Cincinnati Bell 2003 Annual Report Download - page 18

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16
Continuing a legacy of strong results
A letter from the CFO
Our business continues to provide a strong financial base, having grown revenue
56 percent3in the last five years, while setting industry standards for margin per-
formance and capital efficiency.
In 2003, our first priority became paying down debt. Following the sale of the broad-
band assets, finalized in the second quarter, our remaining businesses continued to
steadily generate cash. We produced cash flow of $92 million and completed two debt
exchanges for common stock, reducing net debt by $666 million, or 23 percent.
I am also pleased to report that we have contained costs and driven profitability
in order to help fund important initiatives like the launch of our GSM/GPRS network,
while continuing our heritage of providing excellent customer service.
For the year, Cincinnati Bell reported revenue of $1,558 million, operating income of
$684 million, and net income of $1,332 million, or $5.36 per diluted share. Excluding
special items, operating income was $365 million and net income was $100 million,
or $0.48 per diluted share.
We have all the tools to chip away at the leverage of the company. Management
has the discipline to control spending and continue solid cash flow performance.
We can use our cash flow to pay down debt, which increases the operating flexibility
of the company and drives returns for the shareholder. In this sense, we have the
characteristics of a leveraged buyout, even though we are publicly traded. Over time,
the debt-to-equity ratio can improve dramatically, assuming we continue to run the
business well, maintain the value of the enterprise and de-lever as we go.
Brian A. Ross
Chief Financial Officer
Management has the
discipline to control
spending and continue
solid cash flow performance.
We can use our cash flow
to pay down debt, which
increases the operating
flexibility of the company
and drives returns for
the shareholder.
3Excluding Broadband Services operations.