Cincinnati Bell 2004 Annual Report Download

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2004 Annual Report
Letters to
Shareholders
Notice of
2005 Annual Meeting
and Proxy Statement
Report on
Form 10-K

Table of contents

  • Page 1
    2004 Annual Report Letters to Shareholders Notice of 2005 Annual Meeting Report on and Proxy Statement Form 10-K

  • Page 2
    Contents Letters to Shareholders From the Chairman From the Chief Executive Officer From the Chief Financial Officer Financial Highlights Directors and Company Officers Notice of Annual Meeting Proxy Statement Report on Form 10-K 1 2 5 7 8 9 11 65

  • Page 3
    ... the nation's most-respected and best-performing local exchange and wireless providers, Cincinnati Bell provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. Our employees and operations have long been part of the rich...

  • Page 4
    ... achieved deeper penetration of high-speed Internet and wireless services and launched local telephone service in the growing communities north of Cincinnati, including Dayton, Ohio. Our persistence and hard work paid off-we generated free cash flow of $167 million in 2004. Bundling is "our right to...

  • Page 5
    ...reported an increase of 16,000 in total connections-access lines plus Digital Subscriber Lines (DSL). Deeper market penetration High-speed Internet service, or DSL, helps anchor our bundle. In 2004, we nearly quadrupled our DSL speed with no increase in cost and no increase in price to the customer...

  • Page 6
    ... services-local, long distance, wireless, high-speed Internet and entertainment-in the Greater Cincinnati area. Improving the customer experience 462 339 2000 2001 2002 2003 2004 Over the past two years, we have upgraded our wireless network from TDMA to GSM technology. In doing so, customers...

  • Page 7
    ... investments necessary to operate a worldclass communications company and remain a strong competitive force in our market area. Net Debt (in millions) $2,928 $2,262 $2,112 Impact of asset sales To get a clearer picture of our year-over-year revenue performance, we must take into account the impact...

  • Page 8
    ... on the company's web site, www.cincinnatibell.com, under the Investor Relations tab. These non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. They are presented because Cincinnati Bell Inc. management uses this information when evaluating...

  • Page 9
    ... new products and services. More information on potential risks and uncertainties is available in the company's recent filings with the Securities and Exchange Commission, including Cincinnati Bell's annual Form 10-K report, quarterly Form 10-Q reports and Forms 8-K. The forward-looking statements...

  • Page 10
    ... Senior Vice President, Internal Controls Ann W. Crable Vice President and General Manager, Local Services Brian G. Keating Vice President, Human Resources and Administration David A. Korb Vice President and General Manager, Business Markets Christopher J. Wilson Vice President and General Counsel...

  • Page 11
    ..., 2005 To Our Shareholders: The 2005 Annual Meeting of Shareholders of Cincinnati Bell Inc. (the "Company") will be held on Friday, April 29, 2005, at 11:00 a.m., Eastern Daylight Savings Time, at the Cincinnati Museum Center at Union Terminal, 1301 Western Avenue, Cincinnati, Ohio for the following...

  • Page 12
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  • Page 13
    ... of Cincinnati Bell Inc., an Ohio corporation (the "Company"), in connection with the solicitation of proxies by the Board of Directors for use at the 2005 Annual Meeting of Shareholders. The Annual Meeting will be held on Friday, April 29, 2005, at 11:00 a.m., Eastern Daylight Savings Time, at...

  • Page 14
    ..., including common shares purchased through the Cincinnati Bell Employee Stock Purchase Plan, Cincinnati Bell Retirement Savings Plan, or Cincinnati Bell Inc. Savings and Security Plan and credited to your account under any of such plans; and (2) shares held for you as the beneficial owner through...

  • Page 15
    ... may grant your voting proxy directly to Cincinnati Bell to vote your shares or you may vote your shares in person at the meeting. Cincinnati Bell has enclosed a proxy card for your use in voting by proxy. Beneficial Owner If your shares are held in a stock brokerage account or by another nominee...

  • Page 16
    .... Retirement Savings Plan, Cincinnati Bell Inc. Savings and Security Plan, Cincinnati Bell Inc. Deferred Compensation Plan for Outside Directors or the Convergys Corporation Retirement and Savings Plan, you have the right to direct Fidelity to vote any Cincinnati Bell shares credited to your account...

  • Page 17
    ...-votes will not affect the outcome of any of the matters being voted upon at the meeting. Q: Who will count the votes? A: A representative of Computershare Investor Services, LLC, Cincinnati Bell's transfer agent and registrar, will tabulate the votes and act as the inspector of election. Q: Is my...

  • Page 18
    ...to reduce costs and increase efficiencies by mailing only one copy of Company communications, such as this Proxy Statement, to multiple shareholders who reside at the same household mailing address. If you and other shareholders at the same household mailing address are currently receiving only one...

  • Page 19
    ...the 2004 Annual Meeting of Shareholders. Corporate Governance The Company's Corporate Governance Guidelines are available on the Company's website, www.cincinnatibell.com, in the Corporate Governance Section of the Corporate Information webpage. Committees of the Board The following table sets forth...

  • Page 20
    ... on the Company's website, www.cincinnatibell.com in the Corporate Governance Section of the Corporate Information webpage. Compensation Committee: The Compensation Committee consists of five persons, none of whom is an officer. The Committee held 4 meetings during 2004. The Compensation Committee...

  • Page 21
    ... to the applicable retainers and meeting fees described above. Non-Employee Directors Deferred Compensation Plan The Cincinnati Bell Inc. Deferred Compensation Plan for Outside Directors (the "Directors Deferred Compensation Plan") currently allows each non-employee director of the Company to choose...

  • Page 22
    ... and restrictions. Until paid, all amounts credited to a non-employee director's account under the Directors Deferred Compensation Plan are not funded or otherwise secured, and all payments under the plan are made from the general assets of the Company and its subsidiaries. The Directors Deferred...

  • Page 23
    ...plan generally will have ten years from the date of the grant of the option to elect to exercise the option. Other Compensation for Non-Employee Directors The Company also provides its non-employee directors who live in the Cincinnati area with certain telecommunications services. The average annual...

  • Page 24
    ..., to serve until the 2008 annual meeting of shareholders. Information regarding the business experience of each nominee is provided below. Mr. Mahoney was appointed to fill a vacancy on the board in October 2004. A non-management director of the Company recommended Mr. Mahoney to the Governance...

  • Page 25
    ... May 2001; and President of Cincinnati Bell Wireless Company since 1997. Prior to that time, he served as Senior Vice President, National Sales & Distribution of Rogers Cantel in Canada from 1992 through 1996; as Vice President, Sales and Marketing of Ericsson Mobile Communications from 1990 through...

