Cincinnati Bell Reports Third Quarter 2013 Results and Increases Full-Year Adjusted EBITDA Guidance

  Cincinnati Bell Reports Third Quarter 2013 Results and Increases Full-Year
  Adjusted EBITDA Guidance

Third Quarter Highlights:

  *Strong third quarter Adjusted EBITDA of $103 million
  *Increased full-year Adjusted EBITDA guidance range to $400 - $410 million
  *Fioptics revenue totaled $26 million, an increase of 48 percent from 2012
  *Fioptics entertainment subscribers up 36 percent over prior year
  *Issued $540 million Tranche B term loan facility used to redeem all 8 1/4%
    Senior Notes

Business Wire

CINCINNATI -- November 7, 2013

Cincinnati Bell Inc. (NYSE:CBB) today announced third quarter results for 2013
and raised its 2013 full-year Adjusted EBITDA^1 guidance range to $400 - $410
million. Excluding the results of CyrusOne, the company’s former data center
segment, Cincinnati Bell generated year-to-date Adjusted EBITDA totaling $317
million.

The company reported record Fioptics net activations for the second
consecutive quarter, adding 6,500 new entertainment subscribers and 7,500
high-speed internet subscribers. Cincinnati Bell passed 53,000 addresses with
Fioptics during the first three quarters of 2013 and was able to maintain a 29
percent customer penetration rate. The company is now able to provide its
Fioptics suite of services to approximately 32 percent of Greater Cincinnati.

Total revenue for the third quarter of 2013 was $311 million, down $2 million
from the prior year after excluding the data center segment results. Operating
income totaled $58 million, up $3 million from the prior year after excluding
CyrusOne. Net income of $9 million in the quarter resulted in diluted earnings
per share of 3 cents.

On January 24, 2013, the company successfully completed the initial public
offering (“IPO”) of CyrusOne and its consolidated year-to-date results for
2013 include the results of that business up to the IPO date. Year-to-date
revenue for 2013 was $949 million, operating income was $124 million, and net
income excluding special items^2 totaled $23 million. Excluding the data
center segment results, Cincinnati Bell generated revenue of $933 million,
down $7 million from the prior year. Adjusted EBITDA excluding the data center
business was $317 million, and includes a gain of $7 million associated with
mark-to-market adjustments on compensation plans indexed to the company’s
stock price.

“Customer demand for Fioptics continues to surpass our already high
expectations. We again set an all-time high for Fioptics net activations, and
we are starting to experience year-over-year growth from our Wireline consumer
market,” said Ted Torbeck, president and chief executive officer. “The
impressive growth from our strategic fiber-based investments confirms our
ability to grow Wireline revenue in 2014, a key milestone in our strategy to
create a fiber-based growth company capable of producing significant and
sustainable free cash flows.”

SEGMENT RESULTS

Wireline Segment
Wireline revenue was $181 million for the quarter compared to $182 million in
the third quarter of 2012, as the growth from Fioptics and fiber-based
business solutions continues to increasingly mitigate the impact of access
line losses. For the quarter, operating income was $48 million, down from $51
million in the same period of 2012. Adjusted EBITDA declined by $1 million
year-over-year to $83 million, primarily driven by the continued loss of
higher margin access lines. Adjusted EBITDA margin^3 in the quarter was 45
percent compared to 46 percent in the third quarter of 2012.

Access line loss of 7.6 percent in the third quarter of 2013 was slightly
improved compared to the 7.8 percent loss in the prior year.

Wireless Segment
Wireless revenue was $49 million for the quarter, a decrease of 17 percent
from the third quarter of 2012. Wireless operating income was $7 million in
the third quarter compared to $13 million in the prior year. The segment’s
Adjusted EBITDA of $14 million in the quarter resulted in an Adjusted EBITDA
margin of 29 percent as the loss of postpaid subscribers continues to have a
negative impact on Wireless revenue and Adjusted EBITDA.

At September 30, 2013, total wireless subscribers were 355,000 compared to
416,000 at the end of the third quarter in 2012.

IT Services and Hardware Segment
Revenue was $88 million for the quarter, up 12 percent from $78 million in the
third quarter of 2012. Hardware sales were up 14 percent and managed and
professional services revenue was up 9 percent compared to a year ago. For the
quarter, Adjusted EBITDA was $7 million, an increase of $1 million from the
prior year. Adjusted EBITDA margin of 8 percent for the quarter was comparable
to the third quarter in 2012.

“Our year-to-date 2013 results have been outstanding, and we are pleased to
raise our Adjusted EBITDA guidance range,” said Leigh Fox, chief financial
officer. “In addition to the strong financial results, our recent refinancing
provides us increased financial flexibility and is expected to reduce annual
interest payments by approximately $20 million next year.”

Investment in CyrusOne
The company continues to effectively own 69 percent of CyrusOne, which is
accounted for as an equity method investment. As of September 30, 2013, the
company’s investment in CyrusOne was valued at approximately $845 million.
CyrusOne reported revenue of $68 million and Adjusted EBITDA of $37 million
for the third quarter of 2013. Data center colocation space totaled 992,000
square feet at September 30, 2013, of which 85 percent was utilized.

