[February 27, 2013] |
|
Cincinnati Bell Reports Fourth Quarter and Full Year 2012 Results
CINCINNATI --(Business Wire)--
Cincinnati Bell Inc. (NYSE:CBB) today announced financial results for
the full year and fourth quarter of 2012.
Highlights
-
Achieved 2012 financial guidance for Revenue and Adjusted EBITDA
-
Completed successful IPO of CyrusOne in January 2013 and retained 69
percent ongoing ownership of CyrusOne
-
Passed 71,000 units with Fioptics in 2012 and achieved 28 percent
customer penetration
Ted Torbeck, president and chief executive officer, stated, "In 2012,
Cincinnati Bell delivered solid financial results while executing on a
data center strategy that positions us to significantly reduce debt and
fundamentally change Cincinnati Bell's future leverage profile."
"As the new CEO of Cincinnati Bell, I am honored to be leading a company
with a very strong foundation from which to build. While challenges
exist, our growth initiatives are clear. Our fiber investments are
delivering strong results, and are approaching an inflection point. In
2013, we will increase capital investment to accelerate our fiber
deployment to consumers and businesses in Cincinnati. As a result, we
believe we can return our Wireline business to growth in 2014," Mr.
Torbeck concluded.
Fourth Quarter and Full-Year Performance Highlights
-
Revenue of $1.5 billion was in line with guidance and reflects a 1
percent increase over 2011. Fourth quarter 2012 revenue was $375
million, up $9 million from the same period in 2011. Full year
earnings before interest, taxes, depreciation and amortization1
(Adjusted EBITDA) was $535 million for 2012, ahead of guidance of $530
million and down 2 percent compared to 2011.
-
Wireline revenue for the quarter was $182 million, flat compared to
the prior year when considering a one-time charge for credits recorded
in the fourth quarter of 2011. Revenue for the full year of $731
million was down slightly compared to 2011, as the growth in Fioptics
and data revenue from business customers continues to partially offset
the impact of access line losses. Wireline Adjusted EBITDA for the
full year was $344 million, resulting in an Adjusted EBITDA margin2
of 47 percent, down from 49 percent in the full year of 2011.
-
CyrusOne revenue for the quarter increased 18 percent year-over-year
to $58 million, and revenue for the full year of $221 million
represents a 20 percent increase over 2011. CyrusOne Adjusted EBITDA
for the full year was $115 million, an increase of 13 percent compared
to 2011, resulting in an Adjusted EBITDA margin of 52 percent. During
the fourth quarter, the company added 36,000 square feet of data
center space and sold 41,000 square feet. For the year, the company
constructed 199,000 square feet of additional data center space,
increasing total capacity to 932,000 square feet, and sold 92,000
square feet of space. As a result, the segment's utilization at the
end of 2012 was 78 percent.
-
CyrusOne raised $525 million in 6.375% senior notes in the fourth
quarter, and $480 million of the proceeds were used by the company to
repay Cincinnati Bell corporate bonds and other debt. The company's
net debt3, excluding CyrusOne, totaled $2.1 billion at the
end of 2012.
Fourth Quarter and Full Year Review
For the year, revenue of $1.5 billion reflects a 1 percent increase over
2011, while fourth quarter revenue was 3 percent higher than the
comparable period in 2011. Operating income for the full year of 2012
was $270 million, up 4 percent compared to 2011, with operating income
from the quarter totaling $58 million. Net income for the year of $11
million was affected by a loss on extinguishment of debt of $14 million,
asset impairments of $14 million and CyrusOne REIT formation and other
transaction costs of $6 million. Net income excluding special items4
for the year was $34 million and resulted in 11 cents per diluted
share, down from 24 cents in 2011 due primarily to additional
depreciation associated with our CyrusOne capital expenditures. Full
year 2012 Adjusted EBITDA was $535 million, which includes an $8 million
mark-to-market charge on certain compensation plans as a result of the
increase in the company's stock price in 2012, and was down from 2011
Adjusted EBITDA of $545 million.
"With the repayment of our 2015 bonds and other indebtedness in the
fourth quarter, the company has no significant maturities until 2017,"
said Kurt Freyberger, chief financial officer. "We believe our current
capital structure provides sufficient flexibility to support the growth
of both our Fioptics suite of products and our business-class fiber
product offerings."
Wireline Segment
For the quarter, Wireline revenue of $182 million was flat compared to
the fourth quarter of 2011, after adjusting 2011 for one-time revenue
credits, as the company's Fioptics and strategic business data and VoIP
product lines continue their growth trend, offsetting the impact of
access line losses. For the full year, Wireline revenue totaled $731
million compared to $732 million generated in 2011.
Operating income was $50 million in the quarter, up slightly compared to
the same period in 2011, while the full year 2012 operating income was
$213 million, down $16 million or 7 percent compared to 2011.
Adjusted EBITDA was $84 million in the fourth quarter of 2012 and $344
million for the full year, down 4 percent and 3 percent, respectively,
from the same periods in 2011. Adjusted EBITDA margins of 46 percent for
the quarter and 47 percent for the year were also down from 2011, driven
largely by the continued loss of higher-margin access lines and the
additional costs associated with Fioptics customer acquisition.
At the end of the fourth quarter, the company had a total of 205,000
homes and businesses passed with Fioptics, which represents
approximately 26 percent of the Greater Cincinnati market. The segment
attained an additional 4,000 Fioptics entertainment customers in the
quarter and an additional 5,000 Fioptics high-speed internet
subscribers, increasing the total number of such subscribers to 55,000
and 57,000, respectively. Total high-speed internet subscribers numbered
259,000 at the end of the fourth quarter, up from 257,000 at the end of
2011, as the increase in Fioptics subscribers continues to more than
offset the decrease in DSL high-speed internet subscribers.
Wireless Segment
Wireless revenue was $57 million for the quarter, a decrease of 17
percent from the fourth quarter of 2011, and 2012 full year revenue of
$242 million was down 13 percent compared to 2011 as postpaid subscriber
losses continued. The segment generated operating income of $8 million
in the quarter and $51 million for the year.
Adjusted EBITDA of $17 million in the quarter resulted in an Adjusted
EBITDA margin of 30 percent. Adjusted EBITDA for the year totaled $85
million, which equated to a 35 percent Adjusted EBITDA margin.
Total wireless subscribers at the end of the quarter decreased to
398,000 compared to 459,000 at the end of 2011.
Data Center Colocation Segment
CyrusOne fourth quarter revenue was $58 million, an 18 percent increase
over the fourth quarter in 2011, and annual revenues were $221 million,
up 20 percent compared to 2011. The segment's operating income of $8
million in the quarter and $30 million for the year was down $2 million
and $16 million, respectively, compared to the same periods in 2011.
Adjusted EBITDA for the quarter was $28 million compared to $27 million
in the fourth quarter of 2011, reflecting higher revenue and additional
overhead and other expenses as the company continued to prepare to
operate as a stand-alone, publicly-traded real estate investment trust
entity. As a result, the segment's Adjusted EBITDA margin in the quarter
was 48 percent, down from 56 percent in the fourth quarter of 2011. For
the year, Adjusted EBITDA of $115 million reflects a 13 percent increase
over 2011. The company's 2012 Adjusted EBITDA margin was 52 percent
compared to 55 percent in 2011.
CyrusOne added 36,000 square feet of new data center space during the
quarter and 199,000 square feet for the full year, increasing total
capacity to 932,000 square feet at the end of 2012. The company sold
41,000 square feet of new space during the fourth quarter, and 92,000
square feet for the full year.
IT Services and Hardware Segment
For the quarter, revenue was $87 million, a 15 percent increase over the
fourth quarter in 2011, driven by strong hardware sales which were up 19
percent year-over-year. The segment's full-year revenue of $316 million
was up 5 percent over 2011 due to a $17 million year-over-year increase
in managed and professional services. Adjusted EBITDA in the quarter was
$4 million, resulting in an Adjusted EBITDA margin of 5 percent.
Adjusted EBITDA generated in the full year was $18 million, down $2
million from 2011.
2013 Outlook
Cincinnati Bell is providing the following guidance for 2013, which
excludes CyrusOne results:
Category
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2013 Guidance
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Revenue
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$1.2 billion
|
Adjusted EBITDA
|
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Approx. $390 million*
|
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*Plus or minus 2 percent
Conference Call/Webcast
Cincinnati Bell will host a conference call on February 27, 2013 at 8:30
a.m. (ET) to discuss its results for the fourth quarter and full year 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) 780-1078. 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 8:30 a.m. on Wednesday March 13, 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 6508834. 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, 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.
3Net 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.
4Net 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.
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.
