Broadwing Inc. Reports Financial Results for 2002.Business Editors CINCINNATI--(BUSINESS WIRE)--March 27, 2003 Delivers on Previously Announced Financial Guidance; Reports Second Consecutive Quarter of Positive Cash Flow; Reduces Net Debt by $300 Million During 2002 Completes Write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Business Broadwing Broadwing can mean:-
See: New York Stock Exchange :BRW BRW Business Review Weekly (business magazine; Melbourne, Victoria, Australia) BRW Business Report Writer BRW Barrow, AK, USA - Barrow (Airport Code) BRW Business Requirement Worksheet ) today announced its financial results for the fourth quarter and full year 2002. For the fourth quarter, Broadwing reported revenue of $503 million, an 8 percent decline over the same period in 2001. While the company's Cincinnati Bell Cincinnati Bell is the dominant telephone company for Cincinnati, Ohio and its nearby suburbs in Ohio, Indiana and Kentucky. The parent company is named Cincinnati Bell Inc. businesses grew 4 percent, the revenue decline was due to weakness in its Broadwing Communications operations. In the quarter, the company announced an asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge due to the exit of its Broadwing Communications business. This non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. produced an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $2.2 billion for the quarter. On a per share basis, the loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $10.92, versus a loss of $0.95 per share for the same period last year. Additionally, the company produced $30 million of positive cash flow(i) in the fourth quarter, its second consecutive quarter of positive cash flow. For the year, revenue declined 5 percent to $2.16 billion. Operating loss increased $1.87 billion to $2.09 billion. The loss from continuing operations was $11.18 per share; an increase of $9.68 over the $1.50 per share loss recorded in 2001. Broadwing also reported that net debt(ii) had decreased $300 million during 2002. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with guidance for revenue of $2.15 billion and EBITDA of $640 million. Excluding the impact of all special items discussed in detail later in this release, the company's loss from continuing operations was $0.12 per share and $0.46 per share for the fourth quarter and full year 2002, respectively. "Our Cincinnati Bell businesses continued to produce solid financial results," said Kevin KEVIN Keepers of the Eternal Vigilance of the Islamic Nation (fictional, from White Teeth by Zadie Smith) Mooney Mooney is family name, which is probably predominantly derived from the Irish Ó Maonaigh. It can also be spelled Moony, Meaney, Mauney, Moon, Money. The word can refer to: Companies
Meaney spelling "We have made good strides toward strengthening our balance sheet and improving our liquidity," said Tom Schilling, chief financial officer of Broadwing Inc. "The company was cash flow positive for the third and fourth quarters, reduced net debt by 9 percent for the year, and has sufficient liquidity until 2006." Cincinnati-Based Operations For the fourth quarter, Broadwing's Cincinnati Bell businesses reported revenue growth of 4 percent to $302 million. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. improved 19 percent to $85 million. Selling, general and administrative expenses of $46 million represented a 13 percent decrease from the prior period. Capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. declined year over year by 40 percent, to $28 million. For the year, the Cincinnati Bell businesses reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenue of $1.17 billion for 2002, an increase of 3 percent from a year ago. Operating income increased 18 percent to $356 million. Selling, general and administrative expenses of $180 million were down 18 percent from 2001. For the year, capital spending was $111 million, a reduction of 37 percent from the prior year. The Cincinnati Bell businesses also produced $285 million of positive cash flow during 2002. Local Communications Services Broadwing's local-exchange subsidiary, Cincinnati Bell Telephone, produced revenue growth of 5 percent to $223 million for the fourth quarter. Operating income of $72 million was up 15 percent versus the fourth quarter of 2001. Capital spending of $23 million was $4 million less than the fourth quarter of 2001. For 2002, Cincinnati Bell Telephone delivered revenue of $849 million, a 2 percent improvement over the prior year. Operating income grew 7 percent to $285 million. CBT's capital spending of $80 million was $41 million less than 2001 and just 9 percent of revenue for the year. Cincinnati Cincinnati (sĭnsənăt`ē, –năt`ə), city (1990 pop. 364,040), seat of Hamilton co., extreme SW Ohio, on the Ohio River opposite Newport and Covington, Ky.; inc. as a city 1819. Bell's bundled bun·dle n. 1. A group of objects held together, as by tying or wrapping. 