Item 1. Business - ------------------
General -------
The principal business of the Registrant is the manufacture and sale of scientific laboratory and technical workstations and equipment for professionals, including wood and metal furniture for use in chemistry, physics, biology and other general science laboratories, and benches for electronic light assembly and testing. Other products for laboratory use include fume hoods and accessories, apparatus benches, work surfaces, sinks and sink assemblies, and glove boxes.
Scientific laboratory and technical workstations and equipment and related installation accounted for 100 percent of the Registrant's sales in each of the fiscal years ended April 30, 1995, 1994 and 1993.
The scientific laboratory and technical workstations and equipment produced by the Registrant include general science workstations for use in chemistry, physics and biology laboratories, fume hoods, apparatus benches, work surfaces, sinks and sink assemblies. These products are sold principally to industrial and commercial research laboratories, educational institutions, health-care institutions and governmental entities. The Registrant's products are primarily sold through purchase orders and contracts submitted by customers, through Registrant's commissioned dealers, through a national distributor and through competitive bids submitted by the Registrant. It is common in the scientific laboratory furniture industry for customer orders to require delivery at extended future dates, because the products are frequently to be installed in buildings yet to be constructed. Changes or delays in building construction may cause further delayed delivery dates. Since prices are normally quoted on a firm basis in the industry, the Registrant bears the burden of possible increases in labor and material costs between receipt of an order and delivery of the product.
The need for working capital and the credit practices of the Registrant are comparable to those of other companies selling similar products in similar markets. Payments for products which the Registrant manufactures and installs are received over longer periods of time and require greater working capital than for manufacturers of most products. In addition, payment terms of some building projects allow for a percentage retention amount which extends the collection period of accounts receivable, thus requiring more working capital.
The principal raw materials and products manufactured by others used by the Registrant in its products are cold-rolled carbon and stainless steel, hardwood lumber and plywood, paint, chemicals, resins, hardware, plumbing and electrical fittings. Such materials and products are purchased from multiple suppliers and are readily available.
The Registrant holds various patents and patent rights but does not consider that its success or growth is dependent upon its patents or patent rights. The Registrant's business is not dependent upon licenses, franchises or concessions.
The Registrant's scientific laboratory and technical workstation and equipment business is neither cyclical nor seasonal, nor is it dependent on any one or a few customers. However, sales to VWR Corporation ("VWR Scientific") represented 17 percent, 13 percent, and 15 percent of the Registrant's total sales, for fiscal years 1995, 1994 and 1993, respectively. VWR Scientific is a distributor of the Registrant's products. In the event that VWR Scientific were not a sales channel, the Registrant would distribute these products through its other sales agents, dealers, and direct sales force or through another outside distributor or distributors.
The Registrant's sales backlog as of April 30, 1995 was $24.1 million compared to $25.3 million and $27.9 million as of April 30, 1994 and 1993, respectively. In the Registrant's business, planning for purchases frequently commences several years before installation; therefore, increases and decreases in the business activities of the Registrant usually trail the normal economic cycle. It is expected that the amount of the backlog as of the beginning of the fiscal year, together with orders received for current delivery, will be sufficient to permit the Registrant to operate at satisfactory levels during the current year. All but $1.2 million of the backlog as of the beginning of the current fiscal year is scheduled for shipment during the year; however, it may reasonably be expected that delays in shipments will occur because of customer rescheduling or delay in completion of buildings in which the Registrant's products are to be installed. Based on past experience, the Registrant expects that more than 90 percent of its backlog scheduled for shipment in the current fiscal year will be shipped in the current fiscal year.
Competition -----------
The scientific laboratory and technical workstation and equipment industry is highly competitive. The Registrant believes that the principal competitive factors in the scientific laboratory and technical workstation and equipment industry are price, product performance, and customer service. A substantial portion of the business of the Registrant is based upon competitive public bidding.
Research and Development ------------------------
The amount spent during the fiscal year ended April 30, 1995 on company-sponsored research and development activities related to new products or services or improvement of existing products or services was $527,647. The amounts spent for similar purposes in the fiscal years ended April 30, 1994 and 1993 were $490,481 and $440,580, respectively. Six professional employees were engaged in such research at April 30, 1995.
Environmental Compliance ------------------------
In the last three fiscal years, compliance with federal, state or local provisions enacted or adopted regulating the discharge of materials into the environment has had no material effect on the Registrant. There are no material capital expenditures anticipated for such purposes, and no material effect therefrom is anticipated on the earnings or competitive position of the Registrant.
Employees ---------
The number of persons employed by the Registrant at April 30, 1995 was 575.
Item 2.