2013 Outlook
Cincinnati Bell increased its Adjusted EBITDA guidance for 2013 to reflect
strong year-to-date results. The following guidance excludes the results of
the former data center segment:

      Category          Original 2013           Revised 2013
                                Guidance                  Guidance
            Revenue           $1.2 billion            $1.2 billion
            Adjusted EBITDA   Approx. $390 million*   $400 - $410 million
                                                     
*Plus or minus 2 percent
                                                          

Conference Call/Webcast
Cincinnati Bell will host a conference call on November 7 at 10:00 a.m. (ET)
to discuss its results for the third quarter of 2013. 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) 863-7412.
Callers located outside of the U.S. and Canada may dial (816) 581-1570. A
taped replay of the conference call will be available one hour after the
conclusion of the call until 10:00 a.m. on Thursday November 21, 2013. For
U.S. callers, the replay will be available at (888) 203-1112. For callers
outside of the U.S. and Canada, the replay will be available at (719)
457-0820. The replay reference number is 8162828. An archived version of the
webcast will also be available in the Investor Relations section of
www.cincinnatibell.com.

Safe Harbor Note
This release and the documents incorporated by reference herein contain
forward-looking statements regarding future events and our future results that
are subject to the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. All statements, other than statements of
historical facts, are statements that could be deemed forward-looking
statements. These statements are based on current expectations, estimates,
forecasts, and projections about the industries in which we operate and the
beliefs and assumptions of our management. Words such as “expects,”
“anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” “continues,” “endeavors,” “strives,” “may,” variations
of such words and similar expressions are intended to identify such
forward-looking statements. In addition, any statements that refer to
projections of our future financial performance, our anticipated growth and
trends in our businesses, and other characterizations of future events or
circumstances are forward-looking statements. Readers are cautioned these
forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties, which could cause our actual
results to differ materially and adversely from those reflected in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in this release
and those discussed in other documents we file with the Securities and
Exchange Commission (SEC). More information on potential risks and
uncertainties is available in our recent filings with the SEC, including
Cincinnati Bell's Form 10-K report, Form 10-Q reports and Form 8-K reports.
Actual results may differ materially and adversely from those expressed in any
forward-looking statements. We undertake no obligation to revise or update any
forward-looking statements for any reason.

Use of Non-GAAP Financial Measures
This press release contains information about adjusted earnings before
interest, taxes, depreciation and amortization (Adjusted EBITDA), Adjusted
EBITDA margin, net debt, net income excluding special items, and free cash
flow. 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 these non-GAAP financial measures 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.

^1Adjusted EBITDA provides a useful measure of operational performance. The
company defines Adjusted EBITDA as GAAP operating income plus depreciation,
amortization, transaction-related compensation, restructuring charges, (gain)
loss on sale or disposal of assets, transaction costs, curtailment gain, asset
impairments, components of pension and other retirement plan costs (including
interest costs, asset returns, and amortization of actuarial gains and
losses), 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 the measure as defined by other companies.

CyrusOne defines Adjusted EBITDA as net (loss) income before noncontrolling
interests as defined by U.S. GAAP plus interest expense, other income, income
tax (benefit) expense, depreciation and amortization, restructuring charges,
legal claim costs, transaction costs and transaction-related compensation,
including acquisition pursuit costs, loss on sale of receivables to affiliate,
non-cash compensation, (gain) loss on extinguishment of debt, asset
impairments, (gain) loss on sale of real estate improvements, and other
special items. Other companies may not calculate Adjusted EBITDA in the same
manner as CyrusOne. Accordingly, CyrusOne's Adjusted EBITDA as presented may
not be comparable to others. Detailed reconciliations of CyrusOne's Adjusted
EBITDA to the comparable GAAP financial measure are available in the Investor
Relations section of www.cyrusone.com.

^2Net income excluding special items in total and per share provides a useful
measure of operating performance. Net income excluding special items should
not be considered as an alternative to comparable GAAP measures of
profitability and may not be comparable with net income excluding special
items as defined by other companies.

^3Adjusted EBITDA margin provides a useful measure of operational performance.
The company defines Adjusted EBITDA margin as Adjusted EBITDA divided by
revenue. Adjusted EBITDA margin should not be considered as an alternative to
comparable GAAP measures of profitability and may not be comparable with the
measure as defined by other companies.

Free cash flow provides a useful measure of operational performance, liquidity
and financial health. The company defines free cash flow as cash provided by
(used in) operating, financing and investing activities, adjusted for the
issuance and repayment of debt, debt issuance costs, the repurchase of common
stock, and the proceeds from the sale or the use of funds from the purchase of
business operations, including transaction costs. 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. Although the company feels that there is no comparable GAAP measure
for free cash flow, the attached financial information reconciles free cash
flow to the net increase (decrease) in cash and cash equivalents.

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. Net debt should not be considered as an alternative to
comparable GAAP measures of liquidity and may not be comparable with the
measure as defined by other companies.

About Cincinnati Bell Inc.

