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Cincinnati Bell Inc. Reports Third Quarter Earnings Growth

11/02/06

CINCINNATI--(BUSINESS WIRE)--Nov. 2, 2006--Cincinnati Bell Inc. (NYSE:CBB) today reported improved earnings for the third quarter driven by strong wireless and data growth and lower depreciation and interest expense. Quarterly revenue was $320 million with operating income of $84 million and net income of $25 million, or 9 cents per share. Net income excluding special items(1) in the quarter was $24 million, or 9 cents per share, an increase of $13 million, or 6 cents per share from the third quarter of 2005 also excluding special items. Special items in the current quarter included a charge of $3 million related to the outsourcing of supply chain management functions and a gain on the sale of broadband fiber assets of $5 million.

"Cincinnati Bell's third quarter performance clearly demonstrates the effectiveness and consistent execution of our strategy," said Jack Cassidy, president and chief executive officer. "We continue to operate the best wireless network in Cincinnati and Dayton and generate subscriber growth in an extremely competitive market as evidenced by strong postpaid and record breaking DSL net activations in the quarter."

    Third Quarter Highlights

    --  Quarterly revenue increased to $320 million, up 7 percent or
        $20 million from a year ago as a result of growth in hardware
        and managed services, wireless, and data services.

    --  Net DSL activations totaled 11,000 in the quarter, an increase
        of 25 percent from a year ago and an all-time record. As a
        result, the DSL subscriber base reached 188,000, or 21 percent
        of total access lines. DSL penetration of in-territory
        consumer primary access lines was 31 percent, up 7 percentage
        points from a year ago, representing 163,000 subscribers.

    --  Net postpaid wireless activations in the quarter totaled
        11,000, a significant improvement from 4,000 net activations
        reported in the third quarter of 2005 and approximately even
        with activations in the second quarter of 2006. Postpaid
        average revenue per user (ARPU) was $47, a slight increase
        from a year ago. In the quarter, an independent third party
        reaffirmed Cincinnati Bell's claim to the best wireless
        network in Cincinnati and Dayton. This superior network
        quality contributed to postpaid churn of 1.7 percent, a 23
        percent improvement from the third quarter of 2005.

    --  Penetration of the company's "Super Bundle" of services
        reached 30 percent of Cincinnati Bell households in its
        traditional operating area, representing 157,000 customers, up
        16,000 from a year ago. This continued bundling success drove
        revenue per household to an all-time high of $84, up 8 percent
        from the third quarter of 2005.

    --  Free cash flow(2) was $15 million in the quarter, with which
        the company repaid debt. Net debt(3) totaled $2.1 billion at
        the end of the quarter. Capital expenditures during the
        quarter were $35 million, or 11 percent of revenue.

    Financial and Operations Overview

"Our third quarter performance is indicative of progress in all areas of our business," said Brian Ross, chief financial officer of Cincinnati Bell. "We continue to offset the impact of access line loss with growth in wireless, DSL and managed services. This quarter, DSL net additions were at record levels, wireless service margins improved, and the hardware and managed services segment generated its highest EBITDA ever."

Cincinnati Bell recorded quarterly revenue of $320 million, an increase of 7 percent from the third quarter of 2005. Year-to-date revenue totaled $942 million, an increase of 4 percent from 2005.

In the current quarter, adjusted EBITDA(4) (earnings before interest, taxes, depreciation and amortization) was $118 million, up 3 percent from a year ago. Year-to-date adjusted EBITDA of $346 million represented a decline of 4 percent from the prior year period. Current quarter results include a gain of $3.6 million in the Broadband segment related to the sale of a bankruptcy claim receivable.

Local Segment

Quarterly total access line performance improved from a year ago as the rate of decline slowed from 4.2 percent to 4.0 percent. Compared with the second quarter of 2006, access line decline was up slightly primarily due to higher levels of involuntary churn. Continued growth in expansion markets adjacent to Cincinnati Bell's traditional service area benefited total access line performance and partially offset the impact of in-territory line loss. At the end of the quarter, the company had 47,000 out-of-territory access lines, up 34 percent from the prior year.

The Local segment produced quarterly revenue of $187 million, equal to the third quarter of 2005 as an 11 percent increase in data revenue offset lower voice revenue. Adjusted EBITDA in the quarter of $92 million decreased by $3 million compared to a year ago as a result of increased pension and post-retirement medical expenses. Year-to-date adjusted EBITDA of $283 million was down 2 percent from the prior year period.

Wireless Services

Cincinnati Bell Wireless maintained strong subscriber growth in the quarter as postpaid net activations of 11,000 represented an increase of 7,000 from a year ago. Postpaid churn of 1.7 percent was a significant improvement from 2.2 percent in the third quarter of 2005. ARPU of $47.25 was a slight increase from a year ago. Compared with the second quarter of 2006, postpaid net activations, churn and ARPU declined slightly reflecting the impact of traditional seasonal factors.

The Wireless segment generated quarterly revenue of $65 million, up 12 percent from the third quarter of 2005 and included a $7 million increase in postpaid service revenue. Quarterly adjusted EBITDA was $14 million, an increase of $5 million from a year ago. Year-to-date adjusted EBITDA was $38 million compared with $46 million in the prior year period.

