Cincinnati Bell 2007 Annual Report Download - page 7

Outlook for 2008
On behalf of the Board of Directors, the Cincinnati Bell
leadership team and its 3,000 employees, we are proud
and pleased to report the outstanding year we had in
2007. We believe that the continuing execution of our
strategy positions Cincinnati Bell to deliver exceptional
value for our shareholders in 2008 and into the future.
We will continue with success-based growth, debt
reduction and defending our position as a leading
provider of communications products and services.
While our industry is full of challenge, with challenge
comes opportunity, and we believe we are poised for
success in delivering products and services that offer
convenience and entertainment to our customers for
outstanding values. We remain committed and
dedicated to these propositions and look forward to
serving you in the next year and years to come.
Phillip R. Cox
Chairman of the Board
John F. Cassidy
President and Chief Executive Officer
Brian A. Ross
Chief Financial Officer
Use of Non-GAAP Financial Measures
The report contains information about adjusted earnings
before interest, taxes, depreciation and amortization
(Adjusted EBITDA), earnings per share excluding special
items, free cash flow and net debt. 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 Adjusted EBITDA, earnings per share
excluding special items, free cash flow and net debt to
comparable GAAP financial measures are available at the
following website: investor.cincinnatibell.com (see fourth
quarter 2007 Earnings Release).
1Adjusted EBITDA provides a useful measure of operational
performance. The Company defines Adjusted EBITDA as
GAAP operating income plus depreciation, amortization,
restructuring charges, 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 Adjusted EBITDA as
defined by other companies.
2Earnings per share excluding special items provides a useful
measure of operating performance.
3Free cash flow provides a useful measure of operational
performance, liquidity and financial health. The Company
defines free cash flow as SFAS 95 cash provided by (used in)
operating, financing and investing activities, adjusted for the
issuance and repayment of debt, the repurchase of common
stock and for the proceeds from the sale or the use of funds
from the purchase of business operations. 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.
4Net 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 and
unamortized premium and/or discount, offset by cash and
cash equivalents.
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