FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OR THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to _______
Commission file number 1-8519
CINCINNATI BELL INC.
An Ohio I.R.S. Employer
Corporation No. 31-1056105
201 East Fourth Street, Cincinnati, Ohio 45202
Telephone Number 513 397-9900
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Shares (par value $1.00 per share) New York Stock Exchange
Preferred Share Purchase Rights Cincinnati Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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At February 28, 1995, there were 66,061,106 common shares outstanding.
At February 28, 1995, the aggregate market value of the voting shares owned
by non-affiliates was $1,370,817,819.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
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DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the registrant's annual report to security holders for the
fiscal year ended December 31, 1994 (Parts I, II and IV)
(2) Portions of the registrant's definitive proxy statement dated March 13,
1995 issued in connection with the annual meeting of shareholders (Part III)
TABLE OF CONTENTS
PART I
Item PAGE
---- ----
1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . 8
4. Submission of Matters to a Vote of the Security Holders. . . . . 9
PART II
5. Market for the Registrant's Common Equity
and Related Security Holder Matters. . . . . . . . . . . . . . . 12
6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . 12
7. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . . . 12
8. Financial Statements and Supplementary Data. . . . . . . . . . . 12
9. Disagreements on Accounting and Financial Disclosure . . . . . . 12
PART III
10. Directors and Executive Officers of Registrant . . . . . . . . . 12
11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . 12
12. Security Ownership of Certain Beneficial Owners and Management . 12
13. Certain Relationships and Related Transactions . . . . . . . . . 12
PART IV
14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K. 13
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See page 10 for "Executive Officers of the Registrant".
PART I
ITEM 1. BUSINESS
GENERAL
Cincinnati Bell Inc. (including its wholly owned subsidiaries, except as
the context may otherwise require, the "Company") is incorporated under the laws
of Ohio and has its principal executive offices at 201 East Fourth Street,
Cincinnati, Ohio 45202 (telephone number 513-397-9900).
The Company is a holding company engaged in operations through its
subsidiaries. Its principal subsidiaries are divided into three industry
segments. The telephone operations segment, Cincinnati Bell Telephone Company
("CBT"), provides telecommunications services and products, mainly local
service, network access and toll telephone services. The information systems
segment, Cincinnati Bell Information Systems Inc. ("CBIS"), provides data
processing and software development services for telecommunications and general
business needs. The marketing services segment, MATRIXX Marketing Inc.
("MATRIXX"), provides telephone marketing, research, fulfillment and database
services. Other businesses include Cincinnati Bell Long Distance Inc. ("CBLD")
which provides resale of long distance telecommunications services and products
as well as voice mail and paging services, Cincinnati Bell Directory Inc.
("CBD") which provides Yellow Pages and other directory products and services
and information and advertising services, and companies having interests in
cellular mobile telephone service, the purchase, sale and reconditioning of
telecommunications and computer equipment, and the ownership of real estate used
by the Company.
TELEPHONE OPERATIONS
GENERAL. CBT is engaged principally in the business of furnishing
telecommunications services and products, mainly local service, network access
and toll telephone services, in four counties in southwestern Ohio, six counties
in northern Kentucky and parts of two counties in southeastern Indiana. On
December 31, 1994, CBT had approximately 877,000 network access lines in
service. The principal cities in which CBT furnishes local service are
Cincinnati, Norwood and Hamilton in Ohio and Covington, Newport and Florence in
Kentucky. Approximately 98% of CBT's network access lines are in a single local
service area. Other communications services offered by CBT include voice, data
and video transmission, custom calling services and billing services. In
addition, CBT is a sales agent for certain products and services of AT&T Corp.
("AT&T") and also sells products of other companies.
CBT's local exchange, network access and toll telephone operations are
subject to regulation by the regulatory authorities of the states in which it
operates with respect to intrastate rates and services, issuance of securities
and other matters. CBT is also subject to the jurisdiction of the Federal
Communications Commission ("FCC") with respect to interstate rates, services and
other matters.
The lines provided by CBT to customer premises can be interconnected with
the lines of other telephone companies in the United States and with telephone
systems in most other countries. Interconnection is made through the facilities
of interexchange carriers and local exchange carriers.
The following table sets forth for CBT the number of network access lines
at December 31:
Thousands
------------------------------------
1994 1993 1992 1991 1990
Network Access Lines ---- ---- ---- ---- ----
877 848 827 808 800
Recurring charges for network access lines and other local services for the
year ended December 31, 1994 accounted for approximately 45% of CBT revenues and
sales.
INTRASTATE RATES. Rates for intrastate services offered by CBT are either
non-regulated by state regulatory authorities in Ohio and Kentucky or regulated
by the Public Utilities Commission of Ohio (the "PUCO") and the Public Service
Commission of Kentucky (the "PSCK"). Approximately 77% of CBT's 1994 revenues
was derived from intrastate service. Approximately 82% of 1994 intrastate
revenues was derived from Ohio service, approximately 18% was derived from
Kentucky service and minor amounts were derived from Indiana and other states
service. Of the total 1994 intrastate revenues, local service accounted for
approximately 71%, intrastate long distance service and network access accounted
for approximately 13% and miscellaneous revenue accounted for approximately 16%
of such revenues.
In 1984, the PUCO issued orders providing the format to be employed by
local exchange telephone companies in Ohio for setting charges for intrastate
access by interexchange carriers. The PUCO determined that the Ohio intrastate
access charges should mirror the interstate access charges set by the FCC (see
"Interstate Rates"), with the exception that the PUCO did not order mirroring of
subscriber line charges or carrier common line charges.
Pursuant to procedures established by the PUCO, local exchange companies
are permitted to file plans proposing alternate forms of regulation for
competitive services and basic service rates. CBT filed for a threshold
increase in rates together with an alternative regulation proposal in 1993.
Thereafter, CBT and the intervenors signed a settlement agreement which was
approved by the PUCO on May 5, 1994 approving an alternative regulation plan and
increasing revenues by $11.9 million annually or 3.75% on Ohio regulated
services. The alternative regulation provisions and new rates became effective
May 6, 1994. CBT's authorized rate of return on capital is 11.18%, but CBT can
earn up to 11.93% in a monitoring period without any retargeting of rates.
Earnings higher than 11.93% will trigger a revenue retargeting formula. This
formula will allow for certain adjustments in the following monitoring period.
