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Cincinnati Bell Inc. Reports Third Quarter Results; Strong DSL and Wireless Activations Generate Solid Performance and Momentum

11/08/05

CINCINNATI, Nov 08, 2005 (BUSINESS WIRE) -- Cincinnati Bell Inc. (NYSE:CBB) today announced financial results for the third quarter of 2005 including revenue of $300 million, operating income of $72 million and a net loss of $44 million, or 19 cents per share. Reported results reflect the impact of debt refinancing completed during the quarter and include a $92 million pre-tax loss on the extinguishment of debt. Excluding this charge, net income for the quarter was $11 million, or 3 cents per diluted share.

"Cincinnati Bell continues to assert its competitive edge in the market by delivering the best wireless network in Cincinnati and growing wireless and DSL activations," said Jack Cassidy, president and chief executive officer of Cincinnati Bell.

"In addition, completing the repurchase of our 16% Senior Subordinated Discount Notes is expected to increase free cash flow and accelerate our ability to reduce debt going forward."

Third Quarter Highlights

-- Strong promotions drove record third-quarter DSL net additions of 9,000, up 65 percent from the third quarter 2004. Penetration of in-territory primary consumer access lines increased to 24 percent at quarter-end, up from 18 percent at the same time a year ago. DSL penetration of total in-territory access lines rose to 17 percent versus 13 percent a year ago.

-- Introduction of the innovative "New Rules" wireless rate plans led to a 38 percent increase in postpaid gross activations versus the prior quarter while higher network quality continued to improve churn to 2.15 percent. As a result, postpaid net additions were 4,100, an improvement of 7,500 from the second quarter of 2005.

-- Reflecting Cincinnati Bell's bundling success, its "Super Bundle" subscriber base expanded to 147,000, up 30 percent from a year ago and representing a 25 percent penetration of in-territory households.

-- Cincinnati Bell completed the final stage of its refinancing plan on August 31 with the repurchase of its 16% Notes. The repurchase was financed with new borrowings under the company's senior secured credit facilities. Due to lower interest rates on the new bank debt, the refinancing will increase free cash flow by $20 million to $25 million on an annualized basis.

Financial and Operations Review

"We continued to see improvements driven by investments made in our business over the past year," said Brian Ross, chief financial officer.

"For example, investments in wireless network quality have resulted in consistently better postpaid churn. Access line performance improved sequentially due in part to the investments we made in DSL activations and out-of-territory line additions. We also continued to benefit from investments in our data center and long distance operations."

Cincinnati Bell recorded quarterly revenue of $300 million, consistent with the third quarter of 2004 after normalizing for $6 million in revenue recorded in the prior year but associated with assets that were sold in 2004. Increased revenue from equipment and data center operations, long distance and DSL partially offset lower wireless and local voice revenue.

EBITDA(1) (earnings before interest, taxes, depreciation and amortization) was $114 million compared with $124 million in the second quarter of 2005. Higher expenses supporting better than expected wireless and DSL activations drove more than half of the EBITDA decline in the quarter.

Due to improvements in working capital, quarterly free cash flow(2) increased to $36 million, up 6 percent from the third quarter of 2004. Cincinnati Bell reported net debt(3) of $2.1 billion at quarter-end, down approximately 2 percent from a year ago. Capital expenditures were $38 million, or 13 percent of revenue for the quarter.

Local Communications Services

Total access line performance of Cincinnati Bell Telephone (CBT) improved during the quarter. Sequentially, in-territory access line decline slowed while the growth of out-of-territory lines increased. A loss of 12,000 in-territory lines in the third quarter compared favorably to the 15,000 line loss in the second quarter of 2005. Out-of-territory operations added 3,300 access lines in the quarter, more than double the amount added in the second quarter of 2005. DSL net additions totaled 9,000, up significantly from 4,000 additions in the prior quarter.