2. Something wrapped or tied up for carrying; a package. 3. Biology A cluster or strand of closely bound muscle or nerve fibers. services offerings added almost 53,000 subscribers during the year and now total almost 289,000 subscribers. The company's penetration of bundled services among its residential access lines is 40 percent, making it one of the industry leaders. The company also expanded its ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. base by 23 percent to almost 75,000 subscribers. This represents a 9 percent penetration of addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be access lines. At the end of 2002, Cincinnati Bell had approximately 1,012,000 lines in service, a loss of less than 2 percent from the end of 2001. Wireless Services For the fourth quarter, CBW cbw - Crypt Breakers Workbench reported revenue of $64 million, essentially flat versus fourth quarter 2001. Operating income improved 49 percent to $13 million. Capital spending of $4 million was $14 million less than the same period a year ago and represented just 7 percent of revenue. For the quarter, postpaid post·paid adj. With the postage having been paid in advance. postpaid Adverb, adj with the postage prepaid Adj. 1. churn churn: see butter. was under 2 percent and postpaid ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. was $57 per month. For the year, Cincinnati Bell Wireless produced revenue of $260 million, a 5 percent increase over 2001. Operating income grew by 83 percent to $69 million. Capital spending for 2002 declined $23 million to $30 million. Cincinnati Bell Wireless ended the year with 470,000 subscribers, an increase of 2 percent versus prior year. Other Communications Services Other Communications Services, which includes the company's switched long distance and public payphone payphone Noun a coin-operated telephone payphone pay n → Münztelefon nt; (card phone) → Kartentelefon nt operations, reported revenue of $20 million, down 2 percent from the same period a year ago. Operating income remained at break even, unchanged from the fourth quarter of 2001. For the year, revenue was up 2 percent from 2001 to $80 million. Operating income improved to $2 million from a loss of $4 million in the prior year. Market share for Cincinnati Bell Any Distance, the company's long distance offering, improved to 69 percent in the residential market and 43 percent in the business market, an improvement of 2 points and 5 points respectively versus the prior year. "The solid performance of our Cincinnati Bell businesses in 2002, especially relative to their peer group, is a result of that management team's focus and action to preserve and enhance the strength, profitability, competitive position, and substantial cash flows of our local operations," said Jack Cassidy For the bass guitarist from Jefferson Airplane, see Jack Casady. Jack Cassidy (March 5, 1927 – December 12, 1976) was an American actor, who achieved success in theater, cinema and television. , chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , Broadwing Inc. Broadband Services See broadband and broadband service provider. For the fourth quarter, Broadwing Communications' revenue declined 18 percent to $225 million. As a result of the impact of special items, the operating loss of $2.28 billion was $1.96 billion larger than the loss in the same period a year ago. Capital spending of $8 million in the fourth quarter was $57 million less than the prior year and represented just 4 percent of revenue. For the full year 2002, Broadwing Communications reported revenue of $1.07 billion, a decline of 11 percent from 2001. Operating loss increased $1.94 billion to $2.44 billion as a result of asset write-downs. Primarily as a result of the completion of the optical network in 2001, capital spending was reduced by $407 million to $65 million in 2002, a level which represented just 6 percent of revenue. The terms of the $350 million in new financing arranged by Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. & Company includes restrictions that limit Broadwing Inc.'s funding of Broadwing Communications beyond an aggregate amount of $118 million after October October: see month. 