Investor Relations

News Releases

Print Page << Back

Cincinnati Bell Inc. Posts Solid Second Quarter Results; Revenue Increase Driven by Strong Contributions from Data Center and Long Distance Operations

08/09/05

CINCINNATI--(BUSINESS WIRE)--Aug. 9, 2005--Cincinnati Bell Inc. (NYSE:CBB) today announced its financial results for the second quarter of 2005 including revenue of $315 million, operating income of $76 million and a net loss of $30 million, or 13 cents per share. Reported results include the impact of a $44 million deferred tax asset write-down related to a change in state tax laws. Excluding this non-cash charge, net income for the quarter was $14 million, or 5 cents per diluted share.

"Cincinnati Bell's solid second quarter financial performance was a direct result of our 'de-lever, defend and grow' strategy," said Jack Cassidy, president and chief executive officer. "We also posted steady improvement in wireless postpaid churn as a result of much higher network quality. This quality, combined with our presence as the premier wireless and wireline carrier in the region, forms the foundation of the unique new rate plans we announced on August 1."

    Second Quarter Highlights

    --  The company reported revenue of $315 million, a 6 percent
        increase over the second quarter of 2004, and a 9 percent
        increase versus the first quarter of 2005, due primarily to
        strong equipment sales related to recent data center
        investments and solid growth in long distance revenue.

    --  EBITDA(1) (earnings before interest, taxes, depreciation and
        amortization) of $124 million represents an increase of 2
        percent versus the second quarter of 2004 after adjusting for
        a $5 million increase in non-cash post-retirement medical
        expenses. Lower long distance costs and operating taxes as
        well as higher contribution from equipment sales and managed
        services revenue contributed to the increase. EBITDA also
        increased 2 percent versus the first quarter of 2005, due
        primarily to higher contribution from equipment sales and
        managed services revenue.

    --  Free cash flow(2) of $42 million increased 13 percent versus
        the second quarter of 2004, due to the timing of interest
        payments related to the company's refinancing plan.

    --  Wireless churn continued to improve, reflecting higher GSM
        network quality. Postpaid churn in the second quarter was 2.2
        percent, compared with 2.6 percent in the first quarter of
        2005 and 2.8 percent in the fourth quarter of 2004.

    --  Cincinnati Bell now has 144,000 "super bundle" subscribers, up
        41 percent from a year ago and representing a 24 percent
        penetration of in-territory households. Bundling success
        resulted in Revenue per Household served of $78, a 3 percent
        increase from a year ago.

    --  The company also reported 145,000 DSL subscribers, a 23
        percent increase versus the second quarter of 2004. As a
        result, DSL penetration of in-territory primary consumer
        access lines was 22 percent at quarter-end, up from 17 percent
        at the same time a year ago.

    --  On August 8, Cincinnati Bell announced the refinancing of its
        16% Notes, which is expected to increase free cash flow by $20
        million to $25 million on an annualized basis.

    --  The company reported net debt(3) of $2.1 billion at
        quarter-end, a 5 percent reduction from the same time a year
        ago. Capital expenditures were $43 million, or 14 percent of
        revenue, for the quarter. Year-to-date, capital expenditures
        were $71 million, or 12 percent of revenue.

"This quarter's results benefited from investments we have made in data centers and in our long distance business," said Brian Ross, chief financial officer. "As a result of these investments and our continued focus on cost structure improvements, we are on track to deliver on our financial goals for the year."

Local Communications Services

Quarterly revenue from the Local segment, which includes the operations of Cincinnati Bell Telephone (CBT), held firm at $190 million, essentially unchanged from a year ago as higher DSL revenue helped offset lower voice revenue. EBITDA of $97 million was up slightly from the prior year after adjusting for a $5 million increase in non-cash post-retirement medical expenses.

Access lines declined 3.4 percent from the same time a year ago as a 65 percent increase in out-of-territory lines partially offset lower in-territory lines. In-territory access lines decreased 4.7 percent versus the second quarter of 2004 due primarily to wireless substitution.

Wireless Services

Cincinnati Bell Wireless (CBW) generated revenue of $60 million compared with $67 million in the second quarter of 2004. Higher data and equipment revenue partially offset lower postpaid voice revenue and a $3 million reduction in roaming revenue related to the merger of AT&T Wireless and Cingular. Segment EBITDA was $19 million compared with $22 million in the second quarter of 2004. A $4 million reduction in roaming expense and a $2 million reduction in handset subsidies partially offset the impact of lower revenue.

Higher network quality continued to benefit postpaid churn, which was 2.2 percent in the second quarter compared with 2.6 percent in the first quarter of 2005. As announced on August 1, CBW has leveraged improved network quality by launching new rate plans that offer unlimited calling to any Cincinnati Bell wireless or wireline number. The company expects to generate positive net postpaid subscriber additions in the fourth quarter of 2005.