In the quarter, Cincinnati Bell acquired 20 megahertz of advanced wireless spectrum in the company's Cincinnati and Dayton operating area. This spectrum will enable Cincinnati Bell to continue to expand the wireless business through new data services. After the initial build next year, it will also allow the company to grow by providing increased capacity at historical capital levels.

In addition, outside of its traditional markets Cincinnati Bell acquired spectrum in areas including Indianapolis. The company is currently evaluating the best use of this spectrum, which adjoins its traditional operating area.

Hardware and Managed Services

The Hardware and Managed Services segment produced quarterly revenue of $57 million, a 32 percent increase from a year ago driven by an increase in equipment sales and data center and related managed service activity. This growth produced record quarterly adjusted EBITDA of $6 million, up 74 percent from the third quarter of 2005. The increase was fueled by equipment sales and data center growth. Year-to-date adjusted EBITDA was $14 million, an increase of 27 percent from the prior year period on the strength of increased revenue and higher data center and managed services margins.

This growth is the result of Cincinnati Bell's smart build data center strategy, whereby the company has made significant investments to serve its enterprise customers. Cincinnati Bell continues to see growth opportunities in the Hardware and Managed Services segment at attractive returns and will continue to invest capital in data center services.

Other Communications Services

The Other Communications Services segment, which includes long distance, security monitoring and payphone operations, generated revenue of $20 million, equal to the third quarter of 2005. Adjusted EBITDA of $7 million for the quarter and $22 million year to date, were both approximately equal to the prior year period.

2006 Guidance

In the quarter, Cincinnati Bell participated in the Advanced Wireless Spectrum auction and acquired $37 million of spectrum located primarily in its Cincinnati and Dayton operating territory as well as in the Indianapolis market. The company paid an initial deposit of $7 million in the third quarter and the remaining $30 million in October. As a result of this activity, guidance for 2006 free cash flow has been revised. There are no changes to 2006 revenue, adjusted EBITDA or capital expenditure guidance.

            Category                         2006 Guidance
--------------------------------- ------------------------------------
Revenue                               Approx. flat at $1.2 billion
--------------------------------- ------------------------------------
Adjusted EBITDA                           Approx. $460 million
--------------------------------- ------------------------------------
Capital Expenditures                     Approx. 12% of revenue
--------------------------------- ------------------------------------
Free Cash Flow                          Approx. $125 million(a)
--------------------------------- ------------------------------------

(a) Excludes acquisitions totaling $87 million, which includes the purchase of the 20% minority stake of Cincinnati Bell Wireless previously owned by Cingular.

Conference Call/Webcast

Cincinnati Bell will host a conference call today at 10:00 a.m. (ET) to discuss its results for the third quarter of 2006. 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 866.278.7926. International callers may dial 904.596.2360. A taped replay call will be available one hour after the conclusion of the teleconference until 5:00 p.m. (ET) on November 16, 2006. For U.S. callers, the replay will be available at 888.284.7564. For international callers, the replay will be available at 904.596.3174. The replay reference number is 192470. An archived version of the webcast will also be available at www.cincinnatibell.com.

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; 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 November 2, 2006. Cincinnati Bell anticipates that subsequent events and developments will cause its estimates to change.

Use of Non-GAAP Financial Measures

This press release contains information about net income excluding special items, free cash flow, net debt and adjusted earnings before interest, taxes, depreciation and amortization (adjusted 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 income excluding special items, free cash flow, net debt and adjusted 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)Net income excluding special items provides a useful measure of operating performance. The amounts of the special items are detailed and reconciled to GAAP net income in the accompanying financial statements and in the Investor Relations section of the company's Web site, www.cincinnatibell.com.

(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, adjusted for the issuance and repayment of debt and for the proceeds from the sale or the use of funds from the purchase of business operations. 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.

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

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.

Cincinnati Bell Inc.
Consolidated Statements of Income
(Unaudited)

   (dollars in millions, except per share amounts)

                    Three Months                Nine Months
                 Ended September 30,   %    Ended September 30,   %
                   2006      2005    Change   2006      2005    Change
                 --------- --------- ------ --------- --------- ------

 Revenue            $320.1    $300.3   7%      $941.7    $904.3   4%

 Costs and
  expenses
  Cost of
   services and
   products          142.9     130.6   9%       416.5     373.5  12%
  Selling,
   general and
   admin-
   istrative          59.5      55.8   7%       179.6     171.3   5%
  Depreciation
   and
   amortization       35.6      41.8 (15%)      105.6     133.2 (21%)
  Shareholder
   claim
   settlement            -         -  n/m         6.3         -  n/m
  Gain on sale
   of broadband
   assets            (4.7)         -  n/m       (7.6)         -  n/m
  Restructuring
   charges             3.3         -  n/m         3.5         -  n/m
  Asset
   impairments
   and other
   charges               -         -  n/m           -      23.1  n/m
                 --------- ---------        --------- ---------

   Operating
    income            83.5      72.1  16%       237.8     203.2  17%

 Minority
  interest
  expense
  (income)           (0.2)     (1.0) (80%)        0.1     (5.8) (102%)
 Interest
  expense             41.4      47.0 (12%)      121.3     147.1 (18%)
 Loss on
  extinguishment
  of debt              0.1      91.9 (100%)       0.1      99.8 (100%)
 Other income,
  net                (0.2)     (1.3) (85%)      (0.5)     (1.5) (67%)
                 --------- ---------        --------- ---------

