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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



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(Mark one)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended September 30, 2004



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from  to



Commission File Number: 333-107783



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CBD Media LLC

(Exact Name of Registrant as Specified in Its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 02-0553288                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|312 Plum Street, Suite 900 Cincinnati, OH                      |  | 45202                               
|(Address of Principal Executive Offices)                       |  | (Zip Code)                          



(513) 397-6794

(Registrants Telephone Number, Including Area Code)



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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ̈No  x



Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes ̈No  x



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##### Table of Contents

TABLE OF CONTENTS



|           |  |                                                                                       |  |     
|---------- |  | ------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                       |  | Page
|Part I     |  | FINANCIAL INFORMATION                                                                 |  |     
|Item 1.    |  | Financial Statements                                                                  |  | 3   
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 11  
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 16  
|Item 4.    |  | Controls and Procedures                                                               |  | 16  
|           |  |                                                                                      
|Part II    |  | OTHER INFORMATION                                                                     |  |     
|Item 1.    |  | Legal Proceedings                                                                     |  | 16  
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                      |  | 17  
|           | 
|Signatures |  | 18                                                                                   
|           | 
|Exhibits   |  |                                                                                      



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##### Table of Contents

PART I

FINANCIAL INFORMATION



Item 1. Financial Statements.



CBD MEDIA LLC



CONDENSED CONSOLIDATED BALANCE
SHEETS

SEPTEMBER 30, 2004, DECEMBER 31, 2003 AND SEPTEMBER 30, 2003

(Dollars in Thousands)



|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------ | ------- | ----------------- | - | ------------------------------ |  | - | -------
|                                                                                                                                                             |  | September 30, 2004 (Unaudited) |         | December 31, 2003 |   | September 30, 2003 (Unaudited)
|ASSETS                                                                                                                                                       |  |                                |         |                   |   |                                |  |   |        
|CURRENT ASSETS:                                                                                                                                              |  |                                |         |                   |   |                                |  |   |        
|Cash and cash equivalents                                                                                                                                    |  | $                              | 14,062  |                   | $ | 22,466                         |  | $ | 16,696 
|Accounts receivable (net of allowance of $4,565, $4,875 and $3,608 at September 30, 2004, December 31, 2003 and September 30, 2003,
respectively)            |  |                                | 6,481   |                   |   | 7,020                          |  |   | 7,305  
|Deferred directory costs                                                                                                                                     |  |                                | 14,767  |                   |   | 10,922                         |  |   | 14,615 
|Prepaid expenses and other current assets                                                                                                                    |  |                                | 661     |                   |   | 547                            |  |   | 529    
|Related party receivable                                                                                                                                     |  |                                | 922     |                   |   | 1,000                          |  |   | 22     
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|Total current assets                                                                                                                                         |  |                                | 36,893  |                   |   | 41,955                         |  |   | 39,167 
|                                                                                                                                                             |  |                                |        
|PROPERTY AND EQUIPMENT (NET)                                                                                                                                 |  |                                | 92      |                   |   | 75                             |  |   | 86     
|                                                                                                                                                             |  |                                |        
|DEBT ISSUANCE COSTS (net of accumulated amortization of $1,908, $806 and $480 at September 30, 2004, December 31, 2003 and September 30, 2003,
respectively) |  |                                | 8,742   |                   |   | 9,244                          |  |   | 9,928  
|                                                                                                                                                             |  |                                |        
|GOODWILL                                                                                                                                                     |  |                                | 28,299  |                   |   | 28,299                         |  |   | 28,299 
|                                                                                                                                                             |  |                                |        
|INTANGIBLE ASSETS (NET)                                                                                                                                      |  |                                | 241,595 |                   |   | 260,921                        |  |   | 267,548
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|TOTAL ASSETS                                                                                                                                                 |  | $                              | 315,621 |                   | $ | 340,494                        |  | $ | 345,028
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|LIABILITIES AND MEMBERS CAPITAL                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|CURRENT LIABILITIES:                                                                                                                                         |  |                                |         |                   |   |                                |  |   |        
|Current portion of long-term debt                                                                                                                            |  |                                |         |                   | $ | 1,000                          |  | $ | 600    
|Accounts payable                                                                                                                                             |  | $                              | 994     |                   |   | 1,045                          |  |   | 913    
|Accrued liabilities                                                                                                                                          |  |                                | 8,654   |                   |   | 6,878                          |  |   | 10,783 
|Deferred revenue                                                                                                                                             |  |                                | 6,712   |                   |   | 5,472                          |  |   | 6,049  
|Other current liabilities                                                                                                                                    |  |                                | 635     |                   |   | 659                            |  |   | 659    
|Related party payable                                                                                                                                        |  |                                | 271     |                   |   | 190                            |  |   | 229    
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|Total current liabilities                                                                                                                                    |  |                                | 17,266  |                   |   | 15,244                         |  |   | 19,233 
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|LONG-TERM DEBT (NET OF CURRENT PORTION)                                                                                                                      |  |                                | 280,000 |                   |   | 307,600                        |  |   | 308,000
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|OTHER LONG-TERM LIABILITIES (NET OF CURRENT PORTION)                                                                                                         |  |                                | 1,729   |                   |   | 2,093                          |  |   | 2,212  
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|MEMBERS CAPITAL:                                                                                                                                            |  |                                |         |                   |   |                                |  |   |        
|Contributed capital                                                                                                                                          |  |                                | 10,950  |                   |   | 11,673                         |  |   | 11,673 
|Retained earnings                                                                                                                                            |  |                                | 5,676   |                   |   | 3,884                          |  |   | 3,910  
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|Total members capital                                                                                                                                       |  |                                | 16,626  |                   |   | 15,557                         |  |   | 15,583 
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        
|TOTAL LIABILITIES AND MEMBERS CAPITAL                                                                                                                       |  | $                              | 315,621 |                   | $ | 340,494                        |  | $ | 345,028
|                                                                                                                                                             |  |                                |         |                   |   |                                |  |   |        



See notes to condensed consolidated
financial statements.



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CBD MEDIA LLC



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2004 AND 2003

AND THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

(Dollars in Thousands)



