Internet Capital Group Announces Fourth Quarter and Year-End Financial Results for 2005; Strong Performance in 2005 Sets Stage for Continued Growth in 2006

"2005 was an excellent year for ICG," said Walter Buckley, ICG'sChairman and Chief Executive Officer. "The list of accomplishments islong and includes proof points of the value we built for ourstockholders over the past year."

2005 highlights include the following:

-- Achieved strong annual Core company revenue growth;

-- Ended the year with a strong balance sheet, after capturing $161 million of cash through monetizations and repurchasing $23 million of debt;

-- Listed GoIndustry shares on the AIM Exchange;

-- Acquired a 39% interest in WhiteFence, an on-demand internet software provider; and

-- Enhanced value of CommerceQuest through merger with Metastorm, forming largest pure-play Business Process Management provider.

Looking forward to 2006, Mr. Buckley added, "Our goals for theupcoming year are to continue to work aggressively to drive revenuegrowth at our Core companies of at least 20% in the aggregate,effectively deploy capital to existing and new partner companies, andstrategically monetize assets during the year."

ICG Financial Results

ICG reported consolidated revenue of $12.8 million for the fourthquarter of 2005 versus $12.1 million for the comparable 2004 period.ICG reported consolidated revenue of $50.6 million for the full yearof 2005 versus $41.9 million for the comparable 2004 period. ICGCommerce's German subsidiary was sold in January 2006 for nominalconsideration and has been reflected as a discontinued operation forall periods presented.

ICG reported a net loss of $(12.7) million, or $(0.34) per share,for the fourth quarter of 2005 versus a net loss of $(2.6) million, or$(0.07) per share, for the comparable 2004 period. Results for thefourth quarter of 2005 include $(5.8) million in net after-tax chargesand $(1.4) million in stock-based compensation compared to $3.6million in net gains and $(0.5) million in stock-based compensation inthe 2004 period.

ICG reported net income of $72.5 million, or $1.73 per dilutedshare, for the full year of 2005 versus a net loss of $(135.3)million, or $(3.79) per share, for the comparable 2004 period. Resultsfor the full year of 2005 include $105.5 million in net after-taxgains and $(4.3) million in stock-based compensation compared to$(103.5) million in net charges and $(1.4) million in stock-basedcompensation in the 2004 period. Please refer to the supplementalattachment to this release for a description of these gains/charges.

During the quarter, ICG repurchased $23.0 million face value ofits 5% convertible notes due April 2009 for approximately $28.5million in cash. The remaining principal balance of these notes atDecember 31, 2005 was $37.0 million.

ICG's corporate cash balance at December 31, 2005 was $129.6million and the value of its marketable securities was $63.4 million.ICG's corporate cash balance at February 15, 2006 was $136.6 millionand the quoted value of its public securities was $94.5 million.

ICG Core Partner Company Information

In the fourth quarter of 2005, CommerceQuest was merged intoMetastorm and ICG acquired a 39% ownership stake in WhiteFence.Recently, GoIndustry listed its securities on the AIM Exchange and ICGCommerce sold its German subsidiary. To aid in the comparability ofthe ICG Core Partner Company Information, ICG is presenting pro formafinancial information assuming these events occurred on January 1,2004. Set forth below is pro forma information relating to ICG'scurrent eight private Core companies: CreditTrade, Freeborders, ICGCommerce, Investor Force, Marketron, Metastorm, StarCite andWhiteFence. Our ownership positions in these eight companies averages49%.

Aggregate pro forma revenue of ICG's eight private Core companiesgrew 15% year over year, to $46.9 million, in the fourth quarter of2005 from $40.8 million in the fourth quarter of 2004. Annualaggregate pro forma revenue of ICG's eight Core companies grew 23%year over year, to $189.7 million in 2005 from $154.6 million in 2004.Aggregate pro forma EBITDA (loss) for the Core companies increased to$(4.1) million in the fourth quarter of 2005 from $(3.4) million inthe fourth quarter of 2004. Annual aggregate pro forma EBITDA (loss)for the Core companies improved to $(11.6) million in 2005 from$(21.3) million in 2004. Please refer to the supplemental financialdata at the end of this release for a reconciliation of such amountsto the nearest comparable GAAP measures.