For the quarter, CBW reported improved postpaid subscriber performance, as subscribers decreased by 3,000, compared to a decline of 7,000 in the first quarter of 2005. At quarter-end, CBW served 469,000 subscribers, of which 291,000, or 62 percent, were on the GSM network.

Prepaid Average Revenue per User (ARPU) rose to $21 versus $19 in the second quarter of 2004, due primarily to a 60 percent increase in data revenue. Postpaid ARPU was $48 as higher data revenue was offset by lower roaming and voice revenue.

Hardware and Managed Services

Revenue from the Hardware and Managed Services segment, which includes the operations of Cincinnati Bell Technology Solutions, increased to $55 million, up 94 percent versus the second quarter of 2004. The increase was due primarily to strong equipment and managed services revenue related to the company's recent data center investments. Two equipment sales, totaling $23 million, to data center customers, drove the equipment revenue increase. Quarterly EBITDA of $5 million represents a 39 percent increase versus the same quarter a year ago, driven by higher contribution from equipment and managed services revenue.

Other Communications Services

Other Communications Services, which includes long distance and payphone operations, generated $20 million in quarterly revenue, up 3 percent, or $1 million, from a year ago. Long distance revenue increased 14 percent, or $2 million, which more than offset a 42 percent, or $2 million, decline in payphone and other revenue due to the disposal of unprofitable assets. Long distance revenue increased due to the introduction of new business products and the benefits of bundling. EBITDA of $8 million more than doubled versus the prior year quarter as the cost of long distance minutes fell substantially with the installation of a switch and negotiation of lower long distance rates in the second quarter of 2004.

Long distance subscribers increased 24,000, or 4 percent, versus the end of the second quarter of 2004. Cincinnati Bell's market share of CBT lines for which a long distance carrier is selected was 79 percent in the consumer market and 50 percent in the business market, improvements of 6 points and 4 points, respectively, compared to the same time a year ago.

16% Notes Refinancing

As announced on August 8, 2005, Cincinnati Bell has entered into a Note Repurchase Agreement to repurchase all of its outstanding 16% Senior Subordinated Discount Notes due 2009 (the "16% Notes"). The company expects to finance the purchase of the 16% Notes with new borrowings under its senior secured credit facilities. As a result of lower interest expense, this refinancing is expected to increase free cash flow by $20 million to $25 million on an annualized basis. Cincinnati Bell expects to close this refinancing in the third quarter of 2005. Upon closing, the company will have completed the second and final stage of its refinancing plan announced in January 2005.

Cincinnati Bell's obligation to repurchase the 16% Notes is conditioned upon the completion of the new financing. The company expects to pay approximately $448 million, including accrued interest, to repurchase the 16% Notes. This will result in a third quarter pre-tax loss on extinguishment of debt of approximately $92 million, including a non-cash loss of approximately $37 million.

2005 Guidance

Cincinnati Bell has updated its free cash flow guidance to reflect the impact of the refinancing of its 16% Notes. All other guidance remains unchanged:

Category                    Guidance
----------------------------------------------------------------------
Revenue                     Low single-digit percent decline
----------------------------------------------------------------------
EBITDA                      $480 million to $490 million, including
                             approximately $20 million in incremental
                             non-cash expense related to post-
                             retirement medical benefits.
----------------------------------------------------------------------
Capital Expenditures        Approximately 12 percent of revenue
----------------------------------------------------------------------
Free Cash Flow              Approximately $155 million, a $10 million
                             increase from the company's previous
                             guidance of approximately $145 million
----------------------------------------------------------------------

Conference Call/Webcast

Cincinnati Bell will host a conference call today at 10:00 a.m. (EDT) to discuss its second quarter 2005 results. A live webcast of the call will be available via the Investor Relations section of www.cincinnatibell.com. The conference call dial-in number is 877.641.0086. International callers may dial 678.460.1867. A taped replay call will be available one hour after the conclusion of the teleconference until 5:00 p.m. (EDT) on August 23, 2005. For U.S. callers, the replay will be available at 888.284.7564. For international callers, the replay will be available at 678.460.1866. The replay reference number is 201054. An archived version of the webcast will also be available at www.cincinnatibell.com.

About Cincinnati Bell Inc.

Cincinnati Bell Inc. (NYSE:CBB) is parent to one of the nation's most-respected and best-performing local exchange and wireless providers with a legacy of unparalleled customer service excellence. With headquarters in Cincinnati, Ohio, Cincinnati Bell provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. For more information, visit www.cincinnatibell.com.

Use of Non-GAAP Financial Measures

This press release contains information about net debt, free cash flow and earnings before interest, taxes, depreciation and amortization (EBITDA). These are non-GAAP financial measures used by Cincinnati Bell management when evaluating results of operations and cash flow. Management believes these measures also provide users of the financial statements with additional and useful comparisons of current results of operations and cash flows with past and future periods. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. Detailed reconciliations of net debt, free cash flow and EBITDA to comparable GAAP financial measures have been included in the tables distributed with this release and are available in the Investor Relations section of www.cincinnatibell.com.