|                                                                          |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   |        |  
|------------------------------------------------------------------------- |  | ---------------------------------------- | ------ | - | ---------------------------------------- | - | ------ | --------------------------------------- |  | - | --------------------------------------- | - |  | - | ------ | -
|                                                                          |  | For the Three Months Ended Sept 30, 2004 |        |   | For the Three Months Ended Sept 30, 2003 |   |        | For the Nine Months Ended Sept 30, 2004 |  |   | For the Nine Months Ended Sept 30, 2003 |  
|NET REVENUE                                                               |  | $                                        | 21,746 |   |                                          | $ | 21,629 |                                         |  | $ | 66,354                                  |   |  | $ | 64,646 |  
|                                                                          |  |                                          |        |  
|COST OF REVENUE                                                           |  |                                          | 8,123  |   |                                          |   | 8,546  |                                         |  |   | 25,069                                  |   |  |   | 24,303 |  
|                                                                          |  |                                          |        |  
|AMORTIZATION AND DEPRECIATION                                             |  |                                          | 6,449  |   |                                          |   | 6,631  |                                         |  |   | 19,348                                  |   |  |   | 19,893 |  
|                                                                          |  |                                          |        |  
|GENERAL AND ADMINISTRATIVE                                                |  |                                          | 2,176  |   |                                          |   | 1,687  |                                         |  |   | 5,405                                   |   |  |   | 2,811  |  
|                                                                          |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   |        |  
|OPERATING INCOME                                                          |  |                                          | 4,998  |   |                                          |   | 4,765  |                                         |  |   | 16,532                                  |   |  |   | 17,639 |  
|                                                                          |  |                                          |        |  
|OTHER EXPENSES:                                                           |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   |        |  
|Interest expense                                                          |  |                                          | 4,736  |   |                                          |   | 5,469  |                                         |  |   | 14,789                                  |   |  |   | 20,538 |  
|Interest income                                                           |  |                                          | (13    | ) |                                          |   | (30    | )                                       |  |   | (49                                     | ) |  |   | (179   | )
|                                                                          |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   |        |  
|Total other expenses                                                      |  |                                          | 4,723  |   |                                          |   | 5,439  |                                         |  |   | 14,740                                  |   |  |   | 20,359 |  
|                                                                          |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   |        |  
|NET INCOME (LOSS)                                                         |  |                                          | 275    |   |                                          |   | (674   | )                                       |  |   | 1,792                                   |   |  |   | (2,720 | )
|                                                                          |  |                                          |        |  
|OTHER COMPREHENSIVE INCOME (LOSS):                                        |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   |        |  
|Loss on interest rate swap                                                |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   | (20    | )
|Reclassification adjustment for loss on termination of interest rate swap |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   | 1,099  |  
|                                                                          |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   |        |  
|TOTAL COMPREHENSIVE INCOME (LOSS)                                         |  | $                                        | 275    |   |                                          | $ | (674   | )                                       |  | $ | 1,792                                   |   |  | $ | (1,641 | )
|                                                                          |  |                                          |        |   |                                          |   |        |                                         |  |   |                                         |   |  |   |        |  



See notes to condensed consolidated
financial statements.



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CBD MEDIA LLC



CONDENSED CONSOLIDATED STATEMENTS OF MEMBERS CAPITAL (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

(Dollars in Thousands)



|                                                |  |                     |          |   |                   |   |        |                                               |  |   |                        |   |  |   |          |  
|----------------------------------------------- |  | ------------------- | -------- | - | ----------------- | - | ------ | --------------------------------------------- |  | - | ---------------------- | - |  | - | -------- | -
|                                                |  | Contributed Capital |          |   | Retained Earnings |   |        | Accumulated Other Comprehensive Income (Loss) |  |   | Total Members Capital |  
|BALANCE AT DECEMBER 31, 2002                    |  | $                   | 138,963  |   |                   | $ | 6,630  |                                               |  | $ | (1,079                 | ) |  | $ | 144,514  |  
|NET LOSS                                        |  |                     |          |   |                   |   | (2,720 | )                                             |  |   |                        |   |  |   | (2,720   | )
|MEMBER CONTRIBUTIONS                            |  |                     | 1,000    |   |                   |   |        |                                               |  |   |                        |   |  |   | 1,000    |  
|DISTRIBUTION TO MEMBER                          |  |                     | (128,290 | ) |                   |   |        |                                               |  |   |                        |   |  |   | (128,290 | )
|OTHER COMPREHENSIVE INCOME - INTEREST RATE SWAP |  |                     |          |   |                   |   |        |                                               |  |   | 1,079                  |   |  |   | 1,079    |  
|                                                |  |                     |          |   |                   |   |        |                                               |  |   |                        |   |  |   |          |  
|BALANCE AT SEPTEMBER 30, 2003                   |  | $                   | 11,673   |   |                   | $ | 3,910  |                                               |  | $ |                       |   |  | $ | 15,583   |  
|                                                |  |                     |          |   |                   |   |        |                                               |  |   |                        |   |  |   |          |  
|BALANCE AT DECEMBER 31, 2003                    |  | $                   | 11,673   |   |                   | $ | 3,884  |                                               |  | $ |                        |   |  | $ | 15,557   |  
|NET INCOME                                      |  |                     |          |   |                   |   | 1,792  |                                               |  |   |                        |   |  |   | 1,792    |  
|DISTRIBUTION TO MEMBER                          |  |                     | (723     | ) |                   |   |        |                                               |  |   |                        |   |  |   | (723     | )
|                                                |  |                     |          |   |                   |   |        |                                               |  |   |                        |   |  |   |          |  
|BALANCE AT SEPTEMBER 30, 2004                   |  | $                   | 10,950   |   |                   | $ | 5,676  |                                               |  | $ |                       |   |  | $ | 16,626   |  
|                                                |  |                     |          |   |                   |   |        |                                               |  |   |                        |   |  |   |          |  



See notes to condensed consolidated
financial statements.



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CBD MEDIA LLC



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

(Dollars in Thousands)



|                                                                                           |  |      |         |   |      |   |          |  
|------------------------------------------------------------------------------------------ |  | ---- | ------- | - | ---- | - | -------- | -
|                                                                                           |  | 2004 |         |   | 2003 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                      |  |      |         |   |      |   |          |  
|Net income (loss)                                                                          |  | $    | 1,792   |   |      | $ | (2,720   | )
|Adjustments to reconcile net income (loss) to cash flows provided by operating activities: |  |      |         |   |      |   |          |  
|Depreciation and amortization                                                              |  |      | 19,348  |   |      |   | 19,893   |  
|Amortization of debt issuance costs (including write-off)                                  |  |      | 1,102   |   |      |   | 5,817    |  
|Changes in certain working capital accounts                                                |  |      |         |   |      |   |          |  
|Accounts receivable                                                                        |  |      | 617     |   |      |   | 38       |  
|Prepaid expenses and other assets                                                          |  |      | (114    | ) |      |   | 127      |  
|Deferred directory costs                                                                   |  |      | (3,845  | ) |      |   | (4,064   | )
|Accounts payable and other current liabilities                                             |  |      | (51     | ) |      |   | 131      |  
|Accrued liabilities                                                                        |  |      | 1,857   |   |      |   | 2,699    |  
|Deferred revenue                                                                           |  |      | 1,240   |   |      |   | 787      |  
|Other                                                                                      |  |      | (388    | ) |      |   | (79      | )
|                                                                                           |  |      |         |   |      |   |          |  
|Net cash provided by operating activities                                                  |  |      | 21,558  |   |      |   | 22,629   |  
|                                                                                           |  |      |         |   |      |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES-                                                      |  |      |         |   |      |   |          |  
|Capital expenditures                                                                       |  |      | (39     | ) |      |   | (48      | )
|                                                                                           |  |      |         |   |      |   |          |  
|Net cash used in investing activities                                                      |  |      | (39     | ) |      |   | (48      | )
|                                                                                           |  |      |         |   |      |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                      |  |      |         |   |      |   |          |  
|Member contributions                                                                       |  |      |         |   |      |   | 1,000    |  
|Distribution to member                                                                     |  |      | (723    | ) |      |   | (128,290 | )
|Debt issuance costs                                                                        |  |      | (600    | ) |      |   | (10,408  | )
|Proceeds from borrowings                                                                   |  |      |        |   |      |   | 310,000  |  
|Payments on borrowings                                                                     |  |      | (28,600 | ) |      |   | (211,400 | )
|                                                                                           |  |      |         |   |      |   |          |  
|Net cash used in financing activities                                                      |  |      | (29,923 | ) |      |   | (39,098  | )
|                                                                                           |  |      |         |   |      |   |          |  
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                                  |  |      | (8,404  | ) |      |   | (16,517  | )
|                                                                                           |  |     
|CASH AND CASH EQUIVALENTS:                                                                 |  |      |         |   |      |   |          |  
|Beginning of period                                                                        |  |      | 22,466  |   |      |   | 33,213   |  
|                                                                                           |  |      |         |   |      |   |          |  
|End of period                                                                              |  | $    | 14,062  |   |      | $ | 16,696   |  
|                                                                                           |  |      |         |   |      |   |          |  
|SUPPLEMENTAL CASH FLOW INFORMATION:                                                        |  |      |         |   |      |   |          |  
|Cash paid for interest (including interest rate swap)                                      |  | $    | 11,987  |   |      | $ | 11,407   |  
|                                                                                           |  |      |         |   |      |   |          |  
|Cash paid for income taxes                                                                 |  | $    | 43      |   |      | $ | 38       |  
|                                                                                           |  |      |         |   |      |   |          |  