1, 2002. The amount remaining that could be invested in Broadwing Communications was $58 million as of February February: see month. 28, 2003. These restraints and liquidity uncertainties have prompted the company's independent accountants to issue a going concern qualification to their audit report that will be filed along with the 2002 standalone stand·a·lone adj. Self-contained and usually independently operating: a standalone computer terminal. , subsidiary financial statements of Broadwing Communications Inc. Special Items The following special items impacted Broadwing's income (loss) from continuing operations for the fourth quarter and full year 2002. -- In accordance with SFAS 144, the company recorded a non-cash asset impairment charge at its Broadwing Communications subsidiary of $2.2 billion for the fourth quarter. The net impact of this charge reduced the company's earnings from continuing operations by $6.55 per share for the fourth quarter and full year 2002. -- As a result of the liquidity restrictions and uncertainties surrounding Broadwing Communications, the company's federal income tax provision of $115 million in the fourth quarter of 2002, included a charge of $912 million to establish a valuation reserve against certain deferred tax assets. The impact of this charge reduced the company's earnings from continuing operations by $4.18 per share in both 2002 and the fourth quarter. The company is pursuing several alternatives to resolve these uncertainties related to Broadwing Communications that it expects will result in the realization of these reserved tax assets. -- The company also recorded charges to earnings for restructuring activities of $14 million and $37 million for the fourth quarter and full year 2002, respectively. The net impact of these charges reduced the company's earnings from continuing operations by $0.04 and $0.11 in the fourth quarter and for 2002, respectively. -- During the fourth quarter, the company recorded a non-cash, non-recurring charge of $11 million for the write-down of an investment security. This net impact of this charge reduced the company's earnings from continuing operations by $0.03 for both the fourth quarter and full year. -- During the second and third quarters of 2002 the company recognized non-cash, non-recurring benefits to both revenue and operating income of $18 million and $41 million respectively, as a result of the bankruptcy of two carrier customers, releasing Broadwing Communications from its service obligations. This net impact of these items increased the company's earnings from continuing operations by $0.19 in 2002. They had no impact on the fourth quarter results. -- In the second quarter, the company recorded $13 million to recognize shutdown and other costs related to the termination of a construction contract that is in dispute. The net impact of this item reduced earnings from continuing operations by $0.04 per share in 2002. This item had no impact on fourth quarter results. The company adopted SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142, effective January January: see month. 1, 2002. As a result, the statement of operations See Income statement. reflects a $2.0 billion non-cash, after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge associated with the write-off of goodwill related to the acquisition of its broadband business. This item had no impact on earnings from continuing operations as it was reported as a cumulative effect of a change in accounting principle. "For Broadwing, 2003 will represent a transition year as our company migrates back to our roots and core business of running one of the best performing local and wireless operations in our industry," said Mooney. Today, the company also announced in a separate release the successful completion of a comprehensive amendment to it bank credit facility as well as other progress against its restructuring plan. (i) The company has presented certain information regarding cash flow in the preceding discussion because the company believes cash flow provides a useful measure of a company's operational performance, liquidity and financial health. Cash flow is defined by the company as SFAS 95 cash provided by (used in) operating, financing and investing activities, less changes in restricted cash in operating activities, issuance and repayment of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. in