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, 1997
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.
RETIREMENT SAVINGS 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, 1997 and
1996
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1997
Notes to Financial Statements
Schedules:
Item 27(a) - Schedule of Assets Held for Investment Purposes as of December
31, 1997
Item 27(d) - Schedule of Reportable Transactions for the Year Ended
December 31, 1997
Other schedules are omitted because the information required is contained
in the financial statements.
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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. Retirement Savings Plan as of December 31, 1997 and
1996, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1997. 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. Retirement Savings Plan as of December 31, 1997 and 1996, and the
changes in net assets available for benefits for the year ended December 31,
1997, 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 Schedule of Assets Held
for Investment Purposes as of December 31, 1997 and Schedule of Reportable
Transactions for the year ended December 31, 1997 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. These supplemental schedules are the
responsibility of the Plan's management. 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 22,1998
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CINCINNATI BELL INC. RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997
Thousands of Dollars
---------------------------------- ----------------------------
Equity Equity Capital
Cincinnati Bell Spectrum Balanced Income Index Appreciation
ASSETS Stable Value Fund Income Fund Fund Fund Fund Fund
----------------- ----------- -------- ------- ------- ------------
Investments - stated at fair value
(cost of $76,763):
Temporary cash investments - - - - - -
Cincinnati Bell Inc. shares - -
Mutual funds $ 10,270 $ 4,108 $ 2,486 $18,967 $ 5,832 $ 3,835
Contracts with insurance companies 272 - - - - -
Loans to participants - - - - - -
Interest and dividends receivable - - - - - -
----------------- ----------- -------- ------- ------- ------------
Total Investments 10,542 4,108 2,486 18,967 5,832 3,835
----------------- ----------- -------- ------- ------- ------------
----------------- ----------- -------- ------- ------- ------------
LIABILITIES
Administrative fees payable and other 3 - - - - -
----------------- ----------- -------- ------- ------- ------------
Net Assets Available for Benefits $ 10,539 $ 4,108 $ 2,486 $18,967 $ 5,832 $ 3,835
----------------- ----------- -------- ------- ------- ------------
----------------- ----------- -------- ------- ------- ------------
International New America Cincinnati Bell Inc. Loan
ASSETS Stock Fund Growth Fund Shares Fund Fund Total
------------- ----------- -------------------- -------- ------------
Investments - stated at fair value
(cost of $76,763):
Temporary cash investments - - $ 5,303 - $ 5,303
Cincinnati Bell Inc. shares 94,605 - 94,605
Mutual funds $4,809 $ 8,416 - - 58,723
Contracts with insurance companies - - - - 272
Loans to participants - - - $ 2,043 2,043
Interest and dividends receivable - - 22 - 22
------------- ----------- -------------------- -------- ------------
Total Investments 4,809 8,416 99,930 2,043 160,968
------------- ----------- -------------------- -------- ------------
------------- ----------- -------------------- -------- ------------
LIABILITIES
Administrative fees payable and other - - 149 152
------------- ----------- -------------------- -------- ------------
Net Assets Available for Benefits $ 4,809 $ 8,416 $ 99,781 $ 2,043 $ 160,816
------------- ----------- -------------------- -------- ------------
------------- ----------- -------------------- -------- ------------
- -----------------------------------------
See Notes to Financial Statements
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CINCINNATI BELL INC. RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996
Thousands of Dollars
---------------------------------- ----------------------------
Equity Equity Capital
Cincinnati Bell Spectrum Balanced Income Index Appreciation
ASSETS Stable Value Fund Income Fund Fund Fund Fund Fund
----------------- ----------- -------- -------- -------- ------------
Investments - stated at fair value
(cost of $68,226):
Temporary cash investments - - - - - -
Cincinnati Bell Inc. shares - -
Mutual funds $ 8,911 $ 3,801 $ 1,803 $ 14,263 $ 2,793 $ 3,144
