Supplemental Guarantor Information - Cincinnati Bell Telephone Notes

CBT, a wholly-owned subsidiary of Cincinnati Bell Inc. (the "Parent Company"), had $134.5 million in notes outstanding at December 31, 2012 that are guaranteed by the Parent Company and no other subsidiaries of the Parent Company. The guarantee is full and unconditional. The Parent Company’s subsidiaries generate substantially all of its income and cash flow and generally distribute or advance the funds necessary to meet the Parent Company’s debt service obligations.

The following information sets forth the Condensed Consolidating Balance Sheets of the Company as of December 31, 2012 and 2011 and the Condensed Consolidating Statements of Operations and Comprehensive Income and Cash Flows for the years ended December 31, 2012, 2011, and 2010 of (1) the Parent Company, as the guarantor, (2) CBT, as the issuer, and (3) the non-guarantor subsidiaries on a combined basis.



Condensed Consolidating Statements of Operations and Comprehensive Income
	Year Ended December 31, 2012
(dollars in millions)	Parent (Guarantor)			CBT (Issuer)			Other Non-guarantors			Eliminations			Total
Revenue	$	—		$	642.8		$	893.3		$	(62.2	)	$	1,473.9
Operating costs and expenses	33.9			436.3			795.8			(62.2		)	1,203.8
Operating income (loss)	(33.9		)	206.5			97.5			—			270.1
Interest expense, net	164.8			(1.5		)	55.6			—			218.9
Other expense (income), net	11.5			5.9			(2.1		)	—			15.3
Income (loss) before equity in earnings of subsidiaries and income taxes	(210.2		)	202.1			44.0			—			35.9
Income tax expense (benefit)	(68.3		)	73.8			19.2			—			24.7
Equity in earnings of subsidiaries, net of tax	153.1			—			—			(153.1		)	—
Net income	11.2			128.3			24.8			(153.1		)	11.2
Other comprehensive loss	(0.8		)	—			—			—			(0.8		)
Total comprehensive income	$	10.4		$	128.3		$	24.8		$	(153.1	)	$	10.4

Net income	$	11.2		$	128.3		$	24.8		$	(153.1	)	$	11.2
Preferred stock dividends	10.4			—			—			—			10.4
Net income applicable to common shareowners	$	0.8		$	128.3		$	24.8		$	(153.1	)	$	0.8

	Year Ended December 31, 2011
(dollars in millions)	Parent (Guarantor)			CBT (Issuer)			Other Non-guarantors			Eliminations			Total
Revenue	$	3.4		$	655.8		$	860.6		$	(57.4	)	$	1,462.4
Operating costs and expenses	23.6			435.6			801.1			(57.4		)	1,202.9
Operating income (loss)	(20.2		)	220.2			59.5			—			259.5
Interest expense, net	161.8			3.4			49.8			—			215.0
Other expense (income), net	(0.9		)	7.5			(5.7		)	—			0.9
Income (loss) before equity in earnings of subsidiaries and income taxes	(181.1		)	209.3			15.4			—			43.6
Income tax expense (benefit)	(56.4		)	76.0			5.4			—			25.0
Equity in earnings of subsidiaries, net of tax	143.3			—			—			(143.3		)	—
Net income	18.6			133.3			10.0			(143.3		)	18.6
Other comprehensive loss	(48.8		)	—			(0.1		)	—			(48.9		)
Total comprehensive (loss)/income	$	(30.2	)	$	133.3		$	9.9		$	(143.3	)	$	(30.3	)

Net income	$	18.6		$	133.3		$	10.0		$	(143.3	)	$	18.6
Preferred stock dividends	10.4			—			—			—			10.4
Net income applicable to common shareowners	$	8.2		$	133.3		$	10.0		$	(143.3	)	$	8.2



Condensed Consolidating Statements of Operations and Comprehensive Income
	Year Ended December 31, 2010
(dollars in millions)	Parent (Guarantor)			CBT (Issuer)		Other Non-guarantors			Eliminations			Total
Revenue	$	5.5		$	668.1	$	761.2		$	(57.8	)	$	1,377.0
Operating costs and expenses	34.5			435.0		666.0			(57.8		)	1,077.7
Operating income (loss)	(29.0		)	233.1		95.2			—			299.3
Interest expense, net	137.9			9.8		37.5			—			185.2
Other expense (income), net	45.2			7.6		(5.9		)	—			46.9
Income (loss) before equity in earnings of subsidiaries and income taxes	(212.1		)	215.7		63.6			—			67.2
Income tax expense (benefit)	(61.3		)	82.2		18.0			—			38.9
Equity in earnings of subsidiaries, net of tax	179.1			—		—			(179.1		)	—
Net income	28.3			133.5		45.6			(179.1		)	28.3
Other comprehensive loss	(23.9		)	—		—			—			(23.9		)
Total comprehensive income	$	4.4		$	133.5	$	45.6		$	(179.1	)	$	4.4