Item 2. Properties - --------------------
The Registrant owns and operates three plants in Statesville, North Carolina and one in Lockhart, Texas. The plants are involved in the production of scientific laboratory and technical workstations and equipment.
The plants in Statesville, North Carolina are located in three separate adjacent buildings which contain manufacturing facilities. Office, engineering and drafting personnel and facilities are located in two of the three buildings. The Registrant's corporate offices are located in the largest building. The plant buildings together comprise approximately 382,000 square feet and are located on approximately 20 acres of land. In addition, the Registrant leases a warehouse of 22,000 square feet in Statesville, North Carolina.
The plant in Lockhart, Texas is housed in a building of approximately 129,000 square feet located on approximately 30 acres. In addition, a separate 10,000 square foot office building on this site houses certain administrative personnel.
At April 30, 1995, the Registrant's land and buildings were pledged as collateral securing borrowings and letters of credit outstanding under a revolving credit facility. The Registrant believes its facilities are suitable for their respective uses and are adequate for its current needs.
Item 3.

Item 3. Legal Proceedings - ---------------------------
Not Applicable.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders - -------------------------------------------------------------
Not Applicable.
Executive Officers - ------------------
Information regarding the executive officers of the Registrant is contained in Part III of this report, Item 10(b), and is incorporated into Part I of this report in reliance on General Instruction G(3) to Form 10-K, by reference.
PART II
Item 5.

Item 5. Market for Registrant's Common Equity and Related - ----------------------------------------------------------- Stockholder Matters -------------------
Incorporated by reference from the Registrant's annual report to stockholders for the fiscal year ended April 30, 1995, page 20, sections entitled "Range of Market Prices" and "Quarterly Financial Data". As of July 7, 1995, the Registrant estimates there were approximately 1,400 stockholders of Kewaunee common shares, of which 439 were stockholders of record.
Item 6.

Item 6. Selected Financial Data - ---------------------------------
Incorporated by reference from the Registrant's annual report to stockholders for the fiscal year ended April 30, 1995, pages 18-19, section entitled "Summary of Selected Financial Data".
Item 7.

Item 7. Management's Discussion and Analysis of Financial - ----------------------------------------------------------- Condition and Results of Operations -----------------------------------
Incorporated by reference from the Registrant's annual report to stockholders for the fiscal year ended April 30, 1995, pages 6-8, section entitled "Management's Discussion and Analysis".
Item 8.

Item 8. Financial Statements and Supplementary Data - -----------------------------------------------------
Incorporated by reference from the Registrant's annual report to stockholders for the fiscal year ended April 30, 1995, pages 9-20.
Item 9.

Item 9. Changes in and Disagreements with Accountants on - ---------------------------------------------------------- Accounting and Financial Disclosure -----------------------------------
Not Applicable.
PART III
Item 10.

Item 10. Directors and Executive Officers of the Registrant - ------------------------------------------------------------
(a) Incorporated by reference from the Registrant's proxy statement for use in connection with its annual meeting of stockholders to be held on August 30, 1995, pages 1-3, section entitled "Election of Directors".
(b) The names and ages of the Registrant's executive officers and their business experience during the past five years are set forth below:
Executive Officers of the Registrant ------------------------------------
Name Age Position ---- --- --------
Eli Manchester, Jr. 64 President and Chief Executive Officer
Robert M. Cecchini 61 Vice President-Finance; Treasurer; Secretary; and Chief Financial Officer
T. Ronald Gewin 52 Vice President-Manufacturing
William A. Shumaker 46 Vice President-Sales and Marketing
Eli Manchester, Jr. was elected a director of the Registrant in November 1990. He was elected President and Chief Executive Officer of the Registrant on July 11, 1990. For eighteen years prior thereto, he was President and Chief Executive Officer of BIW Cables Systems, Inc., a manufacturer of electrical and electronic components.
Robert M. Cecchini was elected Vice President of Finance, Chief Financial Officer, Secretary and Treasurer in November 1990. Mr. Cecchini joined the Registrant in July 1989 as Corporate Director of Operational Accounting and Costs. Mr. Cecchini has elected to retire, effective July 31, 1995.
T. Ronald Gewin joined the Registrant in December 1992 as Vice President of Manufacturing. Prior to joining the Registrant, Mr. Gewin was General Manager of a Division of the Grinnell Corporation from 1990 to 1992. He was a Vice President of Manufacturing for a division of White Consolidated Industries from 1987 to 1990.
William A. Shumaker joined the Registrant in December 1993 as Vice President of Sales and Marketing. Prior to joining the Registrant, Mr. Shumaker was with the St. Charles Companies of St. Charles, Illinois, where he served as Vice President of Sales and Marketing with their Institutional Division from 1989 to 1993, and as National Sales Manager with another division from 1984 to 1988. He held various other sales and customer service positions with The St. Charles Companies from 1969 through 1984.
Item 11.

