Cincinnati Bell 2013 Annual Report Download - page 102

The loss of any of the senior management team or attrition among key sales associates could adversely affect
the Company’s business, financial condition, results of operations, and cash flows.
The Company’s success will continue to depend to a significant extent on its senior management team and
key sales associates. Senior management has specific knowledge relating to the Company and the industry that
would be difficult to replace. The loss of key sales associates could hinder the Company’s ability to continue to
benefit from long-standing relationships with customers. The Company cannot provide any assurance that it will
be able to retain the current senior management team or key sales associates. The loss of any of these individuals
could adversely affect the Company’s business, financial condition, results of operations, and cash flows.
Risk Factors Related to Our Investment in CyrusOne
The Company no longer controls the operations of CyrusOne
As of January 24, 2013, CyrusOne is an independent public company which the Company does not control.
As a result, the Company no longer sets the strategies, selects the management team, or controls the operations of
CyrusOne. CyrusOne may choose to pursue strategies which conflict with our business strategies, and, if this
were to occur, the CyrusOne Board is required to act for the benefit of its shareholders.
The Company executed a non-compete agreement with CyrusOne under which both parties agreed not to
enter each other’s lines of business, subject to certain exceptions, for a period of four years. CyrusOne may
choose to compete with us after the expiration of this non-compete agreement which could have an adverse effect
on our telecommunications business.
The Company has a significant investment in CyrusOne
On January 24, 2013, the Company completed the IPO of CyrusOne. As a result, the Company now holds
1,890,000 shares of common stock of CyrusOne and 42,586,835 partnership units of CyrusOne LP, the operating
partnership. The Company’s direct and indirect interests in CyrusOne represent a 69% effective economic
ownership of CyrusOne, valued at $993.2 million as of December 31, 2013. Prior to the IPO of CyrusOne, there
was no active market for CyrusOne’s common stock. The value of our investment is subject to CyrusOne
executing on their strategic plan and other factors beyond CyrusOne’s control, such as stock market volatility and
fluctuations in the valuation of companies perceived by investors to be comparable to CyrusOne, all of which
could cause significant changes in the market price of CyrusOne’s common stock. The fair value of our
investment in CyrusOne may decline which may adversely affect the realization of our investment. In addition,
the stock’s float may not allow us to monetize our shares in a timely manner. As a result, we may be unable to
monetize any or all of our investment in CyrusOne, which would therefore not allow us to repay debt and achieve
a leverage ratio comparable to our peers thereby limiting our opportunity to significantly increase cash flow. Our
inability to liquidate our investment in CyrusOne could ultimately limit the cash to fund operations and our
general obligations and could result in the Company’s dissolution, bankruptcy, liquidation, or reorganization.
Refer to the CyrusOne 2013 form 10-K for additional risk disclosures specific to that entity.
Other Risk Factors
The trading price of the Company’s common stock may be volatile, and the value of an investment in the
Company’s common stock may decline.
The market price of the Company’s common stock has been volatile and could be subject to wide
fluctuations in response to, among other things, the risk factors described in this report and other factors beyond
the Company’s control, such as stock market volatility and fluctuations in the valuation of companies perceived
by investors to be comparable to the Company.
The stock markets have experienced price and volume fluctuations that have affected the Company’s stock
price and the market prices of equity securities of many other companies. These broad market and industry
fluctuations, as well as general economic, political, and market conditions, may negatively affect the market
price of the Company’s stock.
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Form 10-K Part I Cincinnati Bell Inc.