financing activities, short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings (repayments) in financing activities and proceeds from the sale of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in investing activities. Cash flow should not be considered as an alternative to net income (loss) or operating income (loss) and may not be comparable with cash flow as defined by other companies. (ii) The company has presented certain information regarding net debt in the preceding discussion because the company believes net debt provides a useful measure of a company's liquidity and financial health. Net debt is defined by the company as the principle balances of short-term and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. borrowings under the company's credit facility; Cincinnati Bell Telephone notes; 9% senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes and 12 1/2% senior notes of Broadwing Communications; 7 1/4% senior secured notes and 6 3/4% convertible subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before of the parent company; capital leases; other short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. of the company and minority interest, offset by cash and cash equivalents. (iii) The company has presented certain information regarding Earnings before Interest, Taxes, Depreciation, and Amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA) in the preceding discussion because the company believes that EBITDA is generally accepted as providing useful information regarding a company's ability to service and incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. debt. In this regard, the company uses EBITDA as one of the measures to evaluate its operating performance and the operating performance of its segments. EBITDA represents net income (loss) from continuing operations before discontinued operations and cumulative effect of change in accounting principle, interest expense and other financing costs, income tax expense (benefit), depreciation, amortization, restructuring, asset impairments and other charges, minority interest expense (income), equity loss in unconsolidated entities, loss (gain) on investments and other expense (income). EBITDA does not represent cash flow for the periods presented and should not be considered as an alternative to net income (loss) or operating income (loss) or as an alternative to cash flow as a source of liquidity, and may not be comparable with EBITDA as defined by other companies. Conference Call/Webcast Broadwing Inc. will host a conference call discussing its 2002 results and progress against its restructuring plan on Thursday Thursday: see week. , March 27, 2003 at 10:00 am EST EST electroshock therapy. EST abbr. electroshock therapy , which will be web-cast on the company's website at www.broadwing.com. About Broadwing Broadwing Inc. (NYSE:BRW) is an integrated communications company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. comprised of Broadwing Communications and Cincinnati Bell. Broadwing Communications leads the industry as the world's first intelligent, all-optical, switched network provider and offers businesses nationwide a competitive advantage by providing data, voice and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the solutions that are flexible, reliable and innovative on its 18,700-mile optical network and its award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" IP backbone. Cincinnati Bell is one of the nation's most respected and best performing local exchange and wireless providers with a legacy of unparalleled customer service excellence and financial strength. The company was recently ranked number one in customer satisfaction, for the second year in a row, by J.D. Power and Associates for local residential telephone service and residential long distance among mainstream users and received the number one ranking in wireless customer satisfaction in its Cincinnati market. Cincinnati Bell provides a wide range of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. products and services to residential and business customers in Ohio, Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. and Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). . Broadwing Inc. is headquartered in Cincinnati, Ohio “Cincinnati” redirects here. For other uses, see Cincinnati (disambiguation). Cincinnati is a city in the U.S. state of Ohio and the county seat of Hamilton County. . For more information, and to obtain detail of the company's