Item 11. Executive Compensation - --------------------------------
Incorporated by reference from the Registrant's proxy statement for use in connection with its annual meeting of stockholders to be held on August 30, 1995, pages 4-5, section entitled "Executive Compensation," pages 6-7, section entitled "Compensation Committee Report on Executive Compensation," and page 9, section entitled "Agreements with Certain Executives".
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners - ---------------------------------------------------------
and Management --------------
Incorporated by reference from the Registrant's proxy statement for use in connection with its annual meeting of stockholders to be held on August 30, 1995, pages 10-12, sections entitled "Security Ownership of Directors and Executive Officers" and "Security Ownership of Certain Beneficial Owners".
Item 13.

Item 13. Certain Relationships and Related Transactions - --------------------------------------------------------
Incorporated by reference from the Registrant's proxy statement for use in connection with its annual meeting of stockholders to be held on August 30, 1995, pages 1-3, section entitled "Election of Directors".
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules and Reports - ------------------------------------------------------------- on Form 8-K -----------
The following documents are filed or incorporated by reference as part of this report:
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.
(a)(3) Exhibits --------
Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index which is attached hereto at pages S-2 through S-4 and which is incorporated herein by reference.
(b) Reports on Form 8-K -------------------
No reports on Form 8-K were filed during the fourth quarter of the Registrant's fiscal year ended April 30, 1995.
____________________ * Matters incorporated by reference from the Registrant's annual report to stockholders for the year ended April 30, 1995.
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors Kewaunee Scientific Corporation Statesville, North Carolina
We have audited the balance sheets of Kewaunee Scientific Corporation as of April 30, 1995 and 1994, and the related statements of operations, retained earnings, and cash flows for each of the three years in the period ended April 30, 1995; such financial statements are included in your 1995 Annual Report to Stockholders. Our audits also included the financial statement schedule listed in the Index at Item 14(a)(2). These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule 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, such financial statements present fairly, in all material respects, the financial position of Kewaunee Scientific Corporation as of April 30, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended April 30, 1995 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
/s/ Deloitte & Touche LLP June 2, 1995
[LOGO OF DELOITTE TOUCHE TOHMATSU INTERNATIONAL]
Schedule II
Kewaunee Scientific Corporation Valuation and Qualifying Accounts ($ in thousands)
* Uncollectible accounts written off, net of recoveries.
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.
KEWAUNEE SCIENTIFIC CORPORATION
By: /s/ Eli Manchester, Jr. -------------------------------------- Eli Manchester, Jr. President and Chief Executive Officer
Date: July 26, 1995
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 dates indicated.
(i) Principal Executive Officer ) ) ) /s/ Eli Manchester, Jr. ) ------------------------------- ) Eli Manchester, Jr., President ) and Chief Executive Officer ) ) (ii) Principal Financial and Accounting Officer ) ) ) /s/ R. M. Cecchini ) ------------------------------- ) R. M. Cecchini, ) Vice President-Finance, Treasurer ) ) (iii) A majority of the Board of Directors: ) July 26, 1995 ) ) /s/ Margaret B. Bruemmer /s/ Eli Manchester, Jr. ) - ------------------------- -------------------------- ) Margaret B. Bruemmer Eli Manchester, Jr. ) ) ) /s/ W. N. Caldwell /s/ James T. Rhind ) - ------------------------- -------------------------- ) W. N. Caldwell James T. Rhind ) ) ) /s/ John C. Campbell, Jr. /s/ Thomas F. Pyle ) - ------------------------- -------------------------- ) John C. Campbell, Jr. Thomas F. Pyle ) ) ) /s/ Kingman Douglass ) - ------------------------- ) Kingman Douglass )
S-1
KEWAUNEE SCIENTIFIC CORPORATION
Exhibit Index -------------
S-2
- --------------- All footnotes located on page S-4.
(All other exhibits are either inapplicable or not required.)
S-3
- --------------- All footnotes located on page S-4.
S-4