ICG will host a webcast at 10:00 am ET today to discuss results.As part of the live webcast for this call, ICG will post a slidepresentation to accompany the prepared remarks. To access the webcast,go to http://www.internetcapital.com/investorinfo-preswebcast.htm andclick on the link for the fourth quarter conference call webcast.Please log on to the website approximately ten minutes prior to thecall to register and download and install any necessary audiosoftware. The conference call is also accessible through listen-onlymode at 877-407-8035. The international dial in number is201-689-8035.

For those unable to participate in the conference call, a replaywill be available beginning February 16, 2006 at 11:00 am untilFebruary 23, 2006 at 11:59 pm. To access the replay, dial 877-660-6853(domestic) or 201-612-7415 (international) and enter the account code,286, followed by the conference ID number 191684. The replay and slidepresentation can also be accessed on the Internet Capital Group website at http://www.internetcapital.com/investorinfo-preswebcast.htm.

About Internet Capital Group

Internet Capital Group (www.internetcapital.com) owns and buildsInternet software companies that drive business productivity andreduce transaction costs between firms. Founded in 1996, ICG devotesits expertise and capital to maximizing the success of these platformcompanies that are delivering on-demand software and serviceapplications to customers worldwide.

Safe Harbor Statement under Private Securities Litigation ReformAct of 1995

The statements contained in this press release that are nothistorical facts are forward-looking statements that involve certainrisks and uncertainties including but not limited to risks associatedwith the uncertainty of future performance of our partner companies,acquisitions or dispositions of interests in partner companies, theeffect of economic conditions generally, capital spending by customersand development of the e-commerce and information technology markets,and uncertainties detailed in the Company's filings with theSecurities and Exchange Commission. These and other factors may causeactual results to differ materially from those projected.

Internet Capital Group, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)


Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
2005 2004 2005 2004
----------------------- -----------------------


Revenue $ 12,785 $ 12,088 $ 50,576 $ 41,857

Operating Expenses
Cost of revenue 7,688 5,292 28,609 21,464
Selling, general
and
administrative 11,632 7,317 41,954 31,239
Research and
development 2,157 2,143 12,271 8,660
Amortization of
intangibles 578 528 2,126 2,711
Impairment related
and other 321 134 3,044 758
----------------------- -----------------------
Total operating
expenses 22,376 15,414 88,004 64,832
----------------------- -----------------------
(9,591) (3,326) (37,428) (22,975)

Other income (loss),
net 592 2,341 135,489 (106,178)
Interest income 2,050 401 3,890 1,295
Interest expense (699) (867) (3,367) (4,925)
----------------------- -----------------------
Income (loss) before
income taxes,
minority interest
and equity loss (7,648) (1,451) 98,584 (132,783)

Income tax benefit
(expense) 1,709 - (18,640) -
Minority interest 626 (353) 2,282 771
Equity loss (5,070) (1,238) (6,703) (5,893)
----------------------- -----------------------
Income (loss) from
continuing
operations (10,383) (3,042) 75,523 (137,905)
Gain (loss) on
discontinued
operations (2,351) 482 (3,005) 2,588
----------------------- -----------------------
Net income (loss) $ (12,734) $ (2,560) $ 72,518 $ (135,317)
======================= =======================

Basic net income
(loss) per share:
Income (loss) from
continuing
operations $ (0.28) $ (0.08) $ 2.04 $ (3.86)
Discontinued
operations (0.06) 0.01 (0.08) 0.07
----------------------- -----------------------
$ (0.34) $ (0.07) $ 1.96 $ (3.79)
======================= =======================

Shares used in
computation of
basic income (loss)
per share 37,274 37,004 37,109 35,713
======================= =======================

