EXHIBIT 99.1
BROADWING PRESS RELEASE
INVESTOR CONTACT: MEDIA CONTACT:
Mike Hemsath Thomas Osha
513.397.7788 513.397.7316
mike.hemsath@broadwing.com tom.osha@broadwing.com
BROADWING INC. REPORTS PROFIT FOR FIRST QUARTER 2003
o Reports EPS from Continuing Operations of $0.16 per Share
o Restructuring Continues to Strengthen Financial Position
o Closing of Sale of Broadband Business Remains on Track
o Corporate Name Returns to Cincinnati Bell Inc. on May 27th
CINCINNATI--May 6, 2003--Broadwing Inc. (NYSE:BRW) today announced its financial
results for the first quarter of 2003. For the quarter, Broadwing reported net
income of $124 million and earnings per share of $0.55. Reported results
included a non-cash, non-recurring increase in net income of $86 million, or
$0.39 per share, resulting from the cumulative effect of a change in accounting
principle in accordance with SFAS 143. For the quarter, EPS from continuing
operations was $0.16 per share.
Revenue was $481 million, an 11 percent decline from the prior year. While
revenue at the company's Cincinnati Bell businesses increased 2 percent, the
decline in consolidated revenue was attributable to its Broadwing Communications
operations. In February, the company announced an agreement to sell
substantially all of the assets of this business. Broadwing's operating income
of $99 million increased $90 million, largely driven by an $80 million decline
in depreciation and amortization expense.
For the quarter, the company had negative cash flow* of $31 million. During the
quarter, the company incurred $46 million in one-time fees associated with its
financial restructuring. Broadwing Communications consumed $33 million in cash,
an improvement of 70 percent year over year and 17 percent sequentially.
Excluding restructuring fees and cash consumed at Broadwing Communications, cash
flow at the remaining businesses was $47 million.
"Broadwing's financial results for the first quarter clearly demonstrate that
our restructuring efforts are having an impact," said Kevin Mooney, Broadwing's
CEO. "As we continue to transition back to our Cincinnati Bell roots, we expect
the stable and reliable performance of our Cincinnati Bell companies to produce
strong cash flow to deleverage our balance sheet."
As announced last week, the company will return its corporate name to Cincinnati
Bell Inc. and adopt the NYSE ticker symbol CBB. The company will begin trading
under the new name and ticker symbol on May 27, 2003, following the completion
of necessary NYSE filings and other notices.
Cincinnati Bell Operations
For the first quarter, Cincinnati Bell reported revenue of $297 million, a 2
percent increase over the same period a year ago. Revenue growth was derived
primarily from data and internet services sold to business customers. Operating
expenses declined 1 percent over the same period a year ago to $205 million
primarily due to a reduction in depreciation and amortization expense. Operating
income improved 8 percent to $92 million. Capital spending declined year over
year by 17 percent to $21 million.
Local Communications Services
Broadwing's local-exchange subsidiary, Cincinnati Bell Telephone, produced
revenue growth of 2 percent to $217 million for the first quarter. Operating
expenses increased 1 percent to $145 million. Operating income of $72 million
was up 2 percent versus the first quarter of 2002. Capital spending of $19
million represented just 9 percent of revenue.
Cincinnati Bell's bundled services offering, Complete Connections, added 7,300
subscribers during the quarter and now has over 296,000 subscribers. The
company's penetration of bundled services among its residential access lines is
41 percent. Cincinnati Bell also launched Custom Connections during the quarter,
a new bundled suite of services that includes local, long distance, wireless and
ADSL and enables consumers to customize combinations of packages to meet their
personal communication needs. As a result of this new bundled offering, the
company also reported one of its most successful quarters in ADSL growth since
launching the product by
adding 8,400 new customers. Cincinnati Bell now has over 83,000 subscribers for
an 8 percent penetration of total access lines.
At the end of the first quarter of 2003, Cincinnati Bell had approximately
1,009,000 access lines in service, a loss of 1.9 percent, or 19,300 lines, since
the first quarter of 2002. The largest single component of line loss remains
attributable to the disconnection of residential second access lines.
