Feb, 2002 : Broadwing Reports 2001 Financial Results

📅 February 1, 2002 - Broadwing Inc. yesterday announced its financial results for the fourth quarter and full year 2001. For the year,revenues increased 15 percent to $2.35 billion, while earnings beforeinterest, taxes, depreciation and amortization grew 26 percent to $626million.

For the fourth quarter, revenues increased 1 percent to $566 million. EBITDAdeclined 2 percent to $143 million.
"This has proven to be a challenging time for our economy and particularlyfor the communications industry," said Rick Ellenberger, chairman-elect andCEO, Broadwing Inc. "The actions we have taken to focus our company againstthe realities of the marketplace, the momentum we have established withenterprise accounts, and the operating efficiencies we have realized placeour company in the best position to weather the storm and achieve our freecash flow positive objective."
Broadwing's local-exchange company, Cincinnati Bell Telephone, producedrevenues of $833 million for the year, a 5 percent improvement over theprevious year. EBITDA improved 8 percent year over year to $423 million.
Cincinnati Bell Wireless increased revenues 38 percent in 2001 over theprior year to $248 million. EBITDA grew 258 percent over full year 2000 to$66 million. In the fourth quarter, revenues increased 23 percent to $64million and EBITDA improved to $17 million, up 359 percent from the samequarter in 2000.
Broadwing Communications, the company's national broadband servicesbusiness, experienced growth for the first three quarters of 2001, but theeffects of the economic slowdown became pronounced in the fourth quarter.For the year, revenues increased 19 percent to $1.2 billion and EBITDA grew35 percent to $110 million compared to results for full year 2000.
The fourth quarter witnessed a revenue decline of 5 percent over the samequarter in 2000 to $271 million, and EBITDA was $8 million. The revenuesoftness was primarily due to a contraction in broadband demand in thecarrier market.
The mid-year completion of the all-optical switched network increaseddepreciation and contributed to the company's loss. Excluding non-recurringitems, this loss was $0.29 per share, which compares to a $0.18 per shareloss in the fourth quarter of 2000.
As announced in Nov., the company restructured to consolidate operations,streamline functions, and exit non-strategic activities. Non-recurringlosses, including the restructuring charges of $0.69 per share and $0.72 pershare for the quarter and the year, respectively, were partially offset bynon-recurring investment gains of $0.07 per share in both periods.
As previously announced, Broadwing will exit the network constructionbusiness. As a result, the company will account for the constructionbusiness as a discontinued operation in 2002. Adjusted to reflectdiscontinued operations, revenue for full year 2001 was $2.26 billion andEBITDA was $601 million.
For 2002, in light of current market and economic conditions, revenues areexpected to decline by approximately 1 percent to $2.23 billion. EBITDA isexpected to grow by 8 percent to $650 million. A portion of the EBITDAgrowth can be attributed to the effects of the restructuring activitiesBroadwing implemented in the fourth quarter of 2001. Capital expendituresfor 2002 are expected to be $300 million. As a result of these actions,Broadwing expects to reach free cash flow positive mid-year 2002.