With headquarters in Cincinnati, Ohio, Cincinnati Bell (NYSE: CBB) provides
integrated communications solutions - including local and long distance voice,
data, high-speed internet, entertainment and wireless services - that keep
residential and business customers in Greater Cincinnati and Dayton connected
with each other and with the world. In addition, enterprise customers across
the United States rely on CBTS, a wholly-owned subsidiary, for efficient,
scalable office communications systems and end-to-end IT solutions. Cincinnati
Bell also is the majority owner of CyrusOne (NASDAQ: CONE), which provides
best-in-class data center colocation services to enterprise customers through
its facilities with fully redundant power and cooling solutions that are
currently located in the Midwest, Texas, Arizona, London and Singapore. For
more information, please visit www.cincinnatibell.com.

                                                                                                         
                                                                                                                      
Cincinnati Bell Inc.
Consolidated Statements of Operations
(Unaudited)
(Dollars in millions, except per share amounts)
  
                                Three Months Ended                             Nine Months Ended
                                September 30,           Change                 September 30,             Change
                                2013        2012        $           %          2013        2012          $            %
                                                                                                                      
  Revenue                       $ 310.8     $ 368.2     $ (57.4 )   (16 )%     $ 948.5     $ 1,099.2     $ (150.7 )   (14 )%
                                                                                                                      
  Costs and expenses
    Cost of services              159.4       172.3       (12.9 )   (7  )%       478.8       509.8         (31.0  )   (6  )%
    and products
    Selling, general              53.6        72.2        (18.6 )   (26 )%       161.4       199.6         (38.2  )   (19 )%
    and administrative
    Depreciation and              39.8        55.4        (15.6 )   (28 )%       127.6       160.2         (32.6  )   (20 )%
    amortization
    Transaction-related           -           -           -         n/m          42.6        -             42.6       n/m
    compensation
    Restructuring                 -           0.9         (0.9  )   n/m          10.8        3.0           7.8        n/m
    charges
    Curtailment gain              -           -           -         n/m          (0.6  )     -             (0.6   )   n/m
    (Gain) loss on sale
    or disposal of                (0.2  )     (0.6  )     0.4       (67 )%       2.6         (0.6    )     3.2        n/m
    assets, net
    Transaction costs             0.5         1.7         (1.2  )   (71 )%       1.6         1.7           (0.1   )   (6  )%
    Asset impairments            -         0.3       (0.3  )   n/m        -         13.3        (13.3  )   n/m 
                                                                                                                      
           Operating              57.7        66.0        (8.3  )   (13 )%       123.7       212.2         (88.5  )   (42 )%
           income
                                                                                                                      
  Interest expense                46.7        55.2        (8.5  )   (15 )%       140.0       163.3         (23.3  )   (14 )%
  Loss from CyrusOne
  equity method                   1.5         -           1.5       n/m          8.1         -             8.1        n/m
  investment
  Other (income)                 (1.2  )    0.1       (1.3  )   n/m        (1.4  )    1.6         (3.0   )   n/m 
  expense, net
                                                                                                                      
  Income (loss) before            10.7        10.7        -         0   %        (23.0 )     47.3          (70.3  )   n/m
  income taxes
  Income tax expense             1.4       6.8       (5.4  )   (79 )%      3.6       26.3        (22.7  )   (86 )%
                                                                                                                      
  Net income (loss)               9.3         3.9         5.4       n/m          (26.6 )     21.0          (47.6  )   n/m
                                                                                                                      
  Preferred stock                2.6       2.6       -        0   %       7.8       7.8         -         0   %
  dividends
                                                                                                                      
  Net income (loss)
  applicable to common          $ 6.7      $ 1.3      $ 5.4      n/m       $ (34.4 )   $ 13.2       $ (47.6  )   n/m 
  shareowners
                                                                                                                      
                                                                                                                      
  Basic and diluted
  earnings (loss) per           $ 0.03     $ 0.01                            $ (0.17 )   $ 0.07    
  common share
                                                                                                                      
  Weighted average
  common shares
  outstanding
    (in millions)
    - Basic                       207.0       196.4                              205.6       195.8
    - Diluted                     208.5       205.6                              205.6       203.0
                                                                                                                      

                                                               
                                                                        
Cincinnati Bell Inc.
Consolidated Statements of Operations
(Unaudited)
(Dollars in millions, except per share amounts)
   
                                   Three Months Ended
                                   September   June 30,      Change
                                   30,
                                   2013        2013          $          %
                                                                        
  Revenue                          $ 310.8     $ 312.0       $ (1.2 )   0   %
                                                                        
  Costs and expenses
     Cost of services and            159.4       157.6         1.8      1   %
     products
     Selling, general and            53.6        54.7          (1.1 )   (2  )%
     administrative
     Depreciation and                39.8        37.2          2.6      7   %
     amortization
     Transaction-related             -           7.1           (7.1 )   n/m
     compensation
     Restructuring charges           -           8.2           (8.2 )   n/m
     Curtailment gain                -           (0.6  )       0.6      n/m
     (Gain) loss on sale
     or disposal of                  (0.2  )     0.3           (0.5 )   n/m
     assets, net
     Transaction costs              0.5       0.7         (0.2 )   (29 )%
                                                                        
             Operating               57.7        46.8          10.9     23  %
             income
                                                                        
