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11/6/2002



Rail News: Rail Industry Trends

Florida East Coast dissolves telecommunications subsidiary


Two weeks after folding its trucking arm, Florida East Coast Industries Inc. (FECI) put in motion plans to shutter its telecommunications subsidiary.


On Nov. 6, the company announced it wrote down the entire book value of subsidiary EPIK Communications and recorded a third-quarter, pre-tax impairment charge of $238.1 million.


FECI retained Morgan Stanley in June to assist in a review of strategic alternatives for EPIK.


FECI considered deteriorating conditions in the telecommunications industry, prospects for EPIK's business, the fair value of its EPIK investment and available alternatives (such as selling the subsidiary) before opting to exit the telecommunications business.


During the fourth quarter, EPIK plans to sell non-essential assets to
meet existing customer-service obligations and minimize expenses.


"Going forward, we will continue to focus on our core real estate and railway businesses, both of which have a solid track record of success," said FECI Chairman and Chief Executive Officer Robert Anestis in a prepared statement.


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