SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 1-8519
--------------------------
CINCINNATI BELL INC.
SAVINGS AND SECURITY PLAN
--------------------------
CINCINNATI BELL INC.
201 East Fourth Street
Cincinnati, Ohio 45202
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Benefits as of December 31, 1996 and
1995
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1996
Notes to Financial Statements
Schedules:
Item 27(a) - Schedule of Assets Held for Investment Purposes as of December
31, 1996
Item 27(d) - Schedule of Reportable Transactions for the Year Ended
December 31, 1996
Other schedules are omitted because the information required is contained
in the financial statements.
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[LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Employees' Benefit Committee of
Cincinnati Bell Inc.
We have audited the accompanying statements of net assets available for
benefits of the Cincinnati Bell Inc. Savings and Security Plan as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1996. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Cincinnati
Bell Inc. Savings and Security Plan as of December 31, 1996 and 1995, and the
changes in net assets available for benefits for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying index on page 2 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statement of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/S/ Coopers & Lybrand L.L.P.
Cincinnati, Ohio
May 16, 1997
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CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996
----------------------------------------- Thousands of Dollars ------------------------------------------
Cincinnati
Bell New Cincinnati
Stable Spectrum Equity Equity Capital International America Bell Inc.
Value Income Balanced Income Index Appreciation Stock Growth Shares Loan
ASSETS Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
---------- -------- -------- ------ ------ ------------ ------------- ------- ---------- ------ -------
Investments (cost of
$48,809):
Temporary Cash
Investments - - - - - - - - $4,335 - $4,335
Cincinnati Bell
Inc. shares - - 82,268 - 82,268
Mutual funds $11,346 $611 $943 $2,700 $1,176 $545 $1,318 $1,796 - - 20,435
Contracts with
insurance
companies 3,220 - - - - - - - - - 3,220
Loans to
participants - - - - - - - - - 2,176 2,176
Interest and
Dividends
Receivable - - - - - - - - 14 - 14
Other
receivables 126 - - - - - - - - - 126
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
Total
Investments 14,692 611 943 2,700 1,176 545 1,318 1,796 86,617 2,176 112,574
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
LIABILITIES
Administrative fees
payable and other 3 - - - - - - - 7 - 10
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
Net Assets Available
for Benefits $14,689 $611 $943 $2,700 $1,176 $545 $1,318 $1,796 $86,610 $2,176 $112,564
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
- -------------------
See Notes to Financial Statements
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CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1995
----------------------------------------- Thousands of Dollars ------------------------------------------
Cincinnati
Bell New Cincinnati
Stable Spectrum Equity Equity Capital International America Bell Inc.
Value Income Balanced Income Index Appreciation Stock Growth Shares Loan
ASSETS Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
---------- -------- -------- ------ ------ ------------ ------------- ------- ---------- ------ -------
Investments (cost of
$48,809):
Temporary Cash
Investments - - - - - - - - $4,724 - $4,724
Cincinnati Bell
Inc. shares - - 82,268 - 82,268
Mutual funds $11,208 $699 $910 $2,483 $873 $572 $991 $1,248 - - 18,984
Contracts with
insurance
companies 5,894 - - - - - - - - - 5,894
Loans to
participants - - - - - - - - - 2,176 2,176
Interest and
Dividends
Receivable - - - - - - - - 407 - 407
Other
receivables 20 - - - - - - - 448 - 468
------- ---- ---- ------ ---- ---- ---- ------ ------- ------ --------
Total
Investments 17,122 699 910 2,483 873 572 991 1,248 87,847 2,176 114,921
------- ---- ---- ------ ---- ---- ---- ------ ------- ------ --------
------- ---- ---- ------ ---- ---- ---- ------ ------- ------ --------
LIABILITIES
Administrative fees
payable and other - - - - - - - 9 - 9
------- ---- ---- ------ ---- ---- ---- ------ ------- ------ --------
Net Assets Available
for Benefits $17,122 $699 $910 $2,483 $873 $572 $991 $1,248 $87,838 $2,176 $114,912
------- ---- ---- ------ ---- ---- ---- ------ ------- ------ --------
------- ---- ---- ------ ---- ---- ---- ------ ------- ------ --------
- -------------------
See Notes to Financial Statements
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CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
----------------------------------------- Thousands of Dollars ------------------------------------------
Cincinnati
Bell New Cincinnati
Stable Spectrum Equity Equity Capital International America Bell Inc.