  Interest expense                   46.7        45.4          1.3      3   %
  Loss from CyrusOne                 1.5         4.7           (3.2 )   (68 )%
  equity method investment
  Other (income) expense,           (1.2  )    0.1         (1.3 )   n/m 
  net
                                                                        
  Income (loss) before               10.7        (3.4  )       14.1     n/m
  income taxes
  Income tax expense                1.4       (4.2  )      5.6     n/m 
  (benefit)
                                                                        
  Net income                         9.3         0.8           8.5      n/m
                                                                        
  Preferred stock                   2.6       2.6         -       0   %
  dividends
                                                                        
  Net income (loss)
  applicable to common             $ 6.7      $ (1.8  )     $ 8.5     n/m 
  shareowners
                                                                        
                                                                        
  Basic and diluted
  earnings (loss) per              $ 0.03     $ (0.01 )
  common share
                                                                        
  Weighted average common
  shares outstanding
     (in millions)
     - Basic                         207.0       206.9
     - Diluted                       208.5       206.9
                                                                        

                                                                                            
                                                                                                         
Cincinnati Bell Inc.
Income Statements by Segment
(Unaudited)
(Dollars in millions)
 
                           Three Months Ended                           Nine Months Ended
                           September 30,         Change                 September 30,       Change
                           2013        2012      $           %          2013      2012      $            %
  Wireline
  Revenue
    Data                   $ 79.6      $ 77.2    $ 2.4       3   %      $ 236.9   $ 229.4   $ 7.5        3   %
    Voice - local            56.6        63.0      (6.4  )   (10 )%       174.4     193.7     (19.3  )   (10 )%
    service
    Long distance            26.8        28.1      (1.3  )   (5  )%       80.5      86.1      (5.6   )   (7  )%
    and VoIP
    Entertainment            14.4        9.5       4.9       52  %        39.4      25.6      13.8       54  %
    Other                   4.0       4.5      (0.5  )   (11 )%      11.5     13.6     (2.1   )   (15 )%
                                                                                                         
    Total revenue           181.4     182.3    (0.9  )   0   %       542.7    548.4    (5.7   )   (1  )%
                                                                                                         
  Operating costs
  and expenses
    Cost of
    services and             72.4        71.5      0.9       1   %        213.4     211.5     1.9        1   %
    products
    Selling,
    general and              31.7        32.8      (1.1  )   (3  )%       94.4      94.0      0.4        0   %
    administrative
    Depreciation
    and                      29.7        26.6      3.1       12  %        83.8      78.9      4.9        6   %
    amortization
    Other*                  (0.2  )    0.5      (0.7  )   n/m        4.3      1.2      3.1       n/m 
                                                                                                         
    Total
    operating               133.6     131.4    2.2      2   %       395.9    385.6    10.3      3   %
    costs and
    expenses
                                                                                                         
  Operating income         $ 47.8     $ 50.9    $ (3.1  )   (6  )%     $ 146.8   $ 162.8   $ (16.0  )   (10 )%
                                                                                                         
  Wireless
  Revenue
    Service                $ 45.0      $ 55.0    $ (10.0 )   (18 )%     $ 141.8   $ 171.7   $ (29.9  )   (17 )%
    Equipment               4.1       4.5      (0.4  )   (9  )%      12.3     13.3     (1.0   )   (8  )%
                                                                                                         
    Total revenue           49.1      59.5     (10.4 )   (17 )%      154.1    185.0    (30.9  )   (17 )%
                                                                                                         
  Operating costs
  and expenses
    Cost of
    services and             24.2        27.8      (3.6  )   (13 )%       71.5      84.7      (13.2  )   (16 )%
    products
    Selling,
    general and              10.5        11.0      (0.5  )   (5  )%       29.3      32.3      (3.0   )   (9  )%
    administrative
    Depreciation
    and                      7.4         8.1       (0.7  )   (9  )%       30.7      24.0      6.7        28  %
    amortization
    Other*                  -         -        -        n/m        3.5      0.5      3.0       n/m 
                                                                                                         
    Total
    operating               42.1      46.9     (4.8  )   (10 )%      135.0    141.5    (6.5   )   (5  )%
    costs and
    expenses
                                                                                                         
  Operating income         $ 7.0      $ 12.6    $ (5.6  )   (44 )%     $ 19.1    $ 43.5    $ (24.4  )   (56 )%
                                                                                                         
  IT Services and
  Hardware
  Revenue
    Telecom and IT
    equipment              $ 56.2      $ 49.5    $ 6.7       14  %      $ 169.2   $ 145.0   $ 24.2       17  %
    distribution
    Managed and
    professional            31.3      28.8     2.5      9   %       88.8     83.8     5.0       6   %
    services
                                                                                                         
    Total revenue           87.5      78.3     9.2      12  %       258.0    228.8    29.2      13  %
                                                                                                         
  Operating costs
  and expenses
    Cost of
    services and             69.4        61.3      8.1       13  %        209.5     183.3     26.2       14  %
    products
    Selling,
    general and              11.2        10.8      0.4       4   %        33.7      32.0      1.7        5   %
    administrative
    Depreciation
    and                      2.5         2.4       0.1       4   %        7.5       6.3       1.2        19  %
    amortization
    Other*                  -         -        -        n/m        0.7      -        0.7       n/m 
                                                                                                         
