reallocation  of
resources normally assigned to capital deployment activities,  approximately $12
million in operating costs that would have been typically  capitalized under the
Company's capitalization policies were expensed.

Selling, general and administrative expenses

      Total selling, general and administrative ("SG&A") expenses increased from
$180.3  million for the nine months ended  September 30, 1999 to $188.9  million

<PAGE>

for the same period in 2000. SG&A expenses  decreased as a percentage of revenue
from  54% for  1999  to 40% for  2000.  The  increase  in  absolute  dollars  is
principally due to an increase in average staff levels and increased  salary and
benefits per employee  attributable to the new compensation  plan implemented in
2000 to remain competitive in the marketplace. The number of full time employees
increased  from 3,054 at  September  30, 1999 to 3,160 at  September  30,  2000.
Certain of the SG&A  increase can also be  attributed to increases in facilities
costs for new office and switch  space as well as  increased  sales and property
taxes and legal and  professional  fees offset by a net  recovery of  previously
reserved  uncollectible  amounts.  The increase is also offset by a provision of
$45.2  million  recorded  during the nine months  ended  September  30, 1999 for
accounts  receivable  related to certain  elements of transport and  termination
services provided to ILECs, which the Company believed was uncollectible. During
the quarter ended  September 30, 2000, the Company  reviewed the adequacy of the
reserve for bad debts  related to its ISP  customers as the Company had concerns
about the  ability of certain  of these  customers  to  continue  operating  and
attract  future  capital given current  market  conditions,  as well as concerns
associated with certain contract disputes.  As a result, the Company recorded an
additional  provision of approximately $16.0 million.  In addition,  a provision
for uncollectible  accounts in the approximate amount of $4 million was provided
for the  receivable  from one ILEC for  termination  of local ISP traffic deemed
uncollectible because of changes in the regulatory environment.

Depreciation and amortization

      Depreciation and  amortization  increased from $126.1 million for the nine
months ended  September 30, 1999 to $236.5  million for the same period in 2000.
The increase is primarily  due to increased  investment  in  depreciable  assets
resulting from the expansion of the Company's networks and services as well as a
reduction in the overall  weighted-average  useful life of depreciable assets in
service as ICG invests a larger  portion of its  capital in assets with  shorter
lives such as routers and computers.

Provision for impairment of long-lived assets

     During the nine months ended  September  30, 1999,  the Company  recorded a
provision for impairment of long-lived  assets of $29.3 million.  This provision
related to the  impairment of software and other  capitalized  costs  associated
with the Company's billing and provisioning  system  development  projects under
development.  The  provision  related to  management's  decision  to abandon the
billing and provisioning solutions under development.

Net loss on disposal of long-lived assets

      Net loss on disposal  of  long-lived  assets of $2.6  million for the nine
months ended  September 30, 2000  primarily  relates to the write-off of certain
frame relay switches no longer in operation.

Interest expense

     Interest  expense  increased  from $151.6 million for the nine months ended
September  30, 1999 to $195.4  million for the same period in 2000.  Included in
interest  expense  for the nine  months  ended  September  30, 1999 and 2000 was
$142.2 million and $165.8 million of noncash  interest,  respectively.  Interest
expense  also  increased  due to the  increase in debt  issued  under the senior
secured financing  facility.  Additionally,  interest expense is net of interest
capitalized related to construction in progress of $9.0 million and $6.6 million
during the nine months ended September 30, 1999 and 2000, respectively.

Interest income

      Interest  income  increased  from $11.7  million for the nine months ended
September 30, 1999 to $20.4 million for the same period in 2000. The increase is
attributable  to  the  increase  in  cash,   cash   equivalents  and  short-term
investments  resulting  from the cash proceeds to the Company of the 8% Series A
Convertible Preferred Stock.