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
Cincinnati Bell 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)
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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Three Months Ended
|
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Twelve Months Ended
|
|
|
|
|
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December 31,
|
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Change
|
|
December 31,
|
|
Change
|
|
|
|
|
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
374.7
|
|
|
$
|
365.3
|
|
|
$
|
9.4
|
|
|
3%
|
|
$
|
1,473.9
|
|
|
$
|
1,462.4
|
|
|
$
|
11.5
|
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
184.8
|
|
|
|
174.5
|
|
|
|
10.3
|
|
|
6%
|
|
|
694.6
|
|
|
|
677.3
|
|
|
|
17.3
|
|
|
3%
|
|
|
Selling, general and administrative
|
|
|
69.9
|
|
|
|
65.4
|
|
|
|
4.5
|
|
|
7%
|
|
|
269.5
|
|
|
|
263.1
|
|
|
|
6.4
|
|
|
2%
|
|
|
Depreciation and amortization
|
|
|
57.2
|
|
|
|
53.2
|
|
|
|
4.0
|
|
|
8%
|
|
|
217.4
|
|
|
|
199.5
|
|
|
|
17.9
|
|
|
9%
|
|
|
Restructuring charges
|
|
|
0.4
|
|
|
|
12.2
|
|
|
|
(11.8
|
)
|
|
(97)%
|
|
|
3.4
|
|
|
|
12.2
|
|
|
|
(8.8
|
)
|
|
(72)%
|
|
|
Curtailment loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
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|
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n/m
|
|
|
-
|
|
|
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4.2
|
|
|
|
(4.2
|
)
|
|
n/m
|
|
|
Gain on sale or disposal of assets
|
|
|
(1.0
|
)
|
|
|
-
|
|
|
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(1.0
|
)
|
|
n/m
|
|
|
(1.6
|
)
|
|
|
(8.4
|
)
|
|
|
6.8
|
|
|
81%
|
|
|
Impairment of goodwill and other assets
|
|
|
0.9
|
|
|
|
50.8
|
|
|
|
(49.9
|
)
|
|
(98)%
|
|
|
14.2
|
|
|
|
52.4
|
|
|
|
(38.2
|
)
|
|
(73)%
|
|
|
Transaction costs
|
|
|
4.6
|
|
|
|
-
|
|
|
|
4.6
|
|
|
n/m
|
|
|
6.3
|
|
|
|
2.6
|
|
|
|
3.7
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Operating income
|
|
|
57.9
|
|
|
|
9.2
|
|
|
|
48.7
|
|
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n/m
|
|
|
270.1
|
|
|
|
259.5
|
|
|
|
10.6
|
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
55.6
|
|
|
|
53.8
|
|
|
|
1.8
|
|
|
3%
|
|
|
218.9
|
|
|
|
215.0
|
|
|
|
3.9
|
|
|
2%
|
|
Loss on extinguishment of debt
|
|
|
13.6
|
|
|
|
-
|
|
|
|
13.6
|
|
|
n/m
|
|
|
13.6
|
|
|
|
-
|
|
|
|
13.6
|
|
|
n/m
|
|
Other expense, net
|
|
|
0.1
|
|
|
|
0.9
|
|
|
|
(0.8
|
)
|
|
(89)%
|
|
|
1.7
|
|
|
|
0.9
|
|
|
|
0.8
|
|
|
89%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(11.4
|
)
|
|
|
(45.5
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)
|
|
|
34.1
|
|
|
75%
|
|
|
35.9
|
|
|
|
43.6
|
|
|
|
(7.7
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)
|
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(18)%
|
|
Income tax expense (benefit)
|
|
|
(1.6
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)
|
|
|
(15.1
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)
|
|
|
13.5
|
|
|
89%
|
|
|
24.7
|
|
|
|
25.0
|
|
|
|
(0.3
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)
|
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(1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(9.8
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)
|
|
|
(30.4
|
)
|
|
|
20.6
|
|
|
68%
|
|
|
11.2
|
|
|
|
18.6
|
|
|
|
(7.4
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)
|
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(40)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
2.6
|
|
|
|
2.6
|
|
|
|
-
|
|
|
0%
|
|
|
10.4
|
|
|
|
10.4
|
|
|
|
-
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) applicable to common shareowners
|
|
$
|
(12.4
|
)
|
|
$
|
(33.0
|
)
|
|
$
|
20.6
|
|
|
62%
|
|
$
|
0.8
|
|
|
$
|
8.2
|
|
|
$
|
(7.4
|
)
|
|
(90)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common share
|
|
$
|
(0.06
|
)
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
|
|
|
|
|
Diluted earnings (loss) per common share
|
|
$
|
(0.06
|
)
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
|
199.9
|
|
|
|
194.9
|
|
|
|
|
|
|
|
197.0
|
|
|
|
196.8
|
|
|
|
|
|
|
|
- Diluted
|
|
|
199.9
|
|
|
|
194.9
|
|
|
|
|
|
|
|
204.7
|
|
|
|
200.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Consolidated Statements of Operations
|
(Unaudited)
|
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
Change
|
|
|
|
|
|
|
2012
|
|
2012
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
374.7
|
|
|
$
|
368.2
|
|
|
$
|
6.5
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
184.8
|
|
|
|
172.3
|
|
|
|
12.5
|
|
|
7%
|
|
|
Selling, general and administrative
|
|
|
69.9
|
|
|
|
72.2
|
|
|
|
(2.3
|
)
|
|
(3)%
|
|
|
Depreciation and amortization
|
|
|
57.2
|
|
|
|
55.4
|
|
|
|
1.8
|
|
|
3%
|
|
|
Restructuring charges
|
|
|
0.4
|
|
|
|
0.9
|
|
|
|
(0.5
|
)
|
|
(56)%
|
|
|
Gain on sale or disposal of assets
|
|
|
(1.0
|
)
|
|
|
(0.6
|
)
|
|
|
(0.4
|
)
|
|
(67)%
|
|
|
Impairment of goodwill and other assets
|
|
|
0.9
|
|
|
|
0.3
|
|
|
|
0.6
|
|
|
n/m
|
|
|
Transaction costs
|
|
|
4.6
|
|
|
|
1.7
|
|
|
|
2.9
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
57.9
|
|
|
|
66.0
|
|
|
|
(8.1
|
)
|
|
(12)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
55.6
|
|
|
|
55.2
|
|
|
|
0.4
|
|
|
1%
|
|
Loss on extinguishment of debt
|
|
|
13.6
|
|
|
|
-
|
|
|
|
13.6
|
|
|
n/m
|
|
Other expense, net
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
-
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(11.4
|
)
|
|
|
10.7
|
|
|
|
(22.1
|
)
|
|
n/m
|
|
Income tax expense (benefit)
|
|
|
(1.6
|
)
|
|
|
6.8
|
|
|
|
(8.4
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(9.8
|
)
|
|
|
3.9
|
|
|
|
(13.7
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
2.6
|
|
|
|
2.6
|
|
|
|
-
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) applicable to common shareowners
|
|
$
|
(12.4
|
)
|
|
$
|
1.3
|
|
|
$
|
(13.7
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common share
|
|
$
|
(0.06
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
Diluted earnings (loss) per common share
|
|
$
|
(0.06
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
|
199.9
|
|
|
|
196.4
|
|
|
|
|
|
|
|
- Diluted
|
|
|
199.9
|
|
|
|
205.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Income Statements by Segment
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
December 31,
|
|
Change
|
|
December 31,
|
|
Change
|
|
|
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
Wireline
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice - local service
|
|
$
|
61.7
|
|
|
$
|
66.2
|
|
|
$
|
(4.5
|
)
|
|
(7)%
|
|
$
|
255.4
|
|
|
$
|
280.3
|
|
$
|
(24.9
|
)
|
|
(9)%
|
|
|
Data
|
|
|
77.5
|
|
|
|
74.2
|
|
|
|
3.3
|
|
|
4%
|
|
|
306.9
|
|
|
|
291.5
|
|
|
15.4
|
|
|
5%
|
|
|
Long distance and VoIP
|
|
|
27.8
|
|
|
|
28.0
|
|
|
|
(0.2
|
)
|
|
(1)%
|
|
|
113.9
|
|
|
|
111.3
|
|
|
2.6
|
|
|
2%
|
|
|
Entertainment
|
|
|
9.8
|
|
|
|
7.2
|
|
|
|
2.6
|
|
|
36%
|
|
|
35.4
|
|
|
|
26.6
|
|
|
8.8
|
|
|
33%
|
|
|
Other
|
|
|
5.3
|
|
|
|
4.7
|
|
|
|
0.6
|
|
|
13%
|
|
|
18.9
|
|
|
|
22.4
|
|
|
(3.5
|
)
|
|
(16)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
182.1
|
|
|
|
180.3
|
|
|
|
1.8
|
|
|
1%
|
|
|
730.5
|
|
|
|
732.1
|
|
|
(1.6
|
)
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
72.3
|
|
|
|
67.8
|
|
|
|
4.5
|
|
|
7%
|
|
|
283.8
|
|
|
|
270.0
|
|
|
13.8
|
|
|
5%
|
|
|
Selling, general and administrative
|
|
|
31.6
|
|
|
|
29.7
|
|
|
|
1.9
|
|
|
6%
|
|
|
125.6
|
|
|
|
126.7
|
|
|
(1.1
|
)
|
|
(1)%
|
|
|
Depreciation and amortization
|
|
|
27.1
|
|
|
|
26.3
|
|
|
|
0.8
|
|
|
3%
|
|
|
106.0
|
|
|
|
102.4
|
|
|
3.6
|
|
|
4%
|
|
|
