Cincinnati Bell 2007 Annual Report Download - page 116

Cash Flow
2007 Compared to 2006
For the twelve months ended December 31, 2007, cash provided by operating activities totaled $308.8
million, a decrease of $25.9 million compared to the $334.7 million provided by operating activities during the
same period in 2006. The decrease was due to payments of $56.0 million for operating taxes and early pension
contributions partially offset by a customer prepayment of $21.5 million for data center services and increased
operating cash generated by the Wireless segment due to service revenue growth.
Cash flow utilized for investing activities increased $3.5 million to $263.5 million during 2007 as compared
to $260.0 million for 2006. Capital expenditures were $233.8 million, an increase of $82.5 million compared to
2006, which resulted mostly from data center expansion. In addition to the increase in capital expenditures for
data centers, the Company purchased a data center business in South Bend, Indiana in December 2007 for a
purchase price of $20.3 million (including $0.6 million of accrued transaction costs), of which $19.0 million was
paid in cash in 2007. In the first quarter of 2007, the Company purchased a local telecommunication business and
paid $4.6 million. Also, in late 2007 the Company deposited $4.4 million with the FCC for the opportunity to
participate in the auction for the purchase of additional wireless spectrum. Cash flows from investing activities
for 2006 includes payments of $86.7 million for the acquisitions of ATI and the 19.9% minority interest in CBW,
as well as $37.1 million for the purchase of wireless licenses in an FCC auction. Proceeds were received in 2006
for $4.7 million on sale of broadband fiber assets and for $5.7 million on the sale of an investment.
Cash flow used in financing activities was $98.6 million in 2007 compared to $21.0 million during 2006.
The increased use of cash flow for financing activities primarily relates to increased repayments of debt, net of
debt issuances, as discussed above.
2006 Compared to 2005
In 2006, cash provided by operating activities totaled $334.7 million, an increase of $12.4 million compared
to the $322.3 million provided by operating activities during 2005. The increase was generated by working
capital improvements, partially offset by lower operating cash due to access line losses and shareholder claim
payments of $6.3 million.
Cash utilized in investing activities in 2006 was $260.0 million, an increase of $117.3 million compared to
the $142.7 million utilized in 2005. The increase predominately relates to the acquisitions of ATI and the 19.9%
minority interest in CBW for $86.7 million, and the purchase of wireless licenses in the FCC auction for $37.1
million. Capital expenditures increased slightly in 2006 compared to last year. Proceeds were received in 2006
for $4.7 million on the sale of broadband fiber assets and for $5.7 million on the sale of an investment.
Cash flows used in financing activities decreased $157.8 million to a net outflow of $21.0 million in 2006
from an outflow of $178.8 million during 2005. During 2006, the Company funded the acquisitions of the
remaining 19.9% membership interest in CBW and ATI and the purchase of the wireless licenses, which
decreased the Company’s repayment of debt as compared to 2005. The Company repaid $13.3 million in debt in
2006. During 2005, the Company received $752.1 million of cash proceeds from the issuance of the 7% Notes,
additional 8
3
⁄ 8 % Notes and new bank term notes. In addition, during 2005, the Company repaid $903.3 million in
borrowings, substantially all of which was the prepayment of borrowings under its term and revolving credit
facilities and its 16% Notes, using the net cash proceeds discussed above. In conjunction with the debt issuance
and repayments in 2005, the Company incurred debt issuance costs and consent fees of $21.9 million.
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