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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on March 23, 2017

No. 333-          


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



WideOpenWest, Inc.
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  4841
(Primary Standard Industrial
Classification Code Number)
  46-0552948
(I.R.S. Employer
Identification No.)

7887 East Belleview Avenue, Suite 1000
Englewood, Colorado 80111
(720) 479-3500

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



Craig Martin
General Counsel
7887 East Belleview Avenue, Suite 1000
Englewood, Colorado 80111
(720) 479-3500

(Name, address, including zip code, and telephone number, including area code, of agent for service)



With copies to:

Joshua N. Korff, P.C.
Brian Hecht
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
(212) 446-4800

 

Richard D. Truesdell, Jr.
Shane Tintle
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
(212) 450-4000



Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o



CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities
to be Registered

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee

 

Common Stock, $0.01 par value per share

  $100,000,000   $11,590

 

(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)
Includes the offering price of any additional shares of common stock that the underwriters have the option to purchase.



          The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities nor a solicitation of an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated March 23, 2017

PRELIMINARY PROSPECTUS

                  Shares

LOGO

WideOpenWest, Inc.

Common Stock



        This is the initial public offering of shares of common stock of WideOpenWest, Inc. We are offering            shares of our common stock.

        Prior to this offering, there has been no public market for our common stock. The initial public offering price per share of our common stock is expected to be between $             and $            . We intend to apply to list our common stock on                  under the symbol "WOW." Upon completion of this offering, we expect to be a "controlled company" as defined under the corporate governance rules of            .

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.



        Investing in our common stock involves risks. See "Risk Factors" beginning on page 17.

       
 
 
  Per Share
  Total
 

Price to public

  $           $        
 

Underwriting discounts and commissions(1)

  $           $        
 

Proceeds, before expenses, to us

  $           $        

 

(1)
See also "Underwriting" for a description of underwriting compensation in connection with this offering.

        The underwriters have an option to purchase up to                        additional shares from us at the initial public offering price, less the underwriting discount. The underwriters can exercise this option at any time and from time to time within 30 days from the date of this prospectus.

        Delivery of the shares of common stock will be made on or about                  , 2017.



Joint Book-Running Managers

UBS Investment Bank   Credit Suisse

The date of this prospectus is                        , 2017.


Table of Contents


TABLE OF CONTENTS

 
  Page  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    17  

FORWARD-LOOKING STATEMENTS

    41  

USE OF PROCEEDS

    43  

DIVIDEND POLICY

    44  

CAPITALIZATION

    45  

DILUTION

    47  

SELECTED HISTORICAL COMBINED CONSOLIDATED FINANCIAL AND OTHER DATA

    49  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    51  

OUR BUSINESS

    72  

MANAGEMENT

    96  

EXECUTIVE COMPENSATION

    103  

PRINCIPAL STOCKHOLDERS

    122  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    124  

DESCRIPTION OF CERTAIN INDEBTEDNESS

    126  

DESCRIPTION OF CAPITAL STOCK

    129  

SHARES ELIGIBLE FOR FUTURE SALE

    133  

CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

    135  

UNDERWRITING

    139  

LEGAL MATTERS

    146  

EXPERTS

    146  

WHERE YOU CAN FIND MORE INFORMATION

    146  

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

    F-1  



        We have not and the underwriters have not authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where such offers and sales are permitted. The information in this prospectus or any free writing prospectus is accurate only as of its date, regardless of its time of delivery or the time of any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.


MARKET, RANKING AND OTHER INDUSTRY DATA

        In this prospectus, we refer to information regarding market data obtained from internal sources, market research, publicly available information and industry publications. Estimates are inherently uncertain, involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus. We believe that these sources and estimates are reliable as of the date of this prospectus but have not independently verified them and cannot guarantee their accuracy or completeness.

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TRADEMARKS, SERVICE MARKS, TRADE NAMES AND COPYRIGHTS

        We do not own, either legally or beneficially, any trademarks, service marks or trade names in connection with the operation of our business. We own or have rights to copyrights that protect the content of our products. This prospectus may also contain trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this prospectus may be listed without the TM, SM, © and ® symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors, if any, to these trademarks, service marks, trade names and copyrights.


NON-GAAP FINANCIAL MEASURES

        We use certain financial measures in this prospectus such as Revenue Including Acquisitions and Dispositions, Adjusted EBITDA, Transaction Adjusted EBITDA and Transaction Adjusted Capital Expenditures, which are not recognized under generally accepted accounting principles or "GAAP."

        Revenue Including Acquisitions and Dispositions is included in this prospectus because it is a key metric used by management and our Board of Directors to assess our financial performance. We define Revenue Including Acquisitions and Dispositions as revenue after giving effect to certain acquisitions and divestitures made by the Company. We believe that Revenue Including Acquisitions and Dispositions is an appropriate measure of operating performance because it is meaningful to investors by showing how certain acquisitions and divestitures might have affected the Company's historical financial statements.

        The presentation of Revenue Including Acquisitions and Dispositions is not made in accordance with GAAP and our use of the term Revenue Including Acquisitions and Dispositions in this prospectus varies from the use of similar terms by other companies in our industry due to different methods of calculation and is not necessarily comparable. Revenue Including Acquisitions and Dispositions should not be considered as an alternative to revenue or any other performance measures derived in accordance with GAAP as measures of operating performance.

        For a reconciliation of revenue to Revenue Including Acquisitions and Dispositions, see "Prospectus Summary—Summary Historical Combined Consolidated Financial Data."

        Adjusted EBITDA is included in this prospectus because it is a key metric used by management and our Board of Directors to assess our financial performance. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance, and that the presentation of this measure enhances an investor's understanding of our financial performance. Transaction Adjusted EBITDA makes certain additional adjustments to the historical financial information that the Company believes is meaningful to investors by showing how certain acquisitions and divestitures might have affected the Company's historical financial statements.

        We define Adjusted EBITDA as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), gains (losses) realized and unrealized on derivative instruments, management fees to related parties, the write up or write off of any asset, debt modification expenses, loss on extinguishment of debt, integration and restructuring expenses, all non-cash charges and expenses (including equity-based compensation expense) and certain other income and expenses, as further defined in our Senior Secured Credit Facilities (as defined herein). Transaction Adjusted EBITDA represents Adjusted EBITDA after giving effect to the impact of acquisitions and dispositions that were completed during the relevant periods as if they occurred at the beginning of the period presented.

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        The presentation of Adjusted EBITDA and Transaction Adjusted EBITDA is not made in accordance with GAAP and our use of the terms Adjusted EBITDA and Transaction Adjusted EBITDA in this prospectus varies from the use of similar terms by other companies in our industry due to different methods of calculation and are not necessarily comparable. Adjusted EBITDA and Transaction Adjusted EBITDA should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP as measures of operating performance.

        Adjusted EBITDA and Transaction Adjusted EBITDA have important limitations as analytical tools and you should not consider them in isolation or as substitutes for the analysis of our results as reported under GAAP. For example, Adjusted EBITDA and Transaction Adjusted EBITDA:

    do not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future;

    do not reflect changes in, or cash requirements for, our working capital needs;

    do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations;

    do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;

    do not reflect stock-based compensation expense and other non-cash charges; and

    exclude certain tax payments that may represent a reduction in cash available to us.

        For a reconciliation of net income (loss) to Adjusted EBITDA and Transaction Adjusted EBITDA, see "Prospectus Summary—Summary Historical Combined Consolidated Financial Data."

        Transaction Adjusted Capital Expenditures is included in this prospectus because it is a key metric used by management and our Board of Directors to assess our financial performance. We define Transaction Adjusted Capital Expenditures as capital expenditures after giving effect to certain acquisitions and divestitures made by the Company. We believe that Transaction Adjusted Capital Expenditures is an appropriate measure of operating performance because it is meaningful to investors by showing how certain acquisitions and divestitures might have affected the Company's historical financial statements.

        The presentation of Transaction Adjusted Capital Expenditures is not made in accordance with GAAP and our use of the term Transaction Adjusted Capital Expenditures in this prospectus varies from the use of similar terms by other companies in our industry due to different methods of calculation and is not necessarily comparable. Transaction Adjusted Capital Expenditures should not be considered as an alternative to capital expenditures or any other performance measures derived in accordance with GAAP as measures of operating performance.

        For a reconciliation of capital expenditures to Transaction Adjusted Capital Expenditures, see "Prospectus Summary—Summary Historical Combined Consolidated Financial Data."

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PROSPECTUS SUMMARY

        The following summary highlights information appearing elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully. In particular, you should read the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the notes relating to those statements included elsewhere in this prospectus. Some of the statements in this prospectus constitute forward-looking statements. See "Forward-Looking Statements."