    (1) EBITDA provides a useful measure of operational performance.
        The company defines EBITDA as GAAP Operating Income plus
        depreciation, amortization, restructuring charges, asset
        impairments and other special items. EBITDA should not be
        considered as an alternative to comparable GAAP measures of
        profitability.

    (2) Free cash flow provides a useful measure of operational
        performance, liquidity and financial health. The company
        defines free cash flow as SFAS 95 cash provided by (used in)
        operating, financing and investing activities, less changes in
        issuance and repayment of long-term debt and credit facilities
        in financing activities and less proceeds from the sale of
        discontinued operations and assets in investing activities.
        Free cash flow should not be considered as an alternative to
        net income (loss), operating income (loss), cash flow from
        operating activities, or the change in cash on the balance
        sheet and may not be comparable with free cash flow as defined
        by other companies.

    (3) Net debt provides a useful measure of liquidity and financial
        health. The company defines net debt as the sum of the face
        amount of short-term and long-term debt and unamortized
        premium and/or discount, offset by cash and cash equivalents.

    Safe Harbor Note

Certain of the statements and predictions contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. In particular, statements, projections or estimates that include or reference the words "believes," "anticipates," "plans," "intends," "expects," "will," or any similar expression fall within the safe harbor for forward-looking statements contained in the Reform Act. Actual results or outcomes may differ materially from those indicated or suggested by any such forward-looking statement for a variety of reasons, including, but not limited to: Cincinnati Bell's ability to maintain its market position in communications services, including wireless, wireline and internet services; general economic trends affecting the purchase or supply of telecommunication services; world and national events that may affect the ability to provide services; changes in the regulatory environment; any rulings, orders or decrees that may be issued by any court or arbitrator; restrictions imposed under various credit facilities and debt instruments; work stoppages caused by labor disputes; adjustments resulting from year-end audit procedures; and Cincinnati Bell's ability to develop and launch new products and services. More information on potential risks and uncertainties is available in recent filings with the Securities and Exchange Commission, including Cincinnati Bell's Form 10-K report, Form 10-Q reports and Form 8-K reports. The forward-looking statements included in this release represent company estimates as of August 9, 2005. Cincinnati Bell anticipates that subsequent events and developments will cause its estimates to change.

Cincinnati Bell Inc.
Consolidated Statements of Income
(Unaudited)

(in millions - except per share amounts)

                          Three Months            Six Months
                         Ended June 30,    %    Ended June 30,    %
                          2005    2004   Change  2005    2004   Change
                         ------- ------- ------ ------- ------- ------

 Revenue                 $315.4  $297.0      6% $604.0  $599.4      1%
 ------------------------

 Costs and Expenses
 ------------------------
   Cost of Services and
    Products              133.7   117.6     14%  242.9   243.3    (0%)
   Selling, General and
    Administrative         57.4    53.6      7%  115.5   111.5      4%
   Depreciation and
    Amortization           48.4    45.6      6%   91.4    91.3      0%
   Restructuring             --      --    n/m      --     0.2    n/m
   Asset Impairments and
    Other Charges
    (Credits)                --    (0.2)   n/m    23.1    (0.1)   n/m
                         ------- -------        ------- -------

     Operating Income      75.9    80.4    (6%)  131.1   153.2   (14%)

 Minority Interest
  Expense (Income)         (0.5)    1.2  (142%)   (4.8)    1.3    n/m
 Interest Expense          49.6    50.5    (2%)  100.1   101.4    (1%)
 Loss on Extinguishment
  of Debt                    --      --    n/m     7.9      --    n/m
 Other Income, Net         (0.7)     --    n/m    (0.2)   (0.1)   100%
                         ------- -------        ------- -------

   Income before Income
    Taxes                  27.5    28.7    (4%)   28.1    50.6   (44%)

 Income Tax Expense        57.3    13.8    n/m    61.1    24.8    146%
                         ------- -------        ------- -------

    Net Income (Loss)     (29.8)   14.9    n/m   (33.0)   25.8    n/m

 Preferred Stock
  Dividends                 2.6     2.6      0%    5.2     5.2      0%
                         ------- -------        ------- -------

 Net Income (Loss)
  Applicable to Common
  Shareowners            $(32.4)  $12.3    n/m  $(38.2)  $20.6    n/m
                         ======= =======        ======= =======

 Basic and Diluted
  Earnings (Loss) Per
  Common Share           $(0.13)  $0.05         $(0.16)  $0.08
 ----------------------  ======= =======        ======= =======

 Weighted Average Common
  Shares Outstanding
 -----------------------
  - Basic                 245.8   245.0          245.7   245.0
  - Diluted               245.8   250.4          245.7   252.0