This alternative regulation plan provides increased pricing flexibility in some
areas, which allows CBT to be more responsive to customers and the market.
In 1991, the PSCK issued an order amending its prior format to be used by
local exchange companies in Kentucky for setting charges for intrastate access
for interexchange carriers. In this order, the PSCK ordered that rates and
regulations should mirror those of the FCC with certain exceptions that may be
considered for future mirroring based on the merits of each situation.
In October 1994, CBT filed a proposal with the PSCK for new regulated rates
for telephone services provided to its Kentucky customers. This proposal, if
approved in its entirety, would result in uniform rates for basic service in
CBT's Kentucky and Ohio metropolitan service areas and increase revenues by $3.4
million annually.
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INTERSTATE RATES. Approximately 23% of CBT's 1994 revenues was derived
from interstate and foreign services under FCC tariffs. The FCC has regulatory
jurisdiction over services, rates and other matters relating to CBT's interstate
operations. The FCC prescribes a uniform system of accounts applicable to
telephone companies, separations procedures to be utilized in separating
investments, revenues, expenses, taxes and reserves between the federal and
state regulatory jurisdictions, and depreciation rates for interstate plant and
facilities.
The FCC's cost allocation rules specify requirements relative to the
allocation of costs between regulated and non-regulated activities, as well as
transactions between affiliated entities. CBT's cost allocation manual, setting
forth its method for separating regulated and non-regulated activities
consistent with the FCC's cost allocation rules, was approved, as modified by
the FCC. CBT continues to review its cost allocation manual and to modify it as
appropriate to reflect CBT's circumstances.
The FCC also prescribes the rate of return which regulated carriers are
authorized to earn on their regulated interstate business. The currently
effective authorized rate of return is 11.25%. The FCC has yet to design a
valid refund mechanism to replace its automatic refund rule to address instances
where earnings exceed authorized levels for any monitoring period. The U.S.
Court of Appeals for the District of Columbia Circuit previously found the FCC's
automatic refund rule to be arbitrary and capricious. In the absence of FCC
action, several complaints were filed pursuant to Section 208 of the
Communications Act seeking refunds related to prior access periods in which CBT
had allegedly exceeded the authorized rate of return. The FCC has awarded
damages in these cases, thereby attempting to achieve the same results that were
found improper in the previously overturned FCC rule. Cincinnati Bell has filed
appeals to those FCC orders.
CBT receives its principal interstate compensation from access charges paid
by interexchange carriers and end users. Specifically, traffic sensitive
switched access charges apply on a usage sensitive basis to recover costs
associated with the use of CBT's switching and transmission facilities. Special
access charges recover costs of private line connections. CBT's non-traffic
sensitive costs are recovered from subscribers on a flat rate basis (Subscriber
Line Charges) and from interexchange carriers on a usage sensitive basis
(Carrier Common Line Charges). Residential and single line business Subscriber
Line Charges have a cap of $3.50 and multi-line customers' Subscriber Line
Charges have a $6.00 cap. The Carrier Common Line rate recovers the remaining
non-traffic costs.
For interstate services, CBT began to operate under an Optional Incentive
Regulation ("OIR") plan in January 1994. This is an alternative form of
regulation (i.e. departure from traditional rate of return regulation) for small
and mid-sized companies. Under OIR more emphasis is placed on price regulation
similar to price caps. In addition, CBT has some pricing flexibility. Rate
changes can become effective on a 14-day notice without cost support if the rate
changes do not increase "aggregate service basket" rates. New services can be
offered on a 14-day notice without cost support if CBT sets rates no higher than
a geographically adjacent price cap local exchange carrier. This allows CBT to
be more responsive to customers and the market.
In January 1994, CBT completed a successful triennial depreciation
represcription with regulators from the FCC, the PUCO and the PSCK. The new
depreciation rates were effective January 1, 1994 in the interstate and Kentucky
jurisdictions, and were effective July 1, 1994 in the Ohio jurisdiction.
COMPETITION. Customer demands, technology, the preferences of policy
makers and the convergence of other industries with the telecommunications
industry are causes for increasing competition in the telecommunications
industry for CBT. The range of communications services, the equipment available
to provide and access such services and the number of competitors offering such
services continue to increase.
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CBT is redesigning and streamlining its processes and work activities to
improve responsiveness to customer needs, permit more rapid introduction of new
products and services, improve the quality of products and service offerings and
reduce costs. On February 6, 1995, CBT announced the approval of a
restructuring plan which ultimately will result in the reduction in CBT's
workforce by approximately 800 employees. In addition, CBT has upgraded and
will continue to upgrade its telephone plant and network and to explore new
services and technologies as sound business judgment dictates. It has
constructed several optical fiber rings in and around the metropolitan
Cincinnati area to permit it to offer redundancy in telecommunications services
for business customers. CBT offers custom calling features that include Caller
ID, Call Return, Call Block, Priority Forward, Repeat Dialing and Number
Privacy.
Other means of communications that permit bypass of CBT's local exchange
facilities either completely or partially are available and are growing,
although CBT is unable to determine precisely to what extent such bypass may
occur. Alternative access providers, cable companies and wireless providers
have all made clear their intent to compete for segments of the local exchange
business. In addition, interexchange carriers are creating new value-added
services based on Signaling System 7 and Advanced Intelligent Network
technologies, similar to those under development by the local exchange
companies. CBT's competitors range from small service bureaus to large
interexchange carriers and multi-state cellular companies to joint ventures and
other combinations of telecommunications and other companies.
During the fourth quarter 1994, two companies filed requests with the PUCO
to offer basic local exchange telephone service within CBT's Ohio operating
territory. CBT will actively participate in any proceedings which address the
issue of local telecommunications competition.
The effect of this competition on CBT will ultimately be determined by
federal and state regulatory and legislative actions and the type, quality and
cost of CBT's services. CBT continues to position itself in this rapidly
changing and convergent environment in order to remain competitive.
INFORMATION SYSTEMS
GENERAL. CBIS provides data processing and software development services
for the telecommunications industry. CBIS is the leading supplier of billing
solutions to the cellular telecommunications industry.
During 1994, CBIS substantially completed its disposal and restructuring
plan by divesting its holdings in CBIS Federal and other businesses, closing its
foreign data center, eliminating other unprofitable domestic and international
activities and restructuring the remaining CBIS operations. As a result, CBIS
is now focusing on high volume billing and customer transaction solutions that
serve wireless and wireline telecommunications companies.