See notes to condensed consolidated
financial statements.



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CBD MEDIA LLC



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2004 AND 2003

(Dollars in Thousands)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------



Nature of BusinessCBD Media LLC (the Company) is located in Cincinnati, Ohio. The Company publishes yellow page
directories and sells directory advertising and information services in the Greater Cincinnati area, including Northern Kentucky and Southeast Indiana. These services are available to customers in the form of a traditional printed directory, an
internet directory website www.cincinnatibellyellowpages.comand an electronic directory on CD-ROM. The Company, which is incorporated in Delaware and has 1,000 member units, is a wholly-owned subsidiary of CBD Media Holdings LLC.



On May 21, 2003, the Company formed a wholly-owned finance subsidiary,
CBD Finance, Inc. (CBD Finance), which is incorporated in the state of Delaware. In June 2003, CBD Finance co-issued senior subordinated notes, joint and severally, with the Company. Separate financial statements for CBD Finance are not
provided because CBD Finance does not have independent assets or operations from the Company.



Substantially all of the Companys operations are outsourced to third-party service providers, and we are dependent upon the performance of third parties for the following key components of our operations: sales
of advertising, printing of directories, distribution and delivery of directories, and billing and collection. The Company has executed long-term contracts with these third-parties. A change in these suppliers could cause a disruption in the
Companys business due to the time it would take to locate and qualify an alternate supplier for these services.



Basis of PresentationThe condensed consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial information. The information disclosed in the notes to the consolidated financial statements included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2003 has not changed materially unless otherwise disclosed herein. Financial information as of December 31, 2003 included in these condensed consolidated financial statements has been derived from audited consolidated financial
statements. In managements opinion, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the interim periods have been made.



Results of operations are not necessarily indicative of the results that may be expected for future interim periods or for
the full year.



Cash and Cash
EquivalentsCash and cash equivalents represent cash on hand and demand deposits with banks and short-term, highly liquid investments.



Property and EquipmentDepreciation is computed using the straight-line method over estimated useful lives ranging from three to five
years.



Goodwill and Intangible AssetsAt
inception the Company adopted Financial Accounting Standard No. (FAS) 142Goodwill and Other Intangible Assets. Recorded goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for
impairment annually in the fourth quarter. Other intangible assets are reviewed for impairment in accordance with FAS 144Accounting for the Impairment or Disposal of Long-Lived Assets. All other intangible assets except for
advertiser related assets are amortized using the straight-line amortization method. Advertiser related assets are amortized using an accelerated amortization method that matches the expected benefit derived from the advertisers. The accelerated
amortization method used is a method that allocates amortization expense in proportion to each years expected revenues to the total expected revenues over the thirty-year life of the Companys advertisers. Based on the Companys
experience, advertiser attrition is more rapid in the earlier years of the life of the Companys advertisers. A summary of intangible assets is as follows:



|                                  |  |                 |         |   |                      |   |         |                  |  |   |                                  |   |  |       |         |   |  |   |         |  
|--------------------------------- |  | --------------- | ------- | - | -------------------- | - | ------- | ---------------- |  | - | -------------------------------- | - |  | ----- | ------- | - |  | - | ------- | -
|                                  |  | Advertiser list |         |   | Non-compete covenant |   |         | Listing database |  |   | Trademark and tradename licenses |   |  | Total |        
|Carrying amount Sept. 30, 2003    |  | $               | 52,000  |   |                      | $ | 154,000 |                  |  | $ | 200                              |   |  | $     | 104,000 |   |  | $ | 310,200 |  
|Accumulated amortization          |  |                 | (10,037 | ) |                      |   | (24,383 | )                |  |   | (32                              | ) |  |       | (8,200  | ) |  |   | (42,652 | )
|                                  |  |                 |         |   |                      |   |         |                  |  |   |                                  |   |  |       |         |   |  |   |         |  
|Net amount at Sept. 30, 2003      |  | $               | 41,963  |   |                      | $ | 129,617 |                  |  | $ | 168                              |   |  | $     | 95,800  |   |  | $ | 267,548 |  
|                                  |  |                 |         |   |                      |   |         |                  |  |   |                                  |   |  |       |         |   |  |   |         |  
|Carrying amount December 31, 2003 |  | $               | 52,000  |   |                      | $ | 154,000 |                  |  | $ | 200                              |   |  | $     | 104,000 |   |  | $ | 310,200 |  
|Accumulated amortization          |  |                 | (11,509 | ) |                      |   | (28,233 | )                |  |   | (37                              | ) |  |       | (9,500  | ) |  |   | (49,279 | )
|                                  |  |                 |         |   |                      |   |         |                  |  |   |                                  |   |  |       |         |   |  |   |         |  
|Net amount at December 31, 2003   |  | $               | 40,491  |   |                      | $ | 125,767 |                  |  | $ | 163                              |   |  | $     | 94,500  |   |  | $ | 260,921 |  
|                                  |  |                 |         |   |                      |   |         |                  |  |   |                                  |   |  |       |         |   |  |   |         |  
|Carrying amount Sept. 30, 2004    |  | $               | 52,000  |   |                      | $ | 154,000 |                  |  | $ | 200                              |   |  | $     | 104,000 |   |  | $ | 310,200 |  
|Accumulated amortization          |  |                 | (15,370 | ) |                      |   | (39,783 | )                |  |   | (52                              | ) |  |       | (13,400 | ) |  |   | (68,605 | )
|                                  |  |                 |         |   |                      |   |         |                  |  |   |                                  |   |  |       |         |   |  |   |         |  
|Net amount at Sept. 30, 2004      |  | $               | 36,630  |   |                      | $ | 114,217 |                  |  | $ | 148                              |   |  | $     | 90,600  |   |  | $ | 241,595 |  
|                                  |  |                 |         |   |                      |   |         |                  |  |   |                                  |   |  |       |         |   |  |   |         |  



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Amortization of identifiable intangible assets for the next five years as of September 30, 2004 is as
follows:



|                            |  |   |       
|--------------------------- |  | - | ------
|Period ending September 30: |  |   |       
|2005                        |  | $ | 24,700
|2006                        |  |   | 24,192
|2007                        |  |   | 23,747
|2008                        |  |   | 23,359
|2009                        |  |   | 23,018



Deferred
Directory CostsDirect costs incurred related to directories published in June and November of each year are deferred and amortized over the life of the directory, generally twelve months. Primary directory costs include sales
commissions paid to sales agents and printing and distribution costs associated with the directory publications.