  • Page 26
    ... Systems, Inc. (a networking and telecommunications company) since 1997 and was Vice President, Manufacturing/Logistics of Cisco Systems, Inc., from 1993 through 1999. Prior to that time, he served as Senior Director, Manufacturing/Logistics Personal Computer Group of Digital Equipment Corporation...

  • Page 27
    ... CMS Marketing, Services and Trading. He is a director of Spinnaker Exploration Company and Flint, Inc. Director since 2003. Age 58. Proxy Statement Michael G. Morris Mr. Zrno is retired. He was President and Chief Executive Officer of IXC Communications, Inc. (a telecommunications company) from...

  • Page 28
    ...different independent accountant to audit the financial statements of the Company for the fiscal year ending December 31, 2005. One or more members of the firms of Deloitte & Touche LLP and PricewaterhouseCoopers LLP will attend the annual meeting, will have an opportunity to make a statement and...

  • Page 29
    ...of Deloitte & Touche LLP requires the affirmative vote of the holders of a majority of the common shares and Preferred Shares, voting as one class, present or represented at the annual meeting, in person or by proxy, and entitled to vote on this proposal. Abstentions will count as votes against the...

  • Page 30
    ... Report and related disclosure by reference, this information shall not otherwise be deemed to have been filed under such Acts. AUDIT AND FINANCE COMMITTEE REPORT The Audit and Finance Committee of the Board has reviewed and discussed the Company's audited financial statements with the management...

  • Page 31
    ...audits of the Company's employee benefit plans, for audit services required by the Company's creditors and various accounting consultations. Tax Fees Tax Fees for the years ended December 31, 2004 and 2003, respectively, were for consulting services related to the implications of changes in federal...

  • Page 32
    ... GOALS UNDER CINCINNATI BELL INC. 1997 LONG TERM INCENTIVE PLAN (Item 3 on the Proxy Card) Under Section 162(m) of the Internal Revenue Code (the "Code"), the Company may not, for federal income tax purposes, deduct from its income the compensation paid during a tax year to a person who, on...

  • Page 33
    ... covered executives or to any other salaried employees who are subject to certain insider-trading prohibitions and requirements set forth in Section 16 of the Securities Exchange Act of 1934. 2. Use of Performance Goals Under Awards and Maximum Amount of Compensation. Many awards made under the Long...

  • Page 34
    ... payable to a covered executive, will not be able to avoid being subject to the deduction limits of Section 162(m) of the Code even if the Company's shareholders reapprove the material terms of the performance goals applicable to the plan's awards. 3. Business Criteria. Under the plan, the business...

  • Page 35
    ...UNDER CINCINNATI BELL INC. SHORT TERM INCENTIVE PLAN (Item 4 on the Proxy Card) Under Section 162(m) of the Code, the Company may not, for federal income tax purposes, deduct from its income the compensation paid during a tax year to a person who, on the last day of such year, is the chief executive...

  • Page 36
    ... may be granted to a key executive under the plan with respect to any calendar year. The Company's shareholders at their 2000 annual meeting approved the Short Term Incentive Plan, including the material terms of the performance goals under which certain compensation is paid under the Short Term...

  • Page 37
    ... under the Short Term Incentive Plan will generally be reduced if the key executive is entitled to payment under the award but was not in the active service of the Company and its subsidiaries for the entire award year of the award because of his or her retirement, death, disability or leave of...

  • Page 38
    ... goals under which compensation can be paid under the Cincinnati Bell Inc. Short Term Incentive Plan requires the affirmative vote of the holders of the majority of the common shares and preferred shares, acting as one class, present or represented at the annual meeting, in person or by proxy...

  • Page 39
    ... stock, restrictions on which have not yet expired. Awards were granted under various incentive plans approved by Cincinnati Bell Inc. shareholders. (2) The shares to be issued relate to deferred compensation in the form of previously received special awards and annual awards to non-employee...

  • Page 40
    ... either class of stock, (ii) each director and each executive officer named in the Summary Compensation Table on page 32, and (iii) all directors and executive officers of the Company as a group. Unless otherwise indicated, the address of each director and executive officer is c/o Cincinnati Bell...

  • Page 41
    ... and Gabelli Funds, LLC owned 6,400 63⁄4% Convertible Preferred Shares (which are represented by 128,000 Depositary Shares). EXECUTIVE COMPENSATION Any general statement that incorporates this Proxy Statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of...

  • Page 42
    ...targets each executive officer's total direct compensation (base salary, annual incentive compensation and long-term incentive compensation) to be competitive with the revenue adjusted median of the marketplace, using information from general industry surveys and a study group of companies from the...

  • Page 43
    On December 3, 2004, the Compensation Committee set the short-term award targets for fiscal year 2005 under the Cincinnati Bell Inc. Short-Term Incentive Plan. Payment of the annual incentive is based on (i) the Company achieving certain levels of net income and revenue, and (ii) individual ...

  • Page 44
    ... time, he served as Chief Operating Officer of the Company. Mr. Ross was named Chief Financial Officer on January 9, 2004. Prior to that time, he served as Senior Vice President, Finance and Accounting for Cincinnati Bell Telephone Company. Mr. Wilson was named Vice President and General Counsel...

  • Page 45
    ...as Vice President Human Resources and Administration of Cincinnati Bell Inc., an ending annual salary rate of $205,000. Grants of Stock Options in Last Fiscal Year The following table shows all individual grants by the Company of stock options to purchase common shares granted to the named executive...

  • Page 46
    ...(a) On December 31, 2004, the value of a common share on the NYSE (based on the average of the high and low price of the common shares on such date) was $4.10 per share. EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS Employment Agreement with Mr. Cassidy Effective...

  • Page 47
    ... imposed under Section 4999 of the Code plus (ii) any federal, state and local taxes applicable to such additional sum. Executive Deferred Compensation Plan The Executive Deferred Compensation Plan permits, for any calendar year, each employee whose base pay and targeted bonus for the immediately...

  • Page 48
    ... key employee's base salary and cash bonuses for the applicable year that are in excess of such annual compensation limit. Amounts deferred or surrendered by any participating key employee under the Executive Deferred Compensation Plan and any related Company "match" are credited to the account of...

  • Page 49
    ... least 10 years of service credited for the purposes of the plan. If Messrs. Cassidy, Ross, Callaghan, Wilson and Keating were to continue in employment and retire at the normal retirement age of 65, their estimated straight life annuity annual pension amounts under the Management Pension Plan (plus...