 Income (loss)
  before income
  taxes               42.4    (64.5)  n/m       116.8    (36.4)  n/m
 Income tax
  expense
  (benefit)           17.3    (20.4)  n/m        53.2      40.7  31%
                 --------- ---------        --------- ---------

 Net income
  (loss)              25.1    (44.1)  n/m        63.6    (77.1)  n/m

 Preferred stock
  dividends            2.6       2.6   0%         7.8       7.8   0%
                 --------- ---------        --------- ---------

 Net income
  (loss)
  applicable to
  common
  shareowners        $22.5   $(46.7)  n/m       $55.8   $(84.9)  n/m
                 ========= =========        ========= =========


 Basic earnings
  (loss) per
  common share       $0.09   $(0.19)            $0.23   $(0.35)
 --------------- ========= =========        ========= =========

 Diluted
  earnings
  (loss) per
  common share       $0.09   $(0.19)            $0.22   $(0.35)
 --------------- ========= =========        ========= =========

 Weighted
  average common
  shares
  outstanding
  (millions)
 ---------------
  - Basic            247.1     246.1            246.8     245.8
  - Diluted          254.4     246.1            252.7     245.8
Cincinnati Bell Inc.
Segment Information
(Unaudited)

   (dollars in millions)

                    Three Months                Nine Months
                 Ended September 30,   %    Ended September 30,   %
                   2006      2005    Change   2006      2005    Change
                 --------- --------- ------ --------- --------- ------
  Local
 Revenue
  Voice             $117.5    $123.6  (5%)     $357.3    $377.9  (5%)
  Data                60.7      54.9  11%       176.1     162.3   9%
  Other                8.4       8.9  (6%)       27.0      26.9   0%
                 --------- ---------        --------- ---------

 Total revenue       186.6     187.4  (0%)      560.4     567.1  (1%)

 Operating costs
  and expenses:
  Cost of
   services and
   products           59.5      58.4   2%       175.7     175.2   0%
  Selling,
   general and
   adminis-
   trative            35.4      34.0   4%       101.9     103.0  (1%)
  Depreciation        26.6      27.1  (2%)       77.6      81.0  (4%)
  Restructuring
   charges             3.0         -  n/m         3.0         -  n/m
                 --------- ---------        --------- ---------

  Total
   operating
   costs and
   expenses          124.5     119.5   4%       358.2     359.2  (0%)
                 --------- ---------        --------- ---------

 Operating
  income             $62.1     $67.9  (9%)     $202.2    $207.9  (3%)
                 ========= =========        ========= =========

  Wireless
 Revenue
  Service            $59.3     $52.3  13%      $174.5    $163.3   7%
  Equipment            5.7       5.9  (3%)       18.7      16.5  13%
                 --------- ---------        --------- ---------

  Total revenue       65.0      58.2  12%       193.2     179.8   7%

 Operating costs
  and expenses:
  Cost of
   services and
   products           35.4      34.9   1%       109.9      92.2  19%
  Selling,
   general and
   adminis-
   trative            15.8      14.2  11%        45.2      41.3   9%
  Depreciation
   and
   amortization        7.5      13.2 (43%)       23.6      48.4 (51%)
  Asset
   impairments
   and other
   charges              --        --  n/m          --      23.7  n/m
                 --------- ---------        --------- ---------

  Total
   operating
   costs and
   expenses           58.7      62.3  (6%)      178.7     205.6 (13%)
                 --------- ---------        --------- ---------

 Operating
  income (loss)       $6.3    $(4.1)  n/m       $14.5   $(25.8)  n/m
                 ========= =========        ========= =========

  Hardware &
   Managed
   Services
 Revenue
  Hardware           $36.4     $26.4  38%       $97.3     $76.8  27%
  Managed
   services           20.9      17.1  22%        57.0      48.4  18%
                 --------- ---------        --------- ---------

  Total revenue       57.3      43.5  32%       154.3     125.2  23%

 Operating costs
  and expenses:
  Cost of
   services and
   products           45.8      35.6  29%       124.2     101.1  23%
  Selling,
   general and
   adminis-
   trative             5.4       4.4  23%        16.0      13.0  23%
  Depreciation
   and
   amortization        0.9       0.7  29%         2.7       1.7  59%
  Asset
   impairments
   and other
   charges
   (credits)            --        --  n/m          --     (0.1)  n/m
                 --------- ---------        --------- ---------

  Total
   operating
   costs and
   expenses           52.1      40.7  28%       142.9     115.7  24%
                 --------- ---------        --------- ---------

 Operating
  income              $5.2      $2.8  86%       $11.4      $9.5  20%
                 ========= =========        ========= =========

  Other
 Revenue             $19.9     $19.7   1%       $59.3     $58.3   2%

 Operating costs
  and expenses:
  Cost of
   services and
   products            8.9       8.2   9%        26.5      25.2   5%
  Selling,
   general and
   adminis-
   trative             3.8       4.0  (5%)       11.0      11.7  (6%)
  Depreciation         0.6       0.5  20%         1.7       1.4  21%
                 --------- ---------        --------- ---------

