Restructuring positions Cincinnati Bell for the future.

CINCINNATI--(BUSINESS WIRE)--Dec. 12, 1995--Cincinnati Bell Inc. (NYSE:CSN) said today that to improve its long-term profitability, it will record non-recurring charges in the fourth quarter for debt restructuring and for adjustments to the value of certain acquired assets.

These steps will contribute about $5 million, or 8 cents per share, to net income in 1996 and several subsequent years, while reducing 1995 fourth-quarter net income by about $61 million, or 92 cents per share.

Cincinnati Bell said the transactions will retire $155 million in outstanding debt, write off unamortized goodwill costs associated with acquisitions in France and terminate a related financing agreement, and expense certain software development in process as a consequence of another recent acquisition.

John LaMacchia, President and Chief Executive Officer of Cincinnati Bell, said that by taking these steps now, Cincinnati Bell will capture the future benefits of today's lower interest rates, improve the company's future cash flow, and more conservatively value its French telephone marketing business in its financial statements. "Cincinnati Bell's businesses are winding up an outstanding year with what appear to be especially strong fourth-quarter performances," LaMacchia said. "The steps we are taking today will reduce our interest expense and allow even more of this operating strength to reach our bottom line in 1996 and future years."

Cincinnati Bell said it will write off unamortized goodwill associated with two telephone marketing businesses it acquired in Paris, France in 1990. Those businesses, now part of MATRIXX Marketing Europe, have grown by attracting several major international advertisers as clients, but have not yet become profitable.

The writeoff will not affect Cincinnati Bell's cash position, but will reduce fourth-quarter net income by $39 million, or 59 cents a share. This step is expected to benefit Cincinnati Bell's net income by approximately $1 million, or 2 cents per share, starting in 1996. The company will continue to pursue improvements in the results of this strategic business.

Cincinnati Bell said it also will retire $155 million in debt securities of Cincinnati Bell Inc. and of Cincinnati Bell Telephone, and terminate an interest rate and currency swap agreement. That agreement was developed to hedge the effect of currency changes on long-term financing for the acquisitions in France. Cincinnati Bell's effective annual interest rate under the agreement is 11 percent.

The debt restructuring is expected to reduce Cincinnati Bell's 1995 net income by approximately $19 million, or 28 cents per share, but generate savings of $4 million, or 6 cents per share, in 1996 and several years thereafter. Most of the 1995 impact of the debt restructuring is related to termination of the currency swap agreement, which was to expire in the year 2000. Termination is required as a result of the writeoff of goodwill recorded with the purchase.

The remainder is the net result on net income of retiring three outstanding debt issues:

-- $40 million face amount of Cincinnati Bell Telephone 7.3 percent

notes due in 1996, -- $40 million face amount of Cincinnati Bell Telephone 8.625 percent

notes due in 1999, and -- $75 million face amount of Cincinnati Bell Inc. 9.1 percent notes

due in 2000, subject to a tender offer.

In addition, Cincinnati Bell said it will expense in the fourth quarter certain software development costs incurred by Information Systems Development Partnership (ISD), a provider of billing and customer management systems to the cable television industry, which the company is acquiring for CBIS. That step will reduce fourth-quarter net income by $3 million, or five cents a share. That transaction will be completed by the end of this year.

Cincinnati Bell companies supply telecommunications, billing solutions for the communications industry, and marketing services to customers in the United States and abroad.

CONTACT: Cincinnati Bell Inc., Cincinnati

Wayne Buckhout, 513/397-1081