<PAGE>
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 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 1-8519
--------------------------
CINCINNATI BELL INC.
SAVINGS AND SECURITY PLAN
--------------------------
BROADWING INC.
(formerly Cincinnati Bell Inc.)
201 East Fourth Street
Cincinnati, Ohio 45202
1
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
INDEX TO FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
<TABLE>
<S> <C>
Report of Independent Accountants 3
Financial Statements:
Statements of Net Assets Available for Benefits as of December 30, 1999
and December 31, 1998 4
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 30, 1999 5
Notes to Financial Statements 6-16
Supplemental Schedules*:
Schedule of Assets Held for Investment Purposes at End of Year 17
Schedule of Reportable Transactions for the Year Ended
December 30, 1999 18
* Other schedules are omitted because the information required is
contained in the financial statements.
Exhibits:
Consent of Independent Accountants
</TABLE>
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
The Cincinnati Bell Inc. Savings and Security Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Cincinnati Bell Inc. Savings and Security Plan (the "Plan") at December
30, 1999 and December 31, 1998, and the changes in net assets available for
benefits for the year ended December 30, 1999 in conformity with accounting
principles generally accepted in the United States. 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 of these statements in accordance with auditing standards
generally accepted in the United States, which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of "Assets
Held for Investment Purposes at End of Year" and the "Schedule of Reportable
Transactions" 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 supplemental schedules 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/ PricewaterhouseCoopers LLP
------------------------------------
PRICEWATERHOUSECOOPERS LLP
JUNE 23, 2000
3
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 30, 1999 AND DECEMBER 31, 1998
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
ASSETS
Investments at fair value $175,172 $107,713
======== ========
LIABILITIES
Administrative fees payable and other -- 3
-------- --------
Net Assets Available for Benefits $175,172 $107,710
======== ========
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 30, 1999
(THOUSANDS OF DOLLARS)
<TABLE>
<S> <C>
Net Assets Available for Benefits as of December 31, 1998 $107,710
Additions:
Employee contributions 4,593
Participating Company contributions 1,811
Transfers to other Company-sponsored plans, net (460)
----------
Total allotments, contributions and transfers 5,944
Investment income:
Dividends on Broadwing Inc. shares 634
Other dividends 1,151
Interest 934
Net appreciation in fair value of investments 65,196
---------
Total additions 73,859
----------
Deductions:
Benefits paid to participants 6,383
Administrative expenses 14
----------
Total deductions 6,397
----------
Net increase in Assets Available for Benefits 67,462
----------
Net Assets Available for Benefits as of December 30, 1999 $175,172
=========
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
(1) PLAN DESCRIPTION AND ACCOUNTING POLICIES:
a. GENERAL: As a result of its merger with IXC Communications Inc.
(since renamed Broadwing Communications) on November 9, 1999,
Cincinnati Bell Inc. announced it would begin doing business as
Broadwing Inc. ("the Company") on November 15, 1999. In addition, a
proposal to amend the Company's Articles of Incorporation to change
the Company's official name to Broadwing Inc. was approved by the
Company's common shareholders on April 19, 2000. It is expected that
the Cincinnati Bell Inc. Savings and Security Plan ("the Plan") will
be amended during 2000 in order to reflect the Company's new name
(any references to Cincinnati Bell Inc. or Broadwing Inc. are
considered to be references to the Company). During 1999, the Plan
changed its fiscal year-end from December 31 to December 30. The
effect of this change was not material to the financial statements.
The Plan is, subject to certain exceptions, currently available to
hourly employees of Broadwing Inc. and hourly employees of Cincinnati
Bell Telephone Company (CBT) and Cincinnati Bell Public Communications
Inc. (CBPC), both of which are subsidiary corporations of Broadwing.
Notwithstanding the foregoing, certain persons who might be considered
part of the above classes of employees are not eligible for the Plan
(including but not limited to co-op students, interns, job bank
employees and contingency employees).
The Plan is subject to the provisions of the Internal Revenue Code of
1986, as amended (the Code), and the Employee Retirement Income
Security Act of 1974, as amended (ERISA).
The Plan is administered by the Company's Employees' Benefit Committee.
The Plan's trustee is currently T. Rowe Price.
These notes only provide a brief description of certain provisions of
the Plan and do not constitute a document under which the Plan is
operated, and, in the event of any conflict between these notes and the
Plan documents, the Plan documents shall control. Eligible employees
need to refer to the Plan document and to the Plan's summary plan
description for details as to the Plan.