The Local segment produced quarterly revenue of $187 million, down 2 percent from the third quarter of 2004 as a 17 percent increase in DSL revenue partially offset lower voice revenue. Due in part to better than expected DSL activations, EBITDA of $95 million declined 5 percent compared to the third quarter of 2004 after adjusting for a $4 million increase in non-cash post-retirement medical and pension expenses.

Wireless Services

Cincinnati Bell Wireless achieved improvement in both gross activations and churn during the third quarter. Postpaid gross activations were up 38 percent on a sequential basis driven by the success of the "New Rules" campaign introduced in August 2005. These "New Rules" rate plans represent a first in the wireless industry, offering unlimited calling from any Cincinnati Bell Wireless phone to any other wireless or wireline Cincinnati Bell number. Consistently higher network quality resulted in postpaid churn of 2.15 percent versus 3.68 percent in the third quarter of 2004. As a result, postpaid net additions were 4,100, an improvement of 14,600 from the prior year period.

The Wireless segment generated quarterly revenue of $58 million compared with $66 million in the third quarter of 2004. Growth in equipment and data revenue partially offset lower voice revenue and a reduction in roaming revenue related to the merger of AT&T Wireless and Cingular. EBITDA for the quarter was $9 million versus $23 million in the third quarter of 2004, driven by continued subscriber voice revenue compression and increased subsidies associated with higher activations and increased migrations from the legacy TDMA network to the GSM network.

Hardware and Managed Services

Driven by strong equipment sales and managed services revenue from data center operations, revenue from the Hardware and Managed Services segment was $44 million, a $5 million increase versus the third quarter 2004. Quarterly EBITDA of $4 million was even with the third quarter of 2004.

Other Communications Services

Cincinnati Bell's long distance operations, part of the Other Communications Services segment, increased subscribers by 12,000, or 2 percent, versus the end of the third quarter 2004. Long distance market share (as measured by the number of CBT lines for which a long distance carrier was selected) was 80 percent in the consumer market and 51 percent in the business market, improvements of 5 points and 4 points, respectively, compared to the same time a year ago.

Quarterly revenue for the segment, which also includes payphone operations, was $20 million, up $1 million from a year ago when excluding $2 million in revenue associated with assets sold in 2004. Increased revenue contributions from new long distance business products and bundling partially offset a decline in payphone and other revenue due to the sale of low-margin assets. EBITDA of $7 million was even with the third quarter of 2004.

2005 Guidance

The company has revised 2005 financial guidance for EBITDA and Free Cash Flow to reflect lower year to date wireless voice revenue and additional expense related to increased wireless and DSL activations, which are expected to continue into the fourth quarter.

Category                           Guidance
----------------------------------------------------------------------
Revenue                            Low single-digit percent decline
----------------------------------------------------------------------
EBITDA                             $470 million to $480 million
----------------------------------------------------------------------
Capital Expenditures               Approximately 12 percent of revenue
----------------------------------------------------------------------
Free Cash Flow                     Approximately $145 million
----------------------------------------------------------------------

Conference Call/Webcast

Cincinnati Bell will host a conference call today at 10:00 a.m. (EST) to discuss its third 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. (EST) on November 22, 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 205170. 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 November 8, 2005. Cincinnati Bell anticipates that subsequent events and developments will cause its estimates to change.

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,   %
                   2005      2004    Change   2005      2004    Change
                 --------- --------- ------ --------- --------- ------

Revenues           $300.3    $307.9    (2%)   $904.3    $907.3    (0%)
-----------------

Costs and
 Expenses
-----------------
 Cost of Services
  and Products      130.6     118.3     10%    373.5     361.4      3%
 Selling, General
  and
  Administrative     55.8      53.9      4%    171.3     165.6      3%
 Depreciation and
  Amortization       41.8      51.5   (19%)    133.2     142.8    (7%)
 Restructuring         --        --    n/m        --       0.2    n/m
 Asset
  Impairments and
  Other Charges        --       1.6    n/m      23.1       1.5    n/m
                 --------- ---------        --------- ---------