        In this prospectus, unless the context requires otherwise, "we," "us," "our," "WOW!" and the "Company" refer to WideOpenWest, Inc. and its consolidated subsidiaries. "Parent" refers to WideOpenWest Holdings, LLC, our indirect parent company.

        All statistical and operating information in this section gives effect to the acquisitions of Bluemile, Anne Arundel Broadband and NuLink and the divestitures of the South Dakota systems and Lawrence, Kansas system, except as otherwise noted. For additional detail on these transactions, see "—Summary Historical Combined Consolidated Financial Data."


Our Business

Overview

        We are the sixth largest cable operator in the United States ranked by number of customers as of December 31, 2016. We provide high-speed data ("HSD"), cable television ("Video"), Voice over IP-based telephony ("Telephony") and business-class services to a service area that includes approximately 3.0 million homes and businesses. Our services are delivered across 19 markets via our advanced hybrid fiber-coaxial ("HFC") cable network. Our footprint covers over 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee. Led by our robust HSD offering, our products are available either as a bundle or as an individual service to residential and business services customers. As of December 31, 2016, 772,300 customers subscribed to our services.

        We believe we have one of the most technologically advanced, fiber-rich networks in our service areas, with approximately 11,500 route miles of intra- and inter-market fiber and approximately 33,500 miles of coaxial cable. We have designed our network with the goal of maximizing Internet speeds and accommodating future broadband demand. Our all-digital HFC infrastructure operates with a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable to 1.2 Ghz throughout. All of our new communities are built with a capacity of 1.2 Ghz. Our HFC network is fully upgraded with Data Over Cable Service Interface Specification ("DOCSIS") 3.0 and is capable of being upgraded to DOCSIS 3.1 in all of our markets. According to CableLabs, a non-profit innovation and research and development lab founded by members of the cable industry, DOCSIS 3.1 technology has the capacity to support network speeds up to 10 Gbps downstream and up to 1 Gbps upstream. We serve an average of 310 homes per distribution point, which are also referred to as nodes, enabling us to deliver quality HSD service and the capability to provide broadband speeds of 1 Gbps and higher. Our HFC network consists of a high-bandwidth, multi-use service provider backbone, which allows us to centrally source data, voice and video services for both residential and business traffic. We believe the quality and uniform architecture of our next-generation network is a competitive advantage that enables us to offer high-quality broadband services that meet our current and future customers' needs without incurring significant upgrade capital expenditures.

        We operate primarily in economically stable suburbs that are adjacent to large metropolitan areas as well as secondary and tertiary markets, which we believe have favorable competitive and demographic profiles and include businesses operating across a range of industries. We benefit from the

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ability to augment our footprint by pursuing value-accretive network extensions ("edge-outs") to increase our addressable market and grow our customer base. We have historically made selective capital investments in edge-outs to facilitate growth in residential and business services. Additionally, we provide a range of services to small, medium and large businesses within our footprint, and we believe we have the opportunity to grow our business services market share with our robust product suite.

Attractive Markets with Favorable Competitive Dynamics

GRAPHIC


Note: "RGUs" represent Revenue Generating Units.

        We are focused on efficient capital spending and maximizing Adjusted EBITDA through an Internet-centric growth strategy while maintaining a profitable video subscriber base. Based on its per subscriber economics, we believe that HSD represents the greatest opportunity to drive increased profitability across our residential and business markets. According to Cisco, North America has experienced significant growth in bandwidth usage in recent years, driven primarily by (i) over-the-top video ("OTT") viewership trends, (ii) a proliferation of connected devices, and (iii) increased customer demand for high-bandwidth business applications, including cloud computing. We believe our superior network infrastructure provides an efficient, scalable platform to meet our current and future customers' needs and deliver services as demand for bandwidth continues to increase. Data compiled by Kagan demonstrates that cable operators have enjoyed an increasing share of new broadband subscribers since 2010, while telephone companies have seen their share of these customers decline year over year. Also based on data compiled by Kagan, from the quarter ended June 30, 2015 through the quarter ended September 30, 2016, the cable industry has captured in excess of a 95% share of wired broadband net subscriber growth in each quarter. We believe the cable industry's net broadband share growth is indicative of a superior product offering relative to other HSD technologies, such as the digital subscriber line ("DSL") network architecture often utilized in whole or in part by telephone companies.

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Our History

        Since commencing operations in 2001, our focus has been to offer a competitive alternative cable service and establish a brand with a strong market position. We have scaled our business through (i) organic subscriber growth and increased penetration within our existing markets and footprint, (ii) edge-outs to grow our footprint, (iii) upgrades to introduce enhanced broadband services to networks we have acquired, (iv) entry into business services, with a broad range of HSD, Video and Telephony products, and (v) acquisitions and integration of cable systems.

WOW!'s Evolution Over Time

GRAPHIC

        After a period of strong growth from 2001 through 2011, we shifted our focus to integrating our acquisitions and strengthening our product offering. Debt service costs associated with the Knology acquisition and capital expenditures necessary for network priorities and integration limited further investment in edge-outs and other growth opportunities through 2015. Through organic growth, normalization of capital expenditures, de-levering and interest cost reduction, we have increased free cash flow generation and renewed our focus on edge-outs and business services. As a result of a stronger balance sheet, we believe we are better positioned to accelerate our growth investments in a meaningful way going forward. The investments we have made in our platform have resulted in overall customer and HSD subscriber growth for the year ended December 31, 2016.

Our Strengths

        We believe the following core competitive strengths enable us to differentiate ourselves:

    Technologically Advanced Platform that Underpins our Competitive Advantage

        Our all-digital, fiber-rich HFC network has a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable throughout the network to 1.2 Ghz to accommodate future broadband demand. The infrastructure is currently operating on DOCSIS 3.0, is capable of being upgraded to DOCSIS 3.1 and serves approximately 310 homes per node. We offer HSD speeds up to 500 Mbps in 94% of our footprint with the capability to offer 1 Gbps or more in all of our markets. In the fourth quarter of 2016, we launched a 1 Gbps offering in four of our markets, with additional market launches planned for 2017 in our edge-out communities. Over the twelve months ended February 28, 2017, our average monthly Internet speed ranking was second out of 62 cable, fiber, DSL, wireless and satellite Internet service providers, or ISPs, according to Netflix's USA ISP Speed Index.

        We offer a full suite of digital video services, including video-on-demand ("VOD"), high-definition video and digital video recording ("DVR"). In approximately 79% of our footprint, we also offer our "Ultra" video product, which is a technologically advanced, Internet protocol ("IP") enabled,

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whole-home DVR solution that integrates traditional linear video, an advanced user interface and direct access to OTT content, such as Netflix and other applications.

        Our technologically advanced network enables us to provide business services customers with a broad portfolio of carrier-class data and voice services, including Direct Internet Access, Ethernet over fiber and HFC, virtual private networks, Hosted Voice over Internet Protocol ("VoIP") solutions, wholesale fiber connectivity, cell backhaul solutions, disaster recovery, cloud back-up and Session Initiated Protocol ("SIP") and Primary Rate Interface ("PRI") trunking services. Our advanced business services product offering continues to evolve, as we leverage our investment in next generation software enabled infrastructure to launch new services such as a full suite of managed and other virtual services.

        We expect future network-related capital expenditures to be generally stable. We believe that our flexible network architecture will allow us to meet our current and future customers' needs without incurring significant upgrade capital expenditures.

    Value-Accretive Edge-Outs

        We have a proven track record of successful edge-outs. Through network extensions to adjacent communities and increased customer penetration levels over time within these communities, we have increased the number of residential and business services customers that we serve. For the year ended December 31, 2016, we added approximately 8,900 customers from our edge-outs activated in 2016. We have experienced success in this strategy by targeting communities that we believe possess attractive demographic and competitive profiles, making capital-efficient decisions and leveraging our existing operating infrastructure. We have identified a large number of communities near our footprint for edge-out expansion, and believe edge-out expansion has a self-perpetuating effect as each community adjacent to a new edge-out investment presents further expansion opportunities.

        Between 2008 and 2012, we extended our network to over 100,000 new homes passed through edge-outs. During 2016, we expanded our network footprint by approximately 38,000 homes passed in five markets and achieved average customer penetration levels of 23% over an average activation period of 157 days as of December 31, 2016. The edge-outs that we activated in 2016 are continuing to experience net additions, and we expect an increase in penetration levels as they reach full maturity. We continue to selectively evaluate and invest in edge-out opportunities within our markets and believe we are well-positioned based on our historical track record of success in edge-out expansion.