The financial statements of the Plan are prepared under the accrual
basis of accounting.
In 1999, the Plan adopted AICPA Statement of Position 99-3,
"Accounting for and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters" which, among other
things, eliminated previous requirements for defined contribution
plans to present plan investments by general type for
participant-directed investment programs and to disclose
participant-directed investment programs. Accordingly, the
accompanying financial statements do not include details of the
Plan's participant-directed investment programs.
6
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
b. EMPLOYEE CONTRIBUTIONS: The Plan generally, under its current
provisions, permits each eligible employee who has been credited with
at least one year of eligibility service under the Plan to elect to
contribute to the Plan on a weekly basis, in before-tax and/or
after-tax dollars, any amount that is an increment of $5 (and not less
than $5 and not more than 16% of his or her compensation (as defined in
and subject to the rules of the Plan)).
The amount of a Participant's before-tax contributions to the Plan for
any calendar year cannot in any event exceed a legal limit (which limit
was $10,000 for both 1999 and 1998). Also, the percentages of
compensation saved as before-tax contributions by certain highly
compensated eligible employees for any plan year may be further limited
under legal rules so that on average they do not exceed by too large a
margin (as set by law) the average of the before-tax savings
contribution rates of the other eligible employees for such plan year
or the immediately preceding plan year.
The savings contributions made by an eligible employee to the Plan are
allocated to an account of the employee under the Plan. An eligible
employee is always fully vested in the part of his or her Plan account
that is attributable to his or her own savings contributions (his or
her Savings Account).
An eligible employee can specify the manner in which his or her Savings
Account shall be invested in the available funds under the Plan (see
Note (1)h below) and may elect to change periodically the funds to
which future savings contributions are allocated and/or transfer
amounts held under his or her Savings Account from one fund to another.
An eligible employee is generally not subject to federal income tax on
the amount of his or her before-tax contributions to the Plan or on the
Plan's earnings that are allocated to his or her Savings Account until
and to the extent he or she receives such amounts from the Plan (and he
or she may then be able in certain circumstances to defer such tax
further by rolling such amounts over to an individual retirement
account or annuity (an IRA) or another employer plan that accepts the
rollover).
c. EMPLOYER CONTRIBUTIONS: For employers whose employees participate in
the Plan ("the Employers"), matching contributions are made to the Plan
for any eligible employee who has been credited with at least one year
of eligibility service under the Plan in an amount equal to 66 2/3% of
the employee's basic savings contributions made for any pay day that
occurs on or after January 1, 2000 (and after the employee has
completed a year of eligibility service). For any pay day occurring in
the last two calendar years ending prior to January 1, 2000, however,
the matching contributions made for an eligible employee
7
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
who had completed a year of eligibility service under the Plan was 60%
of his or her basic savings contributions made for such pay day.
An eligible employee's basic savings contributions are, for this
purpose, generally equal to the portion of the employee's before-tax
and after-tax savings contributions made for any week that is not in
excess of a certain amount that is set out in the Plan and based on the
level of the employee's base pay for the applicable week (for example,
for a full-time eligible employee and beginning as of January 1, 2000,
such amount is $55 when the employee's weekly base pay is $1,000 or
more, $50 when the employee's weekly base pay is at least $900 but less
than $1,000, $45 when the employee's weekly base pay is at least $800
but less than $900 and so forth). Such matching contributions are
generally made on a bi-weekly basis under the current policies of the
Employers, and they must be made no slower than on a monthly basis and
could be prefunded to an extent.
However, certain legal limits on the maximum amount of contributions
that can be made by and for an eligible employee with respect to any
plan year may apply.
The matching contributions made to the Plan for an eligible employee
are allocated to the account of the employee under the Plan. In
general, an eligible employee is vested in the part of his or her Plan
account that is attributable to the matching contributions made on his
or her behalf (his or her Matching Account) only if he or she is
credited with at least five years of vesting service under the Plan.
However, an eligible employee may become vested in his or her Matching
Account in certain other situations, including if he or she continues
to be employed by the Employers after attaining age 65, if he or she
terminates employment with the Employers by reason of his or her total
disability or death of if he or she began work for the Employers before
1994.
