Cincinnati Bell Reports First Quarter 2019 Results

Cincinnati Bell Inc. (NYSE:CBB), today announced financial results for
the first quarter of 2019.

Leigh Fox, President and Chief Executive Officer of Cincinnati Bell,
commented, “Our first quarter results provided a great start to the
year. The investments in dense metro fiber and the expansion of our IT
services footprint continue to differentiate Cincinnati Bell in the
marketplace.”

Mr. Fox added, “We are pleased to reaffirm our financial guidance for
2019 as we continue to execute on our strategic objectives, positioning
Cincinnati Bell and its stakeholders for long-term success.”

Consolidated Results

• Consolidated revenue totaled $380 million and operating income was $10
  million for the first quarter of 2019
• Adjusted EBITDA of $98 million in the first quarter of 2019, up $19
  million year-over-year including contributions from the merger with
  Hawaiian Telcom on July 2, 2018
• Net loss for the first quarter of 2019 totaled $27 million, resulting
  in diluted loss per share of $0.59, driven by accelerated depreciation
  of certain cloud-related assets associated with insourcing initiatives
  from one of our largest customers, as well as increased restructuring
  and severance related charges and interest expense compared to a year
  ago

Entertainment and Communications Segment

• Entertainment and Communications revenue totaled $250 million for the
  first quarter of 2019
  • Cincinnati revenue totaled $171 million, down 2% from the prior
    year
    • Fioptics revenue totaled $87 million, up 5% year-over-year
    • Fioptics internet subscribers totaled 243,300, up 10,500
      compared to a year ago
    • Fioptics video subscribers totaled 139,200, down 7,100
      year-over-year
    • Fioptics is available to approximately 76% of Greater
      Cincinnati, which includes a combination of fiber to the
      premise (“FTTP”) and fiber to the node (“FTTN”) addresses
    • During the first quarter of 2019, 5,300 additional homes and
      businesses were passed with FTTP, which is available to
      477,600 addresses, approximately 60% of Cincinnati’s total
      addressable market
  • Hawaii revenue totaled $80 million in the first quarter of 2019,
    consistent with the prior quarter
    • Consumer / SMB Fiber revenue totaled $22 million, up 4%
      sequentially
    • Consumer / SMB Fiber internet subscribers totaled 66,600,
      adding 700 new customers in the quarter
    • Video subscribers were 47,800, down 1,000 from the prior
      quarter
    • Consumer / SMB Fiber is available to approximately 50% of
      Hawaii, which includes a combination of FTTP and FTTN addresses
    • During the first quarter of 2019, 1,100 additional homes and
      businesses were passed with FTTP, which is available to
      168,100 addresses, approximately 35% of Hawaii’s total
      addressable market

• Adjusted EBITDA was $91 million for the first quarter of 2019,
  consistent with the prior quarter

IT Services and Hardware Segment

• IT Services and Hardware revenue totaled $136 million for the first
  quarter of 2019, up $9 million year-over-year including contributions
  from Hawaiian Telcom
  • Consulting revenue totaled $39 million for the first quarter, up
    $8 million year-over-year
  • Cloud revenue of $24 million increased $2 million compared to the
    prior year despite insourcing initiatives from one of our largest
    customers
    • Certain cloud revenue from this customer totaled $4 million in
      the first quarter of 2019 generating Adjusted EBITDA of $3
      million; compared to the first quarter of 2018, in which
      certain cloud revenue from the customer totaled $7 million
      resulting in Adjusted EBITDA of $5 million
  • Communications revenue was $47 million, up $7 million
    year-over-year
  • Infrastructure Solutions revenue totaled $26 million, down $8
    million from a year ago

• Adjusted EBITDA of $10 million for the first quarter of 2019, down $2
  million year-over-year

Cash Flow and Financial Position

• Operating cash flows totaled $57 million for the first quarter of 2019
  with free cash flow of $6 million
• Liquidity of $190 million as of March 31, 2019, with no significant
  maturities until 2024
• Capital expenditures were $57 million for the first quarter of 2019
• Gross Net Operating Loss carryforward of approximately $710 million as
  of March 31, 2019

2019 Outlook

• Cincinnati Bell is reaffirming the following guidance for 2019 as
  previously provided on February 14, 2019:

Conference Call/Webcast

Cincinnati Bell will host a conference call on Wednesday, May 8, 2019 at
9:00 a.m. (ET) to discuss its financial results for the first quarter of
2019. A live webcast of the call will be available via the Investor
Relations section of www.cincinnatibell.com.
Callers can dial toll-free (888) 204-4368 or toll (929) 477-0402. A
taped replay of the conference call will be available starting at 12:00
p.m. (ET) on Wednesday, May 8, 2019 until 12:00 p.m. (ET) on Wednesday,
May 22, 2019. To access the telephone replay, please dial toll-free
(888) 203-1112 or toll (719) 457-0820, and then enter the conference ID
number 8208777. An archived webcast will be available for replay
following the conclusion of the live event in the Investor Relations
section of www.cincinnatibell.com.