    Business Services Capabilities

        We offer integrated solutions for businesses, including Direct Internet Access, Ethernet over fiber and HFC, hosted and on-premise VoIP solutions, metro Ethernet services, wholesale fiber connectivity, cell backhaul solutions and SIP and PRI trunking services. Recognizing the opportunity in our markets, we have built the necessary infrastructure, processes and sales and support organizations to scale our business services offering. Supported by our robust network, we have developed a full suite of products for small, medium and large businesses within our footprint, including enhanced telephony services and data speeds of up to 10 Gbps. We have built a consistent sales practice across our business services organization while ensuring product competitiveness and local knowledge to drive market share gain. We utilize multiple distribution channels, including direct sales, wholesale and indirect sales to capture opportunities across a variety of customer segments. Additional products within our portfolio include virtual private networks, a complete line of colocation infrastructure, cloud computing, managed backup and disaster recovery services.

        We have also made significant investments in our fiber network in the Chicago area. Since 2014, we have constructed approximately 1,200 miles of fiber in this market, providing connectivity to more than 500 macro and small cell sites as part of a fiber construction project for a leading wireless carrier.

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While a meaningful portion of the fiber network in this area is under a long-term contract to this carrier, which will generate recurring revenues, there is significant capacity on the network that we expect will support future growth as we connect more business services customers.

        Strong execution has supported our business services expansion to date and will enable us to execute on our growth strategy. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015.

    Attractive Geographic Footprint and Favorable Competitive Dynamics

        Our customers are located primarily in economically stable suburbs adjacent to large metropolitan areas, as well as secondary and tertiary markets, in the Midwest and Southeast United States. Our typical market possesses what we believe to be an advantageous mix of size and geographical position with favorable competitive dynamics and demographics, and includes a number of businesses operating across a range of industries. We believe our network footprint insulates us from heightened competition typical of major metropolitan centers. In addition, the diversity of WOW!'s geographic footprint enables us to mitigate the impact of economic downturns our business could face in a particular region.

        Within our geographical areas, we believe we are typically one of the top two providers of HSD and Video services. We have a proven track record of winning customers from other operators by providing superior HSD product offerings, focusing on local marketing efforts, offering competitive pricing and delivering strong customer service while leveraging our advanced network.

        Based on homes passed, we estimate approximately 53% and 39% of our footprint overlaps with Comcast Corp. and Charter, respectively. We estimate systems formerly owned by Time Warner Cable and Bright House Networks (recently acquired by Charter) overlap with approximately 33% of our homes passed. We believe competitive dynamics with telephone companies are favorable in our markets. We estimate that AT&T Corp's U-verse offering is available in approximately 63% of our footprint based on homes passed. We believe competitive dynamics with AT&T U-verse are favorable for WOW!, as AT&T U-verse's network architecture is a mix of fiber and DSL in several markets. Competition from Verizon FiOS and Frontier Communications is estimated to be 3.5% and 2.7% of our overall footprint, respectively.

    Strong Financial Performance Benefiting from the Mix Shift to HSD

        We have delivered growth in our financial results since our inception. Our margin profile is driven by an increase in HSD revenues, which benefit from gross margins in excess of 95%, and our focus on preserving the profitability of our Video customers, which has resulted in increases in Video average revenue per user ("ARPU"). For the year ended December 31, 2016, HSD revenues represented approximately 30.2% of our total revenues and 45.4% of our gross profit. In comparison, Video represented 44.2% of our total revenues and 23.9% of our gross profit over the same period. High content costs associated with the distribution of Video services are the key driver of the increasing divergence in profitability of HSD and Video. As a result of our continued customer mix shifting to HSD, we believe we will benefit from higher free cash flow conversion and margin expansion because HSD requires lower capital expenditures and operating expenses relative to Video. For the year ended December 31, 2016, we generated net income of $26.3 million, which represented a $53.6 million improvement over the year ended December 31, 2014, and approximately $445.7 million of Transaction Adjusted EBITDA, which represented an increase of $47.2 million, or 5.8%, on an annualized basis over the year ended December 31, 2014. See "—Summary Historical Combined Consolidated Financial Data" for a reconciliation of net income (loss) to Transaction Adjusted EBITDA.

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    Operating Philosophy Founded on a Superior Customer Experience

        We compete strategically by adhering to our operating philosophy, which is: "To deliver an employee and customer experience that lives up to our name." The ongoing pursuit of this philosophy has a strong foundation in the WOW! culture that has been cultivated over time and focuses our organization on four core values: (i) respect: treat others as you wish to be treated; (ii) integrity: choose to do what is right; (iii) servanthood: embracing the attitude and honor of serving others rather than being served; and (iv) ownership: act with thought and a focus on the collective good.

        We believe that servanthood in particular is unique to WOW! and exemplifies our commitment to the customer experience—that "how" we treat our customers is just as important as "what" we provide them and ultimately is how we earn customer loyalty. This mindset is what drives our operating philosophy and we believe compels employees and customers alike to choose WOW!.

    Strong and Experienced Management Team

        Our management team is comprised of senior executives who have significant experience in the telecommunications industry, with an average tenure of seven years with the Company and approximately 24 years of relevant industry experience. Our management team has collaborated to establish WOW!'s unique culture and execute on the Company's operating philosophy and commitment to the customer experience. The team's track record of success has translated into numerous independent awards and recognitions. We have been (i) ranked highest in customer satisfaction by J.D. Power and Associates 21 times in the last twelve years, (ii) rated highest by Consumer Reports fifteen times in the last eight years, and (iii) recognized by PC Magazine with the Reader's Choice Award five times in the last six years. Our management team has substantial experience in deploying new products and services and has successfully guided WOW! through various business cycles. In addition, our management team has considerable experience in successfully identifying and completing edge-outs and acquiring and integrating cable assets.

Our Strategy

        The key components of our strategy are as follows:

    Focus on Highly Profitable Internet-Centric Products

        Driven by the increased Internet needs of our customers, we believe we will continue to experience strong demand for HSD services within our markets. The growth of bandwidth-intensive applications, such as mobile and social media applications, OTT video and cloud-based computing, and the proliferation of connected devices, are expected to continue to drive rapidly-increasing consumption of data. We intend to capitalize on these favorable industry trends by continuing to focus on HSD customer growth via increased penetration, driving a greater mix shift toward higher-margin HSD and business services products and transitioning customers to higher-priced HSD speed tiers. While we will continue to provide a robust Video product to satisfy the needs of our bundled customers, our strategy is to maintain profitability by increasing Video pricing in the face of rising content costs. For customers who value the Video product, our marketing approach is to drive adoption of HSD-centric bundles.

        The growth of our HSD business is driven by our ability to offer a range of speeds, packaged and bundled at a competitive value and provisioned to deliver a consistent and high-quality experience. We provide market-leading speed tiers of 10 Mbps, 100 Mbps, 500 Mbps and 1 Gbps. This "good, better, best" approach provides competitive speed and price-value differentiation while simplifying the overall customer value proposition. Our fiber-rich HFC network is fully DOCSIS 3.1-capable, allowing us to remain highly competitive as our customers' bandwidth needs evolve. In addition, we believe that new product development of HSD-adjacent services provides an opportunity for additional growth. Our

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existing infrastructure enables us to drive new product development initiatives, which could include home security, home automation and other Internet of Things services in the future.

    Accelerate Investment in Highly Accretive Network Edge-Out Builds

        We believe edge-outs are an attractive investment opportunity available to WOW!. We have a track record of successfully identifying and expanding our network in a cost-effective manner to new communities and acquiring residential and business services customers. We believe that capital expenditures and operating costs for edge-outs are inherently lower relative to a new greenfield build because we are able to leverage our existing infrastructure and operating platforms to extend our network to communities adjacent to and near our existing footprint. Management evaluates potential edge-out opportunities based on the expected average acquired customer's annual Adjusted EBITDA contribution from such projects relative to the anticipated required capital expenditures. Based on edge-outs activated in 2016, our average capital expenditures per acquired customer represent a mid-single digit multiple of our average customer's annual Adjusted EBITDA contribution as of December 31, 2016. As our edge-outs mature over time, we expect penetration to increase and this multiple to decrease.

        We continue to evaluate new opportunities for edge-outs to increase our residential and business footprint. Edge-outs are expected to add approximately 72,000 homes passed in 2017, and we have identified additional edge-out opportunities that we expect will be prioritized and built over the next several years. We believe that the overall edge-out opportunity within our network extends beyond what we have identified and will continue to expand as we gain access to new adjacent communities.

    Drive Growth in Business Services Market Opportunity

        We believe that business services represent a substantial growth area for WOW! and we have made significant investments in our network and product capabilities to address these opportunities. We believe that we have a significant market penetration growth opportunity in several of our markets, including those in the Midwest and Florida, and that our advanced network positions us to capitalize on the substantial business services opportunity within our footprint. We believe we have developed the product suite and sales expertise to continue to gain share with the small, medium and large businesses we target within our footprint. We estimate there is an approximately $1.3 billion addressable revenue opportunity across our markets. We believe that a substantial part of our target customer base is served by legacy DSL technologies, creating a clear competitive advantage and market opportunity for our HFC-based cable HSD services. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015. We design our networks with additional capacity so that increased bandwidth can be deployed economically and efficiently, allowing us to address our current and future customers' demand. We believe that our robust, customer-centric solutions, experienced sales organization and strong product capabilities have supported our expansion in the business services market and will help us execute on our growth strategy.