  • Page 50
    ...case of Mr. Keating (age 51 and 26 years of service), if he retires prior to age 65. Effect of Change in Control on Certain Executive Compensation Plans Under the Long Term Incentive Plan, in the event of a change in control, all outstanding stock options will become immediately exercisable, and all...

  • Page 51
    ... dividends thereafter) in each of (i) the Company's common shares (ii) the S&P 500t Stock Index, (iii) the Network Telecom Peer Group, and (iv) the New Custom Composite Index. With the Company's transformation from a national carrier of data and Internet traffic to a local exchange company, the New...

  • Page 52
    ... should be directed to Amy Collins, Secretary, Cincinnati Bell Inc., 201 East Fourth Street, Cincinnati, Ohio 45202, and must be received no later than December 2, 2005 for the 2006 annual meeting of shareholders. Other Matters to Come Before the Meeting At the time this Proxy Statement was released...

  • Page 53
    ... Company's website, www.cincinnatibell.com, in the Corporate Governance Section of the Corporate Information webpage or by writing Amy Collins, Secretary, Cincinnati Bell Inc., 201 East Fourth Street, Cincinnati, Ohio 45202 for a free copy: the Audit and Finance Committee Charter, the Compensation...

  • Page 54
    ... group, or the director who presides at meetings of the nonmanagement directors. Cincinnati Bell has established procedures for such shareholder communications. Shareholders should send any communications to Amy Collins, Secretary, Cincinnati Bell Inc., 201 East Fourth Street, Cincinnati, Ohio 45202...

  • Page 55
    ...the Cincinnati Bell Inc. 1997 Long Term Incentive Plan (the "Plan") and the sponsor of which is the Company (as defined in subsection 1.3 below), is to further the long term growth of the Company by offering competitive incentive compensation related to long term performance goals to those salaried...

  • Page 56
    ... may be granted under the Plan to, and only to, salaried employees. For purposes of the Plan, a "salaried employee" refers to any person who is employed and classified as an employee by the Company or a Subsidiary of the Company, whose pay is based on a monthly or annual rate, and whose position is...

  • Page 57
    ... of the Committee, payments may also be made in connection with any award granted under the Plan of dividends payable with respect to the Common Shares on which the award is based, of an amount equivalent to such dividends, or of an amount determined by applying an interest rate or rates to the...

  • Page 58
    ... under the Plan if, at the time the applicable ISO is otherwise to be granted, the person owns more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries. For purposes hereof, a person shall be considered as owning the stock owned, directly or...

  • Page 59
    ... under the Plan (and/or as to any dividends or other rights issued with respect to such stock) shall require the Participant to be an employee of the Company and/or a Subsidiary of the Company for a specified continuous period of time or to terminate employment with the Company and its Subsidiaries...

  • Page 60
    ...stock split, stock dividend, or similar transaction shall be restricted to the same extent as the applicable restricted stock, unless otherwise determined by the Committee. 8.6 If a Participant to whom restricted stock has been granted under the Plan terminates his or her employment with the Company...

  • Page 61
    ... high and low per share sale prices of the Common Shares on the New York Stock Exchange on the latest preceding date on which the Common Shares were traded); except that, if the Common Shares are not listed on the New York Stock Exchange on the subject date (or, if the subject date is not a business...

  • Page 62
    ... per share paid for Common Shares under the tender offer or similar event times the number of Common Shares covered by such option or portion thereof); and (b) the aggregate purchase price of the Common Shares that are subject to such option or portion thereof. In the event the applicable Change in...

  • Page 63
    ... of such Company Voting Securities among the holders thereof immediately prior to the Reorganization or Sale, (2) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Entity or the Parent Entity) is or becomes the beneficial owner, directly or...

  • Page 64
    ...of shares, or other corporate change, or any distributions to common shareholders other than cash dividends, the Committee shall make such substitution or adjustment in the aggregate number or class of shares which may be distributed under the Plan and in the number, class, and purchase price, grant...

  • Page 65
    ... commonly accepted electronic or telephonic notices given via the internet or an interactive voice response system to a third party broker which is designated by the Company to facilitate and/or administer the exercise or payment of any awards granted under the Plan. 17. Miscellaneous. 17.1 Nothing...

  • Page 66
    ...constitutes a violation of the provisions of any applicable law (or regulation issued under such law) or the rules of any securities exchange on which Common Shares are listed. 17.5 Except to the extent preempted by any applicable Federal law, the Plan shall be subject to and construed in accordance...

  • Page 67
    ...is to provide key executives of the Company and its Subsidiaries (as defined in subsection 1.2 below) with incentive compensation based upon the achievement of specific short term performance goals. 1.2 For purposes of the Plan, "Company" refers to Cincinnati Bell Inc. (which corporation was named...

  • Page 68
    ...; earnings per share; operating income; total shareholder returns; cash generation targets; profit targets; revenue targets; profitability targets as measured by return ratios; net income; return on sales; return on assets; return on equity; and corporate performance indicators (indices...

  • Page 69
    ... of disability plan of a Subsidiary of the Company), his or her retirement (as defined in subsection 4.6 above), or his or her death; and (b) has had at least three months of active service for the Company and its Subsidiaries during the award's Award Year (not including any time the Participant...

  • Page 70
    ..., and/or other entity as part of his or her beneficiary with respect to the Plan, each person, trust, and other entity designated as part of the Participant's beneficiary shall be entitled to an equal share of any amount payable to the Participant's beneficiary under any award granted under the...

  • Page 71
    ... as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Reorganization or Sale, (2) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Entity or the Parent Entity) is or becomes the B-5 Proxy...

  • Page 72
    ...the class of persons eligible to become Participants under the Plan; (b) make any change in the Plan that is required by Section 162(m) (as in effect on the Effective Amendment Date or as it may thereafter be amended or renumbered) of the Code to be approved by the Company's shareholders in order to...

  • Page 73
    ...a part of the Participant's compensation for purposes of any termination or severance pay plan, or any other pension, profit sharing, or other benefit plan, of the Company or any Subsidiary of the Company unless such plan expressly or clearly indicates that the payments or other benefits provided...

  • Page 74
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  • Page 75
    ..., Cincinnati, Ohio 45202 Telephone: (513) 397-9900 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Shares (par value $0.01 per share) Preferred Share Purchase Rights 63⁄4% Convertible Preferred Shares Name of each exchange on which registered New York Stock...

  • Page 76
    ... ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management ...Certain Relationships and Related Transactions ...Principal Accountant Fees and Services ...112 114 114 114 114 PART IV Item 15. Exhibits and Financial Statement Schedules ...Signatures ...This report...