   Operating
    Income           72.1      82.6   (13%)    203.2     235.8   (14%)

Minority Interest
 Expense (Income)    (1.0)      0.2    n/m      (5.8)      1.5    n/m
Interest Expense     47.0      50.6    (7%)    147.1     151.9    (3%)
Loss on
 Extinguishment
 of Debt             91.9        --    n/m      99.8        --    n/m
Other Income, Net    (1.3)     (0.7)    86%     (1.5)     (0.7)   114%
                 --------- ---------        --------- ---------

   Income (Loss)
    before Income
    Taxes           (64.5)     32.5    n/m     (36.4)     83.1  (144%)

Income Tax
 (Benefit)
 Expense            (20.4)     15.0    n/m      40.7      39.8      2%
                 --------- ---------        --------- ---------

   Net Income
    (Loss)          (44.1)     17.5    n/m     (77.1)     43.3    n/m

Preferred Stock
 Dividends            2.6       2.6      0%      7.8       7.8      0%
                 --------- ---------        --------- ---------

Net Income (Loss)
 Applicable to
 Common
 Shareowners       $(46.7)    $14.9    n/m    $(84.9)    $35.5    n/m
                 ========= =========        ========= =========

Basic and Diluted
 Earnings (Loss)
 Per Common Share  $(0.19)    $0.06           $(0.35)    $0.14
---------------- ========= =========        ========= =========

Weighted Average
 Common Shares
 Outstanding
 (millions)
-----------------
 - Basic            246.1     245.1            245.8     245.0
 - Diluted          246.1     249.2            245.8     251.1


Cincinnati Bell Inc.
Segment Information
(Unaudited)

(dollars in millions)

                    Three Months                Nine Months
                 Ended September 30,   %    Ended September 30,   %
                   2005      2004    Change   2005      2004    Change
                 --------- --------- ------ --------- --------- ------
 Local
Revenue
  Voice            $123.6    $130.3    (5%)   $377.9    $391.7    (4%)
  Data               54.9      50.8      8%    162.3     151.6      7%
  Other services      8.9       9.3    (4%)     26.9      27.7    (3%)
                 --------- ---------        --------- ---------
  Total revenue     187.4     190.4    (2%)    567.1     571.0    (1%)

Operating Costs
 and Expenses:
  Cost of
   services and
   products          58.4      53.2     10%    175.2     165.4      6%
  Selling,
   general and
   administrative    34.0      33.1      3%    103.0      99.9      3%
  Depreciation       27.1      29.9    (9%)     81.0      89.6   (10%)
  Restructuring        --        --    n/m        --       0.2    n/m
                 --------- ---------        --------- ---------
  Total operating
   costs and
   expenses         119.5     116.2      3%    359.2     355.1      1%

                 --------- ---------        --------- ---------
Operating income    $67.9     $74.2    (8%)   $207.9    $215.9    (4%)
                 ========= =========        ========= =========

 Wireless
Revenue
  Service           $52.3     $61.7   (15%)   $163.3    $184.9   (12%)
  Equipment           5.9       4.5     31%     16.5      12.5     32%
                 --------- ---------        --------- ---------
  Total revenue      58.2      66.2   (12%)    179.8     197.4    (9%)

Operating Costs
 and Expenses:
  Cost of
   services and
   products          34.9      30.3     15%     92.2      95.7    (4%)
  Selling,
   general and
   administrative    14.2      13.3      7%     41.3      38.8      6%
  Depreciation       13.2      14.7   (10%)     48.4      43.9     10%
  Amortization         --       6.1    n/m        --       7.0    n/m
  Asset
   impairments
   and other
   charges             --       1.7    n/m      23.7       4.2    n/m
                 --------- ---------        --------- ---------
  Total operating
   costs and
   expenses          62.3      66.1    (6%)    205.6     189.6      8%

                 --------- ---------        --------- ---------
Operating income
 (loss)             $(4.1)     $0.1    n/m    $(25.8)     $7.8    n/m
                 ========= =========        ========= =========