Other*
|
|
|
1.0
|
|
|
|
8.2
|
|
|
|
(7.2
|
)
|
|
(88)%
|
|
|
2.2
|
|
|
|
4.5
|
|
|
(2.3
|
)
|
|
(51)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
132.0
|
|
|
|
132.0
|
|
|
|
-
|
|
|
0%
|
|
|
517.6
|
|
|
|
503.6
|
|
|
14.0
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
50.1
|
|
|
$
|
48.3
|
|
|
$
|
1.8
|
|
|
4%
|
|
$
|
212.9
|
|
|
$
|
228.5
|
|
$
|
(15.6
|
)
|
|
(7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
|
$
|
52.8
|
|
|
$
|
60.4
|
|
|
$
|
(7.6
|
)
|
|
(13)%
|
|
$
|
224.5
|
|
|
$
|
252.4
|
|
$
|
(27.9
|
)
|
|
(11)%
|
|
|
Equipment
|
|
|
4.0
|
|
|
|
8.0
|
|
|
|
(4.0
|
)
|
|
(50)%
|
|
|
17.3
|
|
|
|
25.2
|
|
|
(7.9
|
)
|
|
(31)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
56.8
|
|
|
|
68.4
|
|
|
|
(11.6
|
)
|
|
(17)%
|
|
|
241.8
|
|
|
|
277.6
|
|
|
(35.8
|
)
|
|
(13)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
28.3
|
|
|
|
36.1
|
|
|
|
(7.8
|
)
|
|
(22)%
|
|
|
113.0
|
|
|
|
134.2
|
|
|
(21.2
|
)
|
|
(16)%
|
|
|
Selling, general and administrative
|
|
|
11.4
|
|
|
|
13.4
|
|
|
|
(2.0
|
)
|
|
(15)%
|
|
|
43.7
|
|
|
|
55.2
|
|
|
(11.5
|
)
|
|
(21)%
|
|
|
Depreciation and amortization
|
|
|
7.9
|
|
|
|
8.4
|
|
|
|
(0.5
|
)
|
|
(6)%
|
|
|
31.9
|
|
|
|
33.5
|
|
|
(1.6
|
)
|
|
(5)%
|
|
|
Other*
|
|
|
1.5
|
|
|
|
50.3
|
|
|
|
(48.8
|
)
|
|
(97)%
|
|
|
2.0
|
|
|
|
51.4
|
|
|
(49.4
|
)
|
|
(96)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
49.1
|
|
|
|
108.2
|
|
|
|
(59.1
|
)
|
|
(55)%
|
|
|
190.6
|
|
|
|
274.3
|
|
|
(83.7
|
)
|
|
(31)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
7.7
|
|
|
$
|
(39.8
|
)
|
|
$
|
47.5
|
|
|
n/m
|
|
$
|
51.2
|
|
|
$
|
3.3
|
|
$
|
47.9
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Center Colocation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
58.0
|
|
|
$
|
49.1
|
|
|
$
|
8.9
|
|
|
18%
|
|
$
|
221.3
|
|
|
$
|
184.7
|
|
$
|
36.6
|
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
20.6
|
|
|
|
15.8
|
|
|
|
4.8
|
|
|
30%
|
|
|
75.7
|
|
|
|
59.7
|
|
|
16.0
|
|
|
27%
|
|
|
Selling, general and administrative
|
|
|
9.8
|
|
|
|
6.4
|
|
|
|
3.4
|
|
|
53%
|
|
|
31.0
|
|
|
|
23.8
|
|
|
7.2
|
|
|
30%
|
|
|
Depreciation and amortization
|
|
|
19.7
|
|
|
|
16.6
|
|
|
|
3.1
|
|
|
19%
|
|
|
70.6
|
|
|
|
54.8
|
|
|
15.8
|
|
|
29%
|
|
|
Other*
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
13.6
|
|
|
|
-
|
|
|
13.6
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
50.1
|
|
|
|
38.8
|
|
|
|
11.3
|
|
|
29%
|
|
|
190.9
|
|
|
|
138.3
|
|
|
52.6
|
|
|
38%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
7.9
|
|
|
$
|
10.3
|
|
|
$
|
(2.4
|
)
|
|
(23)%
|
|
$
|
30.4
|
|
|
$
|
46.4
|
|
$
|
(16.0
|
)
|
|
(34)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT Services and Hardware
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom and IT equipment distribution
|
|
$
|
59.6
|
|
|
$
|
49.9
|
|
|
$
|
9.7
|
|
|
19%
|
|
$
|
204.6
|
|
|
$
|
206.0
|
|
$
|
(1.4
|
)
|
|
(1)%
|
|
|
Managed and professional services
|
|
|
27.3
|
|
|
|
25.7
|
|
|
|
1.6
|
|
|
6%
|
|
|
111.1
|
|
|
|
94.5
|
|
|
16.6
|
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
86.9
|
|
|
|
75.6
|
|
|
|
11.3
|
|
|
15%
|
|
|
315.7
|
|
|
|
300.5
|
|
|
15.2
|
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
72.4
|
|
|
|
62.4
|
|
|
|
10.0
|
|
|
16%
|
|
|
255.7
|
|
|
|
243.0
|
|
|
12.7
|
|
|
5%
|
|
|
Selling, general and administrative
|
|
|
10.3
|
|
|
|
8.4
|
|
|
|
1.9
|
|
|
23%
|
|
|
42.3
|
|
|
|
37.4
|
|
|
4.9
|
|
|
13%
|
|
|
Depreciation and amortization
|
|
|
2.3
|
|
|
|
1.8
|
|
|
|
0.5
|
|
|
28%
|
|
|
8.6
|
|
|
|
8.4
|
|
|
0.2
|
|
|
2%
|
|
|
Other*
|
|
|
(1.2
|
)
|
|
|
1.9
|
|
|
|
(3.1
|
)
|
|
n/m
|
|
|
(1.2
|
)
|
|
|
1.9
|
|
|
(3.1
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
83.8
|
|
|
|
74.5
|
|
|
|
9.3
|
|
|
12%
|
|
|
305.4
|
|
|
|
290.7
|
|
|
14.7
|
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
3.1
|
|
|
$
|
1.1
|
|
|
$
|
2.0
|
|
|
n/m
|
|
$
|
10.3
|
|
|
$
|
9.8
|
|
$
|
0.5
|
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Other includes restructuring charges, curtailment loss, gain on sale or
disposal of assets, impairment of goodwill and asset impairments.
Cincinnati Bell Inc.
|
Income Statements by Segment
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
Change
|
|
|
|
|
2012
|
|
2012
|
|
$
|
|
%
|
|
Wireline
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Voice - local service
|
|
$
|
61.7
|
|
|
$
|
63.0
|
|
$
|
(1.3
|
)
|
|
(2)%
|
|
|
Data
|
|
|
77.5
|
|
|
|
77.2
|
|
|
0.3
|
|
|
0%
|
|
|
Long distance and VoIP
|
|
|
27.8
|
|
|
|
28.1
|
|
|
(0.3
|
)
|
|
(1)%
|
|
|
Entertainment
|
|
|
9.8
|
|
|
|
9.5
|
|
|
0.3
|
|
|
3%
|
|
|
Other
|
|
|
5.3
|
|
|
|
4.5
|
|
|
0.8
|
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
182.1
|
|
|
|
182.3
|
|
|
(0.2
|
)
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
72.3
|
|
|
|
71.5
|
|
|
0.8
|
|
|
1%
|
|
|
Selling, general and administrative
|
|
|
31.6
|
|
|
|
32.8
|
|
|
(1.2
|
)
|
|
(4)%
|
|
|
Depreciation and amortization
|
|
|
27.1
|
|
|
|
26.6
|
|
|
0.5
|
|
|
2%
|
|
|
Other*
|
|
|
1.0
|
|
|
|
0.5
|
|
|
0.5
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
132.0
|
|
|
|
131.4
|
|
|
0.6
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
50.1
|
|
|
$
|
50.9
|
|
$
|
(0.8
|
)
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Service
|
|
$
|
52.8
|
|
|
$
|
55.0
|
|
$
|
(2.2
|
)
|
|
(4)%
|
|
|
Equipment
|
|
|
4.0
|
|
|
|
4.5
|
|
|
(0.5
|
)
|
|
(11)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
56.8
|
|
|
|
59.5
|
|
|
(2.7
|
)
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
28.3
|
|
|
|
27.8
|
|
|
0.5
|
|
|
2%
|
|
|
Selling, general and administrative
|
|
|
11.4
|
|
|
|
11.0
|
|
|
0.4
|
|
|
4%
|
|
|
Depreciation and amortization
|
|
|
7.9
|
|
|
|
8.1
|
|
|
(0.2
|
)
|
|
(2)%
|
|
|
Other*
|
|
|
1.5
|
|
|
|
-
|
|
|
1.5
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
49.1
|
|
|
|
46.9
|
|
|
2.2
|
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
7.7
|
|
|
$
|
12.6
|
|
$
|
(4.9
|
)
|
|
(39)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Center Colocation
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
58.0
|
|
|
$
|
56.7
|
|
$
|
1.3
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
20.6
|
|
|
|
20.0
|
|
|
0.6
|
|
|
3%
|
|
|
Selling, general and administrative
|
|
|
9.8
|
|
|
|
7.1
|
|
|
2.7
|
|
|
38%
|
|
|
Depreciation and amortization
|
|
|
19.7
|
|
|
|
18.3
|
|
|
1.4
|
|
|
8%
|
|
|
Other*
|
|
|
-
|
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
50.1
|
|
|
|
45.5
|
|
|
4.6
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
7.9
|
|
|
$
|
11.2
|
|
$
|
(3.3
|
)
|
|
(29)%
|
|
|
|
|
|
|
|
|
|
|
|
|
IT Services and Hardware
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Telecom and IT equipment distribution
|
|
$
|
59.6
|
|
|
$
|
49.5
|
|
$
|
10.1
|
|
|
20%
|
|
|
Managed and professional services
|
|
|
27.3
|
|
|
|
28.8
|
|
|
(1.5
|
)
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
86.9
|
|
|
|
78.3
|
|
|
8.6
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
72.4
|
|
|
|
61.3
|
|
|
11.1
|
|
|
18%
|
|
|
Selling, general and administrative
|
|
|
10.3
|
|
|
|
10.8
|
|
|
(0.5
|
)
|
|
(5)%
|
|
|
Depreciation and amortization
|
|
|
2.3
|
|
|
|
2.4
|
|
|
(0.1
|
)
|
|
(4)%
|
|
|
Other*
|
|
|
(1.2
|
)
|
|
|
-
|
|
|
(1.2
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
83.8
|
|
|
|
74.5
|
|
|
9.3
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
3.1
|
|
|
$
|
3.8
|
|
$
|
(0.7
|
)
|
|
(18)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Other includes restructuring charges, gain on sale or disposal of
assets, impairment of goodwill and asset impairments.