Cincinnati Bell Inc.
Segment Information
(Unaudited)


 (dollars in millions)    Three Months            Six Months
                         Ended June 30,    %    Ended June 30,    %
                           2005    2004  Change   2005    2004  Change
                          ------  ------ ------  ------  ------ ------
  Local
 Revenue
    Voice                $126.4  $130.8    (3%) $254.4  $261.4    (3%)
    Data                   54.2    50.4      8%  107.3   100.7      7%
    Other services          9.0     8.4      7%   18.0    18.4    (2%)
                          ------  ------         ------  ------
    Total revenue         189.6   189.6      0%  379.7   380.5      0%

 Operating Costs and
  Expenses:
    Cost of services and
     products              59.0    55.8      6%  116.7   112.1      4%
    Selling, general and
     administrative        33.7    33.3      1%   69.0    66.8      3%
    Depreciation           26.8    29.8   (10%)   53.9    59.7   (10%)
    Restructuring            --      --     --      --     0.2    n/m
                          ------  ------         ------  ------
    Total operating costs
     and expenses         119.5   118.9      1%  239.6   238.8      0%

                         ------- -------        ------- -------
 Operating income        $ 70.1  $ 70.7    (1%) $140.1  $141.7    (1%)
                          ======  ======         ======  ======

  Wireless
 Revenue
    Service              $ 55.3  $ 62.9   (12%) $110.9  $123.2   (10%)
    Equipment               5.0     4.2     19%   10.6     8.0     33%
                          ------  ------         ------  ------
    Total revenue          60.3    67.1   (10%)  121.5   131.2    (7%)

 Operating Costs and
  Expenses:
    Cost of services and
     products              28.0    32.0   (13%)   57.3    65.4   (12%)
    Selling, general and
     administrative        13.6    13.3      2%   27.0    25.5      6%
    Depreciation           20.2    14.7     37%   35.2    29.2     21%
    Amortization             --     0.5    n/m      --     1.0    n/m
    Asset impairments and
     other charges           --      --     --    23.7     2.4    n/m
                          ------  ------         ------  ------
    Total operating costs
     and expenses          61.8    60.5      2%  143.2   123.5     16%

                         ------- -------        ------- -------
 Operating income (loss) $ (1.5) $  6.6  (123%) $(21.7) $  7.7    n/m
                          ======  ======         ======  ======

  Hardware & Mgd.
   Services
 Revenue
    Hardware             $ 38.1  $ 14.7    159% $ 50.4  $ 32.9     53%
    Managed services       16.4    13.4     22%   31.2    29.6      5%
                          ------  ------         ------  ------
    Total revenue          54.5    28.1     94%   81.6    62.5     31%

 Operating Costs and
  Expenses:
    Cost of services and
     products              45.1    21.3    112%   65.4    48.2     36%
    Selling, general and
     administrative         4.5     3.3     36%    8.6     8.7    (1%)
    Depreciation            0.6     0.2    200%    1.0     0.4    150%
    Asset impairments and
     other charges           --      --     --    (0.1)   (1.1)  (91%)
                          ------  ------         ------  ------
    Total operating costs
     and expenses          50.2    24.8    102%   74.9    56.2     33%

                         ------- -------        ------- -------
 Operating income        $  4.3  $  3.3     30% $  6.7  $  6.3      6%
                          ======  ======         ======  ======

  Other
 Revenue                 $ 19.6  $ 19.0      3% $ 38.7  $ 37.8      2%

 Operating Costs and
  Expenses:
    Cost of services and
     products               8.3    12.9   (36%)   17.1    26.0   (34%)
    Selling, general and
     administrative         3.7     3.2     16%    7.6     6.1     25%
    Depreciation            0.5     0.3     67%    0.9     0.7     29%
                          ------  ------         ------  ------
    Total costs and
     expenses              12.5    16.4   (24%)   25.6    32.8   (22%)

                         ------- -------        ------- -------
 Operating income        $  7.1  $  2.6    173% $ 13.1  $  5.0    162%
                          ======  ======         ======  ======



Cincinnati Bell Inc.
Segment Information
(Unaudited)


 (dollars in millions)    Three Months            Six Months
                         Ended June 30,    %    Ended June 30,    %
                           2005    2004  Change  2005    2004   Change
                          ------  ------ ------  ------  ------ ------
 Revenue
 ------------------------
   Local                 $189.6  $189.6      0% $379.7  $380.5    (0%)
   Wireless                60.3    67.1   (10%)  121.5   131.2    (7%)
   Hardware & Mgd.
    Services               54.5    28.1     94%   81.6    62.5     31%
   Other                   19.6    19.0      3%   38.7    37.8      2%
   Broadband                 --      --     --      --      --     --
   Corporate and
    eliminations           (8.6)   (6.8)    26%  (17.5)  (12.6)    39%
                          ------  ------         ------  ------
     Total Revenue       $315.4  $297.0      6% $604.0  $599.4      1%
                          ======  ======         ======  ======