Wireless Services
For the first quarter, Cincinnati Bell Wireless reported revenue of $64 million,
up 1 percent from the first quarter of 2002. Due mainly to a focus on cost
control, operating expenses of $45 million declined 7 percent from the same
quarter a year ago. Operating income improved 22 percent to $19 million and
operating margin increased by 5 points to 30 percent. Capital spending of $2
million was 73 percent less than the same period a year ago and represented just
3 percent of revenue. For the quarter, postpaid churn was 1.8 percent and
postpaid ARPU was $55 per month. Cincinnati Bell Wireless ended the first
quarter with over 470,000 subscribers, an increase of 1 percent versus the prior
year.
Other Communications Services
Other Communications Services, which includes the company's Cincinnati-area
retail voice long distance and public payphone operations, reported revenue of
$20 million, unchanged from a year ago. Operating expenses of $19 million
represented a decrease of 7 percent over the first quarter of 2002. Operating
income was $1 million, an improvement of $2 million from the comparable period
in 2002.
Market share for Cincinnati Bell Any Distance, the company's Cincinnati-area
retail voice long distance offering, improved to 70 percent in the residential
market and 44 percent in the business market, an improvement of 1 point and 5
points, respectively, from a year ago.
Broadband Services
For the first quarter of 2003, Broadwing Communications' revenue declined 22
percent to $211 million. The reduction was due to customer bankruptcies, exiting
lines of business, and economic and industry factors driving weak demand in the
carrier and IT hardware markets. Operating expenses of $201 million represented
a 41 percent decrease from the first quarter in 2002, due largely to a reduction
in depreciation and amortization and restructuring charges. As a result,
operating income of $10 million represented an $84 million improvement over the
first quarter of 2002. Capital spending of $1 million in the first quarter was
$26 million less than the first quarter of 2002.
As previously reported, the terms of the company's financial restructuring limit
Broadwing Inc.'s funding of Broadwing Communications. As of March 31, 2003,
Broadwing Communications had total liquidity available of $58 million.
"Our Cincinnati Bell businesses delivered another solid quarter despite a weak
market," said Jack Cassidy, chief operating officer, Broadwing Inc. "Throughout
2003 we will continue to focus on driving top line stability and retention
through our bundled offerings and achieving bottom line growth through continued
productivity and efficiency gains. In our Broadwing Communications business we
will continue to focus on controlling costs and operating the business in the
most efficient manner until the closing of the sale."
Restructuring Activity
As previously announced, the company successfully completed several elements of
its strategic restructuring plan during the first quarter. In February, the
company announced an agreement to sell substantially all of the assets of its
broadband business, Broadwing Communications Services Inc. In March, the company
closed on a comprehensive amendment to its bank credit facilities that, among
other things, extended its liquidity until 2006. At the same time, the company
closed and funded $350 million in new financing which was used to permanently
retire $220 million in bank debt. Also the company announced exchange offers
whereby certain securities of its Broadwing Communications subsidiary would be
exchanged into common shares of the parent company, Broadwing Inc., upon closing
of the asset sale.
"Broadwing's liquidity has been substantially strengthened by our restructuring
activities," said Tom Schilling, chief financial officer of Broadwing Inc. "The
company produced EPS from continuing operations of $0.16 per share this quarter
and will continue to use the solid cash flow from our Cincinnati Bell operations
to reduce debt and strengthen our balance sheet."
"I'm pleased with the substantial progress that we have made on our
restructuring plan including, the strategic realignment of our company, the
successful completion of a comprehensive amendment to our credit facilities, and
the raising of new capital," said Mooney. "We have more work ahead of us to
finalize our restructuring. However, we are committed to running our Cincinnati
Bell operations with a continued focus on customer service and efficiency,
closing the sale of our broadband business, strengthening our financial
position, and creating value for our shareholders."
