**UNITED STATESSECURITIES 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 OF1934** |
|-----------|--|--------------------------------------------------------------------------------------------|

**For the quarterly period ended March 31, 2003**

**OR**

| **[   ]** |  | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934** |
|---------------------|--|---------------------------------------------------------------------------------------------|

(Commission File Number 1-11965)

**ICG COMMUNICATIONS, INC.**(Exact names of registrant as specified in its charter)

| **Delaware**(State or other jurisdiction of incorporation or organization) |  | **84-1342022**(IRS Employer Identification Number) |
|----------------------------------------------------------------------------|--|----------------------------------------------------|

| **161 Inverness Drive WestEnglewood, Colorado 80112**(Address of principal executive offices) |
|-----------------------------------------------------------------------------------------------|

Registrant's 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 befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period thatthe registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90days.Yes **[ X ]  ** No **[   ]**

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule12b-2 of the Act).Yes **[   ]**   No**[ X ]**

As of May 6, 2003, 8,000,000 shares of ICG Communications, Inc. common stock wereoutstanding, of which 5,972,576 have been distributed to stockholders.

Indicate by check whether the registrant has filed all documents and reports required tobe filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under aplan confirmed by a court. Yes **[ X ]**   No **[   ]**

**Table of Contents**
|                 |
|-----------------|
| PART I          | FINANCIALINFORMATION |
|                 | ITEM 1. | FINANCIALSTATEMENTS |
|                 | ITEM 2. | MANAGEMENT'SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|                 | ITEM 3. | QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|                 | ITEM 4. | CONTROLS ANDPROCEDURES |
|                 |
| PART II         | OTHERINFORMATION |
|                 | ITEM 1. | LEGALPROCEEDINGS |
|                 | ITEM 2. | CHANGES INSECURITIES AND USE OF PROCEEDS |
|                 | ITEM 3. | DEFAULTSUPON SENIOR SECURITIES |
|                 | ITEM 4. | SUBMISSION OFMATTERS TO A VOTE OF SECURITY HOLDERS |
|                 | ITEM 5. | OTHERINFORMATION |
|                 | ITEM 6. | EXHIBITS ANDREPORTS ON FORM 8-K |
| SIGNATURES.     | SIGNATURES |
| CERTIFICATIONS. | CERTIFICATIONS |
| EXHIBITS.       | EXHIBITS |

# **PART I - FINANCIAL INFORMATION**

**ITEM1.          FINANCIAL STATEMENTS**
|                                                 |  |
|-------------------------------------------------|--|
| Consolidated Balance Sheets                     |  |
| Consolidated Statements of Operations           |  |
| Consolidated Statements of Stockholders' Equity |  |
| Consolidated Statements of Cash Flows           |  |
| Notes to Consolidated Financial Statements      |  |

**ICG COMMUNICATIONS, INC. AND SUBSIDIARIESConsolidated Balance Sheets (Reorganized Company)(Unaudited)**

|                                                                                                                                                 | **December 31,2002** |         | **March 31,2003** |
|-------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|---------|-------------------|
|                                                                                                                                                 |                      |         |                   |
|                                                                                                                                                 | **(in thousands)**   |
| **Assets**                                                                                                                                      |                      |         |                   |  |  |  |  |
|                                                                                                                                                 |                      |         |                   |  |  |  |  |
| Current assets:                                                                                                                                 |                      |         |                   |  |  |  |  |
| Cash and cash equivalents                                                                                                                       | $                    | 50,729  |                   |  | $ | 38,134 |  |
| Restricted cash, current                                                                                                                        |                      | 16,645  |                   |  |  | 17,516 |  |
| Trade receivables, net of allowance of $9 million and $7 million atDecember 31, 2002 and March 31, 2003, respectively                           |                      | 26,667  |                   |  |  | 32,576 |  |
| Other receivables, net of allowance of $4 million                                                                                               |                      | 1,946   |                   |  |  | 128 |  |
| Prepaid expenses and deposits                                                                                                                   |                      | 5,656   |                   |  |  | 6,551 |  |
|                                                                                                                                                 |                      |         |                   |  |  |  |  |
|                                                                                                                                                 |                      |         |                   |
| Total current assets                                                                                                                            |                      | 101,643 |                   |  |  | 94,905 |  |
|                                                                                                                                                 |                      |         |                   |  |  |  |  |
| Property and equipment, net (note 4)                                                                                                            |                      | 231,238 |                   |  |  | 235,309 |  |
|                                                                                                                                                 |                      |         |                   |  |  |  |  |
| Restricted cash, non-current                                                                                                                    |                      | 34,393  |                   |  |  | 33,412 |  |
| Deposits                                                                                                                                        |                      | 7,076   |                   |  |  | 7,100 |  |
| Deferred financing costs, net of accumulated amortization of $0.3 millionand $0.5 million at December 31, 2002 and March 31, 2003, respectively |                      | 3,096   |                   |  |  | 2,826 |  |
| Other assets                                                                                                                                    |                      | 12      |                   |  |  | 12 |  |
|                                                                                                                                                 |                      |         |                   |  |  |  |  |
|                                                                                                                                                 |                      |         |                   |
| Total Assets                                                                                                                                    | $                    | 377,458 |                   |  | $ | 373,564 |  |
|                                                                                                                                                 |                      |         |                   |
|                                                                                                                                                 |                      |         |                   |
|                                                                                                                                                 |                      |         |                   |
| (continued)                                                                                                                                     |

See accompanying notes to consolidated financial statements.

**ICG COMMUNICATIONS, INC. AND SUBSIDIARIESConsolidated Balance Sheets (Reorganized Company), Continued(Unaudited)**

|                                                                                                                          | **December 31,2002** |         | **March 31,2003** |
|--------------------------------------------------------------------------------------------------------------------------|----------------------|---------|-------------------|
|                                                                                                                          |                      |         |                   |
|                                                                                                                          | **(in thousands)**   |
| **Liabilities and stockholders' equity**                                                                                 |                      |         |                   |  |  |  |  |
|                                                                                                                          |                      |         |                   |  |  |  |  |
| Current liabilities:                                                                                                     |                      |         |                   |  |  |  |  |
| Accounts payable                                                                                                         | $                    | 8,921   |                   |  | $ | 9,607 |  |
| Accrued liabilities                                                                                                      |                      | 38,905  |                   |  |  | 43,615 |  |
| Restructuring accruals (note 5)                                                                                          |                      | 16,734  |                   |  |  | 7,497 |  |
| Secured Notes and other long-term debt, current portion                                                                  |                      | 12,973  |                   |  |  | 14,787 |  |
| Capital lease obligations, current portion                                                                               |                      | 5,642   |                   |  |  | 5,782 |  |
| Deferred revenue, current portion                                                                                        |                      | 12,977  |                   |  |  | 12,574 |  |
|                                                                                                                          |                      |         |                   |
| Total current liabilities                                                                                                |                      | 96,152  |                   |  |  | 93,862 |  |
|                                                                                                                          |                      |         |                   |  |  |  |  |
| Long-term liabilities:                                                                                                   |                      |         |                   |  |  |  |  |
| Secured Notes                                                                                                            |                      | 55,359  |                   |  |  | 53,412 |  |
| Capital lease obligations                                                                                                |                      | 90,943  |                   |  |  | 88,249 |  |
| Senior Subordinated Term Loan, net of $5 million of debt discount                                                        |                      | 20,056  |                   |  |  | 20,401 |  |
| Other debt                                                                                                               |                      | 16,660  |                   |  |  | 15,848 |  |
| Deferred revenue                                                                                                         |                      | 16,525  |                   |  |  | 15,108 |  |
| Other long-term liabilities (note 7)                                                                                     |                      | 650     |                   |  |  | 3,275 |  |
|                                                                                                                          |                      |         |                   |
|                                                                                                                          |                      |         |                   |  |  |  |  |
| Total liabilities                                                                                                        |                      | 296,345 |                   |  |  | 290,156 |  |
|                                                                                                                          |                      |         |                   |
|                                                                                                                          |                      |         |                   |  |  |  |  |
| Stockholders' equity:                                                                                                    |                      |         |                   |  |  |  |  |
| Reorganized Company preferred stock, $0.001 par value, 10,000,000shares authorized; 0 shares issued and outstanding      |                      | -       |                   |  |  | - |  |
| Reorganized Company common stock, $0.01 par value, 100,000,000shares authorized; 8,000,000 shares issued and outstanding |                      | 80      |                   |  |  | 80 |  |
| Additional paid-in capital                                                                                               |                      | 82,509  |                   |  |  | 82,509 |  |
| Retained earnings (accumulated deficit)                                                                                  |                      | (1,476  | )                 |  |  | 819 |  |
|                                                                                                                          |                      |         |                   |  |  |  |  |
|                                                                                                                          |                      |         |                   |
| Total stockholders' equity                                                                                               |                      | 81,113  |                   |  |  | 83,408 |  |
|                                                                                                                          |                      |         |                   |  |  |  |  |
| Commitments and contingencies (note 5)                                                                                   |                      |         |                   |  |  |  |  |
|                                                                                                                          |                      |         |                   |  |  |  |  |
|                                                                                                                          |                      |         |                   |
| Total liabilities and stockholders' equity                                                                               | $                    | 377,458 |                   |  | $ | 373,564 |  |
|                                                                                                                          |                      |         |                   |
|                                                                                                                          |                      |         |                   |  |  |  |  |
|                                                                                                                          |                      |         |                   |

See accompanying notes to consolidated financial statements.

**ICG COMMUNICATIONS, INC. AND SUBSIDIARIESConsolidated Statements of Operations(Unaudited)**

|                                                | **Predecessor Company**                  |          | **Reorganized Company** |
|------------------------------------------------|------------------------------------------|----------|-------------------------|
|                                                |                                          |          |                         |
|                                                | **Three months ended March 31,**         |
|                                                |                                          |
|                                                |                                          | **2002** |                         |  |  | **2003** |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                | **(in thousands,except per share data)** |
|                                                |                                          |          |                         |  |  |  |  |
| Revenue                                        | $                                        | 112,171  |                         |  | $ | 100,227 |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
| Operating costs and expenses:                  |                                          |          |                         |  |  |  |  |
| Operating costs                                |                                          | 67,378   |                         |  |  | 61,738 |  |
| Selling, general and administrative expenses   |                                          | 27,602   |                         |  |  | 20,307 |  |
| Depreciation and amortization                  |                                          | 19,626   |                         |  |  | 9,871 |  |
| Other expense (income), net                    |                                          | (6       | )                       |  |  | 13 |  |
|                                                |                                          |          |                         |  |  |  |  |
| Total operating costs and expenses             |                                          | 114,600  |                         |  |  | 91,929 |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
| Operating income (loss)                        |                                          | (2,429   | )                       |  |  | 8,298 |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
| Other income (expense):                        |                                          |          |                         |  |  |  |  |
| Interest expense (note 3)                      |                                          | (5,704   | )                       |  |  | (6,255 | ) |
| Interest income (note 3)                       |                                          | -        |                         |  |  | 231 |  |
| Reorganization expense, net (note 3)           |                                          | (23,291  | )                       |  |  | - |  |
| Other income, net                              |                                          | 140      |                         |  |  | 21 |  |
|                                                |                                          |          |                         |  |  |  |  |
| Total other expense, net                       |                                          | (28,855  | )                       |  |  | (6,003 | ) |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
| Net income (loss)                              | $                                        | (31,284  | )                       |  | $ | 2,295 |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
| Net income (loss) per share:                   |                                          |          |                         |  |  |  |  |
| Basic                                          | $                                        | (0.58    | )                       |  | $ | 0.29 |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
| Diluted                                        | $                                        | (0.58    | )                       |  | $ | 0.27 |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
| Weighted average number of shares outstanding: |                                          |          |                         |  |  |  |  |
| Basic                                          |                                          | 53,707   |                         |  |  | 8,000 |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
| Diluted                                        |                                          | 53,707   |                         |  |  | 8,474 |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |
|                                                |                                          |          |                         |  |  |  |  |

See accompanying notes to consolidated financial statements.