definition of net debt, EBITDA and cash flow, visit www.broadwing.com. Note: Information included in this news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve potential risks and uncertainties. Broadwing's future results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, Broadwing's ability to maintain its market position in communications services, general economic trends affecting the purchase of telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. services, world and national events that may affect the ability to provide services, and its ability to develop and launch new products and services. More information on potential risks and uncertainties is available in the company's recent filings with the Securities and Exchange Commission, including the 2001 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for Broadwing Inc. and Broadwing Communications Inc.
Broadwing Inc. Consolidated
Statements of Operations
(Unaudited)
(in millions - except
per share amounts)
For the Three For the Twelve
Months Months
Ended December 31, % Ended December 31, %
2002 2001 Change 2002 2001 Change
-------- -------- ------ -------- -------- ------
Revenue
---------------
Broadband $ 224.7 $ 272.4 (18%) $1,068.1 $1,197.6 (11%)
Local 222.5 211.3 5% 848.5 831.7 2%
Wireless 63.6 63.9 0% 260.4 248.0 5%
Other 20.3 20.6 (1%) 79.9 78.2 2%
Intersegment (28.0) (22.2) 26% (101.0) (83.9) 20%
-------- -------- -------- --------
Total Revenue 503.1 546.0 (8%) 2,155.9 2,271.6 (5%)
-------- -------- -------- --------
Costs &
Expenses
---------------
Cost of
Services and
Products 243.7 286.6 (15%) 1,027.7 1,130.9 (9%)
Selling,
General &
Administrative 118.4 129.8 (9%) 487.4 561.6 (13%)
Depreciation
and
Amortization 125.6 149.2 (16%) 496.3 554.8 (11%)
Restructuring 13.5 83.9 (84%) 37.1 93.4 (60%)
Asset
Impairments
and Other
Charges 2,200.9 148.1 n/m 2,200.9 152.0 n/m
-------- -------- -------- --------
Operating
Income (Loss) (2,199.0) (251.6) n/m (2,093.5) (221.1) n/m
Equity Loss in
Unconsolidated
Entities -- -- n/m -- 4.0 (100%)
Minority Interest
Expense 13.2 12.1 9% 57.6 51.3 12%
Other Expense
(Income), Net 9.6 (22.0) n/m 10.2 (32.2) n/m
Interest
Expense 46.8 40.9 14% 164.2 168.1 (2%)
-------- -------- -------- --------
Income (Loss)
from Continuing
Operations
Before Income
Taxes and
Cumulative
Effect of
Change in
Accounting
Principle (2,268.6) (282.6) n/m (2,325.5) (412.3) n/m
Income Tax
Expense
(Benefit) 114.8 (78.2) n/m 105.7 (96.5) n/m
-------- -------- -------- --------
Income (Loss)
from Continuing
Operations
Before Cumulative
Effect of Change
in Accounting
Principle (2,383.4) (204.4) n/m (2,431.2) (315.8) n/m
Discontinued
Operations,
Net of Taxes -- 8.8 (100%) 217.6 29.6 n/m
Cumulative
Effect of
Change in
Accounting
Principle, Net
of Taxes -- -- n/m (2,008.7) -- n/m
-------- -------- -------- --------
Net Income
(Loss) (2,383.4) (195.6) n/m (4,222.3) (286.2) n/m
Dividends
Applicable to
Preferred
Stock 2.6 2.6 0% 10.4 10.4 0%
-------- -------- -------- --------
Net Income
(Loss)
Applicable to
Common
Shareowners $(2,386.0) $(198.2) n/m $(4,232.7) $(296.6) n/m
======== ======== ======== ========
Basic and Diluted
Earnings (Loss) Per
Common Share
-------------------------
Income (Loss) from Continuing
Operations before Cumulative
Effect
of Change in
Accounting
Principle $(10.92) $(0.95) $(11.18) $(1.50)
Discontinued
Operations,
Net of Taxes -- 0.04 1.00 0.14
Cumulative
Effect of
Change in
Accounting
Principle, Net
of Taxes -- -- (9.20) --
-------- -------- -------- --------
Net Income
(Loss) Per
Common Share $(10.92) $(0.91) $(19.38) $(1.36)
======== ======== ======== ========
Weighted Average Common
Shares Outstanding
-------------------------
- Basic and
Diluted 218.5 218.0 218.4 217.4
Other Data:
---------------
Capital
Expenditures $36.0 $111.7 (68%) $175.9 $648.5 (73%)
Cash Flow (as
defined by the
company) $29.9 $(63.8) n/m $2.8 $(315.0) n/m
Cash
Expenditures
for
Restructuring $(11.9) $(4.5) n/m $(72.3) $(16.5) n/m
Cash Received
for Income Tax
Refunds (net
of tax
payments) $- $- n/m $40.3 $17.9 n/m
Broadwing Inc.
Consolidated Statements of Operations
(Unaudited)
(in millions -
except per
share amounts) 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Quarter
2001 2002 2002 2002 2002
---------------------------------------- ----------
Revenue
-------
Broadband $ 272.4 $ 269.0 $ 278.1 $ 296.2 $ 224.7
Local 211.3 209.7 209.9 206.5 222.5
Wireless 63.9 62.0 67.9 66.9 63.6
Other 20.6 19.5 20.4 19.5 20.3
Intersegment (22.2) (22.8) (23.8) (26.2) (28.0)
---------------------------------------- ----------