CBIS's principal domestic markets include cellular telephone providers and
their resellers, inter-exchange carriers, independent telephone companies and
regional Bell operating companies.
Internationally, CBIS's principal markets include post, telegraph &
telephone ("PTT's") organizations, mobile telecommunications providers and their
resellers, and new competing networks. In the United Kingdom, CBIS Ltd. is an
ISO-9001 certified supplier with TickIT accreditation.
- 4 -
CBIS continues to develop open-systems, client-server billing applications
that could serve wireline, wireless and interexchange companies. These new
applications will form a foundation for more advanced solutions that CBIS
expects to deliver to current and future clients.
COMPETITION. The telecommunications information systems and services
market is highly competitive. Such competition has increased in recent years
and is likely to increase in the future. Some of CBIS's competitors have
substantially greater financial and other resources more readily available than
CBIS. Competition is based mainly on product quality, performance, price and
the quality of client service. Except for the U.S. cellular telephone market
(where CBIS serves cellular companies that have a significant portion of the
market), CBIS has small market shares in the other areas of its business and
faces vigorous competition.
In March 1995, a service bureau client of CBIS that represents
approximately five percent of CBIS's revenues decided not to renew its contract
with CBIS. The current contract expires in 1997.
MARKETING SERVICES
GENERAL. During 1994, MATRIXX became larger and more profitable because of
its WATS Marketing acquisition in 1993 and its growth in its existing business.
The majority of MATRIXX's customers come from the telecommunications, financial
services, consumer products, high technology and direct marketing industries.
MATRIXX concentrates on servicing business needs in the telephone marketing and
related marketing service areas by offering an integrated package of services to
its customers including, without limitation, inbound and outbound telephone
marketing, business-to-business telephone marketing, marketing research,
fulfillment, direct mail, database management, and facilities management.
MATRIXX's inbound and outbound telephone marketing services enable clients
to manage high volumes of inbound and outbound customer contacts in an
environment of shared resources and also increases market awareness with rapid
response to consumer requests for information or services. Its business-to-
business telephone marketing provides sales and customer service personnel who
act as the sales arm and/or marketing service representatives for the client.
They take orders, sell by telephone and provide information about the client's
promotion plans, quantity discounts and new products, both to retailers and
distributors. MATRIXX's marketing research services assist clients in finding
and qualifying customers before they offer a new product or service to the
market. By offering full service marketing research, MATRIXX can support its
clients in their strategic planning and tactical decision-making process.
MATRIXX also designs customized client solutions for consumer markets with a
dedicated staff and services uniquely tailored to the needs of each client.
MATRIXX has international operations in Europe with headquarters in Paris
and an office in the United Kingdom, offering business-to-business and business-
to-consumer telephone marketing, including toll-free services, direct response
services and facilities management.
COMPETITION. The telephone marketing agency business in the United States
is highly competitive, with MATRIXX's competitors ranging in size from very
small firms offering special applications or short term projects to large
independent firms and "in-house" divisions of potential client companies with
size and capabilities equal to those of MATRIXX. The continued trend in the
outsourcing of telephone marketing is important for MATRIXX's continued growth.
The telephone marketing agency business in Europe is in the early stages of
development. The business is very competitive and overcapacity exists in a
market that has not developed very rapidly during the past several years.
MATRIXX is one of several companies controlling a large portion of the French
market.
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OTHER BUSINESSES
GENERAL. Most of the Company's business other than CBT, CBIS and MATRIXX
is conducted by other subsidiaries of the Company or by partnerships in which
the Company owns an interest.
CBLD is a reseller of long distance telecommunications services. CBLD
sells high-quality, competitively-priced long distance services and products to
residence customers and small to medium-sized businesses in Ohio, Indiana,
Kentucky, Western Pennsylvania and Michigan. CBLD also provides voice mail and
paging services.
CBD provides printed Yellow Pages directories and other directory services.
In addition, CBD publishes and provides the White Pages directories for CBT.
CBD continually evaluates new product offerings in both the print and emerging
electronic categories of distribution.
Cincinnati Bell Supply Company engages in the purchase, sale and
reconditioning of telecommunications and computer equipment to customers
nationwide.
Cincinnati Bell Properties Inc. owns certain real estate used by the
Company.
The Company (through its wholly owned subsidiary, Cincinnati Bell Cellular
Systems Company) is a limited partner with a 45% interest in a limited
partnership (of which Ameritech Mobile Phone Service of Cincinnati, Inc. is the
general partner) in the cellular mobile telephone service business in the
Greater Cincinnati, Columbus and Dayton areas. Cincinnati Bell Cellular Systems
Company has commenced a lawsuit against Ameritech Mobile Phone Service of
Cincinnati, Inc. asking that the partnership be dissolved. See "Legal
Proceedings".
COMPETITION. CBLD, CBD and Cincinnati Bell Supply Company are faced with
fierce competition from businesses offering similar products and services.
Their success will be determined by how well they meet the changing needs of
their customers.
RELATIONSHIP WITH AT&T
The Company and its subsidiaries are parties to several agreements with
AT&T and its affiliates pursuant to which the Company and its subsidiaries
either purchase equipment, materials, services and advice from AT&T and its
affiliates or derive significant revenues from AT&T and its affiliates by
providing to them network services, information management systems and marketing
services. With the completion of the merger of AT&T and McCaw Cellular
Communications Inc., in 1994, the Company's revenues from AT&T (combined with
McCaw) have increased compared to prior years. During 1994, the Company's
revenues from AT&T (excluding network access revenues) were approximately $228
million or 18.6% of the Company's consolidated revenues, and the Company's
purchases of goods and services from AT&T and its affiliates were approximately
$80 million. For 1994 revenues from AT&T (combined with McCaw) accounted for
45% of the information systems segment revenues.
CAPITAL ADDITIONS
The Company has been making large expenditures for construction of
telephone plant and investments in its existing subsidiaries and new businesses.
By reinvesting in its telephone plant, the Company expects to be able to
introduce new products and services, respond to competitive challenges and
increase the operating efficiency and productivity of its network.