Contracts with insurance companies 2,529 - - - - -
Loans to participants - - - - - -
Interest and dividends receivable - - - - - -
Other receivables 99 - - - - -
----------------- ----------- -------- -------- -------- ------------
Total Investments 11,539 3,801 1,803 14,263 2,793 3,144
----------------- ----------- -------- -------- -------- ------------
----------------- ----------- -------- -------- -------- ------------
LIABILITIES
Administrative fees payable and other 2 - - - - -
----------------- ----------- -------- -------- -------- ------------
Net Assets Available for Benefits $ 11,537 $ 3,801 $ 1,803 $ 14,263 $ 2,793 $ 3,144
----------------- ----------- -------- -------- -------- ------------
----------------- ----------- -------- -------- -------- ------------
International New America Cincinnati Bell Inc. Loan
ASSETS Stock Fund Growth Fund Shares Fund Fund Total
------------- ----------- -------------------- -------- ------------
Investments - stated at fair value
(cost of $68,226):
Temporary cash investments - - $ 5,118 - $ 5,118
Cincinnati Bell Inc. shares 97,437 - 97,437
Mutual funds $ 4,370 $ 6,071 - - 45,156
Contracts with insurance companies - - - - 2,529
Loans to participants - - - $1,798 1,798
Interest and dividends receivable - - 17 - 17
Other receivables - - - - 99
------------- ----------- -------------------- -------- ------------
Total Investments 4,370 6,071 102,572 1,798 152,154
------------- ----------- -------------------- -------- ------------
------------- ----------- -------------------- -------- ------------
LIABILITIES
Administrative fees payable and other - - 327 - 329
------------- ----------- -------------------- -------- ------------
Net Assets Available for Benefits $ 4,370 $ 6,071 $ 102,245 $ 1,798 $ 151,825
------------- ----------- -------------------- -------- ------------
------------- ----------- -------------------- -------- ------------
- -----------------------------------------
See Notes to Financial Statements
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CINCINNATI BELL INC. RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
Thousands of Dollars
---------------------------------- ----------------------------
Equity Equity Capital
Cincinnati Bell Spectrum Balanced Income Index Appreciation
Stable Value Fund Income Fund Fund Fund Fund Fund
----------------- ----------- -------- -------- -------- ------------
Net Assets Available for Benefits $ 11,537 $ 3,801 $ 1,803 $ 14,263 $ 2,793 $ 3,144
as of December 31, 1996 ----------------- ----------- -------- -------- -------- ------------
Employee allotments 319 258 229 930 480 369
Participating company contributions - - - - - -
Transfers from other Cincinnati Bell
Inc. plans 35 (9) (2) (96) 43 (101)
Transfer of participants' balances -- net (863) (96) 160 1,159 1,396 114
----------------- ----------- -------- -------- -------- ------------
Total allotments, contributions and
transfers (509) 153 387 1,993 1,919 382
Investment income:
Dividends on Cincinnati Bell Inc.
shares - - - - - -
Other dividends - 294 92 1,864 115 470
Interest 683 - - - - -
Net appreciation/(depreciation) of
investments - 153 289 2,273 1,059 48
----------------- ----------- -------- -------- -------- ------------
Total additions 174 600 768 6,130 3,093 900
Less: Distributions to participants 1,172 293 85 1,426 54 209
Administrative and other expenses
paid by the Plan - - - - - -
----------------- ----------- -------- -------- -------- ------------
Total deductions 1,172 293 85 1,426 54 209
Net Assets Available for Benefits $ 10,539 $ 4,108 $ 2,486 $ 18,967 $ 5,832 $ 3,835
as of December 31, 1997 ----------------- ----------- -------- -------- -------- ------------
----------------- ----------- -------- -------- -------- ------------
International New America Cincinnati Bell Inc. Loan
Stock Fund Growth Fund Shares Fund Fund Total
------------- ----------- -------------------- -------- ------------
Net Assets Available for Benefits $ 4,370 $ 6,071 $ 102,245 $ 1,798 $ 151,825
as of December 31, 1996 ------------- ----------- -------------------- -------- ------------
Employee allotments 544 753 907 - 4,789
Participating company contributions - - 1,918 - 1,918
Transfers from other Cincinnati Bell
Inc. plans 1 94 344 106 415
Transfer of participants' balances -- net (104) 448 (2,214) - -
------------- ----------- -------------------- -------- ------------
Total allotments, contributions and
transfers 441 1,295 955 106 7,122
Investment income:
Dividends on Cincinnati Bell Inc.