###
*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 in financing
activities, loans from (to) corporate in financing activities, short-term
borrowings (repayments) in financing activities and proceeds from the sale of
discontinued operations in investing activities. Cash flow should not be
considered as an alternative to net income (loss), operating income (loss), cash
flow from operating activities, or the change in cash on the balance sheet and
may not be comparable with cash flow as defined by other companies. These
non-GAAP financial measures should not be construed as being more important than
comparable GAAP measures. They are presented because the Broadwing Inc.
management uses this information when evaluating the company's results of
operations and cash flow and believes that this information provides the users
of the financial statements with an additional and useful comparison of the
company's current results of operations and cash flows with past and future
periods.
CONFERENCE CALL/WEBCAST
Broadwing Inc. will host a conference call discussing its first quarter 2003
results on Tuesday, May 6, 2003 at 9:30 am EDT, 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 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 solutions that are flexible, reliable and innovative on
its 18,700-mile optical network and its award-
winning 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 products and services to
residential and business customers in Ohio, Kentucky and Indiana. Broadwing Inc.
is headquartered in Cincinnati, Ohio. For more information, and to obtain detail
of the company's definition of cash flow, visit www.broadwing.com.
NOTE: Information included in this news release contains forward-looking
statements 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 services,
Broadwing's ability to complete the sale of its broadband business, 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 2002 Form 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 Months
Ended March 31, %
2003 2002 Change
--------------- --------------- ------------
REVENUE $ 480.7 $ 542.8 (11%)
COSTS & EXPENSES
Cost of Services and Products 219.4 268.0 (18%)
Selling, General & Administrative 120.3 127.8 (6%)
Depreciation and Amortization 41.5 121.6 (66%)
Restructuring -- 16.5 (100%)
Asset Impairments and Other Charges (Credits) 0.3 (0.3) n/m
--------------- ---------------
Operating Income 99.2 9.2 n/m
Minority Interest Expense 14.1 14.2 (1%)
Other Income, Net (0.1) (0.9) (89%)
Interest Expense 45.3 38.3 18%
--------------- ---------------
Income (Loss) from Continuing Operations before Income Taxes,
Discontinued Operations and Cumulative Effect of
Change in Accounting Principle 39.9 (42.4) n/m
Income Tax Expense (Benefit) 2.0 (8.9) n/m
--------------- ---------------
Income (Loss) from Continuing Operations before Discontinued
Operations and Cumulative Effect of Change in Accounting Principle 37.9 (33.5) n/m
Discontinued Operations, Net of Taxes -- 217.8 (100%)
Cumulative Effect of Change in Accounting Principle, Net of Taxes 85.9 (2,008.7) n/m
--------------- ---------------
Net Income (Loss) 123.8 (1,824.4) n/m
Preferred Stock Dividends 2.6 2.6 -
--------------- ---------------
Net Income (Loss) Applicable to Common Shareowners $ 121.2 $ (1,827.0) n/m
=============== ===============
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Income (Loss) from Continuing Operations before Discontinued
Operations and Cumulative Effect of Change in Accounting Principle $ 0.16 $ (0.17)
Discontinued Operations, Net of Taxes -- 1.00
Cumulative Effect of Change in Accounting Principle, Net of Taxes 0.39 (9.21)
--------------- ---------------
Net Earnings (Loss) Per Common Share $ 0.55 $ (8.38)
=============== ===============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
- Basic 218.9 218.2
- Diluted 219.9 218.2
BROADWING INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(UNAUDITED)
(dollars in millions) For the Three Months
Ended March 31, %
2003 2002 Change