An eligible employee's Matching Account shall generally be invested
solely in the Plan's Broadwing Inc. Shares Fund. However, to the extent
an eligible employee's Matching Account was allocated with shares of
Convergys Corporation (Convergys) that were received by the Plan by
reason of the Company's 1998 distribution of shares of Convergys (see
Note 6), such shares have generally been transferred to a new Convergys
Stock Fund held under the Plan (and the employee may redirect his or
her interest in such fund to other available funds under the Plan).
Also, under the current rules of the Plan, an eligible employee who has
met certain age and/or service requirements specified by the Company's
Employees' Benefit Committee may be allowed to transfer the amounts
allocated to his or her Matching Account to other investment funds
available under the Plan over a five-year period and, after passage of
such five-year period, be able to direct the investment of future
matching contributions made to the Plan on his or her behalf in the
same manner as his or her own savings contributions to the Plan are
invested.
8
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
An eligible employee is generally not subject to federal income tax on
the amount of the matching contributions made to the Plan on his or her
behalf or on the Plan's earnings that are allocated to his or her
Matching Account until and to the extent he or she receives such
amounts from the Plan (and he or she may then be able in certain
circumstances to defer such tax further by rolling such amounts over to
an IRA or another employer plan that accepts the rollover).
d. ROLLOVERS: An eligible employee may also, under the current terms of
the Plan, rollover to the Plan a distribution he or she receives from
another employer's tax-qualified savings, profit sharing or other
employer plan, if the distribution meets certain conditions set forth
in the Plan and the Code.
Any such rollover contributions made to the Plan by an eligible
employee are allocated to the account of the employee under the Plan.
An eligible employee is always fully vested in the part of his or her
Plan account that is attributable to his or her rollover contributions
(his or her Rollover Account).
An eligible employee can specify the manner in which his or her
Rollover Account shall be invested in the available funds under the
Plan (see Note (1)h below) and may elect to transfer accounts held
under his or her Rollover Account from one fund to another.
An eligible employee is generally not subject to federal income tax on
the amount of his or her rollover contributions to the Plan or on the
Plan's earnings that are allocated to his or her Rollover Account until
and to the extent he or she receives such amounts from the Plan (and he
or she may then be able in certain circumstances to defer such tax
further by rolling such amounts over to an IRA or another employer plan
that accepts the rollover).
e. DISTRIBUTIONS TO PARTICIPANTS: An eligible employee may receive all or
a portion of his or her account under the Plan while he or she is
employed by the Employers only in certain circumstances.
In general, an eligible employee can withdraw for any reason (1) the
portion of his or her Savings Account that is attributable to his or
her after-tax savings contributions as to which no matching
contributions were made by the Employers, (2) the portion of his or her
Savings Account that is attributable to his or her after-tax savings
contributions made before the plan year of the withdrawal and the two
immediately preceding plan years and as to which matching contributions
were made by the Employers, (3) the entire portion of his or her
Rollover Account, (4) the portion of his or her Matching Account
attributable to matching contributions made before the plan year of the
withdrawal and the two immediately proceeding plan years (provided the
employee is vested in his or her Matching Account) and (5) the portion
of his or her Savings Account that is attributable
9
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
to his or her after-tax savings contributions made for the plan year of
the withdrawal and the two immediately preceding plan years and as to
which matching contributions were made by the Employers (except that,
if he or she withdraws any amount described in clause (5), he or she
will be suspended from making savings contributions to the Plan for six
months and, unless the employee has attained age 65 or has been
credited with at least five years of vesting service under the Plan or
began work for the Employers before 1994, he or she will generally
forfeit his or her Matching Account).
Further, an eligible employee can withdraw the portion of his or her
Savings Account that is attributable to his or her before-tax savings
contributions (not including earnings on such contributions that have
been allocated to such account after December 31, 1998) if the
withdrawal is required by reason of the employee's hardship situation
(and such hardship withdrawal meets the rules set forth in the Plan
that concern hardship withdrawals).
Other than for the above-described in-employment withdrawals, the
distribution of an eligible employee's account under the Plan will
generally occur only after the employee has terminated his or her
employment with the Employers for any reason, including a retirement,
discharge, quit, disability or death. Only the portion of the
employee's account under the Plan in which he or she is vested may be
distributed; the non-vested portion of such account is forfeited in
accordance with rules set forth in the Plan.
f. EMPLOYEE LOANS: Loans are available from the Plan to eligible employees
under the current provisions and policies of the Plan. Such loans are
subject to several conditions, certain of which are described below.