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 in the Greater Cincinnati area. The information systems segment, Cincinnati Bell Information Systems Inc. ("CBIS"), provides data processing and software development services primarily to the telecommunications industry in the United States. 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, 1995, CBT had approximately 906,000 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 calling 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 access lines provided by CBT to customer premises can be interconnected with the access 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:
Recurring charges for network access lines and other local services for the year ended December 31, 1995 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 1995 revenues were derived from intrastate service. Approximately 82% of 1995 intrastate revenues were derived from Ohio service, approximately 18% were derived from Kentucky service and minor amounts were derived from Indiana and other states service. Of the total 1995 intrastate revenues, local service accounted for approximately 73%, intrastate long distance service and network access accounted for approximately 11% 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 subsequent annual 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 sought to continue uniform rates for basic service in CBT's Kentucky and Ohio metropolitan service areas and annually increase revenues by $3.4 million. By an order dated May 23, 1995, the PSCK ordered reductions in certain rates for vertical services such as touch tone, the establishment of extended area service in the three southern counties in CBT's Kentucky operating territory and maintained rate uniformity with CBT's Ohio rates.
INTERSTATE RATES. Approximately 23% of CBT's 1995 revenues were 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 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 United States 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. On August 1, 1995 the United States Court of Appeals for the District of Columbia Circuit issued an opinion upholding the FCC order awarding damages and reversing the FCC's allowance of offsets between different monitoring categories. CBT and other affected carriers have filed a petition with the United States Supreme Court seeking review of the lower court's decision.
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 sensitive 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. Every two years CBT compares actual return with authorized rate of return, currently 11.25%. 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. Moreover, recent federal and state initiatives to accelerate the development of competition in all segments of the telecommunications industry are likely to heighten the competitive pressures facing CBT.
At the federal level, Congress recently passed the Telecommunications Act of 1996 (the "Act") which mandates the development of competitive markets. Under the Act, incumbent local exchange carriers like CBT are required to interconnect with the networks of other service providers, unbundle certain network components and make them available to competing providers at wholesale rates, and remove other perceived barriers to competitive entry by alternative providers of local exchange service. While the Act clearly mandates these and other requirements, it does so in very general terms and leaves it to the FCC and the states to implement them. Thus, the full impact of the Act on CBT will not be known until the FCC and the states complete the numerous rulemakings mandated by the Act. The Act contains a provision that allows local exchange carriers serving fewer than 2% of the nation's access lines to petition their state commissions to delay certain requirements of the Act. CBT falls within this 2% threshold and is currently evaluating this option. CBT plans to participate actively in any FCC proceeding that will have an impact on its rights or obligations under the Act.
At the state level, the PUCO has initiated a generic rulemaking proceeding to establish rules to govern the introduction of local exchange competition. On September 27, 1995, the PUCO issued an entry inviting interested parties to file comments on a set of proposed rules developed by the staff of the PUCO. CBT has filed comments on those proposed rules. It is expected that the PUCO will issue its rules during the second quarter of this year. The PSCK has initiated a similar proceeding in Kentucky. CBT is actively participating in that proceeding.
In addition to initiating the above-mentioned generic rulemaking proceeding, the PUCO, on August 24, 1995, issued an order granting Time Warner Communications of Ohio, L.P. ("TWCO") a certificate of public convenience and necessity to provide basic local exchange service in CBT's operating territory. TWCO's ability to begin operations pursuant to that certificate has been postponed until the PUCO approves TWCO's tariffs. Such tariff approval is vaguely tied to issues under consideration in a separate proceeding being conducted by the PUCO to establish rules to govern the implementation of local exchange competition. CBT believes the PUCO exceeded its statutory authority by granting TWCO a certificate and has filed an appeal of the PUCO's order with the Ohio Supreme Court. MCI Metro Access Transmission Services, Inc. and MFS Intelenet of Ohio, Inc. have also been granted certificates to provide basic local exchange service in Ohio, although not in CBT's operating territory. Other entities requesting similar authority in Ohio include: AT&T Communications of Ohio, Inc., ICG Access Services, Inc., and CableVision Lightpath, Inc.
Other means of communications that permit bypass of CBT's local exchange facilities either completely or partially are available and are increasing, although CBT is unable to determine precisely to what extent CBT's facilities are being bypassed. 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 include small service bureaus, large interexchange carriers and multi-state cellular companies, joint ventures and other combinations of telecommunications and other companies.
The effect of this competition on CBT will ultimately be determined by federal and state regulatory, legislative, and court actions and the type, quality and cost of CBT's services. CBT continues to adjust its position in this rapidly changing and convergent environment. For example, 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. 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.
If regulatory agencies require new competitors to follow long-held principles such as universal service, CBT believes that it will be well positioned to meet the demand of the changing market. If regulatory agencies allow competitors to skim the market, taking only the most profitable customers, CBT believes that it will be more difficult for it to maintain current revenue and profit objectives.
INFORMATION SYSTEMS
GENERAL. CBIS provides customer care and billing services to the communications industry, and is the leading supplier of billing systems to the cellular telecommunications industry. CBIS also provides network systems services primarily to international markets. CBIS's headquarters are in Cincinnati, Ohio. Domestically, CBIS also has offices in Orlando, Florida; Chicago, Illinois; Fairfax, Virginia; Coral Springs, Florida; and Atlanta, Georgia. Internationally, CBIS maintains offices in both Slough and Bristol, England; Bern, Switzerland; and Utrecht, The Netherlands.
During 1995 CBIS made two acquisitions. In December, CBIS acquired Information Systems Development ("ISD"), a developer of advanced billing systems for the cable television industry. This acquisition strengthened and broadened CBIS's position in customer care and billing for the communications industry to include cable television. As a result, CBIS now owns CableMaster 2000-TM-, a multi-service billing system in the cable industry, and services clients that include some of the larger cable systems operated by Cox Communications, Comcast and Time Warner. In March, CBIS acquired X International ("XI"), an established information technology company located in Bristol, England, that provides customer care and billing software for a wide range of telecommunications companies.
CBIS serves clients principally by processing data and creating bills using proprietary software. CBIS provides and manages billing systems in a service bureau environment where its extensive experience can result in demonstrable advantages to clients. These advantages include the freedom to concentrate on core competencies, predictable costs, information management expertise and access to advanced technology without capital expense. CBIS provides these services primarily through long-term contracts ranging in length from three to ten years.
CBIS provides data processing services from data centers located in Cincinnati, Ohio and Orlando, Florida. CBIS computers process over 140 million transactions and over 12 million bills per month. CBIS's goal is to provide state-of-the-art facilities that will provide reliability and responsiveness. CBIS expects to complete construction of a new, state-of-the-art facility in Orlando, Florida, housing both a hardened data center and an office complex by July 1996. This will give CBIS the ability for each data center to backup the other with on-line and disaster recovery coldsite capabilities. This project will result in a major expansion of capacity -- sharply increasing the processing power of CBIS's mainframe computers and nearly doubling the data center's information storage capacity. The combined processing power will exceed 1.6 billion instructions per second, and storage capacity contained in additional disk access storage devices will be nearly 9 trillion bytes of data.
In addition, CBIS has improved fault tolerance through the installation of redundant uninterruptable power supplies and through the development of detailed, company-wide disaster recovery plans, including enhanced backup and recovery processes.
MARKETS. CBIS's largest market is cellular telecommunications, which has been growing in excess of 30 percent per year. CBIS has been the market leader of billing systems to the cellular industry for more than 10 years and has gained experience with many of the top cellular carriers. CBIS systems generate bills for cellular telephone customers in 23 of the 25 largest United States metropolitan areas. CBIS's service bureaus handled approximately 30 percent of the United States cellular market in 1995 and, overall, CBIS systems supported nearly 50 percent of the United States cellular market. CBIS's revenue from cellular clients has increased from $144 million in 1993 to $198 million in 1994 and to $257 million in 1995.