  Total
   operating
   costs and
   expenses           13.3      12.7   5%        39.2      38.3   2%
                 --------- ---------        --------- ---------

 Operating
  income              $6.6      $7.0  (6%)      $20.1     $20.0   1%
                 ========= =========        ========= =========

  Broadband
 Revenue               $--       $--  n/m         $--       $--  n/m

 Costs,
  expenses,
  gains and
  losses:
  Selling,
   general and
   adminis-
   trative           (3.5)     (1.0)  n/m       (2.6)     (3.0)  n/m
  Restructuring
   charges             0.3        --  n/m         0.5        --  n/m
  Gain on sale
   of assets and
   other             (4.7)        --  n/m       (7.6)     (0.6)  n/m
                 --------- ---------        --------- ---------

  Total costs,
   expenses,
   gains and
   losses            (7.9)     (1.0)  n/m       (9.7)     (3.6)  n/m
                 --------- ---------        --------- ---------

 Operating
  income              $7.9      $1.0  n/m        $9.7      $3.6  n/m
                 ========= =========        ========= =========
Cincinnati Bell Inc.
Segment Information
(Unaudited)

   (dollars in millions)

                    Three Months                Nine Months
                 Ended September 30,   %    Ended September 30,   %
                   2006      2005    Change   2006      2005    Change
                 --------- --------- ------ --------- --------- ------
 Revenue
  Local             $186.6    $187.4  (0%)     $560.4    $567.1  (1%)
  Wireless            65.0      58.2  12%       193.2     179.8   7%
  Hardware &
   Managed
   Services           57.3      43.5  32%       154.3     125.2  23%
  Other               19.9      19.7   1%        59.3      58.3   2%
  Broadband              -         -  n/m           -         -  n/m
  Corporate and
   eliminations      (8.7)     (8.5)   2%      (25.5)    (26.1)  (2%)
                 --------- ---------        --------- ---------

  Total revenue     $320.1    $300.3   7%      $941.7    $904.3   4%
                 ========= =========        ========= =========

 Cost of Services
  and Products
  Local              $59.5     $58.4   2%      $175.7    $175.2   0%
  Wireless            35.4      34.9   1%       109.9      92.2  19%
  Hardware &
   Managed
   Services           45.8      35.6  29%       124.2     101.1  23%
  Other                8.9       8.2   9%        26.5      25.2   5%
  Broadband              -         -  n/m           -         -  n/m
  Corporate and
   eliminations      (6.7)     (6.5)   3%      (19.8)    (20.2)  (2%)
                 --------- ---------        --------- ---------

  Total cost of
   services and
   products         $142.9    $130.6   9%      $416.5    $373.5  12%
                 ========= =========        ========= =========

 Selling, General
  &
  Administrative
  Local              $35.4     $34.0   4%      $101.9    $103.0  (1%)
  Wireless            15.8      14.2  11%        45.2      41.3   9%
  Hardware &
   Managed
   Services            5.4       4.4  23%        16.0      13.0  23%
  Other                3.8       4.0  (5%)       11.0      11.7  (6%)
  Broadband          (3.5)     (1.0)  n/m       (2.6)     (3.0)  n/m
  Corporate and
   eliminations        2.6       0.2  n/m         8.1       5.3  53%
                 --------- ---------        --------- ---------

  Total selling,
   general &
   adminis-
   trative           $59.5     $55.8   7%      $179.6    $171.3   5%
                 ========= =========        ========= =========

 Depreciation and
  Amortization
  Local              $26.6     $27.1  (2%)      $77.6     $81.0  (4%)
  Wireless             7.5      13.2 (43%)       23.6      48.4 (51%)
  Hardware &
   Managed
   Services            0.9       0.7  29%         2.7       1.7  59%
  Other                0.6       0.5  20%         1.7       1.4  21%
  Broadband              -         -  n/m           -         -  n/m
  Corporate and
   eliminations          -       0.3  n/m           -       0.7  n/m
                 --------- ---------        --------- ---------

  Total
   depreciation
   and
   amortization      $35.6     $41.8 (15%)     $105.6    $133.2 (21%)
                 ========= =========        ========= =========

 Shareholder
  Claim
  Settlement,
  Gain on Sale of
  Broadband
  Assets,
  Restructuring
  Charges and
  Asset
  Impairments
  Local               $3.0        $-  n/m        $3.0        $-  n/m
  Wireless               -         -  n/m           -      23.7  n/m
  Hardware &
   Managed
   Services              -         -  n/m           -     (0.1)  n/m
  Other                  -         -  n/m           -         -  n/m
  Broadband          (4.4)         -  n/m       (7.1)     (0.6)  n/m
  Corporate and
   eliminations          -         -  n/m         6.3       0.1  n/m
                 --------- ---------        --------- ---------

  Total
   shareholder
   claim
   settlement,
   gain on sale
   of broadband
   assets,
   restructuring
   charges and
   asset
   impairments      $(1.4)        $-  n/m        $2.2     $23.1  n/m
                 ========= =========        ========= =========