Diluted net income
(loss) per share:
Income (loss) from
continuing
operations $ (0.28) $ (0.08) $ 1.80 $ (3.86)
Discontinued
operations (0.06) 0.01 (0.07) 0.07
----------------------- -----------------------
$ (0.34) $ (0.07) $ 1.73 $ (3.79)
======================= =======================


Shares used in
computation of
diluted income
(loss) per share 37,274 37,004 43,660 35,713
======================= =======================



Internet Capital Group, Inc.
Condensed Consolidated Balance Sheets
(In thousands)


December 31, December 31,
2005 2004
------------ ------------

ASSETS
Cash, cash equivalents and short-term
investments $ 148,344 $ 86,951
Other current assets 23,859 17,218
Assets of discontinued operation 9,038 11,409
------------ ------------
Total current assets 181,241 115,578
Marketable securities 63,425 54,082
Fixed assets, net 1,886 1,939
Ownership interests in Partner Companies 71,618 49,794
Goodwill 20,383 45,196
Intangibles, net 3,407 4,705
Other assets 3,552 6,312
------------ ------------
Total Assets $ 345,512 $ 277,606
============ ============



LIABILITIES AND STOCKHOLDERS' EQUITY
Other current liabilities $ 33,334 $ 32,146
Liabilities of discontinued operation 8,760 11,409
------------ ------------
Total current liabilities 42,094 43,555
Senior convertible notes 37,000 60,000
Minority interest and other liabilities 10,173 8,944
------------ ------------
Total Liabilities 89,267 112,499
Stockholders' equity 256,245 165,107
------------ ------------
Total Liabilities and Stockholders'
Equity $ 345,512 $ 277,606
============ ============



Internet Capital Group
----------------------------------------------------------------------
2005 Pro Forma Core Partner Company Information
-----------------------------------------
Year
Three Months Ended Ended
-----------------------------------------
Mar 31, Jun 30, Sep 30, Dec 31, Dec 31,
2005 2005 2005 2005 2005
----------------------------------------------------------------------
Aggregate Pro
Forma Core
Company
Information:
(1)
Aggregate
Revenue $45,396 $49,071 $48,317 $46,939 $189,723
Aggregate
EBITDA
(loss) $(2,434)$(1,566)$(3,584)$(4,061)$(11,645)
Aggregate Net
Loss $(6,919)$(5,443)$(6,834)$(6,841)$(26,037)


Components of
Aggregate Pro
Forma Core
Company
Information

Consolidated
Core
Companies
(Ownership
%):
Revenue $12,518 $11,825 $12,230 $12,785 $ 49,358
Expenses
other
than
interest,
taxes,
depreciation
and
amortization(14,128)(13,941)(15,042)(15,028) (58,139)
-----------------------------------------
ICG Commerce
Holdings, Inc.
(76%) EBITDA (loss) (1,610) (2,116) (2,812) (2,243) (8,781)
Investor Force
Holdings, Inc.
(80%) Interest (49) (24) 82 82 91
StarCite, Inc.
(61%) Taxes (5) (10) - - (15)
Depreciation/
Amortization (891) (838) (773) (780) (3,282)
-----------------------------------------
Net loss $(2,555)$(2,988)$(3,503)$(2,941)$(11,987)
-----------------------------------------

Equity Method
Core
Companies
(Ownership
%):
Revenue $32,878 $37,246 $36,087 $34,154 $140,365
Expenses
CreditTrade other
Inc. than
(27%) interest,
taxes,
depreciation
and
amortization(33,702)(36,696)(36,859)(35,972)(143,229)
-----------------------------------------
Freeborders,
Inc. EBITDA/EBITDA
(33%) (loss) $ (824)$ 550 $ (772)$(1,818)$ (2,864)
Marketron
International,
Inc. (38%) Interest (1,499) (487) (899) (70) (2,955)
Metastorm Inc.
(41%) Taxes (638) (1,667) (883) (485) (3,673)
WhiteFence,
Inc. Depreciation/
(39%) Amortization (1,403) (851) (777) (1,527) (4,558)
-----------------------------------------
Net loss $(4,364)$(2,455)$(3,331)$(3,900)$(14,050)
-----------------------------------------