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The following is a summary of capital additions for the years 1990 through
1994:
Dollars in Thousands
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Investments in
Telephone Plant Existing Subsidiaries Total Capital
Construction and New Businesses Additions
------------ ------------------ ---------
1994 $112,755 $ 43,419 $156,174
1993 $111,595 $123,816 $235,411
1992 $ 94,956 $ 45,100 $140,056
1991 $115,931 $ 77,417 $193,348
1990 $127,690 $156,645 $284,335
The total investment in telephone plant increased from approximately $1,221
million at December 31, 1989 to approximately $1,447 million at December 31,
1994, after giving effect to retirements but before deducting accumulated
depreciation at either date.
Anticipated capital additions in 1995 for the Company including all
subsidiaries are approximately $140 million, of which $100 million is for
telephone plant.
EMPLOYEES
At December 31, 1994 the Company and its subsidiaries had approximately
15,600 employees. CBT and CBIS had approximately 2,500 employees covered under
collective bargaining agreements with the Communications Workers of America
("CWA"), which is affiliated with the AFL-CIO. Those agreements expire in May
1996 for CBT and September 1996 for CBIS.
In November 1994, CBT presented a separation offer to 18 of its senior
managers, 12 of whom accepted the offer. In February 1995, the Company approved
a restructuring plan for CBT which will result in the need for fewer people to
operate that business. In all, CBT expects to eliminate approximately 800
management and hourly positions by 1997.
BUSINESS SEGMENT INFORMATION
The amounts of revenues, operating income, assets, capital additions and
depreciation and amortization attributable to each of the business segments of
the Company for the year ended December 31, 1994 is set forth in the table
relating to business segment information in Note 21 of the Notes to Financial
Statements in the Company's annual report to security holders, and such table is
incorporated herein by reference.
ITEM 2. PROPERTIES
The property of the Company is principally telephone plant which does not
lend itself to description by character and location of principal units. Other
property of the Company is principally computer equipment, computer software,
furniture and fixtures.
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The gross investment in telephone plant and other property, in thousands of
dollars, at December 31, 1994 was as follows:
Telephone Plant
Land, buildings and leasehold improvements $ 184,847
Central office equipment 551,619
Connecting lines (not on customer premises) 578,921
Station equipment 28,538
Furniture, fixtures, vehicles and other 88,341
Telephone plant under construction 15,145
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Total telephone plant 1,447,411
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Other Property
Information systems 175,256
Marketing services 62,811
Other 41,288
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Total other property 279,355
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Total $1,726,766
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----------
Substantially all of the installations of central office equipment and
garages are located in buildings owned by CBT situated on land which it owns.
Some CBT business and administrative offices are in rented quarters, most of
which are included in capitalized leases.
The Company owns and occupies a 120,000 square foot building in Erlanger,
Kentucky, which is a training and education facility.
In March 1995, CBIS entered into a build-to-suit lease agreement for a new
office building and data center in Maitland, Florida. Under the terms of the
agreement, the lease is a 15 year lease term with four 5-year renewal options.
The office building will contain 125,000 square feet and the data center will be
in a separate building of 60,000 square feet. The annual base rent will be
approximately $3.7 million for an initial total commitment of $55.5 million over
the 15 year term.
CBIS, MATRIXX and other Company subsidiaries lease office space in various
cities on commercially reasonable terms. Upon the expiration or termination of
any such leases, these companies could obtain comparable office space. CBIS
also leases some of the computer hardware, computer software and office
equipment necessary to conduct its business pursuant to short term leases, some
of which are capitalized leases.
ITEM 3. LEGAL PROCEEDINGS
None, except as described below.
Cincinnati Bell Cellular Systems Company ("CBCSC") is a limited partner in
a partnership (of which Ameritech Mobile Phone Service of Cincinnati, Inc. is
the general partner) which provides cellular mobile telephone service in the
Greater Cincinnati, Dayton and Columbus areas. The partnership operates in a
9,500 square mile area that contains a population of approximately four million
people. On February 23, 1994, CBCSC filed an action in the Court of Chancery of
the State of Delaware for New Castle County in which CBCSC seeks a dissolution
of the limited partnership, the appointment of a liquidating trustee and damages
against the general partner. CINCINNATI BELL CELLULAR SYSTEMS COMPANY V.
AMERITECH MOBILE PHONE SERVICE OF CINCINNATI, INC., ET AL.
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On April 20, 1983, the Company and Anixter Bros., Inc. ("Anixter") formed a
joint venture (the "Joint Venture") for the purpose of engaging in the
distribution of electrical wire and cable, cable television products and
telephone and communications products. The Joint Venture was to terminate on
December 31, 1993. On November 11, 1993, the Company filed a Complaint against
Anixter and the Joint Venture in the Court of Common Pleas for Hamilton County
contending that Anixter refused to compensate the Company for the going concern
value of the Joint Venture and that the managing partner failed to account
properly for revenues and expenses of the Joint Venture. On December 14, 1993,
Anixter removed the case to the federal district court for the Southern District
of Ohio, and on December 16, 1993 filed its Answer and Counterclaim contending
that the Company wrongfully competed with the Joint Venture. On January 10,
1994, the Company filed a motion to remand the case to state court contending
that the federal court lacked jurisdiction. On November 25, 1994, the Company
filed a petition for mandamus in the U.S. Court of Appeals for the Sixth Circuit
asking that court to order the District Court to remand the case to the state
court. CINCINNATI BELL INC. V. ANIXTER BROS., INC., ET AL.
The Federal Communications Commission has issued orders that require CBT to
refund to interexchange carriers certain amounts based on CBT's having exceeded
targeted earning levels for interstate access services for the 1987-1988 access
period. CBT has appealed the FCC orders, and its appeals have been consolidated
with numerous other appeals involving similar issues pending in the U.S. Circuit
Court of Appeals for the District of Columbia. MCI TELECOMMUNICATIONS CORP., ET
AL. V. FCC AND USA.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
No matter was submitted to a vote of security holders in the fourth quarter
of the fiscal year covered by this report.
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EXECUTIVE OFFICERS OF THE REGISTRANT (DURING 1994).