shares - - 1,283 - 1,283
Other dividends 253 398 - - 3,486
Interest - - 279 168 1,130
Net appreciation/(depreciation) of
investments (119) 997 1,301 - 6,001
------------- ----------- -------------------- -------- ------------
Total additions 575 2,690 3,818 274 19,022
Less: Distributions to participants 136 345 6,231 29 9,980
Administrative and other expenses
paid by the Plan - - 51 - 51
------------- ----------- -------------------- -------- ------------
Total deductions 136 345 6,282 29 10,031
Net Assets Available for Benefits $ 4,809 $ 8,416 $ 99,781 $ 2,043 $ 160,816
as of December 31, 1997 ------------- ----------- -------------------- -------- ------------
------------- ----------- -------------------- -------- ------------
- -----------------------------------------
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. Retirement Savings Plan (the
"Plan") is available to all eligible salaried employees at
Cincinnati Bell Inc. (CBI, the Company) and Cincinnati Bell
Telephone (CBT), and all eligible salaried and hourly employees of
Cincinnati Bell Long Distance Inc. (CBLD), Cincinnati Bell Supply
Co. (CBS), and Cincinnati Bell Telecommunications Services Inc.
(CBTS) and Cincinnati Bell Wireless Co. (CBWC). The Plan is subject
to the provisions of the Employee Retirement Income Act of 1974
(ERISA). The contributions and earnings are taxable to
participants, subject to certain exemptions, upon withdrawal from
the Plan. The defined contribution plan is administered by a
committee ( the "Plan Committee") appointed in accordance with the
provisions of the Plan. The trustee of the Plan is T.Rowe Price.
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' before-tax contributions could not exceed $9,500 for
calendar years 1997 and 1996. 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 funds 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 the lesser of 66 2/3% of the contributions
of the participants or 4% of the participant's covered compensation.
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, per terms of vesting scale. 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 Plan Committee (the
Committee) determines the interest rate charged. The loan rates are
stated at the prime rate + 1% as of 1st day of the quarter at the time
the loan is taken. During 1997 and 1996, rates varied between 9.25%
and 9.50%. 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, 1997 and 1996 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,
1997 and 1996 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, 1997 and 1996;
contracts with insurance companies in the Cincinnati Bell Stable Value
Fund at principal plus accrued earnings on December 31, 1997 and 1996;
loans to participants in the Loan Fund at the principal owed by the
participants on December 31, 1997 and 1996
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.
(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.
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(3) The interest of an employee in each type of investment of the Plan on
December 31, 1997 and December 31, 1996 is represented by units or shares.
The number and value of units or shares were:
DECEMBER 31, 1997 DECEMBER 31, 1996
--------------------------------- ----------------------------------
Number of Value per Number of Value per
units/shares unit/share units/shares unit/share
Cincinnati Bell Stable Value Fund 10,539,115 units $1.0000 11,536,583 units $1.0000
Spectrum Income Fund 352,288 shares $11.6600 339,359 shares $11.2000
Balanced Fund 150,271 shares $16.5400 124,486 shares $14.4800
Equity Income Fund 727,538 shares $26.0700 632,797 shares $22.5400
Equity Index Fund 221,073 shares $26.3800 137,331 shares $20.3400
Capital Appreciation Fund 260,712 shares $14.7100 217,263 shares $14.4700
International Stock Fund 358,348 shares $13.4200 316,640 shares $13.8000
New America Growth Fund 190,453 shares $44.1900 158,210 shares $38.3700
Cincinnati Bell Inc. Shares Fund 25,625,539 units $3.8938 26,818,455 units $3.8100
As of December 31, 1997 the number of participants with balances by
investment fund was:
Cincinnati Bell Stable Value Fund 359
Spectrum Income Fund 266
Balanced Fund 206
Equity Income Fund 586
Equity Index Fund 346
Capital Appreciation Fund 286
International Stock Fund 401
New America Growth Fund 491
Cincinnati Bell Inc. Shares Fund 1025
(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 became effective January 1, 1997:
- Amend the definition of "Covered Employee" to generally include
salaried employees and exclude hourly employees temporarily promoted
to salaried employee positions, consistent with the definitions used
in Cincinnati Bell Pension Plan (CBPP).