 Cost of Services and
  Products
 ------------------------
   Local                 $ 59.0  $ 55.8      6% $116.7  $112.1      4%
   Wireless                28.0    32.0   (13%)   57.3    65.4   (12%)
   Hardware & Mgd.
    Services               45.1    21.3    112%   65.4    48.2     36%
   Other                    8.3    12.9   (36%)   17.1    26.0   (34%)
   Broadband                 --      --     --      --      --     --
   Corporate and
    eliminations           (6.7)   (4.4)    52%  (13.6)   (8.4)    62%
                          ------  ------         ------  ------
     Total Cost of
      Services and
      Products           $133.7  $117.6     14% $242.9  $243.3    (0%)
                          ======  ======         ======  ======

 Selling, General &
  Administrative
 ------------------------
   Local                 $ 33.7  $ 33.3      1% $ 69.0  $ 66.8      3%
   Wireless                13.6    13.3      2%   27.0    25.5      6%
   Hardware & Mgd.
    Services                4.5     3.3     36%    8.6     8.7    (1%)
   Other                    3.7     3.2     16%    7.6     6.1     25%
   Broadband               (1.4)   (0.1)   n/m    (2.1)     --    n/m
   Corporate and
    eliminations            3.3     0.6    n/m     5.4     4.4     23%
                          ------  ------         ------  ------
     Total Selling,
      General &
      Administrative     $ 57.4  $ 53.6      7% $115.5  $111.5      4%
                          ======  ======         ======  ======

 Depreciation and
  Amortization
 ------------------------
   Local                 $ 26.8  $ 29.8   (10%) $ 53.9  $ 59.7   (10%)
   Wireless                20.2    15.2     33%   35.2    30.2     17%
   Hardware & Mgd.
    Services                0.6     0.2    200%    1.0     0.4    150%
   Other                    0.5     0.3     67%    0.9     0.7     29%
   Broadband                 --      --     --      --      --     --
   Corporate and
    eliminations            0.3     0.1    200%    0.4     0.3     33%
                          ------  ------         ------  ------
     Total Depreciation
      and Amortization   $ 48.4  $ 45.6      6% $ 91.4  $ 91.3      0%
                          ======  ======         ======  ======

 Restructuring
 ------------------------
   Local                 $    -  $    -     --  $    -  $  0.2    n/m
   Wireless                   -       -     --       -       -     --
   Hardware & Mgd.
    Services                  -       -     --       -       -     --
   Other                      -       -     --       -       -     --
   Broadband                  -       -     --       -       -     --
   Corporate and
    eliminations             --      --     --      --      --     --
                          ------  ------         ------  ------
     Total Restructuring $    -  $    -     --  $    -  $  0.2    n/m
                          ======  ======         ======  ======

 Asset Impairments and
  Other Charges (Credits)
 ------------------------
   Local                 $    -  $    -     --  $    -  $    -     --
   Wireless                  --      --     --    23.7     2.4    n/m
   Hardware & Mgd.
    Services                 --      --     --    (0.1)   (1.1)  (91%)
   Other                     --      --     --      --      --     --
   Broadband                 --    (0.2)   n/m    (0.5)   (1.4)  (64%)
   Corporate and
    eliminations             --      --     --      --      --     --
                          ------  ------         ------  ------
     Total Asset
      Impairments and
      Other Charges
      (Credits)          $    -  $ (0.2)   n/m  $ 23.1  $ (0.1)   n/m
                          ======  ======         ======  ======

 Operating Income
 ------------------------
   Local                 $ 70.1  $ 70.7    (1%) $140.1  $141.7    (1%)
   Wireless                (1.5)    6.6  (123%)  (21.7)    7.7    n/m
   Hardware & Mgd.
    Services                4.3     3.3     30%    6.7     6.3      6%
   Other                    7.1     2.6    173%   13.1     5.0    162%
   Broadband                1.4     0.3    n/m     2.6     1.4     86%
   Corporate and
    eliminations           (5.5)   (3.1)    77%   (9.7)   (8.9)     9%
                          ------  ------         ------  ------
     Total Operating
      Income             $ 75.9  $ 80.4    (6%) $131.1  $153.2   (14%)
                          ======  ======         ======  ======



Cincinnati Bell Inc.
Consolidated Balance Sheets
(Unaudited)

 (in millions - except segment metric information)

                                               June 30,   December 31,
                                                2005         2004
                                             ------------ ------------

 Assets
 -------------------------------------------

 Cash and Cash Equivalents                         $22.7        $24.9
 Receivables - Net                                 145.5        139.0
 Materials and Supplies                             25.7         22.7
 Other Current Assets                               76.4         66.6
 Property, Plant and Equipment - Net               821.5        857.7
 Goodwill                                           40.9         40.9
 Other Intangible Assets - Net                      35.8         35.8
 Noncurrent Deferred Tax Assets                    594.8        656.7
 Other Noncurrent Assets                           128.1        114.4
                                             ------------ ------------
    Total Assets                                $1,891.4     $1,958.7
                                             ============ ============