CBIS's domestic clients are primarily cellular telephone providers and their resellers, cable television operators, interexchange carriers, independent telephone companies and regional Bell operating companies. Internationally, CBIS's clients primarily include Post, Telegraph and Telephone 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.
CBIS expects that increased competition and the introduction of new services will contribute to continuing growth in telecommunications. Carriers will need billing and customer care systems that address customer loyalty, customer care, and marketing. Deregulation and convergence will further drive the need for complex, but flexible marketing-oriented billing services and systems.
The primary business needs of the carriers across market segments will focus on acquiring and retaining customers, decreasing time-to-market for services, increasing revenues through new services, and improving cost efficiencies. As a result, carriers will need to provide individual and consolidated billing and address the diversity of billing and customer care needs by service and market.
The United States communications industry alone represents a sizable opportunity. The domestic market for billing and customer care systems in 1995 for services like those offered by CBIS is estimated to be over $5 billion. The international market for these billing and customer care services in 1995 is estimated to be nearly $6 billion.
COMPETITION. The telecommunications information systems and services market is becoming increasingly competitive. Competition is based mainly on product quality, performance, price and the quality of client service. CBIS's competitors include Alltel Information Services, AMDOCS, AMS, Andersen Consulting, CSC and EDS, as well as, near-market players, and niche vendors. In addition, CBIS's clients and potential clients are generally large companies with substantial resources and are capable of providing such services for themselves.
PRODUCT DEVELOPMENT AND SUPPORT. CBIS designs and develops both mainframe and client server software. Changes in client requirements, increasing competition and the development of new products and markets create the need to continually update and modify existing software and systems offered to clients. CBIS intends to continue to maintain, improve and expand the functions and capabilities of its software products over the next several years.
CBIS's new flagship product is its Precedent 2000-TM- system, which is a third-generation family of business management systems for the wireless industry. It features an open system distributed processing approach to computing, and employs graphical user interfaces, real-time processing, and relational database technologies. CBIS is generating billing information for cellular customers under a beta trial of Precedent 2000. CBIS will continue to develop this system through 1996.
OTHER. CBIS primarily conducts its business under long-term contracts (three to ten years) and has generally been successful in retaining its clients. Due to the nature of its business, CBIS must stay competitive to receive new bids. Through new contracts and extensions of existing relationships, CBIS has over 86% of its revenues coming from long-term customer relationships. In 1995 CBIS signed a five-year extension of its billing agreement with AT&T for business calling card services. In 1994 CBIS signed a 5 1/2 year contract with McCaw Cellular Communications Inc. (now known as AT&T Wireless Services). In addition, CBIS had several smaller contracts renewed in both 1994 and 1995. CBIS's business with AT&T for residence card services was phased down in the latter part of 1995. Also, one of CBIS's clients, representing about 5% of its business, indicated that it may transition to another provider of billing services no sooner than early 1997. The impact of these phase-outs, if fully implemented and not offset by new contracts, might be to slow future growth. The ISD acquisition allows CBIS to enter the large, growing market of billing for cable television and broadband services. While pursuing new opportunities, CBIS must continue to focus on the needs of its existing client base. A contract non-renewal from a significant client could have a material impact on the future earnings of CBIS.
MARKETING SERVICES
GENERAL. MATRIXX is a provider of telephone marketing and related marketing services. MATRIXX's headquarters are in Cincinnati, Ohio. MATRIXX operates domestically in Salt Lake City, Ogden and Cedar City in Utah; Colorado Springs and Pueblo in Colorado; Tucson, Arizona; Neenah, Wisconsin; and also in Omaha, Nebraska. MATRIXX also has offices in Paris, France and Newcastle, England. MATRIXX's clients include large companies with growing needs for outsourcing and cost effective means of contacting and servicing current and prospective customers. 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, database management, and facilities management. MATRIXX operates over 6,000 computerized workstations in its 16 call centers located in the United States and Europe.
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. MATRIXX also designs customized client systems for consumer markets with dedicated staff and services uniquely tailored to the needs of each client. Its business-to-business telephone marketing provides sales and customer service personnel who act as the sales arm and/or marketing service representatives for their clients. They take orders, sell by telephone and provide information about clients' 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 processes.
MATRIXX's international operations offer 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 and highly fragmented, 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" operations of potential client companies with size and capabilities equal to or greater than 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 believes the principal competitive factors in the telephone marketing and related marketing services industry are reputation for quality, sales and marketing results, price, technological expertise, and the ability to promptly provide clients with customized systems for their customer service, sales and marketing needs.
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 residential customers and small to medium-sized businesses in Ohio, Indiana, Kentucky, Western Pennsylvania and Michigan. CBLD also provides paging, voice messaging, enhanced fax services and conference calling.
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.
The Company (through its wholly owned subsidiary, Cincinnati Bell Cellular Systems Company) is a limited partner with a 45% interest in a limited partnership, Cincinnati SMSA Limited Partnership ("CSLP") (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.
CSLP presently competes with a single wireless service provider, Airtouch, doing business as Cellular One-Registered Trademark-. However, the FCC has initiated auctions of wireless spectrum which can be used for competitive services. Two licenses have been awarded to AT&T and GTE, and four additional licenses will be awarded soon. The new businesses will provide a service known as PCS which may be superior in capacity and transmission quality to that offered by CSLP, using digital instead of analog technology. It's anticipated that the new competitors will begin service by reselling existing cellular services until their facilities have been constructed.
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 and services from AT&T and its affiliates or derive significant revenues from AT&T and its affiliates by providing to them network, data processing, software development, and marketing services. During 1995, the Company's revenues from AT&T and its affiliates were approximately $345 million or 26% of the Company's consolidated revenues. Excluding network access revenues, revenues from AT&T and its affiliates were approximately $294 million or 22% of the Company's consolidated revenues. The Company purchased approximately $69 million of goods and services from AT&T and its affiliates.
CBT and AT&T are discussing whether to revise portions of the companies' agreement governing their joint provision of certain telecommunications services. Revenues subject to discussion represent substantially less than 10% of CBT's revenues, but portions of the contract provide above-average profit contribution. The discussions are in a preliminary stage and their outcome cannot be predicted. The worst case scenario, which is not expected, could have a significant impact on CBT's earnings beginning in mid-1996. The discussions do not involve AT&T's relationships with other Company subsidiaries.
CAPITAL ADDITIONS
The Company has been making large expenditures for construction of telephone plant and investments in its existing subsidiaries and new businesses. As a result of these expenditures, the Company expects to be able to introduce new products and services, respond to competitive challenges and increase its operating efficiency and productivity.
The following is a summary of capital additions for the years 1991 through 1995:
The total investment in telephone plant increased from approximately $1,296 million at December 31, 1990 to approximately $1,503 million at December 31, 1995, after giving effect to retirements but before deducting accumulated depreciation at either date.
Capital additions in 1996 by the Company and its subsidiaries are anticipated to be approximately $145 million, with approximately $90 million designated for telephone plant.
EMPLOYEES
At December 31, 1995 the Company and its subsidiaries had approximately 15,100 employees. CBT and CBIS had approximately 2,200 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. Negotiations with representatives of the CWA began in March 1996, and the outcome cannot be determined at this time.
In the first quarter of 1995, the Company approved a restructuring plan for CBT and the Company. The restructuring plan results in the need for fewer people to operate the businesses. The reduction in CBT's work force is the result of the offer of early retirement incentives to eligible employees. More than 1,300 employees accepted the early retirement offer, including 1,000 hourly employees. At the end of 1995, approximately 250 management and 450 hourly employees had retired. The Company has the option to delay the retirement date of the hourly employees until March 31, 1997.
BUSINESS SEGMENT INFORMATION
The amounts of revenues, operating income, assets, capital additions, depreciation and amortization attributable to each of the business segments of the Company for the year ended December 31, 1995 are set forth in the table relating to business segment information in Note 18 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.