----------------------------------------------------------------------
Reconciliation of
Aggregate Pro Forma
Core Company
Information to GAAP
results
----------------------------------------------
Three Months Ended Year Ended
----------------------------------------------
Mar 31, Jun 30, Sep 30, Dec 31, Dec 31,
2005 2005 2005 2005 2005
----------------------------------------------
Revenue

Aggregate Pro Forma
Core Company Revenue $ 45,396 $ 49,071 $ 48,317 $ 46,939 $ 189,723
Non-consolidated
Partner Companies $(33,505)$(38,565)$(32,923)$(34,154)$(139,147)
----------------------------------------------
Consolidated Revenue $ 11,891 $ 10,506 $ 15,394 $ 12,785 $ 50,576
==============================================


Net Income (Loss)

Aggregate Pro Forma
Core Company EBITDA
(loss) $ (2,434)$ (1,566)$ (3,584)$ (4,061)$ (11,645)
Interest, Taxes,
Depreciation/
Amortization $ (4,485)$ (3,877)$ (3,250)$ (2,780)$ (14,392)
----------------------------------------------
Aggregate Pro Forma
Core Company Net
Income (Loss) $ (6,919)$ (5,443)$ (6,834)$ (6,841)$ (26,037)
Amount attributable
to other
stockholders $ (3,120)$ (427)$ (1,428)$ (3,245)$ (8,220)
----------------------------------------------
ICG's share of net
income (loss) of Core
Partner Companies $ (3,799)$ (5,016)$ (5,406)$ (3,596)$ (17,817)
Other holdings equity
method companies (680) (491) (521) (3,905) (5,597)
Disposed equity method
companies 700 718 726 - 2,144
Corporate general and
administrative (3,574) (3,201) (5,474) (6,530) (18,779)
Corporate interest,
net (447) (281) (234) 1,268 306
Other income(loss)/
restructuring/
impairments 5,187 9,750 118,298 671 133,906
Income taxes - - (20,349) 1,709 (18,640)
Income (loss) on
discontinued
operations (505) (403) 254 (2,351) (3,005)
----------------------------------------------
Consolidated net
income (loss) $ (3,118)$ 1,076 $ 87,294 $(12,734)$ 72,518
==============================================


(1) The rationale for management's use of non-GAAP measures is
included in the "Description of Terms" supplement to this release.



Internet Capital Group
----------------------------------------------------------------------
2004 Pro Forma Core Partner Company Information
-------------------------------------------
Year
Three Months Ended Ended
-------------------------------------------
Mar 31, Jun 30, Sep 30, Dec 31, Dec 31,
2004 2004 2004 2004 2004
----------------------------------------------------------------------
Aggregate Pro
Forma Core
Company
Information:
(1)
Aggregate
Revenue $ 37,817 $ 37,314 $38,574 $40,848 $154,553
Aggregate
EBITDA (loss) $ (7,228)$ (5,348)$(5,358)$(3,407)$(21,341)
Aggregate Net
Loss $(13,908)$(11,752)$(8,195)$(5,899)$(39,754)


Components of
Aggregate Pro
Forma Core
Company
Information

Consolidated
Core
Companies
(Ownership
%):
Revenue $ 9,869 $ 10,165 $10,828 $11,332 $ 42,194

Expenses
other than
interest,
taxes,
depreciation
and
amortization (11,712) (12,470)(11,580)(12,949) (48,711)
-------------------------------------------
ICG Commerce
Holdings,
Inc. EBITDA (loss) (1,843) (2,305) (752) (1,617) (6,517)
Investor Force
Holdings,
Inc. Interest 32 9 (3) 11 49
StarCite,
Inc. Taxes - - - - -
Depreciation/
Amortization (1,200) (1,169) (1,113) (1,097) (4,579)
-------------------------------------------
Net loss $ (3,011)$ (3,465)$(1,868)$(2,703)$(11,047)
-------------------------------------------

