Cincinnati Bell 2006 Annual Report Download - page 125

If the Company fails to extend or renegotiate its collective bargaining agreements with its labor union when
they expire, or if its unionized employees were to engage in a strike or other work stoppage, the Company’s
business and operating results could be materially harmed.
The Company is a party to collective bargaining agreements with its labor union, which represents a
significant number of its employees. Although the Company believes that its relations with its employees are
satisfactory, no assurance can be given that the Company will be able to successfully extend or renegotiate its
collective bargaining agreements when they expire. If the Company fails to extend or renegotiate its collective
bargaining agreements, if disputes with its union arise, or if its unionized workers engage in a strike or a work
stoppage, the Company could experience a significant disruption of operations or incur higher ongoing labor
costs, either of which could have a material adverse effect on the business.
Item 1B. Unresolved SEC Staff Comments
None.
Item 2. Properties
Cincinnati Bell Inc. and its subsidiaries own or maintain telecommunications facilities in three states, which
are Ohio, Kentucky, and Indiana. Principal office locations are in Cincinnati, Ohio.
The property of the Company is principally comprised of telephone plant and equipment in its local
telephone franchise area (i.e., Greater Cincinnati), and the infrastructure associated with its wireless business in
the Greater Cincinnati and Dayton, Ohio operating areas. Each of the Company’s subsidiaries maintains some
investment in furniture and office equipment, computer equipment and associated operating system software,
application system software, leasehold improvements, and other assets. Facilities equipment and access circuits
leased as part of an operating lease arrangement are generally expensed as equipment or services are used.
With regard to its local telephone operations, substantially all of the central office switching stations are
owned and situated on land owned by the Company. Some business and administrative offices are located in
rented facilities, some of which are recorded as capitalized leases. With regard to its wireless operations, CBW
both owns and leases the locations that house its switching and messaging equipment. It owns approximately
45% of the tower structures and leases almost all of the land upon which its towers reside. CBW leases space
primarily from other wireless carriers or tower companies for the remaining tower sites and its ground leases are
typically renewable at CBW’s option with predetermined rate escalations. In addition, CBW leases 21
Company-run retail locations. CBTS operates five data centers – three owned and two leased – in Ohio and
Kentucky through which it provides 24-hour monitoring of the customer’s computer equipment in the data
center, power, environmental controls, and high-speed, high bandwidth point-to-point optical network
connections. Due to the acquisition of ATI in 2006, CBTS also has three leased offices located in Kentucky,
Michigan, and Missouri.
The Company’s gross investment in property, plant, and equipment was $2,586.5 million and $2,509.1
million at December 31, 2006 and 2005, respectively, and was divided among the operating segments as follows:
December 31,
2006 2005
Local ....................................................... 85.9% 87.8%
Wireless ..................................................... 11.3% 9.9%
Technology Solutions .......................................... 2.1% 1.5%
Other ....................................................... 0.7% 0.8%
Total ..................................................... 100.0% 100.0%
For additional information about the Company’s properties, see Note 4 to the Consolidated Financial
Statements that are contained in Item 8 of this Annual Report on Form 10-K.
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