Cincinnati Bell Inc.
|
Segment Information
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
Change
|
|
|
|
December 31,
|
|
Change
|
|
|
|
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
182.1
|
|
|
$
|
180.3
|
|
|
$
|
1.8
|
|
|
1%
|
|
$
|
730.5
|
|
|
$
|
732.1
|
|
|
$
|
(1.6
|
)
|
|
0%
|
|
|
Wireless
|
|
|
56.8
|
|
|
|
68.4
|
|
|
|
(11.6
|
)
|
|
(17)%
|
|
|
241.8
|
|
|
|
277.6
|
|
|
|
(35.8
|
)
|
|
(13)%
|
|
|
Data Center Colocation
|
|
|
58.0
|
|
|
|
49.1
|
|
|
|
8.9
|
|
|
18%
|
|
|
221.3
|
|
|
|
184.7
|
|
|
|
36.6
|
|
|
20%
|
|
|
IT Services and Hardware
|
|
|
86.9
|
|
|
|
75.6
|
|
|
|
11.3
|
|
|
15%
|
|
|
315.7
|
|
|
|
300.5
|
|
|
|
15.2
|
|
|
5%
|
|
|
Eliminations
|
|
|
(9.1
|
)
|
|
|
(8.1
|
)
|
|
|
(1.0
|
)
|
|
(12)%
|
|
|
(35.4
|
)
|
|
|
(32.5
|
)
|
|
|
(2.9
|
)
|
|
(9)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
374.7
|
|
|
$
|
365.3
|
|
|
$
|
9.4
|
|
|
3%
|
|
$
|
1,473.9
|
|
|
$
|
1,462.4
|
|
|
$
|
11.5
|
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Services and Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
72.3
|
|
|
$
|
67.8
|
|
|
$
|
4.5
|
|
|
7%
|
|
$
|
283.8
|
|
|
$
|
270.0
|
|
|
$
|
13.8
|
|
|
5%
|
|
|
Wireless
|
|
|
28.3
|
|
|
|
36.1
|
|
|
|
(7.8
|
)
|
|
(22)%
|
|
|
113.0
|
|
|
|
134.2
|
|
|
|
(21.2
|
)
|
|
(16)%
|
|
|
Data Center Colocation
|
|
|
20.6
|
|
|
|
15.8
|
|
|
|
4.8
|
|
|
30%
|
|
|
75.7
|
|
|
|
59.7
|
|
|
|
16.0
|
|
|
27%
|
|
|
IT Services and Hardware
|
|
|
72.4
|
|
|
|
62.4
|
|
|
|
10.0
|
|
|
16%
|
|
|
255.7
|
|
|
|
243.0
|
|
|
|
12.7
|
|
|
5%
|
|
|
Eliminations
|
|
|
(8.8
|
)
|
|
|
(7.6
|
)
|
|
|
(1.2
|
)
|
|
(16)%
|
|
|
(33.6
|
)
|
|
|
(29.6
|
)
|
|
|
(4.0
|
)
|
|
(14)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of services and products
|
|
$
|
184.8
|
|
|
$
|
174.5
|
|
|
$
|
10.3
|
|
|
6%
|
|
$
|
694.6
|
|
|
$
|
677.3
|
|
|
$
|
17.3
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
31.6
|
|
|
$
|
29.7
|
|
|
$
|
1.9
|
|
|
6%
|
|
$
|
125.6
|
|
|
$
|
126.7
|
|
|
$
|
(1.1
|
)
|
|
(1)%
|
|
|
Wireless
|
|
|
11.4
|
|
|
|
13.4
|
|
|
|
(2.0
|
)
|
|
(15)%
|
|
|
43.7
|
|
|
|
55.2
|
|
|
|
(11.5
|
)
|
|
(21)%
|
|
|
Data Center Colocation
|
|
|
9.8
|
|
|
|
6.4
|
|
|
|
3.4
|
|
|
53%
|
|
|
31.0
|
|
|
|
23.8
|
|
|
|
7.2
|
|
|
30%
|
|
|
IT Services and Hardware
|
|
|
10.3
|
|
|
|
8.4
|
|
|
|
1.9
|
|
|
23%
|
|
|
42.3
|
|
|
|
37.4
|
|
|
|
4.9
|
|
|
13%
|
|
|
Corporate and eliminations
|
|
|
6.8
|
|
|
|
7.5
|
|
|
|
(0.7
|
)
|
|
(9)%
|
|
|
26.9
|
|
|
|
20.0
|
|
|
|
6.9
|
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative
|
|
$
|
69.9
|
|
|
$
|
65.4
|
|
|
$
|
4.5
|
|
|
7%
|
|
$
|
269.5
|
|
|
$
|
263.1
|
|
|
$
|
6.4
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
27.1
|
|
|
$
|
26.3
|
|
|
$
|
0.8
|
|
|
3%
|
|
$
|
106.0
|
|
|
$
|
102.4
|
|
|
$
|
3.6
|
|
|
4%
|
|
|
Wireless
|
|
|
7.9
|
|
|
|
8.4
|
|
|
|
(0.5
|
)
|
|
(6)%
|
|
|
31.9
|
|
|
|
33.5
|
|
|
|
(1.6
|
)
|
|
(5)%
|
|
|
Data Center Colocation
|
|
|
19.7
|
|
|
|
16.6
|
|
|
|
3.1
|
|
|
19%
|
|
|
70.6
|
|
|
|
54.8
|
|
|
|
15.8
|
|
|
29%
|
|
|
IT Services and Hardware
|
|
|
2.3
|
|
|
|
1.8
|
|
|
|
0.5
|
|
|
28%
|
|
|
8.6
|
|
|
|
8.4
|
|
|
|
0.2
|
|
|
2%
|
|
|
Corporate
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
100%
|
|
|
0.3
|
|
|
|
0.4
|
|
|
|
(0.1
|
)
|
|
(25)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
$
|
57.2
|
|
|
$
|
53.2
|
|
|
$
|
4.0
|
|
|
8%
|
|
$
|
217.4
|
|
|
$
|
199.5
|
|
|
$
|
17.9
|
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
1.0
|
|
|
$
|
8.2
|
|
|
$
|
(7.2
|
)
|
|
(88)%
|
|
$
|
2.2
|
|
|
$
|
4.5
|
|
|
$
|
(2.3
|
)
|
|
(51)%
|
|
|
Wireless
|
|
|
1.5
|
|
|
|
50.3
|
|
|
|
(48.8
|
)
|
|
(97)%
|
|
|
2.0
|
|
|
|
51.4
|
|
|
|
(49.4
|
)
|
|
(96)%
|
|
|
Data Center Colocation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
13.6
|
|
|
|
-
|
|
|
|
13.6
|
|
|
n/m
|
|
|
IT Services and Hardware
|
|
|
(1.2
|
)
|
|
|
1.9
|
|
|
|
(3.1
|
)
|
|
n/m
|
|
|
(1.2
|
)
|
|
|
1.9
|
|
|
|
(3.1
|
)
|
|
n/m
|
|
|
Corporate
|
|
|
3.6
|
|
|
|
2.6
|
|
|
|
1.0
|
|
|
38%
|
|
|
5.7
|
|
|
|
5.2
|
|
|
|
0.5
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
|
|
$
|
4.9
|
|
|
$
|
63.0
|
|
|
$
|
(58.1
|
)
|
|
(92)%
|
|
$
|
22.3
|
|
|
$
|
63.0
|
|
|
$
|
(40.7
|
)
|
|
(65)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
50.1
|
|
|
$
|
48.3
|
|
|
$
|
1.8
|
|
|
4%
|
|
$
|
212.9
|
|
|
$
|
228.5
|
|
|
$
|
(15.6
|
)
|
|
(7)%
|
|
|
Wireless
|
|
|
7.7
|
|
|
|
(39.8
|
)
|
|
|
47.5
|
|
|
n/m
|
|
|
51.2
|
|
|
|
3.3
|
|
|
|
47.9
|
|
|
n/m
|
|
|
Data Center Colocation
|
|
|
7.9
|
|
|
|
10.3
|
|
|
|
(2.4
|
)
|
|
(23)%
|
|
|
30.4
|
|
|
|
46.4
|
|
|
|
(16.0
|
)
|
|
(34)%
|
|
|
IT Services and Hardware
|
|
|
3.1
|
|
|
|
1.1
|
|
|
|
2.0
|
|
|
n/m
|
|
|
10.3
|
|
|
|
9.8
|
|
|
|
0.5
|
|
|
5%
|
|
|
Corporate
|
|
|
(10.9
|
)
|
|
|
(10.7
|
)
|
|
|
(0.2
|
)
|
|
(2)%
|
|
|
(34.7
|
)
|
|
|
(28.5
|
)
|
|
|
(6.2
|
)
|
|
(22)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
$
|
57.9
|
|
|
$
|
9.2
|
|
|
$
|
48.7
|
|
|
n/m
|
|
$
|
270.1
|
|
|
$
|
259.5
|
|
|
$
|
10.6
|
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Other includes restructuring charges, curtailment loss, gain on sale or
disposal of assets, impairment of goodwill, asset impairments and
transaction costs.