    Accelerate Free Cash Flow Generation

        We believe we will achieve accelerating free cash flow generation, which will allow us to continue to pursue enhanced, disciplined levels of investment in our edge-out and business services investment opportunities. We expect growth in income from operations and Adjusted EBITDA to exceed revenue growth over time, benefiting from the mix shift to HSD, the transition of customers to higher-priced HSD speed tiers and the management of Video customer profitability. We also expect the mix shift to

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drive a reduction in our capital expenditures relative to our revenues over time. We expect our near-term federal corporate income tax payments to be minimal given our federal net operating loss ("NOL") balance of $833.8 million as of December 31, 2016. See "Risk Factors—Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations."

    Continue Identifying and Successfully Integrating Acquisitions

        We expect to evaluate and pursue opportunistic tuck-in acquisitions. We have acquired six cable companies since 2006. We believe that we have consistently demonstrated an ability to acquire and integrate companies, realize cost synergies and increase the profitability of these businesses post-close. We have pursued these acquisitions for a variety of reasons including: (i) geographic diversity and increased scale; (ii) expansion of WOW!'s network through tuck-ins of smaller adjacent systems; (iii) value creation via upgrading and streamlining undermanaged systems; (iv) enhancement of our business services capabilities; and (v) cost rationalization.

        For example, our acquisition of Sigecom, LLC ("Sigecom") in 2006 (i) expanded WOW!'s footprint into the Evansville, Indiana market, (ii) increased WOW!'s business services presence, and (iii) generated significant cost savings by leveraging Sigecom's infrastructure and expertise, which provided an in-house telephony switch solution throughout our network. Our acquisition of Knology, Inc. ("Knology") in 2012 provided incremental scale, geographic and competitive diversification and allowed us to consolidate a clustered footprint in the Midwest and Southeast. Most recently, our acquisition of HC Cable Opco, LLC d/b/a NuLink ("NuLink") added approximately 34,000 homes and businesses near WOW!'s existing Georgia footprint, with attractive demographics and meaningful edge-out and business services opportunities given its proximity to Atlanta.

        We believe our acquisition track record provides us with an advantage in future consolidation opportunities. We will continue to evaluate and pursue future acquisition opportunities based on the quality of underlying assets, fit within our existing business, opportunity to expand our network and the ability to create value through the realization of cost efficiencies.

    Operating Philosophy Driving Differentiation in Customer Experience

        Our philosophy is to deliver an employee and customer experience that is consistent with the WOW! name. We are a company comprised of people who derive satisfaction from taking care of each other and our customers. As a result, there is heightened awareness and understanding among our team that it is our employees who ultimately are WOW!'s greatest strategic asset. Our approximately 2,900 employees are brand ambassadors across the communities we serve.

        Our purposeful focus on creating a thriving WOW! culture is all for the benefit of our customers. We have established an enduring record of delivering award-winning customer service and satisfaction. Recognition by a variety of independent third parties, including J.D. Power and Associates, Consumer Reports and PC Magazine, has helped create a winning, competitive spirit amongst employees that drives our success.


Summary Risk Factors

        Our business is subject to numerous risks described in the section entitled "Risk Factors" and elsewhere in this prospectus. You should carefully consider these risks before making an investment. Some of these risks include:

    the wide range of competition we face;

    the relative size and resources of our competitors;

    the impact of advancing technology on the leisure and entertainment time of audiences;

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    whether our "edge-out" strategy will succeed;

    the likelihood of prolonged economic downturns, especially any downturns in the housing market, and their effect on our ability to attract new subscribers;

    the volatility of our stock price; and

    the lack of an existing market for our common stock and the uncertainty that such a market will develop.


Distribution

        Prior to the closing of this offering, our indirect parent company, WideOpenWest Holdings, LLC, will be liquidated and the shares of our common stock that it holds (indirectly through Racecar Acquisition LLC) will be distributed to its equity holders based on their relative rights under its limited liability company agreement, with no issuance of additional shares by us. Each holder of vested units of WideOpenWest Holdings, LLC will receive shares of our common stock in the distribution. For additional information regarding the treatment of outstanding units in WideOpenWest Holdings, LLC in connection with the distribution and this offering, see "Executive Compensation—Effect of the Distribution and this Offering."


Our Corporate Information

        Our business commenced operations in 2001. WideOpenWest, Inc. was founded in 2012 as WideOpenWest Kite, Inc. and is a Delaware corporation. WideOpenWest Kite, Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017. WOW!'s principal executive offices are located at 7887 East Belleview Avenue, Suite 1000, Englewood, Colorado 80111. Our telephone number is (720) 479-3500. Our website can be found on the Internet at www.wowway.com.

        The information contained on WOW!'s website or that can be accessed through the website is not part of this prospectus and you should not rely on that information when making a decision whether to invest in our common stock.


Equity Sponsors

        Avista Capital Partners ("Avista") is a leading New York-based private equity firm with approximately $5 billion under management. Founded in 2005, Avista makes control investments in growth-oriented healthcare and communications businesses. Through its team of seasoned investment professionals and industry experts, Avista seeks to partner with exceptional management teams to invest in and add value to well-positioned businesses.

        Founded in 2004, Crestview Partners ("Crestview" and together with Avista, the "Sponsors") is a value-oriented private equity firm focused on the middle market. The firm is based in New York and manages funds with over $7 billion of aggregate capital commitments. The firm is led by a group of partners who have complementary experience and distinguished backgrounds in private equity, finance, operations and management. Crestview's senior investment professionals primarily focus on sourcing and managing investments in each of the specialty areas of the firm: media, energy, financial services and industrials.

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The Offering

Issuer

  WideOpenWest, Inc.

Common stock offered by us

 

            shares.

Underwriters' option to purchase additional shares

 

We have granted the underwriters a 30-day option to purchase up to an additional            shares at the public offering price less underwriting discounts and commissions.

Common stock to be outstanding immediately after completion of this offering

 

Immediately following the consummation of this offering, we will have            shares of common stock outstanding, or            shares if the underwriters' option to purchase additional shares is exercised in full.

Use of proceeds

 

We estimate that the net proceeds to us from this offering, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, will be approximately $            million (or $            million if the underwriters' option to purchase additional shares is exercised in full), assuming the shares offered by us are sold for $            per share, the midpoint of the price range set forth on the cover of this prospectus.

 

We intend to use the net proceeds from the sale of common stock by us in this offering (i) to repay outstanding indebtedness, (ii) for general corporate purposes and (iii) to pay fees and expenses in connection with this offering and other related expenses. For additional information, see "Use of Proceeds."

Principal stockholders

 

Upon completion of this offering, the Sponsors will beneficially own a controlling interest in us. We currently intend to avail ourselves of the "controlled company" exemption under the corporate governance rules of            .

Dividend policy

 

We currently expect to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness; therefore, we do not anticipate paying any cash dividends in the foreseeable future. For additional information, see "Dividend Policy."

Proposed symbol for trading on                    

 

"WOW"

Risk factors

 

For a discussion of risks relating to the Company, our business and an investment in our common stock, see "Risk Factors" and all other information set forth in this prospectus before investing in our common stock.

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        Unless otherwise indicated, all information in this prospectus relating to the number of shares of common stock to be outstanding immediately after this offering:

    assumes the effectiveness of our amended and restated certificate of incorporation and amended and restated bylaws, which we will adopt prior to the completion of this offering;

    excludes            shares of our common stock reserved for future grants under our 2017 Plan (as defined below); and

    assumes (i) no exercise by the underwriters of their option to purchase up to            additional shares from us and (ii) an initial public offering price of $            per share, the midpoint of the price range set forth on the cover of this prospectus.

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Summary Historical Combined Consolidated Financial Data

        The following tables present a summary of our historical combined consolidated financial data at the dates and for the periods indicated. We derived the following summary historical combined consolidated financial data for the years ended December 31, 2014, 2015 and 2016 and as of December 31, 2015 and 2016 from our audited combined consolidated financial statements included elsewhere in this prospectus. The balance sheet data as of December 31, 2014 is derived from our audited combined consolidated financial statements for the year ended December 31, 2014 not included in this prospectus. Our historical operating results are not necessarily indicative of future operating results.

        You should read this data in conjunction with, and it is qualified by reference to, the sections entitled "Selected Historical Combined Consolidated Financial and Other Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our combined consolidated financial statements and related notes appearing elsewhere in this prospectus.