INVESTOR RELATIONS CONTACT:
Kei Lawson, 513-565-0510
E-mail: Takeitha.Lawson@cinbell.com

or

MEDIA CONTACT:
Josh Pichler, 513-565-0310
E-mail: Josh.Pichler@cinbell.com

Safe Harbor Note

This release may contain “forward-looking” statements, as defined in
federal securities laws including the Private Securities Litigation
Reform Act of 1995, which are based on our current expectations,
estimates, forecasts and projections. Statements that are not historical
facts, including statements about the beliefs, expectations and future
plans and strategies of the Company, are forward-looking statements.
Actual results may differ materially from those expressed in any
forward-looking statements. The following important factors, among other
things, could cause or contribute to actual results being materially and
adversely different from those described or implied by such
forward-looking statements including, but not limited to: those
discussed in this release; we operate in highly competitive industries,
and customers may not continue to purchase products or services, which
would result in reduced revenue and loss of market share; we may be
unable to grow our revenues and cash flows despite the initiatives we
have implemented; failure to anticipate the need for and introduce new
products and services or to compete with new technologies may compromise
our success in the telecommunications industry; our access lines, which
generate a significant portion of our cash flows and profits, are
decreasing in number and if we continue to experience access line losses
similar to the past several years, our revenues, earnings and cash flows
from operations may be adversely impacted; our failure to meet
performance standards under our agreements could result in customers
terminating their relationships with us or customers being entitled to
receive financial compensation, which would lead to reduced revenues
and/or increased costs; we generate a substantial portion of our revenue
by serving a limited geographic area; a large customer accounts for a
significant portion of our revenues and accounts receivable and the loss
or significant reduction in business from this customer would cause
operating revenues to decline and could negatively impact profitability
and cash flows; maintaining our telecommunications networks requires
significant capital expenditures, and our inability or failure to
maintain our telecommunications networks could have a material impact on
our market share and ability to generate revenue; increases in broadband
usage may cause network capacity limitations, resulting in service
disruptions or reduced capacity for customers; we may be liable for
material that content providers distribute on our networks; cyber
attacks or other breaches of network or other information technology
security could have an adverse effect on our business; natural
disasters, terrorists acts or acts of war could cause damage to our
infrastructure and result in significant disruptions to our operations;
the regulation of our businesses by federal and state authorities may,
among other things, place us at a competitive disadvantage, restrict our
ability to price our products and services and threaten our operating
licenses; we depend on a number of third party providers, and the loss
of, or problems with, one or more of these providers may impede our
growth or cause us to lose customers; a failure of back-office
information technology systems could adversely affect our results of
operations and financial condition; if we fail to extend or renegotiate
our collective bargaining agreements with our labor union when they
expire or if our unionized employees were to engage in a strike or other
work stoppage, our business and operating results could be materially
harmed; the loss of any of the senior management team or attrition among
key sales associates could adversely affect our business, financial
condition, results of operations and cash flows; our debt could limit
our ability to fund operations, raise additional capital, and fulfill
our obligations, which, in turn, would have a material adverse effect on
our businesses and prospects generally; our indebtedness imposes
significant restrictions on us; we depend on our loans and credit
facilities to provide for our short-term financing requirements in
excess of amounts generated by operations, and the availability of those
funds may be reduced or limited; the servicing of our indebtedness is
dependent on our ability to generate cash, which could be impacted by
many factors beyond our control; we depend on the receipt of dividends
or other intercompany transfers from our subsidiaries and investments;
the trading price of our common shares may be volatile, and the value of
an investment in our common shares may decline; the uncertain economic
environment, including uncertainty in the U.S. and world securities
markets, could impact our business and financial condition; our future
cash flows could be adversely affected if we are unable to fully realize
our deferred tax assets; adverse changes in the value of assets or
obligations associated with our employee benefit plans could negatively
impact shareowners’ deficit and liquidity; third parties may claim that
we are infringing upon their intellectual property, and we could suffer
significant litigation or licensing expenses or be prevented from
selling products; third parties may infringe upon our intellectual
property, and we may expend significant resources enforcing our rights
or suffer competitive injury; we could be subject to a significant
amount of litigation, which could require us to pay significant damages
or settlements; we could incur significant costs resulting from
complying with, or potential violations of, environmental, health and
human safety laws; the possibility that the expected synergies and value
creation from our acquisition of Hawaiian Telcom will not be realized or
will not be realized within the expected time period; the risk that the
businesses of the Company and Hawaiian Telcom will not be integrated
successfully; the risk that unexpected costs will be incurred; and the
other risks and uncertainties detailed in our filings with the SEC,
including our Form 10-K report, Form 10-Q reports and Form 8-K reports.

These forward-looking statements are based on information, plans and
estimates as of the date hereof and there may be other factors that may
cause our actual results to differ materially from these forward-looking
statements. We assume no obligation to update the information contained
in this release except as required by applicable law.

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 (loss) applicable to common
shareholders 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, stock based
compensation, restructuring and severance related charges, (gain) loss
on sale or disposal of assets, transaction and integration costs, asset
impairments, and other special items. Adjusted EBITDA should not be
considered as an alternative to comparable GAAP measures of
profitability and may not be comparable with the measure as defined by
other companies.

Adjusted 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.

²Free 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
activities, adjusted for restructuring and severance related payments,
transaction and integration payments, less capital expenditures and
preferred stock dividends. 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 believes there is no comparable GAAP
measure for free cash flow, the attached financial information
reconciles cash provided by operating activities to free cash flow.

Net debt provides a useful measure of liquidity and financial
health. The company defines net debt as the sum of the face amount of
short-term and long-term debt, unamortized premium and/or discount and
unamortized note issuance costs, offset by cash and cash equivalents.

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

About Cincinnati Bell Inc.

With headquarters in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB)
delivers integrated communications solutions to residential and business
customers over its fiber-optic and copper networks including high-speed
internet, video, voice and data. Cincinnati Bell provides service in
areas of Ohio, Kentucky, Indiana and Hawaii. In addition, enterprise
customers across the United States and Canada rely on CBTS and OnX,
wholly-owned subsidiaries, for efficient, scalable office communications
systems and end-to-end IT solutions. For more information, please visit www.cincinnatibell.com.
The information on the Company’s website is not incorporated by
reference in this press release.

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