The names, ages and positions of the executive officers of the Company are
as follows:
Name Age Title
---- --- -----
(as of 3/31/95)
Dwight H. Hibbard (a,b) 71 Chairman of the Board
John T. LaMacchia (a,b) 53 President and Chief Executive Officer
Raymond R. Clark (a) 57 Executive Vice President
and Chief Executive Officer of
Cincinnati Bell Telephone Company
Brian C. Henry 38 Executive Vice President and
Chief Financial Officer
David J. Lahey (c) 56 Executive Vice President
William H. Zimmer III 41 Secretary and Treasurer
Donald E. Hoffman (d) 56 Senior Vice President of
Cincinnati Bell Telephone Company
Scott Aiken (e) 59 Vice President of
Cincinnati Bell Telephone Company
James F. Orr (f) 49 President and Chief Executive
Officer of CBIS
William D. Baskett III 55 General Counsel and Chief
Legal Officer
Barbara J. Stonebraker 50 Senior Vice President of
Cincinnati Bell Telephone Company
(a) Member of the Board of Directors
(b) Member of the Executive Committee
(c) Served as President and Chief Executive Officer of CBIS and Chairman of
MATRIXX until December 31, 1994.
(d) Served as an officer until February 28, 1995.
(e) Served as an officer until December 30, 1994.
(f) Effective January 1, 1995, Mr. Orr was elected President and Chief
Executive Officer of CBIS.
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Officers are elected annually but are removable at the discretion of the Board
of Directors.
DWIGHT H. HIBBARD, Chairman of the Board since January 1, 1985; Chief Executive
Officer of the Company, 1985-September 30, 1993; Chairman of Cincinnati Bell
Telephone Company, 1985-October 31, 1993. Director of Teradyne, Inc.
JOHN T. LAMACCHIA, President and Chief Executive Officer of the Company since
October 1, 1993; President of the Company since January 1, 1988; Chief Operating
Officer of the Company, 1988-September 30, 1993; Chairman of Cincinnati Bell
Information Systems Inc. since October 1988. Director of Multimedia, Inc. and
The Kroger Company.
RAYMOND R. CLARK, Executive Vice President of the Company since January 1, 1987;
Chief Executive Officer of Cincinnati Bell Telephone Company since January 1,
1988; President since January 1, 1987. Director of Star Banc Corporation, Ohio
National Life Insurance Company and Xtek, Inc.
BRIAN C. HENRY, Executive Vice President and Chief Financial Officer of the
Company since March 29, 1993; Vice President and Chief Financial Officer of
Mentor Graphics, February 1986 to March 28, 1993.
DAVID J. LAHEY, Executive Vice President of the Company since January 1, 1993;
President and Chief Executive Officer of CBIS, February 4, 1994-December 31,
1994; Chairman of MATRIXX Marketing Inc., January 1, 1993-December 31, 1994;
President and Chief Executive Officer of MATRIXX Marketing Inc., February 2,
1989 December 31, 1992.
WILLIAM H. ZIMMER III, Secretary and Treasurer of the Company since August 1,
1991; Secretary and Assistant Treasurer of the Company, December 1, 1988-July
31, 1991.
DONALD E. HOFFMAN, Senior Vice President of Cincinnati Bell Telephone Company
January 1, 1990-February 28, 1995.
SCOTT AIKEN, Vice President of Cincinnati Bell Telephone Company, May 13, 1985-
December 30, 1994.
JAMES F. ORR, President and Chief Executive Officer of CBIS since January 1,
1995; Chief Operating Officer of CBIS, February 4, 1994-December 31, 1994;
President and Chief Executive Officer of MATRIXX Marketing Inc., January 1,
1993-December 31, 1994; Vice President-Market Development, January 1, 1989-
December 31, 1992.
WILLIAM D. BASKETT III, General Counsel and Chief Legal Officer of the Company
since July 1993; Partner of Frost & Jacobs since 1970.
BARBARA J. STONEBRAKER, Senior Vice President of Cincinnati Bell Telephone
Company since 1990.
- 11 -
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER
MATTERS.
Cincinnati Bell Inc. (symbol: CSN) common shares are listed on the New York
Stock Exchange and on the Cincinnati Stock Exchange. As of February 28, 1995
there were approximately 21,553 holders of record of the 66,061,106 outstanding
Common Shares of the Company. The high and low sales prices and dividends
declared per common share each quarter for the last two fiscal years are listed
below:
Quarter 1st 2nd 3rd 4th
--------------------------------------------------------------------------------
1994 High $18 7/8 $17 1/2 $20 1/8 $19 1/2
Low $15 1/2 $15 3/8 $16 $16 3/4
Dividend Declared $ .20 $ .20 $ .20 $ .20
1993 High $23 $24 3/8 $23 1/2 $24
Low $16 1/8 $21 $19 1/8 $17 7/8
Dividend Declared $ .20 $ .20 $ .20 $ .20
ITEMS 6 THROUGH 8.
The Selected Financial Data, Management's Discussion and Analysis of
Financial Condition and Results of Operations, and Financial Statements and
Supplementary Data required by these items are included in the registrant's
annual report to security holders for the fiscal year ended December 31, 1994
included in Exhibit 13 and are incorporated herein by reference pursuant to
General Instruction G(2).
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
No disagreements with accountants on any accounting or financial
disclosure occurred during the period covered by this report.
PART III
ITEMS 10 THROUGH 13.
Information regarding executive officers required by Item 401 of Regulation
S-K is furnished in a separate disclosure in Part I of this report under the
caption "Executive Officers of the Registrant" since the registrant did not
furnish such information in its definitive proxy statement prepared in
accordance with Schedule 14A.
The other information required by these items is included in the
registrant's definitive proxy statement dated March 13, 1995 in the first
paragraph on page 2, the accompanying notes on page 2 and the last paragraph on
page 2, the information under "Election of Directors" on pages 6 and 7, the
information under "Share Ownership of Directors and Officers" on pages 4 and 5,
the information under "Executive Compensation" on pages 12 through 16, and the
information under "Compensation Committee Interlocks and Insider Participation"
on page 4. The foregoing is incorporated herein by reference pursuant to
General Instruction G(3).
- 12 -
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K.
(a) Documents filed as part of this report:
(1) Consolidated Financial Statements: Page
----
Report of Management . . . . . . . . . . . . . . . . . . . . . *
Report of Independent Accountants. . . . . . . . . . . . . . . *
Consolidated Statements of Income. . . . . . . . . . . . . . . *
Consolidated Statements of Common Shareowners' Equity. . . . . *
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . *
Consolidated Statements of Cash Flows. . . . . . . . . . . . . *
Notes to Financial Statements. . . . . . . . . . . . . . . . . *
(2) Financial Statement Schedule:
Report of Independent Accountants. . . . . . . . . . . . . . . 22
II - Valuation and Qualifying Accounts. . . . . . . . . . . . 23
Financial statements and financial statement schedules other than that
listed above have been omitted because the required information is
contained in the financial statements and notes thereto, or because such
schedules are not required or applicable.