**ICG COMMUNICATIONS, INC. AND SUBSIDIARIESConsolidated Statements of Stockholders' Equity (Reorganized Company)(Unaudited)**

|                                                              | **Common Stock** |  | **AdditionalPaid-inCapital** |    | **Retained Earnings** |                          | **TotalStockholders'Equity** |
|--------------------------------------------------------------|------------------|--|------------------------------|----|-----------------------|--------------------------|------------------------------|
|                                                              |                  |  |                              |    |                       |                          |                              |
|                                                              | **Shares**       |  | **Amount**                   |    |                       | **(AccumulatedDeficit)** |                              |
|                                                              |                  |  |                              |    |                       |                          |                              |  |  |
|                                                              |                  |  |                              |    |                       |                          |                              |  |  |  |  |  |  |  |  |
| **Balances at January 1, 2003**                              | 8,000            |  | $                            | 80 |                       | $                        | 82,509                       |  | $ | (1,476 | ) |  | $ | 81,113 |  |
|                                                              |                  |  |                              |    |                       |                          |                              |  |  |  |  |  |  |  |  |
| Net income                                                   | -                |  |                              | -  |                       |                          | -                            |  |  | 2,295 |  |  |  | 2,295 |  |
|                                                              |                  |  |                              |    |                       |                          |                              |  |  |  |  |  |  |  |  |
|                                                              |                  |  |                              |    |                       |                          |                              |  |  |
| **Balances at March 31, 2003**                               | 8,000            |  | $                            | 80 |                       | $                        | 82,509                       |  | $ | 819 |  |  | $ | 83,408 |  |
|                                                              |                  |  |                              |    |                       |                          |                              |  |  |
|                                                              |                  |  |                              |    |                       |                          |                              |  |  |  |  |  |  |  |  |
|                                                              |                  |  |                              |    |                       |                          |                              |  |  |
|                                                              |                  |  |                              |    |                       |                          |                              |
|                                                              |                  |  |                              |    |                       |                          |                              |
|                                                              |                  |  |                              |    |                       |                          |                              |
| See accompanying notes to consolidated financial statements. |

**ICG COMMUNICATIONS, INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows(Unaudited)**

|                                                                                                                           | **Predecessor Company**          |          | **Reorganized Company** |
|---------------------------------------------------------------------------------------------------------------------------|----------------------------------|----------|-------------------------|
|                                                                                                                           |                                  |          |                         |
|                                                                                                                           | **Three months ended March 31,** |
|                                                                                                                           |                                  |
|                                                                                                                           |                                  | **2002** |                         |  |  | **2003** |  |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
|                                                                                                                           | **(in thousands)**               |
| Cash flows from operating activities:                                                                                     |                                  |          |                         |  |  |  |  |
| Net income (loss)                                                                                                         | $                                | (31,284  | )                       |  | $ | 2,295 |  |
| Adjustments to reconcile net income (loss) to net cash provided (used)byoperating activities before reorganization items: |                                  |          |                         |  |  |  |  |
| Reorganization expense, net                                                                                               |                                  | 23,291   |                         |  |  | - |  |
| Depreciation and amortization                                                                                             |                                  | 19,626   |                         |  |  | 9,871 |  |
| Provision for uncollectible accounts                                                                                      |                                  | 2,425    |                         |  |  | - |  |
| Other                                                                                                                     |                                  | 1,266    |                         |  |  | 1,538 |  |
| Changes in operating assets and liabilities:                                                                              |                                  |          |                         |  |  |  |  |
| Receivables                                                                                                               |                                  | (16,546  | )                       |  |  | (4,091 | ) |
| Prepaid expenses and deposits                                                                                             |                                  | (4,153   | )                       |  |  | (849 | ) |
| Accounts payable and accrued liabilities                                                                                  |                                  | (13,354  | )                       |  |  | 5,082 |  |
| Deferred revenue                                                                                                          |                                  | (1,441   | )                       |  |  | (1,821 | ) |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
| Net cash provided (used) by operating activities before reorganizationitems                                               |                                  | (20,170  | )                       |  |  | 12,025 |  |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
| Reorganization items:                                                                                                     |                                  |          |                         |  |  |  |  |
| Reorganization expense, net                                                                                               |                                  | (23,291  | )                       |  |  | - |  |
| Net gain on disposal of long-lived assets                                                                                 |                                  | (2,948   | )                       |  |  | - |  |
| Change in liabilities subject to compromise                                                                               |                                  | 15,073   |                         |  |  | - |  |
| Change in post-petition restructuring accruals                                                                            |                                  | -        |                         |  |  | (9,237 | ) |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
| Net cash used by reorganization items                                                                                     |                                  | (11,166  | )                       |  |  | (9,237 | ) |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
| Net cash provided (used) by operating activities                                                                          |                                  | (31,336  | )                       |  |  | 2,788 |  |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
| Cash flows from investing activities:                                                                                     |                                  |          |                         |  |  |  |  |
| Acquisition of property and equipment                                                                                     |                                  | (7,609   | )                       |  |  | (14,300 | ) |
| Change in prepaid expenses, accounts payable and accrued liabilities foracquisition of property and equipment             |                                  | (2,232   | )                       |  |  | 350 |  |
| Proceeds from disposition of property, equipment and other assets                                                         |                                  | 1,363    |                         |  |  | 82 |  |
| Decrease in restricted cash                                                                                               |                                  | 64       |                         |  |  | 110 |  |
| Decrease (increase) in long-term deposits                                                                                 |                                  | 2,001    |                         |  |  | (24 | ) |
| Purchase of short-term investments                                                                                        |                                  | (10,684  | )                       |  |  | - |  |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
| Net cash used by investing activities                                                                                     |                                  | (17,097  | )                       |  |  | (13,782 | ) |
|                                                                                                                           |                                  |          |                         |  |  |  |  |
|                                                                                                                           |                                  |          |                         |  |  | (continued) |  |

See accompanying notes to consolidated financial statements.

**ICG COMMUNICATIONS, INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows (Continued)(Unaudited)**

|                                                                                                                                                                    | **Predecessor Company**          |          | **Reorganized Company** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|----------|-------------------------|
|                                                                                                                                                                    |                                  |          |                         |
|                                                                                                                                                                    | **Three months ended March 31,** |
|                                                                                                                                                                    |                                  |
|                                                                                                                                                                    |                                  | **2002** |                         |  |  | **2003** |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    | **(in thousands)**               |
| Cash flows from financing activities:                                                                                                                              |                                  |          |                         |  |  |  |  |
| Principal payments on capital lease obligations                                                                                                                    | $                                | (700     | )                       |  | $ | (335 | ) |
| Principal payments on long-term debt                                                                                                                               |                                  | -        |                         |  |  | (1,266 | ) |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
| Net cash used by financing activities                                                                                                                              |                                  | (700     | )                       |  |  | (1,601 | ) |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
| Net decrease in cash and cash equivalents                                                                                                                          |                                  | (49,133  | )                       |  |  | (12,595 | ) |
| Cash and cash equivalents, beginning of period                                                                                                                     |                                  | 146,587  |                         |  |  | 50,729 |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
| Cash and cash equivalents end of period                                                                                                                            | $                                | 97,454   |                         |  | $ | 38,134 |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
| Supplemental disclosure of cash flows information:                                                                                                                 |                                  |          |                         |  |  |  |  |
| Cash paid for interest                                                                                                                                             | $                                | 4,800    |                         |  | $ | 4,169 |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
| Cash paid for income taxes                                                                                                                                         | $                                | -        |                         |  | $ | - |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
| Supplemental disclosure of non-cash investing and financingactivities:                                                                                             |                                  |          |                         |  |  |  |  |
| Increase in property and equipment and asset retirement obligations,resulting from the Company's adoption of the provisions of SFAS 143on January 1, 2003 (note 7) | $                                | -        |                         |  | $ | 2,531 |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
| Reduction in property and equipment and capital lease obligations, resultingfrom the renegotiation of contractual terms, effectiveJanuary 1, 2003                  | $                                | -        |                         |  | $ | 3,233 |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |
|                                                                                                                                                                    |                                  |          |                         |  |  |  |  |

See accompanying notes to consolidated financial statements.

**ICG COMMUNICATIONS, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements(Unaudited)**

**(1)           Organization andDescription of Business**

ICG Communications, Inc., a Delaware corporation, and its subsidiaries are collectivelyreferred to as "ICG" or the "Company."  The Company provides voice, data and Internet communication services. Headquartered in Englewood, Colorado, the Company operates an integrated metropolitan and nationwide fiber optic infrastructure tooffer:
    - Dial-Up Services, including primary rate interface and remote access services, on awholesale basis to national and regional Internet Service Providers ("ISP"s).
    - Point-to-Point Broadband Services, providing traditional special access service tolong-distance and inter-exchange carriers and medium to large sized corporate customers, as well as switched access and SS7services.
    - Corporate Services, primarily retail voice and data services to businesses.

On November 14, 2000, (the "Petition Date"), ICG and its operating subsidiaries filedvoluntary petitions for protection under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the UnitedStates District Court for the District of Delaware (the "Bankruptcy Court").  The filings were made in order to facilitate therestructuring of the Company’s debt, trade liabilities and other obligations.

On December 19, 2001, the Company filed a proposed Plan of Reorganization and a DisclosureStatement in the Bankruptcy Court. The Company subsequently filed a First Amended Plan and Disclosure Statement on March 1,2002.  On March 26, 2002, the Company filed a Second Amended Plan and Disclosure Statement, which were amended on April 3,2002.  The original Plan of Reorganization, the Disclosure Statement, the First Amended Plan and Disclosure Statement, and theSecond Amended Plan and Disclosure Statement are collectively referred to herein as the "Original Plan."  On April 3, 2002,the Company submitted the Original Plan to the Company's creditors for approval. On May 21, 2002, the Bankruptcy Court entered anorder confirming the Original Plan.

The Original Plan, however, did not become effective as a result of certain disagreementsrelating to exit financing between the Company and Cerberus Capital Management, L.P. (“Cerberus”).  After engagingin renegotiations with Cerberus, on July 25, 2002, the Company entered into an agreement with Cerberus that was embodied in aproposed modification to the original Plan of Reorganization.  The Original Plan, as modified, is referred to herein as the"Modified Plan."

The Company determined that the changes to the Original Plan, as reflected in the ModifiedPlan, required a re-solicitation of votes from certain classes of creditors.  Thus, on July 26, 2002, the Company filed theproposed Modified Plan and a Supplement to the Disclosure Statement in the Bankruptcy Court.  On August 23, 2002, the Companysubmitted the Modified Plan to the Company's creditors for approval.  On October 9, 2002, the Bankruptcy Court entered anorder confirming the Modified Plan.  On October 10, 2002 (the "Effective Date"), the Company's Modified Plan became effectiveand the Company emerged from Chapter 11 bankruptcy protection.

The implementation of the Modified Plan resulted in, among other things, Restated Articlesof Incorporation and By-laws, a new capital structure, the satisfaction or disposition of various types of claims against thePredecessor Company and the assumption or rejection of certain lease agreements and executory contracts. Further, on the EffectiveDate, the Company was authorized to issue 8,000,000 shares of new common stock to the Company’s pre-petition creditors. Allof the Company’s Board members resigned as of the Effective Date and the new Board of Directors officially took control ofthe Company.

Pursuant to the Modified Plan, on October 10, 2002, the Company received new financingconsisting of a $25 million senior subordinated term loan (the "Senior Subordinated Term Loan").  The Company's senior securedcredit facility (the "Senior Facility") balance was then cancelled and replaced with new notes (the "Secured Notes"). Proceeds from the Senior Subordinated Tern Loan were utilized to pay down the balance of the Secured Notes to $59million.

**(2)           Summary of SignificantAccounting Policies**

***Basis of Presentation***

As used in this Quarterly Report, "Predecessor Company" refers to the Company prior to itsemergence from bankruptcy.  "Reorganized Company" refers to the Company after its emergence from bankruptcy.

Between November 14, 2000, and October 10, 2002, ICG operated as a debtor-in-possessionunder the supervision of the Bankruptcy Court.  ICG's financial statements for reporting periods within that timeframe wereprepared in accordance with the provisions of Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities inReorganization Under the Bankruptcy Code." 

In connection with its emergence from bankruptcy, the Company adopted Fresh Start ("FreshStart") reporting in October 2002, in accordance with the requirements of SOP 90-7.  The application of SOP 90-7 resulted inthe creation of a new reporting entity. Under Fresh Start reporting, the reorganization value of ICG was allocated to its assetsand liabilities on a basis substantially consistent with purchase accounting in accordance with Statement of Financial AccountingStandards ("SFAS") No. 141, "Business Combinations."

The accompanying interim unaudited financial statements should be read in conjunction withICG's Annual Report on Form 10-K for the year ended December 31, 2002, as certain information and note disclosures normallyincluded in financial statements prepared in accordance with generally accepted accounting principles have been condensed oromitted pursuant to the rules and regulations of the United States Securities and Exchange Commission.  In the opinion ofmanagement, the Company's interim financial statements reflect all necessary adjustments, which are of a normal recurring nature,for a fair presentation.  Operating results for the three months ended March 31, 2003 are not necessarily indicative of theresults that may be expected for the fiscal year ending December 31, 2003.  All significant intercompany accounts andtransactions have been eliminated in consolidation.  Certain 2002 amounts have been reclassified to conform to the 2003presentation.