Equity Method
Core
Companies
(Ownership
%):
Revenue $ 27,948 $ 27,149 $27,746 $29,516 $112,359

CreditTrade Expenses
Inc. other than
interest,
taxes,
depreciation
and
amortization (33,333) (30,192)(32,352)(31,306)(127,183)
-------------------------------------------
Freeborders, EBITDA/
Inc. EBITDA
(loss) $ (5,385)$ (3,043)$(4,606)$(1,790)$(14,824)
Marketron
International,
Inc. Interest (3,681) (3,366) (393) (242) (7,682)
Metastorm
Inc. Taxes (416) (469) (6) 378 (513)
WhiteFence, Depreciation/
Inc. Amortization (1,415) (1,409) (1,322) (1,542) (5,688)
-------------------------------------------
Net loss $(10,897)$ (8,287)$(6,327)$(3,196)$(28,707)
-------------------------------------------

----------------------------------------------------------------------
Reconciliation of
Aggregate Pro Forma
Core Company
Information to GAAP
results
-----------------------------------------------
Three Months Ended Year Ended
-----------------------------------------------
Mar 31, Jun 30, Sep 30, Dec 31, Dec 31,
2004 2004 2004 2004 2004
-----------------------------------------------
Revenue

Aggregate Pro Forma
Core Company Revenue $ 37,817 $ 37,314 $ 38,574 $ 40,848 $ 154,553
Non-consolidated
Partner Companies $ (28,026)$(27,295)$(28,615)$(28,760)$(112,696)
-----------------------------------------------
Consolidated Revenue $ 9,791 $ 10,019 $ 9,959 $ 12,088 $ 41,857
===============================================


Net Income (Loss)

Aggregate Pro Forma
Core Company EBITDA
(loss) $ (7,228)$ (5,348)$ (5,358)$ (3,407)$ (21,341)
Interest, Taxes,
Depreciation/
Amortization $ (6,680)$ (6,404)$ (2,837)$ (2,492)$ (18,413)
-----------------------------------------------
Aggregate Pro Forma
Core Company Net
Income (Loss) $ (13,908)$(11,752)$ (8,195)$ (5,899)$ (39,754)
Amount attributable
to other
stockholders $ (10,146)$ (9,169)$ (4,721)$ (4,749)$ (28,785)
-----------------------------------------------
ICG's share of net
income (loss) of Core
Partner Companies $ (3,762)$ (2,583)$ (3,474)$ (1,150)$ (10,969)
Other equity method
companies (283) (1,296) (1,007) (910) (3,496)
Disposed equity method
companies (167) 136 152 1,289 1,410
Corporate general and
administrative (3,343) (3,006) (3,863) (3,833) (14,045)
Corporate interest,
net (1,268) (1,231) (559) (537) (3,595)
Other income(loss)/
restructuring/
impairments (114,376) 3,344 1,723 2,099 (107,210)
Income taxes - - - - -
Income (loss) on
discontinued
operations (596) 2,783 (81) 482 2,588
-----------------------------------------------
Consolidated net
income (loss) $(123,795)$ (1,853)$ (7,109)$ (2,560)$(135,317)
===============================================


(1) The rationale for management's use of non-GAAP measures is
included in the "Description of Terms" supplement to this release.

INTERNET CAPITAL GROUP, INC.

December 31, 2005

Description of Terms

Consolidated Statements of Operations

Effect of Various Accounting Methods on our Results of Operations

The various interests that the Company acquires in its partnercompanies are accounted for under three methods: consolidation, equitymethod and cost method. The effect of a partner company's net resultsof operations on the Company's net results of operations is generallythe same under either the consolidation method of accounting or theequity method of accounting, because under each of these methods onlyour share of the earnings or losses of a partner company is reflectedin its net results of operations in the Consolidated Statements ofOperations. The applicable accounting method is generally determinedbased on the Company's voting interest in a partner company.