Debt Issue CostsThe costs related to the issuance of debt are capitalized and amortized to interest expense over the life of the
related loans using the effective interest method. On June 13, 2003, the Company successfully completed a recapitalization, in which the existing credit facility was terminated and the Company entered into a new $165,000 senior credit facility, and
issued and sold $150,000 of 85/8% senior subordinated notes. The Company incurred debt issuance costs of
approximately $10,408 related to the recapitalization. Existing debt issuance costs related to the Term A and Term B loans of approximately $6,242 (and accumulated amortization of approximately $1,357) were written off and charged to interest
expense in conjunction with the termination of such debt. In February 2004, the Company refinanced the tranche B term loan of its senior credit facility with a tranche C term loan to adjust the interest rate, maturity date and eliminate the annual
principal reduction requirement. In connection with the refinancing the Company capitalized financing fees of approximately $600. Amortization of approximately $1,102 and $5,817 (including $4,885 related to the write-off of existing debt issuance
costs) has been charged to interest expense for the nine months ended September 30, 2004 and 2003, respectively.



Vendor IncentivesThe Company has long-term contracts with certain vendors under which the vendors pay cash incentives to the Company
for entering into the contracts. These incentives are recorded as deferred income and amortized as a reduction of cost of sales over the related contract terms. The amount of deferred vendor incentives that are expected to be amortized within one
year are recorded as a current liability within other current liabilities. The remaining portion of deferred vendor incentives are recorded within other long-term liabilities. Total deferred vendor incentives were approximately $2,364, $2,752 and
$2,871 at September 30, 2004, December 31, 2003 and September 30, 2003, respectively.



Fair Value of Financial InstrumentsThe carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable, accounts payable and other accrued expenses approximate
their fair values due to the short-term nature of these financial instruments. The fair value of the Companys long-term debt, including current maturities, is estimated using discounted cash flow analyses, based on the incremental borrowing
rates currently available to the Company for similar debt with similar terms and maturity.



Concentration of Credit RisksFinancial instruments which potentially expose the Company to concentrations of credit risk consist primarily of accounts receivable. Management believes its credit
policies are prudent and reflect normal industry terms and business risk. The Company does not anticipate non-performance by its customers and, accordingly, does not require collateral.



Revenue RecognitionRevenue is primarily the result of selling advertising that is subsequently placed in
the Cincinnati Bell Yellow Pages. Revenues related to publishing directories are recognized using the amortization method under which revenues are recognized over the lives of the directories, generally twelve months. Deferred revenue
relates to the sale of advertising to national advertisers which is billed in advance and recognized over the lives of the directories. Net revenue includes primarily



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estimated sales adjustments for estimated losses due to claims resulting from publication errors,
omissions in customer advertising, customer early terminations or other customer complaints. The estimated sales adjustments are determined based on our historical experience, our current knowledge of customers with disconnected phone service, and
customer complaints received.



Income
TaxesNo provision for federal taxes is required because the Company has elected to be taxed as a limited liability company; accordingly, each members respective share of income is included in its federal return. The Company has
provided for certain state and city taxes which are classified within general and administrative expenses, in the amount of approximately $59 and $111 for the nine months ended September 30, 2004 and 2003, respectively.



Use of EstimatesThe preparation of the financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.



Reclassifications For comparative purposes, certain
prior year amounts have been reclassified to conform to current classifications.



|2. | LONG-TERM DEBT
|-- | --------------



Long-term debt at September 30, 2004, December 31, 2003 and September 30, 2003 consisted of the following:



|                                                                                                                                                                                      |  |               |         |                   |   |               |  |   |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ----------------- | - | ------------- |  | - | -------
|                                                                                                                                                                                      |  | Sept 30, 2004 |         | December 31, 2003 |   | Sept 30, 2003
|85/8%
Senior subordinated notes due 2011                                                                                                                                              |  | $             | 150,000 |                   | $ | 150,000       |  | $ | 150,000
|Term loan facility, payable to a consortium of banks, with interest of 3.94% at September 30, 2004, and 4.38% at December 31, 2003, and
September 30, 2003. Due on December 31, 2009. |  |               | 130,000 |                   |   | 158,600       |  |   | 158,600
|                                                                                                                                                                                      |  |               |         |                   |   |               |  |   |        
|Total                                                                                                                                                                                 |  |               | 280,000 |                   |   | 308,600       |  |   | 308,600
|Less current maturities                                                                                                                                                               |  |               |        |                   |   | 1,000         |  |   | 600    
|                                                                                                                                                                                      |  |               |         |                   |   |               |  |   |        
|Total                                                                                                                                                                                 |  | $             | 280,000 |                   | $ | 307,600       |  | $ | 308,000
|                                                                                                                                                                                      |  |               |         |                   |   |               |  |   |        



On June 13, 2003, the
Company successfully completed a recapitalization, in which the then existing credit facility was terminated and the Company entered into a new $165,000 senior credit facility, and issued and sold $150,000 of 85/8% senior subordinated notes due 2011. Net of fees and expenses, the note issuance generated cash proceeds of
$141,442. These proceeds, along with the proceeds from its senior credit facility with a tranche B term loan of $160,000, and cash on hand were used to retire the then existing $50,000 Term Loan A and the $160,000 Term Loan B. As part of the
recapitalization, the Company made distributions of $128,290 to its member. Substantially all assets of the Company are pledged as collateral under the existing debt agreements.



On June 13, 2003, the Company also entered into a revolving line of credit as part of the same senior credit facility as the
$160,000 tranche B term loan, under which the Company may borrow up to $5,000 at the banks prime rate or LIBOR, plus applicable margins. This line of credit replaced the then existing line of credit, under which the Company could borrow up to
$10,000 at the banks prime rate plus 2.25% or the LIBOR rate plus 3.25%. There were no borrowings outstanding on the revolving lines of credit at September 30, 2004, December 31, 2003 or September 30, 2003.



The fair value of the Companys debt obligations was approximately
$288,445 as of September 30, 2004.



Under the terms of the
loan agreements noted above, certain restrictive covenants exist regarding the Companys ability to enter into new loan agreements, enter into interest rate hedges, buy or sell assets, enter into mergers or acquisitions, affect a liquidation of
the Company, pay dividends, or amend the provisions of the Companys bylaws, articles of incorporation or any provision of any material contract. Other restrictive covenants include leverage restrictions, interest coverage, and fixed charge
coverage. At September 30, 2004 and 2003, the Company was in compliance with the restrictive covenants.



In conjunction with the previous credit facility, the Company entered into an interest rate swap agreement on October 4, 2002 that effectively converted a
portion of the interest on the Term A and B loans to a fixed rate of 6.17%. In accordance with FAS 133Accounting for Derivative Instruments and Hedging Activities, the Company has classified this interest rate swap agreement as a
cash flow hedge. On June 18, 2003, in conjunction with the recapitalization, the Company paid approximately $2,900 to terminate this interest rate swap agreement.



In February 2004, the Company refinanced its tranche B term loan with a tranche C term loan to adjust the interest rate to
prime plus 1.25% or LIBOR plus 2.25%, adjust the maturity date and eliminate the annual principal reduction requirement.



