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Financial Position

Financial Position. February 24, 2004. Presentation Overview. 2004 Overview Strong Financial Position Wall Street Perspectives Significant Financial Milestones Most Recent Results Why Broadwing is Your Solution. 2004-Building Momentum.

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Financial Position

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  1. Financial Position February 24, 2004

  2. Presentation Overview • 2004 Overview • Strong Financial Position • Wall Street Perspectives • Significant Financial Milestones • Most Recent Results • Why Broadwing is Your Solution

  3. 2004-Building Momentum “Few companies have engineered the transformation we executed in the past 18 months. Few in communications services have the momentum that we have. We believe that the power of the Broadwing brand and our expanded network position us to become the carrier of choice for customers who demand speed, flexibility, reliability and market-leading customer service.” --Dr. David Huber, CEO Completed the Reorganization of Our Business;Significant Sales and Gross Profit Momentum

  4. 2004-Building Momentum Momentum: Significant 12-month Accomplishments • Completed Focal acquisition • Expanded our network and market footprint with 24 tier one local markets • Added 4,000 new customers • $20-30 million in synergies over 12-18 month period • Sold new customers and extended contracts • Ascent Media, Blue Cross and Blue Shield Association, Mayo Foundation, AirTran Airways, and many others • Expanded product portfolio • CoreConnect – bandwidth on reserve for carriers and large enterprises • Media Services -- serves the special needs of the broadcast and media industry • Broadwing PRIorityConnect – VoIP aggregation service • Continued momentum into 2005 • Major contract with Grainger for MultiConnect • GrandSLAm unified service level agreement • MPLS-Based Converged Services Network • Broadwing PRIorityConnect SIP

  5. Significant 2004 Financial Achievements Momentum: Significant 12-month accomplishments • Increased revenue • Broadwing Communications full year 2004 revenue: $658.4M • Up 112% from 2003 • Consolidated company full year 2004 revenue: $672.3M • Up 114% from 2003 • Reduced costs • Services business’ annual “cost of service” down by almost $50M • Excludes incremental costs from Focal acquisition • Improved margins • Consolidated gross margin percentage increased to 33% from 28% in 4Q03 • Progress towards profitability • Consolidated EBITDA loss reduced to $59.3M from $218.5M loss in 2003 • 73% improvement year over year Note: Full year comparisons include 12 months of revenue from 7/03 acquisition of Broadwing Communications and 4 months from 9/04 acquisition of Focal

  6. Strong Financial Position Consolidated Financials (NASDAQ: BWNG)

  7. Strong Financial Position Balanced Revenue Stream Q4 2004

  8. Most Recent Results • 4Q 2004 Highlights Consolidated Revenue (1) $219.9 M Broadwing Services Revenue $212.2 M (96%+ of total) 4Q04 Consolidated EBITDA $ (2.4) M Cash Balance$274.4 M • Maintaining strong balance sheet • Maintaining healthy cash balance helps win business in a challenging marketplace • Low Debt • Capital expenditures of $32M for Converged, VoIP, Media Services, Network Upgrades & success-based investments for customer wins (1) Includes Corvis Equipment Corporation revenue of $7.7 M

  9. Most Recent Results • 4Q 2004 Highlights • Grew revenue in challenging market where many competitors saw continued declines • Experienced balanced revenue growth: • Across product lines – voice, data and broadband • Across customer types – enterprise, carrier/wholesale, government • Growth both “organically” and from Focal acquisition • Improved gross profit and EBITDA • From company growth, integration efforts, and continued cost containment • Built momentum toward profitability • Improved consolidated EBITDA loss • Reduced total company net loss v. 4Q03

  10. Why Broadwing is Your Solution • Solid balance sheet • Low debt • Efficient operating structure • Investing in growth

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