Consolidation. Partner companies in which the Company directly orindirectly possesses voting control or those where the Company haseffective control, and for which other shareholders do not possess theright to participate in significant management decisions are generallyaccounted for under the consolidation method of accounting. Under thismethod, a partner company's accounts (revenue, cost of revenue,selling, general and administrative, research and development,impairment related and other, amortization of intangibles, otherincome (loss) and interest income/expense) are reflected within theCompany's Consolidated Statements of Operations. Participation ofother partner company stockholders in the earnings or losses of aconsolidated partner company is reflected in the caption "Minorityinterest" in the Company's Consolidated Statements of Operations.Minority interest adjusts the Company's consolidated net results ofoperations to reflect only its share of the earnings or losses of theconsolidated partner company. During the three months ended December31, 2005, the Company accounted for 3 of its partner companies underthis method; ICG Commerce, Investor Force and StarCite. During thethree months ended December 31, 2004, the Company accounted for 2 ofits partner companies under this method; ICG Commerce andCommerceQuest.

Equity Method. Partner companies whose results the Company doesnot consolidate, but over whom it exercises significant influence, aregenerally accounted for under the equity method of accounting. Whetheror not the Company exercises significant influence with respect to apartner company depends on an evaluation of several factors including,among others, representation on the partner company's board ofdirectors and ownership level, which is generally a 20% to 50%interest in the voting securities of the partner company, includingvoting rights associated with the Company's holdings in common,preferred and other convertible instruments in the partner company.Under the equity method of accounting, a partner company's accountsare not reflected within the Company's Consolidated Statements ofOperations; however, its share of the earnings or losses of thepartner company is reflected in the caption "Equity Loss" in theConsolidated Statements of Operations. During the three months endedDecember 31, 2005, the Company accounted for 8 of its partnercompanies under this method.

Cost Method. Partner companies not accounted for under either theconsolidation or the equity method of accounting are accounted forunder the cost method of accounting. Under this method, the Company'sshare of the earnings or losses of these companies is not included inthe Company's Consolidated Statements of Operations. During the threemonths ended December 31, 2005, the Company accounted for 11 of itspartner companies under this method.

Selling, general and administrative expenses

Consolidated selling, general and administrative expensesincreased from $7.3 million during the three months ended December 31,2004 to $11.6 million during the three months ended December 31, 2005.The increase is primarily the result of $2.1 million of accrualreversals in the 2004 period for liabilities that were settled forless than originally estimated, an increase in stock-basedcompensation of $0.9 million in 2005 and an accrual of $1.5 million topotentially settle a pending lawsuit in 2005.

Significant items impacting the consolidated financial statements:
($ millions)


Q4 YTD
----------------------- -----------------------
Gains/(losses): 2005 2004 2005 2004
----------- ----------- ----------- -----------

Legal settlement
accrual included in
SG&A ($1.5) $0.0 ($1.5) $0.0
----------- ----------- ----------- -----------

Restructuring
charges/impairments ($0.3) ($0.1) ($3.0) ($0.8)
----------- ----------- ----------- -----------

Other gains (losses):
Sale of Marketable
Securities 0.7 2.9 15.1 3.3
Repurchase of
convertible notes (5.9) -- (5.9) (133.2)
Sales of Partner
Companies 4.9 0.3 125.3 22.6
Other net 0.9 (0.9) 1.0 1.1
----------- ----------- ----------- -----------
Other Income (Loss) $0.6 $2.3 $135.5 ($106.2)
----------- ----------- ----------- -----------

Income tax benefit
(expense) $1.7 $0.0 ($18.6) $0.0
----------- ----------- ----------- -----------

ICG's share of
Partner
Company charges, net ($3.9) 0.9 ($3.9) 0.9
----------- ----------- ----------- -----------