    Total
    operating               83.1      74.5     8.6      12  %       251.4    221.6    29.8      13  %
    costs and
    expenses
                                                                                                         
  Operating income         $ 4.4      $ 3.8     $ 0.6      16  %      $ 6.6     $ 7.2     $ (0.6   )   (8  )%
                                                                                                         
  Data Center
  Colocation**
  Revenue                  $ -        $ 56.7    $ (56.7 )   n/m       $ 15.6    $ 163.3   $ (147.7 )   n/m 
                                                                                                         
  Operating costs
  and expenses
    Cost of                  -           20.0      (20.0 )   n/m          4.8       55.1      (50.3  )   n/m
    services
    Selling,
    general and              -           7.1       (7.1  )   n/m          2.4       21.2      (18.8  )   n/m
    administrative
    Depreciation
    and                      -           18.3      (18.3 )   n/m          5.2       50.9      (45.7  )   n/m
    amortization
    Other*                  -         0.1      (0.1  )   n/m        -        13.6     (13.6  )   n/m 
                                                                                                         
    Total
    operating               -         45.5     (45.5 )   n/m        12.4     140.8    (128.4 )   n/m 
    costs and
    expenses
                                                                                                         
  Operating income         $ -        $ 11.2    $ (11.2 )   n/m       $ 3.2     $ 22.5    $ (19.3  )   n/m 

 
    *Other includes restructuring charges, (gain) loss on sale or disposal of
    assets, asset impairments, and a curtailment gain.
    **Results for 2013 only include CyrusOne's results through January 23,
    2013. Effective January 24, 2013, the date of completion of CyrusOne's
    IPO, the Company owns 69% of CyrusOne as an equity method investment, and
    therefore does not consolidate the CyrusOne results of operations in the
    total company or segment results.
    

                                                               
                                                                        
Cincinnati Bell Inc.
Income Statements by Segment
(Unaudited)
(Dollars in millions)
 
                                Three Months Ended
                                September 30,   June 30,     Change
                                2013            2013         $          %
  Wireline
  Revenue
    Data                        $   79.6        $  79.2      $ 0.4      1   %
    Voice - local                   56.6           58.3        (1.7 )   (3  )%
    service
    Long distance and               26.8           26.8        -        0   %
    VoIP
    Entertainment                   14.4           13.0        1.4      11  %
    Other                          4.0          4.3        (0.3 )   (7  )%
                                                                        
    Total revenue                  181.4        181.6      (0.2 )   0   %
                                                                        
  Operating costs and
  expenses
    Cost of services                72.4           69.8        2.6      4   %
    and products
    Selling, general                31.7           31.7        -        0   %
    and administrative
    Depreciation and                29.7           27.3        2.4      9   %
    amortization
    Other*                         (0.2   )      3.9        (4.1 )   n/m 
                                                                        
    Total operating                133.6        132.7      0.9     1   %
    costs and expenses
                                                                        
  Operating income              $   47.8       $  48.9      $ (1.1 )   (2  )%
                                                                        
  Wireless
  Revenue
    Service                     $   45.0        $  47.5      $ (2.5 )   (5  )%
    Equipment                      4.1          4.2        (0.1 )   (2  )%
                                                                        
    Total revenue                  49.1         51.7       (2.6 )   (5  )%
                                                                        
  Operating costs and
  expenses
    Cost of services                24.2           23.8        0.4      2   %
    and products
    Selling, general                10.5           9.0         1.5      17  %
    and administrative
    Depreciation and                7.4            7.3         0.1      1   %
    amortization
    Other*                         -            0.2        (0.2 )   n/m 
                                                                        
    Total operating                42.1         40.3       1.8     4   %
    costs and expenses
                                                                        
  Operating income              $   7.0        $  11.4      $ (4.4 )   (39 )%
                                                                        
  IT Services and
  Hardware
  Revenue
    Telecom and IT
    equipment                   $   56.2        $  56.1      $ 0.1      0   %
    distribution
    Managed and
    professional                   31.3         29.9       1.4     5   %
    services
                                                                        
    Total revenue                  87.5         86.0       1.5     2   %
                                                                        
  Operating costs and
  expenses
    Cost of services                69.4           70.7        (1.3 )   (2  )%
    and products
    Selling, general                11.2           11.8        (0.6 )   (5  )%
    and administrative
    Depreciation and                2.5            2.5         -        0   %
    amortization
    Other*                         -            0.7        (0.7 )   n/m 
                                                                        
    Total operating                83.1         85.7       (2.6 )   (3  )%
    costs and expenses
                                                                        
  Operating income              $   4.4        $  0.3       $ 4.1     n/m 

 
    *Other includes restructuring charges, (gain) loss on sale or disposal of
    assets, and a curtailment gain.
    

