The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Business Wire

Cincinnati Bell Reports Third Quarter 2012 Results

<ul> <li class='bwlistitemmargb'> Third quarter Adjusted EBITDA increases $3 million year-over-year, excluding $6 million of mark-to-market charges from a 53 percent third quarter increase in stock price </li> <li class='bwlistitemmargb'> CyrusOne third quarter revenue increases 20 percent and Adjusted EBITDA increases 19 percent year-over-year </li> <li class='bwlistitemmargb'> CyrusOne receives favorable private letter ruling regarding qualification as a real estate investment trust </li> <li class='bwlistitemmargb'> Fioptics passes 15,000 new homes during the third quarter and subscribers increase 34 percent year-over-year </li> </ul>

Monday, October 29, 2012

Cincinnati Bell Reports Third Quarter 2012 Results16:50 EDT Monday, October 29, 2012 CINCINNATI (Business Wire) -- Cincinnati Bell Inc. (NYSE:CBB) today announced financial results for the third quarter of 2012. For the quarter, revenue was $368 million, comparable to the third quarter of 2011. Net income of $4 million in the quarter resulted in diluted earnings per share of 1 cent compared to 7 cents in the third quarter of 2011, due primarily to $6 million of mark-to-market charges on compensation plans associated with a 53 percent increase in the company's stock price during the third quarter of 2012 and an $8 million gain in 2011 on the sale of the company's home security business. Adjusted earnings before interest, taxes, depreciation and amortization1 (Adjusted EBITDA) for the third quarter were $130 million, down from $133 million generated in the same period of 2011, as a result of the mark-to-market charges partially offset by growth in CyrusOne Adjusted EBITDA. “Cincinnati Bell delivered strong financial results again this quarter, building on its performance from the first half of 2012,” said Jack Cassidy, president and chief executive officer. “During the third quarter, the company achieved its highest stock price in almost five years, up 88 percent since the beginning of the year.” Highlights Wireline revenue for the quarter was $182 million, comparable to $183 million in the third quarter of 2011, while Adjusted EBITDA of $84 million was down from $87 million generated in the third quarter of 2011 as a result of access line losses. Fioptics entertainment subscribers increased 34 percent year-over-year to 51,000, which represents 28 percent of the total 184,000 units passed with Fioptics at quarter-end. Wireless generated revenue of $60 million and Adjusted EBITDA of $21 million during the quarter, translating into a strong Adjusted EBITDA margin2 of 35 percent. For the quarter, CyrusOne revenue of $57 million increased by 20 percent compared to the third quarter of 2011, and its Adjusted EBITDA increased by 19 percent to $30 million, resulting in an Adjusted EBITDA margin of 52 percent. At the end of the quarter, the segment had 896,000 square feet of data center capacity, and utilization was 78 percent. The company received a favorable outcome on its private letter ruling request with the Internal Revenue Service regarding CyrusOne's qualification as a real estate investment trust. Financial and Operations Review “The company's strong third quarter results were led by CyrusOne's 20 percent increase in revenue and 19 percent increase in Adjusted EBITDA compared to 2011,” said Kurt Freyberger, chief financial officer. “We were also happy to receive a favorable outcome on our private letter ruling request regarding CyrusOne's qualification as a REIT, which continues our progress toward an IPO of this company.” Wireline Segment Wireline revenue of $182 million during the quarter was comparable to $183 million in the third quarter of 2011, as the growth of the company's entertainment, data and VoIP product lines continue to offset the impact of access line losses. Operating income in the quarter decreased to $51 million from $65 million in the third quarter of 2011, driven primarily by the $8 million gain from the 2011 sale of the home security business and the impact of access line losses. Adjusted EBITDA in the quarter was $84 million compared to $87 million in the third quarter of 2011, and the segment's Adjusted EBITDA margin was 46 percent. During the quarter, the company expanded its Fioptics network to pass 15,000 additional homes and businesses, ending the quarter with a total of 184,000 units passed. The segment added 5,000 new Fioptics entertainment and high-speed internet subscribers during the quarter, increasing the total number of such subscribers to 51,000 and 52,000, respectively, at the end of the quarter. Total high-speed internet subscribers at quarter-end increased to 260,000, up from 257,000 at the end of the second quarter in 2012, as the increase in Fioptics subscribers was partially offset by a decrease in DSL high-speed internet subscribers. Wireless Segment Wireless