Accretion and preferred dividends on preferred securities of subsidiaries

     Accretion  of costs and  preferred  dividends on  preferred  securities  of
subsidiaries  increased  from $45.7 million for the nine months ended  September
30,  1999 to $51.4  million  for the same  period in 2000.  The  increase is due
primarily to the periodic payment of dividends on the 14% Exchangeable Preferred
Stock  Mandatorily  Redeemable 2008 (the "14% Preferred  Stock") and the 14 1/4%
Exchangeable Preferred Stock Mandatorily Redeemable 2009 (the "14 1/4% Preferred

<PAGE>

Stock") in  additional  shares of 14%  Preferred  Stock and 14 1/4% of Preferred
Stock. Accretion and preferred dividends on preferred securities of subsidiaries
recorded  during the nine  months  ended  September  30,  2000  consists  of the
accretion  of  issuance  costs  and  the  accrual  of the  preferred  securities
dividends  associated with the 6 3/4%  Exchangeable  Limited  Liability  Company
Preferred  Securities   Mandatorily  Redeemable  2009  (the  "6  3/4%  Preferred
Securities"), the 14% Preferred Stock and the 14 1/4% Preferred Stock.

Loss from continuing operations

      Loss from continuing operations increased from $366.5 million for the nine
months ended September 30, 1999 to $482.9 million for same period in 2000 due to
the increases in operating costs, SG&A expenses,  depreciation and amortization,
offset by an increase in revenue and a decrease in the provision for  impairment
of long-lived assets, as noted above.

Income(loss) on disposal and operation of discontinued operations

     Income  (loss)from  discontinued  operations was a loss of $8.0 million for
the nine months ended September 30, 1999 and income of $0.7 million for the same
period in 2000. The loss from discontinued  operations for the nine months ended
September 30, 1999  consists of the combined net losses of Network  Services and
Satellite  Services  including  an  estimated  loss on the  disposal  of Network
Services of $8.0 million.  Income from  discontinued  operations in 2000 is from
the Zycom legal expenses  reimbursed as part of the settlement  outstanding with
the minority  shareholders.  (See "Sale of Assets and  Discontinued  Operations"
above for further discussion.)

Extraordinary gain on sales of operations of NETCOM

      The Company reported an extraordinary  gain on the sales of the operations
of NETCOM during the nine months ended September 30, 1999 of $193.0 million, net
of  income  taxes  of  $6.4  million.  Offsetting  the  gain  on  the  sales  is
approximately  $16.6 million of net losses of operations of NETCOM from November
3, 1998 through the dates of the sales and  approximately  $35.5  million of the
proceeds was deferred and  recognized  over the one year term of the  MindSpring
Capacity Agreement.

Accretion and dividends of 8% Series A Convertible Preferred Stock to
liquidation value

      Accretion  and  dividends of 8% Series A  Convertible  Preferred  Stock to
liquidation value is comprised of the dividends and the accretion to liquidation
value of the 8% Series A Convertible Preferred Stock of $31.7 million.


Charge for beneficial conversion feature of 8% Series A Convertible Preferred
Stock

      Charge for  beneficial  conversion  of 8% Series A  Convertible  Preferred
Stock during the nine months ended  September  30, 2000 relates to the charge of
$159.3  million of the proceeds of the 8% Series A Convertible  Preferred  Stock
which was allocated to the intrinsic value of the beneficial  conversion feature
of the convertible preferred securities to additional paid-in capital. As the 8%
Series A Convertible  Preferred Stock is immediately  convertible into shares of
ICG common stock, the beneficial  conversion feature was recognized  immediately
as a  return  to the  preferred  shareholders  during  the  three  months  ended
September 30, 2000.


LIQUIDITY AND CAPITAL RESOURCES

      The Company has incurred significant  operating and net losses as a result
of the development  and operation of its networks.  The Company expects that its
operating  losses will  continue as it operates as a  debtor-in-possession  as a
result of its Chapter 11 bankruptcy filing described in the "Company  Overview".
The Company does not expect that cash provided by operations  will be sufficient
to fund the continuation of daily operations of the business during bankruptcy.

     At September 30, 2000,  the Company had cash and short term  investments of
approximately  $234.3 million.  On November 14, 2000, the Company announced that
it  had   obtained  a   commitment   letter   which  will  provide  the  Company
debtor-in-possession  financing  for a minimum of $200 million and the potential
for  an   additional   $150   million  if  certain   criteria   are  met.   This
debtor-in-possession  financing is subject to customary  pre-closing  conditions
and is contingent  upon  Bankruptcy  Court  approval.  The  debtor-in-possession
financing  terms require that the Company's  Senior  Facility be paid off at the
time of the first borrowing.  Management  believes that current cash, short term
investments and the debtor-in-possession  financing, along with protection under
bankruptcy  law,  should  enable the  Company  to fund  operations  through  the
bankruptcy restructuring process.