-------------------------
* Incorporated herein by reference to the appropriate portions of the
registrant's annual report to security holders for the fiscal year ended
December 31, 1994. (See Part II)
- 13 -
(3) Exhibits
Exhibits identified in parenthesis below, on file with the Securities and
Exchange Commission ("SEC"), are incorporated herein by reference as exhibits
hereto.
Exhibit
Number
-------
(3)(a) Amended Articles of Incorporation effective November 9,
1989. (Exhibit (3)(a) to Form 10-K for 1989, File No.
1-8519).
(3)(b) Amended Regulations of the Registrant. (Exhibit 3.2 to
Registration Statement No. 2-96054).
(4)(a) Provisions of the Amended Articles of Incorporation and
the Amended Regulations of the registrant which define
the rights of holders of Common Shares and the Preferred
Shares are incorporated by reference to such Amended
Articles filed as Exhibit (3)(a) hereto and such Amended
Regulations filed as Exhibit (3)(b) hereto.
(4)(b)(i) Rights Agreement dated as of October 27, 1986 between the
Company and Morgan Shareholder Services Trust Company,
Rights Agent. (Exhibit (1) to Form 8-A, File No.
1-8519).
(4)(b)(ii) First Amendment to Rights Agreement, dated as of October
3, 1988, between the Company and Morgan Shareholder
Services Trust Company, Rights Agent. (Exhibit
(4)(b)(ii) to Form 10-K for 1988, File No. 1-8519).
(4)(c)(i) Indenture dated June 15, 1990 between Cincinnati Bell
Inc. and The Bank of New York, Trustee, in connection
with $75,000,000 of Cincinnati Bell Inc. Ten Year 9.10%
Notes Due June 15, 2000. (Exhibit (4)(c)(ii) to Form
10-K for 1990, File No. 1-8519).
Indenture dated December 15, 1992 between Cincinnati Bell
Inc., Issuer, and The Bank of New York, Trustee, in
connection with $100,000,000 of Cincinnati Bell Inc.
6.70% Notes Due December 15, 1997. A copy of this
Indenture is not being filed because it is similar in all
material respects to the Indenture filed as Exhibit
(4)(c)(i) above.
Indenture dated July 1, 1993 between Cincinnati Bell
Inc., Issuer, and The Bank of New York, Trustee, in
connection with $50,000,000 of Cincinnati Bell, Inc.
7 1\4% Notes Due June 15, 2023. Exhibit 4-A to
Form 8-K, date of report July 12, 1993, File No. 1-8519.
(4)(c)(ii) Indenture dated December 27, 1989 among Cincinnati Bell
Telephone Company, Issuer, Cincinnati Bell Inc.,
Guarantor, and The Bank of New York (Delaware), Trustee,
in connection with $40,000,000 of Cincinnati Bell
Telephone Company Guaranteed Ten Year 8 5/8% Notes, Due
December 15, 1999. (Exhibit 4(c)(ii) to Form 10-K for
1992, File No. 1-8519).
- 14 -
Indenture dated April 30, 1986 among Cincinnati Bell
Telephone Company, Issuer, Cincinnati Bell Inc.,
Guarantor, and The Bank of New York (Delaware), Trustee,
in connection with $40,000,000 of Cincinnati Bell
Telephone Company Guaranteed Ten Year 7.30% Notes, Due
April 30, 1996. A copy of this Indenture is not being
filed because it is similar in all material respects to
the Indenture filed as Exhibit (4)(c)(ii) above.
(4)(c)(iii) Indenture dated August 1, 1962 between Cincinnati Bell
Telephone Company and Bank of New York, Trustee
(formerly, The Central Trust Company was trustee), in
connection with $20,000,000 of Cincinnati Bell Telephone
Company Forty Year 4 3/8% Debentures, Due August 1, 2002.
(Exhibit 4(c)(iii) to Form 10-K for 1992, File No.
1-8519).
Indenture dated October 1, 1958 between Cincinnati Bell
Telephone Company and Bank of New York, Trustee
(formerly, The Central Trust Company was trustee), in
connection with $25,000,000 of Cincinnati Bell Telephone
Company Thirty-Five Year 4 l/2% Debentures, Due October
1, 1993. A copy of this Indenture is not being filed
because it is similar in all material respects to the
Indenture filed as Exhibit (4)(c)(iii) above.
Indenture dated August 1, 1971 between Cincinnati Bell
Telephone Company and Bank of New York, Trustee (formerly
The Fifth Third Bank was trustee), in connection with
$50,000,000 of Cincinnati Bell Telephone Company Forty
Year 7 3/8% Debentures, Due August 1, 2011. A copy of
this Indenture is not being filed because it is similar
in all material respects to the Indenture filed as
Exhibit (4)(c)(iii) above.
(4)(c)(iv) Indenture dated as of October 27, 1993 among Cincinnati
Bell Telephone Company, as Issuer, Cincinnati Bell Inc.,
as Guarantor, and The Bank of New York, as Trustee.
(Exhibit 4-A to Form 8-K, date of report October 27,
1993, File No. 1-8519).
(4)(c)(v) No other instrument which defines the rights of holders
of long term debt of the registrant is filed herewith
pursuant to Regulation S-K, Item 601(b)(4)(iii)(A).
Pursuant to this regulation, the registrant hereby agrees
to furnish a copy of any such instrument to the SEC upon
request.
(10)(ii)(B) Agreement Establishing Cincinnati SMSA Limited
Partnership between Advanced Mobile Phone Service, Inc.
and Cincinnati Bell Inc. executed on December 9, 1982.
(Exhibit (10)(k) to Registration Statement No. 2-82253).
(10)(iii)(A)(1)(i)* Short Term Incentive Plan of Cincinnati Bell Inc., as
amended February 3, 1986. (Exhibit (10)(iii)(A)(1) to
Form 10-K for 1986, File No. 1-8519).
(10)(iii)(A)(1)(ii)* Amendment to Short Term Incentive Plan of Cincinnati Bell
Inc. (effective December 5, 1988). (Exhibit
(10)(iii)(A)(1)(ii) to Form 10-K for 1988, File No.
1-8519).
-----------------------
* Management contract or compensatory plan required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K.