 Hardware & Mgd.
  Services
Revenue
  Hardware          $26.4     $24.0     10%    $76.8     $56.9     35%
  Managed
   services          17.1      14.6     17%     48.4      44.2     10%
                 --------- ---------        --------- ---------
  Total revenue      43.5      38.6     13%    125.2     101.1     24%

Operating Costs
 and Expenses:
  Cost of
   services and
   products          35.6      31.0     15%    101.1      79.2     28%
  Selling,
   general and
   administrative     4.4       3.8     16%     13.0      12.4      5%
  Depreciation        0.7       0.2    n/m       1.7       0.7    143%
  Asset
   impairments
   and other
   charges
   (credits)           --        --    n/m      (0.1)     (1.1)  (91%)
                 --------- ---------        --------- ---------
  Total operating
   costs and
   expenses          40.7      35.0     16%    115.7      91.2     27%

                 --------- ---------        --------- ---------
Operating income     $2.8      $3.6   (22%)     $9.5      $9.9    (4%)
                 ========= =========        ========= =========

 Other
Revenue             $19.7     $20.7    (5%)    $58.3     $58.6    (1%)

Operating Costs
 and Expenses:
  Cost of
   services and
   products           8.2       9.5   (14%)     25.2      35.6   (29%)
  Selling,
   general and
   administrative     4.0       4.0     --      11.7      10.1     16%
  Depreciation        0.5       0.4     25%      1.4       1.2     17%
                 --------- ---------        --------- ---------
  Total costs and
   expenses          12.7      13.9    (9%)     38.3      46.9   (18%)

                 --------- ---------        --------- ---------
Operating income     $7.0      $6.8      3%    $20.0     $11.7     71%
                 ========= =========        ========= =========


Cincinnati Bell Inc.
Segment Information
(Unaudited)

(dollars in millions)

                    Three Months                Nine Months
                 Ended September 30,   %    Ended September 30,   %
                   2005      2004    Change   2005      2004    Change
                 --------- --------- ------ --------- --------- ------
Revenue
-----------------
 Local             $187.4    $190.4    (2%)   $567.1    $571.0    (1%)
 Wireless            58.2      66.2   (12%)    179.8     197.4    (9%)
 Hardware & Mgd.
  Services           43.5      38.6     13%    125.2     101.1     24%
 Other               19.7      20.7    (5%)     58.3      58.6    (1%)
 Broadband             --        --    n/m        --        --    n/m
 Corporate and
  eliminations       (8.5)     (8.0)     6%    (26.1)    (20.8)    25%
                 --------- ---------        --------- ---------
   Total Revenue   $300.3    $307.9    (2%)   $904.3    $907.3    (0%)
                 ========= =========        ========= =========

Cost of Services
 and Products
-----------------
 Local              $58.4     $53.2     10%   $175.2    $165.4      6%
 Wireless            34.9      30.3     15%     92.2      95.7    (4%)
 Hardware & Mgd.
  Services           35.6      31.0     15%    101.1      79.2     28%
 Other                8.2       9.5   (14%)     25.2      35.6   (29%)
 Broadband             --        --    n/m        --        --    n/m
 Corporate and
  eliminations       (6.5)     (5.7)    14%    (20.2)    (14.5)    39%
                 --------- ---------        --------- ---------
   Total Cost of
    Services and
    Products       $130.6    $118.3     10%   $373.5    $361.4      3%
                 ========= =========        ========= =========

Selling, General
 & Administrative
-----------------
 Local              $34.0     $33.1      3%   $103.0     $99.9      3%
 Wireless            14.2      13.3      7%     41.3      38.8      6%
 Hardware & Mgd.
  Services            4.4       3.8     16%     13.0      12.4      5%
 Other                4.0       4.0     --      11.7      10.1     16%
 Broadband           (1.0)     (2.7)  (63%)     (3.0)     (2.7)    11%
 Corporate and
  eliminations        0.2       2.4   (92%)      5.3       7.1   (25%)
                 --------- ---------        --------- ---------
   Total Selling,
    General &
    Administrative  $55.8     $53.9      4%   $171.3    $165.6      3%
                 ========= =========        ========= =========