 Liabilities and Shareowners' Deficit
 -------------------------------------------

 Current Portion of Long-Term Debt                 $24.2        $30.1
 Accounts Payable                                   61.4         58.9
 Current Portion of Unearned Revenue and
  Customer Deposits                                 39.8         42.5
 Accrued Taxes                                      33.4         45.4
 Other Current Liabilities                         129.7        120.5
 Long-Term Debt, Less Current Portion            2,076.0      2,111.1
 Unearned Revenue, Less Current Portion              8.1          8.9
 Other Noncurrent Liabilities                      143.7        126.6
 Minority Interest                                  34.4         39.2
 Shareowners' Deficit                             (659.3)      (624.5)
                                             ------------ ------------
    Total Liabilities and Shareowners'
     Deficit                                    $1,891.4     $1,958.7
                                             ============ ============


 Other Data:
 -------------------------------------------
 Common Shares Outstanding at Balance Sheet
  Date                                             245.9        245.4
 Net Debt                                       $2,068.2     $2,112.4
 Credit Facility Availability                     $211.5       $377.8

 Segment Metric Information (in thousands):
 -------------------------------------------
 Local Access Lines                                946.5        970.1
 Complete Connections Subscribers                  337.8        336.4
 DSL Subscribers                                   144.6        130.8
 Custom Connections Subscribers                    144.0        123.4

 GSM:
   Postpaid Wireless Subscribers                   175.9        119.3
   Prepaid Wireless Subscribers                    115.2         87.5
 TDMA:
   Postpaid Wireless Subscribers                   120.3        187.0
   Prepaid Wireless Subscribers                     57.8         87.2
                                             ------------ ------------
 Total Wireless Subscribers                        469.2        481.0
                                             ============ ============

   Consumer Long Distance Lines                    420.8        423.5
   Business Long Distance Lines                    145.5        138.1
                                             ------------ ------------
 Total Long Distance Lines                         566.3        561.6
                                             ============ ============



Cincinnati Bell Telephone
Access Line Detail
(Unaudited)

 (in thousands)
                         ----------------------------
                                    2003
                         ----------------------------
                            1Q      2Q     3Q    4Q
                         ----------------------------
 Access Lines
 -----------------------

 In-Territory:
          Primary
           Residential     624.6   620.3 617.7 613.9
          Secondary
           Residential      64.3    62.2  60.0  58.1
          Business/Other   313.2   310.2 308.0 304.6
                         ----------------------------
 Total In-Territory      1,002.1   992.7 985.7 976.6

 Out-of-Territory:
          Primary
           Residential       2.3     2.7   3.1   3.4
          Secondary
           Residential       0.1     0.1   0.2   0.2
          Business/Other     4.7     5.0   5.2   5.6
                         ----------------------------
 Total Out-of-Territory      7.1     7.8   8.5   9.2

                         ----------------------------
 Total Access Lines      1,009.2 1,000.5 994.2 985.8
                         ============================


Cincinnati Bell Telephone
Access Line Detail
(Unaudited)

 (in thousands)
                         ------------------------ ------------
                                  2004               2005
                         ------------------------ ------------
                           1Q    2Q    3Q    4Q     1Q    2Q
                         ------------------------ ------------
 Access Lines
 -----------------------

 In-Territory:
          Primary
           Residential   611.8 606.3 601.5 592.7  584.2 573.0
          Secondary
           Residential    56.0  54.0  52.2  50.5   48.9  47.1
          Business/Other 301.5 299.6 298.4 296.6  296.1 294.3
                         ------------------------ ------------
 Total In-Territory      969.3 959.9 952.1 939.8  929.2 914.4

 Out-of-Territory:
          Primary
           Residential     4.6  10.9  15.8  18.4   17.7  18.4
          Secondary
           Residential     0.2   0.6   0.7   0.8    0.8   0.9
          Business/Other   6.8   8.0   9.9  11.1   12.2  12.8
                         ------------------------ ------------
 Total Out-of-Territory   11.6  19.5  26.4  30.3   30.7  32.1

                         ------------------------ ------------
 Total Access Lines      980.9 979.4 978.5 970.1  959.9 946.5
                         ======================== ============



Cincinnati Bell Inc.
Net Debt Calculation
(Unaudited)

                                                            Change
                                 June 30,   December 31, -------------
 (dollars in millions)             2005         2004         $     %
                                 ----------   ----------  ------------