  • Page 77
    ... "Super bundle", Custom ConnectionsSM, which assembles a customized package of local, long distance, wireless and digital subscriber line ("DSL") services on a single monthly bill and at a price discount to the purchase of each service on an individual basis. As of December 31, 2004 the Company had...

  • Page 78
    ... based data transport, and DSL and dial-up Internet access. Other services consist of inside wire installation, maintenance and other ancillary services. The Local segment provides these services primarily through the operations of CBT to customers located in southwestern Ohio, northern Kentucky and...

  • Page 79
    ... data services. GSM/GPRS technology, to which CBW plans to migrate its subscriber base, provides, in addition to voice communication and SMS, enhanced wireless data communication services, such as mobile web browsing, internet access, email and picture messaging. The GSM/GPRS is enhanced data rates...

  • Page 80
    ...working capital adjustments related to the sale. Other The Other segment combines the operations of CBAD, CBCP and Public. CBAD and CBCP market and sell voice long distance service and surveillance hardware and monitoring services to residential and business customers in the Company's operating area...

  • Page 81
    ... and 555,000 long distance subscribers at December 31, 2003 and 2002, respectively. With regard to Local segment access lines for which a long distance carrier is chosen, CBAD's market share within the Greater Cincinnati area increased in 2004, with residential and business market share growing to...

  • Page 82
    ... from indefeasible right of use agreements ("IRU's")), switched voice services, data and Internet services (including data collocation and managed services) and other services. These transport and switched voice services were generally provided over BRCOM's national optical network, which comprised...

  • Page 83
    ... to distribute funds or assets to the Company. If the Company's subsidiaries were to be prohibited from paying dividends or making distributions to the Company, it would have a material adverse effect on the Company and the trading price of the Cincinnati Bell common stock, preferred stock and debt...

  • Page 84
    ... of the credit facilities and its other debt instruments could: • limit the Company's ability to plan for or react to market conditions or meet capital needs or otherwise restrict the Company's activities or business plans; and • adversely affect the Company's ability to finance its operations...

  • Page 85
    ... resources on the Greater Cincinnati operating area. In November 2003, Time Warner Cable filed an application with the Public Utilities Commission of Ohio to provide local and interexchange voice service in several market areas in Ohio, including Cincinnati. In June 2004, Time Warner began offering...

  • Page 86
    ... has impacted Cincinnati Bell Telephone's in-territory local exchange operations in the form of greater competition. At the state level, CBT conducts local exchange operations in portions of Ohio, Kentucky and Indiana and, consequently, is subject to regulation by the Public Utilities Commissions...

  • Page 87
    ... current and future enterprise, carrier and residential customers. The Company seeks to meet these needs through new product introductions, service quality and technological superiority. For example, in 2003, we began implementing the Global System for Mobile Communications and General Packet Radio...

  • Page 88
    ... associated with its wireless business in the Greater Cincinnati and Dayton, Ohio operating areas. Each of the Company's subsidiaries maintains some investment in furniture and office equipment, computer equipment and associated operating system software, application system software, leasehold...

  • Page 89
    ... agreement, the Company is required to vacate the facilities by the fourth quarter of 2005. The Company has completed its review of new facilities for its headquarters of which will remain in Cincinnati, Ohio. The wireless infrastructure consists primarily of switching and messaging equipment, radio...

  • Page 90
    ... closing prices during each quarter for the last two fiscal years are listed below: Quarter 1st 2nd 3rd 4th 2004 High Low 2003 High Low Dividends ... $5.89 $4.00 $4.95 $3.51 $4.49 $3.85 $6.80 $3.71 $4.35 $3.46 $7.25 $5.09 $4.30 $3.26 $5.79 $4.84 The Company does not currently intend to pay...

  • Page 91
    ... of Cincinnati Bell Directory in 2002. Refer to Note 16 of the Notes to Consolidated Financial Statements for a detailed discussion of the reporting of discontinued operations. (dollars in millions, except per share amounts) 2004 2003 2002 2001 2000 Operating Data Revenue ...Cost of services and...

  • Page 92
    ... See Notes 1 and 4 of Notes to Consolidated Financial Statements. Total long-term obligations comprise long-term debt, other noncurrent liabilities that will be settled in cash and the BRCOM Preferred Stock, which prior to its exchange in 2003 was classified as minority interest in the consolidated...

  • Page 93
    ... with operating cash ï¬,ows. • Defended its core franchise through bundling, adding 52,000 net subscribers to its Custom ConnectionsSM "Super Bundle" which offers local, long distance, wireless, DSL and the Company's value-added service package, Complete Connectionst, on a single bill at a price...

  • Page 94
    ... Statements. Revenue Recognition - The Company recognizes revenue as services are provided. Local access fees are billed monthly, in advance, while revenue is recognized as the services are provided. Postpaid wireless, long distance, switched access, reciprocal compensation and data and Internet...

  • Page 95
    ..."Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). During the fourth quarter of 2003, the Company revised the estimated economic useful life of its wireless TDMA network due to the expected migration of its TDMA customer base to its GSM/GPRS network. The Company shortened...

  • Page 96
    ... further or record an impairment charge related to its TDMA network. Technological change, which occurs more rapidly than expected, may have the affect of shortening the estimated depreciable life of other network and operating assets that the Company employs. This could have a substantial impact...

  • Page 97
    ...which are reviewed annually, include the discount rate, expected long-term rate of return on plan assets and health care cost trend rates. The discount rate is selected based on current market interest rates on high-quality, fixed-income investments at December 31 of each year. The health care cost...

  • Page 98
    ... are recognized in the market related value of plan assets over five years. Changes in actual asset return experience and discount rate assumptions can impact the Company's operating results, financial position and cash ï¬,ows. Actual asset return experience results in an increase or decrease in...

  • Page 99
    ... wireless operating territories, the Company estimates that revenue in its Hardware and Managed Services segment decreased approximately $33.4 million in 2004. Also, revenue in the Local segment declined $12.8 million during 2004 as data revenue growth from DSL transport and dial-up Internet access...

  • Page 100
    .... The decrease in operating income was primarily due to the aforementioned gain on the sale of the broadband assets recorded in 2003. Minority interest income of $0.5 million in 2004 relates to the 19.9% minority interest of Cingular in the net income of Cincinnati Bell Wireless LLC ("CBW"). This...

  • Page 101
    ... $13.3 million of construction contract termination costs not repeated in 2003. The remaining decline of $37.3 million was primarily the result of lower Cincinnati Bell Technology Solutions ("CBTS") costs related to decreased equipment sales. Selling, general and administrative ("SG&A") expenses...