Cincinnati Bell Inc.
|
Segment Information
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
Change
|
|
|
|
|
|
2012
|
|
2012
|
|
$
|
|
%
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
182.1
|
|
|
$
|
182.3
|
|
|
$
|
(0.2
|
)
|
|
0%
|
|
|
Wireless
|
|
|
56.8
|
|
|
|
59.5
|
|
|
|
(2.7
|
)
|
|
(5)%
|
|
|
Data Center Colocation
|
|
|
58.0
|
|
|
|
56.7
|
|
|
|
1.3
|
|
|
2%
|
|
|
IT Services and Hardware
|
|
|
86.9
|
|
|
|
78.3
|
|
|
|
8.6
|
|
|
11%
|
|
|
Eliminations
|
|
|
(9.1
|
)
|
|
|
(8.6
|
)
|
|
|
(0.5
|
)
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
374.7
|
|
|
$
|
368.2
|
|
|
$
|
6.5
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Services and Products
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
72.3
|
|
|
$
|
71.5
|
|
|
$
|
0.8
|
|
|
1%
|
|
|
Wireless
|
|
|
28.3
|
|
|
|
27.8
|
|
|
|
0.5
|
|
|
2%
|
|
|
Data Center Colocation
|
|
|
20.6
|
|
|
|
20.0
|
|
|
|
0.6
|
|
|
3%
|
|
|
IT Services and Hardware
|
|
|
72.4
|
|
|
|
61.3
|
|
|
|
11.1
|
|
|
18%
|
|
|
Eliminations
|
|
|
(8.8
|
)
|
|
|
(8.3
|
)
|
|
|
(0.5
|
)
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of services and products
|
|
$
|
184.8
|
|
|
$
|
172.3
|
|
|
$
|
12.5
|
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
31.6
|
|
|
$
|
32.8
|
|
|
$
|
(1.2
|
)
|
|
(4)%
|
|
|
Wireless
|
|
|
11.4
|
|
|
|
11.0
|
|
|
|
0.4
|
|
|
4%
|
|
|
Data Center Colocation
|
|
|
9.8
|
|
|
|
7.1
|
|
|
|
2.7
|
|
|
38%
|
|
|
IT Services and Hardware
|
|
|
10.3
|
|
|
|
10.8
|
|
|
|
(0.5
|
)
|
|
(5)%
|
|
|
Corporate and eliminations
|
|
|
6.8
|
|
|
|
10.5
|
|
|
|
(3.7
|
)
|
|
(35)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative
|
|
$
|
69.9
|
|
|
$
|
72.2
|
|
|
$
|
(2.3
|
)
|
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
27.1
|
|
|
$
|
26.6
|
|
|
$
|
0.5
|
|
|
2%
|
|
|
Wireless
|
|
|
7.9
|
|
|
|
8.1
|
|
|
|
(0.2
|
)
|
|
(2)%
|
|
|
Data Center Colocation
|
|
|
19.7
|
|
|
|
18.3
|
|
|
|
1.4
|
|
|
8%
|
|
|
IT Services and Hardware
|
|
|
2.3
|
|
|
|
2.4
|
|
|
|
(0.1
|
)
|
|
(4)%
|
|
|
Corporate
|
|
|
0.2
|
|
|
|
-
|
|
|
|
0.2
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
$
|
57.2
|
|
|
$
|
55.4
|
|
|
$
|
1.8
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other*
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
1.0
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
100%
|
|
|
Wireless
|
|
|
1.5
|
|
|
|
-
|
|
|
|
1.5
|
|
|
n/m
|
|
|
Data Center Colocation
|
|
|
-
|
|
|
|
0.1
|
|
|
|
(0.1
|
)
|
|
n/m
|
|
|
IT Services and Hardware
|
|
|
(1.2
|
)
|
|
|
-
|
|
|
|
(1.2
|
)
|
|
n/m
|
|
|
Corporate
|
|
|
3.6
|
|
|
|
1.7
|
|
|
|
1.9
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
|
|
$
|
4.9
|
|
|
$
|
2.3
|
|
|
$
|
2.6
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
50.1
|
|
|
$
|
50.9
|
|
|
$
|
(0.8
|
)
|
|
(2)%
|
|
|
Wireless
|
|
|
7.7
|
|
|
|
12.6
|
|
|
|
(4.9
|
)
|
|
(39)%
|
|
|
Data Center Colocation
|
|
|
7.9
|
|
|
|
11.2
|
|
|
|
(3.3
|
)
|
|
(29)%
|
|
|
IT Services and Hardware
|
|
|
3.1
|
|
|
|
3.8
|
|
|
|
(0.7
|
)
|
|
(18)%
|
|
|
Corporate
|
|
|
(10.9
|
)
|
|
|
(12.5
|
)
|
|
|
1.6
|
|
|
13%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
$
|
57.9
|
|
|
$
|
66.0
|
|
|
$
|
(8.1
|
)
|
|
(12)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2012
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Local access lines
|
|
573.9
|
|
585.8
|
|
621.3
|
|
|
|
|
|
|
|
|
|
|
Long distance lines
|
|
417.9
|
|
426.4
|
|
447.4
|
|
|
|
|
|
|
|
|
|
|
High-speed internet subscribers
|
|
|
|
|
|
|
|
|
DSL subscribers
|
|
202.6
|
|
207.8
|
|
218.0
|
|
|
Fioptics subscribers
|
|
56.8
|
|
52.3
|
|
39.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
259.4
|
|
260.1
|
|
257.3
|
|
|
|
|
|
|
|
|
|
|
Fioptics entertainment subscribers
|
|
55.1
|
|
51.1
|
|
39.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
|
|
|
|
|
|
|
Postpaid wireless subscribers
|
|
251.3
|
|
270.7
|
|
311.0
|
|
|
Prepaid wireless subscribers
|
|
146.5
|
|
144.9
|
|
148.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
397.8
|
|
415.6
|
|
459.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Center Colocation
|
|
|
|
|
|
|
|
|
Data center capacity (in square feet)
|
|
932.0
|
|
896.0
|
|
763.0
|
|
|
Utilization rate*
|
|
78%
|
|
78%
|
|
88%
|
|
|
|
|
|
|
|
|
|
*
|
|
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 billing 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
|
|
4Q
|
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
|
|
266.4
|
|
Secondary Residential
|
|
21.8
|
|
20.8
|
|
19.3
|
|
19.1
|
|
18.3
|
|
16.3
|
|
15.6
|
|
14.9
|
|
14.2
|
|
13.6
|
|
13.1
|
|
12.5
|
|
Business/ Other
|
|
261.9
|
|
258.7
|
|
256.2
|
|
252.5
|
|
250.7
|
|
248.7
|
|
244.4
|
|
240.8
|
|
238.5
|
|
237.5
|
|
234.4
|
|
232.1
|
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
|
|
511.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
22.4
|
|
Secondary Residential
|
|
1.1
|
|
1.1
|
|
1.0
|
|
1.0
|
|
0.9
|
|
0.9
|
|
0.9
|
|
0.8
|
|
0.8
|
|
0.8
|
|
0.7
|
|
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
|
|
39.8
|
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
|
|
62.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
573.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Net Debt and Common Shares Outstanding
|
(Unaudited)
|
(Dollars and shares in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
2012
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables Facility
|
|
$
|
52.0
|
|
|
$
|
44.0
|
|
|
$
|
-
|
|
7% Senior Notes due 2015
|
|
|
-
|
|
|
|
249.7
|
|
|
|
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
|
|
|
683.9
|
|
|
|
775.0
|
|
|
|
775.0
|
|
CyrusOne 6 3/8% Senior Notes due 2022
|
|
|
525.0
|
|
|
|
-
|
|
|
|
-
|
|
7 1/4% Senior Notes due 2023
|
|
|
40.0
|
|
|
|
40.0
|
|
|
|
40.0
|
|
Various Cincinnati Bell Telephone notes
|
|
|
134.5
|
|
|
|
207.5
|
|
|
|
207.5
|
|
Capital leases and other debt
|
|
|
136.5
|
|
|
|
141.5
|
|
|
|
144.4
|
|
Net unamortized discount
|
|
|
(7.5
|
)
|
|
|
(7.5
|
)
|
|
|
(8.7
|
)
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
2,689.4
|
|
|
|
2,575.2
|
|
|
|
2,533.6
|
|
|
|
|
|
|
|
|
|
Less: Interest rate swap adjustment
|
|
|
-
|
|
|
|
(2.2
|
)
|
|
|
(2.9
|
)
|
Less: Cash and cash equivalents
|
|
|
(23.6
|
)
|
|
|
(7.7
|
)
|
|
|
(73.7
|
)
|
|
|
|
|
|
|
|
|
|
Net debt (as defined by the company)
|
|
$
|
2,665.8
|
|
|
$
|
2,565.3
|
|
|
$
|
2,457.0
|
|
|
|
|
|
|
|
|
|
Credit facility availability:
|
|
|
|
|
|
|
|
Corporate
|
|
|
200.0
|
|
|
|
210.0
|
|
|
|
210.0
|
|
|
CyrusOne*
|
|
|
225.0
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
425.0
|
|
|
$
|
210.0
|
|
|
$
|
210.0
|
|
|
|
|
|
|
|
|
|
Common shares outstanding
|
|
|
202.5
|
|
|
|
199.4
|
|
|
|
195.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
On January 24, 2013, we completed the initial public offering of
CyrusOne, and Cincinnati Bell no longer has access to this facility.
