COLUMBIA, Md. -- Broadwing Corporation (NASDAQ: BWNG), a leading provider of optical network communications services and solutions, today announced its fourth quarter and full year 2004 financial and operational results.

Revenue for the fourth quarter ended December 31, 2004, was $219.9 million, an increase of 54% versus the same period prior year, and annual revenue of $672.3 million, an increase of 114% from the prior year. Revenue was generated primarily from sales of communications services, as well as from communications equipment sales to the U.S. government. Comparisons with prior periods reflect the respective revenue contributions of the acquisitions of Broadwing Communications in July 2003 and Focal Communications in September 2004.

The consolidated net loss for the fourth quarter was $43.4 million, or a loss of $0.68 per share, as compared to a reported net loss of $55.4 million, or a loss of $1.20 per share for the fourth quarter 2003. Reported net loss for fiscal 2004 was $152.2 million, or a loss of $2.86 per share, as compared with a reported net loss of $260.5 million, or a loss of $6.00 per share for fiscal year 2003. The company’s reported net loss per share results are reflective of the company’s 1:20 reverse stock split and subsequent 1:1 stock dividend, essentially a 1:10 reverse stock split, that was effected October 8, 2004.

.“This was a milestone year for Broadwing,” said Dr. David Huber, Broadwing Corporation’s chairman and chief executive officer. “In 2004, we completed the reorganization of our business, changed our name and stock ticker symbol, acquired Focal Communications, and expanded our market footprint. We signed new customers, increased sales with existing customers, introduced new services, and made marked improvements in both revenue and margins.”

“Broadwing’s financial results showed that our momentum is building and we are beginning to see a positive impact from our Focal acquisition, as well as from our continued focus on sales productivity and operating cost reductions,” Dr. Huber said.

Quarterly Results

In the fourth quarter of 2004, the communications services division contributed $212.2 million in revenue, a 30% increase from the prior quarter and an increase of approximately 50% over the same period in the prior year. Fourth quarter results included three months of revenue from the Focal Communications acquisition.

Long-distance and local voice services revenue was $105.2 million, an increase of 67% sequentially and a 114% increase from the third quarter 2004. The increase in voice revenue was due primarily to the inclusion of a full quarter of Focal revenue, as well as to an increase in revenue from sales of voice services to carrier/wholesale customers. Revenue from data and broadband services was $107.0 million in the fourth quarter, an increase of 7% from prior quarter and 17% from the fourth quarter 2003. As a result of the incorporation of a full quarter of Focal revenue, the product groups of data/broadband and voice contributed equally to total services revenue in the fourth quarter.

“Our fourth quarter results demonstrated that we continue to execute on our strategic plan,” said Lynn Anderson, chief financial officer of Broadwing Corporation. We grew communications services revenue in a challenging market across product lines and customer types, both organically and via the acquisition of Focal Communications.”

The Company’s equipment division reported $7.7 million of revenue for the quarter from sales of communications equipment and equipment services to the U.S. government. Equipment sales from a relatively small customer base result in fluctuations in revenue and gross profit from the Company’s equipment division. The fourth quarter equipment division revenue performance was particularly strong and should not be considered typical.

Fourth quarter 2004 results include $0.9 million of restructuring and other charges principally related to consolidation efforts associated with the acquisition of Focal Communications.

Financial Position

Cash, cash equivalents and investments were $274.4 million at December 31, 2004, a $47.3 million decrease from the prior quarter. The change in cash from last quarter included approximately $31.9 million of capital expenditures associated with network investments to support the Focal integration, growth in our voice services, and new market initiatives, such as the recently announced Converged Network, Voice over Internet Protocol (VoIP), and Media Services.

Fiscal 2004 Annual Results

For fiscal year 2004, revenue was $672.3 million as compared to $314.3 million for the prior year. Fiscal year 2004 results included a full 12 months of revenue from the Broadwing Communications acquisition and four months of revenue from the Focal Communications acquisition. The communications services division contributed $658.4 million to consolidated revenue. The equipment services division generated $13.9 million in revenue from equipment sales principally to the U.S. government.

Annual 2004 results included $3.9 million of restructuring and other charges principally related to consolidation efforts associated with the Broadwing Communications and Focal acquisitions.

Broadwing Corp.