Cincinnati Bell 2005 Annual Report Download - page 145

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17. Senior Executive Bonuses and Termination Benefits
During 2003, the Company recorded a charge of $11.2 million related to four senior executives for certain
success-based incentives and termination benefits in accordance with their employment contracts, including all of
the benefits related to its former Chief Executive Officer who resigned effective July 31, 2003. Substantially all
of these benefits were paid upon termination. The charge was required as the success plan, as defined in the
senior executive employment agreements, was completed upon the first stage closing of the sale of substantially
all of the broadband assets on June 13, 2003. Three of the senior executives, excluding the former Chief
Executive Officer, were required to remain with the Company for 180 days following the completion of the
success plan. The charge included $0.8 million of non-cash expenses related to the accelerated vesting of stock
options.
18. Supplemental Guarantor Information — Cincinnati Bell Telephone Notes
CBT, a wholly-owned subsidiary of Cincinnati Bell Inc. (the “Parent Company”), has $230.0 million in
notes outstanding that are guaranteed by the Parent Company and no other subsidiaries of the Parent Company.
In the fourth quarter of 2005, Cincinnati Bell Public Communications merged into the Parent Company. The
financial information presented below combines Cincinnati Bell Public Communications and the Parent
Company for all periods presented. The guarantee is full and unconditional. The Parent Company’s subsidiaries
generate substantially all of its income and cash flow and generally distribute or advance the funds necessary to
meet the Parent Company’s debt service obligations.
The following information sets forth the condensed consolidating balance sheets of the Company as of
December 31, 2005 and 2004 and the condensed consolidating statements of operations and cash flows for the
three years ended December 31, 2005, 2004, and 2003 of (1) the Parent Company, as the guarantor, (2) CBT, as
the issuer, and (3) the non-guarantor subsidiaries on a combined basis:
Condensed Consolidating Statements of Operations
Year ended December 31, 2005
(dollars in millions)
Parent
(Guarantor) CBT
Other
(Non-guarantors) Eliminations Total
Revenue ................................ $ 4.5 $755.6 $483.4 $ (33.9) $1,209.6
Operating costs and expenses ............... 23.2 479.5 482.0 (33.9) 950.8
Operating income (loss) .................... (18.7) 276.1 1.4 — 258.8
Equity in earnings of subsidiaries, net of tax .... 115.0 — — (115.0) —
Interest expense .......................... 168.1 16.9 37.1 (37.7) 184.4
Loss on extinguishment of debt .............. 99.8 — — — 99.8
Other expense (income), net ................ (25.2) (5.9) (21.8) 37.7 (15.2)
Income (loss) before income taxes ........... (146.4) 265.1 (13.9) (115.0) (10.2)
Income tax expense (benefit) ................ (81.9) 99.8 36.4 — 54.3
Net income (loss) ......................... (64.5) 165.3 (50.3) (115.0) (64.5)
Preferred stock dividends ................... 10.4 — — — 10.4
Net income (loss) applicable to common
shareowners ........................... $ (74.9) $165.3 $ (50.3) $(115.0) $ (74.9)
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