|
|
|
Cincinnati Bell Inc.
|
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA
(Non-GAAP)
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2012
|
|
|
|
|
Wireline
|
|
Wireless
|
|
Data Center Colocation
|
|
IT Services & Hardware
|
|
Corporate
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss (GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(9.8
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.6
|
)
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
55.6
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
13.6
|
|
|
|
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (GAAP)
|
|
$
|
50.1
|
|
|
$
|
7.7
|
|
|
$
|
7.9
|
|
|
$
|
3.1
|
|
|
$
|
(10.9
|
)
|
|
$
|
57.9
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
27.1
|
|
|
|
7.9
|
|
|
|
19.7
|
|
|
|
2.3
|
|
|
|
0.2
|
|
|
|
57.2
|
|
|
|
Restructuring charges (reversals)
|
|
|
1.9
|
|
|
|
1.1
|
|
|
|
-
|
|
|
|
(1.2
|
)
|
|
|
(1.4
|
)
|
|
|
0.4
|
|
|
|
Loss (gain) on sale or disposal of assets
|
|
|
(1.4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
(1.0
|
)
|
|
|
Transaction costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4.6
|
|
|
|
4.6
|
|
|
|
Impairment of goodwill and other assets
|
|
|
0.5
|
|
|
|
0.4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.9
|
|
|
|
Legal claim costs
|
|
|
-
|
|
|
|
-
|
|
|
|
0.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.2
|
|
|
|
Pension and other retirement plan expenses
|
|
|
5.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.3
|
|
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
84.0
|
|
|
$
|
17.1
|
|
|
$
|
27.8
|
|
|
$
|
4.2
|
|
|
$
|
(6.8
|
)
|
|
$
|
126.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
|
|
|
46
|
%
|
|
|
30
|
%
|
|
|
48
|
%
|
|
|
5
|
%
|
|
|
-
|
|
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sequential dollar change in Adjusted EBITDA
|
|
$
|
0.2
|
|
|
$
|
(3.6
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
3.6
|
|
|
$
|
(3.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sequential percentage change in Adjusted EBITDA
|
|
|
0
|
%
|
|
|
(17
|
)%
|
|
|
(6
|
)%
|
|
|
(32
|
)%
|
|
|
35
|
%
|
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2011
|
|
|
|
|
Wireline
|
|
Wireless
|
|
Data Center Colocation
|
|
IT Services & Hardware
|
|
Corporate
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss (GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(30.4
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(15.1
|
)
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
53.8
|
|
|
|
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) (GAAP)
|
|
$
|
48.3
|
|
|
$
|
(39.8
|
)
|
|
$
|
10.3
|
|
|
$
|
1.1
|
|
|
$
|
(10.7
|
)
|
|
$
|
9.2
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
26.3
|
|
|
|
8.4
|
|
|
|
16.6
|
|
|
|
1.8
|
|
|
|
0.1
|
|
|
|
53.2
|
|
|
|
Restructuring charges
|
|
|
7.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.9
|
|
|
|
2.6
|
|
|
|
12.2
|
|
|
|
Impairment of goodwill and other assets
|
|
|
0.5
|
|
|
|
50.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
50.8
|
|
|
|
Legal claim costs
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
1.2
|
|
|
|
Pension and other retirement plan expenses
|
|
|
4.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
87.7
|
|
|
$
|
18.9
|
|
|
$
|
27.3
|
|
|
$
|
4.8
|
|
|
$
|
(6.8
|
)
|
|
$
|
131.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
|
|
|
49
|
%
|
|
|
28
|
%
|
|
|
56
|
%
|
|
|
6
|
%
|
|
|
-
|
|
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year dollar change in Adjusted EBITDA
|
|
$
|
(3.7
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
0.5
|
|
|
$
|
(0.6
|
)
|
|
$
|
-
|
|
|
$
|
(5.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year percentage change in Adjusted EBITDA
|
|
|
(4
|
)%
|
|
|
(10
|
)%
|
|
|
2
|
%
|
|
|
(13
|
)%
|
|
|
0
|
%
|
|
|
(4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2012
|
|
|
|
|
Wireline
|
|
Wireless
|
|
Data Center Colocation
|
|
IT Services & Hardware
|
|
Corporate
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11.2
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
24.7
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
218.9
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
13.6
|
|
|
|
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (GAAP)
|
|
$
|
212.9
|
|
|
$
|
51.2
|
|
|
$
|
30.4
|
|
|
$
|
10.3
|
|
|
$
|
(34.7
|
)
|
|
$
|
270.1
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
106.0
|
|
|
|
31.9
|
|
|
|
70.6
|
|
|
|
8.6
|
|
|
|
0.3
|
|
|
|
217.4
|
|
|
|
Restructuring charges (reversals)
|
|
|
3.5
|
|
|
|
1.6
|
|
|
|
0.5
|
|
|
|
(1.2
|
)
|
|
|
(1.0
|
)
|
|
|
3.4
|
|
|
|
Loss (gain) on sale or disposal of assets
|
|
|
(1.8
|
)
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
0.4
|
|
|
|
(1.6
|
)
|
|
|
Transaction costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6.3
|
|
|
|
6.3
|
|
|
|
Impairment of goodwill and other assets
|
|
|
0.5
|
|
|
|
0.4
|
|
|
|
13.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14.2
|
|
|
|
Legal claim costs
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
Pension and other retirement plan expenses
|
|
|
23.0
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.4
|
|
|
|
24.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
344.1
|
|
|
$
|
85.1
|
|
|
$
|
115.0
|
|
|
$
|
17.7
|
|
|
$
|
(27.3
|
)
|
|
$
|
534.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
|
|
|
47
|
%
|
|
|
35
|
%
|
|
|
52
|
%
|
|
|
6
|
%
|
|
|
-
|
|
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2011
|
|
|
|
|
Wireline
|
|
Wireless
|
|
Data Center Colocation
|
|
IT Services & Hardware
|
|
Corporate
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18.6
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
25.0
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
215.0
|
|
|
|
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (GAAP)
|
|
$
|
228.5
|
|
|
$
|
3.3
|
|
|
$
|
46.4
|
|
|
$
|
9.8
|
|
|
$
|
(28.5
|
)
|
|
$
|
259.5
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
102.4
|
|
|
|
33.5
|
|
|
|
54.8
|
|
|
|
8.4
|
|
|
|
0.4
|
|
|
|
199.5
|
|
|
|
Restructuring charges
|
|
|
7.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.9
|
|
|
|
2.6
|
|
|
|
12.2
|
|
|
|
Gain on sale of assets
|
|
|
(8.4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8.4
|
)
|
|
|
Impairment of goodwill and other assets
|
|
|
1.0
|
|
|
|
51.4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
52.4
|
|
|
|
Transaction costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2.6
|
|
|
|
2.6
|
|
|
|
Legal claim costs
|
|
|
-
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
1.6
|
|
|
|
Pension and other retirement plan expenses
|
|
|
23.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.5
|
|
|
|
25.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
355.0
|
|
|
$
|
88.2
|
|
|
$
|
102.0
|
|
|
$
|
20.1
|
|
|
$
|
(20.6
|
)
|
|
$
|
544.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
|
|
|
49
|
%
|
|
|
32
|
%
|
|
|
55
|
%
|
|
|
7
|
%
|
|
|
-
|
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year dollar change in Adjusted EBITDA
|
|
$
|
(10.9
|
)
|
|
$
|
(3.1
|
)
|
|
$
|
13.0
|
|
|
$
|
(2.4
|
)
|
|
$
|
(6.7
|
)
|
|
$
|
(10.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year percentage change in Adjusted EBITDA
|
|
|
(3
|
)%
|
|
|
(4
|
)%
|
|
|
13
|
%
|
|
|
(12
|
)%
|
|
|
(33
|
)%
|