 Operating Income
  Local              $62.1     $67.9  (9%)     $202.2    $207.9  (3%)
  Wireless             6.3     (4.1)  n/m        14.5    (25.8)  n/m
  Hardware &
   Managed
   Services            5.2       2.8  86%        11.4       9.5  20%
  Other                6.6       7.0  (6%)       20.1      20.0   1%
  Broadband            7.9       1.0  n/m         9.7       3.6  n/m
  Corporate and
   eliminations      (4.6)     (2.5)  84%      (20.1)    (12.0)  67%
                 --------- ---------        --------- ---------

  Total operating
   income            $83.5     $72.1  16%      $237.8    $203.2  17%
                 ========= =========        ========= =========
Cincinnati Bell Inc.
Segment Metric Information
(Unaudited)


                                            September 30, December 31,
                                                2006          2005
                                            ------------- ------------
 (in thousands)

 Local access lines                                900.5        930.6
 DSL subscribers                                   187.7        162.5
 Custom Connections (Super Bundle)
  subscribers                                      166.4        150.3


 Postpaid wireless subscribers                     350.1        315.1
 Prepaid wireless subscribers                      156.1        180.5
                                            ------------- ------------

 Total wireless subscribers                        506.2        495.6
                                            ============= ============


 Consumer long distance lines                      398.9        412.6
 Business long distance lines                      156.6        151.1
                                            ------------- ------------

 Total long distance lines                         555.5        563.7
                                            ============= ============
Cincinnati Bell Telephone
Local Access Line Detail
(Unaudited)


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

   In-Territory:
      Primary Residential                 611.8  606.3  601.5  592.7
      Secondary Residential                56.0   54.0   52.2   50.5
      Business/Other                      301.5  299.6  298.4  296.6
                                          ----------------------------
   Total In-Territory                     969.3  959.9  952.1  939.8

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

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

Cincinnati Bell Telephone
Local Access Line Detail
(Unaudited)


                      --------------------------- --------------------
                                 2005                     2006
                      --------------------------- --------------------
   (in thousands)       1Q     2Q     3Q     4Q     1Q     2Q     3Q
                      ------ ------ ------ ------ ------ ------ ------
   Local Access
    Lines
   -----------------

   In-Territory:
      Primary
       Residential    584.2  573.0  563.9  555.7  547.4  536.7  522.5
      Secondary
       Residential     48.9   47.1   45.4   43.9   42.4   40.9   39.2
      Business/Other  296.1  294.3  292.9  293.3  290.9  291.3  291.4
                      --------------------------- --------------------
   Total In-
    Territory         929.2  914.4  902.2  892.9  880.7  868.9  853.1

   Out-of-Territory:
      Primary
       Residential     17.7   18.4   20.5   21.5   22.8   24.8   26.8
      Secondary
       Residential      0.8    0.9    1.0    1.0    1.1    1.1    1.2
      Business/Other   12.2   12.8   13.9   15.2   16.3   17.7   19.4
                      --------------------------- --------------------
   Total Out-of-
    Territory          30.7   32.1   35.4   37.7   40.2   43.6   47.4

                      --------------------------- --------------------
   Total Access
    Lines             959.9  946.5  937.6  930.6  920.9  912.5  900.5
                      =========================== ====================
Cincinnati Bell Inc.
Net Debt Calculation
(Unaudited)

                                                             Change
                                                          ------------
                               September 30, December 31,
                                   2006          2005       $      %
                               ------------- ------------ ------------
 (dollars in millions)
 Credit facility, revolver             $4.0           $-   $4.0   n/m
 Credit facility, tranche B
  term loan                           396.0        399.0   (3.0)  (1%)
 Cincinnati Bell Telephone
  notes                               230.0        230.0      -     0%
 7 1/4% Senior Notes due 2013         496.9        500.0   (3.1)  (1%)
 7 1/4% Senior Notes due 2023          50.0         50.0      -     0%
 8 3/8% Senior Subordinated
  Notes due 2014                      630.9        633.4   (2.5)  (0%)
 7% Senior Notes due 2015             244.8        246.4   (1.6)  (1%)
 Capital leases and other debt         19.6         24.9   (5.3) (21%)
 Net unamortized premium                0.9          1.0   (0.1) (10%)
                               ------------- ------------ ------------

  Total debt                        2,073.1      2,084.7  (11.6)  (1%)

 Add: Interest rate swap
  liability                            14.3         10.2    4.1    40%
 Less: Cash and cash
  equivalents                         (27.5)       (25.7)  (1.8)    7%
                               ------------- ------------ ------------

  Net debt (as defined by the
   company)                        $2,059.9     $2,069.2  $(9.3)  (0%)
                               ============= ============ ============

 Credit facility availability        $238.7       $243.6  $(4.9)  (2%)
                               ============= ============ ============
Cincinnati Bell Inc.
Consolidated Statements of Cash Flows
(Unaudited)

   (dollars in millions)

                                  Three Months         Nine Months
                               Ended September 30, Ended September 30,

                                 2006      2005      2006      2005
                               --------- --------- --------- ---------

 Cash provided by operating
  activities                      $52.6     $74.2    $210.2    $225.4
                               --------- --------- --------- ---------

  Capital expenditures            (35.2)    (37.7)   (109.8)   (108.7)
  Acquisition of business and
   remaining minority interest
   in CBW                             -         -     (86.7)        -
  Deposit for wireless licenses
   purchase                        (7.0)        -      (7.0)        -
  Proceeds from sale of
   broadband assets                 4.7         -       4.7         -
  Other                             0.2       1.2       2.2       1.2
                               --------- --------- --------- ---------

