Cincinnati Bell 2014 Annual Report Download - page 96
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Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
The Company leases certain circuits, facilities, and equipment used in its operations. Operating lease expense was $14.0 million, $13.4 million, and $19.3
million in 2014, 2013, and 2012, respectively. In 2013, $0.3 million of the operating lease expense was associated with CyrusOne as it was included for the
first 23 days of January prior to its IPO. In 2012, CyrusOne operating lease expense was $5.9 million. Certain facility leases and tower site leases provide for
renewal options with fixed rent escalations beyond the initial lease term. Future minimum payments for certain operating leases that will be transferred to the
acquirer no later than April 6, 2015, due to shutting down wireless operations, have been excluded beyond the transfer date.
At December 31, 2014, future minimum lease payments required under operating leases having initial or remaining non-cancellable lease terms for the next
five years are as follows:
2015 $ 10.3
2016 6.5
2017 5.1
2018 3.7
2019 3.2
Thereafter 21.6
Total $ 50.4
Asset retirement obligations exist for leased wireless towers and certain other assets. The following table presents the activity for the Company’s asset
retirement obligations, which are included in "Other noncurrent liabilities" in the Consolidated Balance Sheets:
Balance, beginning of period $ 8.5
$ 7.1
Liabilities settled (0.2)
(0.1)
Liabilities incurred —
0.1
Revisions to estimated cash flow 0.3
1.1
Accretion expense 0.5
0.5
Deconsolidation of CyrusOne —
(0.2)
Balance, end of period $ 9.1
$ 8.5
During the normal course of business, the Company makes certain indemnities, commitments, and guarantees under which it may be required to make
payments in relation to certain transactions. These include (a) intellectual property indemnities to customers in connection with the use, sale, and/or license
of products and services, (b) indemnities to customers in connection with losses incurred while performing services on their premises, (c) indemnities to
vendors and service providers pertaining to claims based on negligence or willful misconduct of the Company, (d) indemnities involving the representations
and warranties in certain contracts, and (e) outstanding letters of credit which totaled $6.9 million as of December 31, 2014. In addition, the Company has
made contractual commitments to several employees providing for payments upon the occurrence of certain prescribed events. The majority of these
indemnities, commitments, and guarantees do not provide for any limitation on the maximum potential for future payments that the Company could be
obligated to make.
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