Value Income Balanced Income Index Appreciation Stock Growth Shares Loan
ASSETS Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
---------- -------- -------- ------ ------ ------------ ------------- ------- ---------- ------ -------
Net Assets Available
for Benefits $17,122 $699 $910 $2,483 $873 $572 $991 $1,248 $73,165 $2,035 $100,098
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
December 31, 1995
Employee Allotments 1,032 116 111 323 130 93 165 274 1,365 - 3,609
Participating Company
contributions - - - - - - - - 1,598 - 1,598
Transfers to other
Cincinnati Bell
Inc. Plans (105) (26) (49) (41) (43) (1) (27) (14) (291) - (597)
Transfer of
participants'
balances -- Net 3,442 10 150 619 331 131 480 485 (5,967) 319 -
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
Total allotments,
contributions
and transfers 4,369 100 212 901 418 223 618 745 (3,295) 319 4,610
Investment Income:
Dividends on
Cincinnati Bell
shares - - - - - - - - 941 - 941
Other dividends - 47 42 173 41 51 35 147 - - 536
Interest 990 - - - - - - - 196 174 1,360
Net appreciation/
(depreciation) of
investments - (1) 78 282 167 37 133 124 43,406 - 44,226
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
Total additions 5,359 146 332 1,356 626 311 786 1,016 41,248 493 51,673
Less: Distributions
to participants 7,792 234 299 1,139 323 338 459 468 27,772 352 39,176
Administrative and
other expenses
paid by the Plan - - - - - - - - 31 - 31
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
Total Deductions 7,792 234 299 1,139 323 338 459 468 27,803 352 39,207
Net Assets Available
for Benefits $14,689 $611 $943 $2,700 $1,176 $545 $1,318 $1,796 $86,610 $2,176 $112,564
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
------- ---- ---- ------ ------ ---- ------ ------ ------- ------ --------
December 31, 1996
- -----------------
See Notes to Financial Statements
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NOTES TO FINANCIAL STATEMENTS
(1) PLAN DESCRIPTION AND ACCOUNTING POLICIES:
a. General: The Cincinnati Bell Inc. Savings and Security Plan (the
"Plan") is available to all eligible hourly employees at Cincinnati
Bell Inc. (CBI) and Cincinnati Bell Telephone (CBT). The Plan is
subject to the provisions of the Employee Retirement Income Act of
1974 (ERISA). Participants should refer to the Plan document for a
complete description of the Plan.
b. Employee Contributions: Participants in the Plan may contribute up
to 16% of their compensation to the Plan in before -tax dollars.
Participants may also contribute to the Plan on an after-tax basis.
Total before-tax and after-tax contributions may not exceed 16% of a
participant's compensation. The participants specify the manner in
which their own contribution shall be invested in the available funds.
Participants may elect to change the manner in which contributions are
allocated and may also transfer contributions from one fund to another.
c. Employer Contributions: The Company is required to make monthly
matching contributions of an amount equal to 60% of the
contributions of the participants. All employer contributions are
allocated to the Cincinnati Bell Inc. Shares Fund. If a participant
has less than five years of vesting service, the Company's
contributions are subject to forfeiture. If a participant has at
least five years of vesting service, he/she is fully vested in the
Company's matching contributions to their account. In addition, a
participant becomes fully vested at age 65 or at the participant's
death.
d. Distributions to Participants: Distributions are made to
participants, or their beneficiary, upon termination of employment,
attainment of age 70-1/2, death, disability, or financial hardship.
e. Participant Loans: Loans are available to participants from their
individual accounts. For each participant, the number of loans
outstanding is limited to two, and no more than two loans are allowed
to originate during a single Plan year. The minimum amount of any
loan is $1,000, while the maximum amount cannot exceed the lesser of
50% of the vested value of the participant's Plan account or $50,000,
reduced by any outstanding loan balances. The interest rate charged
is determined by the Plan Committee. The loan rates are stated at the
prime rate + 1% as of 1st day of the quarter at the time the loan is
taken. The minimum term of the loan is 6 months and the maximum term
is five years, unless the loan is used to acquire the participant's
principal residence, in which case the term of the loan may not
exceed fifteen years.
f. Temporary Cash Investments: Temporary cash investments include all
cash balances and highly liquid investments with maturity of three
months or less at the time of purchase. Temporary cash investments are
placed in short-term investment funds with the Trustee.
g. Investments: There are nine investment funds available to plan
participants. These include: Cincinnati Bell Stable Value Fund,
Spectrum Income Fund, Balanced Fund, Equity Income Fund, Equity
Index Fund, Capital Appreciation Fund, International Stock Fund,
New America Growth Fund and the Cincinnati Bell Inc. Shares Fund.