<PAGE>

     At  September  30,  2000,  the Company had  approximately  $2.3  billion of
indebtedness  outstanding and $1.2 billion of mandatorily  redeemable  preferred
shares.  As a result of filing for protection  under bankruptcy law, the Company
is not currently paying any of the debt service obligations that are outstanding
as of November 14, 2000. In addition,  future  payment of principal and interest
on all of the outstanding  indebtedness and dividends on the preferred shares is
subject  to  court  approval  and  may be  discharged  in  whole  or in  part in
bankruptcy  with proceeds  from the court  approved  plan of  reorganization  or
liquidation  of the Company.  There can be no assurance that any amounts owed to
creditors will be paid or be paid in full.

     As a result of the Company's  liquidity  problems,  the Company's directors
did not declare a dividend on the 6 3/4% Preferred Securities that was otherwise
payable on  November  15,  2000.  In  addition,  the  Company  has not  declared
dividends on the 14% and 14 1/4% Preferred Stock.

      In the event that plans or assumptions  change, or prove to be inaccurate,
significant  unexpected expenses are incurred, or cash resources,  together with
borrowings under the  debtor-in-possession  financing  arrangement,  prove to be
insufficient to fund operations,  the Company may be required to seek additional
sources  of  capital  (or  seek   additional   capital   sooner  than  currently
anticipated).  There can be no guarantee,  however, that additional capital will
be available on reasonable terms, or at all.

Net Cash Provided (Used) By Operating Activities

     The Company's  operating  activities used $48.2 million and provided $139.2
million for the nine months ended September 30, 1999 and 2000, respectively. Net
cash used by operating  activities for the nine months ended  September 30, 1999
includes  the  extraordinary  gain on the  sale of  Netcom  of  $193.0  million,
partially offset by non-cash  transactions such as depreciation and amortization
and deferred interest expense. Net cash provided by operating activities for the
nine months ended  September 30, 2000 is primarily  due to the advance  payments
received pursuant to the IRU agreements.

Net Cash Used By Investing Activities

      Investing  activities  used $76.6  million and $562.0  million in the nine
months ended  September  30, 1999 and 2000,  respectively.  Net cash provided by
investing  activities  for the nine months  ended  September  30, 1999  includes
proceeds  from the sales of the  operations  of NETCOM  of  $252.9  million  and
proceeds  from  the  sales  of  short-term  investments  available  for sale and
marketable  securities  of  $60.5  million,  offset  by  cash  expended  for the
acquisition  of property,  equipment and other assets of $368.1  million and the
change in accounts payable and accrued liabilities for the purchase of long-term
assets of $3.3  million.  Net cash  used by  investing  activities  for the nine
months  ended  September  30, 2000  primarily  includes  cash  expended  for the
acquisition  of property,  equipment and other assets of $649.1  million and the
change in accounts payable and accrued liabilities for the purchase of long-term
assets  of  $50.7  million,  partially  offset  by  proceeds  from  the  sale of
short-term  investments  available for sale and  marketable  securities of $33.0
million.  The Company  acquired  assets under capital leases and pursuant to IRU
agreements of $232.5 million during the nine months ended September 30, 2000.

Net Cash Provided By Financing Activities

      Financing activities provided $69.0 million and $535.8 million in the nine
months ended  September  30, 1999 and 2000,  respectively.  Net cash provided by
financing  activities  for the nine  months  ended  September  30, 1999 and 2000
include  proceeds  from the  issuance of common  stock in  conjunction  with the
exercise of options and warrants and the Company's employee stock purchase plan,
offset by principal  payments on long-term  debt and capital leases and payments
of  preferred  dividends  on  preferred  securities  of  subsidiaries.  Net cash
provided by financing  activities  for the nine months ended  September 30, 2000
also includes  $95.0 million in proceeds from the issuance of long-term debt and
$720.3  million in proceeds  from the  issuance  of the 8% Series A  Convertible
Preferred Stock  partially  offset by $179.5 million of payments made on the IRU
agreement.