                                                                                                    
                                                                                                                 
Cincinnati Bell Inc.
Segment Information
(Unaudited)
(Dollars in millions)
 
                           Three Months Ended                             Nine Months Ended
                           September 30,           Change                 September 30,             Change
                           2013        2012        $           %          2013        2012          $            %
  Revenue
    Wireline               $ 181.4     $ 182.3     $ (0.9  )   0   %      $ 542.7     $ 548.4       $ (5.7   )   (1  )%
    Wireless                 49.1        59.5        (10.4 )   (17 )%       154.1       185.0         (30.9  )   (17 )%
    IT Services              87.5        78.3        9.2       12  %        258.0       228.8         29.2       13  %
    and Hardware
    Data Center              -           56.7        (56.7 )   n/m          15.6        163.3         (147.7 )   n/m
    Colocation**
    Eliminations            (7.2  )    (8.6  )    1.4      16  %       (21.9 )    (26.3   )    4.4       17  %
                                                                                                                 
    Total revenue          $ 310.8    $ 368.2    $ (57.4 )   (16 )%     $ 948.5    $ 1,099.2    $ (150.7 )   (14 )%
                                                                                                                 
  Cost of Services
  and Products
    Wireline               $ 72.4      $ 71.5      $ 0.9       1   %      $ 213.4     $ 211.5       $ 1.9        1   %
    Wireless                 24.2        27.8        (3.6  )   (13 )%       71.5        84.7          (13.2  )   (16 )%
    IT Services              69.4        61.3        8.1       13  %        209.5       183.3         26.2       14  %
    and Hardware
    Data Center              -           20.0        (20.0 )   n/m          4.8         55.1          (50.3  )   n/m
    Colocation**
    Eliminations            (6.6  )    (8.3  )    1.7      20  %       (20.4 )    (24.8   )    4.4       18  %
                                                                                                                 
    Total cost of
    services and           $ 159.4    $ 172.3    $ (12.9 )   (7  )%     $ 478.8    $ 509.8      $ (31.0  )   (6  )%
    products
                                                                                                                 
  Selling, General
  and
  Administrative
    Wireline               $ 31.7      $ 32.8      $ (1.1  )   (3  )%     $ 94.4      $ 94.0        $ 0.4        0   %
    Wireless                 10.5        11.0        (0.5  )   (5  )%       29.3        32.3          (3.0   )   (9  )%
    IT Services              11.2        10.8        0.4       4   %        33.7        32.0          1.7        5   %
    and Hardware
    Data Center              -           7.1         (7.1  )   n/m          2.4         21.2          (18.8  )   n/m
    Colocation**
    Corporate and           0.2       10.5      (10.3 )   (98 )%      1.6       20.1        (18.5  )   (92 )%
    eliminations
                                                                                                                 
    Total selling,
    general and            $ 53.6     $ 72.2     $ (18.6 )   (26 )%     $ 161.4    $ 199.6      $ (38.2  )   (19 )%
    administrative
                                                                                                                 
  Depreciation and
  Amortization
    Wireline               $ 29.7      $ 26.6      $ 3.1       12  %      $ 83.8      $ 78.9        $ 4.9        6   %
    Wireless                 7.4         8.1         (0.7  )   (9  )%       30.7        24.0          6.7        28  %
    IT Services              2.5         2.4         0.1       4   %        7.5         6.3           1.2        19  %
    and Hardware
    Data Center              -           18.3        (18.3 )   n/m          5.2         50.9          (45.7  )   n/m
    Colocation**
    Corporate               0.2       -         0.2      n/m        0.4       0.1         0.3       n/m 
                                                                                                                 
    Total
    depreciation           $ 39.8     $ 55.4     $ (15.6 )   (28 )%     $ 127.6    $ 160.2      $ (32.6  )   (20 )%
    and
    amortization
                                                                                                                 
  Other*
    Wireline               $ (0.2  )   $ 0.5       $ (0.7  )   n/m        $ 4.3       $ 1.2         $ 3.1        n/m
    Wireless                 -           -           -         n/m          3.5         0.5           3.0        n/m
    IT Services              -           -           -         n/m          0.7         -             0.7        n/m
    and Hardware
    Data Center              -           0.1         (0.1  )   n/m          -           13.6          (13.6  )   n/m
    Colocation**
    Corporate               0.5       1.7       (1.2  )   (71 )%      48.5      2.1         46.4      n/m 
                                                                                                                 
    Total other            $ 0.3      $ 2.3      $ (2.0  )   (87 )%     $ 57.0     $ 17.4       $ 39.6      n/m 
                                                                                                                 
  Operating Income
    Wireline               $ 47.8      $ 50.9      $ (3.1  )   (6  )%     $ 146.8     $ 162.8       $ (16.0  )   (10 )%
    Wireless                 7.0         12.6        (5.6  )   (44 )%       19.1        43.5          (24.4  )   (56 )%
    IT Services              4.4         3.8         0.6       16  %        6.6         7.2           (0.6   )   (8  )%
    and Hardware
    Data Center              -           11.2        (11.2 )   n/m          3.2         22.5          (19.3  )   n/m
    Colocation**
    Corporate               (1.5  )    (12.5 )    11.0     88  %       (52.0 )    (23.8   )    (28.2  )   n/m 
                                                                                                                 
    Total
    operating              $ 57.7     $ 66.0     $ (8.3  )   (13 )%     $ 123.7    $ 212.2      $ (88.5  )   (42 )%
    income

 
    *Other includes restructuring charges, (gain) loss on sale or disposal of
    assets, asset impairments, transaction-related compensation, transaction
    costs, and a curtailment gain.
    **Results for 2013 only include CyrusOne's results through January 23,
    2013. Effective January 24, 2013, the date of completion of CyrusOne's
    IPO, the Company owns 69% of CyrusOne as an equity method investment, and
    therefore does not consolidate the CyrusOne results of operations in the
    total company or segment results.
    