--------------- --------------- ------------
REVENUE
Broadband $ 210.6 $ 269.0 (22%)
Local 216.7 213.1 2%
Wireless 63.9 63.5 1%
Other 20.0 20.1 -
Corporate and eliminations (30.5) (22.9) 33%
--------------- ---------------
Total Revenue $ 480.7 $ 542.8 (11%)
=============== ===============
COST OF SERVICES AND PRODUCTS
Broadband $ 129.1 $ 172.2 (25%)
Local 78.0 70.4 11%
Wireless 25.7 28.8 (11%)
Other 14.7 16.1 (9%)
Corporate and eliminations (28.1) (19.5) 44%
--------------- ---------------
Total Cost of Services and Products $ 219.4 $ 268.0 (18%)
=============== ===============
SELLING, GENERAL & ADMINISTRATIVE
Broadband $ 69.7 $ 77.3 (10%)
Local 35.6 36.4 (2%)
Wireless 11.2 11.5 (3%)
Other 3.9 4.0 (3%)
Corporate and eliminations (0.1) (1.4) (93%)
--------------- ---------------
Total Selling, General & Administrative $ 120.3 $ 127.8 (6%)
=============== ===============
DEPRECIATION AND AMORTIZATION
Broadband $ 2.0 $ 77.8 (97%)
Local 31.2 35.8 (13%)
Wireless 7.6 7.5 1%
Other 0.5 0.4 25%
Corporate and eliminations 0.2 0.1 100%
--------------- ---------------
Total Depreciation and Amortization $ 41.5 $ 121.6 (66%)
=============== ===============
RESTRUCTURING
Broadband $ - $ 15.9 (100%)
Local - 0.4 (100%)
Wireless - - n/m
Other - - n/m
Corporate and eliminations - 0.2 (100%)
--------------- ---------------
Total Restructuring $ - $ 16.5 (100%)
=============== ===============
ASSET IMPAIRMENTS AND OTHER CHARGES (CREDITS)
Broadband $ - $ (0.3) (100%)
Local 0.3 - n/m
Wireless - - n/m
Other - - n/m
Corporate and eliminations - - n/m
--------------- ---------------
Total Asset Impairments and Other Charges (Credits) $ 0.3 $ (0.3) n/m
=============== ===============
OPERATING INCOME
Broadband $ 9.8 $ (74.0) n/m
Local 71.5 70.0 2%
Wireless 19.3 15.8 22%
Other 1.0 (0.5) n/m
Corporate and eliminations (2.4) (2.1) 14%
--------------- ---------------
Total Operating Income $ 99.2 $ 9.2 n/m
=============== ===============
BROADWING INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions - except debt covenants and segment information)
March 31, December 31,
2003 2002
-------------- -------------
ASSETS
Cash and Cash Equivalents $ 36.4 $ 44.9
Restricted Cash 7.0 7.0
Receivables - Net 182.8 290.6
Other Current Assets 65.1 67.3
Short-Term Assets Held for Sale 94.4 -
Property, Plant and Equipment - Net 933.5 867.9
Goodwill 40.9 40.9
Other Intangible Assets - Net 66.8 66.9
Other Noncurrent Assets 112.5 82.1
Long-Term Assets Held for Sale 54.8 -
-------------- -------------
Total Assets $ 1,594.2 $ 1,467.6
============== =============
LIABILITIES AND SHAREOWNERS' DEFICIT
Debt Maturing in One Year $ 356.3 $ 203.7
Current Portion of Unearned Revenue and
Customer Deposits 29.8 108.9
Other Current Liabilities 299.1 424.5
Short-Term Liabilities to be Assumed in Sale 133.7 -
Long-Term Debt, Less Current Portion 2,184.1 2,354.7
Unearned Revenue, Less Current Portion 2.6 293.3
Other Noncurrent Liabilities 235.8 186.9
Long-Term Liabilities to be Assumed in Sale 285.5 -
Minority Interest 445.7 443.9
Common Shareowners' Deficit (2,378.4) (2,548.3)
-------------- -------------
Total Liabilities and Shareowners' Deficit $ 1,594.2 $ 1,467.6
============== =============
OTHER DATA:
Common Shares Outstanding at Balance Sheet Date 218.9 218.7
Net Debt $ 2,951.8 $ 2,957.4
Credit Facility Availability $ 268.9 $ 163.9
DEBT COVENANTS (SEE NOTE 1):
Debt to EBITDA Ratio - Calculated 4.19 n/a
Debt to EBITDA Ratio - Required 5.20 n/a
Senior Secured Debt to EBITDA Ratio - Calculated 2.77 n/a
Senior Secured Debt to EBITDA Ratio - Required 3.45 n/a
Interest Coverage Ratio - Calculated 5.06 n/a
Interest Coverage Ratio - Required 3.75 n/a
Year-to-date Capital Expenditures - Actual 21.5 n/a
Maximum Annual Capital Expenditures - Allowed 146.0 n/a
SEGMENT INFORMATION:
Local Access Lines 1,009,000 1,012,000
Wireless Subscribers 470,000 470,000
Note 1: The company renegotiated its debt covenants in March 2003 in
conjunction with its refinancing, which rendered historical
covenant information irrelevant.