      On August 12,  1999,  ICG  Equipment  and  NetAhead  entered into a $200.0
million senior secured financing facility (the "Senior Facility")  consisting of
a $75.0  million  term  loan,  a $100.0  million  term loan and a $25.0  million
revolving  line  of  credit.  As  of  September  30,  2000,  $84.4  million  was
outstanding  under the loans at weighted  average  interest  rates  ranging from
9.26% to 10.06% for the nine months ended September 30, 2000.
<PAGE>

      As of September 30, 2000,  the Company had an aggregate  accreted value of
approximately  $2.0 billion  outstanding under the 13 1/2% Senior Discount Notes
due 2005 (the "13 1/2 % Notes"), the 12 1/2% Senior Discount Notes due 2006 (the
"12 1/2 % Notes"),  the 11 5/8%  Senior  Discount  Notes due 2007 (the "11 5/8 %
Notes"), the 10% Notes and the 9 7/8% Notes.

      As of  September  30,  2000,  an  aggregate  amount  of $1.2  billion  was
outstanding under the 6 3/4% Preferred Securities,  the 14% Preferred Stock, the
14 1/4% Preferred Stock and the 8% Series A Convertible Preferred Stock.

Capital Expenditures

      The Company's  capital  expenditures  including assets acquired with cash,
under  capital  leases and pursuant to IRU  agreements  were $374.3  million and
$881.6  million  for  the  nine  months  ended  September  30,  1999  and  2000,
respectively.  The Company is in the process of  evaluating  its future  capital
expenditure  requirements in light of the bankruptcy  proceedings and as part of
the Company's restructuring plan.

      To facilitate the expansion of its services and networks,  the Company has
entered into equipment purchase  agreements with various vendors under which the
Company has  committed to purchase a  substantial  amount of equipment and other
assets,  including a full range of switching systems, fiber optic cable, network
electronics,  software and  services.  If the Company  fails to meet the minimum
purchase level in any given year, the vendor may discontinue  certain discounts,
allowances and incentives otherwise provided to the Company.

     Under the debtor-in-possession  financing commitment, the Company's capital
expenditures will be significantly restricted.  Given this, there is substantial
uncertainty  about the  Company's  ability to complete  and place in service the
Company's  $869 million  construction  in progress  balance as of September  30,
2000.

Transport and Termination Charges

Terminating Local Traffic

      ICG records revenue earned under interconnection agreements with incumbent
local exchange  carriers  ("ILECs") as an element of its local services revenue.
Many of the ILECs have not paid all of the amounts that the Company has recorded
as revenue and have  disputed  these  charges  based on the belief that  dial-up
calls to ISPs are not local traffic as defined by the various agreements and not
subject to payment of transport and termination  charges under state and federal
laws and public  policies.  In addition,  some ILECs,  while paying a portion of
reciprocal compensation due to ICG, have disputed other portions of the charges.

     ICG has, as of September 30, 2000, a net receivable for  terminating  local
traffic in the approximate  amount of $66 million,  approximately $29 million of
which is due and  payable,  pursuant  to the terms of executed  agreements  with
several  ILECs,  when  regulatory  approval of the  amendments  to the  parties'
interconnection  agreements is obtained.  ICG has received cash of approximately
$11  million  and $94  million  during the three  months and nine  months  ended
September 30, 2000, respectively, from the ILECs for terminating local traffic.

      The following  table  represents  the amount of revenue ICG has recognized
for terminating  local traffic of the ILECs during the respective  periods ($ in
millions):


                Three months ended            Nine months ended
                   September 30,                 September 30,
                1999           2000            1999         2000
            -------------  ------------    -----------  ------------
                $25            $26             $95          $100

      Revenue  for  the  nine  months   ended   September   30,  1999   includes
approximately  $22 million for the tandem  switching and common  transport  rate
elements,  the collection of which was determined to be uncertain in the quarter
commencing July 1, 1999. ICG recorded a provision of  approximately  $45 million
against the accounts  receivable  balances recorded prior to July 1, 1999 in the
event the tandem  switching and common  transport rate element  amounts were not
ultimately  collected.  Effective July 1, 1999, ICG ceased  recognition of these
rate  elements  as revenue  until cash is  received  but  continued  to bill and
vigorously  pursue  collection  of all  amounts  due under  its  interconnection
agreements.
<PAGE>

      The Company  determined in the three months ended  September 30, 2000 that
approximately  $4 million of the revenue  previously  recognized for terminating
ISP traffic  for one ILEC may not be  collectible  due to a changing  regulatory
environment and has therefore provided a provision for uncollectible accounts.