                                                               
                                                                        
Cincinnati Bell Inc.
Segment Information
(Unaudited)
(Dollars in millions)
 
                               Three Months Ended
                               September      June 30,      Change
                               30,
                               2013           2013          $           %
  Revenue
    Wireline                   $  181.4       $ 181.6       $ (0.2  )   0   %
    Wireless                      49.1          51.7          (2.6  )   (5  )%
    IT Services and               87.5          86.0          1.5       2   %
    Hardware
    Eliminations                 (7.2   )     (7.3  )      0.1      1   %
                                                                        
    Total revenue              $  310.8      $ 312.0      $ (1.2  )   0   %
                                                                        
  Cost of Services and
  Products
    Wireline                   $  72.4        $ 69.8        $ 2.6       4   %
    Wireless                      24.2          23.8          0.4       2   %
    IT Services and               69.4          70.7          (1.3  )   (2  )%
    Hardware
    Eliminations                 (6.6   )     (6.7  )      0.1      1   %
                                                                        
    Total cost of
    services and               $  159.4      $ 157.6      $ 1.8      1   %
    products
                                                                        
  Selling, General and
  Administrative
    Wireline                   $  31.7        $ 31.7        $ -         0   %
    Wireless                      10.5          9.0           1.5       17  %
    IT Services and               11.2          11.8          (0.6  )   (5  )%
    Hardware
    Corporate and                0.2         2.2         (2.0  )   (91 )%
    eliminations
                                                                        
    Total selling,
    general and                $  53.6       $ 54.7       $ (1.1  )   (2  )%
    administrative
                                                                        
  Depreciation and
  Amortization
    Wireline                   $  29.7        $ 27.3        $ 2.4       9   %
    Wireless                      7.4           7.3           0.1       1   %
    IT Services and               2.5           2.5           -         0   %
    Hardware
    Corporate                    0.2         0.1         0.1      n/m 
                                                                        
    Total depreciation         $  39.8       $ 37.2       $ 2.6      7   %
    and amortization
                                                                        
  Other*
    Wireline                   $  (0.2   )    $ 3.9         $ (4.1  )   n/m
    Wireless                      -             0.2           (0.2  )   n/m
    IT Services and               -             0.7           (0.7  )   n/m
    Hardware
    Corporate                    0.5         10.9        (10.4 )   (95 %)
                                                                        
    Total other                $  0.3        $ 15.7       $ (15.4 )   (98 )%
                                                                        
  Operating Income
    Wireline                   $  47.8        $ 48.9        $ (1.1  )   (2  )%
    Wireless                      7.0           11.4          (4.4  )   (39 )%
    IT Services and               4.4           0.3           4.1       n/m
    Hardware
    Corporate                    (1.5   )     (13.8 )      12.3     89  %
                                                                        
    Total operating            $  57.7       $ 46.8       $ 10.9     23  %
    income

 
    *Other includes restructuring charges, (gain) loss on sale or disposal of
    assets, transaction-related compensation, transaction costs, and a
    curtailment gain.
    

                                                        
                                                                 
Cincinnati Bell Inc.
Segment Metric Information
(Unaudited)
(In thousands)
 
                                  September 30,     June 30,     September 30,
                                  2013              2013         2012
                                                                 
  Local access lines              541.2             550.0        585.8
                                                                 
  Long distance lines             400.8             406.5        426.4
                                                                 
  High-speed internet
  subscribers
      DSL subscribers             191.3             194.9        207.8
      Fioptics                    74.3              66.8         52.3
      subscribers
                                                                 
                                  265.6             261.7        260.1
                                                                 
  Fioptics units passed           258.0             238.0        184.0
                                                                 
  Fioptics entertainment          69.7              63.2         51.1
  subscribers
                                                                 
  Wireless
      Postpaid wireless           209.4             223.1        270.7
      subscribers
      Prepaid wireless            145.8             146.9        144.9
      subscribers
                                                                 
                                  355.2             370.0        415.6
                                                                 

                                                                                             
                                                                                                              
Cincinnati Bell Inc.
Local Access Line Detail
(Unaudited)
(In thousands)

                                                                                            
                          2011                              2012                              2013
                          1Q      2Q      3Q      4Q        1Q      2Q      3Q      4Q        1Q      2Q      3Q
Local Access
Lines
                                                                                                              
In-Territory:
   Primary                321.8   313.8   304.8   296.7     288.9   281.7   274.3   266.4     259.1   253.1   247.7
   Residential
   Secondary              18.3    16.3    15.6    14.9      14.2    13.6    13.1    12.5      12.0    11.4    10.9
   Residential
   Business/Other         250.7  248.7  244.4  240.8     238.5  237.5  234.4  232.1     229.7  228.2  226.7
Total                     590.8   578.8   564.8   552.4     541.6   532.8   521.8   511.0     500.8   492.7   485.3
In-Territory
                                                                                                              