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.
The gross investment in telephone plant and other property, in millions of dollars, at December 31, 1995 was as follows:
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, some of which are included in capitalized leases.
On March 20, 1996, the Company sold to a third party a 112,000 square foot building in Erlanger, Kentucky, which was 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 Orlando, 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.

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 five 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 because of poor performance. On October 20, 1995, CBCSC filed a motion for summary judgment on certain counts and Ameritech filed a Motion for Summary Judgment on another count. The Court has not yet decided these motions, but the Court did issue an Order requesting that the parties brief certain additional issues. CINCINNATI BELL CELLULAR SYSTEMS COMPANY V. AMERITECH MOBILE PHONE SERVICE OF CINCINNATI, INC., ET AL.
In connection with the above-described litigation, recent changes in the structure of the telecommunications industry, including the enactment of the Telecommunications Act of 1996, have positioned the partnership in direct competition with its two major partners, including the Company, creating irreconcilable conflicts of interest among them. The Company has pursued this litigation to maximize the value of this asset for the benefit of the shareholders. There are many possible outcomes of the litigation. The potential impact of a settlement from the lawsuit is an extremely broad range depending upon the form of distribution and the amount of damages awarded. At this time, the Company believes that it will recover its approximately $50 million investment in the partnership as of February 29, 1996.
On October 4, 1995, the Department of Agriculture filed a claim for approximately $4 million allegedly representing damages incurred as a result of a latent defect in the work that CBIS performed under Task 1A of a Task Order Contract with the Department of Agriculture. The Company is in the process of appealing this claim to the Court of Federal Claims. Related to this claim, on January 16, 1996, DynCorp pursuant to the provisions of a Stock Purchase Agreement dated October 31, 1994, and as amended May 30, 1995, in which DynCorp purchased 100% of the outstanding capital stock of CBIS Federal Inc., filed demand for arbitration under the procedures of the American Arbitration Association. DynCorp's demand for arbitration seeks damages and other relief as follows: $2.5 million for monies withheld by the United States Government on certain Department of Agriculture task order contracts, a declaration that CBIS must indemnify DynCorp for additional claims or losses on certain government contracts, an award of $5 million in punitive damages, and fees and expenses relating to the arbitration proceedings.
AT&T Corp. filed a collection action in the United States District Court, Southern District of Ohio, Western Division, to collect damages awarded by the Federal Communications Commission requiring 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 moved to dismiss this action on the grounds that AT&T may be barred from collecting such amounts due to the expiration of the statute of limitations. AT&T CORP. V. CINCINNATI BELL TELEPHONE CO.
ITEM 4.