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  Year Ended December 31,  
(in millions)
  2014   2015   2016  

Statement of Operations Data:

                   

Revenue

  $ 1,264.3   $ 1,217.1   $ 1,237.0  

Costs and expenses:

                   

Operating (excluding depreciation and amortization)

    737.0     678.6     668.3  

Selling, general and administrative

    135.8     110.6     116.4  

Depreciation and amortization

    251.3     221.1     207.0  

Management fee to related party

    1.7     1.9     1.7  

    1,125.8     1,012.2     993.4  

Income from operations

    138.5     204.9     243.6  

Other income (expense):

                   

Interest expense

    (237.0 )   (226.0 )   (211.1 )

Realized and unrealized gain on derivative instruments, net

    4.1     5.6     2.3  

Gain on sale of assets

    52.9          

Loss on early extinguishment of debt

        (22.9 )   (38.0 )

Other income (expense), net

    3.4     (0.4 )   2.2  

Loss before provision for income tax

    (38.1 )   (38.8 )   (1.0 )

Income tax benefit (expense), net

    10.8     (9.9 )   27.3  

Net income (loss)

  $ (27.3 ) $ (48.7 ) $ 26.3  

Balance Sheet Data:

                   

Total assets

  $ 2,874.7   $ 2,684.7   $ 2,770.8  

Total debt, including capital lease obligations

  $ 3,019.3   $ 2,882.2   $ 2,871.2  

Total liabilities

  $ 3,690.9   $ 3,550.7   $ 3,488.8  

Other Financial Data:

   
 
   
 
   
 
 

Revenue Including Acquisitions and Dispositions(1)

  $ 1,186.3   $ 1,195.4   $ 1,208.4  

Capital expenditures

  $ 251.9   $ 231.9   $ 287.5  

Transaction Adjusted Capital Expenditures(1)

  $ 244.1   $ 229.2   $ 285.6  

Adjusted EBITDA(1)

  $ 438.1   $ 443.9   $ 463.6  

Transaction Adjusted EBITDA(1)

  $ 398.5   $ 429.1   $ 445.7  

Other Data(2): (in thousands)

   
 
   
 
   
 
 

Homes passed

    2,985.0     3,003.1     3,094.3  

Total customers(3)

    809.1     777.8     803.4  

                   

HSD RGUs

    727.8     712.5     747.4  

Video RGUs

    634.7     547.5     501.4  

Telephony RGUs

    359.4     296.8     258.1  

Total RGUs

    1,721.9     1,556.8     1,506.9  

(1)
Since 2014, the Company has completed certain key acquisitions and divestitures. These transactions do not constitute a significant business combination for which a balance sheet is required by Regulation S-X or a disposition of a significant portion of a business. However, the Company presents certain financial data that gives effect to the impact of acquisitions and dispositions that were completed during the relevant periods as if they occurred at the beginning of the period presented.

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    The following table shows a reconciliation of Revenue to Revenue Including Acquisitions and Dispositions:

 
  Year Ended December 31,  
(in millions)
  2014   2015   2016  

Revenue

  $ 1,264.3   $ 1,217.1   $ 1,237.0  

Revenue related to NuLink(a)

    23.2     24.7     17.1  

Revenue related to AAB(b)

    7.1          

Revenue related to the South Dakota systems(c)

    (62.5 )        

Revenue related to the Lawrence system(d)

    (45.8 )   (46.4 )   (45.7 )

Revenue Including Acquisitions and Dispositions

  $ 1,186.3   $ 1,195.4   $ 1,208.4  

    We define Adjusted EBITDA as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), gains (losses) realized and unrealized gain on derivative instruments, management fees to related party, the write up or write off of any asset, debt modification expenses, loss on early extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including equity based compensation expense) and certain other income and expenses, as further defined in our Senior Secured Credit Facilities. Transaction Adjusted EBITDA represents Adjusted EBITDA after giving effect to the impact of acquisitions and dispositions that were completed during the relevant periods as if they occurred at the beginning of the period presented. The following table shows a reconciliation of GAAP net income (loss) to Adjusted EBITDA and Transaction Adjusted EBITDA:

 
  Year Ended December 31,  
(in millions)
  2014   2015   2016  

Net income (loss)

  $ (27.3 ) $ (48.7 ) $ 26.3  

Depreciation & amortization

    251.3     221.1     207.0  

Management fee to related party

    1.7     1.9     1.7  

Interest expense

    237.0     226.0     211.1  

Realized and unrealized (gain) loss on derivative instruments

    (4.1 )   (5.6 )   (2.3 )

Loss on early extinguishment of debt

        22.9     38.0  

(Gain) on sale of assets

    (52.9 )        

Non-recurring professional fees, M&A integration and restructuring expense

    46.6     16.0     10.2  

Non-cash compensation

            1.1  

Other (income) expense, net

    (3.4 )   0.4     (2.2 )

Income tax (benefit) expense

    (10.8 )   9.9     (27.3 )

Adjusted EBITDA

  $ 438.1   $ 443.9   $ 463.6  

Adjusted EBITDA related to NuLink(a)

    7.8     8.4     5.8  

Adjusted EBITDA related to AAB(b)

    1.0          

Adjusted EBITDA related to the South Dakota systems(c)

    (26.8 )        

Adjusted EBITDA related to the Lawrence system(d)

    (21.6 )   (23.2 )   (23.7 )

Transaction Adjusted EBITDA(e)

  $ 398.5   $ 429.1   $ 445.7  

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    The following table shows a reconciliation of capital expenditures to Transaction Adjusted Capital Expenditures:

 
  Year Ended December 31,  
(in millions)
  2014   2015   2016  

Capital expenditures

  $ 251.9   $ 231.9   $ 287.5  

Capital expenditures related to NuLink(a)

    3.5     3.7     3.8  

Capital expenditures related to AAB(b)

    1.2          

Capital expenditures related to the South Dakota systems(c)

    (8.0 )        

Capital expenditures related to the Lawrence system(d)

    (4.5 )   (6.4 )   (5.7 )

Transaction Adjusted Capital Expenditures

  $ 244.1   $ 229.2   $ 285.6  

(a)
Represents our management's estimate of pre-acquisition Revenue, Adjusted EBITDA and Capital Expenditures of NuLink for the periods preceding our acquisition of substantially all of the operating assets of NuLink on September 9, 2016 based on the books and records of NuLink, as adjusted by our management to reflect the assets actually acquired. We believe that, based on operating data, including operating data for the period following our acquisition of NuLink (from September 9, 2016 through September 30, 2016), the amounts represent a reasonable estimate of Revenue, Adjusted EBITDA and Capital Expenditures from NuLink's operations. However, there can be no assurances that such results accurately reflect the actual results of the acquired assets of NuLink for the periods preceding September 9, 2016. Such amounts are unaudited and have not been independently verified by our management.

(b)
Represents our management's estimate of pre-acquisition Revenue, Adjusted EBITDA and Capital Expenditures of Anne Arundel Broadband ("AAB") for the periods preceding our increased investment in AAB on April 30, 2014 based on the books and records of AAB, as adjusted by our management to reflect the assets actually acquired. We believe that, based on operating data, including operating data for the period following our increased investment in AAB (from May 1, 2014 through December 31, 2014), the amounts represent a reasonable estimate of Revenue, Adjusted EBITDA and Capital Expenditures from AAB's operations. However, there can be no assurances that such results accurately reflect the actual results of the acquired assets of AAB for the periods preceding April 30, 2014. Such amounts are unaudited and have not been verified by our management.

(c)
Represents the Revenue, Adjusted EBITDA and Capital Expenditures of the South Dakota systems for the periods preceding our divestiture of such assets on September 30, 2014 based on the individual books and records of the South Dakota systems. Such amounts have been extracted from the consolidated financial statements for the Company which has been audited. We believe that such amounts represent a reasonable estimate of Revenue, Adjusted EBITDA and Capital Expenditures for the South Dakota systems for the periods preceding our divestiture, however, the individual books and records of the South Dakota systems have not been audited. As a result, there can be no assurances that such results accurately reflect the actual results of the South Dakota systems for the periods preceding September 30, 2014.

(d)
Represents the Revenue, Adjusted EBITDA and Capital Expenditures of the Lawrence system for the periods preceding our divestiture of such assets on January 12, 2017 based on the individual books and records of the Lawrence system. Such amounts have been extracted from the consolidated financial statements for the Company which has been audited. We believe that such amounts represent a reasonable estimate of Revenue, Adjusted EBITDA and Capital Expenditures for the Lawrence system for the periods preceding our divestiture,

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    however, the individual books and records of the Lawrence system have not been audited. As a result, there can be no assurances that such results accurately reflect the actual results of the Lawrence system for the periods preceding January 12, 2017.