An eligible employee cannot have more than two outstanding loans from
the Plan at any time, and the employee may not be allowed to originate
more than two loans from the Plan during a single plan year.
The minimum amount of any loan to an eligible employee from the Plan is
$1,000, while the maximum amount of such a loan cannot exceed the
lesser of (1) 50% of the vested balance of the employee's account under
the Plan (exclusive of the amounts attributable to the employee's
savings contributions which were matched to some extent for the plan
year of the loan and the two immediately preceding plan years, the
matching contributions of the Employers made for his or her behalf with
respect to the plan year of the loan and the two immediately preceding
plan years and income earned after 1988 on the employee's before-tax
savings contributions to the Plan, all of which amounts are not
available for a loan) or (2) $50,000 (reduced by the highest
outstanding balance of loans made to the employee from the Plan and
other plans of the Employers during the one year period ending on the
day before the new loan is made).
10
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
The Company's Employees' Benefit Committee determines the interest rate
charged by the Plan on a loan made to an eligible employee, which must
be a reasonable rate of interest. In general, a loan rate is currently
determined by adding 1% to a prime lending rate in effect as of the
first day of the calendar quarter in which the loan is made.
During the plan year ending December 30, 1999 and the immediately
preceding plan year, interest rates on loans made under the Plan varied
between 8.75% and 10.0% per annum.
In general, any loan to an eligible employee must be repaid through
payroll deductions and be secured by the portion of the employee's
account under the Plan that is loaned to the employee. The minimum term
of any loan from the Plan to an eligible employee is 6 months, and the
maximum term of a Plan loan is 59 months.
g. TEMPORARY CASH INVESTMENTS: Temporary cash investments include all cash
balances and highly liquid investments with maturities of three months
or less at the time of purchase. Temporary cash investments may be held
in any investment funds used by the Plan in order to meet the cash
needs of the Plan.
h. INVESTMENTS: There are currently nine investment funds available for
the investment of future contributions made by or for eligible
employees under the Plan: the Broadwing Stable Value Fund, the Spectrum
Income Fund, the Balanced Fund, the Equity Income Fund, the Equity
Index Fund, the Capital Appreciation Fund, the International Stock
Fund, the New America Growth Fund and the Broadwing Inc. Shares Fund.
All of the above funds are administered, trustee and/or advised by T.
Rowe Price or a related subsidiary. In addition, the Plan holds a
Convergys Stock Fund to which shares of Convergys that were received by
the Plan by reason of the Company's distribution of Convergys shares
were allocated (see Note 6). Eligible employees who have interests in
the Convergys Stock Fund may transfer the balances they have in such
fund to other funds available under the Plan but cannot direct future
contributions made by or for their behalf to the Convergys Stock Fund.
Each fund held under the Plan (except for the Broadwing Stable Value
Fund and the Broadwing Inc. Shares Fund) has always been, and is
currently, quoted in shares. Such shares generally represent the net
asset value of shares in the applicable mutual or other fund.
The Broadwing Stable Value Fund and the Broadwing Inc. Shares Fund have
always been quoted in units. These units have represented a
proportionate interest in the two investment funds in which both the
Plan and the Cincinnati Bell Inc. Retirement Savings Plan participate.
The unit values for both the Broadwing Stable Value Fund and the
Broadwing Inc. Shares Fund were initiated at a value of 1.0000 on July
1, 1992.
11
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
The Broadwing Stable Value Fund maintains a unit value of 1.0000 at all
times and any income, gains, losses, contributions or withdrawals
results in more or less units being credited to an account. The
Broadwing Inc. Shares Fund unit value has fluctuated with the
performance of the underlying investments of such fund, which has
consisted primarily of Broadwing common stock and a small amount of
temporary cash investments.
Effective May 1, 2000, the Broadwing Inc. Shares Fund has been
changed so that it is quoted in shares (and not units). The
Broadwing Stable Value Fund is still quoted in units.