  • Page 102
    ... payment on the 121⁄2% Preferreds, the Company continued to accrue the dividends in accordance with the terms of the security. On September 8, 2003 the Company completed the exchange of all of the 121⁄2% Preferreds for approximately 14.1 million shares of Cincinnati Bell Inc. common stock...

  • Page 103
    ...segment provides local voice telephone service, including enhanced custom calling features, and data services, which include dedicated network access, Gigabit Ethernet ("Gig-E") and Asynchronous Transfer Mode ("ATM") based data transport, and DSL and dial-up Internet access, to customers in 29 Form...

  • Page 104
    ... to use wireless communication ("wireless substitution") in lieu of the traditional local service. In March 2004, the Company expanded its product suite in Dayton, Ohio and began to mass market voice services to residential and small business customers. This helped to increase CLEC access lines by...

  • Page 105
    ... 31, 2004, 89% of CBT's access lines in its incumbent local exchange operating territory were loop-enabled for DSL transport with a penetration of approximately 16.7% of total access lines, up from 12.6% at December 31, 2003. Other high speed/high capacity data services such as transport, digital...

  • Page 106
    ... of 2003, CBT also introduced Custom ConnectionsSM, a bundled suite of services that leverages the Company's local, long distance, wireless and DSL products and enables consumers to customize packages that meet their personal communication needs. Custom ConnectionsSM added 54,700 subscribers in 2003...

  • Page 107
    ...short message service ("SMS") data services. GSM/GPRS technology, to which CBW plans to migrate its subscriber base, provides, in addition to voice communication and SMS, enhanced wireless data communication services, such as mobile web browsing, internet access, email and picture messaging. The GSM...

  • Page 108
    ... same local area and retain the same phone number. WLNP did not have any significant impact in 2004. Costs and Expenses Cost of services and products consists largely of the costs of equipment sales to both new and existing subscribers, CBW's network operation costs, the cost to purchase wholesale...

  • Page 109
    ...Company's licensed service area in the Greater Cincinnati and Dayton, Ohio metropolitan markets. In the first three quarters of 2003, the Company also focused its marketing efforts on prepaid subscribers. These subscribers require less growth capital on the Company's TDMA network, which the Company...

  • Page 110
    ... data center collocation, IT consulting services, telecommunications and computer equipment in addition to their related installation and maintenance. The Hardware and Managed Services is comprised of the operations within CBTS. In March 2004, CBTS sold certain operating assets, which were generally...

  • Page 111
    ...services and maintenance directly related to the sale of IT, data and telephony equipment. The CBTS business model links the capability to sell a wide range of equipment from various manufacturers along with the Company's technical and infrastructure capability to offer complete technology solutions...

  • Page 112
    ... margin increased 15 points to 11% in 2003 compared to 2002. Other The Other segment combines the operations of Cincinnati Bell Any Distance ("CBAD"), Cincinnati Bell Complete Protection ("CBCP") and Cincinnati Bell Public Communications Inc. ("Public"). CBAD resells long distance voice services and...

  • Page 113
    ... service offering were more than offset by a 10% decline in minutes of use in response to intense competition, including further penetration of wireless plans with free long distance. CBAD had 539,000 subscribed access lines as of December 31, 2003 in the Cincinnati and Dayton, Ohio operating areas...

  • Page 114
    ...ï¬,ects access charges paid to local exchange carriers and other providers, transmission lease payments to other carriers and costs incurred for network construction projects. In 2004, cost of services and products amounted to zero, compared to $202.8 million incurred during 2003, due to the sale of...

  • Page 115
    ... internet products in connection with the sale of the broadband assets on June 13, 2003. Costs and Expenses Cost of services and products primarily reï¬,ected access charges paid to local exchange carriers and other providers, transmission lease payments to other carriers, costs incurred for network...

  • Page 116
    ... alternatives related to BRCOM and reduce debt. Throughout 2003, as a result of the execution of this plan, the Company completed the sale of BRCOM's broadband business, secured additional sources of capital, amended its credit facilities and completed the exchange of debt and preferred stock at...

  • Page 117
    ... stock warrants, each to purchase one share of Cincinnati Bell Inc. common stock at $3.00 each, which expire in March 2013. Of the total gross proceeds received, $47.5 million was allocated to the fair value of the warrants using the Black-Scholes option-pricing model and was recorded as a discount...

  • Page 118
    ... credit facility agreement), senior secured debt to EBITDA, interest coverage ratios and fixed charge ratio. The facilities also contain certain covenants which, among other things, may restrict the Company's ability to incur additional debt or liens, pay dividends, repurchase Company common stock...

  • Page 119
    ... payments on long-term debt and $1.6 million of other current debt in addition to $4.2 million related to the current portion of capital leases. The Company expects to have the ability to meet its current debt obligations through cash ï¬,ows generated by its operations. Cingular Wireless Corporation...

  • Page 120
    ... of billing, customer service and other services, which remains in effect until June 30, 2008. The contract states that Convergys will be the primary provider of certain data processing, professional and consulting and technical support services for the Company within CBT's operating territory. In...

  • Page 121
    ... Company. During 2004, a class action complaint against Cincinnati Bell Wireless Company and Cincinnati Bell Wireless, LLC was filed in Hamilton County, Ohio. The complaint alleges that the plaintiff and similarlysituated customers were wrongfully assessed roaming charges for wireless phone calls...

  • Page 122
    ... business, the Company makes certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These include (a) intellectual property indemnities to customers in connection with the use, sales and/or license of products and services...

  • Page 123
    ... million in fees related to the sale of the BRCOM assets. In 2004, the Company received $3.3 million from the sale of certain assets of CBTS and Public, generally consisting of operating assets outside its current operating area, net of working capital adjustments. During 2004, the Company reduced...

  • Page 124
    ... local exchange carriers while opening up opportunities for new competitive entrants and services with minimal regulation. While Cincinnati Bell has expanded beyond its incumbent local exchange operations by offering wireless, long distance, broadband service, Internet access and out-of-territory...

  • Page 125
    ... overview and approval. In both Ohio and Kentucky, CBT operates under alternative regulation plans in which CBT cannot increase the price of basic local services and is subject to restrictions on its ability to increase the price of other related services. In return, CBT is not subject to an...

  • Page 126
    ... new plan requires the Local segment to operate as a Competitive Local Exchange Carrier ("CLEC") in service areas outside of CBT's traditional ILEC franchise area. For approximately the past six years, CBT has offered local services, primarily on its own facilities-based network, to Ohio communities...