Total Revenue 546.0 537.4 552.5 562.9 503.1
---------------------------------------- ----------
Costs & Expenses
----------------
Cost of Services
and Products 286.6 264.6 267.6 251.8 243.7
Selling, General
& Administrative 129.8 125.8 126.8 116.5 118.4
Depreciation and
Amortization 149.2 121.6 122.2 126.8 125.6
Restructuring 83.9 16.5 -- 7.1 13.5
Asset Impairments
and Other
Charges 148.1 -- -- -- 2,200.9
---------------------------------------- ----------
Operating
Income (Loss) (251.6) 8.9 35.9 60.7 (2,199.0)
Equity Loss in
Unconsolidated
Entities -- -- -- -- --
Minority Interest
Expense 12.1 14.2 14.8 15.5 13.2
Other Expense
(Income), Net (22.0) (1.2) 0.4 1.4 9.6
Interest Expense 40.9 38.3 38.9 40.1 46.8
---------------------------------------- ----------
Income (Loss)
from Continuing
Operations
Before Income
Taxes and
Cumulative
Effect of
Change in
Accounting
Principle (282.6) (42.4) (18.2) 3.7 (2,268.6)
Income Tax Expense
(Benefit) (78.2) (8.9) 0.1 (0.3) 114.8
---------------------------------------- ----------
Income (Loss)
from Continuing
Operations
Before
Cumulative
Effect of
Change in
Accounting
Principle (204.4) (33.5) (18.3) 4.0 (2,383.4)
Discontinued
Operations,
Net of Taxes 8.8 217.8 (0.2) -- --
Cumulative Effect
of Change in
Accounting
Principle,
Net of Taxes -- (2,008.7) -- -- --
---------------------------------------- ----------
Net
Income (Loss) (195.6) (1,824.4) (18.5) 4.0 (2,383.4)
Dividends
Applicable to
Preferred Stock 2.6 2.6 2.6 2.6 2.6
---------------------------------------- ----------
Net Income (Loss)
Applicable to
Common
Shareowners $ (198.2)$(1,827.0) $ (21.1) $ 1.4 $ (2,386.0)
======================================== ==========
Basic and
Diluted Earnings
(Loss) Per
Common Share
-----------------
Income (Loss)
from Continuing
Operations before
Cumulative Effect
of Change in
Accounting
Principle $ (0.95) $ (0.17) $ (0.10) $ 0.01 $ (10.92)
Discontinued
Operations,
Net of Taxes 0.04 1.00 -- -- --
Cumulative
Effect of
Change in
Accounting
Principle,
Net of Taxes -- (9.21) -- -- --
---------------------------------------- ----------
Net Income
(Loss) Per
Common Share $ (0.91) $ (8.38) $ (0.10) $ 0.01 $ (10.92)
======================================== ==========
Weighted Average
Common Shares
Outstanding
----------------
- Basic and
Diluted 218.0 218.2 218.4 218.5 218.5
Other Data:
----------------
Capital
Expenditures $ 111.7 $ 52.7 $ 47.0 $ 40.2 $ 36.0
Cash Flow
(as defined by
the company) $ (63.8) $ (64.2) $ (25.0) $ 62.1 $ 29.9
Cash Expenditures
for Restructuring $ (4.5) $ (37.1) $ (12.2) $ (11.1) $ (11.9)
Cash Received for
Income Tax
Refunds (net of
tax payments) $ - $ 2.5 $ (0.7) $ 38.5 $ -
Broadwing Inc.
Consolidated Balance Sheets
(Unaudited)
(in millions - except debt convenants December 31, December 31,
and segment information) 2002 2001
------------ ------------
Assets
Cash and Cash Equivalents $ 44.9 $ 30.0
Restricted Cash 7.0 -
Receivables - Net 290.6 310.9
Assets of Discontinued Operations -- 21.4
Other Current Assets 67.3 109.1
Property, Plant and Equipment - Net 867.9 3,059.3
Goodwill 40.9 2,048.6
Other Intangible Assets - Net 66.9 396.3
Other Noncurrent Assets 82.1 336.4
------------ ------------
Total Assets $ 1,467.6 $ 6,312.0
============ ============
Liabilities and Shareowners'
Equity (Deficit)
Debt Maturing in One Year $ 203.7 $ 150.0
Current Portion of Unearned
Revenue and Customer Deposits 108.9 178.3
Liabilities of Discontinued Operations - 11.9
Other Current Liabilities 424.5 582.1
Long-Term Debt, Less Current Portion 2,354.7 2,702.0
Unearned Revenue, Less Current Portion 276.5 415.9
Other Noncurrent Liabilities 203.7 157.7
Minority Interest 443.9 435.7
Common Shareowners' Equity (Deficit) (2,548.3) 1,678.4
------------ ------------
Total Liabilities and
Shareowners' Equity (Deficit) $ 1,467.6 $ 6,312.0
============ ============
Other Data:
Common Shares Outstanding
at Balance Sheet Date 218.7 218.1
Credit Facility Availability $ 163.9 $ 348.9
Debt Covenants:
Debt to EBITDA Ratio - Calculated 3.36 3.70
Debt to EBITDA Ratio - Required 3.75 5.00
Senior Secured Debt to
EBITDA Ratio - Calculated 2.83 3.16
Senior Secured Debt to
EBITDA Ratio - Required 3.00 3.75
Debt to Capitalization Ratio - Calculated 42% 46%
Debt to Capitalization Ratio - Required 55% 55%
Interest Coverage Ratio - Calculated 3.49 3.39
Interest Coverage Ratio - Required 2.50 2.00
Segment Information:
Local Access Lines 1,012,000 1,032,000
Wireless Subscribers 470,000 462,000
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