      During  the nine  months  ended  September  30,  2000,  ICG  entered  into
agreements to resolve  certain  disputes  with several  ILECs that  collectively
represent  approximately 75% of ICG's applicable terminating traffic. One of the
agreements  has an  effective  date of  December  31, 1999 and the other June 1,
2000. The agreements separately resolve the payment of certain past amounts. The
revenue for the nine months ended September 30, 2000 includes  approximately $13
million derived from the resolution of previously disputed issues not related to
that period and  approximately  $4.0 million  from rates earned  pursuant to the
previous  interconnection  agreement,  neither of which will recur in subsequent
periods.

      The resolution of ICG's disputes with the remaining ILECs will continue to
be based on rulings by state public  utility  commissions  and/or by the Federal
Communications  Commission ("FCC"), or through negotiations between the parties.
ICG continues to pursue  collection of the remaining amounts owed by these ILECs
under ICG's existing  interconnection  agreements,  and certain  disputes remain
outstanding.

     During the quarter,  the Colorado PUC issued a ruling in an ICG arbitration
decision that, subject to the outcome of judicial appellate proceedings,  denies
ICG the  ability  to  collect  reciprocal  compensation  for  ISP-bound  traffic
initiated on the  incumbent  network and  connected on ICG's network in Colorado
when a new  interconnection  agreement  between  ICG  and  Qwest  Communications
(formerly US West) becomes effective.  ICG believes that the new interconnection
agreement will become  effective  during the fourth  quarter,  after the parties
execute  and  receive  PUC  approval  of a new  interconnection  agreement  that
complies with the PUC's final arbitration decision. Once effective, the terms in
the new agreement concerning  compensation for terminating ISP traffic will then
be applied  retroactively  beginning 45 days prior to the effective  date of the
new agreement. In prior periods, the impacted traffic represented  approximately
15% of the Company's applicable terminating traffic.

Other Transport and Terminating Traffic

      ICG has also  recognized  revenue  for  other  transport  and  terminating
traffic  of the  ILECs.  The amount of  revenue  recognized,  pursuant  to ICG's
interconnection agreements, during the respective periods ($ in millions):

            Three months ended            Nine months ended
              September 30,                 September 30,
            1999          2000            1999         2000
        -------------  ------------    -----------  ------------
            $ 4            $ 4            $ 12         $ 14

      The  revenue  for the  nine  months  ended  September  30,  2000  includes
approximately  $3 million  derived from the  resolution of  previously  disputed
issues not related to the respective periods.

     ICG has, as of September 30, 2000, a net receivable  for other  terminating
traffic in the approximate  amount of $26 million,  approximately $16 million of
which is due from  several  ILECs and payment in this amount will be received as
it is part of a  binding  agreement,  subject  only to  regulatory  approval  of
amendments to the parties' interconnection  agreements. ICG has received cash of
approximately $2 million and $8 million, during the three months and nine months
ended September 30, 2000, respectively.

Future Reciprocal Compensation Revenue

      ICG has reached interconnection agreements with certain ILECs that provide
for the payment of compensation  for terminating ISP traffic.  These  agreements
expire at dates ranging from October 2000 through May 2003.  Upon  expiration of
its  interconnection  agreements,  the Company  expects to continue to negotiate
and/or arbitrate reasonable  compensation and collection terms for transport and
termination services, although there is no assurance that such compensation will
remain  consistent with current levels.  Additionally,  in those states in which
ICG has not reached a  negotiated  resolution  with the ILEC with respect to the
reciprocal  compensation rate to be applied on a going-forward basis, and/or for
subsequent  time  periods,  ongoing  state and  federal  regulatory  proceedings
addressing intercarrier compensation for Internet traffic also may impact future
rates of compensation.
<PAGE>

      While ICG intends to pursue the collection of all  receivables  related to
transport  and  termination  charges  and  believes  that  future  revenue  from
transport  and  termination  charges  recognized  under  ICG's   interconnection
agreements  will be realized,  there can be no assurance that future  regulatory
and judicial  rulings will be  favorable  to ICG, or that  different  reciprocal
compensation rates and rate structures will not be adopted when ICG's agreements
are  renegotiated  or  arbitrated,  or as a result  of FCC or  state  commission
proceedings on future compensation  methods. ICG believes that different pricing
plans will continue to be considered and adopted,  and expects that revenue from
transport and termination  charges likely will decrease as a percentage of total
local services revenue from local services in subsequent periods.