revenue for the quarter was $60 million, down from $68 million in the third quarter of 2011 due to subscriber losses. Despite falling revenue, continued focus on cost reduction during the quarter provided operating income of $13 million, up from $12 million in the third quarter of 2011, while Adjusted EBITDA of $21 million was also up from $20 million in the third quarter of 2011. As a result, the segment generated a strong Adjusted EBITDA margin of 35 percent during the quarter. Total wireless subscribers at the end of the quarter decreased to 416,000 from 472,000 at the end of the third quarter in 2011. Wireless ended the quarter with a total of 126,000 smartphone subscribers, up from 120,000 at the end of the third quarter in 2011. Postpaid smartphone subscribers at quarter-end represented 38 percent of the total postpaid subscribers, up from 32 percent at the end of the third quarter in 2011. Data Center Colocation Segment CyrusOne revenue in the quarter grew to $57 million, an increase of $10 million or 20 percent compared to the third quarter in 2011, while the segment's operating income of $11 million was comparable to the same period in 2011. Adjusted EBITDA in the quarter was $30 million, an increase of 19 percent compared to the third quarter in 2011. During the quarter, the company completed construction on 95,000 square feet of new data center space in Dallas, San Antonio, and Houston, increasing capacity to 896,000 square feet. CyrusOne sold 11,000 square feet of new space in the third quarter, resulting in quarter-end utilization of 78 percent. The segment's Adjusted EBITDA margin in the third quarter of 52 percent was comparable to 53 percent in both the third quarter of 2011 and the second quarter in 2012. IT Services and Hardware Segment Revenue was $78 million in the quarter compared to $79 million in the third quarter of 2011, while Adjusted EBITDA and Adjusted EBITDA margin were both comparable to the same period in 2011 at $6 million and 8 percent, respectively. 2012 Outlook   Cincinnati Bell reaffirms its financial guidance for 2012:   Category2012 Guidance Revenue $1.5 billion Adjusted EBITDA Approx. $530 million*   *Plus or minus 2 percent   Conference Call/Webcast Cincinnati Bell will host a conference call on October 30, 2012 at 10:00 a.m. (ET) to discuss its results for the third quarter of 2012. 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) 780-1235. Callers located outside of the U.S. and Canada may dial (816) 581-1572. A taped replay of the conference call will be available one hour after the conclusion of the call until 10:00 a.m. on Tuesday November 13, 2012. 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 6953549. 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, free cash flow, net income excluding special items, and net debt. 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, restructuring charges, asset impairments, components of pension and other retirement plan costs related to interest costs, asset returns, and amortization of actuarial gains and losses, and other special items. 2Adjusted 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 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. 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. About Cincinnati Bell Inc. With headquarters in Cincinnati, Ohio, Cincinnati Bell (NYSE: CBB) provides integrated communications solutions - including local, long distance, data, 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, Cincinnati Bell provides best-in-class data center colocation services to its enterprise customers through its facilities with fully redundant power and cooling solutions that are currently located in the Midwest, Texas, London and Singapore. Complementing the colocation products, Cincinnati Bell also offers complex information technology solutions like managed services and technology staffing. For more information, visit www.cincinnatibell.com.   Cincinnati Bell Inc.Consolidated Statements of Operations(Unaudited)(Dollars in millions, except per share amounts)                   Three Months EndedNine Months EndedSeptember 30,ChangeSeptember 30,Change20122011$%20122011$%   Revenue $ 368.2 $ 368.8 $ (0.6 ) 0% $ 1,099.2 $ 1,097.1 $ 2.1 0%   Costs and expenses Cost of services and products 172.3 174.6 (2.3 ) (1)% 509.8 502.8 7.0 1% Selling, general and administrative 72.2 66.5 5.7 9% 199.6 197.7 1.9 1% Depreciation and amortization 55.4 49.1 6.3 13% 160.2 146.3 13.9 10% Restructuring charges 0.9 - 0.9 n/m 3.0 - 3.0 n/m Gain on sale or disposal of assets (0.6 ) (8.4 ) 7.8 93% (0.6 ) (8.4 ) 7.8 93% Curtailment loss - - - n/m - 4.2 (4.2 ) n/m Transaction costs 1.7 0.7 1.0 n/m 1.7 2.6 (0.9 ) (35)% Asset impairments   0.3     -     0.3   n/m   13.3     1.6     11.7   n/m   Operating income 66.0 86.3 (20.3 ) (24)% 212.2 250.3 (38.1 ) (15)%   Interest expense 55.2 53.3 1.9 4% 163.3 161.2 2.1 1% Other expense, net   0.1     -     0.1   n/m   1.6     -     1.6   n/m   Income before income taxes 10.7 33.0 (22.3 ) (68)% 47.3 89.1 (41.8 ) (47)% Income tax expense   6.8     15.4     (8.6 ) (56)%   26.3     40.1     (13.8 ) (34)%   Net income 3.9 17.6 (13.7 ) (78)% 21.0 49.0 (28.0 ) (57)%   Preferred stock dividends   2.6     2.6     -   0%   7.8     7.8     -   0%   Net income applicable to common shareowners $ 1.3   $ 15.0   $ (13.7 ) (91)% $ 13.2   $ 41.2   $ (28.0 ) (68)%     Basic earnings per common share $ 0.01   $ 0.08   $ 0.07   $ 0.21   Diluted earnings per common share $ 0.01   $ 0.07   $ 0.07   $ 0.21     Weighted average common shares outstanding(in millions) - Basic 196.4 196.5 195.8 197.4 - Diluted 205.6 200.6 203.0 200.4     Cincinnati Bell Inc.Consolidated Statements of Operations(Unaudited)(Dollars in millions, except per share amounts)           Three Months EndedSeptember 30,June 30,Change20122012$%   Revenue $ 368.2 $ 368.2 $ - 0%   Costs and expenses Cost of services and products 172.3 171.7 0.6 0% Selling, general and administrative 72.2 63.4 8.8 14% Depreciation and amortization 55.4 53.7 1.7 3% Restructuring charges 0.9 1.2 (0.3 ) (25)% Gain on sale or disposal of assets (0.6 ) - (0.6 ) n/m Transaction costs 1.7 - 1.7 n/m Asset impairments   0.3     13.0   (12.7 ) (98)%   Operating income 66.0 65.2 0.8 1%   Interest expense 55.2 53.7 1.5 3% Other expense, net   0.1     -   0.1   n/m   Income before income taxes 10.7 11.5 (0.8 ) (7)% Income tax expense   6.8     7.0   (0.2 ) (3)%   Net income 3.9 4.5 (0.6 ) (13)%   Preferred stock dividends   2.6     2.6   -   0%   Net income applicable to common shareowners $ 1.3   $ 1.9 $ (0.6 ) (32)%     Basic and diluted earnings per common share $ 0.01   $ 0.01   Weighted average common shares outstanding(in millions) - Basic 196.4 195.8 - Diluted 205.6 201.7     Cincinnati Bell Inc.Income Statements by Segment(Unaudited)(Dollars in millions)                     Three Months EndedNine Months EndedSeptember 30,ChangeSeptember 30,Change20122011$%20122011$%Wireline Revenue Voice - local service $ 63.0 $ 69.1 $ (6.1 ) (9 )% $ 193.7 $ 214.1 $ (20.4 ) (10 )% Data 77.2 73.5 3.7 5 % 229.4 217.3 12.1 6 % Long distance and VoIP 28.1 28.0 0.1 0 % 86.1 83.3 2.8 3 % Entertainment 9.5 7.0 2.5 36 % 25.6 19.4 6.2 32 % Other   4.5   5.1     (0.6 ) (12 )%   13.6   17.7     (4.1 ) (23 )%   Total revenue   182.3   182.7     (0.4 ) 0 %   548.4   551.8     (3.4 ) (1 )%   Operating costs and expenses Cost of services and products 71.5 68.7 2.8 4 % 211.5 202.2 9.3 5 % Selling, general and administrative 32.8 31.6 1.2 4 % 94.0 97.0 (3.0 ) (3 )% Depreciation and amortization 26.6 25.6 1.0 4 % 78.9 76.1 2.8 4 % Other*   0.5   (8.4 )   8.9   106 %   1.2   (3.7 )   4.9   132 %   Total operating costs and expenses   131.4   117.5     13.9   12 %   385.6   371.6     14.0   4 %   Operating income $ 50.9 $ 65.2   $ (14.3 ) (22 )% $ 162.8 $ 180.2   $ (17.4 ) (10 )%   Wireless Revenue Service $ 55.0 $ 62.3 $ (7.3 ) (12 )% $ 171.7 $ 192.0 $ (20.3 ) (11 )% Equipment   4.5   5.8     (1.3 ) (22 )%   13.3   17.2     (3.9 ) (23 )%   Total revenue   59.5   68.1     (8.6 ) (13 )%   185.0   209.2     (24.2 ) (12 )%   Operating costs and expenses Cost of services and products 27.8 34.2 (6.4 ) (19 )% 84.7 98.1 (13.4 ) (14 )% Selling, general and administrative 11.0 14.3 (3.3 ) (23 )% 32.3 41.8 (9.5 ) (23 )% Depreciation and amortization 8.1 8.0 0.1 1 % 24.0 25.1 (1.1 ) (4 )% Other*   -   -     -   n/m     0.5   1.1     (0.6 ) (55 )%   Total operating costs and expenses   46.9   56.5     (9.6 ) (17 )%   141.5   166.1     (24.6 ) (15 )%   Operating income $ 12.6 $ 11.6   $ 1.0   9 % $ 43.5 $ 43.1   $ 0.4   1 %   Data Center Colocation Revenue $ 56.7 $ 47.1   $ 9.6   20 % $ 163.3 $ 135.6   $ 27.7   20 %   Operating costs and expenses Cost of services 20.0 15.8 4.2 27 % 55.1 43.9 11.2 26 % Selling, general and administrative 7.1 6.8 0.3 4 % 21.2 17.4 3.8 22 % Depreciation and amortization 18.3 13.2 5.1 39 % 50.9 38.2 12.7 33 % Other*   0.1   -     0.1   n/m     13.6   -     13.6   n/m     Total operating costs and expenses   45.5   35.8     9.7   27 %   140.8   99.5     41.3   42 %   Operating income $ 11.2 $ 11.3   $ (0.1 ) (1 )% $ 22.5 $ 36.1   $ (13.6 ) (38 )%   IT Services and Hardware Revenue Telecom and IT equipment distribution $ 49.5 $ 54.3 $ (4.8 ) (9 )% $ 145.0 $ 156.1 $ (11.1 ) (7 )% Managed and professional services   28.8   24.6     4.2   17 %   83.8   68.8     15.0   22 %   Total revenue   78.3   78.9     (0.6 ) (1 )%   228.8   224.9     3.9   2 %   Operating costs and expenses Cost of services and products 61.3 63.0 (1.7 ) (3 )% 183.3 180.6 2.7 1 % Selling, general and administrative 10.8 9.7 1.1 11 % 32.0 29.0 3.0 10 % Depreciation and amortization   2.4   2.2     0.2   9 %   6.3   6.6     (0.3 ) (5 )%   Total operating costs and expenses   74.5   74.9     (0.4 ) (1 )%   221.6   216.2     5.4   2 %   Operating income $ 3.8 $ 4.0   $ (0.2 ) (5 )% $ 7.2 $ 8.7   $ (1.5 ) (17 )%   *Other includes restructuring charges, gain on sale or disposal of assets, curtailment loss and asset impairments.     