Depreciation and
 Amortization
-----------------
 Local              $27.1     $29.9    (9%)    $81.0     $89.6   (10%)
 Wireless            13.2      20.8   (37%)     48.4      50.9    (5%)
 Hardware & Mgd.
  Services            0.7       0.2    n/m       1.7       0.7    143%
 Other                0.5       0.4     25%      1.4       1.2     17%
 Broadband             --        --    n/m        --        --    n/m
 Corporate and
  eliminations        0.3       0.2     50%      0.7       0.4     75%
                 --------- ---------        --------- ---------
   Total
    Depreciation
    and
    Amortization    $41.8     $51.5   (19%)   $133.2    $142.8    (7%)
                 ========= =========        ========= =========

Asset Impairments
 and Other
 Charges
 (Credits)
-----------------
 Local                 $-        $-    n/m        $-        $-    n/m
 Wireless              --       1.7    n/m      23.7       4.2    n/m
 Hardware & Mgd.
  Services             --        --    n/m      (0.1)     (1.1)  (91%)
 Other                 --        --    n/m        --        --    n/m
 Broadband             --      (0.1)   n/m      (0.5)     (1.6)  (69%)
 Corporate and
  eliminations         --        --    n/m        --        --    n/m
                 --------- ---------        --------- ---------
   Total Asset
    Impairments
    and Other
    Charges
    (Credits)          $-      $1.6    n/m     $23.1      $1.5    n/m
                 ========= =========        ========= =========

Operating Income
-----------------
 Local              $67.9     $74.2    (8%)   $207.9    $215.9    (4%)
 Wireless            (4.1)      0.1    n/m     (25.8)      7.8    n/m
 Hardware & Mgd.
  Services            2.8       3.6   (22%)      9.5       9.9    (4%)
 Other                7.0       6.8      3%     20.0      11.7     71%
 Broadband            1.0       2.8   (64%)      3.6       4.3   (16%)
 Corporate and
  eliminations       (2.5)     (4.9)  (49%)    (12.0)    (13.8)  (13%)
                 --------- ---------        --------- ---------
   Total
    Operating
    Income          $72.1     $82.6   (13%)   $203.2    $235.8   (14%)
                 ========= =========        ========= =========


Cincinnati Bell Inc.
Consolidated Balance Sheets
(Unaudited)

(dollars in millions, except segment metric information)

                                           September 30, December 31,
                                               2005          2004
                                           ------------- -------------

Assets
------

Cash and Cash Equivalents                         $23.7         $24.9
Receivables - Net                                 148.8         139.0
Materials and Supplies                             24.9          22.7
Other Current Assets                               78.2          66.6
Property, Plant and Equipment - Net               822.5         857.7
Goodwill                                           40.9          40.9
Other Intangible Assets - Net                      35.8          35.8
Noncurrent Deferred Tax Assets                    608.5         656.7
Other Noncurrent Assets                           110.0         114.4
                                           ------------- -------------
   Total Assets                                $1,893.3      $1,958.7
                                           ============= =============


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

Current Portion of Long-Term Debt                 $35.4         $30.1
Accounts Payable                                   69.1          58.9
Current Portion of Unearned Revenue and
 Customer Deposits                                 39.6          42.5
Accrued Taxes                                      37.4          45.4
Other Current Liabilities                         104.3         120.5
Long-Term Debt, Less Current Portion            2,109.8       2,111.1
Unearned Revenue, Less Current Portion              7.9           8.9
Other Noncurrent Liabilities                      161.5         126.6
Minority Interest                                  33.4          39.2
Shareowners' Deficit                             (705.1)       (624.5)
                                           ------------- -------------
   Total Liabilities and Shareowners'
    Deficit                                    $1,893.3      $1,958.7
                                           ============= =============