Investments of the Broadwing Stable Value Fund consist in part of
investment contracts that are reported at estimated fair value,
which approximates contract value (contributions made plus interest
accrued at the current rate, less withdrawals and fees). These
investment contracts are nontransferable but provide for
benefit-responsive withdrawals by Plan participants at contract
value. Benefit-responsive withdrawals are provided for on a
proportional basis by the issuers of the investment contracts. The
Plan's Trustee Valuation Committee determines fair value for these
investments after considering such factors as the benefit
responsiveness of the investment contract and the ability of the
parties to the investment contract to perform in accordance with
contract terms. Transactions for the Fund are accounted for on the
trade date. Interest income is accrued as earned. Realized and
unrealized gains and losses from security transactions are recorded
on an identified cost basis.
The values of the Plan's investments on December 30, 1999 and December
31, 1998 are determined as follows: the 1999 share value of the
Broadwing shares in the Broadwing Inc. Shares Fund and Convergys
shares in the Convergys Stock Fund on the basis of the last published
sales prices on December 30, 1999 on the New York Stock Exchange; the
1998 share value of the Broadwing shares in the Broadwing Inc. Shares
Fund and Convergys shares in the Convergys Stock Fund on the basis of
the pro-rata allocation of the last published market price for the
consolidated Company value on December 31, 1998 (this pro-rata
allocation was derived using the last "when issued" price for
Cincinnati Bell Inc. and Convergys as of December 31, 1998, compared
to the consolidated Cincinnati Bell Inc. value on December 31, 1998)
(see Note 6); shares in the Spectrum Income Fund, Balanced Fund,
Equity Income Fund, Equity Index Fund, Capital Appreciation Fund,
International Stock Fund, New America Growth Fund, and any mutual fund
held under the Broadwing Stable Value Fund on the basis of the last
published net asset value on December 30, 1999 and December 31, 1998;
contracts with insurance companies in the Broadwing Stable Value Fund
at principal plus accrued earnings on December 30, 1999 and December
31, 1998 and loans to participants made by the Plan at the principal
amount owed by the participants on December 30, 1999 and December 31,
1998.
12
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
As presented in the Statement of Changes in Net Assets Available for
Benefits, the net appreciation (depreciation) in the value of Plan
investments consists of realized gains or losses, and the unrealized
appreciation (depreciation) of those same investments. Net realized
gains were $736,458 and $439,508 for 1999 and 1998, respectively.
i. ADMINISTRATIVE EXPENSES: The administrative expenses of the Plan that
are not clearly related to a specific investment fund are generally
paid from Plan assets. These expenses are generally allocated and
charged to each eligible employee's account based on the proportion
that such employee's account balance under the Plan bears to all
account balances under the Plan.
j. FORFEITURES: Any amounts forfeited by employees under the Plan are
generally valued as of the end of the month in which the event causing
the forfeiture occurs and are applied to reduce subsequent
contributions of the Employers to the Plan. During 1999, employer
contributions were reduced by $8,000 from forfeited nonvested amounts.
13
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
k. USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management of the Plan to make estimates and assumptions that affect
the reported 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) AMENDMENT OR TERMINATION OF THE PLAN: While the Company has not expressed
any intent to terminate the Plan, it reserves the right to amend or
terminate the Plan at any time. In the event of the termination of the
Plan, all affected participants' accounts would become 100% vested.
(3) INVESTMENTS: The interest of an eligible employee in each type of
investment of the Plan on December 30, 1999 and December 31, 1998 is
represented by units or shares. The following investments represent five
percent or more of the Plan's net assets (dollars in thousands):
<TABLE>
<CAPTION>
December 30, 1999 December 31, 1998
-------------------------------------------------------------------------------
<S> <C> <C>
Broadwing Stable Value Fund $ 9,802 $ 9,745
Broadwing Inc. Shares Fund* 91,816 37,467
Convergys Stock Fund 53,146 43,146
------- -------
$ 154,764 $ 90,358
======= =======
</TABLE>
*The Broadwing Inc. Shares Fund consists of $68,640 and $31,359 in
nonparticipant-directed investments at December 30, 1999 and December 31,
1998, respectively. Remaining amounts are participant-directed.
