Cincinnati Bell Reports Third Quarter 2019 Results

HIGHLIGHTS
• Revenue of $383 million and operating income of $23 million— Adjusted EBITDA¹ totaled $102 million
• Entertainment and Communications revenue totaled $249 million, generating Adjusted EBITDA of $93 million, up 2% year-over-year
• Fiber-to-the-premise (“FTTP”) HSI net activations totaled 3,800 in Cincinnati and 900 in Hawaii during the quarter
• Hawaiian Telcom generated Adjusted EBITDA of $25 million, an increase of 13% from a year ago
• IT Services and Hardware revenue totaled $141 million, generating Adjusted EBITDA of $12 million
• Cash provided by operating activities totaled $189 million year-to-date, and free cash flow² of $34 million year-to-date

CINCINNATI – November 7, 2019 – Cincinnati Bell Inc. (NYSE:CBB, news, filings), today announced financial results for the third quarter of 2019.
Commenting on the company’s performance, President and Chief Executive Officer Leigh Fox stated, “Our solid third quarter results demonstrate the superior quality of our fiber assets and ability to capitalize on the expanded scale of our IT services business. Looking ahead, we remain committed to our full year 2019 financial guidance.”

Consolidated Results
• Consolidated revenue totaled $383 million in the third quarter of 2019 and $1,146 million year-to-date
• Operating income was $23 million in the third quarter of 2019 and $58 million year-to-date
• Adjusted EBITDA of $102 million in the third quarter of 2019 and $303 million year-to-date

Entertainment and Communications Segment
• Entertainment and Communications revenue totaled $249 million for the third quarter of 2019
– Cincinnati revenue totaled $171 million in the third quarter
– Fioptics revenue totaled $88 million, up $2 million from a year ago
– Fioptics internet subscribers totaled 247,100, up 10,500 year-over-year
– Fioptics is available to approximately 75% of Greater Cincinnati, which includes a combination of fiber-to-the-premise (“FTTP”) and fiber-to-the-node (“FTTN”) addresses
– During the first nine months of 2019, 9,700 additional homes and businesses were passed with FTTP, which is available to 482,000 addresses or approximately 60% of Cincinnati’s total addressable market
– Hawaii revenue totaled $78 million in the third quarter of 2019
– Consumer / SMB Fiber revenue totaled $22 million, up 4% from a year ago
– Consumer / SMB Fiber internet subscribers totaled 67,800, adding 3,800 customers year-over-year
– Consumer / SMB Fiber is available to approximately 50% of Hawaii, which includes a combination of FTTP and FTTN addresses
– During the first nine months of 2019, 3,600 additional homes and businesses were passed with FTTP, which is available to 170,600 addresses, approximately 35% of Hawaii’s total addressable market
• Adjusted EBITDA was $93 million in the third quarter of 2019, up 2% from a year ago

IT Services and Hardware Segment
• IT Services and Hardware revenue totaled $141 million for the third quarter of 2019
– Communications revenue was $51 million, up $4 million year-over-year
– Consulting revenue totaled $38 million for the third quarter, up $2 million year-over-year
– Cloud revenue of $23 million, up $3 million from the prior year excluding insourcing initiatives from General Electric Company (“GE”)
– Infrastructure Solutions revenue totaled $29 million, down $3 million year-over-year
• Adjusted EBITDA was $12 million for the third quarter of 2019, consistent year-over-year excluding the impact of GE’s insourcing initiatives

Cash Flow and Financial Position
• Operating cash flows totaled $189 million year-to-date with free cash flow totaling $34 million year-to-date
• Liquidity of $162 million as of September 30, 2019, with no significant maturities until 2024
• Capital expenditures were $167 million year-to-date
• Gross NOL carryforward of approximately $800 million as of September 30, 2019

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

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