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Scheduled maturities of long-term debt are as follows:



|                         |  |   |        
|------------------------ |  | - | -------
|Year ending December 31: |  |   |        
|2009                     |  | $ | 130,000
|2011                     |  |   | 150,000
|                         |  |   |        
|TOTAL                    |  | $ | 280,000
|                         |  |   |        



In October 2004, the
Company amended the senior credit facility to replace the tranche C term loan with a tranche D term loan; see Note 5.



|3. | RELATED PARTY TRANSACTIONS
|-- | --------------------------



BRHI Inc., an affiliate of Cincinnati Bell Inc., owns membership units of CBD Media Holdings LLC. Additionally, other affiliates of Cincinnati Bell Inc.
provide the Company with billing, collection and distribution services. Total fees for such services were $860 and $990 for the nine months ended September 30, 2004 and 2003, respectively. In addition, the Company provides Cincinnati Bell Telephone
with advertising, printing and distribution services. Total fees for such services were $4,250 and $4,363, for the nine months ended September 30, 2004 and 2003, respectively.



Entities affiliated with CBD Media Holdings LLC provide management services to the Company under the terms of an advisory
agreement. Total fees for such services were $1,500 and $826 for the nine months ended September 30, 2004 and 2003, respectively.



|4. | MANAGEMENT UNIT AWARDS AND INCENTIVE COMPENSATION
|-- | -------------------------------------------------



During 2002, CBD Media Holdings LLC awarded 23,570 Class C units in CBD Media Holdings LLC to employees of the Company. During 2003, an additional 806
Class C units were issued. In 2004, 330 Class C units were forfeited. The fair value of the Class C units awarded to management of the Company on the date of grant was determined to be less than $3. The Company is required to record the impact of
these Class C units within its financial statements. The Class C units are subject to various restrictions, including continuous employment over a four-year period. Subsequent to the vesting period, any transfer or sale of the Class C units is
subject to the approval of the majority owners of CBD Media Holdings LLC. Management believes that the restrictions on liquidation and lack of voting rights make the Class C units subordinate to the other classes of unit holders in CBD Media
Holdings LLC. Therefore, this arrangement is consistent with the definition of junior stock and is accounted for on its measurement date in accordance with Financial Accounting Standards Board Interpretation No. (FIN) 38 - Determining
the Measurement Date for Stock Option, Purchase, and Award Plans Involving Junior Stock. Compensation expense is not recorded until a measurement date is reached in accordance with FIN 38. A measurement date will be reached when the restrictions on
the Class C units are removed, generally upon a change in control of the Company or approval of the majority owners of CBD Media Holdings LLC. At the measurement date, the Company will recognize compensation expense equal to the fair value of the
Class C units on that date.



In April 2004, the holders of the
Class C units received aggregate distributions from the Company of $1,555. As these distributions were made by the Company without regard to vesting or eventual vesting of the Class C units, such distributions were recorded as compensation expense.



In connection with the recapitalization in June 2003, CBD
Investor, Inc. (majority owner CBD Media Holdings LLC) established an incentive compensation program for Company employees who hold the Class C units, under which CBD Investor, Inc. paid these employees as a group, an aggregate amount of $1,000 upon
consummation of the recapitalization, which was paid and expensed in July 2003. CBD Investor, Inc. also agreed to provide an additional pool to these employees of up to $4,350. This additional incentive amount is subject to vesting over a five-year
period and is payable only upon the occurrence of certain specified events. Additionally, in order for any incentive amount to be payable, the aggregate value of the Class C units at such event must equal or exceed $8,600 but may not exceed $13,250.
If the total value of the Class C units at the time of such event exceeds $13,250, then no incentive amount is payable. The incentive amount will be paid upon the occurrence of a qualifying event and charged to expense when the incentive payment
becomes probable and in accordance with the remaining vesting period.



|5. | SUBSEQUENT EVENTS
|-- | -----------------



In October 2004, the Companys parent, CBD Media Holdings LLC (CBD Holdings), completed a recapitalization. CBD Holdings issued and sold
$100,000 of 9 1⁄4% senior notes due 2012. In connection with the recapitalization, the Company amended the senior credit facility by replacing the existing $130,000 tranche C term loan with a $153,000 tranche D term loan. The Company distributed
approximately $7,000 of cash on hand and the proceeds of the increased term loan to CBD Holdings. CBD Holdings then distributed such funds, along with the net proceeds of the senior notes due 2012, to its equityholders.



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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.



CBD Media LLC Overview



We are the exclusive telephone directory publisher for Cincinnati Bell-branded yellow pages in the Cincinnati-Hamilton metropolitan area, which is the
23rd largest metropolitan area in the country, according to the most recent U.S. Census. We are a leader in the directory publishing industry and, in 2003, we believe our directories captured over 85% of total directory advertising spending in the
Cincinnati-Hamilton metropolitan area.



We generate our revenue
primarily through the sale of advertising in our directories. In 2003, we published fourteen yellow pages directories and distributed over 2.3 million copies to businesses and residences. These directories included advertisements from over 19,000
local customers who are principally small and medium-sized businesses, as well as approximately 1,100 national advertisers. We are also the exclusive publisher of the white pages for Cincinnati Bell Telephone. In 2003, we published one white pages
directory and distributed over one million copies to businesses and residences.



We acquired our directory publishing business in March 2002 from Cincinnati Bell Inc., the owner and operator of Cincinnati Bell Telephone. The acquisition has been accounted for under the purchase method of
accounting. Our acquisition of the assets and certain liabilities of the directory publishing business from Cincinnati Bell Inc. is referred to herein as the acquisition.



We completed a recapitalization in the third quarter of 2003, which consisted of the following transactions:



| |  | We entered into a senior credit facility providing for borrowings in an aggregate principal amount of up to $165.0 million, including a tranche B term loan facility of $160.0
million and a revolving credit facility providing for borrowings of up to $5.0 million;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We issued $150.0 million of 85/8% senior subordinated notes due 2011;
| | - | ---------------------------------------------------------------------



| |  | We repaid all of the outstanding borrowings under our former credit facility and terminated that facility;
| | - | ----------------------------------------------------------------------------------------------------------



| |  | We paid approximately $2.9 million to terminate an interest rate swap related to our former credit facility; and
| | - | ----------------------------------------------------------------------------------------------------------------



| |  | We made aggregate distributions to our sole equityholder, CBD Holdings, of approximately $128.3 million.
| | - | --------------------------------------------------------------------------------------------------------



Our entering into the senior credit facility and the initial funding thereunder, the issuance of the senior subordinated
notes, our repayment of the borrowings under our former credit facility, our termination of an interest rate swap related to our former credit facility, the payment of distributions to CBD Holdings and the payment of related fees and expenses are
collectively referred to herein as the 2003 recapitalization.



In October 2004, our parent, CBD Media Holdings LLC (CBD Holdings), completed a recapitalization, which we refer to as the 2004 recapitalization. CBD Holdings issued and sold $100 million of 9
1⁄4% senior notes due 2012. In connection with the 2004 recapitalization, we amended our senior credit facility by replacing the existing $130 million tranche C term loan with a $153 million tranche D term loan. We distributed approximately $7
million of cash on hand and the proceeds of the increased term loan to CBD Holdings. CBD Holdings then distributed such funds, along with the net proceeds of the senior notes due 2012, to its equityholders.