- 15 -
(10)(iii)(A)(2)(i)* Cincinnati Bell Inc. Senior Management Long Term
Incentive Plan, as amended January 1, 1984. (Exhibit
(10)(iii)(A)(2) to Form 10-K for 1986, File No. 1-8519).
(10)(iii)(A)(2)(ii)* Amendment to Cincinnati Bell Senior Management Long Term
Incentive Plan (effective December 5, 1988). (Exhibit
(10)(iii)(A)(2)(ii) to Form 10-K for 1988, File No.
1-8519).
(10)(iii)(A)(3)* Cincinnati Bell Inc. Deferred Compensation Plan for
Non-Employee Directors, as amended July 1, 1983.
(Exhibit (10)(iii)(A)(3) to Form 10-K for 1986, File No.
1-8519).
(10)(iii)(A)(4)(i)* Cincinnati Bell Inc. Pension Program, as amended
effective June 5, 1989. (Exhibit (10)(iii)(A)(4) to Form
10-K for 1989, File No. 1-8519).
(10)(iii)(A)(4)(ii)* Cincinnati Bell Inc. Pension Program, as amended
effective November 4, 1991.
(10)(iii)(A)(5)* Cincinnati Bell Inc. 1988 Incentive Award Deferral Plan,
as amended (effective November 11, 1988). (Exhibit
(10)(iii)(A)(5) to Form 10-K for 1988, File No. 1-8519).
(10)(iii)(A)(6)(i)* Cincinnati Bell Inc. Senior Management Incentive Award
Deferral Plan, as amended January 1, 1984. (Exhibit
(10)(iii)(A)(6) to Form 10-K for 1986, File No. 1-8519).
(10)(iii)(A)(6)(ii)* Amendment to Cincinnati Bell Senior Management Incentive
Award Deferral Plan (effective December 5, 1988).
(Exhibit (10)(iii)(A)(6)(ii) to Form 10-K for 1988, File
No. 1-8519).
(10)(iii)(A)(7)(i)* Executive Employment Agreement dated December 1, 1987
between the Company and Dwight H. Hibbard. (Exhibit
(10)(iii)(A)(8) to Form 10-K for 1987, File No. 1-8519).
(10)(iii)(A)(7)(ii)* Amendment to Executive Employment Agreement dated
November 4, 1991 between the Company and Dwight H.
Hibbard. (Exhibit (10)(iii)(A)(8)(ii) to Form 10-K for
1991, File No. 1-8519).
(10)(iii)(A)(7)(iii)* Amendment to Executive Employment Agreement Dated April
20, 1992 between the Company and Dwight H. Hibbard.
(10)(iii)(A)(7)(iv)* Amendment to Executive Employment Agreement dated
February 4, 1994 between the Company and Dwight H.
Hibbard. (Exhibit (10)(iii)(A)(8)(iii) to Form 10-K for
1993, File No. 1-8519).
(10)(iii)(A)(8)* Executive Employment Agreement dated December 1, 1987
between the Company and John T. LaMacchia. (Exhibit
(10)(iii)(A)(10) to Form 10-K for 1987, File No. 1-8519).
-----------------------
* Management contract or compensatory plan required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K.
- 16 -
(10)(iii)(A)(9)* Executive Employment Agreement dated December 1, 1987
between the Company and Raymond R. Clark. (Exhibit
(10)(iii)(A)(11) to Form 10-K for 1987, File No. 1-8519).
(10)(iii)(A)(10)* Compensation Agreement between the Company and Sheldon
Horing, effective January 1, 1991. (Exhibit
(10)(iii)(A)(12) to Form 10-K for 1991, File No. 1-8519).
(10)(iii)(A)(11)* Separation and Consulting Agreement and Waiver and
Release between the Company and Sheldon Horing effective
March 11, 1994.
(10)(iii)(A)(12)* Employment Agreement dated as of April 1, 1988 between
the Company and David J. Lahey. (Exhibit
(10)(iii)(A)(16) to Form 10-K for 1991, as amended, File
No. 1-8519).
(10)(iii)(A)(13)* Employment Agreement dated as of February 7, 1994 between
the Company and David J. Lahey. (Exhibit
(10)(iii)(A)(13) to Form 10-K for 1993, File No. 1-8519).
(10)(iii)(A)(14)* Executive Employment Agreement dated as of March 29, 1993
between the Company and Brian C. Henry. (Exhibit
(10)(iii)(A)(14) to Form 10-K for 1993, File No. 1-8519).
(10)(iii)(A)(15)(i)* Employment Agreement dated as of January 1, 1989 between
the Company and James F. Orr. (Exhibit
(10)(iii)(A)(15)(i) to Form 10-K for 1993, File No.
1-8519).
(10)(iii)(A)(15)(ii)* Amendment to Employment Agreement dated as of June 30,
1993 between the Company and James F. Orr. (Exhibit
(10)(iii)(A)(15)(ii) to Form 10-K for 1993, File No.
1-8519).
(10)(iii)(A)(16)* Employment Agreement dated as of December 31, 1993
between the Company and James F. Orr. (Exhibit
(10)(iii)(A)(16) to Form 10-K for 1993, File No. 1-8519).
(10)(iii)(A)(17)(i)* Employment Agreement dated as of August 19, 1994 between
the Company and James F. Orr.
(10)(iii)(A)(17)(ii)* Amendment to Employment Agreement dated as of October 31,
1994 between the Company and James F. Orr.
(10)(iii)(A)(18)* Employment Agreement dated as of December 30, 1994
between the Company and Barbara J. Stonebraker.
(10)(iii)(A)(19)* Separation Agreement and Waiver and Release between the
Company and Donald E. Hoffman dated December 21, 1994.
(10)(iii)(A)(20)(i)* Cincinnati Bell Inc. Executive Deferred Compensation
Plan. (Exhibit (10)(iii)(A)(17) to Form 10-K for 1993,
File No. 1-8519).
----------------------
*Management contract or compensatory plan required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K.
- 17 -
(10)(iii)(A)(20)(ii)* Amendment to Cincinnati Bell Inc. Executive Deferred
Compensation Plan effective January 1, 1994.
(10)(iii)(A)(21)(i)* Cincinnati Bell Inc. 1988 Long Term Incentive Plan.
(Exhibit (10)(iii)(A)(12)(i) to Form 10-K for 1988, File
No. 1-8519).
