EPIK Is Cut LooseEPIK Is Cut Loose

ST. AUGUSTINE, Fla. -- Florida East Coast Industries, Inc. (NYSE:FLA, FLA.b) (FECI) today announced that it has written down the entire book value of the long-lived assets of its telecommunications subsidiary, EPIK Communications, and that it is seeking to exit the telecommunications business. Robert W. Anestis, chairman and chief executive officer of FECI, commented: "We are committed to exiting the telecommunications business in the best way possible for our shareholders. Going forward, we will continue to focus on our core Real Estate and Railway businesses, Flagler Development Company and Florida East Coast Railway, L.L.C., both of which have a solid track record of success. Notably, our core businesses generate significant cash flow to support the future growth of our Company. On an annualized basis, the Railway is contributing over $70 million in EBITDA and Flagler's operating property rentals contribute nearly $40 million. We will capitalize on FECI's established positions in the Southeast real estate and freight markets." On June 20, 2002, FECI announced it had retained Morgan Stanley to assist in a review of strategic alternatives for EPIK. As a result of the review, FECI has decided to exit the telecommunications business and will record a non-cash impairment charge of $238.1 million pre-tax, equivalent to $146.4 million after tax or $4.02 per diluted share, in the third quarter 2002. This accounts for the entire book value of EPIK's long-lived assets. In the fourth quarter of 2002, EPIK will seek to sell those assets that are no longer needed to meet existing customers service obligations while minimizing expenses. FECI presently intends to continue to support EPIK's provision of such service to existing customers while it seeks to exit the telecommunications business. However, there can be no assurance that FECI will continue such support indefinitely. Florida East Coast Industries Inc. EPIK Communications Inc.