By Mike Boyer
The Cincinnati Enquirer
Broadwing Inc. is flying the coop.
The name the parent of Cincinnati Bell adopted three years ago with great fanfare when it acquired broadband provider IXC Communications Inc. will go away in about a month when it reverts to its old name, Cincinnati Bell Inc.
The company announced at Tuesday's annual shareholders' meeting at Union Terminal in Queensgate that the board of directors approved the name change, reflecting its decision to sell the broadband business.
"Cincinnati Bell is, and will always be, an excellent company whose outstanding performance has been recently overshadowed by the troubles in our national operations,'' CEO Kevin Mooney told investors at the meeting.
The company said it would begin trading under the new name and ticker symbol CBB May 27.
Mooney, who succeeded former chairman and CEO Rick Ellenberger in September, said the company is making good progress in completing the broadband sale and reducing the debt it took on to acquire the business. The company is expected to report first-quarter results May 6.
In February, the company said it would sell the broadband network to a new private company, CIII Communications LLP for $129 million. At the same time, the company announced a financial restructuring that includes $350 million in new financing and swapping $500 million in senior debt and minority interests for about 26 million shares of Broadwing common stock.
The company has blamed its failed $4 billion investment in broadband on the slumping economy, the collapse of the dot-com bubble and a cold shoulder from capital markets.
In response to a shareholder's question about whether any executives other than Ellenberger were asked to resign because of the broadband failure, chairman Dan Meyer said Ellenberger , who received $4.3 million under his employment agreement, and the board mutually agreed to his departure. "Lots of situations change,'' Meyer said of the broadband market collapse. "With a crystal ball, it wouldn't have been done.''
Mooney said 2002 was a difficult year for all telecommunications companies, with more than 70 companies filing for Chapter 11 bankruptcy reorganization.
But with the broadband sale and refinancing completed by mid-summer, he said, the company will be a good position to continue paying down its debt and maintaining Cincinnati Bell's franchise.
With the broadband sale, Mooney said the company will have more than $2 billion in tax losses that it will be able to use for years to generate cash to reduce its roughly $2.5 billion in debt after the sale.
Jack Cassidy, chief operating officer, said Cincinnati Bell last year generated $1.17 billion in revenues, up 3 percent , and $356 million in operating earnings, up 18 percent from the prior year.
"Not many telcos were able to report positive revenue trends or double-digit operating income growth,'' he said.
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