(10)(iii)(A)(21)(ii)* Amendment to Cincinnati Bell Inc. 1988 Long Term
Incentive Plan effective December 5, 1988. (Exhibit
(10)(iii)(A)(12)(ii) to Form 10-K for 1988, File No.
1-8519).
(10)(iii)(A)(22)* Cincinnati Bell Inc. 1988 Stock Option Plan for
Non-Employee Directors. (Exhibit (10) (iii)(A)(13) to
Form 10-K for 1988, File No. 1-8519).
(10)(iii)(A)(23)* Cincinnati Bell Inc. 1989 Stock Option Plan. (Exhibit
(10)(iii)(A)(14) to Form 10-K for 1989, File No. 1-8519).
(10)(iii)(A)(24)* Cincinnati Bell Inc. Retirement Plan for Outside
Directors. (Exhibit (10)(iii)(A)(21) to Form 10-K for
1993, File No. 1-8519).
(11) Computation of Earnings (Loss) per Common Share.
(12) Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Dividends.
(13) Portions of the Cincinnati Bell Inc. annual report to
security holders for the fiscal year ended December 31,
1994 as incorporated by reference including the Selected
Financial Data, Report of Management, Report of
Independent Accountants, Management's Discussion and
Analysis and Consolidated Financial Statements.
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Accountants.
(24) Powers of Attorney.
(27) Financial Data Schedules.
(99)(a) Annual Report on Form 11-K for the Cincinnati Bell Inc.
Retirement Savings Plan (formerly the Cincinnati Bell
Inc. Savings Plan for Salaried Employees) for the year
1994 will be filed by amendment on or before June 30,
1995.
(99)(b) Annual Report on Form 11-K for the Cincinnati Bell Inc.
Savings and Security Plan for the year 1994 will be filed
by amendment on or before June 30, 1995.
(99)(c) Annual Report on Form 11-K for the MATRIXX Marketing Inc.
Profit Sharing/401(k) Plan for the year 1994 will be
filed by amendment on or before June 30, 1995.
(99)(d) Annual Report on Form 11-K for the CBIS Retirement and
Savings Plan for the year 1994 will be filed by amendment
on or before June 30, 1995.
----------------------
*Management contract or compensatory plan required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K.
- 18 -
The Company will furnish, without charge, to a security holder upon
request, a copy of the documents, portions of which are incorporated by
reference (Annual Report to security holders and proxy statement), and will
furnish any other exhibit at cost.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
- 19 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CINCINNATI BELL INC.
March 28, 1995 By /s/ Brian C. Henry
-----------------------------
Brian C. Henry,
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
Principal Executive Officer;
President, Chief Executive
JOHN T. LAMACCHIA* Officer and Director
-------------------------------
John T. LaMacchia
Principal Accounting and
Financial Officer; Executive
Vice President and
BRIAN C. HENRY* Chief Financial Officer
-------------------------------
Brian C. Henry
JOHN F. BARRETT* Director
-------------------------------
John F. Barrett
PAUL W. CHRISTENSEN, JR.* Director
-------------------------------
Paul W. Christensen, Jr.
RAYMOND R. CLARK* Director
-------------------------------
Raymond R. Clark
PHILLIP R. COX* Director
-------------------------------
Phillip R. Cox
WILLIAM A. FRIEDLANDER* Director
-------------------------------
William A. Friedlander
Chairman of the Board and
DWIGHT H. HIBBARD* Director
-------------------------------
Dwight H. Hibbard
ROBERT P. HUMMEL, M.D.* Director
-------------------------------
Robert P. Hummel, M.D.
- 20 -
Signature Title Date
--------- ----- ----
JAMES D. KIGGEN* Director
-------------------------------
James D. Kiggen
MARY D. NELSON* Director
-------------------------------
Mary D. Nelson
DAVID B. SHARROCK* Director
-------------------------------
David B. Sharrock
*By /s/ Brian C. Henry March 28, 1995
------------------------------------
Brian C. Henry
as attorney-in-fact and on his behalf
as Executive Vice President and
Chief Financial Officer
- 21 -
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareowners of
Cincinnati Bell Inc.
Our report on the consolidated financial statements of Cincinnati Bell Inc. has
been incorporated by reference in this Form 10-K from page 23 of the 1994 annual
report of Cincinnati Bell Inc. In connection with our audits of such
consolidated financial statements, we have also audited the related financial
statement schedule on page 23 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information required to be
included therein.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Cincinnati, Ohio
February 13, 1995
- 22 -
Schedule II
CINCINNATI BELL INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Thousands of Dollars)
-----------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
-----------------------------------------------------------------------------------------------------------------------------
Additions Deductions
----------------------- ----------
(1) (2)
Balance at Charged Balance
Description Beginning Charged to to Other at End
of Period Expenses Accounts of Period
-----------------------------------------------------------------------------------------------------------------------------
Year 1994
Allowance for doubtful accounts. . . . . . . . . . . . . $ 14,031 $ 11,099 $ 2,966 (a) $ 14,040 (b) $ 14,056
Accrual for disposal and restructuring . . . . . . . . . $ 35,385 $ (2,000) $ 0 $ 22,309 $ 11,076
Deferred tax valuation allowance . . . . . . . . . . . . $ 3,391 $ (985) $ 21,015 $ 0 $ 23,421
Year 1993
Allowance for doubtful accounts. . . . . . . . . . . . . $ 6,705 $ 14,614 $ 4,121 (a) $ 11,409 (b) $ 14,031
Accrual for disposal and restructuring . . . . . . . . . $ 10,545 $ 35,385 $ 0 $ 10,545 $ 35,385
Deferred tax valuation allowance . . . . . . . . . . . . $ 6,711 $ (3,881) $ 561 $ 0 $ 3,391
Year 1992
Allowance for doubtful accounts. . . . . . . . . . . . . $ 4,959 $ 8,225 $ 5,140 (a) $ 11,619 (b) $ 6,705
Accrual for disposal and restructuring . . . . . . . . . $ 9,991 $ 10,545 $ 0 $ 9,991 $ 10,545
Deferred tax valuation allowance . . . . . . . . . . . . $ 5,419 $ 0 $ 1,292 $ 0 $ 6,711
<FN>
---------------
(a) Primarily includes amounts previously written off which were credited directly to this account when recovered
and an allocation of the purchase price for receivables purchased from Interexchange Carriers.
(b) Primarily includes amounts written off as uncollectible.
- 23 -