  • Page 127
    ...; • changes in competition in markets in which the Company operates; • pressures on the pricing of the Company's products and services; • advances in telecommunications technology; • the ability to generate sufficient cash ï¬,ow to fund the Company's business plan and maintain its networks...

  • Page 128
    ...the increase in interest expense resulting from the issuance of the new bonds in the short-term, but are subject to, and will be affected by, future changes in interest rates. Potential nonperformance by counterparties to the swap agreements exposes the Company to a certain amount of credit risk due...

  • Page 129
    ... 8. Financial Statements and Supplementary Schedules Index to Consolidated Financial Statements Consolidated Financial Statements: Management's Report on Internal Control over Financial Reporting ...Report of Independent Registered Public Accounting Firm ...Consolidated Statements of Operations and...

  • Page 130
    ... 31, 2004 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein. March 14, 2005 /s/ John F. Cassidy John F. Cassidy President and Chief Executive Officer /s/ Brian A. Ross Brian A. Ross Chief Financial...

  • Page 131
    ... an integrated audit of Cincinnati Bell Inc.'s 2004 consolidated financial statements and of its internal control over financial reporting as of 2004 and audits of its 2003 and 2002 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board...

  • Page 132
    ...financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely...

  • Page 133
    ... operations, net of taxes of $119.7 ...Income (loss) before cumulative effect of change in accounting principle ...Cumulative effect of change in accounting principle, net of taxes of $0.0, $47.5 and $5.9, respectively ...Net income (loss) ...Preferred stock dividends ...Net income (loss) applicable...

  • Page 134
    Cincinnati Bell Inc. CONSOLIDATED BALANCE SHEETS (Millions of Dollars) As of December 31 2004 2003 Assets Current assets ...Cash and cash equivalents ...Receivables, less allowances of $14.5 and $20.2 ...Materials and supplies ...Deferred income tax benefits, net ...Prepaid expenses and other ...

  • Page 135
    ..., net ...Proceeds from the sale of discontinued operations ...Net cash provided by (used in) investing activities ...Cash ï¬,ows from financing activities Issuance of long-term debt ...Repayment of long-term debt ...Debt issuance costs ...Purchase of Cincinnati Bell shares for treasury and employee...

  • Page 136
    ... 31, 2001 ...Shares issued (purchased) under employee plans ...Net loss ...Additional minimum pension liability adjustment, net of taxes of $3.3 ...Unrealized gain on interest rate swaps, net of taxes of $1.6 ...Restricted stock amortization ...Dividends on 63⁄4% preferred stock ... 62 Balance...

  • Page 137
    ... generally accepted accounting principles. Certain prior year amounts have been reclassified to conform to the current classifications. The Company realigned its business segments during the first quarter of 2004. Cincinnati Bell Technology Solutions Inc. ("CBTS"), a data equipment and managed...

  • Page 138
    ...the purchase price consideration over the fair value of assets acquired recorded in connection with purchase business combinations. Indefinite-lived intangible assets consist primarily of Federal Communications Commission ("FCC") licenses for spectrum of the Wireless segment. The Company determined...

  • Page 139
    ...-line basis over their estimated useful lives ranging from 2 to 40 years. As a result of the merger between Cingular Wireless and AT&T Wireless, consummated on October 26, 2004, the roaming and trade name agreements are no longer operative. Accordingly, the remaining estimated useful lives of...

  • Page 140
    ..." ("EITF 00-21"), Cincinnati Bell Wireless LLC ("CBW") ceased deferral of revenue and cost related to customer connections and activations. As CBW does not require customer contracts and sells its services at fair market value, the activation revenue is allocated to and recorded upon the sale of the...

  • Page 141
    .... Fiber Exchange Agreements - In connection with the development of its optical network, the Company's Broadband segment entered into various agreements to exchange fiber usage rights. The Company accounted for agreements with other carriers to either exchange fiber asset service contracts for...

  • Page 142
    ... of variable rate borrowings from its credit facility and changes in current rates compared to that of its fixed rate debt, the Company sometimes employs derivative financial instruments to manage its exposure to these ï¬,uctuations and its total interest expense over time. The Company does not...

  • Page 143
    ... for four years from the date of the sale to purchase capacity on the buyer's national network in order to sell long distance services under the Cincinnati Bell Any Distance ("CBAD") brand to residential and business customers in the Greater Cincinnati and Dayton area markets, subject to an annual...

  • Page 144
    ... charge is reï¬,ected as a cumulative effect of change in accounting principle, net of taxes, in the Consolidated Statements of Operations and Comprehensive Income (Loss). As of December 31, 2004 and December 31, 2003, goodwill totaled $40.9 million, of which $40.1 million related to the Wireless...

  • Page 145
    ... Company adopted a restructuring plan which included initiatives to consolidate data centers, reduce the Company's expense structure, exit the network construction business, eliminate other nonstrategic operations and merge the digital subscriber line ("DSL") and certain dial-up Internet operations...

  • Page 146
    ..., "Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS 121"). As a result, the Company recorded a $148.1 million asset impairment charge related to the closing of data centers, consolidation of office space and curtailment of other Company operations...

  • Page 147
    ...net." 7. Debt The Company's debt consisted of the following as of the dates below: December 31, (dollars in millions) 2004 2003 Current portion of long-term debt: Credit facilities, current portion ...Current maturities of capital lease obligations ...Current maturities of Cincinnati Bell Telephone...

  • Page 148
    ... Rates The average interest rate charged on borrowings under the revolving and term credit facilities was 4.04% in 2004 versus 4.95% in 2003, which during 2004 was based upon 4.25% and 2.50% above the London Interbank Offered Rate ("LIBOR"), respectively. Fees The Company pays commitment fees...

  • Page 149
    ... credit facility agreement), senior secured debt to EBITDA, interest coverage ratios and fixed charge ratio. The facilities also contain certain covenants which, among other things, may restrict the Company's ability to incur additional debt or liens, pay dividends, repurchase Company common stock...

  • Page 150
    ... million letter of credit against its revolving credit facility. The interest rate charged on the borrowings not repaid within terms of the financing arrangement is variable based on the prime rate and was prime plus 6.0% during 2004 and 2003. Cincinnati Bell Telephone Notes CBT has $100.0 million...

  • Page 151
    ... Bell Inc. or Cincinnati Bell Telephone, which exceeds $20.0 million. For the years ended December 31, 2004, 2003 and 2002 the Company recorded $16.5 million, $17.7 million and $18.4 million, respectively, of cash interest expense related to these CBT notes. 16% Senior Subordinated Discount...