 Credit Facilities              $     32.0   $    438.8  $(406.8)(93%)
 Cincinnati Bell Telephone
  notes                              250.0        250.0        -    -
 7 1/4% Senior Notes due 2013        500.0        500.0        -    -
 16% Senior Subordinated
  Discount Notes due 2009            382.7        375.2      7.5    2%
 7 1/4% Senior Notes due 2023         50.0         50.0        -    -
 8 3/8% Senior Subordinated
  Notes due 2014                     646.3        543.9    102.4   19%
 7% Senior Notes due 2015            252.9            -    252.9  n/m
 Capital leases                       12.9         15.6     (2.7)(17%)
 Other short-term debt                 1.0          1.6     (0.6)(38%)
 Other long-term debt                  0.4            -      0.4  n/m
 Unamortized discount, net of
  unamortized premiums               (28.0)       (33.9)     5.9 (17%)
                                 ----------   ----------  -------

    Total Debt                     2,100.2      2,141.2    (41.0) (2%)

 Add: Interest Rate Swap
  Asset on 8 3/8% Notes due
  2014 and 7% Notes due 2015          (9.3)        (3.9)    (5.4) 138%
 Less: Cash and Cash
  Equivalents                        (22.7)       (24.9)     2.2  (9%)
                                 ----------   ----------  -------

    Net Debt (as defined by
     the company)               $  2,068.2   $  2,112.4  $ (44.2) (2%)
                                 ==========   ==========  =======



Cincinnati Bell Inc.
Consolidated Statements of Cash Flows
(Unaudited)

 (dollars in millions)                   Three Months    Six Months
                                        Ended June 30, Ended June 30,
                                         2005   2004    2005    2004
                                        ------- ------ ------- -------

 Cash provided by operating activities   $86.8  $74.6  $151.2  $144.4
                                        ------- ------ ------- -------

   Capital expenditures                  (43.0) (38.1)  (71.0)  (61.3)
   Proceeds from sale of assets              -   (1.3)      -     1.9
   Other                                     -    1.5       -     1.5
                                        ------- ------ ------- -------
 Cash used in investing activities       (43.0) (37.9)  (71.0)  (57.9)
                                        ------- ------ ------- -------

   Issuance of long-term debt              0.1      -   352.1       -
   Increase (decrease) in new credit
    facility, net                        (43.0)     -    32.0       -
   Repayment of previous credit
    facility and other debt               (1.2) (36.2) (442.0)  (88.1)
   Debt issuance costs and consent fees      -      -   (21.0)      -
   Issuance of common shares - exercise
    of stock options                       0.8    0.3     1.7     1.8
   Preferred stock dividends paid         (2.6)  (2.6)   (5.2)   (5.2)
   Other                                     -    1.3       -     1.3
                                        ------- ------ ------- -------
 Cash used in financing activities       (45.9) (37.2)  (82.4)  (90.2)
                                        ------- ------ ------- -------

 Net decrease in cash and cash
  equivalents                             (2.1)  (0.5)   (2.2)   (3.7)
 Cash and cash equivalents at beginning
  of period                               24.8   22.8    24.9    26.0
                                        ------- ------ ------- -------
 Cash and cash equivalents at end of
  period                                 $22.7  $22.3   $22.7   $22.3
                                        ======= ====== ======= =======


 Reconciliation of GAAP Cash Flow to
  Free Cash Flow as defined by the
  company
 Net decrease in cash and cash
  equivalents                            $(2.1) $(0.5)  $(2.2)  $(3.7)
 Less adjustments:
   Issuance of debt (financing
    activities)                            0.1      -   384.1       -
   Repayment of debt (financing
    activities)                          (44.2) (36.2) (442.0)  (88.1)
   Proceeds from sale of assets
    (purchase price adjustment)
    (financing activities)                   -   (1.3)      -     1.9
                                        ------- ------ ------- -------

    Free cash flow (as defined by the
     company)                            $42.0  $37.0   $55.7   $82.5
                                        ======= ====== ======= =======


 Cash Expenditures for Restructuring     $(0.4) $(0.7)  $(0.9)  $(2.2)

 Income Tax Refunds / (Payments)         $(1.6) $(1.7)  $(1.1)  $(1.6)



Reconciliation of EBITDA to Operating Income (GAAP)

                                        Three Months     Six Months
                                       Ended June 30,  Ended June 30,
                                         2005    2004    2005    2004
                                        ------- ------  ------- ------

Operating Income (GAAP)                $ 75.9  $ 80.4  $131.1  $153.2

Add:
      Depreciation and Amortization      48.4    45.6    91.4    91.3
      Restructuring                         -       -       -     0.2
      Asset Impairments & Other             -    (0.2)   23.1    (0.1)
                                        ------- ------  ------- ------

                                         48.4    45.4   114.5    91.4
                                        ------- ------  ------- ------

EBITDA (Non-GAAP)                      $124.3  $125.8  $245.6  $244.6
                                        ======= ======  ======= ======