BROADWING INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
(dollars in millions) FOR THE THREE MONTHS ENDED MARCH 31, 2003
-------------------------------------------------
SFAS 95 CONSOLIDATING CASH FLOW BROADBAND LOCAL WIRELESS
-------------------------------------------------
SFAS 95 Cash provided by (used in) operating activities $ (32.2) $ 53.8 $ 21.8
Capital expenditures (0.5) (19.1) (2.1)
Proceeds from sale of investments - - -
-------------------------------------------------
SFAS 95 Cash provided by (used in) investing activities (0.5) (19.1) (2.1)
Issuance of long-term debt 30.0 - -
Repayment of long-term debt - - -
Loan from (to) corporate 8.3 (35.5) (19.5)
Short-term borrowings (repayments), net (1.4) 0.4 -
Debt issuance costs - - -
Issuance of common shares - exercise of stock options - - -
Minority interest and preferred stock dividends paid - - -
-------------------------------------------------
SFAS 95 Cash provided by (used in) financing activities 36.9 (35.1) (19.5)
-------------------------------------------------
Net increase (decrease) in cash and cash equivalents 4.2 (0.4) 0.2
Cash and cash equivalents and beginning of period 2.9 2.6 0.8
-------------------------------------------------
Cash and cash equivalents and end of period $ 7.1 $ 2.2 $ 1.0
=================================================
RECONCILIATION OF SFAS 95 CASH FLOW TO CASH FLOW AS DEFINED BY
THE COMPANY
Net increase (decrease) in cash and cash equivalents $ 4.2 $ (0.4) $ 0.2
Less adjustments:
Issuance of long term debt (financing activities) 30.0 - -
Repayment of long-term debt (financing activities) - - -
Loan from (to) corporate (financing activities) 8.3 (35.5) (19.5)
Short-term borrowings (repayments), net (financing activities) (1.4) 0.4 -
-------------------------------------------------
Cash flow (as defined by the company) $ (32.7) $ 34.7 $ 19.7
=================================================
Cash Expenditures for Restructuring $ (4.6) $ (0.4) $ -
Cash Received for Income Tax Refunds (net of tax payments) $ (0.5) $ - $ -
(dollars in millions) FOR THE THREE MONTHS ENDED MARCH 31, 2003
-----------------------------------------------------
BROADWING
SFAS 95 CONSOLIDATING CASH FLOW OTHER CORPORATE CONSOLIDATED
------------------------------ ------------------
SFAS 95 Cash provided by (used in) operating activities $ 1.9 $ (12.6) $ 32.7
Capital expenditures (0.3) - (22.0)
Proceeds from sale of investments - 3.8 3.8
------------------------------ ------------------
SFAS 95 Cash provided by (used in) investing activities (0.3) 3.8 (18.2)
Issuance of long-term debt - 350.0 380.0
Repayment of long-term debt - (356.1) (356.1)
Loan from (to) corporate (1.5) 48.2 -
Short-term borrowings (repayments), net - - (1.0)
Debt issuance costs - (44.6) (44.6)
Issuance of common shares - exercise of stock options - 1.3 1.3
Minority interest and preferred stock dividends paid - (2.6) (2.6)
------------------------------ ------------------
SFAS 95 Cash provided by (used in) financing activities (1.5) (3.8) (23.0)
------------------------------ ------------------
Net increase (decrease) in cash and cash equivalents 0.1 (12.6) (8.5)
Cash and cash equivalents and beginning of period - 38.6 44.9
------------------------------ ------------------
Cash and cash equivalents and end of period $ 0.1 $ 26.0 $ 36.4
============================== ==================
RECONCILIATION OF SFAS 95 CASH FLOW TO CASH FLOW AS DEFINED BY
THE COMPANY
Net increase (decrease) in cash and cash equivalents $ 0.1 $ (12.6) $ (8.5)
Less adjustments:
Issuance of long term debt (financing activities) - 350.0 380.0