  • Page 152
    ... of variable rate borrowings from its credit facility and changes in current rates compared to that of its fixed rate debt, the Company sometimes employs derivative financial instruments to manage its exposure to these ï¬,uctuations and its total interest expense over time. The Company does not...

  • Page 153
    ... in the Company's Wireless subsidiary, Cincinnati Bell Wireless LLC ("CBW"). The minority interest balance is adjusted as a function of AWE's 19.9% share of the net income (or loss) of CBW, with an offsetting amount being reï¬,ected in the Consolidated Statements of Operations and Comprehensive...

  • Page 154
    ... of billing, customer service and other services, which remains in effect until June 30, 2008. The contract states that Convergys will be the primary provider of certain data processing, professional and consulting and technical support services for the Company within CBT's operating territory. In...

  • Page 155
    ... Company. During 2004, a class action complaint against Cincinnati Bell Wireless Company and Cincinnati Bell Wireless, LLC was filed in Hamilton County, Ohio. The complaint alleges that the plaintiff and similarlysituated customers were wrongfully assessed roaming charges for wireless phone calls...

  • Page 156
    ... business, the Company makes certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These include (a) intellectual property indemnities to customers in connection with the use, sales and/or license of products and services...

  • Page 157
    ...shares of Company common shares outstanding at December 31, 2004, are net of approximately 7.9 million shares that were repurchased by the Company under its share repurchase program and certain management deferred compensation arrangements for a total cost of $145.4 million. Preferred Share Purchase...

  • Page 158
    ..., except per share amounts) 2004 2003 2002 Numerator: Income (loss) from continuing operations before discontinued operations and cumulative effect of change in accounting principle Preferred stock dividends ...Numerator for basic - income (loss) from continuing operations applicable to common...

  • Page 159
    Year ended December 31, 2004 2003 2002 U.S. federal statutory rate ...State and local income taxes, net of federal income tax benefit ...Change in valuation allowance, net of federal income tax expense Dividends on 121⁄2% exchangeable preferred stock ...Nondeductible interest expense ...Other ...

  • Page 160
    ... certain group life insurance benefits through Retirement Funding Accounts and funds health care benefits and other group life insurance benefits using Voluntary Employee Benefit Association ("VEBA") trusts. It is the Company's practice to fund amounts as deemed appropriate from time to time...

  • Page 161
    ... and Other Benefits 2003 2002 Discount rate - net periodic benefit expense ...Expected long-term rate of return on Pension and VEBA plan assets ...Expected long-term rate of return on retirement fund account assets ...Future compensation growth rate ... 6.00% 8.25% n/a 4.50% 6.50% 8.25% n/a 4.50...

  • Page 162
    ...in cash to be used for group health benefits under postretirement plans. The Company expects to make a cash funding contribution to its pension plans and postretirement health plans of approximately $2.5 million and $9.2 million, respectively in 2005. The following benefit payments, which reï¬,ect...

  • Page 163
    ...Actual return on plan assets ...Employer contribution ...Benefits paid ...Fair value of plan assets at December 31 ...Reconciliation to Balance Sheet: Unfunded status ...Unrecognized transition (asset) obligation ...Unrecognized prior service cost ...Unrecognized net loss ...(Accrued) prepaid bene...

  • Page 164
    ... Postretirement and Other Benefits 2004 2003 Discount rate - projected benefit obligation ...Expected long-term rate of return on Pension and VEBA plan assets ...Expected long-term rate of return on retirement fund account assets ...Future compensation growth rate ... 5.50% 8.25% n/a 4.50% 6.00...

  • Page 165
    ... Plans ("Company LTIP"). Under the Company LTIP, options are granted with exercise prices that are no less than market value of the stock at the grant date. Generally, stock options and stock appreciation rights have ten-year terms and vesting terms of three to five years. The number of shares...

  • Page 166
    ... directory advertising and informational services in Cincinnati Bell Telephone's local service area. In the first quarter of 2002, the Company recorded a pre-tax gain of $328.3 million ($211.8 million, net of taxes), related to the sale of these assets in the Consolidated Statements of Operations...

  • Page 167
    ... of products and services. The Company's segments are strategic business units that offer distinct products and services and are aligned with specific subsidiaries of the Company. The Company operates in five business segments, Local, Wireless, Hardware and Managed Services, Other and Broadband...

  • Page 168
    ... which the Company owns 80.1% and Cingular, through its subsidiary AWE, owns the remaining 19.9%. This segment provides advanced, digital voice and data communications services and sales of related communications equipment to customers in the Greater Cincinnati and Dayton, Ohio operating areas. The...

  • Page 169
    ... Revenue ...Operating Income (Loss) Local ...Wireless ...Hardware and managed services ...Other ...Broadband ...Corporate and Eliminations ...Total Operating Income (Loss) ...Capital Additions Local ...Wireless ...Hardware and managed services ...Other ...Broadband ...Corporate and Eliminations...

  • Page 170
    ...accounts payable - The carrying amounts approximate fair value. Current and Long-term debt - The fair value is estimated based on year-end closing market prices of the Company's debt and of similar liabilities. The carrying amounts of long-term debt, excluding capital leases and unamortized discount...

  • Page 171
    ... (benefit) ...Income (loss) from continuing operations and cumulative effect of change in accounting principle ...Cumulative effect of change in accounting principle, net of tax ...Net income (loss) ...Preferred stock dividends ...Net income (loss) applicable to common shareowners ... $ - 27.3 (27...

  • Page 172
    ... operations before discontinued operations and cumulative effect of change in accounting principle ...Income from discontinued operations, net ...Cumulative effect of a change in accounting principle, net of tax ...Net income (loss) ...Preferred stock dividends ...Net income (loss) applicable...

  • Page 173
    ...As of December 31, 2004 Parent (CBT Note Guarantor) CBT Issuer Other (Non-guarantors) Eliminations Total Cash and cash equivalents ...Receivables, net ...Other current assets ...Total current assets ...Property, plant and equipment, net ...Goodwill and other intangibles, net ...Investments in and...

  • Page 174
    ...in millions) For the year ended December 31, 2004 Parent (CBT Note Guarantor) CBT Issuer Other (Non-guarantors) Eliminations Total Cash ï¬,ows provided by (used in) operating activities ...Capital expenditures ...Proceeds from sale of assets ...Other investing activities ...Cash Flows provided by...

  • Page 175
    ...from sale of discontinued operations ...Other investing activities ...Cash ï¬,ows provided by (used in) investing activities ...Issuance of long-term debt ...Capital contributions and other intercompany transactions Repayment of long-term debt ...Issuance of common shares - exercise of stock options...