Cincinnati Bell Inc.
Normalized Statements of Operations - Reconciliation to Reported
 Results
(Unaudited)
 (in millions - except per               Special
  share amounts)                          Items
                                        ----------
                                                     Three Months
                           Three Months                  Ended
                              Ended                  June 30, 2005
                            June 30,    Income Tax       Before
                            2005 (GAAP)   Expense     Special Items
                           ----------------------------------------
                                           (b)
 Revenue                     $   315.4    $     -         $  315.4
 --------------------------

 Costs and Expenses
 --------------------------
   Cost of Services and
    Products                     133.7         --            133.7
   Selling, General and
    Administrative                57.4         --             57.4
   Depreciation and
    Amortization                  48.4         --             48.4
                              ---------    -------         --------

     Operating Income             75.9         --             75.9

 Minority Interest Expense
  (Income)                        (0.5)                      (0.5)
 Interest Expense                 49.6         --             49.6
 Other Income, Net                (0.7)        --             (0.7)
                              ---------    -------         --------

   Income before Income
    Taxes                         27.5         --             27.5

 Income Tax Expense               57.3      (44.2)            13.1
                              ---------    -------         --------

    Net Income (Loss)            (29.8)      44.2             14.4

 Preferred Stock Dividends         2.6          -              2.6
                              ---------    -------         --------

 Net Income (Loss)
  Applicable to Common
  Shareowners                $   (32.4)   $  44.2         $   11.8
                              =========    =======         ========


 Weighted Average Diluted
  Shares                         245.8      251.6(a)         251.6(a)

 Diluted Earnings (Loss)
  Per Common Share           $   (0.13)   $  0.18         $   0.05
                              =========    =======         ========

(a) Shares have been adjusted for dilutive common stock equivalents
    that result after excluding the income tax adjustment from
    earnings.

Normalized results have been adjusted for the following:
(b) Write-down of certain state deferred tax assets due to change in
    state tax laws.



Cincinnati Bell Inc.
Normalized Statements of Operations - Reconciliation to Reported
 Results
(Unaudited)

 (in millions - except per share amounts)

                                 Special Items
                       ----------------------------------
                                                              Six
                Six                                          Months
                Months                                       Ended
                Ended                             Asset      June 30,
                June                             Impair-     2005
                 30,    Income       Debt        ments &     Before
                2005      Tax      Extinguish-    Other      Special
               (GAAP)   Expense      ment        Charges     Items
               -----------------------------------------------------
                         (b)          (c)          (d)
 Revenue       $604.0  $     -    $         -    $     -      604.0
 --------------

 Costs and
  Expenses
 --------------
   Cost of
    Services
    and
    Products    242.9       --             --         --      242.9
   Selling,
    General and
    Administra-
    tive        115.5       --             --         --      115.5
   Depreciation
    and
    Amortiza-
    tion         91.4       --             --         --       91.4
   Asset
    Impairments
    and Other
    Charges      23.1       --             --      (23.1)        --
                ------  -------    -----------    -------    -------

    Operating
     Income     131.1       --             --       23.1      154.2

 Minority
  Interest
  Expense
  (Income)       (4.8)      --             --        4.6       (0.2)
 Interest
  Expense       100.1       --             --         --      100.1
 Loss on
  Extinquish-
  ment of Debt    7.9       --           (7.9)        --         --
 Other Income,
  Net            (0.2)      --             --         --       (0.2)
                ------  -------    -----------    -------    -------

   Income
    before
    Income
    Taxes        28.1       --            7.9       18.5       54.5

 Income Tax
  Expense        61.1    (47.6)           3.2        7.4       24.1
                ------  -------    -----------    -------    -------

    Net Income
     (Loss)     (33.0)    47.6            4.7       11.1       30.4

 Preferred
  Stock
  Dividends       5.2       --             --         --        5.2
                ------  -------    -----------    -------    -------

 Net Income
  (Loss)
  Applicable to
  Common
  Shareowners  $(38.2) $  47.6    $       4.7    $  11.1    $  25.2
                ======  =======    ===========    =======    =======


 Weighted
  Average
  Diluted
  Shares        245.7    251.1(a)       251.1(a)   251.1(a)   251.1(a)

 Diluted
  Earnings
  (Loss) Per
  Common Share $(0.16) $  0.19    $      0.02    $  0.04    $  0.10
                ======  =======    ===========    =======    =======

(a) Shares have been adjusted for dilutive common stock equivalents
    that result after excluding the adjustments from earnings.

Normalized results have been adjusted for the following:
(b) Write-down of certain state deferred tax assets due to change in
    state tax rates and state tax laws;
(c) Non-cash loss of $7.9 million due to the extinguishment of the
    company's prior credit facility; and
(d) Asset impairments and other charges of $23.1 million,
    substantially all of which related to a write-down of the
    company's TDMA network assets.

    CONTACT: Cincinnati Bell Inc.
             Michael Vanderwoude, 513-397-7685
             mike.vanderwoude@cinbell.com

    SOURCE: Cincinnati Bell Inc.