Cincinnati Bell 2009 Annual Report Download - page 163

16. Supplemental Guarantor Information — Cincinnati Bell Telephone Notes
CBT, a wholly-owned subsidiary of CBI, the parent company, has $207.5 million in notes outstanding that
are guaranteed on a subordinated basis by CBI and no other subsidiaries of CBI. The guarantee is full and
unconditional. CBI’s subsidiaries generate substantially all of its income and cash flow and generally distribute
or advance the funds necessary to meet CBI’s debt service obligations. Separately, in connection with a fifteen
year contract for data center space between CBTS and a data center customer, CBI has guaranteed the
performance obligations of CBTS in relation to providing the data center space and managed services under that
long-term contract. In addition, CBI has also guaranteed capital leases, mainly for CBTS, totaling $29.6 million.
The following information sets forth the Condensed Consolidating Balance Sheets of the Company as of
December 31, 2009 and 2008 and the Condensed Consolidating Statements of Operations and Cash Flows for the
years ended December 31, 2009, 2008, and 2007 of (1) CBI, 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, 2009
(dollars in millions)
Parent
(Guarantor) CBT
Other
(Non-guarantors) Eliminations Total
Revenue ................................... $ — $688.9 $704.2 $ (57.1) $1,336.0
Operating costs and expenses .................. 20.1 441.9 635.6 (57.1) 1,040.5
Operating income (loss) ...................... (20.1) 247.0 68.6 — 295.5
Interest expense ............................. 111.5 14.4 16.2 (11.4) 130.7
Other expense (income) ....................... 3.2 (0.8) (3.3) 11.4 10.5
Income (loss) before equity in earnings of
subsidiaries and income taxes ................ (134.8) 233.4 55.7 — 154.3
Income tax expense (benefit) ................... (41.0) 84.8 20.9 — 64.7
Equity in earnings of subsidiaries, net of tax ...... 183.4 — — (183.4) —
Net income ................................. 89.6 148.6 34.8 (183.4) 89.6
Preferred stock dividends ..................... 10.4 — — — 10.4
Net income applicable to common shareowners .... $ 79.2 $148.6 $ 34.8 $(183.4) $ 79.2
Year Ended December 31, 2008
Parent
(Guarantor) CBT
Other
(Non-guarantors) Eliminations Total
Revenue ................................... $ — $716.7 $736.4 $ (50.1) $1,403.0
Operating costs and expenses .................. 20.8 480.6 646.5 (50.1) 1,097.8
Operating income (loss) ...................... (20.8) 236.1 89.9 — 305.2
Interest expense ............................. 119.6 14.8 25.2 (19.9) 139.7
Other expense (income) ....................... (30.9) 7.1 (6.8) 19.9 (10.7)
Income (loss) before equity in earnings of
subsidiaries and income taxes ................ (109.5) 214.2 71.5 — 176.2
Income tax expense (benefit) ................... (32.7) 79.3 27.0 — 73.6
Equity in earnings of subsidiaries, net of tax ...... 179.4 — — (179.4) —
Net income ................................. 102.6 134.9 44.5 (179.4) 102.6
Preferred stock dividends ..................... 10.4 — — — 10.4
Net income applicable to common shareowners .... $ 92.2 $134.9 $ 44.5 $(179.4) $ 92.2
93
Form 10-K