(e)
Revenue Including Acquisitions and Dispositions, Transaction Adjusted EBITDA and Transaction Adjusted Capital Expenditures give effect to events that are directly attributable to the transactions described therein, factually supportable and expected to have a continuing impact on the combined results. These metrics do not reflect non-recurring charges that have been incurred in connection with the relevant transaction and related financings, including legal fees, broker fees and accounting fees.
(2)
After giving effect to the divestiture of the assets of the Lawrence system, as of December 31, 2016, homes passed was equal to approximately 3.026 million, total customers was approximately 772,300, HSD RGUs was approximately 718,900, Video RGUs was approximately 486,400, Telephony RGUs was approximately 251,100 and Total RGUs was approximately 1,456,400. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Homes Passed and Subscribers."

(3)
Defined as the number of customers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe. The period ended December 31, 2016 includes subscriber numbers from the NuLink acquisition on September 9, 2016. Due to the sale of our South Dakota systems on September 30, 2014, the South Dakota systems' homes passed and subscribers are not included in the above table for the year ended December 31, 2015.

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including our historical financial statements and the notes thereto, before making a decision to invest in our common stock. If any of the following risks actually occur, our business, financial condition, results of operations and prospects could be harmed. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment in us. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking statements. See "Forward-Looking Statements."

Risks Related to Our Business

We face a wide range of competition, which could negatively affect our business and financial results.

        Our industry is, and will continue to be, highly competitive. Some of our principal residential services competitors, including other cable and local telephone companies, offer services that provide features and functions comparable to the residential high-speed data, video, and/or telephony that we offer, and these competitors offer these services in bundles similar to ours. In most of our markets, cable competitors have invested in their networks and are able to offer a product suite which is comparable to ours. In addition, in some of our operating areas, AT&T, Verizon or other incumbent telephone providers have upgraded their networks to carry two-way video, high-speed data with substantial bandwidth and IP-based telephony services, which they market and sell in bundles, in some cases, along with their wireless services. These telephone incumbents may also offer satellite video as a part of their bundle, either in partnership with a satellite provider or directly as is the case with DirecTV. Consequently, there are more than two providers of "triple-play" services in some of our markets.

        In addition, each of our residential services faces competition from other companies that provide residential services on a stand-alone basis. Our residential video service faces competition from other cable and direct broadcast satellite providers that seek to distinguish their services from ours by offering aggressive promotional pricing, exclusive programming, and/or assertions of superior service or offerings. Increasingly, our residential video service also faces competition from companies that deliver content to consumers over the Internet and on mobile devices, some without charging a fee for access to the content. This trend could negatively impact customer demand for our residential video service, especially premium channels and VOD services, and could encourage content owners to seek higher license fees from us in order to subsidize their free distribution of content. Our residential high-speed data and telephony services also face competition from wireless Internet and voice providers, and our residential voice service faces competition from other cable providers, OTT phone service and other communication alternatives, including texting, social networking and email. In recent years, a trend known as "wireless substitution" has developed whereby certain customers have chosen to utilize a wireless telephone service as their sole phone provider. We expect this trend to continue in the future.

        We also compete across each of our business high-speed data, networking and telephony services with incumbent local exchange carriers ("ILECs"), competitive local exchange carriers ("CLECs") and other cable companies.

        Any inability to compete effectively or an increase in competition could have an adverse effect on our financial results and return on capital expenditures due to possible increases in the cost of gaining and retaining subscribers and lower per subscriber revenue could slow or cause a decline in our growth rates and could reduce our revenue. As we expand and introduce new and enhanced services, we may be subject to competition from other providers of those services. We cannot predict the extent to which this competition will affect our future business and financial results or return on capital expenditures.

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        In addition, future advances in technology, as well as changes in the marketplace, in the economy and in the regulatory and legislative environments, may also result in changes to the competitive landscape.

Many of our competitors are larger than we are and possess more resources than we do.

        The industry in which we operate is highly competitive and has become more so in recent years. In some instances, we compete against companies with fewer regulatory burdens, better access to financing, greater personnel resources, greater resources for marketing, greater brand name recognition, and long-established relationships with regulatory authorities and customers. Increasing consolidation in the cable industry and the repeal of certain ownership rules have provided additional benefits to certain of our competitors, either through access to financing, resources or efficiencies of scale.

        In providing video service, we currently compete with Charter Communications, Inc. ("Charter"), Comcast Corporation ("Comcast"), Frontier Communications Corporation ("Frontier"), Mediacom Communications Corporation ("Mediacom"), Cox Communications, Inc. ("Cox"), AT&T Inc. ("AT&T") and Verizon Communications, Inc. ("Verizon"). We also compete with satellite television providers, including DirecTV and Dish Network. Satellite television providers typically offer local broadcast television stations, which further reduces our current advantage over satellite television providers and our ability to attract and maintain customers.

        In providing local and long-distance telephone services and data services, we compete with the incumbent local phone company in each of our markets as well as other cable providers in our markets. AT&T, CenturyLink, Inc. ("CenturyLink"), Frontier and Verizon are the primary ILECs in our targeted regions. They offer both local and long-distance services in our markets and are particularly strong competitors. We seek to attract customers away from other telephone companies and cable television service operators offering telephone services with Internet-based telephony. Cable operators offering voice services and data services in our markets increase competition for our bundled services.

We face risks relating to competition for the leisure and entertainment time of audiences, which has intensified in part due to advances in technology.

        Our business is subject to risks relating to increasing competition for the leisure and entertainment time of consumers. Our business competes with all other sources of entertainment and information delivery. Technological advancements, such as new video formats and Internet streaming and downloading, many of which have been beneficial to our business, have nonetheless increased the number of entertainment and information delivery choices available to consumers and have intensified the challenges posed by audience fragmentation. Increasingly, content owners are delivering their content directly to consumers over the Internet, often without charging any fee for access to the content. Furthermore, due to consumer electronics innovations, consumers are more readily able to watch such Internet-delivered content on television sets and mobile devices. Although the increase of delivery of content through the Internet could be beneficial to demand for our HSD products, the increasing number of choices available to audiences could negatively impact not only consumer demand for our other products and services, but also advertisers' willingness to purchase advertising from us. If we do not respond appropriately to the increasing leisure and entertainment choices available to consumers, our competitive position could deteriorate, which could adversely affect our operations, business, financial condition or results of operations.

Our future growth is partially dependent upon our edge-out strategy, which may or may not be successful.

        We are strategically focused on driving growth by constructing additional cable networks in order to sell our products and services within communities (generally near or adjacent to our cable network) which we do not currently serve. Generally, residents and enterprises within these communities can

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already purchase a bundled triple-play offering from other providers, or purchase high-speed data, video and telephony services from other operators on an à la carte basis. Therefore, we are expanding into competitive environments. This effort requires considerable financial and management resources, including reducing the near-term cash generation profile of our business. Additionally, we must obtain pole attachment agreements, franchises, construction permits, telephone numbers and other regulatory approvals to commence operations in these communities. Delays in entering into pole attachment agreements, receiving the necessary franchises and construction permits and conducting the construction itself have adversely affected our scheduled construction plans in the past and could do so again in the future. Difficulty in obtaining necessary resources may also adversely affect our ability to expand into new markets. We may face resistance from competitors who are already in markets we wish to enter. If our expectations regarding our ability to attract customers in these communities are not met, the capital requirements to complete the network investment or the time required to attract our expected level of customers are incorrect, our financial performance may suffer.

Our future growth is partially dependent upon a business services strategy, which may or may not be successful.

        One of the elements of our growth strategy is to execute upon a meaningful expansion in the business services market. To accommodate this growth, we may commit significant capital investments to technology, equipment and personnel focused on our business services. If we are unable to sufficiently build the necessary infrastructure and internal support functions to scale and expand our customer base, the potential growth of business services would be limited. In many cases, business services customers have service level agreements that require us to provide higher standards of service and reliability that may prove difficult to meet. In addition, there is significant competition in business services including significantly larger and better capitalized competitors with greater geographic reach. We may not be able to successfully compete with these competitors or be able to make the operational or financial investments necessary to successfully serve the targeted customer base.

A prolonged economic downturn, especially any downturn in the housing market, may negatively impact our ability to attract new subscribers and generate increased revenues.

        We are exposed to risks associated with prevailing economic conditions, which could adversely impact demand for our products and services and have a negative impact on our financial results. In addition, the global financial markets have displayed uncertainty, and at times the equity and credit markets have experienced unexpected volatility, which could cause economic conditions to worsen. A continuation or further weakening of these economic conditions could lead to reductions in consumer demand for our services, especially premium video services and enhanced features, such as DVRs, and a continued increase in the number of homes that replace their wireline telephone service with wireless service or OTT phone service and their video service with Internet-delivered and/or over-air content, which would negatively impact our ability to attract customers, maintain or increase rates and maintain or increase revenue. The expanded availability of free or lower cost competitive services, such as video streaming over the Internet, or substitute services, such as wireless phones, may further reduce consumer demand for our services during periods of weak economic conditions. In addition, providing video services is an established and highly penetrated business. Our ability to gain new video subscribers is partially dependent on growth in occupied housing in our service areas, which is influenced by both national and local economic conditions. If the number of occupied homes in our operating areas declines and/or the number of home foreclosures significantly increases, we may be unable to maintain or increase the number of our video subscribers.