All of the above funds are administered, trusteed and invested by
T. Rowe Price or a related subsidiary.
All funds except for the Cincinnati Bell Stable Value Fund and the
Cincinnati Bell Inc. Shares Fund are quoted in shares. These shares
represent the Net Asset Value of shares in T. Rowe Price mutual funds.
The Cincinnati Bell Stable Value Fund and the Cincinnati Bell Inc.
Shares Fund are quoted in units. These units represent a
proportionate interest in two investment funds in which both the
Cincinnati Bell Inc. Retirement Savings Plan and Cincinnati Bell Inc.
Savings and Security Plan participate.
The unit values for both the Cincinnati Bell Stable Value Fund and the
Cincinnati Bell Inc. Shares Fund were initiated at a value of 1.0000
on July 1, 1992. The Cincinnati Bell Stable Value Fund will maintain
a unit value of 1.000 at all times and any income, gains or losses,
contributions or withdrawals would result in more or less units being
credited to an account. The Cincinnati Bell Inc. Shares Fund unit
value will fluctuate with the performance of the underlying
investments which consists primarily of Cincinnati Bell Inc. shares
and a small amount of temporary investments.
The values of investments on December 31, 1996 and 1995 are determined
as follows: Cincinnati Bell shares in the Cincinnati Bell Inc. Shares
Fund on the basis of the last published sales prices on December 31,
1996 and 1995 on the New York Stock Exchange; shares in the following
T. Rowe Price mutual funds: Spectrum Income Fund, Balanced Fund,
Equity Income Fund, Equity Index Fund, Capital Appreciation Fund,
International Stock Fund and the New America Growth Fund on the basis
of the last published net asset value on December 31, 1996 and 1995;
contracts with insurance companies in the Cincinnati Bell Stable Value
Fund at principal plus accrued earnings on December 31, 1996 and 1995;
loans to participants in the Loan Fund at the principal owed by the
participants on December 31, 1996 and 1995.
The Plan presents in the Statement of Changes in Net Assets Available
for Benefits the net appreciation (depreciation) in the value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) of those investments.
h. Administrative Expenses: Administrative expenses are paid by the Plan.
i. Forfeiture of Rights: Units in the Cincinnati Bell Inc. Shares Fund
forfeited by employees under the Plan are valued as of the end of the
same day as the event causing the forfeiture and are applied as
credits reducing subsequent matching Participating Company
contributions.
j. Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reporting
amounts of Net Assets Available for Benefits as of the date of the
Plan's financial statements and the reported Changes in Net Assets
Available for Benefits during the reporting period. Actual results
could differ from these estimates.
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(2) TERMINATION: While CBI has not expressed any intent to terminate the Plan,
it reserves the right to terminate the Plan at any time. In the event of
such termination, all participants' accounts would become 100% vested and
subject to distribution under the provisions of the Plan.
(3) The interest of an employee in each type of investment of the Plan on
December 31, 1996 and December 31, 1995 is represented by units or shares.
The number and value of units or shares were:
December 31, 1996 December 31, 1995
--------------------------------- ---------------------------------
Number of Value per Number of Value per
units/shares unit/share units/shares unit/share
Cincinnati Bell Stable Value Fund 14,689,133 units 1.0000 17,121,329 units 1.0000
Spectrum Income Fund 54,571 shares 11.2000 62,218 shares 11.2400
Balanced Fund 65,154 shares 14.4800 68,814 shares 13.2200
Equity Income Fund 119,803 shares 22.5400 124,089 shares 20.0100
Equity Index Fund 57,793 shares 20.3400 50,752 shares 17.2100
Capital Appreciation Fund 37,636 shares 14.4700 41,851 shares 13.6700
International Stock Fund 95,487 shares 13.8000 81,025 shares 12.2300
New America Growth Fund 46,796 shares 38.3700 35,751 shares 34.9100
Cincinnati Bell Inc. Shares Fund 22,717,452 units 3.8100 33,448,294 units 2.1874
December 31, 1996 the number of participants with balances by investment
fund was:
Cincinnati Bell Stable Value Fund 981
Spectrum Income Fund 187
Balanced Fund 158
Equity Income Fund 396
Equity Index Fund 170
Capital Appreciation Fund 143
International Stock Fund 239
New America Growth Fund 319
Cincinnati Bell Inc. Shares Fund 1,588
(4) TAX STATUS:
The Internal Revenue Service has issued a determination that the Plan meets
the requirements of Section 401(a) of the Internal Revenue Code (the
"Code") and is exempt from Federal income taxes under Section 501(a) of the
Code.