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Consolidated Statements of Cash Flows
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities
|
|
$
|
57.7
|
|
|
$
|
91.4
|
|
|
$
|
212.7
|
|
|
$
|
289.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(124.3
|
)
|
|
|
(88.5
|
)
|
|
|
(367.2
|
)
|
|
|
(255.5
|
)
|
|
|
Increase in restricted cash
|
|
|
-
|
|
|
|
-
|
|
|
|
(11.1
|
)
|
|
|
-
|
|
|
|
Release of restricted cash
|
|
|
4.2
|
|
|
|
-
|
|
|
|
4.9
|
|
|
|
-
|
|
|
|
Proceeds from sale of assets
|
|
|
1.0
|
|
|
|
1.7
|
|
|
|
1.6
|
|
|
|
11.5
|
|
|
|
Other, net
|
|
|
-
|
|
|
|
(0.4
|
)
|
|
|
-
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used in investing activities
|
|
|
(119.1
|
)
|
|
|
(87.2
|
)
|
|
|
(371.8
|
)
|
|
|
(244.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
525.0
|
|
|
|
-
|
|
|
|
525.0
|
|
|
|
-
|
|
|
|
Increase in corporate credit and receivables facilities
|
|
|
8.0
|
|
|
|
-
|
|
|
|
52.0
|
|
|
|
0.4
|
|
|
|
Repayment of debt
|
|
|
(431.1
|
)
|
|
|
(2.5
|
)
|
|
|
(442.4
|
)
|
|
|
(11.5
|
)
|
|
|
Debt issuance costs
|
|
|
(20.9
|
)
|
|
|
-
|
|
|
|
(20.9
|
)
|
|
|
(0.8
|
)
|
|
|
Dividends paid on preferred stock
|
|
|
(2.6
|
)
|
|
|
(2.6
|
)
|
|
|
(10.4
|
)
|
|
|
(10.4
|
)
|
|
|
Common stock issuance costs
|
|
|
(5.7
|
)
|
|
|
-
|
|
|
|
(5.7
|
)
|
|
|
-
|
|
|
|
Common stock repurchase
|
|
|
-
|
|
|
|
(0.4
|
)
|
|
|
(0.3
|
)
|
|
|
(10.4
|
)
|
|
|
Proceeds from exercise of options and warrants
|
|
|
4.0
|
|
|
|
0.3
|
|
|
|
12.1
|
|
|
|
0.4
|
|
|
|
Financing obligations and other, net
|
|
|
0.6
|
|
|
|
(16.0
|
)
|
|
|
(0.4
|
)
|
|
|
(16.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (used in) provided by financing activities
|
|
|
77.3
|
|
|
|
(21.2
|
)
|
|
|
109.0
|
|
|
|
(48.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
15.9
|
|
|
|
(17.0
|
)
|
|
|
(50.1
|
)
|
|
|
(3.6
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
7.7
|
|
|
|
90.7
|
|
|
|
73.7
|
|
|
|
77.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
23.6
|
|
|
$
|
73.7
|
|
|
$
|
23.6
|
|
|
$
|
73.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Cash Flow to
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow (as defined by the company)
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
$
|
15.9
|
|
|
$
|
(17.0
|
)
|
|
$
|
(50.1
|
)
|
|
$
|
(3.6
|
)
|
|
Less adjustments:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
(525.0
|
)
|
|
|
-
|
|
|
|
(525.0
|
)
|
|
|
-
|
|
|
|
Increase in corporate credit and receivables facilities
|
|
|
(8.0
|
)
|
|
|
-
|
|
|
|
(52.0
|
)
|
|
|
(0.4
|
)
|
|
|
Repayment of debt
|
|
|
431.1
|
|
|
|
2.5
|
|
|
|
442.4
|
|
|
|
11.5
|
|
|
|
Debt issuance costs
|
|
|
20.9
|
|
|
|
-
|
|
|
|
20.9
|
|
|
|
0.8
|
|
|
|
Common stock repurchase
|
|
|
-
|
|
|
|
0.4
|
|
|
|
0.3
|
|
|
|
10.4
|
|
|
|
Proceeds from sale of assets, net of expenses
|
|
|
(1.0
|
)
|
|
|
(1.7
|
)
|
|
|
(1.6
|
)
|
|
|
(10.8
|
)
|
|
|
Transaction costs
|
|
|
9.3
|
|
|
|
-
|
|
|
|
11.0
|
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (as defined by the company)
|
|
$
|
(56.8
|
)
|
|
$
|
(15.8
|
)
|
|
$
|
(154.1
|
)
|
|
$
|
10.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax payments (refunds)
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Free Cash Flow (as defined by the company)
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow for the three months ended December 31, 2011
|
|
|
|
$
|
(15.8
|
)
|
|
|
|
|
|
|
|
Decrease in Adjusted EBITDA
|
|
|
|
|
(5.6
|
)
|
|
Increase in capital expenditures
|
|
|
|
|
(35.8
|
)
|
|
Increase in interest payments
|
|
|
|
|
(5.5
|
)
|
|
Increase in pension and postretirement payments
|
|
|
|
|
(1.8
|
)
|
|
Change in working capital and other
|
|
|
|
|
7.7
|
|
|
|
|
|
|
|
|
Free Cash Flow for the three months ended December 31, 2012
|
|
|
|
$
|
(56.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow for the twelve months ended December 31, 2011
|
|
|
|
$
|
10.5
|
|
|
|
|
|
|
|
|
Decrease in Adjusted EBITDA
|
|
|
|
|
(10.1
|
)
|
|
Increase in capital expenditures
|
|
|
|
|
(111.7
|
)
|
|
Increase in interest payments
|
|
|
|
|
(6.1
|
)
|
|
Increase in pension and postretirement payments
|
|
|
|
|
(6.6
|
)
|
|
Change in working capital and other
|
|
|
|
|
(30.1
|
)
|
|
|
|
|
|
|
|
Free Cash Flow for the twelve months ended December 31, 2012
|
|
|
|
$
|
(154.1
|
)
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Capital Expenditures
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Dec. 31, 2012
|
|
Sep. 30, 2012
|
|
Jun. 30, 2012
|
|
Mar. 31, 2012
|
|
Dec. 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
36.7
|
|
$
|
27.8
|
|
$
|
26.4
|
|
$
|
23.3
|
|
$
|
37.4
|
Wireless
|
|
|
3.4
|
|
|
4.2
|
|
|
1.9
|
|
|
6.3
|
|
|
7.0
|
Data Center Colocation
|
|
|
81.8
|
|
|
41.6
|
|
|
52.0
|
|
|
52.8
|
|
|
41.3
|
IT Services and Hardware
|
|
|
2.4
|
|
|
1.9
|
|
|
2.5
|
|
|
2.2
|
|
|
2.8
|
Total capital expenditures
|
|
$
|
124.3
|
|
$
|
75.5
|
|
$
|
82.8
|
|
$
|
84.6
|
|
$
|
88.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
Before Special Items
|
|
|
|
|
|
(GAAP)
|
|
Special Items
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
374.7
|
|
|
$
|
-
|
|
|
|
$
|
374.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
184.8
|
|
|
|
-
|
|
|
|
|
184.8
|
|
|
|
Selling, general and administrative
|
|
|
69.9
|
|
|
|
(0.2
|
)
|
[A]
|
|
|
69.7
|
|
|
|
Depreciation and amortization
|
|
|
57.2
|
|
|
|
-
|
|
|
|
|
57.2
|
|
|
|
Restructuring charges
|
|
|
0.4
|
|
|
|
(0.4
|
)
|
[B]
|
|
|
-
|
|
|
|
Gain on sale or disposal of assets
|
|
|
(1.0
|
)
|
|
|
1.0
|
|
[C]
|
|
|
-
|
|
|
|
Impairment of goodwill and other assets
|
|
|
0.9
|
|
|
|
(0.9
|
)
|
[D]
|
|
|
-
|
|
|
|
Transaction costs
|
|
|
4.6
|
|
|
|
(4.6
|
)
|
[E]
|
|
|
-
|
|
|
|
|
Operating income
|
|
|
57.9
|
|
|
|
5.1
|
|
|
|
|
63.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
55.6
|
|
|
|
-
|
|
|
|
|
55.6
|
|
|
Loss on extinguishment of debt
|
|
|
13.6
|
|
|
|
(13.6
|
)
|
[F]
|
|
|
-
|
|
|
Other expense, net
|
|
|
0.1
|
|
|
|
-
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(11.4
|
)
|
|
|
18.7
|
|
|
|
|
7.3
|
|
|
Income tax expense (benefit)
|
|
|
(1.6
|
)
|
|
|
7.5
|
|
|
|
|
5.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(9.8
|
)
|
|
|
11.2
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
2.6
|
|
|
|
-
|
|
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) applicable to common shareowners
|
|
$
|
(12.4
|
)
|
|
$
|
11.2
|
|
|
|
$
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares
|
|
|
199.9
|
|
|
|
209.8
|
|
[G]
|
|
|
199.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per common share
|
|
$
|
(0.06
|
)
|
|
$
|
0.05
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized results have been adjusted for the following (pretax
adjustments are tax effected at 40%):
|
|
|
|
A
|
|
Costs associated with investigation and resolution of special legal
matters.
|
|
|
|
B
|
|
Restructuring charges consist of severance.
|
|
|
|
C
|
|
Gain on sale of wireline equipment.
|
|
|
|
D
|
|
Impairment of property recorded to reduce the carrying values of
these assets to reflect their estimated fair values.
|
|
|
|
E
|
|
Transaction costs consist of legal and consulting fees incurred in
legal entity restructuring.
|
|
|
|
F
|
|
Loss on extinguishment of 7% Senior Notes, 8 3/8% Senior Notes and
various CBT notes.
|
|
|
|
G
|
|
Dilutive effect of common stock equivalents based on net income
excluding special items.
