Cincinnati Bell 2014 Annual Report Download - page 97

Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
As permitted under Ohio law, the Company has agreements whereby the Company indemnifies its officers and directors for certain events or occurrences
while the officer or director is, or was, serving at the Company's request in such capacity. The term of the indemnification period is for the lifetime of the
officer or director. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is
unlimited; however, the Company has a director and officer insurance policy that limits the Company's exposure and enables the Company to recover a
portion of any future amounts paid. As a result of the Company's insurance policy coverage, the Company believes the estimated fair value of these
indemnification agreements is minimal. The Company has no liabilities recorded for these agreements as of December 31, 2014 or 2013.
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The Company has noncancellable purchase commitments related to certain goods and services. These agreements range from one to three years. As of
December 31, 2014 and 2013, the minimum commitments for these arrangements were approximately $178 million and $117 million, respectively. The
Company generally has the right to cancel open purchase orders prior to delivery and to terminate the contracts without cause.
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Cincinnati Bell and its subsidiaries are subject to various lawsuits, actions, proceedings, claims and other matters asserted under laws and regulations in the
normal course of business. We believe the liabilities accrued for legal contingencies in our consolidated financial statements, as prescribed by GAAP, are
adequate in light of the probable and estimable contingencies. However, there can be no assurances that the actual amounts required to satisfy alleged
liabilities from various legal proceedings, claims, tax examinations, and other matters, and to comply with applicable laws and regulations, will not exceed
the amounts reflected in our consolidated financial statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of
December 31, 2014, cannot be reasonably determined.
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In 2010, the Company's Board of Directors approved long-term incentive programs for certain members of management. Payment was contingent upon the
completion of a qualifying transaction and attainment of an increase in the equity value of the data center business, as defined in the plans.
The CyrusOne IPO completed on January 24, 2013 was a qualifying transaction and triggered payments under this contingent compensation plan. For the
year ended December 31, 2013, compensation expense of $42.6 million was recognized for these awards and other transaction-related incentives, of which
$20.0 million was associated with CyrusOne employees. This expense has been presented as transaction-related compensation in our Consolidated Statement
of Operations for the year ended December 31, 2013.
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