 Cash used in investing
  activities                      (37.3)    (36.5)   (196.6)   (107.5)
                               --------- --------- --------- ---------

  Issuance of long-term debt          -         -         -     352.1
  Increase (decrease) in
   corporate credit facility,
   net                             (8.0)    406.0       4.0     438.0
  Repayment of debt                (5.7)   (440.5)    (11.4)   (882.5)
  Debt issuance costs and
   consent fees                       -      (0.9)        -     (21.9)
  Issuance of common shares -
   exercise of stock options        1.0       0.7       1.7       2.4
  Preferred stock dividends        (2.6)     (2.6)     (7.8)     (7.8)
  Other                             0.9       0.6       1.7       0.6
                               --------- --------- --------- ---------

 Cash provided by (used in)
  financing activities            (14.4)    (36.7)    (11.8)   (119.1)
                               --------- --------- --------- ---------

 Net increase (decrease) in
  cash and cash equivalents         0.9       1.0       1.8      (1.2)
 Cash and cash equivalents at
  beginning of period              26.6      22.7      25.7      24.9
                               --------- --------- --------- ---------

 Cash and cash equivalents at
  end of period                   $27.5     $23.7     $27.5     $23.7
                               ========= ========= ========= =========


 Reconciliation of GAAP Cash
  Flow to Free Cash Flow as
  defined by the company
 Net increase (decrease) in
  cash and cash equivalents        $0.9      $1.0      $1.8     $(1.2)
 Less adjustments:
  Issuance of long-term debt
   and net change in corporate
   credit facility                  8.0    (406.0)     (4.0)   (790.1)
  Repayment of debt                 5.7     440.5      11.4     882.5
  Acquisition of business and
   remaining minority interest
   in CBW                             -         -      86.7         -
                               --------- --------- --------- ---------

     Free cash flow (as defined
      by the company)             $14.6     $35.5     $95.9     $91.2
                               ========= ========= ========= =========


 Income tax payments              $(1.4)       $-     $(5.2)    $(1.1)
Cincinnati Bell Inc.
Reconciliation of Adjusted EBITDA (Non-GAAP) to Operating Income
 (GAAP)
(Unaudited)

   (dollars in millions)

               -------------------------------------------------------
                        Three Months Ended September 30, 2006
               -------------------------------------------------------
                                                                Total
               Local  Wireless  HMS  Other Broadband Corporate Company
               ------ -------- ----- ----- --------- --------- -------

Operating
 Income (GAAP)  $62.1     $6.3  $5.2  $6.6      $7.9    $(4.6)   $83.5

Add:
 Depreciation
  and
  amortization   26.6      7.5   0.9   0.6        --        --    35.6
 Shareholder
  claim
  settlement,
  gain on sale
  of broadband
  assets,
  restructuring
  charges and
  asset
  impairments     3.0       --    --    --     (4.4)        --   (1.4)
               -------------------------------------------------------

EBITDA (Non-
 GAAP)          $91.7    $13.8  $6.1  $7.2      $3.5    $(4.6)  $117.7
               =======================================================



               -------------------------------------------------------
                        Three Months Ended September 30, 2005
               -------------------------------------------------------
                                                                Total
               Local  Wireless  HMS  Other Broadband Corporate Company
               ------ -------- ----- ----- --------- --------- -------

Operating
 Income (GAAP)  $67.9   $(4.1)  $2.8  $7.0      $1.0    $(2.5)   $72.1

Add:
 Depreciation
  and
  amortization   27.1     13.2   0.7   0.5         -       0.3    41.8
               -------------------------------------------------------

EBITDA (Non-
 GAAP)          $95.0     $9.1  $3.5  $7.5      $1.0    $(2.2)  $113.9
               =======================================================



               -------------------------------------------------------
                        Nine Months Ended September 30, 2006
               -------------------------------------------------------
                                                                Total
               Local  Wireless  HMS  Other Broadband Corporate Company
               ------ -------- ----- ----- --------- --------- -------

Operating
 Income (GAAP) $202.2    $14.5 $11.4 $20.1      $9.7   $(20.1)  $237.8

Add:
 Depreciation
  and
  amortization   77.6     23.6   2.7   1.7         -         -   105.6
 Shareholder
  claim
  settlement,
  gain on sale
  of broadband
  assets,
  restructuring
  charges and
  asset
  impairments     3.0        -     -     -     (7.1)       6.3     2.2
               -------------------------------------------------------

EBITDA (Non-
 GAAP)         $282.8    $38.1 $14.1 $21.8      $2.6   $(13.8)  $345.6
               =======================================================



               -------------------------------------------------------
                        Nine Months Ended September 30, 2005
               -------------------------------------------------------
                                                                Total
               Local  Wireless  HMS  Other Broadband Corporate Company
               ------ -------- ----- ----- --------- --------- -------

Operating
 Income (GAAP) $207.9  $(25.8)  $9.5 $20.0      $3.6   $(12.0)  $203.2

Add:
 Depreciation
  and
  amortization   81.0     48.4   1.7   1.4         -       0.7   133.2
 Shareholder
  claim
  settlement,
  gain on sale
  of broadband
  assets,
  restructuring
  charges and
  asset
  impairments       -     23.7 (0.1)     -     (0.6)       0.1    23.1
               -------------------------------------------------------