  • Page 176
    ...Parent Company: Cincinnati Bell Public Communications Inc., ZoomTown.com Inc., Cincinnati Bell Complete Protection Inc., BRFS LLC, BRHI Inc., Cincinnati Bell Any Distance Inc., Cincinnati Bell Telecommunication Services Inc., Cincinnati Bell Wireless Company and Cincinnati Bell Wireless Holdings LLC...

  • Page 177
    ...benefit) ...Income (loss) from continuing operations before discontinued operations ...and cumulative effect of change in accounting principle . . Cumulative effect of a change in accounting principle, net of tax ...Net income (loss) ...Preferred stock dividendes ... - 27.3 (27.3) 1,160.7 202.3 (44...

  • Page 178
    ...) from continuing operations before discontinued operations ...and cumulative effect of change in accounting principle . . Income from discontinued operations, net...Cumulative effect of a change in accounting principle, net of tax ...Net income (loss) ...Preferred stock dividendes ... - 12.1 (12...

  • Page 179
    ... assets ...Property, plant and equipment, net ...Goodwill and other intangibles, net ...Investments in and advances to subsidiaries ...Other noncurrent assets ...Current portion of long-term debt ...$ Accounts payable ...Other current liabilities ...Total current liabilities ...Long-term debt, less...

  • Page 180
    ...expenditures ...Proceeds from sale of discontinued operations ...Other investing activities ...Cash ï¬,ows provided by (used in) investing activities ...Issuance of long-term debt ...Capital contributions ...Repayment of long-term debt ...Issuance of common shares - exercise of stock options . Other...

  • Page 181
    ... Quarterly Financial Information (Unaudited) (dollars in millions except per common share amounts) 2004 First Second Third Fourth Total Revenue Operating income ...Income from: Continuing operations before discontinued operations and cumulative effect of change in accounting principle ...Net Income...

  • Page 182
    ... shares of common stock in Cincinnati Bell Inc. The net impact of this charge reduced the Company's diluted earnings per share by $0.07. Additionally, the Company recorded a non-cash charge of $8.4 million to interest expense to write-off deferred financing costs related to the Company's credit...

  • Page 183
    ... in 2003. The net impact of the income tax benefit increased the Company's fourth quarter diluted earnings per share by $3.08. 22. Concentrations The Company generates substantially all of its revenue by serving customers in the Greater Cincinnati and Dayton, Ohio areas. An economic downturn...

  • Page 184
    ...notes. The Company used the net proceeds of approximately $345.7 million from the New Bond issues and initial direct borrowings of approximately $110.0 million from the new revolving credit facility in order to terminate the prior credit facility and pay financing and other fees associated with the...

  • Page 185
    ... generally accepted accounting principles. Cincinnati Bell Inc.'s management, with the participation of the Chief Executive Officer and Chief Financial Officer, have evaluated any changes in the Company's internal control over financial reporting that occurred during the fourth quarter of 2004...

  • Page 186
    ...Chief Executive Officer Chief Financial Officer Senior Vice President, Corporate Development Senior Vice President, Internal Controls Vice President and General Counsel Vice President, Human Resources and Administration Vice President, Investor Relations and Corporate Communications Vice President...

  • Page 187
    ... Investor Relations and Corporate Communications of the Company since January 2004; Vice President of Business Development, 2003, Vice President of Product Management and Development, 2001-2002; General Manager of Cincinnati Bell Any Distance, 2000; Director of Marketing for Cincinnati Bell Wireless...

  • Page 188
    ...cial Owners and Management The information required by these items, except as disclosed below, can be found in the Proxy Statement for the Company's 2005 Annual Meeting of Shareholders dated March 29, 2005 and incorporated herein by reference. Equity Compensation Plans Number of securities remaining...

  • Page 189
    ... 14. Principal Accountant Fees and Services The information required by these items can be found in the Proxy Statement for the Company's 2005 Annual Meeting of Shareholders dated March 29, 2005 and incorporated herein by reference. PART IV Item 15. Exhibits, Financial Statement Schedules Exhibits...

  • Page 190
    ... November 30, 1998 among Cincinnati Bell Telephone Company, as Issuer, Cincinnati Bell Inc., as Guarantor, and the Bank of New York, as Trustee (filed herewith). Indenture dated as of March 26, 2003, by and among Broadwing Inc., as Issuer, Cincinnati Bell Public Communications Inc., the Guarantors...

  • Page 191
    ... Amendment No. 3 to Operating Agreement, dated as of February 14, 2004 between New Cingular Wireless PCS, New Cingular Wireless Services, Inc., Cincinnati Bell Wireless Holdings LLC, Cincinnati Bell Inc., Cingular Wireless LLC, and Cincinnati Bell Wireless LLC (Exhibit 10.1 to Current Report on Form...

  • Page 192
    ... File No. 1-8519). Agreement and Amendment No. 1 to Operating Agreement, dated October 16, 2003 between AT&T Wireless PCS LLC and Cincinnati Bell Wireless Company LLC (Exhibit (10)(i)(4.1) to Form 10-K for the year ended December 31, 2003, File No. 1-8519). Short Term Incentive Plan of Broadwing Inc...

  • Page 193
    ... Act of 2002. + Filed herewith. * Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K. The Company's reports on Form 10-K, 10-Q, and 8-K are available free of charge at the following website: http://www.cincinnatibell.com. Upon request...

  • Page 194
    Schedule II CINCINNATI BELL INC. VALUATION AND QUALIFYING ACCOUNTS (dollars in millions) Beginning of Period Charge (Benefit) to Expenses To (from) Other Accounts Deductions End of Period Allowance for Doubtful Accounts Year 2004 ...Year 2003 ...Year 2002 ...Deferred Tax Valuation Allowance Year ...

  • Page 195
    ...CINCINNATI BELL INC. By /s/ Brian A. Ross Brian A. Ross Chief Financial Officer By /s/ Gary A. Cornett Gary A. Cornett Principal Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed... F. Cassidy President and Chief Executive Officer ...

  • Page 196
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  • Page 197
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  • Page 198
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  • Page 199
    ... Street, Cincinnati, Ohio 45202. Investor Relations contact Michael Vanderwoude Vice President, Investor Relations and Corporate Communications (513) 397-7685 Transfer Agent and Registrar Questions regarding registered shareholder accounts or the Stock Purchase Plan should be directed to Cincinnati...

  • Page 200
    201 East Fourth Street P.O. Box 2301 Cincinnati, Ohio 45202 513.397.9900 www.cincinnatibell.com