Earnings Release Q3 2012

CINCINNATI - October 29, 2012 - 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.

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.

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 An archived version of the webcast will also be available in the Investor Relations section of www.cincinnatibell.com.

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.

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.

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.

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 Ended										Nine Months Ended
				September 30,						Change				September 30,						Change
				2012			2011			$			%	2012			2011			$			%

	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 Ended
				September 30,			June 30,		Change
				2012			2012		$			%

	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 Ended									Nine Months Ended
			September 30,					Change				September 30,					Change
			2012		2011			$			%	2012		2011			$			%
	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 Ended
			September 30,		June 30,			Change
			2012		2012			$			%
	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 Ended											Nine Months Ended
			September 30,						Change					September 30,						Change
			2012			2011			$			%		2012			2011			$			%
	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 Ended
			September 30,			June 30,			Change
			2012			2012			$			%
	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,
			2012		2012		2011

	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)


		2010				2011				2012
		1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
	Local 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,
		2012			2012			2011

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, 2012
			Wireline			Wireless			Data Center Colocation			IT Services & Hardware			Corporate			Total Company

	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, 2012
			Wireline			Wireless			Data Center Colocation			IT Services & Hardware			Corporate			Total Company

	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, 2011
			Wireline			Wireless			Data Center Colocation			IT Services & Hardware			Corporate			Total Company

	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, 2012
			Wireline			Wireless			Data Center Colocation			IT Services & Hardware			Corporate			Total Company

	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, 2011
			Wireline			Wireless			Data Center Colocation			IT Services & Hardware			Corporate			Total Company

	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 Ended						Nine Months Ended
			September 30,						September 30,
			2012			2011			2012			2011

	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.
Normalized Statements of Operations (Non-GAAP) - Reconciliation to Reported Results
(Unaudited)
(Dollars in millions, except per share amounts)



											Three
				Three							Months Ended
				Months Ended							September 30, 2012
				September 30, 2012							Before 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)



											Three
				Three							Months Ended
				Months Ended							September 30, 2011
				September 30, 2011							Before 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)



											Nine
				Nine							Months Ended
				Months Ended							September 30, 2012
				September 30, 2012							Before 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)



											Nine
				Nine							Months Ended
				Months Ended							September 30, 2011
				September 30, 2011							Before 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.



Category	2012 Guidance
Revenue	$1.5 billion
Adjusted EBITDA	Approx. $530 million*


•	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


•	CyrusOne third quarter revenue increases 20 percent and Adjusted EBITDA increases 19 percent year-over-year


•	CyrusOne receives favorable private letter ruling regarding qualification as a real estate investment trust


•	Fioptics passes 15,000 new homes during the third quarter and subscribers increase 34 percent year-over-year


•	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


•	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.



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.