Out-of-Territory:
   Primary                30.4    29.3    27.8    26.7      25.2    24.3    23.3    22.4      20.8    19.8    18.9
   Residential
   Secondary              0.9     0.9     0.9     0.8       0.8     0.8     0.7     0.7       0.6     0.6     0.6
   Residential
   Business/Other         41.5   41.6   41.8   41.4      41.0   40.6   40.0   39.8      39.2   36.9   36.4
Total                     72.8    71.8    70.5    68.9      67.0    65.7    64.0    62.9      60.6    57.3    55.9
Out-of-Territory
                                                                                            
Total Access              663.6  650.6  635.3  621.3     608.6  598.5  585.8  573.9     561.4  550.0  541.2
Lines
                                                                                                              

                                                         
                                                                  
Cincinnati Bell Inc.
Net Debt and Common Shares Outstanding
(Unaudited)
(Dollars and shares in millions)

                                                                  
                                September 30,     June 30,        December 31,
                                2013              2013            2012
                                                                  
Corporate Credit                $  -              $ 8.0           $  -
Agreement***
Receivables Facility***            -                100.8            52.0
8 1/4% Senior Notes due            500.0            500.0            500.0
2017***
8 3/4% Senior
Subordinated Notes due             625.0            625.0            625.0
2018
Corporate Credit
Agreement - Tranche B              540.0            -                -
Term Loan
8 3/8% Senior Notes due            683.9            683.9            683.9
2020
CyrusOne 6 3/8% Senior             -                -                525.0
Notes due 2022*
7 1/4% Senior Notes due            40.0             40.0             40.0
2023
Various Cincinnati Bell            134.5            134.5            134.5
Telephone notes
Capital leases and                 104.1            104.7            136.5
other debt*
Net unamortized                   (10.4    )      (6.7    )       (7.5    )
discount
                                                                  
      Total debt                   2,617.1          2,190.2          2,689.4
                                                                  
Less: Cash and cash               (413.7   )      (5.5    )       (23.6   )
equivalents***
                                                                  
      Net debt (as
      defined by the            $  2,203.4       $ 2,184.7      $  2,665.8 
      company)
                                                                  
Credit facility
availability:
      Corporate                 $  200.0          $ 192.0         $  200.0
      CyrusOne**                  -              -              225.0   
                                                                  
                                $  200.0         $ 192.0        $  425.0   
                                                                  
Common shares                     208.0          208.0          202.5   
outstanding


*On January 24, 2013, CyrusOne completed its IPO. As of this date, Cincinnati
Bell Inc. no longer has any obligations related to CyrusOne's 6 3/8% Senior
Notes due 2022 or capital lease obligations.
**On January 24, 2013, CyrusOne completed its IPO. As of this date, Cincinnati
Bell Inc. no longer has access to the CyrusOne credit facility.
***On October 15, 2013, the company used the proceeds from the Tranche B Term
Loan to fully repay the 8 1/4% Senior Notes due 2017. In September 2013, prior
to the October 15, 2013 call date, the proceeds temporarily increased cash and
were used to temporarily pay down the Corporate Credit Agreement and
Receivables Facility.


                                                                               
                                                                                         
Cincinnati Bell Inc.
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)
(Unaudited)
(Dollars in millions)
                                                                             
                         Three Months Ended September 30, 2013
                                               IT
                         Wireline   Wireless   Services   Data Center        Corporate   Total
                                               &          Colocation*                    Company
                                               Hardware
                                                                                         
  Net Income                                                                             $ 9.3
  (GAAP)
  Add:
    Income tax                                                                             1.4
    expense
    Interest                                                                               46.7
    expense
    Loss from
    CyrusOne
    equity                                                                                 1.5
    method
    investment
    Other                                                                                 (1.2  )
    income, net
                                                                                         
  Operating              $ 47.8     $ 7.0      $  4.4     $   -              $  (1.5 )   $ 57.7
  Income (GAAP)
  Add:
    Depreciation
    and                    29.7       7.4         2.5         -                 0.2        39.8
    amortization
    Gain on sale
    or disposal            (0.2 )     -           -           -                 -          (0.2  )
    of assets
    Transaction            -          -           -           -                 0.5        0.5
    costs
    Pension and
    other
    retirement            5.2      -         -         -               0.3      5.5   
    plan
    expenses
  Adjusted
  EBITDA                 $ 82.5    $ 14.4    $  6.9    $   -             $  (0.5 )   $ 103.3 
  (Non-GAAP)
                                                                                         
  Adjusted                 45   %     29   %      8   %       -                 -          33    %
  EBITDA Margin
                                                                               
                         Three Months Ended June 30, 2013
                                               IT
                         Wireline   Wireless   Services   Data Center        Corporate   Total
                                               &          Colocation*                    Company
                                               Hardware
                                                                                         
  Net Income                                                                             $ 0.8
  (GAAP)
  Add:
    Income tax                                                                             (4.2  )
    benefit
    Interest                                                                               45.4
    expense
    Loss from
    CyrusOne                                                          *Story
    equity                                                            too
    method                                                            large*
    investment

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