During 1999, the Plan's investments (including gains and losses on
investments bought and sold as well as held during the year)
appreciated in value by $65,196 as follows (dollars in thousands):
Mutual funds $ 828
Common Stock of the Company 47,852
Common Stock of Convergys Corporation 16,516
--------
Total $ 65,196
========
The number of eligible employees whose Plan accounts are invested in the
various investment funds as of December 30, 1999 are shown in the table
below (since employees can invest in a variety of investment funds, the sum
of employees in this chart will not equal the number of employees who are
participating in the Plan):
<TABLE>
<S> <C>
Broadwing Stable Value Fund 690
Spectrum Income Fund 223
Balanced Fund 219
Equity Income Fund 537
Equity Index Fund 525
Capital Appreciation Fund 219
International Stock Fund 326
New America Growth Fund 568
Broadwing Inc. Shares Fund 2,648
Convergys Stock Fund 1,460
</TABLE>
14
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
(4) NONPARTICIPANT-DIRECTED INVESTMENTS: Information about the net assets
and the significant components of the changes in net assets relating
to the nonparticipant-directed investments is as follows (this investment
represents five percent or more of the Plan's net assets):
<TABLE>
<CAPTION>
December 30, December 31,
Description 1999 1998
----------- ---- ----
<S> <C> <C>
Net Assets:
Company common stock $65,915 $26,991
Cash 2,711 4,352
Interest receivable 14 18
------- -------
Total $68,640 $31,361
======= =======
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December 30,
1999
-----
Changes in Net Assets:
<S> <C>
Employee contributions $1,838
Employer contributions 1,811
Dividends on Company common shares 503
Interest income 159
Net appreciation on Company common stock 32,828
Transfers from other Company plans 4,359
Benefits paid to participants (2,401)
Transfers to participant-directed investments (1,818)
-------
Total $37,279
=======
</TABLE>
(5) TAX STATUS: The Internal Revenue Service has issued a determination that
the Plan meets the requirements of Section 401(a) of the Code and is exempt
from Federal income taxes under Section 501(a) of the Code.
(6) PLAN AMENDMENTS: Plan amendments that became effective subsequent to
December 31, 1998:
- Allow for any amount of an eligible employee's wages
reduced on or after January 1, 2000 to pay for qualified parking fringe
benefits generally to be considered as part of the employee's
compensation for purposes of the Plan.
- Update the Plan's provisions as to the employers whose employees
will participate in the Plan.
- Eliminate the Plan's provision that would otherwise cause an eligible
employee's years of vesting service to be disregarded under the Plan if
the employee both had no nonforfeitable right to an employer-provided
benefit under the Plan and incurred a five year break in service under
the terms of the Plan (since such provision did not affect any employee
who had any before-tax salary reduction contributions made to the Plan
on his or her behalf and hence had virtually no applicability under the
Plan).
- Modify, effective as of January 1, 2000, the amounts that can be
saved under the Plan by eligible employees as basic savings
contributions (that are generally matched to an extent by contributions
of the Employers) so that such amounts are in accordance with a 1999
collective bargaining agreement between one of the Employers and the
Communications Workers of America.
- Modify, effective as of January 1, 2000, the amount of matching
contributions to be made by the Employers so that such amounts are in
accordance with a 1999 collective bargaining agreement between one of
the Employers and the Communications Workers of America.
- Clarify the provision of the Plan that permits an eligible employee
to direct the investment of certain amounts allocated to his or her
account under the Plan and corrects a typographical error made in
another provision of the Plan.
- Update, effective as of May 9, 1999, the amount of the vested portion
of an eligible employee's account under the Plan that can be
distributed after his or her termination of employment and without
obtaining his or her consent, so that such amount is in accordance with
a 1999 collective bargaining agreement between one of the Employers and
the Communications Workers of America.
- Change the plan year of the Plan (the Plan's fiscal year) to a
12-month period ending each December 30. Prior to this change, the
Plan's plan year was a calendar year. In addition, because of this
change, the Plan had a "short" plan year that began on January 1, 1999
and ended on December 30, 1999.
15
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
- Permit (but do not require) the Employers to prefund at the start of
or during a plan year any contributions which they will be required to
make to the Plan for such plan year.
(7) SPIN-OFF OF CONVERGYS: On December 31, 1998, the Company completed the
spin-off of Convergys Corporation (Convergys). At that time, owners of
the Company's common shares received Convergys common shares equal to
the number of Company shares held at the record date for the spin-off.