Discontinued
Operations ($2.4) $0.5 ($3.0) $2.6
----------- ----------- ----------- -----------
($5.8) $3.6 $105.5 ($103.5)

Stock-based
compensation ($1.4) ($0.5) ($4.3) ($1.4)
----------- ----------- ----------- -----------

($7.2) $3.1 $101.2 ($104.9)
=========== =========== =========== ===========

Aggregate Pro Forma Core Company Information

In an effort to illustrate macro trends within its private Corecompanies, ICG provides an aggregation of revenue and net loss figuresreflecting 100% of the pro forma revenue and aggregate pro formaEBITDA for these companies. These non-GAAP measures are considered proforma because management has added WhiteFence, removed GoIndustry andICG Commerce's German subsidiary figures and combined CommerceQuestand Metastorm figures as if the acquisition of a 39% ownershipinterest in WhiteFence, the listing of GoIndustry securities on theAIM Exchange, ICG Commerce's sale of its German subsidiary and themerger of CommerceQuest and Metastorm occurred as of January 1, 2004.The Company calculates aggregate pro forma EBITDA for these purposesas earnings/(losses) before interest, tax, depreciation andamortization and refers to it as "aggregate EBITDA". The Companyrefers to the aggregate pro forma revenue of its private Core partnercompanies as "aggregate revenue." ICG does not own its Core companiesin their entirety and, therefore, this information should beconsidered in this context. Aggregate revenue and aggregate EBITDA, inthis context, represent certain of the financials measures used by theCompany's management to evaluate the performance for Core companies.The Company's management believes these non-GAAP financial measuresprovide useful information to investors, potential investors,securities analysts and others so each group can evaluate private Corecompanies' current and future prospects in a similar manner as theCompany's management and review results on a comparable basis for allperiods presented.

ICG's share of net loss of Core, Other Holdings and disposedPartner Companies

Represents ICG's share of the net loss of Core, Other Holdings anddisposed Partner Companies accounted for under the consolidated andequity method of accounting.

Corporate Expenses and Interest Expense, net

General and administrative expenses consist of payroll and relatedexpenses for executive, operational, acquisitions, finance andadministrative personnel, professional fees and other generalcorporate expenses for Internet Capital Group. Stock-basedcompensation is included and primarily consists of non-cash chargesrelated to certain compensation arrangements.

Interest expense relates primarily to the interest expense on theCompany's outstanding 5% senior convertible notes due April 2009(2005) and redeemed 5.5 % convertible notes (2004).

Income Taxes

Income tax benefit of approximately $1.7 million during the threemonths ended December 31, 2005 and income tax expense of $18.6 millionfor the year ended December 31, 2005 is primarily the result oftaxable income as the result of the Company's sale of its ownershipinterest in LinkShare offset by utilization of current year operatinglosses and current and prior year utilization of certain net operatinglosses subject to limitations on their utilization due to ownershipchanges experienced by the Company and certain consolidated PartnerCompanies.

The Company made an estimated federal income tax payment of $26.9million during the three months ended December 31, 2005. Accordingly,$8.3 million is reflected as an income tax receivable included inother current assets on the Consolidated Balance Sheet at December 31,2005. The $8.3 million net refund was received during the three monthsended March 31, 2006.

Discontinued Operations

ICG Commerce's (a consolidated Partner Company) German subsidiarywas sold in January 2006 for nominal consideration and has beenreflected as a discontinued operation. Accordingly, the operatingresults of this discontinued operation have been presented separatelyfrom continuing operations for all periods presented.

During the three months ended December 31, 2002, two of theCompany's consolidated Partner Companies, Delphion and Logistics,disposed of substantially all of their assets. Accordingly, theoperating results of these two discontinued operations had beenpresented separately from continuing operations. During the threemonths ended June 30, 2004, the Company received $3.0 million in cashproceeds from the release of a Delphion escrow. This amount has beenreflected as income from discontinued operations.