The demand for our bundled broadband communications services may be lower than we expect.

        The demand for high-speed data, video and telephony services, either alone or as part of a bundle, cannot readily be determined. Our business could be adversely affected if demand for bundled

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broadband communications services is materially lower than we expect. Our ability to generate revenue will suffer if the markets for the services we offer, including telephony and high-speed data services, fail to develop, grow more slowly than anticipated or become saturated with competitors.

Our business is characterized by rapid technological change, and if we do not respond appropriately to technological changes, our competitive position may be harmed.

        We operate in a highly competitive, consumer-driven, rapidly changing environment and our success is, to a large extent, dependent on our ability to acquire, develop, adopt and exploit new and existing technologies to distinguish our services from those of our competitors. We have invested in advanced technology platforms that support advanced communications services and multiple emerging interactive services, such as VOD, DVR, interactive television, IP Centrex services and pure fiber network services. If we choose technologies or equipment that are less effective, cost-efficient or attractive to our customers than those chosen by our competitors, or if we offer services that fail to appeal to consumers, are not available at competitive prices or that do not function as expected, our competitive position could deteriorate, and our business and financial results could suffer. In addition, we may be required to select one technology over another and may not choose the technology that is the most economic, efficient or attractive to customers. We may also encounter difficulties in implementing new technologies, products and services and may encounter disruptions in service as a result.

        The ability of our competitors to acquire or develop and introduce new technologies, products and services more quickly than us may adversely affect our competitive position. Furthermore, advances in technology, decreases in the cost of existing technologies or changes in competitors' product and service offerings also may require us to make additional future research and development expenditures or to offer at no additional charge, or at a lower price, certain products and services that we currently offer to customers separately or at a premium. In addition, the uncertainty of the costs for obtaining intellectual property rights from third parties could impact our ability to respond to technological advances in a timely manner.

Increases in programming and retransmission costs or the inability to obtain popular programming could adversely affect our operations, business, financial condition or results of operations.

        Programming has been and is expected to continue to be, our largest single operating expense. In recent years, the cable industry has experienced rapid increases in the cost of cable programming, retransmission consent charges for local commercial television broadcast stations and regional sports programming. We expect these trends to continue. As compared to large national providers, our relatively modest base of subscribers limits our ability to negotiate lower programming costs. As we increase the channel capacity of our systems and add programming to our expanded basic and digital programming tiers, we may face additional market constraints on our ability to pass programming cost increases on to our customers. Furthermore, content providers may be unwilling to enter into distribution arrangements on acceptable terms and owners of non-broadcast video programming content may enter into exclusive distribution arrangements with our competitors. Any inability to pass programming cost increases on to our customers would have an adverse impact on our gross profit and a failure to carry programming that is attractive to our subscribers could adversely impact subscription and advertising revenues.

A decline in advertising revenues or changes in advertising markets could negatively impact our businesses.

        A decline in advertising revenues could negatively impact our results of operations. Declines can be caused by the economic prospects of specific advertisers or industries, by increased competition for the leisure time of audiences, by audience fragmentation, by the growing use of new technologies or by the economy in general, any of which may cause advertisers to alter their spending priorities based on

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these or other factors. Further, natural disasters, wars, acts of terrorism, or other significant adverse events could lead to a reduction in advertising revenues as a result of general economic uncertainty.

Changes in broadcast carriage regulations could impose significant additional costs on us.

        Federal "must carry" rules require us to carry some local broadcast television signals on our cable systems that we might not otherwise carry. If the Federal Communications Commission (the "FCC") seeks to revise or expand the "must carry" rules, for example by requiring carriage of multicast signals, we would be forced to carry video programming that we would not otherwise carry, potentially drop more popular programming in order to free capacity for the required programming, decrease our ability to manage our bandwidth efficiently and/or increase our costs, which could make us less competitive. As a result, cable operators, including us, could be placed at a disadvantage versus other multichannel video providers. Potential federal legislation regarding programming packaging, bundling or à la carte delivery of programming could fundamentally change the way in which we package and price our services. We cannot predict the outcome of any current or future FCC proceedings or legislation in this area, or the impact of such proceedings on our business at this time.

Programming exclusivity in favor of our competitors could adversely affect the demand for our video services.

        We obtain our programming by entering into contracts or arrangements with programming suppliers. Federal rules restrict cable operators and other multichannel video programming distributors from entering into certain exclusive programming arrangements. A programming supplier, however, could enter into an exclusive arrangement, consistent with these rules, with one of our video competitors that could create a competitive advantage for that competitor by restricting our access to this programming. If our ability to offer popular programming on our cable television systems is restricted by exclusive arrangements between our competitors and programming suppliers, the demand for our video services may be adversely affected and our cost to obtain programming may increase.

We may not be able to obtain necessary hardware, software and operational support.

        We depend on third-party suppliers and licensors to supply some of the hardware, software and operational support necessary to provide our services. Some of these vendors represent our sole source of supply or have, either through contract or as a result of intellectual property rights, a position of some exclusivity. If demand exceeds these vendors' capacity, they experience operating or financial difficulties, they significantly increase the amount we pay for necessary products or services, or they cease production of any necessary product due to lack of demand, our ability to provide some services may be materially adversely affected. Any of these events could materially and adversely affect our ability to retain and attract subscribers, and have a material negative impact on our operations, business, financial condition or results of operations.

Loss of interconnection arrangements could impair our telephone service.

        We rely on other companies to connect the calls made by our local telephone customers to the customers of other local telephone providers. These calls are completed because our network is interconnected with the networks of other telecommunications carriers. These interconnection arrangements are mandated by the Communications Act of 1934, as amended (the "Communications Act"), and the FCC's implementing regulations. It is generally expected that the Communications Act will continue to undergo considerable interpretation and modification, including the FCC's potential forbearance from continuing to enforce carriers' statutory and regulatory interconnection obligations, which could have a negative impact on our interconnection agreements. It is also possible that further amendments to the Communications Act may be enacted which could have a negative impact on our interconnection agreements. The contractual arrangements for interconnection and access to unbundled network elements with incumbent carriers generally contain provisions for incorporation of changes in

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governing law. Thus, future FCC, state public service commission ("PSC") and/or court decisions may negatively impact the rates, terms and conditions of the interconnection services that we have obtained and may seek to obtain under these agreements, which could adversely affect our operations, business, financial condition or results of operations. Our ability to compete successfully in the provision of services will depend on the nature and timing of any such legislative changes, regulations and interpretations and whether they are favorable to us or to our competitors.

We receive support from various funds established under federal and state law and the continued receipt of that support is not assured.

        We receive payments from various federal or state universal service support programs. These include interstate common line support and Lifeline and Schools and Libraries programs within the federal Universal Service Fund (the "Federal USF") program, as well as similar state universal support programs. The total cost of all of the various Federal USF programs has increased greatly in recent years, putting pressure on regulators to reform those programs, and to limit both eligibility and support flows. In addition, we receive traffic termination payments from other carriers based upon rates established by various regulatory bodies. These rates may be subject to meaningful reductions due to ongoing rate reform efforts being led by the FCC. Our ability to receive state support program funds is also subject to the determination of certain PSCs. Adverse decisions by those PSCs may reduce our ability to access those funds.

        In November 2011, the FCC adopted an order reforming core parts of the USF and that also broadly recast the existing intercarrier compensation (the "ICC") scheme. The order, which became effective December 29, 2011, established the Connect America Fund (the "CAF") to replace support revenues provided by the current USF and redirected support from voice services to broadband services. The order also broadly altered the manner in which affected companies will have to operate their businesses.

        In March 2016, the FCC released its Report and Order (the "Order") regarding universal service support program reform for rate-of-return incumbent local exchange carriers. The Order focuses on broadband, including stand-alone broadband, and seeks to direct federal support to areas lacking broadband. It also reforms legacy support mechanisms to ensure that carriers have the incentives and support to continue investing in robust broadband networks. Rate-of-return incumbent local exchange carriers can choose from two paths for Federal USF support: 1) a model-based option (A-CAM); and 2) a broadband loop support mechanism that will provide support for stand-alone broadband and replace interstate common line support (legacy support). In November 2016, the FCC released a Public Notice announcing that 216 rate-of-return companies elected the A-CAM Cost Model, which exceeded the available A-CAM budget by more than $160 million annually. To contend with the oversubscription, the FCC intends to take "other measures that may be necessary" in order to prioritize among electing carriers or modify A-CAM parameters. While our affected subsidiaries did not choose the A-CAM option, we cannot anticipate what changes may come to the A-CAM model and if those changes might impact those carriers like us that have chosen the legacy support path.

Our exposure to the credit risks of our customers, vendors and third parties could adversely affect our operations, business, financial condition and results of operations.

