HERNDON, VA, Nov. 3, 2009 (Marketwire) --

HERNDON, VA -- (Marketwire) -- 11/03/09 -- RCN Corporation (NASDAQ: RCNI) today announced third quarter 2009 results.

RCN Corporation is a leading provider of all-digital and high-definition video, high-speed internet, and premium voice services to residential and small-medium business customers, in Philadelphia, Lehigh Valley, PA, New York, Boston, Chicago and Washington, D.C., as well as high-capacity transport services to carrier and large enterprise customers.

"We are executing very well against our 2009 objectives, building free cash flow to $29 million year-to-date while still fueling our business for future growth," stated Peter D. Aquino, President and Chief Executive Officer. "We have successfully managed through nearly a full year of economic uncertainty, and stayed on pace to expand margins, invest in product development, and make process improvements. In our residential business, Project Analog Crush(SM) is now complete in all of our metro markets and we are midway through our Lehigh Valley Crush. By year end, RCN will be the largest MSO in the country to be 100% digital, providing over 100 HD channels, an expansive VOD library, and a robust International tier, with channel capacity for future growth. In addition, the RCN/TiVo HD DVR remains on track for a first quarter 2010 launch, and we are accelerating our DOCSIS 3.0 deployment to address the huge SMB opportunity in RCN's metro markets. In the RCN Metro segment, we continue to capture demand for high capacity bandwidth from large carrier and enterprise customers, leveraging our position as a premier regional service provider with best-in-class Metro Ethernet and on-net fiber connectivity in 5 of the top 10 metro markets in the country."

Third Quarter Review

Following are highlights of third quarter 2009 results for consolidated RCN and for the company's two reporting segments: Residential/Small-Medium Business, comprised of the RCN and RCN Business Services business units; and RCN Metro Optical Networks.

Consolidated Results

--  Revenue. Total revenue of $192 million increased 3% from $187 million
    in the third quarter of 2008 and was flat compared to $192 million in the
    second quarter of 2009.
--  EBITDA. EBITDA of $56.4 million increased 12% from $50 million in the
    third quarter of 2008 and increased 2% from $55.5 million in the second
    quarter of 2009.  EBITDA margin of 29% expanded by nearly 250 basis points
    from the third quarter of 2008 and 50 basis points from the second quarter
    of 2009.  EBITDA is a non-GAAP financial measure - see "Non-GAAP Measures"
    below.
--  Capital Expenditures. Capital expenditures were $34 million compared
    to $34 million in the third quarter of 2008 and $25 million in the second
    quarter of 2009.
--  Free Cash Flow.  Free cash flow was $11 million compared to negative
    $2 million in the third quarter of 2008 and $10 million in the second
    quarter of 2009.  Free cash flow is a non-GAAP financial measure - see "Non-
    GAAP Measures" below.
--  Share Repurchases. RCN repurchased nearly 85,000 shares of common
    stock during the third quarter at an average price of $6.94, or an
    aggregate value of $0.6 million.  To date, RCN has repurchased over 2.4
    million shares under its $25 million repurchase authorization, for an
    aggregate value of approximately $17 million, leaving approximately $8
    million remaining under the program.
    

Residential/Small-Medium Business Segment

--  Revenue. Residential/Small-Medium Business revenue of $144 million was
    flat compared to $144 million in the third quarter of 2008 and decreased 1%
    from $145 million in the second quarter of 2009.  Year-over-year revenue
    comparisons reflect the addition of 2,000 customers and flat average
    revenue per customer ("ARPC") of $111.
--  EBITDA. Residential/Small-Medium Business EBITDA of $40 million
    increased 9% from $37 million in the third quarter of 2008, and was flat
    compared to the second quarter of 2009.  EBITDA margin of 28% expanded by
    over 200 basis points from the third quarter of 2008 and approximately 25
    basis points from the second quarter of 2009.  Third quarter 2009 EBITDA
    includes $1.8 million in direct cost benefits related to the settlement of
    ordinary course network cost disputes.
--  Capital Expenditures. Residential/Small-Medium Business capital
    expenditures were $25 million, down from $27 million in the third quarter
    of 2008 and up from $16 million in the second quarter of 2009.
--  Customers, RGUs and Digital Penetration. Residential/Small-Medium
    Business customers of approximately 430,000 increased 2,000 compared to the
    third quarter of 2008 and were flat compared to the second quarter of 2009.
    Total revenue generating units of approximately 903,000 decreased by 12,000
    compared to the third quarter of 2008 and decreased by 8,000 compared to
    the second quarter of 2009, as continued growth in video and data RGU's was
    offset by a reduction in voice RGU's, consistent with trends for highly-
    penetrated landline voice providers.  Third quarter 2009 bundle rate and
    digital video penetration rate remained stable at 67% and 91%,
    respectively.
    