(5) PLAN AMENDMENTS:
The following Plan amendments were approved in 1996:
Effective retroactively to January 1, 1991, the Plan was amended to
state specific details regarding the computation of "Vesting Service"
rather then refer to the provision of the Cincinnati Bell Pension Plan
related to vesting.
The Plan was amended to change the corrective steps which must be
taken if pre-tax allotments paid to the Trust on behalf of Highly
Compensated Participants exceed certain limitations for any Plan
Year to make clear that the corrective contributions are treated as
pre-tax contributions.
Effective August 9, 1996, the Plan was amended to allow for a higher
maximum allotment of (a) $45 for weekly covered compensation of $800
up to $900 and (b) $50 for weekly covered compensation of $900 and
over.
Effective January 1, 1997, the Plan was amended to allow eligible
participants to diversify Company Matching Contributions according
to a specified five year schedule.
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CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
----------------------Thousands of Dollars--------------------
Number of
Shares or
Principal
Name of Issuer and Title of Issue Amount Cost Value
--------------------------------- --------- ------- --------
CINCINNATI BELL INC. SHARES FUND
Temporary cash investments 4,335 $ 4,335 $ 4,335
Cincinnati Bell Inc. shares* 1,334,978 shs. 17,619 82,268
Interest receivable 14 14 14
------- -------
Total Cincinnati Bell Inc. Shares Fund 21,968 86,617
T. ROWE PRICE SPECTRUM INCOME FUND 54,571 shs. 598 611
T. ROWE PRICE BALANCED FUND 65,154 shs. 836 943
T. ROWE PRICE EQUITY INCOME FUND 119,803 shs. 2,282 2,700
T. ROWE PRICE EQUITY INDEX FUND 57,793 shs. 957 1,176
T. ROWE PRICE CAPITAL APPRECIATION FUND 37,636 shs. 513 545
T. ROWE PRICE INTERNATIONAL STOCK FUND 95,487 shs. 1,198 1,318
T. ROWE PRICE NEW AMERICA GROWTH FUND 46,796 shs. 1,589 1,796
CINCINNATI BELL STABLE VALUE FUND
T. Rowe Price Stable Value Common Trust Fund * 11,346 11,346 11,346
Contract with Confederation Life
Insurance Company + 285 285 285
Contracts with Hartford Life Insurance
Company + 2,293 2,293 2,293
Contracts with Metropolitan Life
Insurance Company + 511 511 511
Contracts with Prudential Insurance Company
of America + 131 131 131
Other receivables 126 126
------ ------
Total Cincinnati Bell Stable Value Fund 14,692 14,692
LOAN FUND
Loans to Participants 2,176 2,176 2,176
------ ------
Total Loan Fund 2,176 2,176
------ ------
GRAND TOTAL $ 48,809 $ 112,574
-------- ---------
-------- ---------
- -----------------------------
* Investment represents 5% or more of the Net Assets Available for
Benefits.
+ The contracts with these insurance companies guarantee the repayment
of principal and the crediting of interest. During 1996, the composite
effective annual interest rate earned under these contracts was approximately
6.48%. The rate at which interest will be credited in future years may be
either higher or lower.
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CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
Current
Value on
Identity of Purchase Selling Cost of Date of Net Gain
Party Involved Description of Asset Price Price Asset Transactions or (Loss)
- ------------------------- -------------------- ---------- ---------- ---------- ----------- ----------
Cincinnati Bell Shares Fund Company Stock 3,376,415 3,376,415 3,376,415
Cincinnati Bell Shares Fund Company Stock 34,056,486 10,370,267 34,056,486 23,686,219
Stable Value Fund GIC 6,497,485 6,497,485 6,497,485
Stable Value Fund GIC 8,929,681 8,929,680 8,929,681 1
Equity Income Fund Mutual Fund 1,281,518 1,281,518 1,281,518
Equity Income Fund Mutual Fund 1,344,290 1,145,885 1,344,290 198,405
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Employees' Benefit Committee have duly caused this annual report
to be signed by the undersigned, thereunto duly authorized.
CINCINNATI BELL INC.
SAVINGS AND SECURITY PLAN
By: \s\ Pamela B. Wolfe
-------------------------------------------
Pamela B. Wolfe
Secretary
Employees' Benefit Committee
June 16, 1997
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