Since the Broadwing Inc. (then known as Cincinnati Bell Inc.) Shares
Fund held shares of Company common stock at the record date, a separate
investment fund known as the Convergys Stock Fund was created. The value
reflected in the Statement of Assets Available for Plan Benefits at
December 31, 1998 for the Broadwing Inc. Shares Fund and the Convergys
Stock Fund was based on a pro-rata allocation of the last published
market price for the consolidated Broadwing Inc. (then known as
Cincinnati Bell Inc.) on December 31, 1998. This pro-rata allocation was
determined using the percentages of the last published "when issued"
prices for Broadwing Inc. (then known as Cincinnati Bell Inc.) and
Convergys as of December 31, 1998. The cost basis of the Broadwing Inc.
Shares Fund and the Convergys Stock Fund are based on a similar pro-rata
calculation of ending market values at December 31, 1998, applied
against the total cost basis of the shares. The Convergys Stock Fund is
not available to plan participants for prospective contributions or
investments, and participants cannot re-invest in the Convergys Stock
Fund once they have transferred their investment in the Convergys Stock
Fund to other investment funds. The Convergys employees participating in
the Savings and Security Plan prior to December 31, 1998 had their
investment balance transferred to a savings plan sponsored by Convergys
in January 1999.
16
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
AS OF DECEMBER 30, 1999
<TABLE>
<CAPTION>
Thousands of Dollars
-------------------------------------------------
NUMBER OF
SHARES OR
NAME OF ISSUER AND TITLE OF ISSUE UNITS COST VALUE
--------- ------- ----------
<S> <C> <C> <C>
BROADWING INC. SHARES FUND:
Temporary cash investments $ ** $ 4,041
Broadwing Inc. shares # 18,855,414 units 41,662* 87,756
Interest receivable ** 19
--------- ---------
TOTAL BROADWING INC. SHARES FUND ** 91,816
CONVERGYS STOCK FUND 1,687,165 shares ** 53,146
T. ROWE PRICE SPECTRUM INCOME FUND 86,653 shares ** 930
T. ROWE PRICE BALANCED FUND 82,070 shares ** 1,613
T. ROWE PRICE EQUITY INCOME FUND 157,739 shares ** 3,891
T. ROWE PRICE EQUITY INDEX FUND 115,229 shares ** 4,543
T. ROWE PRICE CAPITAL APPRECIATION FUND 79,576 shares ** 995
T. ROWE PRICE INTERNATIONAL STOCK FUND 110,851 shares ** 2,103
T. ROWE PRICE NEW AMERICA GROWTH FUND 76,074 shares ** 3,635
BROADWING STABLE VALUE FUND:
T. Rowe Price Stable Value Common Trust Fund 9,768,662 units ** 9,769
Contracts with Prudential Insurance Company
of America + 33,327 units ** 33
-------- -------
TOTAL BROADWING STABLE VALUE FUND ** 9,802
LOAN FUND:
Loans to Participants ** 2,698
-------- -------
GRAND TOTAL ** $175,172
======== ========
</TABLE>
+ These contracts guarantee the repayment of principal and the crediting of
interest. The composite effective annual interest rate earned under these
contracts for the plan years 1999 and 1998 was approximately 5.95% and 6.25%,
respectively. The rate at which interest will be credited in future years may be
either higher or lower.
# Party-in-interest to the Plan
* Cost information provided for the Broadwing Inc. Shares Fund is inclusive
of both participant-directed and nonparticipant-directed accounts. The cost
associated with nonparticipant-directed accounts was $57,313 at December 30,
1999.
** This information not required for participant-directed accounts.
17
<PAGE>
CINCINNATI BELL INC. SAVINGS AND SECURITY PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 30, 1999
<TABLE>
<CAPTION>
Current
Value on
Identity of Description of Purchase Selling Cost of Date of Net Gain
Party Involved Asset Price Price Asset Transactions or (Loss)
--------------------------- ------------------ ------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Broadwing Inc. Shares Fund Company Stock $ 7,639,055 $7,639,055 $ 7,639,055 $ -
Broadwing Inc. Shares Fund Company Stock $ 1,956,581 $ 3,850,494 $1,956,581 $ 3,850,494 $ 1,893,913
</TABLE>
* The above totals reflect the net activity of 231 purchase and sale
transactions during the plan year.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the members of the Employees' Benefit Committee have duly caused this annual
report to be signed by the undersigned, thereunto duly authorized.
CINCINNATI BELL INC. SAVINGS AND
SECURITY PLAN
By /s/ Virginia Neill
-----------------------------------
Virginia Neill
Secretary
Employees' Benefit Committee
June 23, 2000
19