Repayment of long-term debt (financing activities) - (356.1) (356.1)
Loan from (to) corporate (financing activities) (1.5) 48.2 -
Short-term borrowings (repayments), net (financing activities) - - (1.0)
------------------------------ ------------------
Cash flow (as defined by the company) $ 1.6 $ (54.7) $ (31.4)
============================== ==================
Cash Expenditures for Restructuring $ - $ (0.7) $ (5.7)
Cash Received for Income Tax Refunds (net of tax payments) $ - $ - $ (0.5)
BROADWING INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
(dollars in millions) FOR THE THREE MONTHS ENDED DECEMBER 31, 2002
------------------------------------------------
SFAS 95 CONSOLIDATING CASH FLOW BROADBAND LOCAL WIRELESS
------------------------------------------------
SFAS 95 Cash provided by (used in) operating activities $ (31.2) $ 83.3 $ 17.9
Capital expenditures (8.0) (23.2) (4.3)
---------------------------------------------
SFAS 95 Cash provided by (used in) investing activities (8.0) (23.2) (4.3)
Issuance of long-term debt 38.0 - -
Repayment of long-term debt - - -
Loan from (to) corporate (11.0) (61.0) (13.7)
Short-term borrowings (repayments), net 2.1 (1.6) -
Debt issuance costs - - -
Purchase of Broadwing shares for treasury and employee benefit plans - - -
Issuance of common shares - exercise of stock options - - -
Minority interest and preferred stock dividends paid - - -
---------------------------------------------
SFAS 95 Cash provided by (used in) financing activities 29.1 (62.6) (13.7)
---------------------------------------------
Net increase (decrease) in cash and cash equivalents (10.1) (2.5) (0.1)
Cash and cash equivalents and beginning of period 13.0 5.1 0.9
---------------------------------------------
Cash and cash equivalents and end of period $ 2.9 $ 2.6 $ 0.8
=============================================
RECONCILIATION OF SFAS 95 CASH FLOW TO CASH FLOW AS DEFINED BY THE COMPANY
Net increase (decrease) in cash and cash equivalents $ (10.1) $ (2.5) $ (0.1)
Less adjustments:
Change in restricted cash (operating activities) - - -
Issuance of long term debt (financing activities) 38.0 - -
Repayment of long-term debt (financing activities) - - -
Loan from (to) corporate (financing activities) (11.0) (61.0) (13.7)
Short-term borrowings (repayments), net (financing activities) 2.1 (1.6) -
---------------------------------------------
Cash flow (as defined by the company) $ (39.2) $ 60.1 $ 13.6
=============================================
Cash Expenditures for Restructuring $ (7.9) $ (0.8) $ -
Cash Received for Income Tax Refunds (net of tax payments) $ - $ - $ -
(dollars in millions) FOR THE THREE MONTHS ENDED DECEMBER 31, 2002
-----------------------------------------------
BROADWING
SFAS 95 CONSOLIDATING CASH FLOW OTHER CORPORATE CONSOLIDATED
------------------------ ------------------
SFAS 95 Cash provided by (used in) operating activities $ 0.1 $ (7.5) $ 62.6
Capital expenditures (0.4) (0.1) (36.0)
------------------------ ------------------
SFAS 95 Cash provided by (used in) investing activities (0.4) (0.1) (36.0)
Issuance of long-term debt - - 38.0
Repayment of long-term debt - (51.2) (51.2)
Loan from (to) corporate 0.3 85.4 -
Short-term borrowings (repayments), net - - 0.5
Debt issuance costs - (0.8) (0.8)
Purchase of Broadwing shares for treasury and employee benefit plans - (0.6) (0.6)
Issuance of common shares - exercise of stock options - 0.3 0.3
Minority interest and preferred stock dividends paid - (2.6) (2.6)
------------------------ ------------------
SFAS 95 Cash provided by (used in) financing activities 0.3 30.5 (16.4)
------------------------ ------------------