As used herein, unless the context otherwise requires, CBD Media,
we, us, our or other similar terms refers to the business of CBD Media LLC and CBD Holdings refers to CBD Media Holdings LLC, the parent of CBD Media LLC.



Critical Accounting Policies and Estimates



Our discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. The application of these principles requires that in some instances we make
estimates and assumptions regarding future events that impact the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Predicting future events is inherently an imprecise activity and as such requires the use of judgments. On an ongoing basis, we review the basis for our estimates and will make adjustments based on historical
experience, current and anticipated economic conditions, accepted actuarial valuation methodologies or other factors that we consider to be reasonable under the circumstances. We cannot assure you that actual results will not differ from those
estimates.



We consider the following policies to be important
in understanding the judgments involved in preparing our financial statements and the uncertainties that could affect our financial condition, results of operations or cash flows.



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Revenue recognition. The sale of advertising in telephone directories published by us is our
primary source of revenue. We recognize revenues ratably over the life of each directory using the deferral and amortization method, with revenue recognition commencing in the month of delivery.



Revenue from Internet advertisements is recognized ratably over the
twelve-month period we commit to carry the advertisement.



Cost of revenue. Direct costs related to the publication of print directories, including sales commissions, paper, printing, transportation, distribution and pre-press production and employee costs relating to each of the foregoing
are recognized ratably over the life of each directory under the deferral and amortization method, with cost recognition commencing in the month of delivery. In addition, costs associated with advertising and electronic directories are included in
this category.



Allowance for sales adjustments.
Adjustments to revenue are primarily for estimated losses due to claims resulting from publication errors, omissions in customer advertising, customer early terminations or other customer complaints. They are accrued over the time period for which
the associated revenues are recognized based on our knowledge of known issues and our historical experience.



Vendor incentives. We have long-term contracts with various vendors under which the vendors pay cash incentives to us for entering into the
contracts. These incentives are recorded as deferred income and amortized as a reduction of cost of revenue over the related contract terms. The amount of deferred vendor incentives that are expected to be amortized within one year are recorded as a
current liability within other current liabilities. The remaining portion of deferred vendor incentives are recorded within other long-term liabilities.



Goodwill and other intangible assets. We review our long-lived assets, including goodwill for impairment whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. Several factors could trigger an impairment review such as:



| |  | significant underperformance relative to expected historical or projected future operating results;
| | - | ---------------------------------------------------------------------------------------------------



| |  | significant regulatory changes that would impact future operating revenues;
| | - | ---------------------------------------------------------------------------



| |  | significant negative industry or economic trends; and
| | - | -----------------------------------------------------



| |  | significant changes in the overall strategy by which we operate our business.
| | - | -----------------------------------------------------------------------------



We reduce the carrying amounts of long-lived assets, goodwill and identifiable intangible assets to their fair values when the fair values of such
assets is determined to be less than their carrying amounts. Fair value is typically estimated using a discounted cash flow analysis, which requires us to estimate the future cash flows anticipated to be generated by the particular asset being
tested for impairment as well as select a discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, we consider historical results adjusted to reflect current and anticipated operating
conditions, industry-specific conditions, product pricing and necessary capital expenditures. The use of different assumptions or estimates for future cash flows could produce different impairment amounts (or none at all) for long-lived assets,
goodwill and identifiable intangible assets.



Results of Operations



Comparison of Results of Operations for the Three Months Ended
September 30, 2004 and 2003.



Net revenue. Net
revenue for the three months ended September 30, 2004 was $21.7 million, consisting of $17.3 million in local advertising, $3.4 million in national advertising and $1.0 million in internet advertising. Net revenue for the three months ended
September 30, 2003 was $21.6 million, consisting of $17.5 million in local advertising, $3.2 million in national advertising and $0.9 million in internet advertising.



Adjustments to revenue were $0.9 million for the three months ended September 30, 2004 and 2003. Adjustments as a percentage
of total revenue were 4% for the three months ended September 30, 2004 and 2003.



Cost of revenue. Cost of revenue was $8.1 million for the three months ended September 30, 2004 and $8.5 million for the three months ended September 30, 2003. The decrease is primarily related to a one-time
$0.3 million management payout associated with the 2003 recapitalization to product managers that was included within cost of revenue for the three months ended September 30, 2003. In addition, we experienced a decrease in commissions expense due to
lower local revenue and printing costs for the three months ended September 30, 2004. Cost of revenue represented 37% of net revenue for the three months ended September 30, 2004 and 39% of net revenue for the three months ended September 30, 2003.



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General and administrative expense. General and administrative expense was $2.2 million for the
three months ended September 30, 2004 and $1.7 million for the three months ended September 30, 2003. The increase is primarily related to $1.1 million of professional fees in connection with the examination of alternative capital structures. This
increase was offset by the $0.7 million one-time management payout associated with the 2003 recapitalization that was included within general and administrative expense for the three months ended September 30, 2003.



Depreciation and amortization expense. Depreciation and amortization
expense was $6.4 million for the three months ended September 30, 2004 and $6.6 million for the three months ended September 30, 2003.



Interest expense. Interest expense was $4.7 million for the three months ended September 30, 2004 and $5.5 million for the same period in 2003. The
decrease was due primarily to the decrease in outstanding debt from $308.6 million at September 30, 2003 to $280 million at September 30, 2004.



Net income (loss). Net income was $0.3 million for the three months ended September 30, 2004 and net loss was $0.7 million for the same period in
2003. The increase in net income was due primarily to the reduction of interest expense.



Comparison of Results of Operations for the Nine Months Ended September 30, 2004 and 2003.



Net revenue. Net revenue for the nine months ended September 30, 2004 was $66.4 million, consisting of $53.6 million in local advertising, $10.0
million in national advertising and $2.8 million in internet advertising; net revenue for the nine months ended September 30, 2003 was $64.6 million, consisting of $52.6 million in local advertising, $9.5 million in national advertising and $2.5
million in internet advertising.



Adjustments to revenue were
$2.7 million for the nine months ended September 30, 2004 and 2003. Adjustments as a percentage of total revenue were 4% in 2004 and 2003.



Cost of revenue. Cost of revenue was $25.1 million for the nine months ended September 30, 2004 and $24.3 million for the nine months ended
September 30, 2003. Cost of revenue was 38% of net revenue for the nine months ended September 30, 2004 and 2003. The increase is primarily due to the increase in revenue and corresponding increase advertising, printing, and billing and collection
costs as these costs tend to be variable in nature.



General
and administrative expense. General and administrative expense was $5.4 million for the nine months ended September 30, 2004 and $2.8 million for the nine months ended September 30, 2003. General and administrative expense was 8% of net revenue
for the nine months ended September 30, 2004 and 3% of net revenue for the nine months ended September 30, 2003. The increase is related to additional compensation expense of $1.1 million related to the management units, an increase in management
fees of $0.7 million, and $1.1 million of professional fees in connection with the examination of alternative capital structures. These increases were offset by the $0.7 million one-time management payout associated with the 2003 recapitalization
that was included within general and administrative expense for the nine months ended September 30, 2003.



Depreciation and amortization expense. Depreciation and amortization expense was $19.3 million for the nine months ended September 30, 2004 and
$19.9 million for the nine months ended September 30, 2003. The decrease is due primarily to the accelerated amortization method used to amortize advertiser related intangible assets.