     During the six months  ended June 30,  2000,  ICG  successfully  negotiated
agreements,  which  assured  the  recognition  and receipt of  compensation  for
terminating  ISP traffic and  resolved  disputed  issues with  several  ILECs as
discussed  above.  The future rates  negotiated are generally lower than ICG has
been  historically  receiving  and  were  negotiated  for  a  three-year  period
subsequent  to  the  date  of  the  agreements.   Payment  of  compensation  for
terminating ISP traffic at the rates  negotiated in these  agreements will apply
for the term of the agreement,  irrespective of any state or federal  regulatory
or  judicial  rulings  that may be  issued  over the  three-year  period  of the
agreements  concerning the  applicability  of  compensation  obligations for ISP
traffic.

      The revenue from reciprocal  compensation is driven by three factors.  The
number of lines on switch,  the minutes of use per line,  and the rate under the
interconnection  agreement.  These  factors  are in a large  measure  beyond the
control of the Company.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company's  financial  position and cash flows are subject to a variety
of risks in the normal course of business, which include market risks associated
with  movements  in interest  rates and equity  prices.  The  Company  routinely
assesses  these risks and has  established  policies and  business  practices to
protect against the adverse effects of these and other potential exposures.  The
Company does not, in the normal  course of business,  use  derivative  financial
instruments for trading or speculative purposes.

Interest Rate Risk

     The Company's  exposure to market risk  associated with changes in interest
rates relates primarily to the Company's proposed debtor-in-possession financing
which, subject to changes, will incur interest at the LIBOR rate plus 4%.


<PAGE>


                                     PART II

ITEM 1.   LEGAL PROCEEDINGS

          On  November  14,  2000 the  Company  filed  voluntary  petitions  for
          protection  under Chapter 11 of the United States  Bankruptcy  Code in
          the Federal District of Delaware.  The Company is currently  operating
          as  debtors-in-possession  under  the  supervision  of the  Bankruptcy
          Court. The bankruptcy petition was filed in order to preserve cash and
          give the Company the opportunity to restructure its debt.


          During  the third  quarter  2000 the  Company  was  served  with seven
          lawsuits filed by various  shareholders in the Federal  District Court
          for the  District of Colorado  (Case  numbers:  00-S-1864,  00-S-1910,
          00-S-1908, 00-S-1945, 00-S-1963, 00-S-1957, and 00-S-1919). All of the
          suits name as defendants  the Company,  the  Company's  former CEO, J.
          Shelby  Bryan  and  the  Company's   former   President,   John  Kane.
          Additionally,  one of  the  complaints  names  the  Company's  current
          President, William S. Beans, Jr., as a defendant.

        All of the complaints seek unspecified damages for alleged violations of
        Rules  10(b)  and  20(a) of the  Securities  Exchange  Act of 1934.  The
        complaints  seek  class  action  certification  for  similarly  situated
        shareholders.  It is anticipated  that the lawsuits will be consolidated
        and that a lead  plaintiff's  counsel  will be chosen by the Court.  The
        Company has retained  the law firm of Skadden,  Arps,  Slate,  Meagher &
        Flom LLP to vigorously defend it against these lawsuits. The Company has
        also tendered these claims to the Company's  insurers.  At this time, it
        is  anticipated  that the  claims  against  the  Company  will be stayed
        pursuant to the Company's filing for bankruptcy. It is uncertain at this
        time  whether  these  lawsuits  will  materially  adversely  effect  the
        Company's financial or operational stability.