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.
EXECUTIVE OFFICERS OF THE REGISTRANT (DURING 1995).
The names, ages and positions of the executive officers of the Company are as follows:
Name Age Title - ---- --- ----- (as of 3/31/96)
Dwight H. Hibbard (a,b) 72 Chairman of the Board
John T. LaMacchia (a,b) 54 President and Chief Executive Officer
Raymond R. Clark (c) 58 Former Executive Vice President of the Company and President and Chief Executive Officer of CBT
Brian C. Henry 39 Executive Vice President and Chief Financial Officer
David S. Gergacz (d) 47 Executive Vice President of the Company and President and Chief Executive Officer of CBT
James F. Orr 50 Executive Vice President of the Company and President and Chief Executive Officer of CBIS
William H. Zimmer III 42 Secretary and Treasurer
William D. Baskett III 56 General Counsel and Chief Legal Officer
David F. Dougherty 41 President and Chief Executive Officer of MATRIXX
Barbara J. Stonebraker 51 Senior Vice President of CBT
Barry L. Nelson 49 President and Chief Executive Officer of CBLD
(a) Member of the Board of Directors
(b) Member of the Executive Committee
(c) Served as Executive Vice President of the Company and President and Chief Executive Officer of CBT until July 31, 1995.
(d) Mr. Gergacz was elected President and Chief Executive Officer of CBT effective August 1, 1995.
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 The Kroger Company.
RAYMOND R. CLARK, Executive Vice President of the Company, January 1, 1987 - July 31, 1995; Chief Executive Officer of Cincinnati Bell Telephone Company, January 1, 1988 - July 31, 1995; President of Cincinnati Bell Telephone Company, January 1, 1987 - July 31, 1992. 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 S. GERGACZ, Executive Vice President of the Company since August 1, 1995; President and Chief Executive Officer of Cincinnati Bell Telephone Company since August 1, 1995. President and Chief Executive Officer of Rogers Communications/Cantel, 1993-1995; President and Chief Executive Officer of Boston Technology 1991-1993; President and Chief Operating Officer of Network Systems Division of U.S. Sprint, 1988-1991.
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.
JAMES F. ORR, Executive Vice President of the Company since June 1, 1995; President and Chief Executive Officer of Cincinnati Bell Information Systems Inc. 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.
DAVID F. DOUGHERTY, President and Chief Executive Officer of MATRIXX Marketing Inc. since January 1, 1995; Senior Vice President and Chief Operating Officer U.S. Operations, January 1, 1993 - December 31, 1994; President of the Consumer Division, January 1, 1991 - December 31, 1992.
BARRY L. NELSON, Chief Executive Officer of Cincinnati Bell Long Distance Inc. since January 1, 1995; President since May 1, 1987.
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.
PART II
ITEM 5.