The preparation of financial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affect the amounts reported in the financial statements andaccompanying notes.  Management bases its estimates and judgments on historical experience, current economic and industryconditions and on various other factors that are believed to be reasonable under the circumstances.  Such information formsthe basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from othersources.  Actual results, however, may differ from these estimates under different assumptions or conditions. 

***Comparability of Financial Information***

Due to the adoption of Fresh Start reporting in October 2002, the Reorganized Company'saccompanying post-Fresh Start statement of operations and statement of cash flows have not been prepared on a consistent basis withthe Predecessor Company's financial statements, and are therefore not comparable in certain respects to the financial statementsprior to the application of Fresh Start reporting.

***Net Income (Loss) Per Share***

The Predecessor Company's weighted average outstanding common shares were used incalculating basic and diluted net loss per share for the three months ended March 31, 2002.  No potential common shares suchas options or warrants were included in the calculation, as their effect would have been anti-dilutive.  All outstandingcommon shares and potential common shares of the Predecessor Company were cancelled in October 2002 in connection with theCompany's emergence from bankruptcy.

For the three months ended March 31, 2003, the Reorganized Company's weighted averageoutstanding common shares were used in calculating basic net income per share.  In addition to outstanding common shares,outstanding dilutive options and warrants were included in the calculation of diluted net income per share.

***Stock-Based Compensation***

The Company accounts for its stock-based employee and non-employee director compensationplans using the intrinsic value based method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issuedto Employees," and related Interpretations ("APB 25").  Stock-based instruments issued to third parties are accounted for inaccordance with SFAS No. 123, "Accounting for Stock-Based Compensation."

The Company has recorded no compensation expense for the stock options granted under itsemployee stock option plan for the periods presented pursuant to the intrinsic value based method of APB 25.  The followingtable illustrates the effect on net income and net income per share for the three months ended March 31, 2003, if the Company hadapplied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation (in thousands, except per sharedata):

| Net income:                                                                                                   |   |       |   |
|---------------------------------------------------------------------------------------------------------------|---|-------|---|
| As reported                                                                                                   | $ | 2,295 |   |
| Deduct: total stock-based employee compensationexpense determined under fair value based methodfor all awards |   | (251  | ) |
|                                                                                                               |   |       |   |
| Pro forma                                                                                                     | $ | 2,044 |   |
|                                                                                                               |   |       |   |
|                                                                                                               |   |       |   |
|                                                                                                               |   |       |   |

|                       |   | **As reported** |  |  |   | **Pro forma** |  |
|-----------------------|---|-----------------|--|--|---|---------------|--|
|                       |   |                 |  |  |   |               |  |
| Net income per share: |   |                 |  |  |   |               |  |
| Basic                 | $ | 0.29            |  |  | $ | 0.26          |  |
|                       |   |                 |  |  |   |               |  |
|                       |   |                 |  |  |   |               |  |
|                       |   |                 |  |  |   |               |  |
| Diluted               | $ | 0.27            |  |  | $ | 0.24          |  |
|                       |   |                 |  |  |   |               |  |
|                       |   |                 |  |  |   |               |  |
|                       |   |                 |  |  |   |               |  |

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with thefollowing assumptions: option life of 5 years, volatility of 60%, risk-free interest rate ranging from 2.7% to 3.2%, and nodividends.The following table summarizes the status of the Reorganized Company's employee stock option plan:

|                                  | **Sharesunderlyingoptions** |  | **Weightedaverageexercise price** |
|----------------------------------|-----------------------------|--|-----------------------------------|
|                                  |                             |  |                                   |  |
|                                  |                             |  |                                   |  |
| Outstanding at December 31, 2002 | 701,677                     |  | $                                 | 9.12 |
| Granted                          | 40,000                      |  |                                   | 3.25 |
|                                  |                             |  |                                   |  |
| Outstanding at March 31, 2003    | 741,677                     |  | $                                 | 8.80 |
|                                  |                             |  |                                   |  |
|                                  |                             |  |                                   |  |
|                                  |                             |  |                                   |  |
|                                  |                             |  |                                   |  |

In addition, options to purchase 40,000 common shares at a strike price of $9.12 wereoutstanding at March 31, 2003, under the ICG Communications, Inc. Directors' Stock Option Plan.

**(3)           Accounting DuringBankruptcy Proceedings**

ICG's financial statements during the Company's bankruptcy proceedings were prepared inaccordance with the provisions of SOP 90-7.

***Interest Expense***

Contractual interest expense of $63 million was not recorded for the three months endedMarch 31, 2002, due to the Company's bankruptcy proceedings.

***Interest Income***

Interest income of $0.6 million for the three months ended March 31, 2002, was consideredearned as a result of the bankruptcy filing, and was therefore classified as a reorganization item, in accordance with therequirements of SOP 90-7.

***Reorganization Expense, Net***

In accordance with SOP 90-7, all costs and expenses incurred in connection with thePredecessor Company's reorganization from the Petition Date to the Effective Date were classified as reorganization items in theaccompanying consolidated statements of operations. The Predecessor Company incurred the following reorganization items for thethree months ended March 31, 2002 (in thousands of dollars):

| Severance and employee retention costs    |  | 312    |   |
|-------------------------------------------|--|--------|---|
| Legal and professional fees               |  | 3,708  |   |
| Switch site closure costs                 |  | 706    |   |
| Contract termination expenses             |  | 21,554 |   |
| Net gain on disposal of long-lived assets |  | (2,954 | ) |
| Interest income                           |  | (577   | ) |
| Other                                     |  | 542    |   |
|                                           |  |        |   |
| Total                                     |  | 23,291 |   |
|                                           |  |        |   |
|                                           |  |        |   |
|                                           |  |        |   |
|                                           |  |        |   |

**(4)           Property andEquipment**

Property and equipment, including assets held under capital leases, is comprised of thefollowing (in thousands of dollars):

|                                          |  | **December 31,2002** |         | **March 31,2003** |
|------------------------------------------|--|----------------------|---------|-------------------|
|                                          |  |                      |         |                   |
|                                          |  |                      |         |                   |  |  |  |  |
| Buildings and Improvements               |  |                      | 29,370  |                   |  |  | 29,370 |  |
| Furniture, fixtures and office equipment |  |                      | -       |                   |  |  | 415 |  |
| Machinery and equipment                  |  |                      | 3,662   |                   |  |  | 3,693 |  |
| Fiber optic equipment                    |  |                      | 51,864  |                   |  |  | 53,001 |  |
| Circuit switch equipment                 |  |                      | 73,964  |                   |  |  | 74,434 |  |
| Packet switch equipment                  |  |                      | 19,641  |                   |  |  | 19,498 |  |
| Fiber optic network                      |  |                      | 47,432  |                   |  |  | 47,017 |  |
| Site improvements                        |  |                      | 99      |                   |  |  | 2,919 |  |
| Construction in progress                 |  |                      | 11,408  |                   |  |  | 20,794 |  |
| Assets held for sale                     |  |                      | 1,749   |                   |  |  | 1,749 |  |
|                                          |  |                      |         |                   |
|                                          |  |                      | 239,189 |                   |  |  | 252,890 |  |
| Less accumulated depreciation            |  |                      | (7,951  | )                 |  |  | (17,581 | ) |
|                                          |  |                      |         |                   |
|                                          |  |                      | 231,238 |                   |  |  | 235,309 |  |
|                                          |  |                      |         |                   |
|                                          |  |                      |         |                   |
|                                          |  |                      |         |                   |

Property and equipment includes $21 million of equipment that has not been placed inservice and $2 million of equipment that is being held for sale at March 31, 2003, that is not being depreciated.

As described in note 7, ICG adopted SFAS No. 143, "Accounting for Asset RetirementObligations", effective January 1, 2003.

**(5)           Commitments andContingencies**

***Impact of WorldCom, Inc. Bankruptcy***

On July 21, 2002, WorldCom, Inc. and substantially all of its active U.S. subsidiaries(collectively referred to as "WorldCom") filed voluntary petitions for reorganization under Chapter 11 of the BankruptcyCode.  Since WorldCom's bankruptcy filing, ICG has continued to provide service to WorldCom.  Revenue from WorldComaccounted for approximately 12% of the Company's total revenue in the three months ended March 31, 2003.  Under the BankruptcyCode, WorldCom can elect to affirm or reject its pre-petition contracts with ICG. 

ICG and MCI WorldCom Network Services, Inc., have reached agreement with regard to therenegotiation and assumption of MCI WorldCom Network Services, Inc.'s pre-petition contract.  The assumption is subject toapproval by WorldCom's bankruptcy court.  If approved, WorldCom's minimum commitment to ICG will decrease by approximately$1.2 million per month in April 2003 through March 2004, and increase by approximately $0.8 million per month in April 2004 throughSeptember 2004.  In addition, the settlement agreement calls for MCI WorldCom Network Services, Inc. to pay ICG, within twobusiness days of WorldCom's bankruptcy court approval, approximately $1.5 million relating to revenue that has not yet beenrecorded by ICG.  As of March 31, 2003, the Company had $3.5 million in net trade receivables due from WorldCom.

***Operating Costs and Accrued Liabilities***

The Company leases certain network facilities, primarily circuits, from ILECs and CLECs toaugment its owned infrastructure for which it is generally billed a fixed monthly fee.   The Company also uses thefacilities of other carriers for which it is billed on a usage basis.  The Company issued a significant number of disconnectorders to ILECs and CLECs for leased circuits throughout 2001 and 2002 as a result of the Company's optimization of its network andassociated operating cost structure, as well as the curtailment of the Company's expansions plans.  In addition, many of theseproviders changed the Company's billing account numbers ("BAN"s) in an attempt to segregate the Company's pre- and post-Chapter 11petition billing activity.  Disconnected services were frequently not reflected on a timely basis by these facilitiesproviders on the Company's invoices, resulting in inaccurate invoices and disputes, and the assignment of new BANs by thesefacilities providers frequently resulted in incorrect balances being carried forward on invoices.  The Company disputesinvoices for usage billings when the call record detail is not adequate to support such charges.  As a result of these andother types of billing disputes, the Company is in settlement negotiations with certain providers. 

In determining the amount of such operating expenses and related accrued liabilities toreflect in its financial statements, the Company considers the adequacy of documentation of disconnect notices, compliance withprevailing contractual requirements for submitting such disconnect notices and disputes to the provider of the facilities, andcompliance with its interconnection agreements with these carriers.  Significant judgment is required in estimating theultimate outcome of the dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiationsor settle any litigation. 

***Other Commitments and Contingencies***

Certain other customers have approached ICG about the possibility of settling orrestructuring their service contracts.  If the Company agrees to settle or restructure any significant customer contracts,ICG's results of operations and financial condition could be materially impacted.  At this time, the Company cannot predictthe possible outcome of such negotiations. 

The Company emerged from bankruptcy on October 10, 2002.  However, certainpost-confirmation proceedings continue in the Bankruptcy Court relating to pre-petition claims filed by creditors, administrativeclaims and claims for damages on rejected executory contracts.  As of March 31, 2003, the Reorganized Company's balance sheetincludes $7 million in estimated accrued liabilities for the settlement of such claims.

**(6)           MajorCustomers**

A significant amount of the Company's revenue is derived from long-term contracts withcertain large customers, including one major customer, Qwest Communications Corporation (together with its affiliated entities,"Qwest").  Revenue from Qwest accounted for 26% and 30% of total revenue in the three months ended March 31, 2002 and 2003,respectively.  As of March 31, 2003, the Company had $5.8 million in net trade receivables due from Qwest.

In addition, as described in more detail in note 5, revenue from WorldCom accounted forapproximately 12% of the Company's total revenue in the three months ended March 31, 2003. 

**(7)           New AccountingStandards**

Effective January 1, 2003, ICG adopted SFAS No. 143, "Accounting for Asset RetirementObligations." The statement requires that a liability for the fair value of an asset retirement obligation be recognized in theperiod in which it is incurred, with the offsetting associated asset retirement cost capitalized as part of the carrying amount ofthe long-lived asset. The asset retirement cost is subsequently allocated to expense using a systematic and rational method overthe useful life of the related asset. Changes in the asset retirement obligation resulting from the passage of time are recognizedas an increase in the carrying amount of the liability and as accretion expense. The adoption of SFAS 143 resulted in theestablishment of asset retirement obligations of $2.5 million, which are included in other long-term liabilities in theaccompanying balance sheet, and an increase to net property and equipment of $2.5 million.  Accretion expense of $0.1 millionfor the three months ended March 31, 2003, is included in other operating expense (income), net, in the accompanying statement ofoperations.