        On April 4, 1997,  certain  shareholders  of Zycom  filed a  shareholder
        derivative  suit and class action  complaint  for  unspecified  damages,
        purportedly on behalf of all of the minority  shareholders  of Zycom, in
        the District Court of Harris County,  Texas (Case No. 97-17777)  against
        the Company,  Zycom and certain of their  subsidiaries.  In this action,
        the plaintiffs  alleged that the Company and certain of its subsidiaries
        breached certain  fiduciary  duties owed to the plaintiffs.  The Company
        denied all such  allegations.  The Company  has  recently  finalized  an
        agreement to settle all claims asserted in this litigation.

        The Company is a party to certain other  litigation  which has arisen in
        the  ordinary  course of  business.  In the opinion of  management,  the
        ultimate  resolution of these  matters will not have a material  adverse
        effect on the Company's  financial  condition,  results of operations or
        cash flows.


ITEM 2. CHANGES IN SECURITIES

        None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Due to the bankruptcy  proceedings  discussed in note 1 to the Company's
        unaudited  consolidated  financial  statements for the nine months ended
        September 30, 2000, the Company is currently in default under the 13 1/2
        % Notes, 12 1/2% Notes,  11 5/8% Notes,  10% Notes, 9 7/8% Notes and the
        Senior Secured  Facility.  In addition,  the Company is in default under
        the 14 1/4%  Preferred  Stock,  14% Preferred  Stock,  6 3/4%  Preferred
        Securities and 8% Series A Convertible Preferred Stock.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

        None.

ITEM 5. OTHER INFORMATION

        None.



<PAGE>


ITEM 6. EXHIBITS AND REPORT ON FORM 8-K

        (A) Exhibits.

            (10)  Material Contracts.

                  10.1  Amendment to  Employment  Agreement,  dated as of July
                        12, 2000 by and between ICG  Communications,  Inc. and
                        Michael D. Kallet.

                  10.2  Employment Agreement, dated as of August 7, 2000 by and
                        between ICG Communications, Inc. and John Colgan.

                  10.3  Employment Agreement, dated as of September 24, 2000 by
                        and  between  ICG  Communications,   Inc.  and  Randall
                        Curran.

                  10.4  Amendment  and  Waiver  No. 4 to the  Loan  Documents,
                        dated as of September 29, 2000,  among ICG  Equipment,
                        Inc.,  ICG  NetAhead,  Inc.,  ICG  Services,  Inc., as
                        Parent,  certain Initial Lender Parties party thereto,
                        Morgan   Stanley   Senior   Funding,   Inc.,  as  Sole
                        Book-Runner  and Lead Arranger,  Royal Bank of Canada,
                        as Collateral  Agent and as  Administrative  Agent for
                        such  Lender  Parties,  Bank  of  America,   N.A.,  as
                        Documentation   Agent  and   Barclays   Bank  Plc,  as
                        Co-Documentation Agent

             (27) Financial Data Schedule.

                  27.1: Financial  Data Schedule of ICG  Communications,  Inc.
                        for the nine months ended September 30, 2000.

        (B) Report on Form 8-K.  The  following reports on Form 8-K was filed by
            the registrants during the three months ended September 30, 2000:

            (i)   Current  Report on Form 8-K dated August 11,  2000,  regarding
                  the  announcement  of  earnings  information  and  results  of
                  operations  for  the  quarter  ended  June  30,  2000  of  ICG
                  Communications, Inc.

            (ii)  Current  Report on Form 8-K dated August 25, 2000,  announcing
                  the  resignation  of J.  Shelby  Bryan as  Chairman  and Chief
                  Executive Officer on September 22, 2000.

            (iii) Current Report on Form 8-K dated September 18, 2000, regarding
                  the announcement of a revised business plan.

            (iv)  Current   Report  on  Form  8-K  dated   September  19,  2000,
                  announcing the  resignation  of James  Washington as Executive
                  Vice  President of Network  Services  effective  September 13,
                  2000.

            (v)   Current   Report  on  Form  8-K  dated   September  19,  2000,
                  announcing the resignation of Carl E. Vogel as Chairman of the
                  Board of Directors  and Chief  Executive  Officer on September
                  18, 2000.

            (vi)  Current Report on Form 8-K dated November 14, 2000, announcing
                  that  the  Company  and  most of its  subsidiaries  filed  for
                  voluntary bankruptcy protection under Chapter 11 of the United
                  States Bankruptcy Code.