Net income	$	28.3		$	133.5	$	45.6		$	(179.1	)	$	28.3
Preferred stock dividends	10.4			—		—			—			10.4
Net income applicable to common shareowners	$	17.9		$	133.5	$	45.6		$	(179.1	)	$	17.9



Condensed Consolidating Balance Sheets
	As of December 31, 2012
(dollars in millions)	Parent (Guarantor)			CBT (Issuer)		Other Non-guarantors		Eliminations			Total
Cash and cash equivalents	$	3.8		$	1.9	$	17.9	$	—		$	23.6
Receivables, net	1.0			—		198.0		—			199.0
Other current assets	3.1			34.4		43.8		(0.4		)	80.9
Total current assets	7.9			36.3		259.7		(0.4		)	303.5
Property, plant and equipment, net	0.1			646.7		940.6		—			1,587.4
Goodwill and intangibles, net	—			2.3		485.1		—			487.4
Investments in and advances to subsidiaries	1,449.9			228.2		—		(1,678.1		)	—
Other noncurrent assets	384.6			6.3		266.3		(163.1		)	494.1
Total assets	$	1,842.5		$	919.8	$	1,951.7	$	(1,841.6	)	$	2,872.4

Current portion of long-term debt	$	—		$	3.0	$	10.4	$	—		$	13.4
Accounts payable	1.2			61.7		72.7		—			135.6
Other current liabilities	85.6			50.2		69.7		0.9			206.4
Total current liabilities	86.8			114.9		152.8		0.9			355.4
Long-term debt, less current portion	1,841.7			141.3		693.0		—			2,676.0
Other noncurrent liabilities	383.3			138.6		181.7		(164.4		)	539.2
Intercompany payables	228.9			—		276.4		(505.3		)	—
Total liabilities	2,540.7			394.8		1,303.9		(668.8		)	3,570.6
Shareowners’ equity (deficit)	(698.2		)	525.0		647.8		(1,172.8		)	(698.2		)
Total liabilities and shareowners’ equity (deficit)	$	1,842.5		$	919.8	$	1,951.7	$	(1,841.6	)	$	2,872.4

	As of December 31, 2011
(dollars in millions)	Parent (Guarantor)			CBT (Issuer)		Other Non-guarantors		Eliminations			Total
Cash and cash equivalents	$	69.6		$	1.4	$	2.7	$	—		$	73.7
Receivables, net	2.0			—		177.4		—			179.4
Other current assets	5.8			31.8		31.7		(1.4		)	67.9
Total current assets	77.4			33.2		211.8		(1.4		)	321.0
Property, plant and equipment, net	0.1			642.5		757.9		—			1,400.5
Goodwill and intangibles, net	—			2.4		505.1		—			507.5
Investments in and advances to subsidiaries	1,731.4			237.3		—		(1,968.7		)	—
Other noncurrent assets	387.9			7.6		234.0		(143.8		)	485.7
Total assets	$	2,196.8		$	923.0	$	1,708.8	$	(2,113.9	)	$	2,714.7

Current portion of long-term debt	$	—		$	3.1	$	9.9	$	—		$	13.0
Accounts payable	1.0			53.7		78.7		—			133.4
Other current liabilities	93.2			55.3		61.5		—			210.0
Total current liabilities	94.2			112.1		150.1		—			356.4
Long-term debt, less current portion	2,182.0			216.3		122.3		—			2,520.6
Other noncurrent liabilities	404.3			122.8		171.0		(145.2		)	552.9
Intercompany payables	231.5			—		595.8		(827.3		)	—
Total liabilities	2,912.0			451.2		1,039.2		(972.5		)	3,429.9
Shareowners’ equity (deficit)	(715.2		)	471.8		669.6		(1,141.4		)	(715.2		)
Total liabilities and shareowners’ equity (deficit)	$	2,196.8		$	923.0	$	1,708.8	$	(2,113.9	)	$	2,714.7