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 29, 1996 there were approximately 19,664 holders of record of the 66,923,079 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:
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, 1995 included in Exhibit 13 and are incorporated herein by reference pursuant to General Instruction G(2).
ITEM 9.

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 14, 1996 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 page 5, the information under "Executive Compensation" on page 11 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).
PART IV
ITEM 14.

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 24
II - Valuation and Qualifying Accounts 25
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, 1995. (See Part II)
(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 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)(ii) to Form 10-K for 1992, File No. 1-8519.
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 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 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)(ii) above.
(4)(c)(iii) 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)(iv) 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 January 1, 1995.
(10)(iii)(A)(2)* 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)(3)* Cincinnati Bell Inc. Pension Program, as amended effective (November 4, 1991). (Exhibit (10)(iii)(A)(4)(ii) to Form 10-K for 1994, File No. 1- 8519).
(10)(iii)(A)(4)* 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)(5)(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)(5)(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)(6)* Agreement dated February 1, 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)(7)* 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).
(10)(iii)(A)(8)* 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)(9)* Employment Agreement dated as of July 17, 1995 between the Company and David S. Gergacz.
(10)(iii)(A)(10)* Employment Agreement dated as of January 1, 1995 between the Company and Barry L. Nelson.
(10)(iii)(A)(11)* Employment Agreement dated as of January 1, 1995 between the Company and David F. Dougherty.
(10)(iii)(A)(12)* Amendment to Employment Agreement dated as of January 1, 1995 between the Company and David F. Dougherty.
(10)(iii)(A)(13)* 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)(14)(i)* Employment Agreement dated as of August 19, 1994 between the Company and James F. Orr. (Exhibit (10)(iii)(A)(17)(i) to Form 10-K for 1994, File No. 1- 8519).
(10)(iii)(A)(14)(ii)* Amendment to Employment Agreement dated as of October 31, 1994 between the Company and James F. Orr. (Exhibit (10)(iii)(A)(17)(ii) to Form 10-K for 1994, File No. 1-8519).
(10)(iii)(A)(15)* Employment Agreement dated as of December 30, 1994 between Cincinnati Bell Telephone Company and Barbara J. Stonebraker. (Exhibit (10)(iii)(A)(18) to Form 10-K for 1994, File No. 1-8519).
(10)(iii)(A)(16)(i)* Cincinnati Bell Inc. Executive Deferred Compensation Plan. (Exhibit (10)(iii)(A)(17) to Form 10-K for 1993, File No. 1-8519).
(10)(iii)(A)(16)(ii)* Amendment to Cincinnati Bell Inc. Executive Deferred Compensation Plan effective January 1, 1994. (Exhibit (10)(iii)(A)(20)(ii) to Form 10-K for 1994, File No. 1- 8519).
(10)(iii)(A)(17)(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)(17)(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)(18)* 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)(19)* 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)(20)* 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, 1995 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 for the year 1995 will be filed by amendment on or before June 30, 1996.
(99)(b) Annual Report on Form 11-K for the Cincinnati Bell Inc. Savings and Security Plan for the year 1995 will be filed by amendment on or before June 30, 1996.
(99)(c) Annual Report on Form 11-K for the MATRIXX Marketing Inc. Profit Sharing/401(k) Plan for the year 1995 will be filed by amendment on or before June 30, 1996.
(99)(d) Annual Report on Form 11-K for the CBIS Retirement and Savings Plan for the year 1995 will be filed by amendment on or before June 30, 1996.
........................ * Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
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.
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, 1996 By /S/ JAMES M. DAHMUS ------------------------ James M. Dahmus, Vice President and Controller
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
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.
JAMES D. KIGGEN* Director - ---------------- James D. Kiggen
SIGNATURE TITLE DATE
CHARLES S. MECHEM, JR.* Director - ------------------------- Charles S. Mechem, Jr.
MARY D. NELSON* Director - ---------------- Mary D. Nelson
DAVID B. SHARROCK* Director - ------------------- David B. Sharrock
*By /s/ BRIAN C. HENRY March 28, 1996 ------------------- Brian C. Henry as attorney-in-fact and on his behalf as Executive Vice President and Chief Financial Officer
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 25 of the 1995 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 25 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 14, 1996
(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.