- Amend the rules relating to required distributions of pre-tax
allotments, post-tax allotments and Company-matching contributions to
provide that any required distribution will be made by reducing the
highest dollar amount of excess contribution rather than the highest
percentage of excess contributions.
- Adopt the simplified definition of highly compensated employee,
generally, an employee earning $80,000 or more.
- Recognize credit for military service.
- Mandatory distributions not required for employees who remain employed
after age 70 1/2.
- A participant's loan will not be automatically defaulted because of a
reduction or suspension of pay, provided that adequate provisions for
manual repayments are made.
- Effective 11/2/97, add employees of Cincinnati Bell Wireless Co.
(CBWC) as "Covered Employees" and CBWC as a "Participating Co.".
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CINCINNATI BELL INC. RETIREMENT SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
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 $ 5,303 $ 5,303 $ 5,303
Cincinnati Bell Inc. shares *# 3,051,774 shs. 21,703 94,605
Interest receivable $ 22 22 22
--------- ---------
Total Cincinnati Bell Inc. Shares Fund 27,028 99,930
T. ROWE PRICE SPECTRUM INCOME FUND 352,388 shs. $3,873 $4,108
T. ROWE PRICE BALANCED FUND 150,271 shs. 1,983 2,486
T. ROWE PRICE EQUITY INCOME FUND * 727,538 shs. 14,146 18,967
T. ROWE PRICE EQUITY INDEX FUND 221,073 shs. 4,287 5,832
T. ROWE PRICE CAPITAL APPRECIATION FUND 260,712 shs. 3,648 3,835
T. ROWE PRICE INTERNATIONAL STOCK FUND 358,348 shs. 4,514 4,809
T. ROWE PRICE NEW AMERICA GROWTH FUND * 190,453 shs. 6,742 8,416
CINCINNATI BELL STABLE VALUE FUND
T. Rowe Price Stable Value Common Trust Fund * 10,270 10,270 10,270
Contracts with Metropolitan Life Insurance Company + 171 units 171 171
Contracts with Prudential Insurance Company of America + 101 units 101 101
--------- ---------
Total Cincinnati Bell Stable Value Fund 10,542 10,542
LOAN FUND
Loans to Participants $ 2,043 0 2,043
--------- ---------
GRAND TOTAL $ 76,763 $ 160,968
--------- ---------
--------- ---------
- -------------------------
* 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 1997, the composite
effective annual interest rate earned under these contracts for the plan
years 1997 and 1996 was approximately 6.85% and 6.48%, respectively.
The interest rate at December 31, 1997 and 1996 was 6.85% and 6.48%,
respectively. The rate at which interest will be credited in future
years may be either higher or lower.
# Party-in-interest to the Plan.
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CINCINNATI BELL INC. RETIREMENT SAVINGS PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
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 $ 4,949,901 - $ 4,949,901 $ 4,949,901
Cincinnati Bell Shares Fund Company Stock $ 4,618,251 $ 10,078,026 $ 4,618,251 $ 10,078,026 $ 5,459,775
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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. RETIREMENT
SAVINGS PLAN
By /s/ Pamela B. Wolfe
----------------------------
Pamela B. Wolfe
Secretary
Employees' Benefit Committee
June 16, 1998
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