EBITDA (Non-
 GAAP)         $288.9    $46.3 $11.1 $21.4      $3.0   $(11.2)  $359.5
               =======================================================
Cincinnati Bell Inc.
Normalized Statements of Operations (Non-GAAP) - Reconciliation to
 Reported Results
(Unaudited)

 (dollars in millions,
  except per share
  amounts)                     Special Items
                          -----------------------
                                                         Three
                Three      Gain on                    Months Ended
             Months Ended  Sale of                 September 30, 2006
            September 30, Broadband Restructuring Before Special Items
             2006 (GAAP)   Assets      Charge          (Non-GAAP)
            ----------------------------------------------------------
                              A           B
 Revenue           $320.1        $-            $-               $320.1

 Costs and
  expenses
  Cost of
   services
   and
   products         142.9         -             -                142.9
  Selling,
   general
   and
   adminis-
   trative           59.5         -             -                 59.5
  Deprec-
   iation
   and amor-
   tization          35.6         -             -                 35.6
  Gain on
   sale of
   broadband
   assets           (4.7)       4.7                                  -
  Restruc-
   turing
   charges            3.3                   (3.3)                    -
            ------------- --------- ------------- --------------------

   Operating
    income
    (loss)           83.5     (4.7)           3.3                 82.1

 Minority
  interest
  income            (0.2)                                        (0.2)
 Interest
  expense            41.4         -             -                 41.4
 Loss on
  extin-
  guishment
   of
  debt                0.1                                          0.1
 Other
  income,
  net               (0.2)         -             -                (0.2)
            ------------- --------- ------------- --------------------

 Income
  (loss)
  before
  income
  taxes              42.4     (4.7)           3.3                 41.0
 Income tax
  expense
  (benefit)          17.3     (1.9)           1.3                 16.7
            ------------- --------- ------------- --------------------

 Net income
  (loss)             25.1     (2.8)           2.0                 24.3

 Preferred
  stock
  dividends           2.6         -             -                  2.6
            ------------- --------- ------------- --------------------

 Net income
  (loss)
  applicable
  to common
  share-
  owners            $22.5    $(2.8)          $2.0                 21.7
            ============= ========= ============= ====================


 Weighted
  average
  diluted
  common
  shares            254.4     254.4         254.4                254.4
            ============= ========= ============= ====================

 Diluted
  earnings
  (loss) per
  common
  share             $0.09   $(0.01)         $0.01                $0.09
            ============= ========= ============= ====================


A The Company sold certain broadband fiber assets for a gain of $4.7
   million.

B In September 2006, the Company incurred employee separation expense
   related to the outsourcing of certain supply chain functions.
Cincinnati Bell Inc.
Normalized Statements of Operations (Non-GAAP) - Reconciliation to
 Reported Results
(Unaudited)
(dollars in millions, except per share amounts)

                                   Special Items
                      ---------------------------------------
                                                                Nine
                                                              Months
                                                                Ended
               Nine                                            Sept.
              Months                                          30, 2006
               Ended                                          Before
               Sept.   Gain on                                 Special
                30,    Sale of  Shareholder Income  Restruct-   Items
               2006   Broadband    Claim      Tax     uring    (Non-
              (GAAP)   Assets   Settlement  Expense  Charge     GAAP)
              --------------------------------------------------------
                          A          B         C        D
Revenue       $941.7        $-          $-      $-        $-   $941.7

Costs and
 expenses
Cost of
 services and
 products      416.5         -           -       -         -    416.5
Selling,
 general and
 administra-
 tive          179.6         -           -       -         -    179.6
Depreciation
 and amortiz-
 ation         105.6         -           -       -         -    105.6
Shareholder
 claim
 settlement      6.3         -        (6.3)      -         -        -
Gain on sale
 of broadband
 assets         (7.6)      7.6           -       -         -        -
Restruct-
 uring charges   3.5         -           -       -      (3.5)       -
              ------- --------- ----------- ------- --------- --------

Operating
 income (loss) 237.8      (7.6)        6.3       -       3.5    240.0

Minority
 interest
 expense         0.1         -           -       -         -      0.1
Interest
 expense       121.3         -           -       -         -    121.3
Loss on
 extinguish-
 ment of debt    0.1         -           -       -         -      0.1
Other income,
 net            (0.5)        -           -       -         -     (0.5)
              ------- --------- ----------- ------- --------- --------

Income (loss)
 before income
 taxes         116.8      (7.6)        6.3      --       3.5    119.0
Income tax
 expense
 (benefit)      53.2      (3.0)        2.5    (3.6)      1.4     50.5
              ------- --------- ----------- ------- --------- --------

Net income      63.6      (4.6)        3.8     3.6       2.1     68.5

Preferred
 stock
 dividends       7.8         -           -       -         -      7.8
              ------- --------- ----------- ------- --------- --------

Net income
 (loss)
 applicable to
 common
 shareowners   $55.8     $(4.6)       $3.8    $3.6      $2.1    $60.7
              ======= ========= =========== ======= ========= ========


Weighted
 average
 diluted
 common shares 252.7     252.7       252.7   252.7     252.7    252.7
              ======= ========= =========== ======= ========= ========

Diluted
 earnings
 (loss) per
 common share  $0.22    $(0.02)      $0.02   $0.01     $0.01    $0.24
              ======= ========= =========== ======= ========= ========


A Gain on sale of Broadband assets includes sale of certain broadband
   fiber assets and expiration of certain indemnifications that were
   previously reserved.