**ITEM2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS**

*Unless the context otherwise requires, the term "Company", "ICG" or "Registrant" meansthe combined business operations of ICG Communications, Inc. and its subsidiaries. All dollar amounts are in U.S.dollars.*

*This section and other parts of this Quarterly Report contain "forward lookingstatements" intended to qualify as safe harbors from liability as established by the Private Securities Litigation Reform Act of1995.  These forward looking statements can generally be identified as such because the context of the statements includewords such as "intends," "anticipates," "expects," "estimates," "plans," "believes" and other similar words.  Additionally,statements that describe the Company's future plans, objectives or goals also are forward-looking statements.  Allforward-looking statements are subject to certain risks and uncertainties that could cause actual results or outcomes to differmaterially from those currently anticipated.  These risks and uncertainties, which are described in more detail herein under"Liquidity and Capital Resources", include, but are not limited to the following:*
    - Customer concentration and the Company's ability to retain its major customers onprofitable terms;
    - The Company's ability to collect reciprocal compensation;
    - The Company's ability to sustain positive operating income and netincome;
    - The Company's ability to successfully maintain commercial relationships with itscritical suppliers;
    - The Company's ability to manage expansion of its service offerings and its network andinfrastructure;
    - The Secured Notes and Senior Subordinated Term Loan contain certain covenants thatrestrict the Company's financial and operational flexibility;
    - Changes in, or the Company's inability to comply with, existing governmentregulations;
    - The performance of the Company's network;
    - The rapid change of technology within the telecommunications industry;
    - The Company's ability to access capital markets in a timely manner, at reasonablecosts and on satisfactory terms and conditions;
    - The Reorganized Company is largely controlled by two parties;
    - Potential for business combinations; and
    - General economic conditions and the related impact on demand for the Company'sservices.

*These forward-looking statements speak only as of the date of this QuarterlyReport.  The Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether asa result of new information, future events or otherwise.  Although the Company believes that its plans, intentions andexpectations reflected in or suggested by the forward-looking statements made in this Quarterly Report are reasonable, there is noassurance that such plans, intentions or expectations will be achieved.*

The following discussion and analysis of the Company's financial condition and results ofoperations should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included inthis Quarterly Report.  All dollar amounts are in U.S. dollars.

**BUSINESS OVERVIEW**

ICG is a facilities-based, nationwide communications provider focused on providing dataand voice services to Internet Service Providers ("ISP"s), telecommunication carriers and corporate customers.  Headquarteredin Englewood, Colorado, ICG is a competitive local exchange carrier ("CLEC") certified in most states, having interconnectionagreements with every major local exchange carrier. ICG's facilities support three primary product offerings:

**Dial-Up Services**

The Company provides primary rate interface ("PRI") ports (one and two way) and managedmodem remote access services ("RAS") to many of the largest national ISPs and other telecommunications carriers, as well as tonumerous regional ISPs and other communication service companies. Most of these services are provided through the Company's ownedswitch facilities. Currently, ICG's network footprint has the capability to provide Dial-Up service to over 75% of the nation'spopulation. Before any reciprocal compensation revenues earned from these services, revenue from Dial-Up services accounted for 53%of the Company's total first quarter 2003 revenue. Associated reciprocal compensation revenue accounted for an additional 10% ofthe Company's total first quarter 2003 revenue. As of March 2003, the Company had approximately 839,000 ISP customer ports inservice.

**Point-to-Point Broadband Service**

The Company provides dedicated bandwidth to connect (i) inter-exchange carriers to localmarkets, large corporations and other carrier facilities and (ii) large corporations to their inter-exchange carrier sites andother corporate locations. Such dedicated bandwidth sales are focused in areas where ICG maintains local fiber and buildings on itsown network or in close proximity thereto. Point-to-Point Broadband service also includes switched access and SS7 services.Point-to-Point Broadband service accounted for 22% of the Company's total first quarter 2003 revenue.

**Corporate Services**

The Company offers Internet access, data and voice services to corporate customers, withan emphasis on Dedicated Internet Access ("DIA") and Internet Protocol ("IP") telephony services. ICG is well positioned to expandthis service with its metropolitan and regional fiber and switching asset base and nation-wide data network infrastructure.Corporate Services accounted for 15% of the Company's total first quarter 2003 revenue. As of March 2003, Corporate Services'customers accounted for approximately 98,000 access lines.

**Network**

To provide its service offerings, ICG combines its approximately 5,700 route miles ofmetropolitan and regional fiber network infrastructure and its 46 voice and data switches with its nationwide fiber optic backbone,data points of presence, 23 asynchronous transfer mode ("ATM") switches, and numerous private and public Internet peeringarrangements.  The design of the physical network permits the Company to offer flexible, high-speed telecommunicationsservices to its customers.

The regional network infrastructure consists of fiber optic cables and associated advancedelectronics and transmission equipment. The Company's network includes a centrally controlled, logical IP switch (i.e., "SoftSwitch"), and is generally configured in redundant synchronous optical network ("SONET") rings to make the network accessible tothe largest concentration of telecommunications intensive business customers within a given market. This network architecture alsooffers the advantage of uninterrupted service in the event of a fiber cut or equipment failure, thereby resulting in limitedoutages and increased network reliability in a cost efficient manner.

**REORGANIZATION AND EMERGENCE FROM BANKRUPTCY**

On November 14, 2000, (the "Petition Date"), ICG and its operating subsidiaries filedvoluntary petitions for protection under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the UnitedStates District Court for the District of Delaware (the "Bankruptcy Court").  The filings were made in order to facilitate therestructuring of the Company’s debt, trade liabilities and other obligations.

On December 19, 2001, the Company filed a proposed Plan of Reorganization and a DisclosureStatement in the Bankruptcy Court. The Company subsequently filed a First Amended Plan and Disclosure Statement on March 1,2002.  On March 26, 2002, the Company filed a Second Amended Plan and Disclosure Statement, which were amended on April 3,2002.  The original Plan of Reorganization, the Disclosure Statement, the First Amended Plan and Disclosure Statement, and theSecond Amended Plan and Disclosure Statement are collectively referred to herein as the "Original Plan."  On April 3, 2002,the Company submitted the Original Plan to the Company's creditors for approval. On May 21, 2002, the Bankruptcy Court entered anorder confirming the Original Plan.

The Original Plan, however, did not become effective as a result of certain disagreementsrelating to exit financing between the Company and Cerberus Capital Management, L.P. (“Cerberus”).  After engagingin renegotiations with Cerberus, on July 25, 2002, the Company entered into an agreement with Cerberus that was embodied in aproposed modification to the original Plan of Reorganization.  The Original Plan, as modified, is referred to herein as the"Modified Plan."

The Company determined that the changes to the Original Plan, as reflected in the ModifiedPlan, required a re-solicitation of votes from certain classes of creditors.  Thus, on July 26, 2002, the Company filed theModified Plan and a Supplement to the Disclosure Statement in the Bankruptcy Court.  On August 23, 2002, the Company submittedthe Modified Plan to the Company's creditors for approval.  On October 9, 2002, the Bankruptcy Court entered an orderconfirming the Modified Plan.  On October 10, 2002 (the "Effective Date"), the Company's Modified Plan became effective andthe Company emerged from Chapter 11 bankruptcy protection.

The implementation of the Modified Plan resulted in, among other things, Restated Articlesof Incorporation and By-laws, a new capital structure, the satisfaction or disposition of various types of claims against thePredecessor Company and the assumption or rejection of certain lease agreements and executory contracts. Further, on the EffectiveDate, the Company was authorized to issue 8,000,000 shares of new common stock to the Company’s pre-petition creditors. Allof the Company’s Board members resigned as of the Effective Date and the new Board of Directors officially took control ofthe Company.

Pursuant to the Modified Plan, on October 10, 2002, the Company received new financingconsisting of a $25 million senior subordinated term loan (the "Senior Subordinated Term Loan").  The Company's senior securedcredit facility (the "Senior Facility") balance was then cancelled and replaced with new notes (the "Secured Notes"). Proceeds from the Senior Subordinated Tern Loan were utilized to pay down the balance of the Secured Notes to $59million.

Under the terms of the Senior Subordinated Term Loan, subject to certain ownershippercentage requirements, Cerberus is entitled to appoint two directors to the reorganized Company’s Board of Directors. Pursuant to the Modified Plan, W. R. Huff Asset Management Co. L.L.P. ("Huff") is also entitled to appoint two directors. Further, the Modified Plan authorized the appointment of the Company's Chief Executive Officer, Randall E. Curran, to serve asChairman of the Company's Board of Directors until the first meeting of Stockholders.  According to the Company's RestatedBy-laws, certain corporate actions require the approval of a supermajority of the Board of Directors.

**CRITICAL ACCOUNTING POLICIES**

Management's Discussion and Analysis of Financial Condition and Results of Operationsaddresses the Company's consolidated financial statements, which have been prepared in accordance with accounting principlesgenerally accepted in the United States of America.  The preparation of these financial statements requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reportingperiod.

On an ongoing basis, management evaluates its estimates and judgments, including thoserelated to revenue recognition, uncollectible accounts receivable, long-lived assets, operating costs and accruals, litigation andcontingencies.  Management bases its estimates and judgments on historical experience, current economic and industryconditions and on various other factors that are believed to be reasonable under the circumstances.  Such information formsthe basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from othersources.  Actual results, however, may differ from these estimates under different assumptions or conditions.  Managementbelieves the following critical accounting policies address the more significant judgments and estimates used in the preparation ofits consolidated financial statements.

###### ***Financial Reporting by Entities in Reorganization under the Bankruptcy Code andFresh Start Reporting***

Between November 14, 2000, and October 10, 2002, ICG operated as a debtor-in-possessionunder the supervision of the Bankruptcy Court.  ICG's financial statements for reporting periods within that timeframe wereprepared in accordance with the provisions of Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities inReorganization Under the Bankruptcy Code." 

In connection with its emergence from bankruptcy, the Company adopted Fresh Start ("FreshStart") reporting in October 2002, in accordance with the requirements of SOP 90-7.  The application of SOP 90-7 resulted inthe creation of a new reporting entity. Under Fresh Start reporting, the reorganization value of ICG was allocated to its assetsand liabilities on a basis substantially consistent with purchase accounting in accordance with Statement of Financial AccountingStandards ("SFAS") No. 141, "Business Combinations."

As used in this Quarterly Report, "Predecessor Company" refers to the Company prior to itsemergence from bankruptcy.  "Reorganized Company" refers to the Company after its emergence from bankruptcy.

***Revenue Recognition and Accounts Receivable***

Revenue for dedicated transport, data, Internet and the majority of switched services,exclusive of switched access, is generally billed in advance on a fixed rate basis and recognized over the period the services areprovided.  Switched access revenue and inter-carrier compensation, including reciprocal compensation and carrier access, isgenerally billed on a transactional basis determined by customer usage.  The transactional elements of switched accessservices and inter-carrier compensation are billed in arrears and estimates are used to recognize revenue in the period thatservice is provided.  Fees billed in connection with customer installations and other up front charges are deferred andrecognized as revenue ratably over the estimated average contract life.  

In the past, the Company entered into indefeasible rights-of-use agreements ("IRUs"),pursuant to which the Company continues to lease its metropolitan fiber and other infrastructure to other telecommunicationsservices providers.  If the requirements for sales-type lease accounting were met, the Company recognized revenue in theperiod that facilities became available for use by the customer.  If the requirements for sales-type lease accounting were notmet, as was generally the case, the Company has recognized revenue ratably over the term of the agreement.  Revenue earned onthe portion of IRUs attributable to the provision of maintenance services has been recognized ratably over the term of theagreement. 

The Company records reciprocal compensation and carrier access revenue in accordance withregulatory authority approval and pursuant to interconnection agreements with incumbent local exchange carriers ("ILEC"s) andinterexchange carriers ("IXC"s) for the origination, transport and/or termination of traffic originated by ILEC and IXC customers,including Internet traffic.  The Company recognizes revenue as the service is provided, except in those cases where historicalexperience indicates that the revenue would be under dispute and collection would be uncertain. 

The Company recognizes revenue at the amount expected to be realized, which includesadjustments for billing accuracy and service performance.  Valuation allowances for uncollectible accounts receivable areestablished through a charge to selling, general and administrative expenses.  The Company assesses the adequacy of thisreserve periodically, evaluating general factors such as the length of time individual receivables are past due, historicalcollection experience, the economic and competitive environment, and changes in the credit worthiness of customers.  TheCompany also assesses the ability of specific customers to meet their financial obligations and establishes specific valuationallowances based on the amount the Company expects to collect from these customers, as considered necessary.  If circumstancesrelating to specific customers change or economic conditions improve or worsen such that past collection experience and assessmentof the economic environment are no longer relevant, the estimate of the recoverability of the Company's trade receivables maychange.