Interest expense. Interest expense was $14.8 million for the nine months ended September 30, 2004 and $20.5 million
for the nine months ended September 30, 2003. The decrease is primarily related to the write-off of deferred financing costs associated with the former credit facility in 2003 and the decrease in outstanding debt from $308.6 million at September 30,
2003 to $280 million at September 30, 2004.



Net income
(loss). Net income was $1.8 million for the nine months ended September 30, 2004 and net loss was $2.7 million for the nine months ended September 30, 2003. The increase in net income is due primarily to the decrease in interest expense as
compared to the same period last year offset by higher general and administrative costs in 2004.



Liquidity and Capital Resources



Our principal source of liquidity has been cash flow generated from operations. The timing of our cash flows throughout the year is reasonably predictable, as our customers typically pay for their advertisements in equal payments over a
twelve-month period. The payment of our material expenses is based on our contractual arrangements and occurs predictably at set times during the year. Our primary liquidity requirements have been for debt service on the senior credit facility, the
senior subordinated notes and related party notes payable and for working capital needs. We have historically generated sufficient cash flow to fund our operations and capital expenditures and to make required debt service payments.



Net Cash Provided by (Used in) Operations. Net cash provided by
operations for the nine months ended September 30, 2004, was $21.6 million as compared to $22.6 million for the same period in 2003. This difference is primarily related to the $2.9 million payment made to terminate an interest rate swap described
below in this section.



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Net Cash Provided by (Used in) Financing Activities. Net cash used in financing activities for the
nine months ended September 30, 2004, was $30.0 million as compared to $39.1 million for the same period in 2003. The net cash used in financing activities was the result of the payments on CBD Medias current senior credit facility, costs
associated with the repricing, and distribution for taxes to equityholders.



Net Cash Provided by (Used in) Investing Activities. Net cash used in investing activities for the nine months ended September 30, 2004 was $39,000 as compared to $48,000 for the same period in 2003.



Indebtedness. On June 13, 2003, we entered into the
senior credit facility providing for borrowings in an aggregate principal amount of up to $165.0 million and issued $150.0 million of notes. In February 2004, CBD Media refinanced its $165.0 million senior credit facility with a $155.0 million
senior credit facility, which consisted of a revolving credit facility and a tranche C term loan facility. The revolving credit facility provided for loans in a total principal amount of up to $5.0 million, which, as permitted, may be used for
general corporate purposes. The tranche C term loan facility consisted of a $150.0 million term loan.



On October 26, 2004, CBD Holdings completed the 2004 recapitalization in which it issued and sold $100 million of 91⁄4% senior notes due 2012. In
connection with the 2004 recapitalization, we amended our senior credit facility by replacing the existing $130.0 million tranche C term loan with a $153.0 million tranche D term loan. We distributed approximately $7.0 million of cash on hand and
the proceeds of the increased term loan to CBD Holdings. CBD Holdings then distributed such funds, along with the net proceeds of the senior notes due 2012, to its equityholders.



Our senior credit facility bears interest at a variable rate. In addition to paying interest on outstanding principal
amounts under our senior credit facility, we are required to pay a commitment fee to the lenders for the unused commitments under the revolving credit facility.



Our revolving credit facility will mature in June 2009. The tranche D term loan of the senior credit facility matures in December, 2009.



Our senior credit facility contains negative and affirmative covenants and
requirements affecting us and domestic subsidiaries that we create or acquire, with exceptions set forth in our credit agreement. Our senior credit facility contains the following negative covenants and restrictions, among others: restrictions on
liens, real estate purchases and sales, sale-leaseback transactions, indebtedness, dividends and other restricted payments, guarantees, redemptions, liquidations, consolidations and mergers, acquisitions, asset dispositions, investments, loans,
advances, changes in line of business, formation of new subsidiaries, changes in fiscal year, transactions with affiliates, capital expenditures, amendments to charter, by-laws and other material documents, hedging agreements and intercompany
indebtedness. Our senior credit facility also requires us, and will require our future subsidiaries, with exceptions set forth in our credit agreement, to meet financial covenants and ratios specified therein, including a maximum leverage ratio, a
maximum senior leverage ratio, an interest coverage ratio, and a capital expenditures covenant. At September 30, 2004, we were in compliance with the restrictive covenants.



In addition, the indenture for the senior subordinated notes limits our ability, among other things, to incur additional
debt, pay dividends or make distributions in respect of our equity interests or to make other types of restricted payments or investments, sell assets, agree to payment restrictions affecting our restricted subsidiaries, consolidate, merge, sell or
otherwise dispose of all or substantially all of our assets, enter into transactions with our affiliates, create liens and enter into new lines of businesses.



In connection with the 2003 recapitalization, we paid a breakage fee of approximately $2.9 million to cancel a fixed interest rate swap agreement
related to our former credit facility.



As of September 30,
2004, we had outstanding $280.0 million in aggregate indebtedness, excluding unused commitments, with an additional $5.0 million of borrowing capacity available under our revolving credit facility. Our total interest expense for the nine months
ended September 30, 2004 was $14.7 million for the same period in 2003, total interest expense was $20.4 million.



Liquidity. Our ability to make payments on our indebtedness, and to fund our working capital needs and planned capital expenditures will depend
upon our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Our liquidity could also be impacted by a



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decline in usage of printed yellow page directories; however, we have not experienced a significant decline. While in the
short term any impact could be offset by price increases, in the long term any such impact could limit our ability to meet our financial obligations especially given our favorable operating margins and low variable costs. Based on our current levels
of operations, we believe that our cash flow from operations and available borrowings under our senior credit facility will be adequate to meet our liquidity for the foreseeable future.



CBD Holdings ability to make payments on its 91/4% senior notes depends upon our ability to make distributions to it. The terms of our senior credit facility and the indenture governing our senior subordinated notes include
covenants that, under certain circumstances, would prohibit us from making distributions to CBD Holdings, or distributions in amounts sufficient enough for CBD Holdings to make scheduled payments of interest (including liquidated damages, if any) on
its senior notes, or to satisfy its obligation to repay its senior notes at maturity, or to repurchase its senior notes under the circumstances provided in the indenture pursuant to which its senior notes were issued. Any failure by CBD Holdings to
make such payments or to repurchase notes as required, would be a default under its indenture and any such default could cause us to be in default under the senior credit facility (which, in turn could cause us to be in default under the indenture
pursuant to which our senior subordinated notes were issued).



Based on our current levels of operations, we believe that our cash flow from operations and available borrowings under the senior credit facility will be adequate to meet our liquidity needs for the foreseeable future and to permit us to
make distributions to CBD Holdings to make scheduled interest payments on its senior notes.



As part of the 2003 recapitalization, we distributed to our sole equityholder, CBD Holdings, an aggregate of $128.3 million. On October 24, 2004 we distributed to CBD Holdings a payment of $30.0 million. As a result
of these distributions, we will have limited cash and cash equivalents on hand and our primary source of liquidity is expected to continue to be cash flow generated from operations as well as our ability to borrow up to $5.0 million under the
revolving credit facility. We expect that our primary liquidity requirements will be for debt service on our senior credit facility and the notes and also for capital expenditures and working capital.



