Financial: Cincinnati Bell Delivers Double-Digit Revenue, Earnings Growth; Record 12% 1Q Revenue Growth, EPS of 18 Cents, Up 13% - Company Financial Information

EDGE, On & About AT&T, May 3, 1999

Cincinnati Bell Inc. (NYSE:CSN) announced Monday double-digit gains in revenues, operating income and earnings per share for the first quarter of 1999.

Those results include a 12 percent revenue gain to $242 million, a 10 percent operating income gain to $45.3 million, and a 13 percent gain in diluted earnings per share to 18 cents.

Cincinnati Bell's new wireless business, still in its startup phase but now an operating segment, added $15 million in revenues. Its $9 million operating loss reduced first-quarter EPS by 4 cents. Wireless is an 80 percent-owned venture with AT&T that began operating in May 1998. Excluding wireless, Cincinnati Bell's operating income increased 31 percent and EPS increased 29 percent for the first quarter.

"I am pleased with our financial performance this quarter," Cincinnati Bell President and CEO Rick Ellenberger said. "During the quarter, we launched a number of new services that make it easier for customers to enjoy the full range of our communications capabilities at attractive prices. At the same time, we continued to manage costs effectively and aggressively marketed our innovative data, Internet and wireless products, which are driving our double-digit growth this year."

Highlights of the quarter include: * A strong 26 percent gain in wireless subscribers from year-end 1998, with growing perosubscriber revenues and very little customer turnover;

* Surging demand for broadband capacity and services. Broadband revenues represented 75 percent of total quarterly revenue growth at Cincinnati Bell Telephone.

* Across-the-board gains in penetration for our major enhanced calling services, with more growth likely under bundled services offers. Residential Caller ID penetration jumped to 26 percent in the first quarter from 23 percent at year-end.

* More than 5,000 Digital Subscriber Line (DSL) customers, double the number at the end of last year.

* And a successful yellow pages sales campaign that restored growth for our main directory products.

Cincinnati Bell's Local Communications Services segment, which is Cincinnati Bell Telephone and ZoomTown.com, had a solid first quarter. Revenues increased 4 percent to $181.6 million, and operating income increased 35 percent to $45.9 million.

Cincinnati Bell Telephone's (CBT) broadband revenues increased 25 percent from the first quarter of 1998 as demand for high speed connectivity continued to expand. CBT last week launched a new offering for business, called Integrated Advantage, which combines local, long-distance, Internet and data communications services.

CBT's revenues from value-added voice calling services increased 26 percent. In March, CBT added two new enhanced-service offers, Complete Connections and Reveal. Complete Connections is a bundle of up to 20 calling services with one residence line for a flat rate of $34.95 per month. Reveal is a unique CBT-developed service that discourages unwanted calls. Anonymous calls to Reveal customers get a message requesting a keyed-in telephone number before Reveal will connect the call. Sales of both packages have exceeded expectations.

Cincinnati Bell experienced continued strong demand for its high-speed Internet access service, ADSL. At the end of the quarter, 5,100 Cincinnati Bell ADSL customers were installed and on-line, sampling both the enhanced local content on ZoomTown, our unique Cincinnati-focused Intranet, and the growing E-commerce, streaming video and rapid-retrieval opportunities for ADSL users on the global Internet.

ADSL and ZoomTown are available to more than 50 percent of CBT's customers. Most ADSL customers also choose Cincinnati Bell's FUSE Internet access service. FUSE subscriber volume increased 69 percent in the first quarter from the first quarter last year.

Network access lines grew 2.7 percent from March 1998 to March 1999. Adding high capacity services which are not included in access line counts, access lines and voice-grade equivalents increased 12.4 percent.

Wireless was a substantial contributor to Cincinnati Bell's rapid first-quarter revenue growth. Total wireless revenues were $15 million for the quarter. Since PCS began last May, the average monthly bill for Cincinnati Bell Wireless customers has continued to increase, because many more users are choosing or converting to bundled single-rate local and long distance plans, and plans with more minutes.

Revenues for Cincinnati Bell's directory segment declined slightly for the quarter, reflecting competition from other directory publishers. However, sales campaigns for Cincinnati Bell's metro-area Yellow Pages directories grew a very solid 4.8 percent, compared with a 2.2 percent decline last year. Revenues from those new directory sales begin in June. Margins are expected to remain strong.

Revenues for Cincinnati Bell's other businesses, including its long distance, equipment and network integration businesses, increased 21 percent. Sales of refurbished Lucent-brand communications equipment accelerated during the quarter. Also, CBLD recorded its first significant out-of-territory sales of its data, Internet and local service bundle during the quarter.