###### ***Operating Costs and Accrued Liabilities***

The Company leases certain network facilities, primarily circuits, from ILECs and CLECs toaugment its owned infrastructure for which it is generally billed a fixed monthly fee.   The Company also uses thefacilities of other carriers for which it is billed on a usage basis.  The Company issued a significant number of disconnectorders to ILECs and CLECs for leased circuits throughout 2001 and 2002 as a result of the Company's optimization of its network andassociated operating cost structure, as well as the curtailment of the Company's expansions plans.  In addition, many of theseproviders changed the Company's billing account numbers ("BAN"s) in an attempt to segregate the Company's pre- and post-Chapter 11petition billing activity.  Disconnected services were frequently not reflected on a timely basis by these facilitiesproviders on the Company's invoices, resulting in inaccurate invoices and disputes, and the assignment of new BANs by thesefacilities providers frequently resulted in incorrect balances being carried forward on invoices.  The Company disputesinvoices for usage billings when the call record detail is not adequate to support such charges.  As a result of these andother types of billing disputes, the Company is in settlement negotiations with certain providers. 

In determining the amount of such operating expenses and related accrued liabilities toreflect in its financial statements, the Company considers the adequacy of documentation of disconnect notices, compliance withprevailing contractual requirements for submitting such disconnect notices and disputes to the provider of the facilities, andcompliance with its interconnection agreements with these carriers.  Significant judgment is required in estimating theultimate outcome of the dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiationsor settle any litigation. 

###### ***Property and Equipment***

The Company's property and equipment includes property and equipment in service, underconstruction or development, and held for sale.

Property and equipment in service is stated at historical cost, reduced by provisions torecognize impairment in value, as required.  Costs associated directly with network construction, service installations anddevelopment of business support systems, including employee related costs, and interest expense incurred during the constructionperiod, are capitalized.  Depreciation is calculated on a straight-line basis over the assets' estimated useful lives, whichare determined based on historical usage with consideration given to technological changes, trends in the industry and othereconomic factors that could impact the network architecture and asset utilization.  Assets held for sale are stated at theestimated proceeds from the sale, less costs to sell.

Equipment held under capital leases is stated at the lower of the fair value of the assetor the net present value of the minimum lease payments at the inception of the lease.  Amortization of equipment held undercapital leases is included in depreciation and amortization expense, and is calculated on a straight-line basis over the estimateduseful lives of the assets, or the related lease term, whichever is shorter.

The Company provides for the impairment of long-lived assets pursuant to SFAS No. 144,"Accounting for the Impairment or Disposal of Long-Lived Assets," which requires that long-lived assets and certain identifiableintangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that thecarrying value of an asset may not be recoverable.  An impairment loss is recognized when the asset's carrying value exceedsthe estimated undiscounted future cash flows from the asset, excluding interest.  Measurement of the impairment loss is thenbased on the estimated fair value of the asset.  Considerable judgment is required to project such future cash flows and, ifrequired, to estimate the fair value of the impaired long-lived assets.

Pursuant to the adoption of Fresh Start in October 2002, the Company wrote down the valueof its property and equipment by $392 million, and the balance of the accumulated depreciation by $126 million.  The totalFresh Start value of the long-lived assets was generally allocated on a pro rata basis to the individual asset categories based onasset appraisals obtained in November 2001 and March 2002.  The adjusted property and equipment values are being depreciatedover the remaining useful lives of the assets.

**LIQUIDITY AND CAPITAL RESOURCES**

**Funding Requirements**

At March 31, 2003, the Company had cash, cash equivalents and restricted cash totaling $89million, which is comprised of the following: (i) cash and cash equivalents of $38 million; (ii) restricted cash – current of$18 million, which represents the amount the Company expects will be available for current operations in the next twelve months;and (iii) restricted cash – non-current of $33 million.

The Company expects to pay approximately $7 million in the next twelve months to certainholders of pre-petition claims, professional services providers, and other parties for matters relating to the Company's bankruptcyproceedings. 

The Company anticipates that it will need additional financing in 2005 and 2006 in orderto refinance the Secured Notes and the Senior Subordinated Term Loan, respectively. Such refinancing, however, is contingent uponmarket conditions and the Company's results of operations, and is therefore not assured.

**Capital Commitments**

###### ***Capital Expenditures***

Capital expenditures, exclusive of amounts required to sustain network functionality, willbe driven primarily by customer demand for the Company's services.  If customer demand for new services does not meetmanagement's expectations, capital expenditures will be proportionally reduced.

**Assessment of Risks and Uncertainties**

The Company is subject to a number of significant risks. The telecommunications industrycontains many inherent risks, and the Company faces risks specific to its own operations.  These risks include, but are notlimited to the following:

###### ***Customer concentration and the Company's ability to retain its major customers onprofitable terms***

A significant amount of the Company's revenue is derived from long-term contracts withcertain large customers.  In the first quarter of 2003, four customers individually represented more than 5% of ICG's totalrevenue: Qwest Communications Corporation (together with its affiliated entities, "Qwest"), various subsidiaries of WorldCom, Inc.,altogether, "WorldCom"), and two large national ISPs.  Revenue from Qwest accounted for 30% of total revenue for the threemonths ended March 31, 2003.  Revenue from these top four customers in the first quarter of 2003 accounted for 57% of ICG'stotal revenue.

In general, upon the contractual expiration of the Company's agreements with itscustomers, there can be no assurance that customers will elect to continue such agreements; in fact, they may elect to disconnectservices.  In addition, certain material customer agreements do not require the customer to maintain minimum commitments attheir current levels.  There can be no assurance that such customers will continue to purchase the same amount of servicesfrom ICG.

During 2002, a number of the Company's customers filed for bankruptcy protection. Under the Bankruptcy Code, customers who file for bankruptcy protection may choose to affirm or reject their pre-petition contractswith the Company.  If they choose to reject those contracts, ICG's recourse is to pursue an unsecured claim in the customer'sbankruptcy proceeding for damages associated with rejection of the contract.  The ultimate amount and nature of recovery onsuch claims is highly uncertain and specific to each proceeding.  WorldCom filed for bankruptcy protection on July 21,2002.  Since WorldCom's bankruptcy filing, ICG has continued to provide service to WorldCom.  The WorldCom entitiesaccounted for approximately 12% of the Company's revenue in the first quarter of 2003. 

ICG and MCI WorldCom Network Services, Inc., have reached agreement with regard to therenegotiation and assumption of MCI WorldCom Network Services, Inc.'s pre-petition contract.  The assumption is subject toapproval by WorldCom's bankruptcy court.     If approved, WorldCom's minimum commitment to ICG will decrease byapproximately $1.2 million per month in April 2003 through March 2004, and increase by approximately $0.8 million per month inApril 2004 through September 2004.  In addition, the settlement agreement calls for MCI WorldCom Network Services, Inc. to payICG, within two business days of WorldCom's bankruptcy court approval, approximately $1.5 million relating to revenue that has notyet been recorded by ICG.  As of March 31, 2003, the Company had $3.5 million in net trade receivables due fromWorldCom.

As of March 31, 2003, customers who have filed for bankruptcy protection, includingWorldCom, represented approximately 13% of the Company's monthly revenue.  Given the depressed state of the national economyand the telecommunications sector in particular, there can be no assurance that the Company will not lose significant recurringrevenue due to customer bankruptcies.

In addition, certain other customers have approached ICG about possibly settling orrestructuring future rates and/or levels of service provided under their service contracts.  If the Company agrees to settleor restructure the future provisions of any significant customer contracts, ICG's results of operations and financial conditioncould be materially affected. At this time, the Company cannot predict the possible outcome of such negotiations.

While management continues to evaluate and plan for the expiration of certain contractswith large customers and the replacement of monthly recurring revenue from customers currently involved in bankruptcy proceedings,the unexpected loss of any one or more of these customers, particularly Qwest, could have a significant impact on the Company'soperating results.

###### ***The Company's ability to collect reciprocal compensation***

Reciprocal compensation rates are negotiated elements of inter-carrier compensationestablished pursuant to interconnection agreements between the parties.  The Company has executed interconnection agreementswith all regional bell operating companies ("RBOC"s) and most other ILECs and, while the initial terms of some of those agreementshave expired or are soon expiring, the Company is in the process of renegotiating and extending the terms of the interconnectionagreements.  The interconnection agreements currently in effect with three of the major RBOCs expire in June 2003, October2003, and June 2004, respectively.

In most states in which the Company provides services, regulatory agencies haveestablished lower traffic termination rates than the negotiated rates provided for in the Company's interconnectionagreements.  As a result, future reciprocal compensation rates will likely be lower than the rates under the expiringinterconnection agreements.

Reciprocal compensation revenue is discussed in more detail under "Results ofOperations."

###### ***The Company's ability to sustain positive operating income and netincome***

Prior to filing for bankruptcy, the Company incurred substantial net losses and negativecash flows from operating activities. Since the third quarter of 2002, however, the Company has experienced positive operatingincome.  Further, the Company achieved positive net income in the first quarter of 2003.  Nevertheless, there can be noassurance that the Company will continue to experience positive operating income or net income.

###### ***The Company's ability to successfully maintain commercial relationships with itscritical suppliers***

The Company relies in part on other telecommunications service providers to provide datacommunications capacity via leased telecommunications lines. If its suppliers are unable or unwilling to provide or expand theircurrent levels of service to the Company in the future, or are unable to provide these services in a timely manner, ICG'soperations could be materially affected. Although leased telecommunications lines are available from several alternative suppliers,there can be no assurance that ICG could obtain substitute services from other providers at reasonable prices or in a timelyfashion. ICG is also subject to risks relating to potential disruptions in its suppliers' services, and there is no assurance thatsuch interruptions will not occur. Service interruptions could produce substantial customer dissatisfaction and possibly cause theCompany to fail to meet its minimum network performance commitments, which could adversely affect the Company's results ofoperations and financial condition.

###### ***The Company's ability to manage expansion of its service offerings and its networkand infrastructure***

The Company plans to introduce new communications services, expand service in its existingmarkets, and possibly expand service offerings into new markets.  Such projects of a significant nature entail variousoperational and financial risks, including the following:
    - Obtaining any required governmental permits and rights-of-way;
    - Implementing interconnection agreements with ILECs and addressing other regulatorymatters;
    - Designing, acquiring and installing transmission, switching and datafacilities;
    - Attracting new customers and selling new services to existing customers;
    - Training and managing the Company's employee base; and
    - Accurately predicting and managing the cost and timing of associated capital expenditureprograms.

In the event the Company is unable to successfully manage and implement such projects, theCompany's business, results of operations and financial condition could be adversely affected in a material manner.

***The Secured Notes and Senior Subordinated Term Loan contain certain covenants thatrestrict the Company's financial and operational flexibility***

Under the terms of the Secured Notes and Senior Subordinated Term Loan, the Company isrequired to adhere to a number of affirmative, negative and financial covenants, including among other things, covenants whichrequire it to (i) maintain a minimum cash balance ("Minimum Cash Balance"); (ii) maintain a minimum level of EBITDA performance("Minimum EBITDA"); and (iii) limit capital expenditures ("Maximum Capital Expenditures").

Specifically, the financial covenants in the Secured Notes and the Senior SubordinatedTerm Loan require the Company to maintain the following Minimum EBITDA amounts as of the end of each fiscal quarter as set forthbelow (in thousands of dollars):

| **Fiscal Quarter Ending:** |  | **Minimum EBITDA (1) (2)** |
|----------------------------|--|----------------------------|
|                            |  |                            |
| June 30, 2003              |  | 67,251                     |
| September 30, 2003         |  | 70,649                     |
| December 31, 2003          |  | 74,046                     |
| March 31, 2004             |  | 79,586                     |
| June 30, 2004              |  | 85,248                     |
| September 30, 2004         |  | 91,269                     |
| December 31, 2004          |  | 97,111                     |
| March 31, 2005             |  | 109,708                    |
| June 30, 2005              |  | 120,660                    |

(1)           EBITDA is defined in theSecured Notes and Senior Subordinated Term Loan as consolidated net income (or net loss) plus income and franchise tax expenses,interest expense, amortization expense, depreciation expense, other non-cash charges, and any non-recurring extraordinary lossesless interest income and any non-recurring extraordinary gains.

(2)           Minimum EBITDA amount iscalculated as the total consolidated EBITDA of the Company for each of the preceding four fiscal quarterly periods (i.e. a trailingfour-quarter calculation).

The Minimum Cash Balance financial covenant in the Secured Notes requires the Company tomaintain cash balances on deposit in collateral accounts equal to 75% of the outstanding balance of the Secured Notes until July25, 2003, and an amount equal to 50% of the outstanding balance of the Secured Notes throughout the remainder of the term of theSecured Notes. 