Net increase (decrease) in cash and cash equivalents - 22.9 10.2
Cash and cash equivalents and beginning of period - 15.7 34.7
------------------------ ------------------
Cash and cash equivalents and end of period $ - $ 38.6 $ 44.9
======================== ==================
RECONCILIATION OF SFAS 95 CASH FLOW TO CASH FLOW AS DEFINED BY THE COMPANY
Net increase (decrease) in cash and cash equivalents $ - $ 22.9 $ 10.2
Less adjustments:
Change in restricted cash (operating activities) - (7.0) (7.0)
Issuance of long term debt (financing activities) - - 38.0
Repayment of long-term debt (financing activities) - (51.2) (51.2)
Loan from (to) corporate (financing activities) 0.3 85.4 -
Short-term borrowings (repayments), net (financing activities) - - 0.5
------------------------- ------------------
Cash flow (as defined by the company) $ (0.3) $ (4.3) $ 29.9
========================= ==================
Cash Expenditures for Restructuring $ - $ (3.7) $ (12.4)
Cash Received for Income Tax Refunds (net of tax payments) $ - $ - $ -
BROADWING INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
(dollars in millions) FOR THE THREE MONTHS ENDED MARCH 31, 2002
------------------------------------------------
SFAS 95 CONSOLIDATING CASH FLOW BROADBAND LOCAL WIRELESS
------------------------------------------------
SFAS 95 Cash provided by (used in) operating activities $ (68.9) $ 69.6 $ 7.5
Capital expenditures (26.8) (17.9) (7.7)
Proceeds from sale of investments - - -
Proceeds from sale of discontinued operations - - -
------------------------------------------------
SFAS 95 Cash provided by (used in) investing activities (26.8) (17.9) (7.7)
Issuance of long-term debt 52.0 - -
Repayment of long-term debt - - -
Loan from (to) corporate 54.7 (50.6) (0.3)
Short-term borrowings (repayments), net (0.5) (1.1) -
Debt issuance costs - - -
Issuance of common shares - exercise of stock options - - -
Minority interest and preferred stock dividends paid (12.3) - -
------------------------------------------------
SFAS 95 Cash provided by (used in) financing activities 93.9 (51.7) (0.3)
------------------------------------------------
Net increase (decrease) in cash and cash equivalents (1.8) - (0.5)
Cash and cash equivalents and beginning of period 11.6 - 1.1
------------------------------------------------
Cash and cash equivalents and end of period $ 9.8 $ - $ 0.6
================================================
RECONCILIATION OF SFAS 95 CASH FLOW TO CASH FLOW AS DEFINED BY THE COMPANY
Net increase (decrease) in cash and cash equivalents $ (1.8) $ - $ (0.5)
Less adjustments:
Issuance of long term debt (financing activities) 52.0 - -
Repayment of long-term debt (financing activities) - - -
Loan from (to) corporate (financing activities) 54.7 (50.6) (0.3)
Short-term borrowings (repayments), net (financing activities) (0.5) (1.1) -
Proceeds from the sale of discontinued operations (investing activities) - - -
------------------------------------------------
Cash flow (as defined by the company) $ (108.0) $ 51.7 $ (0.2)
================================================
Cash Expenditures for Restructuring $ (31.9) $ (4.6) $ -
Cash Received for Income Tax Refunds (net of tax payments) $ 0.1 $ 0.1 $ 0.6
(dollars in millions) FOR THE THREE MONTHS ENDED MARCH 31, 2002
------------------------------------------------
CORPORATE BROADWING
SFAS 95 CONSOLIDATING CASH FLOW OTHER & DISC OPS CONSOLIDATED
----------------------------- ------------------
SFAS 95 Cash provided by (used in) operating activities $ (2.7) $ (22.9) $ (17.4)
Capital expenditures (0.2) (0.1) (52.7)
Proceeds from sale of investments - 23.3 23.3