Condensed Consolidating Statements of Cash Flows



	Year Ended December 31, 2012
(dollars in millions)	Parent (Guarantor)			CBT (Issuer)			Other Non-guarantors			Eliminations		Total
Cash flows provided by (used in) operating activities	$	(144.8	)	$	250.4		$	107.1		$	—	$	212.7
Capital expenditures	—			(108.8		)	(258.4		)	—		(367.2		)
Proceeds from sale of assets	—			1.4			0.2			—		1.6
Other investing activities	—			—			(6.2		)	—		(6.2		)
Cash flows used in investing activities	—			(107.4		)	(264.4		)	—		(371.8		)
Issuance of long-term debt	—			—			525.0			—		525.0
Funding between Parent and subsidiaries, net	433.6			(66.0		)	(367.6		)	—		—
Increase in receivables facility, net	—			—			52.0			—		52.0
Repayment of debt	(352.0		)	(76.5		)	(13.9		)	—		(442.4		)
Debt issuance costs	(3.6		)	—			(17.3		)	—		(20.9		)
Common stock issuance costs	—			—			(5.7		)	—		(5.7		)
Common stock repurchase	(0.3		)	—			—			—		(0.3		)
Proceeds from exercise of options and warrants	12.1			—			—			—		12.1
Other financing activities	(10.8		)	—			—			—		(10.8		)
Cash flows provided by (used in) financing activities	79.0			(142.5		)	172.5			—		109.0
Increase (decrease) in cash and cash equivalents	(65.8		)	0.5			15.2			—		(50.1		)
Beginning cash and cash equivalents	69.6			1.4			2.7			—		73.7
Ending cash and cash equivalents	$	3.8		$	1.9		$	17.9		$	—	$	23.6

	Year Ended December 31, 2011
(dollars in millions)	Parent (Guarantor)			CBT (Issuer)			Other Non-guarantors			Eliminations		Total
Cash flows provided by (used in) operating activities	$	(139.6	)	$	264.7		$	164.8		$	—	$	289.9
Capital expenditures	—			(106.3		)	(149.2		)	—		(255.5		)
Proceeds from sale of assets	11.5			—			—			—		11.5
Other investing activities	(0.7		)	—			—			—		(0.7		)
Cash flows provided by (used in) investing activities	10.8			(106.3		)	(149.2		)	—		(244.7		)
Funding between Parent and subsidiaries, net	150.3			(156.5		)	6.2			—		—
Increase in receivables facility, net	—			—			0.4			—		0.4
Repayment of debt	—			(2.3		)	(9.2		)	—		(11.5		)
Common stock repurchase	(10.4		)	—			—			—		(10.4		)
Other financing activities	(11.3		)	—			(16.0		)	—		(27.3		)
Cash flows provided by (used in) financing activities	128.6			(158.8		)	(18.6		)	—		(48.8		)
Decrease in cash and cash equivalents	(0.2		)	(0.4		)	(3.0		)	—		(3.6		)
Beginning cash and cash equivalents	69.8			1.8			5.7			—		77.3
Ending cash and cash equivalents	$	69.6		$	1.4		$	2.7		$	—	$	73.7



	Year Ended December 31, 2010
(dollars in millions)	Parent (Guarantor)			CBT (Issuer)			Other Non-guarantors			Eliminations		Total
Cash flows provided by (used in) operating activities	$	(54.6	)	$	224.9		$	129.7		$	—	$	300.0
Capital expenditures	—			(88.7		)	(61.0		)	—		(149.7		)
Acquisition of businesses	—			—			(526.7		)	—		(526.7		)
Other investing activities	—			0.3			0.6			—		0.9
Cash flows used in investing activities	—			(88.4		)	(587.1		)	—		(675.5		)
Funding between Parent and subsidiaries, net	(423.8		)	(137.0		)	560.8			—		—
Proceeds from issuance of long-term debt, net of financing costs	2,090.1			1.6			—			—		2,091.7
Decrease in receivables facility, net	—			—			(85.9		)	—		(85.9		)
Repayment of debt	(1,540.5		)	(1.4		)	(12.6		)	—		(1,554.5		)
Common stock repurchase	(10.0		)	—			—			—		(10.0		)
Other financing activities	(11.5		)	—			—			—		(11.5		)
Cash flows provided by (used in) financing activities	104.3			(136.8		)	462.3			—		429.8
Increase (decrease) in cash and cash equivalents	49.7			(0.3		)	4.9			—		54.3
Beginning cash and cash equivalents	20.1			2.1			0.8			—		23.0
Ending cash and cash equivalents	$	69.8		$	1.8		$	5.7		$	—	$	77.3