Cincinnati Bell Inc.Income Statements by Segment(Unaudited)(Dollars in millions)           Three Months EndedSeptember 30,June 30,Change20122012$%Wireline Revenue Voice - local service $ 63.0 $ 64.7 $ (1.7 ) (3 )% Data 77.2 76.2 1.0 1 % Long distance and VoIP 28.1 29.1 (1.0 ) (3 )% Entertainment 9.5 8.4 1.1 13 % Other   4.5   5.3     (0.8 ) (15 )%   Total revenue   182.3   183.7     (1.4 ) (1 )%   Operating costs and expenses Cost of services and products 71.5 71.2 0.3 0 % Selling, general and administrative 32.8 30.7 2.1 7 % Depreciation and amortization 26.6 26.4 0.2 1 % Other*   0.5   0.7     (0.2 ) (29 )%   Total operating costs and expenses   131.4   129.0     2.4   2 %   Operating income $ 50.9 $ 54.7   $ (3.8 ) (7 )%   Wireless Revenue Service $ 55.0 $ 57.6 $ (2.6 ) (5 )% Equipment   4.5   4.2     0.3   7 %   Total revenue   59.5   61.8     (2.3 ) (4 )%   Operating costs and expenses Cost of services and products 27.8 27.4 0.4 1 % Selling, general and administrative 11.0 10.6 0.4 4 % Depreciation and amortization 8.1 8.0 0.1 1 % Other*   -   -     -   n/m     Total operating costs and expenses   46.9   46.0     0.9   2 %   Operating income $ 12.6 $ 15.8   $ (3.2 ) (20 )%   Data Center Colocation Revenue $ 56.7 $ 54.0   $ 2.7   5 %   Operating costs and expenses Cost of services 20.0 17.8 2.2 12 % Selling, general and administrative 7.1 7.6 (0.5 ) (7 )% Depreciation and amortization 18.3 17.0 1.3 8 % Other*   0.1   13.5     (13.4 ) (99 )%   Total operating costs and expenses   45.5   55.9     (10.4 ) (19 )%   Operating income (loss) $ 11.2 $ (1.9 ) $ 13.1   n/m     IT Services and Hardware Revenue Telecom and IT equipment distribution $ 49.5 $ 49.8 $ (0.3 ) (1 )% Managed and professional services   28.8   27.5     1.3   5 %   Total revenue   78.3   77.3     1.0   1 %   Operating costs and expenses Cost of services and products 61.3 63.3 (2.0 ) (3 )% Selling, general and administrative 10.8 10.9 (0.1 ) (1 )% Depreciation and amortization   2.4   2.3     0.1   4 %   Total operating costs and expenses   74.5   76.5     (2.0 ) (3 )%   Operating income $ 3.8 $ 0.8   $ 3.0   n/m     *Other includes restructuring charges, gain on sale or disposal of assets and asset impairments.     Cincinnati Bell Inc.Segment Information(Unaudited)(Dollars in millions)                     Three Months EndedNine Months EndedSeptember 30,ChangeSeptember 30,Change20122011$%20122011$%Revenue Wireline $ 182.3 $ 182.7 $ (0.4 ) 0% $ 548.4 $ 551.8 $ (3.4 ) (1)% Wireless 59.5 68.1 (8.6 ) (13)% 185.0 209.2 (24.2 ) (12)% Data Center Colocation 56.7 47.1 9.6 20% 163.3 135.6 27.7 20% IT Services and Hardware 78.3 78.9 (0.6 ) (1)% 228.8 224.9 3.9 2% Eliminations   (8.6 )   (8.0 )   (0.6 ) (8)%   (26.3 )   (24.4 )   (1.9 ) (8)%   Total revenue $ 368.2   $ 368.8   $ (0.6 ) 0% $ 1,099.2   $ 1,097.1   $ 2.1   0%   Cost of Services and Products Wireline $ 71.5 $ 68.7 $ 2.8 4% $ 211.5 $ 202.2 $ 9.3 5% Wireless 27.8 34.2 (6.4 ) (19)% 84.7 98.1 (13.4 ) (14)% Data Center Colocation 20.0 15.8 4.2 27% 55.1 43.9 11.2 26% IT Services and Hardware 61.3 63.0 (1.7 ) (3)% 183.3 180.6 2.7 1% Eliminations   (8.3 )   (7.1 )   (1.2 ) (17)%   (24.8 )   (22.0 )   (2.8 ) (13)%   Total cost of services and products $ 172.3   $ 174.6   $ (2.3 ) (1)% $ 509.8   $ 502.8   $ 7.0   1%   Selling, General and Administrative Wireline $ 32.8 $ 31.6 $ 1.2 4% $ 94.0 $ 97.0 $ (3.0 ) (3)% Wireless 11.0 14.3 (3.3 ) (23)% 32.3 41.8 (9.5 ) (23)% Data Center Colocation 7.1 6.8 0.3 4% 21.2 17.4 3.8 22% IT Services and Hardware 10.8 9.7 1.1 11% 32.0 29.0 3.0 10% Corporate and eliminations   10.5     4.1     6.4   n/m   20.1     12.5     7.6   61%   Total selling, general and administrative $ 72.2   $ 66.5   $ 5.7   9% $ 199.6   $ 197.7   $ 1.9   1%   Depreciation and Amortization Wireline $ 26.6 $ 25.6 $ 1.0 4% $ 78.9 $ 76.1 $ 2.8 4% Wireless 8.1 8.0 0.1 1% 24.0 25.1 (1.1 ) (4)% Data Center Colocation 18.3 13.2 5.1 39% 50.9 38.2 12.7 33% IT Services and Hardware 2.4 2.2 0.2 9% 6.3 6.6 (0.3 ) (5)% Corporate   -     0.1     (0.1 ) n/m   0.1     0.3     (0.2 ) (67)%   Total depreciation and amortization $ 55.4   $ 49.1   $ 6.3   13% $ 160.2   $ 146.3   $ 13.9   10%   Other* Wireline $ 0.5 $ (8.4 ) $ 8.9 106% $ 1.2 $ (3.7 ) $ 4.9 132% Wireless - - - n/m 0.5 1.1 (0.6 ) (55)% Data Center Colocation 0.1 - 0.1 n/m 13.6 - 13.6 n/m IT Services and Hardware - - - n/m - - - n/m Corporate   1.7     0.7     1.0   n/m   2.1     2.6     (0.5 ) (19)%   Total other $ 2.3   $ (7.7 ) $ 10.0   130% $ 17.4   $ -   $ 17.4   n/m   Operating Income Wireline $ 50.9 $ 65.2 $ (14.3 ) (22)% $ 162.8 $ 180.2 $ (17.4 ) (10)% Wireless 12.6 11.6 1.0 9% 43.5 43.1 0.4 1% Data Center Colocation 11.2 11.3 (0.1 ) (1)% 22.5 36.1 (13.6 ) (38)% IT Services and Hardware 3.8 4.0 (0.2 ) (5)% 7.2 8.7 (1.5 ) (17)% Corporate   (12.5 )   (5.8 )   (6.7 ) (116)%   (23.8 )   (17.8 )   (6.0 ) (34)%   Total operating income $ 66.0   $ 86.3   $ (20.3 ) (24)% $ 212.2   $ 250.3   $ (38.1 ) (15)%   *Other includes restructuring charges, gain on sale or disposal of assets, curtailment loss, transaction costs and asset impairments.     