Proceeds from sale of discontinued operations - 345.0 345.0
----------------------------- ------------------
SFAS 95 Cash provided by (used in) investing activities (0.2) 368.2 315.6
Issuance of long-term debt - - 52.0
Repayment of long-term debt - (336.2) (336.2)
Loan from (to) corporate 3.0 (6.8) -
Short-term borrowings (repayments), net - (0.1) (1.7)
Debt issuance costs - (2.8) (2.8)
Issuance of common shares - exercise of stock options - 0.4 0.4
Minority interest and preferred stock dividends paid - (2.7) (15.0)
----------------------------- ------------------
SFAS 95 Cash provided by (used in) financing activities 3.0 (348.2) (303.3)
----------------------------- ------------------
Net increase (decrease) in cash and cash equivalents 0.1 (2.9) (5.1)
Cash and cash equivalents and beginning of period - 17.3 30.0
----------------------------- ------------------
Cash and cash equivalents and end of period $ 0.1 $ 14.4 $ 24.9
============================= ==================
RECONCILIATION OF SFAS 95 CASH FLOW TO CASH FLOW AS DEFINED BY THE COMPANY
Net increase (decrease) in cash and cash equivalents $ 0.1 $ (2.9) $ (5.1)
Less adjustments:
Issuance of long term debt (financing activities) - - 52.0
Repayment of long-term debt (financing activities) - (336.2) (336.2)
Loan from (to) corporate (financing activities) 3.0 (6.8) -
Short-term borrowings (repayments), net (financing activities) - (0.1) (1.7)
Proceeds from the sale of discontinued operations (investing activities) - 345.0 345.0
----------------------------- ------------------
Cash flow (as defined by the company) $ (2.9) $ (4.8) $ (64.2)
============================= ==================
Cash Expenditures for Restructuring $ - $ (0.6) $ (37.1)
Cash Received for Income Tax Refunds (net of tax payments) $ 0.1 $ 1.6 $ 2.5
BROADWING INC.
NET DEBT CALCULATION
(UNAUDITED)
MARCH 31, DECEMBER 31,
(dollars in millions) 2003 2002
-----------------------------------------
Credit Facilities $ 1,322.0 $ 1,648.1
16% Senior subordinated notes of Broadwing Inc. 350.2 -
Cincinnati Bell Telephone notes 270.0 270.0
9% Senior subordinated notes of Broadwing Communications 46.0 46.0
12 1/2% Senior notes of Broadwing Communications 0.8 0.8
7 1/4% Senior secured notes of Broadwing Inc. 50.0 50.0
6 3/4% Convertible subordinated notes of Broadwing Inc. 511.3 502.8
Capital leases (See Note 2) 38.7 39.0
Other short-term debt 2.0 2.6
Unamortized discount (48.5) (0.9)
Minority interest 445.7 443.9
------------------ ------------------
Total Debt and Minority Interest 2,988.2 3,002.3
Less: Cash and Cash Equivalents 36.4 44.9
------------------ ------------------
Net Debt (as defined by the company) $ 2,951.8 $ 2,957.4
================== ==================
CHANGE
------------------------
(dollars in millions) $ %
------------------------
Credit Facilities $ (326.1) (20%)
16% Senior subordinated notes of Broadwing Inc. 350.2 n/m
Cincinnati Bell Telephone notes - -
9% Senior subordinated notes of Broadwing Communications - -
12 1/2% Senior notes of Broadwing Communications - -
7 1/4% Senior secured notes of Broadwing Inc. - -
6 3/4% Convertible subordinated notes of Broadwing Inc. 8.5 2%
Capital leases (See Note 2) (0.3) (1%)
Other short-term debt (0.6) n/m
Unamortized discount (47.6) n/m
Minority interest 1.8 -
------------
Total Debt and Minority Interest (14.1) -
Less: Cash and Cash Equivalents (8.5) (19%)
------------
Net Debt (as defined by the company) $ (5.6) -
============
Note 2: Includes $2.1 million of capital leases that will be assumed by
C III Communications LLC in connection with the sale of
substantially all of the assets of the Broadband segment.