B Reserve of $6.3 million recorded to settle the Company's shareholder
   claim.

C Kentucky net operating loss carry-forward write-off due to
   regulations issued in first quarter 2006.

D In September 2006, the Company incurred employee separation expense
   related to the outsourcing of certain supply chain functions.
Cincinnati Bell Inc.
Normalized Statements of Operations - Reconciliation to Reported
 Results
(Unaudited)

   (dollars in millions, except   Special Items
    per share amounts)
                                  --------------
                        Three                           Three
                     Months Ended                    Months Ended
                    September 30,   16% Notes     September 30, 2005
                     2005 (GAAP)  Extinguishment Before Special Items
                    -------------------------------------------------
                                        B
  Revenue                 $300.3             $-               $300.3

  Costs and expenses
   Cost of services
    and products           130.6              -                130.6
   Selling, general
    and
    administrative          55.8              -                 55.8
   Depreciation and
    amortization            41.8              -                 41.8
                    ------------- -------------- --------------------

    Operating income        72.1              -                 72.1

  Minority interest
   income                   (1.0)             -                 (1.0)
  Interest expense          47.0              -                 47.0
  Loss on
   extinguishment of
   debt                     91.9          (91.9)                   -
  Other income, net         (1.3)             -                 (1.3)
                    ------------- -------------- --------------------

  Income (loss)
   before income
   taxes                   (64.5)          91.9                 27.4
  Income tax expense
   (benefit)               (20.4)          36.8                 16.4
                    ------------- -------------- --------------------

  Net income (loss)        (44.1)          55.1                 11.0

  Preferred stock
   dividends                 2.6              -                  2.6
                    ------------- -------------- --------------------

  Net income (loss)
   applicable to
   common
   shareowners            $(46.7)         $55.1                 $8.4
                    ============= ============== ====================


  Weighted average
   diluted common
   shares                  246.1          253.1 A              253.1 A
                    ============= ============== ====================

  Diluted earnings
   (loss) per common
   share                  $(0.19)         $0.22                $0.03
                    ============= ============== ====================


A Shares have been adjusted for dilutive common stock equivalents
   that result after excluding the special items from earnings.

B Loss on extinguishment of the company's 16% Notes.
Cincinnati Bell Inc.
Normalized Statements of Operations - Reconciliation to Reported
 Results
(Unaudited)
(dollars in millions, except per share amounts)
                                     Special Items
                          -----------------------------------
                                                               Nine
                                                              Months
                  Nine                                         Ended
                 Months                                      Sept. 30,
                  Ended                             Asset       2005
                Sept. 30, Income                 Impairments  Before
                  2005      Tax        Debt       & Other     Special
                  (GAAP)  Expense Extinguishment   Charges     Items
                --------- ------- -------------- ----------- ---------
                             B          C             D
Revenue           $904.3      $-             $-          $-    $904.3

Costs and
 expenses
 Cost of
  services and
  products         373.5       -              -           -     373.5
 Selling,
  general and
  administrative   171.3       -              -           -     171.3
 Depreciation
  and
  amortization     133.2       -              -           -     133.2
 Asset
  impairments
  and other
  charges           23.1       -              -       (23.1)        -
                --------- ------- -------------- ----------- ---------

  Operating
   income          203.2       -              -        23.1     226.3

Minority
 interest income    (5.8)      -              -         4.6      (1.2)
Interest expense   147.1       -              -           -     147.1
Loss on
 extinguishment
 of debt            99.8       -          (99.8)          -         -
Other income,
 net                (1.5)      -              -           -      (1.5)
                --------- ------- -------------- ----------- ---------

Income (loss)
 before income
 taxes             (36.4)      -           99.8        18.5      81.9
Income tax
 expense
 (benefit)          40.7   (47.6)          39.9         7.4      40.4
                --------- ------- -------------- ----------- ---------

Net income
 (loss)            (77.1)   47.6           59.9        11.1      41.5

Preferred stock
 dividends           7.8       -              -           -       7.8
                --------- ------- -------------- ----------- ---------

Net income
 (loss)
 applicable to
 common
 shareowners      $(84.9)  $47.6          $59.9       $11.1     $33.7
                ========= ======= ============== =========== =========


Weighted average
 diluted common
 shares            245.8   251.8 A        251.8 A     251.8 A   251.8
                ========= ======= ============== =========== =========

Diluted earnings
 (loss) per
 common share     $(0.35)  $0.19          $0.24       $0.04     $0.13
                ========= ======= ============== =========== =========



A Shares have been adjusted for dilutive common stock equivalents that
   result after excluding the special items from earnings.

B Write-down of certain state deferred tax assets due to change in
   state tax rates and state tax laws.

C Loss on extinguishment of the company's prior credit facility
   and 16% Notes.

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.
             Investor / Media contact:
             Tony Schulte, 513-397-9540
             tony.schulte@cinbell.com

    SOURCE: Cincinnati Bell Inc.