Cincinnati Bell Inc.Segment Information(Unaudited)(Dollars in millions)             Three Months EndedSeptember 30,June 30,Change20122012$%Revenue Wireline $ 182.3 $ 183.7 $ (1.4 ) (1)% Wireless 59.5 61.8 (2.3 ) (4)% Data Center Colocation 56.7 54.0 2.7 5% IT Services and Hardware 78.3 77.3 1.0 1% Eliminations   (8.6 )   (8.6 )   -   0%   Total revenue $ 368.2   $ 368.2   $ -   0%   Cost of Services and Products Wireline $ 71.5 $ 71.2 $ 0.3 0% Wireless 27.8 27.4 0.4 1% Data Center Colocation 20.0 17.8 2.2 12% IT Services and Hardware 61.3 63.3 (2.0 ) (3)% Eliminations   (8.3 )   (8.0 )   (0.3 ) (4%)   Total cost of services and products $ 172.3   $ 171.7   $ 0.6   0%   Selling, General and Administrative Wireline $ 32.8 $ 30.7 $ 2.1 7% Wireless 11.0 10.6 0.4 4% Data Center Colocation 7.1 7.6 (0.5 ) (7)% IT Services and Hardware 10.8 10.9 (0.1 ) (1)% Corporate and eliminations   10.5     3.6     6.9   n/m   Total selling, general and administrative $ 72.2   $ 63.4   $ 8.8   14%   Depreciation and Amortization Wireline $ 26.6 $ 26.4 $ 0.2 1% Wireless 8.1 8.0 0.1 1% Data Center Colocation 18.3 17.0 1.3 8% IT Services and Hardware 2.4 2.3 0.1 4% Corporate   -     -     -   n/m   Total depreciation and amortization $ 55.4   $ 53.7   $ 1.7   3%   Other* Wireline $ 0.5 $ 0.7 $ (0.2 ) (29)% Wireless - - - n/m Data Center Colocation 0.1 13.5 (13.4 ) (99)% IT Services and Hardware - - - n/m Corporate   1.7     -     1.7   n/m   Total other $ 2.3   $ 14.2   $ (11.9 ) (84)%   Operating Income (Loss) Wireline $ 50.9 $ 54.7 $ (3.8 ) (7)% Wireless 12.6 15.8 (3.2 ) (20)% Data Center Colocation 11.2 (1.9 ) 13.1 n/m IT Services and Hardware 3.8 0.8 3.0 n/m Corporate   (12.5 )   (4.2 )   (8.3 ) n/m   Total operating income $ 66.0   $ 65.2   $ 0.8   1%   *Other includes restructuring charges, gain on sale or disposal of assets, transaction costs and asset impairments.   Cincinnati Bell Inc.Segment Metric Information(Unaudited)(In thousands)           September 30,June 30,September 30,201220122011   Local access lines 585.8 598.5 635.3   Long distance lines 426.4 433.6 457.8   High-speed internet subscribers DSL subscribers 207.8 210.5 221.4 Fioptics subscribers 52.3   47.1   37.3     260.1   257.6   258.7     Fioptics entertainment subscribers 51.1 46.4 38.0     Wireless Postpaid wireless subscribers 270.7 284.9 322.2 Prepaid wireless subscribers 144.9   145.2   149.6     415.6   430.1   471.8       Data Center Colocation Data center capacity (in square feet) 896,000 801,000 736,000 Utilization rate* 78 % 85 % 86 %         * Data center utilization is calculated by dividing data center square footage that is committed contractually to customers, if built, by total data center square footage. Some data center square footage that is committed contractually may not yet be billed to the customer.                                   Cincinnati Bell Inc.Local Access Line Detail(Unaudited)(In thousands)                                         2010201120121Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3QLocal Access Lines   In-Territory: Primary Residential 354.1 345.5 336.8 328.9 321.8 313.8 304.8 296.7 288.9 281.7 274.3 Secondary Residential 21.8 20.8 19.3 19.1 18.3 16.3 15.6 14.9 14.2 13.6 13.1 Business/Other 261.9   258.7   256.2   252.5 250.7   248.7   244.4   240.8 238.5 237.5 234.4 Total In-Territory 637.8 625.0 612.3 600.5 590.8 578.8 564.8 552.4 541.6 532.8 521.8   Out-of-Territory: Primary Residential 32.9 32.5 32.1 31.2 30.4 29.3 27.8 26.7 25.2 24.3 23.3 Secondary Residential 1.1 1.1 1.0 1.0 0.9 0.9 0.9 0.8 0.8 0.8 0.7 Business/Other 39.9   40.4   41.5   41.4 41.5   41.6   41.8   41.4 41.0   40.6   40.0 Total Out-of-Territory 73.9 74.0 74.6 73.6 72.8 71.8 70.5 68.9 67.0 65.7 64.0                                       Total Access Lines 711.7   699.0   686.9   674.1 663.6   650.6   635.3   621.3 608.6   598.5   585.8   Cincinnati Bell Inc.Net Debt and Common Shares Outstanding(Unaudited)(Dollars and shares in millions)             September 30,June 30,December 31,201220122011   Receivables Facility $ 44.0 $ 19.0 $ - 7% Senior Notes due 2015 249.7 250.0 250.4 8 1/4% Senior Notes due 2017 500.0 500.0 500.0 8 3/4% Senior Subordinated Notes due 2018 625.0 625.0 625.0 8 3/8% Senior Notes due 2020 775.0 775.0 775.0 7 1/4% Senior Notes due 2023 40.0 40.0 40.0 Various Cincinnati Bell Telephone notes 207.5 207.5 207.5 Capital leases and other debt 141.5 143.6 144.4 Net unamortized discount   (7.5 )   (7.9 )   (8.7 )   Total debt 2,575.2 2,552.2 2,533.6   Less: Interest rate swap adjustment (2.2 ) (2.4 ) (2.9 ) Less: Cash and cash equivalents   (7.7 )   (4.1 )   (73.7 )   Net debt (as defined by the company) $ 2,565.3   $ 2,545.7   $ 2,457.0     Credit facility availability $ 210.0   $ 210.0   $ 210.0     Common shares outstanding   199.4     197.4     195.7     Cincinnati Bell Inc.Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)(Unaudited)(Dollars in millions)             Three Months Ended September 30, 2012Wireline     Wireless     Data Center Colocation     IT Services & Hardware     Corporate     TotalCompany   Net Income (GAAP) $ 3.9 Add: Income tax expense 6.8 Interest expense 55.2 Other expense, net   0.1     Operating Income (GAAP) $ 50.9 $ 12.6 $ 11.2 $ 3.8 $ (12.5 ) $ 66.0 Add: Depreciation and amortization 26.6 8.1 18.3 2.4 - 55.4 Restructuring charges 0.9 - - - - 0.9 Gain on sale or disposal of assets (0.4 ) - (0.2 ) - - (0.6 ) Transaction costs - - - - 1.7 1.7 Asset impairments - - 0.3 - - 0.3 Pension and other retirement plan expenses   5.8     -     -     -     0.4     6.2     Adjusted EBITDA (Non-GAAP) $ 83.8   $ 20.7   $ 29.6   $ 6.2   $ (10.4 ) $ 129.9     Adjusted EBITDA Margin 46 % 35 % 52 % 8 % - 35 %     Three Months Ended June 30, 2012WirelineWirelessData Center ColocationIT Services & HardwareCorporateTotalCompany   Net Income (GAAP) $ 4.5 Add: Income tax expense 7.0 Interest expense   53.7     Operating Income (Loss) (GAAP) $ 54.7 $ 15.8 $ (1.9 ) $ 0.8 $ (4.2 ) $ 65.2 Add: Depreciation and amortization 26.4 8.0 17.0 2.3 - 53.7 Restructuring charges 0.7 - 0.5 - - 1.2 Asset impairments - - 13.0 - - 13.0 Legal claim costs - - 0.2 - - 0.2 Pension and other retirement plan expenses   6.0     -     -     -     0.3     6.3     Adjusted EBITDA (Non-GAAP) $ 87.8   $ 23.8   $ 28.8   $ 3.1   $ (3.9 ) $ 139.6     Adjusted EBITDA Margin 48 % 39 % 53 % 4 % - 38 %   Sequential dollar change in Adjusted EBITDA $ (4.0 ) $ (3.1 ) $ 0.8 $ 3.1 $ (6.5 ) $ (9.7 )   Sequential percentage change in Adjusted EBITDA (5 )% (13 )% 3 % 100 % (167 )% (7 )%     Three Months Ended September 30, 2011WirelineWirelessData Center ColocationIT Services & HardwareCorporateTotalCompany   Net Income (GAAP) $ 17.6 Add: Income tax expense 15.4 Interest expense   53.3     Operating Income (GAAP) $ 65.2 $ 11.6 $ 11.3 $ 4.0 $ (5.8 ) $ 86.3 Add: Depreciation and amortization 25.6 8.0 13.2 2.2 0.1 49.1 Gain on sale of assets (8.4 ) - - - - (8.4 ) Transaction costs - - - - 0.7 0.7 Legal claim costs - - 0.4 - - 0.4 Pension and other retirement plan expenses   4.8     -     -     -     0.3     5.1     Adjusted EBITDA (Non-GAAP) $ 87.2   $ 19.6   $ 24.9   $ 6.2   $ (4.7 ) $ 133.2     Adjusted EBITDA Margin 48 % 29 % 53 % 8 % - 36 %     Year-over-year dollar change in Adjusted EBITDA $ (3.4 ) $ 1.1 $ 4.7 $ - $ (5.7 ) $ (3.3 )   Year-over-year percentage change in Adjusted EBITDA (4 )% 6 % 19 % 0 % (121 )% (2 )%                         Cincinnati Bell Inc.Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)(Unaudited)(Dollars in millions)       Nine Months Ended September 30, 2012WirelineWirelessData CenterColocationIT Services &HardwareCorporateTotalCompany   Net Income (GAAP) $ 21.0 Add: Income tax expense 26.3 Interest expense 163.3 Other expense, net   1.6     Operating Income (GAAP) $ 162.8 $ 43.5 $ 22.5 $ 7.2 $ (23.8 ) $ 212.2 Add: Depreciation and amortization 78.9 24.0 50.9 6.3 0.1 160.2 Restructuring charges 1.6 0.5 0.5 - 0.4 3.0 Gain on sale or disposal of assets (0.4 ) - (0.2 ) - - (0.6 ) Transaction costs - - - - 1.7 1.7 Asset impairments - - 13.3 - - 13.3 Legal claim costs - - 0.2 - - 0.2 Pension and other retirement plan expenses   17.2     -     -     -     1.1     18.3     Adjusted EBITDA (Non-GAAP) $ 260.1   $ 68.0   $ 87.2   $ 13.5   $ (20.5 ) $ 408.3     Adjusted EBITDA Margin 47 % 37 % 53 % 6 % - 37 %                             Nine Months Ended September 30, 2011WirelineWirelessData CenterColocationIT Services & HardwareCorporateTotalCompany   Net Income (GAAP) $ 49.0 Add: Income tax expense 40.1 Interest expense   161.2     Operating Income (GAAP) $ 180.2 $ 43.1 $ 36.1 $ 8.7 $ (17.8 ) $ 250.3 Add: Depreciation and amortization 76.1 25.1 38.2 6.6 0.3 146.3 Gain on sale of assets (8.4 ) - - - - (8.4 ) Transaction costs - - - - 2.6 2.6 Legal claim costs - - 0.4 - - 0.4 Asset impairments 0.5 1.1 - - - 1.6 Pension and other retirement plan expenses   18.9     -     -     -     1.1     20.0     Adjusted EBITDA (Non-GAAP) $ 267.3   $ 69.3   $ 74.7   $ 15.3   $ (13.8 ) $ 412.8     Adjusted EBITDA Margin 48 % 33 % 55 % 7 % - 38 %     Year-over-year dollar change in Adjusted EBITDA $ (7.2 ) $ (1.3 ) $ 12.5 $ (1.8 ) $ (6.7 ) $ (4.5 )   Year-over-year percentage change in Adjusted EBITDA (3 )% (2 )% 17 % (12 )% (49 )% (1 )%   Cincinnati Bell Inc.Consolidated Statements of Cash Flows(Unaudited)(Dollars in millions)                 Three Months EndedNine Months EndedSeptember 30,September 30,2012201120122011   Cash provided by operating activities $ 63.1   $ 80.6   $ 155.0   $ 198.5     Capital expenditures (75.5 ) (74.5 ) (242.9 ) (167.0 ) Proceeds from sale of assets 0.6 9.8 0.6 9.8 Increase in restricted cash (11.1 ) - (11.1 ) - Release of restricted cash 0.7 - 0.7 - Other, net   -     (0.1 )   -     (0.3 )   Cash used in investing activities   (85.3 )   (64.8 )   (252.7 )   (157.5 )   Increase in corporate credit and receivables facilities, net 25.0 - 44.0 0.4 Repayment of debt (3.3 ) (2.8 ) (11.3 ) (9.0 ) Debt issuance costs - - - (0.8 ) Dividends paid on preferred stock (2.6 ) (2.6 ) (7.8 ) (7.8 ) Common stock repurchase - (10.0 ) (0.3 ) (10.0 ) Proceeds from exercise of options and warrants 6.6 - 8.1 0.1 Other, net   0.1     0.2     (1.0 )   (0.5 )   Cash provided by (used in) financing activities   25.8     (15.2 )   31.7     (27.6 )   Net (decrease) increase in cash and cash equivalents 3.6 0.6 (66.0 ) 13.4 Cash and cash equivalents at beginning of period   4.1     90.1     73.7     77.3     Cash and cash equivalents at end of period $ 7.7   $ 90.7   $ 7.7   $ 90.7       Reconciliation of GAAP Cash Flow to Free Cash Flow (as defined by the company) Net (decrease) increase in cash and cash equivalents $ 3.6 $ 0.6 $ (66.0 ) $ 13.4 Less adjustments: Increase in corporate credit and receivables facilities, net (25.0 ) - (44.0 ) (0.4 ) Repayment of debt 3.3 2.8 11.3 9.0 Debt issuance costs - - - 0.8 Proceeds from sale of assets, net of expenses (0.6 ) (9.1 ) (0.6 ) (9.1 ) Transaction costs 1.7 0.7 1.7 2.6 Common stock repurchase   -     10.0     0.3     10.0     Free cash flow (as defined by the company) $ (17.0 ) $ 5.0   $ (97.3 ) $ 26.3     Income tax payments (refunds) $ 0.4   $ -   $ (0.3 ) $ (1.3 )     Cincinnati Bell Inc.Free Cash Flow (as defined by the company)(Unaudited)(Dollars in millions)         Free Cash Flow for the three months ended September 30, 2011 $ 5.0   Decrease in Adjusted EBITDA (3.3 ) Increase in capital expenditures (1.0 ) Increase in pension and postretirement payments and contributions (5.6 ) Change in working capital and other   (12.1 )   Free Cash Flow for the three months ended September 30, 2012 $ (17.0 )     Free Cash Flow for the nine months ended September 30, 2011 $ 26.3   Decrease in Adjusted EBITDA (4.5 ) Increase in capital expenditures (75.9 ) Increase in pension and postretirement payments and contributions (4.8 ) Change in working capital and other   (38.4 )   Free Cash Flow for the nine months ended September 30, 2012 $ (97.3 )                       Cincinnati Bell Inc.Capital Expenditures(Unaudited)(Dollars in millions)     Three Months EndedSep. 30, 2012Jun. 30, 2012Mar. 31, 2012Dec. 31, 2011Sep. 30, 2011   Wireline $ 27.8 $ 26.4 $ 23.3 $ 37.4 $ 27.1 Wireless 4.2 1.9 6.3 7.0 4.9 Data Center Colocation 41.6 52.0 52.8 41.3 41.0 IT Services and Hardware   1.9   2.5   2.2   2.8   1.5 Total capital expenditures $ 75.5 $ 82.8 $ 84.6 $ 88.5 $ 74.5         Cincinnati Bell Inc.Normalized Statements of Operations (Non-GAAP) - Reconciliation to Reported Results(Unaudited)(Dollars in millions, except per share amounts)         ThreeThreeMonths EndedMonths EndedSeptember 30, 2012September 30, 2012Before Special Items(GAAP)Special Items(Non-GAAP)   Revenue $ 368.2 $ - $ 368.2   Costs and expenses Cost of services and products 172.3 - 172.3 Selling, general and administrative 72.2 - 72.2 Depreciation and amortization 55.4 - 55.4 Restructuring charges 0.9 (0.9 ) [A] - Gain on sale or disposal of assets (0.6 ) 0.6 [B] - Transaction costs 1.7 (1.7 ) [C] - Asset impairments   0.3     (0.3 ) [D]   - Operating income 66.0 2.3 68.3   Interest expense 55.2 - 55.2 Other expense, net   0.1     -     0.1   Income before income taxes 10.7 2.3 13.0 Income tax expense   6.8     0.9     7.7   Net income 3.9 1.4 5.3   Preferred stock dividends   2.6     -     2.6   Net income applicable to common shareowners $ 1.3   $ 1.4   $ 2.7     Weighted average diluted common shares   205.6     205.6     205.6   Diluted earnings per common share* $ 0.01   $ 0.01   $ 0.01     Normalized results have been adjusted for the following (pretax adjustments are tax effected at 40%):   A Restructuring charges consist of severance and lease abandonments.   B Gain on sale of data center and wireline equipment.   C Transaction costs consist of legal and consulting fees incurred in legal entity restructuring.   D Impairment of intangibles and property recorded to reduce the carrying values of these assets to reflect their estimated fair values.   * Diluted earnings per common share have been calculated independently for the results above. Therefore, the sum of the per share amounts will not necessarily equal the per share results for the Before Special Items (Non-GAAP) results.             