As a result of the significant increase in our indebtedness and the aggregate
distributions to our equityholder of approximately $128.3 million as part of the 2003 recapitalization, we have substantially increased our leverage. Our liquidity requirements will also be significantly increased, primarily due to increased debt
service obligations.



Based on the restrictions under the terms
of our senior credit facility and the indenture governing our senior subordinated notes, we currently expect that, in order for CBD Holdings to make scheduled payments of interest (including liquidated damages, if any) on its senior notes, we will
be required (1) to generate, every six months, restricted payment capacity (as measured by the terms of our indenture) in excess of $4.625 million, and (2) have the ability to incur at least $1.00 of additional debt under such indenture.



We cannot assure you, however, that in the long-term our business will
generate sufficient cash flow from operations or that future borrowings will be available to us under our senior credit facility or otherwise in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs
(including to make distributions to CBD Holdings in order to fund its debt services obligations). To the extent that such sources were not adequate to fund our liquidity needs, we would need to raise additional capital, restructure our indebtedness
or cut costs in order to lower our liquidity needs. If we consummate an acquisition, our debt service requirements could increase. We may need to refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will
be able to refinance any of our indebtedness on commercially reasonable terms or at all. We will require a significant amount of cash to service our debt, including the senior subordinated notes, and our ability to generate cash depends on many
factors beyond our control.



Advisory agreement. We are
a party to an advisory agreement dated March 7, 2002 and further amended on June 13, 2003, with a related party, Applegate & Collatos, Inc., or ACI. This advisory agreement requires us to make quarterly payments of $500,000 to ACI and reimburse
ACI for its reasonable expenses. Pursuant to a letter of instruction effective October 1, 2003, ACI directed us to make quarterly payments to CBD Holdings (capped at $500,000) and without additional payments for reimbursement of expenses. Such
quarterly payments were received by CBD Holdings for the period from October 1, 2003 until September 30, 2004, and then paid by CBD Holdings to ACI. The letter of instruction has been withdrawn and, pursuant to the advisory agreement, CBD Media will
make quarterly payments of $500,000 to ACI directly and will reimburse ACI for reasonable expenses, effective October 1, 2004.



Forward-Looking Statements



In this periodic report on Form 10-Q, we make forward-looking statements, which are subject to uncertainties. These statements are included throughout
this report on Form 10-Q and relate to, among other things, analyses and other information based on forecasts of future results and estimates of amounts not yet determinable, including our ability to generate cash flow in the future and our ability
to service our debt obligations. These forward-looking statements are identified by their use of terms and phrases such as anticipate, believe, could, estimate, expect, intend,
may, plan, predict, project, will, continue, and other similar terms and phrases, including references to assumptions.



These forward-looking statements are subject to numerous assumptions, risks
and uncertainties. Factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by us in those statements include, among others, the
following:



| |  | national and local economic and business conditions that affect advertising expenditures by businesses and individuals as well as consumer trends in the usage of our principal
product;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our ability to maintain relationships with third-party service providers;
| | - | -------------------------------------------------------------------------



| |  | the effect of competition in local telephone service on Cincinnati Bell Telephones current dominant position in the local market;
| | - | ----------------------------------------------------------------------------------------------------------------------------------



| |  | our relationship with Cincinnati Bell Telephone;
| | - | ------------------------------------------------



| |  | fluctuations in the price of paper;
| | - | -----------------------------------



| |  | the retention of key employees;
| | - | -------------------------------



| |  | changes in taxes and government regulations that influence local phone service;
| | - | -------------------------------------------------------------------------------



| |  | our degree of leverage, which may affect our ability to obtain financing in the future;
| | - | ---------------------------------------------------------------------------------------



| |  | the reduction in our operating flexibility resulting from restrictive covenants in our debt agreements, including the risk of default that could occur;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the effects of tax legislative action;
| | - | --------------------------------------



| |  | the effect of any rating agency downgrades on the cost and availability of new debt financings; and
| | - | ---------------------------------------------------------------------------------------------------



| |  | our relationship with our principal stockholders.
| | - | -------------------------------------------------



Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance that we
will attain these expectations or that any deviations will not be material. Except as otherwise required



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by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to
any forward-looking statement contained in this periodic report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.



Item 3. Quantitative and Qualitative Disclosure of Market Risk.



Interest on the senior subordinated notes issued is charged at a fixed rate. As of September 30, 2004, approximately 54% of our total outstanding debt has a fixed interest rate. Interest rate changes generally do not
affect the market value of floating rate debt but do impact the amount of our interest payments and our future earnings and cash flows. Conversely for fixed rate debt, interest rate changes do not impact future cash flows and earnings, but do impact
the fair market value of such debt. As a portion of our debt bears a variable interest rate, changes in market rates for interest can impact our operating results and cash flows. For example, holding the amount of senior credit facility debt
outstanding constant, a one percentage point increase in interest rates would have caused an estimated decrease in annual pre-tax earnings and cash flows of $1.5 million. The fair value of our debt obligations was approximately $288.4 million as of
September 30, 2004.



Item 4. Controls and Procedures.



The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Companys Exchange Act reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms and that such information is accumulated and communicated to the Companys management, including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.



As required by SEC Rule 13a-15(b), the Company carried out an evaluation,
under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer and the Companys Chief Financial Officer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Companys Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure
controls and procedures were effective as of the end of the period covered by this report at the reasonable assurance level.



There has been no change in the Companys internal controls over financial reporting during the Companys most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Companys internal controls over financial reporting.



PART II



OTHER INFORMATION



Item 1. Legal Proceedings.



From
time to time, we are a party to litigation matters arising in connection with the normal course of our business. In many of these matters, plaintiffs allege that they have suffered damages from errors or omissions or improper listings contained in
directories published by us. Although we have not had notice of any such claims that we believe to be material, any pending or future claim could have a material adverse effect on our business, financial condition, results of operations or cash
flows.



In addition, we are exposed to defamation and breach of
privacy claims arising from our publication of directories and our methods of collecting, processing and using personal data. The subjects of our data and users of data that we collect and publish could have claims against us if such data were found
to be inaccurate, or if personal data stored by us was improperly accessed and disseminated by unauthorized persons. Although we have not had notice of any material claims relating to defamation or breach of privacy claims to date, we may become
party to litigation matters that could have a material adverse effect on our business.



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Item 6. Exhibits and Reports on Form 8-K.



(a) Exhibits



|             |  |                                                                                                                                                                                      
|------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 31.1 |  | Certification of Periodic Report by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.                                                   
|             | 
|Exhibit 31.2 |  | Certification of Periodic Report by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.                                                   
|             | 
|Exhibit 32.1 |  | Certification of Periodic Report by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of
2002.*

---

|* | This certificate is being furnished solely to accompany the report pursuant to 18 U.S.C. 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(b) Reports on Form 8-K filed during the quarter ended September 30, 2004.



On August 3, 2004, CBD Media LLC issued a press release
announcing its financial results for the second quarter ended June 30, 2004 (Item 7 and 12).



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SIGNATURES



Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                        |  |               |  |                                      
|----------------------- |  | ------------- |  | -------------------------------------
|                        |  | CBD MEDIA LLC
|                        |  |              
|Date: November 15, 2004 |  | By:           |  | /s/    Douglas A. Myers              
|                        |  | Name:         |  | Douglas A. Myers                     
|                        |  | Title:        |  | President and Chief Executive Officer



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