<PAGE>


                                INDEX TO EXHIBITS
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


<PAGE>


                                INDEX TO EXHIBITS

10.1  Amendment  to  Employment  Agreement,  dated as of July 12,  2000 by and
      between ICG Communications, Inc. and Michael D. Kallet.

10.2  Employment  Agreement,  dated  as of  August  7,  2000 by and between  ICG
      Communications, Inc. and John Colgan.

10.3  Employment  Agreement,  dated as of September  24, 2000 by and between ICG
      Communications, Inc. and Randall Curran.

10.4  Amendment and Waiver No. 4 to the Loan Documents,  dated as of September
      29, 2000, among ICG Equipment,  Inc., ICG NetAhead,  Inc., ICG Services,
      Inc., as Parent,  certain  Initial Lender Parties party thereto,  Morgan
      Stanley Senior  Funding,  Inc., as Sole  Book-Runner  and Lead Arranger,
      Royal Bank of Canada,  as Collateral Agent and as  Administrative  Agent
      for such Lender Parties,  Bank of America,  N.A., as Documentation Agent
      and Barclays Bank Plc, as Co-Documentation Agent

27.1  Financial Data Schedule of ICG Communications,  Inc. for the nine months
      ended September 30, 2000.


<PAGE>


                                  EXHIBIT 10.1

 Amendment to Employment Agreement, dated as of July 12, 2000, by and between
                ICG Communications, Inc. and Michael D. Kallet.

<PAGE>


                                  EXHIBIT 10.2

     Employment Agreement, dated as of August 7, 2000, by and between ICG
                     Communications, Inc. and John V. Colgan.

<PAGE>


                                  EXHIBIT 10.3

   Employment Agreement, dated as of September 25, 2000, by and between ICG
                     Communications, Inc. and Randall Curran.


<PAGE>


                                  EXHIBIT 10.4

Amendment  and Waiver No. 4 to the Loan  Documents,  dated as of  September  29,
2000,  among ICG  Equipment,  Inc., ICG NetAhead,  Inc., ICG Services,  Inc., as
Parent,  certain  Initial Lender  Parties party  thereto,  Morgan Stanley Senior
Funding,  Inc., as Sole Book-Runner and Lead Arranger,  Royal Bank of Canada, as
Collateral Agent and as  Administrative  Agent for such Lender Parties,  Bank of
America, N.A., as Documentation Agent and Barclays Bank Plc, as Co-Documentation
Agent.



<PAGE>
                                   SIGNATURES


      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, on November 20, 2000.



                                          ICG COMMUNICATIONS, INC.





Date:  November 20, 2000              By: /s/ Harry R. Herbst
                                          --------------------------------------
                                          Harry R. Herbst, Executive Vice
                                          President and Chief Financial Officer
                                          (Principal Financial Officer)





Date:  November 20, 2000                By: /s/ John V. Colgan
                                            ------------------------------------
                                           John V. Colgan, Senior Vice President
                                           and Controller (Principal Accounting
                                           Officer)


<PAGE>


                                   SIGNATURES


      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, on November 20, 2000.



                                          ICG HOLDINGS (CANADA) CO.





Date:  November 20, 2000                By: /s/ Harry R. Herbst
                                            ------------------------------------
                                           Harry R. Herbst, Executive Vice
                                           President and Chief Financial Officer
                                           (Principal Financial Officer)






Date:  November 20, 2000                By: /s/ John V. Colgan
                                            ------------------------------------
                                           John V. Colgan, Senior Vice President
                                           and Controller (Principal Accounting
                                           Officer)


<PAGE>

                                   SIGNATURES


      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, on November 20, 2000.



                                          ICG HOLDINGS, INC.





Date:  November 20, 2000                By: /s/ Harry R. Herbst
                                            ------------------------------------
                                           Harry R. Herbst, Executive Vice
                                           President and Chief Financial Officer
                                           (Principal Financial Officer)






Date:  November 20, 2000                By: /s/ John V. Colgan
                                            ------------------------------------
                                           John V. Colgan, Senior Vice President
                                           and Controller (Principal Accounting
                                           Officer)