Other Data:
-----------
Common Shares Outstanding at Balance Sheet
 Date                                             246.2         245.4
Net Debt                                       $2,126.2      $2,112.4
Credit Facility Availability                     $205.5        $377.8

Segment Metric Information (in thousands):
------------------------------------------
Local Access Lines                                937.6         970.1
Complete Connections Subscribers                  334.6         336.4
DSL Subscribers                                   153.5         130.8
Custom Connections Subscribers                    146.6         123.4

GSM:
  Postpaid Wireless Subscribers                   209.4         119.3
  Prepaid Wireless Subscribers                    126.6          87.5
TDMA:
  Postpaid Wireless Subscribers                    90.9         187.0
  Prepaid Wireless Subscribers                     45.3          87.2
                                           ------------- -------------
Total Wireless Subscribers                        472.2         481.0
                                           ============= =============

  Consumer Long Distance Lines                    418.1         423.5
  Business Long Distance Lines                    148.7         138.1
                                           ------------- -------------
Total Long Distance Lines                         566.8         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    3Q
                           ------------------------ ------------------
Access Lines
-------------

 In-Territory:
  Primary Residential      611.8 606.3 601.5 592.7  584.2 573.0 563.9
  Secondary Residential     56.0  54.0  52.2  50.5   48.9  47.1  45.4
  Business/Other           301.5 299.6 298.4 296.6  296.1 294.3 292.9
                           ------------------------ ------------------
 Total In-Territory        969.3 959.9 952.1 939.8  929.2 914.4 902.2

 Out-of-Territory:
  Primary Residential        4.6  10.9  15.8  18.4   17.7  18.4  20.5
  Secondary Residential      0.2   0.6   0.7   0.8    0.8   0.9   1.0
  Business/Other             6.8   8.0   9.9  11.1   12.2  12.8  13.9
                           ------------------------ ------------------
 Total Out-of-Territory     11.6  19.5  26.4  30.3   30.7  32.1  35.4

                           ------------------------ ------------------
 Total Access Lines        980.9 979.4 978.5 970.1  959.9 946.5 937.6
                           ======================== ==================


Cincinnati Bell Inc.
Net Debt Calculation
(Unaudited)

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

Credit Facilities                  $438.0        $438.8   $(0.8)    0%
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                -         375.2  (375.2)  n/m
7 1/4% Senior Notes due 2023         50.0          50.0       -    --
8 3/8% Senior Subordinated
 Notes due 2014                     637.2         543.9    93.3    17%
7% Senior Notes due 2015            248.1             -   248.1   n/m
Capital leases                       19.2          15.6     3.6    23%
Other short-term debt                 1.3           1.6    (0.3) (19%)
Other long-term debt                  0.4             -     0.4   n/m
Net unamortized premium
 (discounts)                          1.0         (33.9)   34.9 (103%)
                             ------------- ------------- -------------

   Total Debt                     2,145.2       2,141.2     4.0     0%

Add: Interest Rate Swap
 Liability (Asset)                    4.7          (3.9)    8.6   n/m
Less: Cash and Cash
 Equivalents                        (23.7)        (24.9)    1.2   (5%)
                             ------------- ------------- -------------

   Net Debt (as defined by
    the company)                 $2,126.2      $2,112.4   $13.8     1%
                             ============= ============= =============


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

(dollars in millions)            Three Months         Nine Months
                              Ended September 30, Ended September 30,
                                2005      2004      2005       2004
                              --------- --------- --------- ----------

Cash provided by operating
 activities                      $74.2     $72.0    $225.4     $216.5
                              --------- --------- --------- ----------

 Capital expenditures            (37.7)    (38.6)   (108.7)    (100.0)
 Proceeds from sale of assets        -         -         -        1.9
 Other                             1.2       1.6       1.2        3.1
                              --------- --------- --------- ----------
Cash used in investing
 activities                      (36.5)    (37.0)   (107.5)     (95.0)
                              --------- --------- --------- ----------