The financial covenants in the Secured Notes and the Senior Subordinated Term Loanrelating to capital expenditures limit the Company’s capital expenditures as set forth below (in thousands ofdollars):

| **Fiscal Quarter Ending:** |  | **Maximum CapitalExpenditures (3)** |
|----------------------------|--|-------------------------------------|
|                            |  |                                     |
| June 30, 2003              |  | 85,477                              |
| September 30, 2003         |  | 72,948                              |
| December 31, 2003          |  | 78,777                              |
| March 31, 2004             |  | 82,755                              |
| June 30, 2004              |  | 86,729                              |
| September 30, 2004         |  | 90,704                              |
| December 31, 2004          |  | 86,678                              |
| March 31, 2005             |  | 93,123                              |
| June 30, 2005              |  | 99,564                              |

(3)           Maximum CapitalExpenditures are calculated as the total consolidated capital expenditures, as defined in the agreements, of the Company for eachof the preceding four fiscal quarterly periods (i.e. a trailing four-quarter calculation).

In addition, the Secured Notes and the Senior Subordinated Term Loan contain otherrestrictive provisions or covenants that limit, and in some circumstances prohibit, the Company's ability to:
    - Incur additional debt;
    - Engage in mergers and acquisitions;
    - Pay dividends, make investments or other restricted payments;
    - Create liens;
    - Sell assets; and
    - Raise additional capital.

These provisions and covenants limit the Company's future financial and operatingflexibility. In addition, if the Company is unable to maintain compliance with the covenants in the Secured Notes and the SeniorSubordinated Term Loan, the lenders may accelerate repayment of amounts owed under these credit agreements.  Furthermore, theSecured Notes and the Senior Subordinated Term Loan contain cross-default provisions under which the Company is deemed to be indefault under such credit agreements if it is in default under any of the Company's other material outstandingobligations.

Based on internal Company projections, the Company believes that it will remain incompliance with the financial covenants in the Secured Notes and the Senior Subordinated Term Loan until at least the fourthquarter of 2004.  To the extent that these future operating results are realized, the Company would need to request amodification or waiver with respect to the Minimum EBITDA covenant at that time.  However, management anticipates that theCompany's business provides sufficient flexibility so as to enable the Company to remain in compliance with the financial covenants(i.e. improved sales and revenue performance, reduced costs, etc.).

The Company's financial projections, which are inherently uncertain, are based on the goodfaith assumptions of management regarding estimates of future revenues and operating results as well as estimates of the ultimateresolution of contingencies.  Actual results could be materially different from these projections, which in turn could impactat any time the Company's ability to maintain compliance with the financial covenants.

If the Company’s revenue growth is not sufficient to comply with the Minimum EBITDAcovenant described above, the Company would have to consider cost-cutting and other measures to enhance liquidity in order to meetthe covenants.  These measures could include reductions in headcount, reductions in discretionary expenditures, or shuttingdown less profitable operations.  The Company has already implemented tight controls over expense and capital spending, and inMay 2003 initiated a reduction in its workforce of approximately 25%.  The Company expects to complete the reduction inworkforce by June 2003.

Although the Company believes that it will be able to manage its business as describedabove so as to remain in compliance with the financial covenants, other factors, including those further described in this RiskFactors section, could cause the Company to fail to meet its covenant requirements.   In the event of non-compliance,absent the Company’s ability to obtain a modification or waiver of non-compliance from the secured lenders, or secureadditional capital or alternative financing, the secured lenders could declare a default requiring the Company to acceleraterepayment.

###### ***Changes in, or the Company's inability to comply with, existing governmentregulations***

Communication services are subject to significant regulation at the federal, state andlocal levels.  Assumptions inherent in ICG's business plan are consistent with both existing, as well as recently enactedregulatory changes.  Adverse changes to the regulatory environment, such as the following, could negatively impact theCompany:
    - Delays in receiving required regulatory approvals or the imposition of onerous conditionsfor these approvals;
    - Difficulties in completing and obtaining regulatory approval of interconnectionagreements, which provide for the interconnection of ICG's networks with existing local telephone companies' networks;
    - Enactment of new, adverse legislation or regulatory requirements or changes in theinterpretation of existing laws or regulations; and
    - Enactment of new, adverse legislation that increases the Company's tax burden or the taxburden of the Company's customers.

Many regulatory proceedings regarding issues that are important to the Company's businessare currently underway or are being contemplated by federal and state authorities. Changes in regulations or future regulationsadopted by federal, state or local regulators, or other legislative or judicial initiatives relating to the telecommunicationsindustry could cause ICG's pricing and business models to fluctuate or otherwise have a material adverse effect on theCompany.

###### ***The performance of the Company's network***

Many of the Company's material service contracts require the Company to meet certainminimum performance standards.  In the event the Company fails to meet these minimum performance levels, the Company may berequired to issue credits and the customers may, in certain circumstances, have the ability to terminate their contracts and pursueother civil remedies.  Although the Company's network has been designed in such a manner so as to mitigate the impact ofnetwork outages, there can be no guarantee that such a network failure will not occur.  In the event of a network outage, theCompany could fail to meet these performance standards and its revenue could be impacted accordingly.

Additionally, while the Company has installed what it believes are adequate protections toguard against unauthorized use of its network by third parties, these safeguards are not infallible and it is possible that theintegrity of the network could be compromised to the detriment of the Company and its customers.

###### ***The rapid change of technology within the telecommunicationsindustry***

ICG believes its telecommunications infrastructure enables the Company to provide superiorservice and reliability to its customers.  Nevertheless, the Company continuously evaluates emerging technologies in light ofits planned service offerings and the demands of its customer base in order to maintain the Company's competitive positioningwithin the industry (i.e. functionality, operating cost structure, etc.).

Integrating new technologies into the Company's network, if necessary, may prove to bedifficult and expensive and technological upgrades to the Company's network may not become available in a timely fashion at areasonable cost, or at all.  Furthermore, the development and introduction of new technologies by competitors may reduce thecost of services similar to those the Company provides and/or could give rise to new competition not currently anticipated. If the Company's network infrastructure becomes obsolete and the Company is unable to maintain its competitive positioning, ICG'sbusiness, results of operations and financial condition will be adversely affected in a material manner.

Moreover, the Company relies on critical vendors to support the existing technologydeployed in the Company's network.  While the Company's vendors are committed to supporting such critical Companyinfrastructure for the near term, such support will not necessarily be available indefinitely.  In such circumstances, theCompany would either need to develop alternative methods of support or replace existing technology, neither of which may befeasible.

***The Company's ability to access capital markets in a timely manner, at reasonablecosts and on satisfactory terms and conditions***

The terms and conditions of the Secured Notes and the Senior Subordinated Term Loanrequire repayments in 2005 and 2006, respectively.  Management does not anticipate that internally generated funds will besufficient to satisfy these debt payments. Accordingly, depending upon actual operating results, ICG will likely need to raiseadditional funds to refinance the Secured Notes and the Senior Subordinated Term Loan in 2005 and 2006, respectively.

Further, the Company may need to raise additional funds to take advantage of unanticipatedopportunities, including expansion or acquisitions of complementary businesses or technologies, develop new products or services,or respond to unanticipated competitive pressures.

If ICG does not have sufficient funding for its growth or contractual cash commitments, itmay be required to delay or abandon certain development plans or seek additional capital earlier than anticipated. The Companycannot provide any assurance that additional financing arrangements will be available to it on acceptable terms, or at all.Moreover, ICG's outstanding indebtedness may adversely affect its ability to engage in additional financings. If adequate funds arenot available, ICG's business, results of operations and financial condition could be adversely affected in a materialmanner.

# ***The Reorganized Company is largely controlled by twoparties***

Currently, Huff and Cerberus control approximately 22% and 16%, respectively, of thevoting securities of the Reorganized Company.  In addition, pursuant to the Modified Plan and the Company's Restated By-laws,the Company's Board of Directors is comprised of five directors, with Huff and Cerberus each having the right to appoint twodirectors.  Further, a super-majority vote of the existing Board of Directors is required to appoint an additionaldirector.

Additionally, the non-Huff and non-Cerberus shareholders currently do not have theauthority to amend the Restated By-laws as they relate to the control of the Board of Directors by Huff and Cerberus.  Thenon-Huff and non-Cerberus shareholders will have the authority to replace one of the Huff nominees only when Huff beneficially ownsless than 5% of the common stock of the Reorganized Company (before management options).  The second Huff nominee can bereplaced if Huff holds less than 1% (before management options) of the common stock of the Reorganized Company.  Similarly,the non-Huff and non-Cerberus shareholders will have the authority to replace one of the Cerberus nominees only when Cerberusbeneficially owns less than 5% of the common stock of the Reorganized Company (before management options) and Cerberus no longerowns any portion of the Senior Subordinated Term Loan.  The second Cerberus nominee can be replaced if Cerberus no longer ownsany of the Senior Subordinated Term Loan and holds less than 1% (before management options) of the common stock of the ReorganizedCompany.

As a result of the foregoing, it is likely that, for the foreseeable future, Huff andCerberus will have the collective ability to control all matters requiring Board action, including potential financingtransactions, mergers and acquisitions, sales or other dispositions of assets, the nomination of directors and the overallmanagement and policies of the Company.  It is also possible, however, that in certain circumstances the interests of Huff andCerberus may not coincide.  Moreover, as certain of the directors are in some cases also employees or agents of Huff orCerberus, they may not be considered independent by some standards. 

###### ***Potential for business combinations***

The Company continuously evaluates the feasibility and possible strategic benefits ofpotential business combinations and other transactions that would extend its geographic markets, expand its services, or enlargethe capacity of the Company's networks. Notwithstanding the required consent from its secured lenders under the Senior Notes andthe Senior Subordinated Term Loan in order to consummate such a transaction, any material transaction that the Company wouldundertake could result in an increase in the Company's indebtedness or the issuance of additional common stock or both, or a changeof control. There can be no assurance that the Company will enter into any such transaction or, if it does, on whatterms.

###### ***General economic conditions and the related impact on demand for the Company'sservices***

The national economy, and the telecommunications industry in particular, have beensignificantly affected by the current economic slowdown. Many of the Company's customers have experienced substantial financialdifficulty over the last year, in some cases leading to bankruptcies and liquidations. The financial difficulties of the Company'scustomers could have a material impact if the Company is unable to collect revenue from these customers. In addition, customersexperiencing financial difficulty are less likely to order additional services, and the Company's business plan is predicated uponincreasing both the number of customers and the services current customers order.

The telecommunications industry is extremely competitive, particularly with regard topricing for services and service levels.  Many of the Company's existing and potential competitors have significantly greaterresources than ICG.  Competitors may also have more established brand names and larger customer bases to better promote theirservices.

Further, the immense capital investments made in the telecommunications industry havecreated an oversupply of network infrastructure.  Combined with this oversupply, rapid technological advancements and intensecompetition have resulted in significant pricing pressure in each of the Company's main service areas.  While the Companybelieves that overall its pricing is competitive, it cannot predict what impact such oversupply of network infrastructure will haveon future operating results.  There can be no assurance that sufficient demand will exist for the Company's services, thatprices will not continue to decline, or that the Company can successfully compete in its selected markets.

Moreover, the financial difficulties experienced by the telecommunications industrydiminish the Company's ability to obtain additional capital and may adversely affect the willingness of potential customers to movetheir telecommunications services to an emerging provider such as ICG.

**Historical Cash Activities**

Due to the adoption of Fresh Start reporting in October 2002, the Reorganized Company'spost-Fresh Start statement of cash flows has not been prepared on a consistent basis with, and is therefore generally notcomparable to, that of the Predecessor Company prior to the application of Fresh Start.  In accordance with SOP 90-7, theReorganized Company's statement of cash flows has been presented separately from that of the Predecessor Company. 

***Net Cash Provided (Used) By Operating Activities***

The Reorganized Company's operating activities before reorganization items provided $12million of cash in the three months ended March 31, 2003.  Operating activities before reorganization items consisted of netincome of $2 million and net non-cash charges of $12 million, offset by net cash used by working capital of $2 million. Reorganization items, consisting of the change in post-petition restructuring accruals, used $9 million of cash.

The Predecessor Company's operating activities before reorganization items used $20million of cash in the three months ended March 31, 2002.  Operating activities before reorganization items consisted of a netloss before reorganization items of $8 million and net cash used by working capital of $35 million, offset by net non-cash chargesof $23 million. Reorganization items used $11 million of cash, which consisted primarily of net reorganization expense of $23million and gain on disposal of long-lived assets of $3 million, offset by the change in liabilities subject to compromise of $15million.