RCN Metro Optical Networks Segment

--  Revenue. RCN Metro revenue of $48 million increased 11% from $43
    million in the third quarter of 2008, and 2% from $47 million in the second
    quarter of 2009, driven primarily by continued strength in transport
    services as well as growth in data and Internet services.
--  EBITDA. RCN Metro EBITDA of $17 million increased 21% from $14 million
    in the third quarter of 2008 and 6% from $16 million in the second quarter
    of 2009.  EBITDA margin of 34% grew by nearly 300 basis points from the
    third quarter of 2008 and over 130 basis points from the second quarter of
    2009.  EBITDA and EBITDA margin increased primarily as a result of revenue
    growth and continued realization of synergies.
--  Capital Expenditures. RCN Metro capital expenditures were $9 million
    compared to $6 million in the third quarter of 2008 and $9 million in the
    second quarter of 2009.
    

Reported Results

Revenue increased to $192 million in the third quarter of 2009, compared to $187 million in the third quarter of 2008 and $192 million in the second quarter of 2009. Net loss was $6 million in the third quarter of 2009, compared to $15 million in the third quarter of 2008 and $9 million in the second quarter of 2009.

Michael T. Sicoli, Chief Financial Officer of RCN, stated, "Our strategy of investing to drive consistent revenue growth and margin expansion while maintaining a stable level of capital expenditures is delivering significant growth in free cash flow. Year to date, we have generated $29 million in free cash flow, a $38 million improvement compared to the same period in 2008. We will continue to focus on optimizing our balanced geographic and customer portfolio for growth and further strengthening our operational and financial flexibility. We remain on track to achieve our 2009 objectives of revenue and EBITDA growth and solid free cash flow generation."

Non-GAAP Measures

In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP") throughout this press release, RCN has presented non-GAAP financial measures, such as EBITDA, EBITDA Margin, Free Cash Flow and ARPC. RCN believes that these non-GAAP measures, viewed in addition to and not in lieu of its reported GAAP results, provide useful information to investors because they are an integral part of RCN's internal evaluation of operating performance. In addition, they are measures that RCN uses to evaluate management's effectiveness. Reconciliations to comparable GAAP measures as well as definitions begin on page 8. RCN's non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies.

Third Quarter Conference Call

Management will conduct a conference call to discuss third quarter 2009 results today at 08:30 AM Eastern time. Please be sure to dial into the call 10 to 15 minutes before start time. The dial in number for the call is (877) 862-3628, conference ID: 34787863. The call is also being webcast with an accompanying slide presentation, which can be accessed at http://investor.rcn.com/events.cfm.

A replay of this conference call will be available from 9:30 AM today until Midnight Eastern time on November 10. The dial in number for the replay is 706-645-9291; the conference ID is the same as above. The webcast and slides will also be archived on RCN's website.

About RCN Corporation

RCN Corporation (NASDAQ: RCNI), www.rcn.com, is a competitive broadband services provider delivering all-digital and high-definition video, high-speed internet and premium voice services to residential and small-medium business customers under the brand names of RCN and RCN Business Services, respectively. In addition, through its RCN Metro Optical Networks business unit, RCN delivers fiber-based high-capacity data transport services to large commercial customers, primarily large enterprises and carriers, targeting the metropolitan central business districts in the company's geographic markets. RCN's primary service areas include Washington, D.C., Philadelphia, Lehigh Valley (PA), New York City, Boston and Chicago. (RCNI-Q)

RCN Forward-Looking Statements

This press release contains forward-looking statements regarding future events and future performance of RCN that involve risks and uncertainties that could materially affect actual results. This information is qualified in its entirety by cautionary statements and risk factors disclosure contained in certain of RCN's Securities and Exchange Commission filings.