 Issuance of long-term debt          -         -     352.1          -
 Increase in new credit
  facility, net                  406.0         -     438.0          -
 Repayment of previous credit
  facility and other debt       (440.5)    (32.9)   (882.5)    (120.9)
 Debt issuance costs and
  consent fees                    (0.9)        -     (21.9)         -
 Issuance of common shares -
  exercise of stock options        0.7       0.1       2.4        1.9
 Preferred stock dividends
  paid                            (2.6)     (2.6)     (7.8)      (7.8)
 Other                             0.6       1.1       0.6        2.3
                              --------- --------- --------- ----------
Cash used in financing
 activities                      (36.7)    (34.3)   (119.1)    (124.5)
                              --------- --------- --------- ----------

Net decrease in cash and cash
 equivalents                       1.0       0.7      (1.2)      (3.0)
Cash and cash equivalents at
 beginning of period              22.7      22.3      24.9       26.0
                              --------- --------- --------- ----------
Cash and cash equivalents at
 end of period                   $23.7     $23.0     $23.7      $23.0
                              ========= ========= ========= ==========


Reconciliation of GAAP Cash
 Flow to Free Cash Flow as
 defined by the company
Net decrease in cash and cash
 equivalents                      $1.0      $0.7     $(1.2)     $(3.0)
Less adjustments:
 Issuance of debt (financing
  activities)                        -         -    (352.1)         -
 Repayment of debt (financing
  activities), net                34.5      32.9     444.5      120.9
 Proceeds from sale of assets
  (investing activities)             -         -         -       (1.9)
                              --------- --------- --------- ----------

 Free cash flow (as defined
  by the company)                $35.5     $33.6     $91.2     $116.0
                              ========= ========= ========= ==========


Cash Expenditures for
 Restructuring                   $(0.2)    $(0.7)    $(1.5)     $(4.9)

Income Tax Refunds /
 (Payments)                         $-     $(0.3)    $(1.1)     $(2.0)


Cincinnati Bell Inc.
Reconciliation of EBITDA to Operating Income (GAAP)
(Unaudited)

     (dollars in millions)       Three Months         Nine Months
                              Ended September 30, Ended September 30,
                                2005      2004      2005       2004
                              --------- --------- --------- ----------

Operating Income (GAAP)          $72.1     $82.6    $203.2     $235.8

Add:
     Depreciation and
      Amortization                41.8      51.5     133.2      142.8
     Restructuring                   -         -         -        0.2
     Asset Impairments and
      Other Charges                  -       1.6      23.1        1.5
                              --------- --------- --------- ----------

                                  41.8      53.1     156.3      144.5
                              --------- --------- --------- ----------

EBITDA (Non-GAAP)               $113.9    $135.7    $359.5     $380.3
                              ========= ========= ========= ==========


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

(dollars in millions, except per share amounts)

                                Special Items
                                --------------
                                                       Three
                      Three                         Months Ended
                   Months Ended                  September 30, 2005
                  September 30,   16% Notes        Before Special
                   2005 (GAAP)  Extinguishment         Items
                  -------------------------------------------------
                                     (b)
Revenues           $     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
 Expense (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
 (Benefit) Expense       (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 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 special items from earnings.

Normalized results have been adjusted for the following:
(b)Loss on extinguishment of 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                          Asset      Sept.
                 Ended                          Impair-      30,
                 Sept.                           ments      2005
                  30,   Income       Debt         &         Before
                 2005    Tax      Extinguish-    Other      Special
                 (GAAP) Expense      ment        Charges    Items
                ---------------------------------------------------
                          (b)         (c)         (d)
Revenues        $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
 Expense
 (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          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               (a)           (a)        (a)        (a)
 Diluted Shares  245.8   251.8         251.8      251.8      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.

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

SOURCE: Cincinnati Bell Inc.

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