***Net Cash Used By Investing Activities***

The Reorganized Company's investing activities used $14 million of cash in the threemonths ended March 31, 2003, which was comprised primarily of capital expenditures for network infrastructure upgrades,enhancements to back office systems and labor costs associated with the installation of new services.

The Predecessor Company's investing activities used $17 million of cash in the threemonths ended March 31, 2002.  Net cash used by investing activities was comprised primarily of the purchase of short-terminvestments of $11 million, capital expenditures of $8 million, the change in current assets and liabilities for the acquisition ofproperty and equipment, proceeds from the disposition of property, equipment and other assets, and fluctuations in restricted cashand long-term deposit balances.

***Net Cash Used By Financing Activities***

The Reorganized Company's financing activities used $2 million of cash in the three monthsended March 31, 2003, which was comprised primarily of principal payments on long-term debt and capital leaseobligations. 

The Predecessor Company's financing activities used $1 million of cash in the three monthsended March 31, 2002, which was comprised primarily of principal payments on capital lease obligations.

***Supplemental Disclosure of Non-cash Investing and FinancingActivities***

The Company's property and equipment and asset retirement obligations eachincreased by $3 million in the three months ended March 31, 2003, as a result of the Company's adoption of the provisions of SFAS143 on January 1, 2003.  In addition, the Company renegotiated the contractual terms of a capital lease effective January 1,2003, which resulted in a $3 million decrease in property and equipment and a corresponding decrease in capital leaseobligations.

**RESULTS OF OPERATIONS**

Due to the adoption of Fresh Start reporting in October 2002, the Reorganized Company'spost-Fresh Start statement of operations has not been prepared on a consistent basis with, and is therefore generally notcomparable to, that of the Predecessor Company prior to the application of Fresh Start.  In accordance with SOP 90-7, theReorganized Company's statement of operations has been presented separately from that of the Predecessor Company.  However,the Reorganized Company's revenue (except as noted below), operating costs, and selling, general and administrative expenses werenot affected by the adoption of Fresh Start reporting, and are therefore comparable to those of the Predecessor Company.

|                                     | **Statement of Operations Data (unaudited)** |
|-------------------------------------|----------------------------------------------|
|                                     |                                              |
|                                     | **Predecessor Company**                      |  | **Reorganized Company** |
|                                     |                                              |  |  |
|                                     | **Three months ended March 31,**             |
|                                     |                                              |
|                                     | **2002**                                     |  | **2003** |
|                                     |                                              |  |  |
|                                     | **$**                                        |  | **%** |  | **$** |  | **%** |
|                                     |                                              |  |  |  |  |  |  |
|                                     | **($ values in thousands)**                  |
| Revenue(1)                          | 112,171                                      |  |  | 100 |  |  | 100,227 |  |  | 100 |  |
| Operating costs                     | 67,378                                       |  |  | 60 |  |  | 61,738 |  |  | 62 |  |
| Selling, general and administrative | 27,602                                       |  |  | 25 |  |  | 20,307 |  |  | 20 |  |

|                                            | **Statistical Data**    |
|--------------------------------------------|-------------------------|
|                                            |                         |
|                                            | **Predecessor Company** |  | **Reorganized Company** |
|                                            |                         |  |  |
|                                            | **March 31,2002**       | **June 30,2002** | **Sept. 30,2002** |  | **Dec. 31,2002** | **March 31,2003** |
|                                            |                         |  |  |  |  |  |
| Full time employees                        | 1,342                   | 1,138 | 1,147 |  | 1,146 | 1,150 |
| Access lines in service, in thousands(2)   | 807                     | 834 | 870 |  | 903 | 937 |
| Buildings connected:                       |                         |  |  |  |  |  |
| On-net                                     | 911                     | 912 | 909 |  | 909 | 908 |
| Hybrid(3)                                  | 5,189                   | 4,748 | 4,413 |  | 4,262 | 4,121 |
|                                            |                         |  |  |  |  |  |
| Total buildings connected                  | 6,100                   | 5,660 | 5,322 |  | 5,171 | 5,029 |
| Operational switches:                      |                         |  |  |  |  |  |
| Circuit                                    | 47                      | 46 | 46 |  | 47 | 46 |
| ATM                                        | 25                      | 26 | 26 |  | 24 | 23 |
|                                            |                         |  |  |  |  |  |
| Total operational switches                 | 72                      | 72 | 72 |  | 71 | 69 |
| Operational regional fiber route miles(4)  | 5,542                   | 5,542 | 5,704 |  | 5,726 | 5,731 |
| Operational regional fiber strand miles(5) | 165,847                 | 165,927 | 166,228 |  | 172,574 | 180,494 |
| Collocations with ILECs                    | 160                     | 158 | 158 |  | 162 | 145 |
|                                            |                         |  |  |  |  |  |

(1)           Revenue for theReorganized Company is comparable to the revenue for the Predecessor Company, except with respect to revenue recognition of certaindeferred revenue.  Due to the write down of the deferred revenue balance in connection with the application of Fresh Startreporting, revenue was reduced by $1 million per quarter.

(2)           Access lines in serviceinclude only provisioned lines generating revenue.

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

(4)           Regional fiber route milesrefers to the number of miles of fiber optic cable, including leased fiber.  As of March 31, 2003, the Company had 5,731regional fiber route miles, 3,723 of which were leased.

(5)           Regional fiber strandmiles refers to the number of regional fiber route miles, including leased fiber, along a telecommunications path multiplied by thenumber of fiber strands along that path.  As of March 31, 2003, the Company had 180,494 regional fiber strand miles, 44,158 ofwhich were leased.

**THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THREE MONTHS ENDED MARCH 31,2002**

###### ***Revenue***

|                          |  | **PredecessorCompany**           |  | **ReorganizedCompany** |
|--------------------------|--|----------------------------------|--|------------------------|
|                          |  |                                  |  |                        |
|                          |  | **Three Months Ended March 31,** |
|                          |  |                                  |
|                          |  | **2002**                         |  | **2003**               |
|                          |  |                                  |  |                        |
|                          |  | **$**                            |  | **%**                  |  | **$** |  | **%** |
|                          |  |                                  |  |                        |  |  |  |  |
|                          |  | **($ values in thousands)**      |
|                          |  |                                  |  |                        |  |  |  |  |
| Dial-Up                  |  | 44,222                           |  | 39                     |  | 53,243 |  | 53 |
| Point-to-Point Broadband |  | 29,961                           |  | 27                     |  | 22,337 |  | 22 |
| Corporate Services       |  | 20,241                           |  | 18                     |  | 14,724 |  | 15 |
| Reciprocal Compensation  |  | 17,747                           |  | 16                     |  | 9,923 |  | 10 |
|                          |  |                                  |  |                        |  |  |  |  |
| Total Revenue            |  | 112,171                          |  | 100                    |  | 100,227 |  | 100 |
|                          |  |                                  |  |                        |  |  |  |  |
|                          |  |                                  |  |                        |  |  |  |  |
|                          |  |                                  |  |                        |  |  |  |  |

Total revenue decreased $12 million, or 11%, for the three months ended March 31, 2003, ascompared to the three months ended March 31, 2002.  The decrease was due primarily to an $8 million decrease in Point-to-PointBroadband revenue, a $5 million decrease in Corporate Services revenue, and an $8 million decrease in reciprocal compensationrevenue, offset by a $9 million increase in Dial-Up revenue. 

The general economic downturn and the severe downturn in the telecommunications industryhave resulted in an oversupply of network infrastructure.  In addition, the slowing economy has resulted in many of theCompany's customers ceasing operations, filing for bankruptcy protection, or looking for opportunities to cut costs.  Theeffects on the Company include higher levels of customer disconnections and increased pricing pressure on new and existing customercontracts.  In addition, customers are taking longer to make buying decisions, thus lengthening the sales cycle.

###### ***Dial-Up***

Dial-Up revenue is earned by providing PRI ports (one- and two- way) and managed modem(RAS) services to ISPs and other communication service companies.  Dial-Up revenue is comprised of (i) monthly recurringrevenue, which includes fixed monthly service revenue and service revenue directly attributable to usage and (ii) non-recurringrevenue, which includes installation revenue, billing adjustments and credits, and other non-recurring items. 

Dial-Up revenue increased 20% from $44 million in the first quarter of 2002 to $53 millionin the first quarter of 2003.  For the first quarter of 2003 as compared to the first quarter of 2002, monthly recurringrevenue increased 33% due to a 24% increase in the average billed line count and a 7% increase in the average monthly revenue perline.  Dial-Up revenue's contribution to total revenue rose from 39% in the first quarter of 2002 to 53% in the first quarterof 2003.

###### ***Point-to-Point Broadband***

Point-to-Point Broadband revenue is generated from service provided to IXCs and end-userbusiness customers.  This service provides dedicated bandwidth and offers DS1 to OC-192 capacity to connect: (i) long-haulcarriers to local markets, large companies and other long-haul carrier facilities; and (ii) large companies to their long distancecarrier facilities and other facilities. 

Point-to-Point Broadband revenue decreased 25% from $30 million in the first quarter of2002 to $22 million in the first quarter of 2003.  The decrease in Point-to-Point Broadband revenue was comprised of decreasesin special access, switched access and SS7 revenues of 22%, 32% and 64%, respectively.  Special access, switched access andSS7 revenue represented 90%, 6% and 4%, respectively of total Point-to-Point Broadband revenue in the first quarter of 2003. Special access revenue decreased primarily due to churn related to IXC customers reducing network capacity and a loss of end-usersas a result of the economic downturn.  Switched access and SS7 revenues decreased primarily due to the loss ofcustomers.  Point-to-Point Broadband revenue's contribution to total revenue declined from 27% in the first quarter of 2002 to22% in the first quarter of 2003.

###### ***Corporate Services***

Corporate Services revenue includes: (i) local enhanced telephony ("Voice"); (ii)dedicated internet access ("DIA") provided to businesses over ICG's major metropolitan fiber optic networks or lines leased fromthe ILECs; and (iii) other business services.  Other business services include carrier access billing service ("CABS"), whichis generated from the origination & termination of switched access traffic. 

Corporate Services revenue decreased 27% from $20 million in the first quarter of 2002 to$15 million in the first quarter of 2003.  Recurring voice revenue decreased $4 million, or 29%, due primarily to a 19%decrease in the average billed line count, which was primarily due to customer churn, and a 13% decrease in the average monthlyrevenue per line.  Corporate Services revenue's contribution to total revenue declined from 18% in the first quarter of 2002to 15% in the first quarter of 2003.

###### ***Reciprocal compensation***

Reciprocal compensation revenue is primarily earned pursuant to interconnection agreementswith ILECs for the transport and termination of calls originated by ILEC customers, including Internet boundcalls. 

Reciprocal compensation revenue decreased 44% from $18 million in the first quarter of2002 to $10 million in the first quarter of 2003.  Reciprocal compensation's contribution to total revenue decreased from 16%in the first quarter of 2002 to 10% in the first quarter of 2003.  Reciprocal compensation revenue in the first quarter of2002 included $5 million from a customer settlement.  Excluding this settlement, reciprocal compensation revenue would havedecreased 22%, primarily due to contractual and regulated rate reductions.  The Company anticipates that reciprocalcompensation revenue will continue to decline in the future based on future negotiated and regulated rate reductions and theexpiration of agreements currently in effect between ICG and the major ILECs.

###### ***Operating costs***

Total operating costs decreased 8% from $67 million in the first quarter of 2002 to $62million in the first quarter of 2003.  As a percentage of revenue, operating costs increased from 60% in the first quarter of2002 to 62% in the first quarter of 2003.  Operating costs consist primarily of payments to ILECs, other CLECs, and longdistance carriers for the use of network facilities to support local, special, switched access services, and long distance servicesas well as internal network operating costs, right of way fees and other operating costs.  Internal network operating costsinclude the cost of engineering and operations personnel dedicated to the operations and maintenance of the network. Operating costs decreased primarily due to a 16% reduction in average headcount for the first quarter of 2003, as compared to thefirst quarter of 2002, offset by a 2% increase in external line costs due primarily to the Company's network footprint expansionthrough leased facilities.

In May 2003, the Company initiated a reduction in its workforce of approximately25%.  The Company expects to complete the reduction in workforce by June 2003. 

###### ***Selling, general and administrative expenses("SG&A")***

SG&A expenses decreased 26% from $28 million in the first quarter of 2002 to $20million in the first quarter of 2003.  SG&A expenses represented 25% and 20% of revenue in the first quarter of 2002 and2003, respectively.  SG&A expenses decreased primarily due to the 16% reduction in average headcount for the first quarterof 2003, as compared to the first quarter of 2002.  In addition, first quarter 2002 SG&A expenses included a Company-wideemployee bonus accrual.  No such accrual was made in the first quarter of 2003.  Also, first quarter 2002 SG&Aexpenses included $2.4 million of provision for doubtful accounts; however, no provision for doubtful accounts was deemed necessaryin the first quarter of 2003, and was therefore not recorded.