|
|
|
|
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
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
|
Before Special Items
|
|
|
|
|
|
(GAAP)
|
|
Special Items
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
365.3
|
|
|
$
|
-
|
|
|
|
$
|
365.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
174.5
|
|
|
|
-
|
|
|
|
|
174.5
|
|
|
Selling, general and administrative
|
|
|
65.4
|
|
|
|
(1.2
|
)
|
[A]
|
|
|
64.2
|
|
|
Depreciation and amortization
|
|
|
53.2
|
|
|
|
-
|
|
|
|
|
53.2
|
|
|
Restructuring charges
|
|
|
12.2
|
|
|
|
(12.2
|
)
|
[B]
|
|
|
-
|
|
|
Impairment of goodwill and other assets
|
|
|
50.8
|
|
|
|
(50.8
|
)
|
[C]
|
|
|
-
|
|
|
|
Operating income
|
|
|
9.2
|
|
|
|
64.2
|
|
|
|
|
73.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
53.8
|
|
|
|
-
|
|
|
|
|
53.8
|
|
Other expense, net
|
|
|
0.9
|
|
|
|
-
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(45.5
|
)
|
|
|
64.2
|
|
|
|
|
18.7
|
|
Income tax expense (benefit)
|
|
|
(15.1
|
)
|
|
|
25.7
|
|
|
|
|
10.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(30.4
|
)
|
|
|
38.5
|
|
|
|
|
8.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
2.6
|
|
|
|
-
|
|
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) applicable to common shareowners
|
|
$
|
(33.0
|
)
|
|
$
|
38.5
|
|
|
|
$
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares
|
|
|
194.9
|
|
|
|
198.3
|
|
[D]
|
|
|
198.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per common share*
|
|
$
|
(0.17
|
)
|
|
$
|
0.19
|
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized results have been adjusted for the following (pretax
adjustments are tax effected at 40%):
|
|
|
|
A
|
|
Costs associated with investigation and resolution of special legal
matters.
|
|
|
|
B
|
|
Restructuring charges incurred for employee separations, lease
abandonments and contract terminations.
|
|
|
|
C
|
|
Impairment of Wireless goodwill and impairment recorded to reduce
carrying value of property to reflect its estimated fair value.
|
|
|
|
D
|
|
Dilutive effect of common stock equivalents based on net income
excluding special items.
|
|
|
|
*
|
|
The sum of the GAAP and Special Items per share results will not
necessarily equal the Non-GAAP per share result.
|
|
|
|
Cincinnati Bell Inc.
|
Normalized Statements of Operations (Non-GAAP) - Reconciliation
to Reported Results
|
(Unaudited)
|
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
|
|
|
|
|
|
Twelve
|
|
|
|
|
|
Months Ended
|
|
|
|
|
|
Months Ended
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
Before Special Items
|
|
|
|
|
|
(GAAP)
|
|
Special Items
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,473.9
|
|
|
$
|
-
|
|
|
|
$
|
1,473.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
694.6
|
|
|
|
-
|
|
|
|
|
694.6
|
|
|
Selling, general and administrative
|
|
|
269.5
|
|
|
|
(0.4
|
)
|
|
[A]
|
|
269.1
|
|
|
Depreciation and amortization
|
|
|
217.4
|
|
|
|
-
|
|
|
|
|
217.4
|
|
|
Restructuring charges
|
|
|
3.4
|
|
|
|
(3.4
|
)
|
|
[B]
|
|
-
|
|
|
Gain on sale or disposal of assets
|
|
|
(1.6
|
)
|
|
|
1.6
|
|
|
[C]
|
|
-
|
|
|
Impairment of goodwill and other assets
|
|
|
14.2
|
|
|
|
(14.2
|
)
|
|
[D]
|
|
-
|
|
|
Transaction costs
|
|
|
6.3
|
|
|
|
(6.3
|
)
|
|
[E]
|
|
-
|
|
|
|
Operating income
|
|
|
270.1
|
|
|
|
22.7
|
|
|
|
|
292.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
218.9
|
|
|
|
-
|
|
|
|
|
218.9
|
|
Loss on extinguishment of debt
|
|
|
13.6
|
|
|
|
(13.6
|
)
|
|
[F]
|
|
-
|
|
Other expense, net
|
|
|
1.7
|
|
|
|
(1.4
|
)
|
|
[G]
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
35.9
|
|
|
|
37.7
|
|
|
|
|
73.6
|
|
Income tax expense
|
|
|
24.7
|
|
|
|
15.1
|
|
|
|
|
39.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
11.2
|
|
|
|
22.6
|
|
|
|
|
33.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
10.4
|
|
|
|
-
|
|
|
|
|
10.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income applicable to common shareowners
|
|
$
|
0.8
|
|
|
$
|
22.6
|
|
|
|
$
|
23.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares
|
|
|
204.7
|
|
|
|
204.7
|
|
|
|
|
204.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.00
|
|
|
$
|
0.11
|
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized results have been adjusted for the following (pretax
adjustments are tax effected at 40%):
|
|
|
|
A
|
|
Costs associated with 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
|
|
Impairment of intangibles and property recorded to reduce the
carrying values of these assets to reflect their estimated fair
values.
|
|
|
|
E
|
|
Transaction costs consist of legal and consulting fees incurred in
legal entity restructuring.
|
|
|
|
F
|
|
Loss on extinguishment of 7% Senior Notes, 8 3/8% Senior Notes and
various CBT notes.
|
|
|
|
G
|
|
Loss on termination of financing obligation.
|
|
|
|
Cincinnati Bell Inc.
|
Normalized Statements of Operations (Non-GAAP) - Reconciliation
to Reported Results
|
(Unaudited)
|
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
|
|
|
|
|
|
Twelve
|
|
|
|
|
Months Ended
|
|
|
|
|
|
Months Ended
|
|
|
|
|
December 31, 2011
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
Before Special Items
|
|
|
|
|
|
(GAAP)
|
|
Special Items
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,462.4
|
|
|
$
|
-
|
|
|
|
$
|
1,462.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
677.3
|
|
|
|
-
|
|
|
|
|
677.3
|
|
|
Selling, general and administrative
|
|
|
263.1
|
|
|
|
(1.6
|
)
|
|
[A]
|
|
261.5
|
|
|
Depreciation and amortization
|
|
|
199.5
|
|
|
|
-
|
|
|
|
|
199.5
|
|
|
Restructuring charges
|
|
|
12.2
|
|
|
|
(12.2
|
)
|
|
[B]
|
|
-
|
|
|
Curtailment loss
|
|
|
4.2
|
|
|
|
(4.2
|
)
|
|
[C]
|
|
-
|
|
|
Gain on sale of assets
|
|
|
(8.4
|
)
|
|
|
8.4
|
|
|
[D]
|
|
-
|
|
|
Impairment of goodwill and other assets
|
|
|
52.4
|
|
|
|
(52.4
|
)
|
|
[E]
|
|
-
|
|
|
Transaction costs
|
|
|
2.6
|
|
|
|
(2.6
|
)
|
|
[F]
|
|
-
|
|
|
|
Operating income
|
|
|
259.5
|
|
|
|
64.6
|
|
|
|
|
324.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
215.0
|
|
|
|
-
|
|
|
|
|
215.0
|
|
Other expense, net
|
|
|
0.9
|
|
|
|
-
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
43.6
|
|
|
|
64.6
|
|
|
|
|
108.2
|
|
Income tax expense
|
|
|
25.0
|
|
|
|
25.8
|
|
|
|
|
50.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
18.6
|
|
|
|
38.8
|
|
|
|
|
57.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
10.4
|
|
|
|
-
|
|
|
|
|
10.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income applicable to common shareowners
|
|
$
|
8.2
|
|
|
$
|
38.8
|
|
|
|
$
|
47.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares
|
|
|
200.0
|
|
|
|
200.0
|
|
|
|
|
200.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share*
|
|
$
|
0.04
|
|
|
$
|
0.19
|
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized results have been adjusted for the following (pretax
adjustments are tax effected at 40%):
|
|
|
|
A
|
|
Costs associated with investigation and resolution of special legal
matters.
|
|
|
|
B
|
|
Restructuring charges incurred for employee separations, lease
abandonments and contract terminations.
|
|
|
|
C
|
|
Curtailment of bargained pension plan as a result of pension service
credits being frozen for the majority of the plan participants.
|
|
|
|
D
|
|
Gain on sale of assets sold in connection with the home security
monitoring business.
|
|
|
|
E
|
|
Impairment of Wireless goodwill and impairment recorded to reduce
carrying value of property to reflect its estimated fair value.
|
|
|
|
F
|
|
Transaction costs consist of legal and professional fees incurred in
due diligence.
|
|
|
|
*
|
|
The sum of the GAAP and Special Items per share results will not
necessarily equal the Non-GAAP per share result.
|
|
|
|
Cincinnati Bell Inc.
|
Reconciliation of Operating Income (GAAP) Guidance to Adjusted
EBITDA (Non-GAAP) Guidance
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Operating Income (GAAP) Guidance
|
|
|
|
|
|
|
|
|
$
|
210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
150
|
|
|
Pension and other retirement plan expenses
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Adjusted EBITDA (Non-GAAP) Guidance
|
|
|
|
|
|
|
|
|
$
|
390
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Plus or minus 2 percent.
|
|
|
|
|
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|