Cincinnati Bell 2014 Annual Report Download - page 20

Table of Contents
Form 10-K Part I
Cincinnati Bell Inc.
The Company has a significant investment in CyrusOne.
As of December 31, 2014, we effectively own 44% of CyrusOne, which is held in the form of 1.9 million shares of CyrusOne common stock and 26.6 million
CyrusOne LP partnership units. 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. 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 2014 Form 10-K for additional risk disclosures specific to that entity.
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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.
Companies that have experienced volatility in the market price of their stock have periodically been subject to securities class action litigation. The
Company may be the target of this type of litigation in the future. Securities litigation could result in substantial costs and/or damages and divert
management's attention from other business concerns.
The Company's failure to remove all subscribers from its wireless network may result in a fine or a penalty adversely affecting revenues, earnings and cash
flows.
On September 30, 2014, we closed the agreement to sell our wireless spectrum licenses which requires us to cease wireless operations no later than April 6,
2015. Should we still have wireless subscribers at that time, we would be subject to penalty per terms of the agreement. Subsequent to discontinuing wireless
operations, we will start the process of decommissioning the network and removing assets and equipment from our remaining tower leases. Any unforeseen
complications or delays could negatively impact profitability and cash flows.
The uncertain economic environment, including uncertainty in the U.S. and world securities markets, could impact the Company's business and financial
condition.
The uncertain economic environment could have an adverse effect on the Company's business and financial liquidity. The Company's primary source of cash
is customer collections. If economic conditions were to worsen, some customers may cancel services or have difficulty paying. These conditions would result
in lower revenues and increases in the allowance for doubtful accounts, which would negatively affect the results of operations. Furthermore, the sales cycle
would be further lengthened if business customers slow spending or delay decision-making on the Company's products and services, which would adversely
affect revenues. If competitors lower prices as a result of economic conditions, the Company would also experience pricing pressure. If the economies of the
U.S. and the world deteriorate, this could have a material adverse effect on the Company's business, financial condition, results of operations, and cash flows.
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