In May 2003, the Company initiated a reduction in its workforce of approximately 25%.  The Company expects to complete the reduction in workforce by June 2003.  

***Depreciation and amortization***

The Reorganized Company's depreciation and amortization expense was $10 million in thefirst quarter of 2003.  The average remaining useful life of property and equipment in service is approximately 6years.

The Predecessor Company's depreciation and amortization expense was $20 million in thefirst quarter of 2002.  Pursuant to the adoption of Fresh Start in October 2002, the Company wrote down the book value of itsproperty and equipment by $392 million, and the $126 million balance of the accumulated depreciation to zero.  The total FreshStart value of the long-lived assets was allocated pro rata to the individual asset categories based on recent assetappraisals.  The adjusted property and equipment values are being depreciated over the remaining useful lives of theassets.

***Other operating expense (income), net***

Other operating expense (income), net, includes net gain on disposal of long-lived assetsin the first quarter of 2002 and 2003, as well as SFAS 143 accretion expense in the first quarter of 2003. 

***Interest expense***

The Reorganized Company incurred $6 million in interest expense in the first quarter of2003, primarily on the Secured Notes, the Senior Subordinated Term Loan, other debt and capital leases.  Interest expenseincludes $0.6 million of non-cash amortization of deferred financing costs and debt discount, as well as $1.0 million of non-cashaccreted interest that is included in capital lease obligations.

The Predecessor Company incurred $6 million in interest expense in the first quarter of2002, primarily on the Senior Facility, which was refinanced on the Effective Date, and capital leases. Interest expense included$0.2 million of non-cash amortization of deferred financing costs, as well as $1.2 million of non-cash accreted interest that isincluded in capital lease obligations. Contractual interest expense of $63 million was not recorded for the three months ended March 31, 2002, due to theCompany's bankruptcy proceedings.

***Interest income***

The Reorganized Company's interestincome of $0.2 million in the first quarter of 2003 is included in Interest Income in the consolidated statement ofoperations.

The Predecessor Company's interest income of $0.6 million in the first quarter of 2002 wasconsidered earned as a result of the bankruptcy filing, and was therefore classified as a reorganization item, in accordance withthe requirements of SOP 90-7.

###### ***Reorganization expense, net***

The Predecessor Company recorded net reorganization expense of $23 million in the firstquarter of 2002.  Reorganization items consisted of income and expenses associated with the bankruptcy proceedings that werenot directly attributable to the ongoing operations of the Company.  The reorganization items consisted primarily of $22million in contract termination expenses, $4 million in legal and professional fees, offset by a $3 million gain on disposal oflong-lived assets.

**NEW ACCOUNTING STANDARDS**

Effective January 1, 2003, ICG adopted SFAS No. 143, "Accounting for Asset RetirementObligations." The statement requires that a liability for the fair value of an asset retirement obligation be recognized in theperiod in which it is incurred, with the offsetting associated asset retirement cost capitalized as part of the carrying amount ofthe long-lived asset. The asset retirement cost is subsequently allocated to expense using a systematic and rational method overthe useful life of the related asset. Changes in the asset retirement obligation resulting from the passage of time are recognizedas an increase in the carrying amount of the liability and as accretion expense. The adoption of SFAS 143 resulted in theestablishment of asset retirement obligations of $2.5 million, which are included in other long-term liabilities in theaccompanying balance sheet, and an increase to net property and equipment of $2.5 million.  Accretion expense of $0.1 millionfor the three months ended March 31, 2003, is included in other operating expense (income), net, in the accompanying statement ofoperations.

  In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated withExit or Disposal Activities." This Statement addresses financial accounting and reporting for costs associated with exit ordisposal activities and nullifies Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain EmployeeTermination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)."  ThisStatement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability isincurred, not at the date of an entity's commitment to an exit plan, as was required under Issue 94-3.  Examples of costscovered by the standard include lease termination costs and certain employee severance costs that are associated with arestructuring, discontinued operation, plant closing, or other exit or disposal activity. This Statement also establishes that fairvalue is the objective for initial measurement of the liability.  The provisions of this Statement are effective for exit ordisposal activities that are initiated after December 31, 2002.

**ITEM3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK**

The Company is subject to market risks arising from changes in interest rates. As of theEffective Date, the Company's primary interest rate exposure results from changes in LIBOR or the prime rate, which are used todetermine the interest rate applicable to the Secured Notes outstanding principal balance.   The weighted averageinterest rate applicable to the Secured Notes outstanding principal balance at March 31, 2003, was 7.8%.  A hypotheticalchange in annual interest rate of 1% per annum applied to the Secured Notes outstanding principal balance on March 31, 2003, wouldresult in additional interest expense of $0.6 million.

The Company does not, in the normal course of business, use derivative financialinstruments for trading or speculative purposes.

**ITEM4.          CONTROLS AND PROCEDURES**

The Company's Chief Executive Officer and Chief Financial Officer have evaluated theeffectiveness of the Company's disclosure controls and procedures within 90 days of the filing date of this Quarterly Report. Based on this evaluation, the officers have concluded that the Company's disclosure controls and procedures are effective ingathering, analyzing and disclosing on a timely basis material information required to be included in the Company's periodicfilings under the Securities Exchange Act of 1934.  There have been no significant changes in the Company's internal controlsor in other factors that could significantly affect these controls subsequent to the date of this evaluation.

**PART II - OTHER INFORMATION**

**ITEM1.          LEGAL PROCEEDINGS**

On November 14, 2000, the Company and most of its subsidiaries filed voluntary petitionsfor protection under the Bankruptcy Code in the Delaware Bankruptcy Court (Joint Case Number 00-4238 (PJW)). The bankruptcypetition was filed in order to preserve cash and give the Company the opportunity to restructure its debt. The Company's ModifiedPlan was confirmed and became effective on October 10, 2002.  The Bankruptcy Court continues to retain exclusive jurisdictionover all matters arising out of and related to the Company's bankruptcy case, including, but not limited to, the resolution anddisposition of pre-petition and administrative claims.  The Company expects that these claims will be resolved not later than2004, and that the Bankruptcy Court will enter a final decree shortly thereafter closing the Chapter 11 case.

The Company is a party to certain other litigation that has arisen in the ordinary courseof business. In the opinion of management, the ultimate resolution of these matters will not have a material adverse impact on theCompany's financial condition or results of operations. The Company is not involved in any administrative or judicial proceedingsrelative to an environmental matter.

**ITEM2.          CHANGES IN SECURITIES AND USE OF PROCEEDS.**

None.

**ITEM3.          DEFAULTS UPON SENIOR SECURITIES.**

None.

**ITEM4.          SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**

No matters were submitted to a vote of security holders during the quarter ended March 31,2003.

**ITEM5.          OTHER INFORMATION.**

None.

**ITEM6.          EXHIBITS AND REPORTS ON FORM 8-K**

**                       (A)      EXHIBITS**

                                   99.1     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002.

                                   99.2     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002.

**                       (B)      REPORTS ON FORM 8-K**

                                   The registrant did not file any reports on Form 8-K during the three months ended March 31, 2003.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May14, 2003.

|   |                         |
|--------|------------------------------|
|        | **ICG COMMUNICATIONS, INC.** |

|                                                                                                                     |  |                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------|--|-------------------------------------------------------------------------------------------------------|
| Date:  May 14, 2003                 |  | **/s/  ****Richard E. Fish, Jr.**                                                           |
|                                                                                                                          |  |                                                                                                       |
|                                                                                                                          |  | Richard E. Fish, Jr.Executive Vice President and Chief Financial Officer(Principal Financial Officer) |

|                     |        |                                                                             |
|--------------------------|--------|----------------------------------------------------------------------------------|
| Date:  May 14, 2003 |   | **/s/  ****John V. Colgan**                                            |
|                          |        |                                                                                  |
|                          |   | John V. ColganSenior Vice President and Controller(Principal Accounting Officer) |

**CERTIFICATIONS**

I, Randall E. Curran, certify that:

1)        I have reviewed this Quarterly Report on Form10-K of ICG Communications, Inc.;

2)        Based on my knowledge, this Quarterly Reportdoes not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by thisQuarterly Report;

3)        Based on my knowledge, the financialstatements, and other financial information included in this Quarterly Report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this QuarterlyReport;

4)        The registrant's other certifying officersand I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14and 15d-14) for the registrant and have:

          a)       designed such disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this Quarterly Report is being prepared;

          b)      evaluated the effectiveness of the registrant's disclosure controls and procedures as of a datewithin 90 days prior to the filing date of this Quarterly Report (the "Evaluation Date"); and

          c)       presented in this Quarterly Report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

5)        The registrant's other certifying officersand I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant'sboard of directors (or persons performing the equivalent functions):

          a)       all significant deficiencies in the design or operation of internal controls which couldadversely affect the registrant's ability to record, process, summarize and report financial data and have identified for theregistrant's auditors any material weaknesses in internal controls; and

          b)      any fraud, whether or not material, that involves management or other employees who have asignificant role in the registrant's internal controls; and

6)        The registrant's other certifying officersand I have indicated in this Quarterly Report whether there were significant changes in internal controls or in other factors thatcould significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actionswith regard to significant deficiencies and material weaknesses.

|                     |  |                                     |
|--------------------------|--|------------------------------------------|
| Date:  May 14, 2003 |  | **/s/****Randall E. Curran**             |
|                          |  |                                          |
|                          |  | Randall E. CurranChief Executive Officer |

**CERTIFICATIONS (continued)**

I, Richard E. Fish, certify that:

1)        I have reviewed this Quarterly Report on Form10-K of ICG Communications, Inc.;

2)        Based on my knowledge, this Quarterly Reportdoes not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by thisQuarterly Report;

3)        Based on my knowledge, the financialstatements, and other financial information included in this Quarterly Report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this QuarterlyReport;

4)        The registrant's other certifying officersand I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14and 15d-14) for the registrant and have:

          a)       designed such disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this Quarterly Report is being prepared;

          b)      evaluated the effectiveness of the registrant's disclosure controls and procedures as of a datewithin 90 days prior to the filing date of this Quarterly Report (the "Evaluation Date"); and

          c)       presented in this Quarterly Report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

5)        The registrant's other certifying officersand I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant'sboard of directors (or persons performing the equivalent functions):

          a)       all significant deficiencies in the design or operation of internal controls which couldadversely affect the registrant's ability to record, process, summarize and report financial data and have identified for theregistrant's auditors any material weaknesses in internal controls; and

          b)      any fraud, whether or not material, that involves management or other employees who have asignificant role in the registrant's internal controls; and

6)        The registrant's other certifying officersand I have indicated in this Quarterly Report whether there were significant changes in internal controls or in other factors thatcould significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actionswith regard to significant deficiencies and material weaknesses.

|                                                                                                                                                                                                 |  |                                                                                                       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|-------------------------------------------------------------------------------------------------------|
| Date:  May 14,2003                             |  | **/s/  ****Richard E. Fish, Jr.**                                                           |
|                                                                                                                                                                                                 |  |                                                                                                       |
|                                                                                                                                                                                                 |  | Richard E. Fish, Jr.Executive Vice President and Chief Financial Officer(Principal Financial Officer) |

**EXHIBIT INDEX**
| 99.1         | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002. |
|------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
| 99.2         | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002. |

**Exhibit 99.1**

**CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of ICG Communications, Inc. (the "Company") onForm 10-Q for the period ended March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the"Report"), I, Randall Curran, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adoptedpursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1)         The Report fully complies with therequirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)         The information contained in theReport fairly presents, in all material respects, the financial condition and result of operations of the Company.

|                     |  |                                     |
|--------------------------|--|------------------------------------------|
| Date:  May 14, 2003 |  | **/s/  ****Randall E. Curran** |
|                          |  |                                          |
|                          |  | Randall E. CurranChief Executive Officer |

**Exhibit 99.2**

**CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of ICG Communications, Inc. (the "Company") onForm 10-Q for the period ended March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the"Report"), I, Richard E. Fish, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adoptedpursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1)          The Report fully complies withthe requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)         The information contained in theReport fairly presents, in all material respects, the financial condition and result of operations of the Company.

|                                                                                                                                                                                                                                      |  |                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|-------------------------------------------------------------------------------------------------------|
| Date:  May 14,2003                                    |  | **/s/  ****Richard E. Fish, Jr.**                                                           |
|                                                                                                                                                                                                                                           |  |                                                                                                       |
|                                                                                                                                                                                                                                           |  | Richard E. Fish, Jr.Executive Vice President and Chief Financial Officer(Principal Financial Officer) |