Cincinnati Bell Inc.Normalized Statements of Operations (Non-GAAP) - Reconciliation to Reported Results(Unaudited)(Dollars in millions, except per share amounts)         ThreeThreeMonths EndedMonths EndedSeptember 30, 2011September 30, 2011Before Special Items(GAAP)Special Items(Non-GAAP)   Revenue $ 368.8 $ - $ 368.8   Costs and expenses Cost of services and products 174.6 - 174.6 Selling, general and administrative 66.5 (0.4 ) [A] 66.1 Depreciation and amortization 49.1 - 49.1 Gain on sale of assets (8.4 ) 8.4 [B] - Transaction costs   0.7     (0.7 ) [C]   - Operating income 86.3 (7.3 ) 79.0   Interest expense   53.3     -     53.3   Income before income taxes 33.0 (7.3 ) 25.7 Income tax expense   15.4     (2.9 )   12.5   Net income 17.6 (4.4 ) 13.2   Preferred stock dividends   2.6     -     2.6   Net income applicable to common shareowners $ 15.0   $ (4.4 ) $ 10.6     Weighted average diluted common shares   200.6     200.6     200.6   Diluted earnings per common share $ 0.07   $ (0.02 ) $ 0.05     Normalized results have been adjusted for the following (pretax adjustments are tax effected at 40%):   A Legal claim costs.   B Gain on sale of assets sold in connection with the home security monitoring business.   C Transaction costs consist of legal and professional fees incurred in due diligence.           Cincinnati Bell Inc.Normalized Statements of Operations (Non-GAAP) - Reconciliation to Reported Results(Unaudited)(Dollars in millions, except per share amounts)         NineNineMonths EndedMonths EndedSeptember 30, 2012September 30, 2012Before Special Items(GAAP)Special Items(Non-GAAP)   Revenue $ 1,099.2 $ - $ 1,099.2   Costs and expenses Cost of services and products 509.8 - 509.8 Selling, general and administrative 199.6 (0.2 ) [A] 199.4 Depreciation and amortization 160.2 - 160.2 Restructuring charges 3.0 (3.0 ) [B] - Gain on sale or disposal of assets (0.6 ) 0.6 [C] - Transaction costs 1.7 (1.7 ) [D] - Asset impairments   13.3     (13.3 ) [E]   - Operating income 212.2 17.6 229.8   Interest expense 163.3 - 163.3 Other expense, net   1.6     (1.4 ) [F]   0.2   Income before income taxes 47.3 19.0 66.3 Income tax expense   26.3     7.6     33.9   Net income 21.0 11.4 32.4   Preferred stock dividends   7.8     -     7.8   Net income applicable to common shareowners $ 13.2   $ 11.4   $ 24.6     Weighted average diluted common shares   203.0     203.0     203.0   Diluted earnings per common share* $ 0.07   $ 0.06   $ 0.12     Normalized results have been adjusted for the following (pretax adjustments are tax effected at 40%):   A Costs associated with the investigation and resolution of special legal matters.   B Restructuring charges consist of severance and lease abandonments.   C Gain on sale of data center and wireline equipment.   D Transaction costs consist of legal and consulting fees incurred in legal entity restructuring.   E Impairment of intangibles and property recorded to reduce the carrying values of these assets to reflect their estimated fair values.   F Loss on termination of financing obligation.   * Diluted earnings per common share have been calculated independently for the results above. Therefore, the sum of the per share amounts will not necessarily equal the per share results for the Before Special Items (Non-GAAP) results.   Cincinnati Bell Inc.Normalized Statements of Operations (Non-GAAP) - Reconciliation to Reported Results(Unaudited)(Dollars in millions, except per share amounts)                   NineNineMonths EndedMonths EndedSeptember 30, 2011September 30, 2011Before Special Items(GAAP)Special Items(Non-GAAP)   Revenue $ 1,097.1 $ - $ 1,097.1   Costs and expenses Cost of services and products 502.8 - 502.8 Selling, general and administrative 197.7 (0.4 ) [A] 197.3 Depreciation and amortization 146.3 - 146.3 Gain on sale of assets (8.4 ) 8.4 [B] - Curtailment loss 4.2 (4.2 ) [C] - Transaction costs 2.6 (2.6 ) [D] - Asset impairments   1.6     (1.6 ) [E]   - Operating income 250.3 0.4 250.7   Interest expense   161.2     -     161.2   Income before income taxes 89.1 0.4 89.5 Income tax expense   40.1     0.2     40.3   Net income 49.0 0.2 49.2   Preferred stock dividends   7.8     -     7.8   Net income applicable to common shareowners $ 41.2   $ 0.2   $ 41.4     Weighted average diluted common shares   200.4     200.4     200.4   Diluted earnings per common share $ 0.21   $ 0.00   $ 0.21     Normalized results have been adjusted for the following (pretax adjustments are tax effected at 40%):   A Legal claim costs.   B Gain on sale of assets sold in connection with the home security monitoring business.   C Curtailment of bargained pension plan as a result of pension service credits being frozen for the majority of the plan participants.   D Transaction costs consist of legal and professional fees incurred in due diligence.   E Impairment recorded to reduce carrying value of property to reflect its estimated fair value.       Cincinnati Bell Inc.Reconciliation of Operating Income (GAAP) Guidance to Adjusted EBITDA (Non-GAAP) Guidance(Unaudited)(Dollars in millions)           2012 Operating Income (GAAP) Guidance $ 273   Add:   Depreciation and amortization 215 Other 5 Pension and other retirement plan expenses 24 Asset impairments   13   2012 Adjusted EBITDA (Non-GAAP) Guidance $ 530 *     * Plus or minus 2 percent. Cincinnati Bell Inc.Josh Duckworth, 513-397-2292(Investor/Media)joshua.duckworth@cinbell.com