        We are exposed to risks associated with a potential general economic downturn and how such a development could impact our customers. Dramatic declines in the housing market in recent years, including falling home prices and increasing foreclosures, have affected consumer confidence and may cause increased delinquencies in payment or cancellations of services by our customers, or lead to unfavorable changes in the mix of products our customers purchase. The general economic downturn also may affect advertising sales as companies seek to reduce expenditures and conserve cash. Any of these events may adversely affect our operations, business, financial condition or results of operations.

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        In addition, we are susceptible to risks associated with the potential financial instability of the vendors and third parties on which we rely to provide products and services, or to which we delegate certain functions. A general economic downturn, as well as volatility and disruption in the capital and credit markets, also could adversely affect vendors and third parties and lead to significant increases in prices, reduction in output or the bankruptcy of our vendors or third parties upon which we rely. Any interruption in the services provided by our vendors or by third parties could adversely affect our operations, business, financial condition or results of operations.

Historically, we have made several acquisitions, and we may make more acquisitions in the future as part of our growth strategy. Future acquisitions or joint ventures could strain our business and resources. In addition, we may not be able to identify suitable acquisitions.

        If we acquire existing companies or networks or enter into joint ventures, we may:

    miscalculate the value of the acquired company or joint venture;

    divert resources and management time;

    experience difficulties in integrating the acquired business or joint venture with our operations;

    experience relationship issues, such as with customers, employees and suppliers as a result of changes in management;

    incur additional liabilities or obligations as a result of the acquisition or joint venture; and

    assume additional financial burdens in connection with the transaction.

        Additionally, ongoing consolidation in our industry may reduce the number of attractive acquisition targets. Our failure to successfully identify and consummate acquisitions could adversely affect our operations, business, financial condition or results of operations.

We could be negatively impacted by future interpretation or implementation of regulations or legislation.

        Our video and telephony services are subject to extensive regulation at the federal, state and local levels. In addition, the federal government has extended regulation to high-speed data services. We are also subject to regulation of our video services relating to rates, equipment, technologies, programming, levels and types of services, taxes and other charges. The current telecommunications and cable legislation and regulations are complex and in many areas set forth policy objectives to be implemented by regulation at the federal, state and local levels. It is generally expected that the Communications Act and implementing regulations and decisions, as well as applicable state laws and regulations, will continue to undergo considerable interpretation and modification. From time to time, federal legislation, FCC and PSC decisions, and court decisions interpreting legislation, FCC or PSC decisions, are made that can affect our business. We cannot predict the timing or the future financial impact of legislation or administrative decisions. Our ability to compete successfully will depend on the nature and timing of any such legislative changes, regulations or interpretations, and whether they are favorable to us or to our competitors.

Compliance with, and changes to, environmental, safety and health laws and regulations could result in significant costs or adversely affect us.

        We are subject to a variety of federal, state and local environmental, safety and health laws and regulations, including those governing such matters as the generation, storage, reporting, treating, handling, remediation, use, disposal and transportation of, and exposure to, hazardous materials, the emission and discharge of hazardous materials into the atmosphere, the emission of electromagnetic radiation and health and safety. Noncompliance with such laws and regulations can result in, among other things, imposition of civil or criminal penalties or fines or suspension or cessation of our

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operations. Such laws and regulations are becoming increasingly more stringent and there can be no assurances that we will not incur significant costs to comply with, or liabilities under, such laws and regulations. Some of our sites have battery and diesel fuel operated powered backup generators or sources, or may have potential contamination risks from historical or surrounding activities. Under certain environmental laws and regulations, we may be liable for the costs of remediating contamination, regardless of fault, and these costs could be significant.

"Net neutrality" legislation or regulation could limit our ability to operate our high-speed data service business profitably and to manage our broadband facilities efficiently.

        On December 21, 2010, the FCC adopted new rules imposing "net neutrality" obligations on broadband Internet access providers. The new rules, which became effective on November 20, 2011, were based on the principles of (i) transparency, (ii) no blocking and (iii) no unreasonable discrimination, and are applicable to fixed and wireless broadband Internet access providers to different extents. Under the new rules, fixed and wireless broadband Internet access providers were required to make their practices transparent to both consumers and providers of Internet content, services, applications and devices on both their website and at the point-of-sale. In addition, subject to "reasonable network management," fixed broadband Internet access providers were prohibited from blocking lawful content, applications, services and non-harmful devices, and from engaging in unreasonable discrimination in transmitting lawful traffic. Verizon and other parties filed for additional FCC review, and filed an appeal challenging the FCC's authority to issue such rules, which was heard by the U.S. Court of Appeals for the D.C. Circuit. On January 14, 2014, a D.C. Circuit panel struck down the portions of the FCC's 2010 rules that banned blocking or discriminatory treatment of websites or other online applications by retail broadband Internet access providers such as incumbent telephone companies and cable operators. At the same time, the court approved the agency's requirement that broadband providers adequately disclose their policies regarding blocking and "network management" (that is, practices for avoiding network congestion, giving priority to some classes of traffic over others, etc.).

        On February 26, 2015, the FCC announced that it reclassified broadband Internet access as a telecommunications service under Title II of the Communications Act (the "Open Internet Order"). The FCC announced that its Open Internet Order prohibits: (i) broadband providers from blocking access to legal content, applications, services, or non-harmful devices; (ii) broadband providers from impairing or degrading lawful Internet traffic on the basis of content, applications, services or non-harmful devices; and (iii) broadband providers from favoring some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind—in other words, no "fast lanes." This rule also bans ISPs such as us from prioritizing content and services of their affiliates. The FCC further announced that its Open Internet Order will require additional disclosure and network management practices and will extend a number of the Title II regulatory requirements to broadband Internet access services, such as compliance with the privacy provisions of Section 222 of the Communications Act.

        The legality of the Open Internet Order was challenged in court by a number of parties. On June 14, 2016, the D.C. Circuit upheld the Open Internet Order.

        The composition of the FCC changed in January 2017. We anticipate that some of the new rules established by the Open Internet Order will be modified by the FCC; however, the impact on our business is unknown.

        If the Open Internet Order survives any further legal challenges and remains unmodified by either future legislation or the FCC as re-composed, the rules imposed by the Order may increase our costs, impact our ability to provide service to our customers and adversely affect our profitability.

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Regulation may limit our ability to make required investments or adopt business models that are needed to continue to provide robust high-speed data service.

        The rising popularity of bandwidth-intensive Internet-based services increases the demand for, and usage of, our high-speed data service. Examples of such services include the delivery of video via streaming technology and by download, peer-to-peer file sharing services and gaming services. We need flexibility to develop pricing and business models that will allow us to respond to changing consumer uses and demands and, if necessary, to invest more capital than currently expected to increase the bandwidth capacity of our systems. Our ability to do so could be restricted by legislative or regulatory efforts to increase the "net neutrality" requirements applicable to cable operators.

Offering telephony service may subject us to additional regulatory burdens, causing us to incur additional costs.

        We offer telephony services over our broadband network and continue to develop and deploy VoIP services. The FCC has ruled that competitive telephone companies that support VoIP services, such as those we offer our customers, are entitled to interconnect with incumbent providers of traditional telecommunications services, which ensure that our VoIP services can compete in the telephony market. The FCC has also declared that certain VoIP services are not subject to traditional state public utility regulation. The full extent of the FCC preemption of state and local regulation of VoIP services is not yet clear. Expanding our offering of these services may require us to obtain certain additional authorizations. We may not be able to obtain such authorizations in a timely manner, or conditions could be imposed upon such licenses or authorizations that may not be favorable to us. Telecommunications companies generally are subject to other significant regulation which could also be extended to VoIP providers. If additional telecommunications regulations are applied to our VoIP service, it could cause us to incur additional costs. The FCC has already extended certain traditional telecommunications carrier requirements, such as 911 emergency calling, USF collection, Communications Assistance for Law Enforcement Act, privacy, customer proprietary information, number porting, disability and discontinuance of service requirements to many VoIP providers such as us.

Rate regulation could materially adversely impact our operations, business, financial results or financial condition.

        Under current FCC rules, rates for basic service tier ("BST") video service and associated equipment may be regulated where there is no effective competition. Under current FCC rules, cable operators are presumed to be subject to effective competition. In all of the communities we serve, we are not subject to BST video rate regulation, either because the local franchising authority has not asked the FCC for permission to regulate rates due to the lack of effective competition or because of the presumed presence of effective competition. Except for telephony services provided by our operating companies that are ILECs (which are subject to certain rate regulations), there is currently no rate regulation for our other services, including high-speed data and non-ILEC telephony services. It is possible, however, that the FCC or Congress will adopt more extensive rate regulation for our video services or regulate the rates of other services, such as high-speed data, business data (or special access) services and telephony services, which could impede our ability to raise rates, or require rate reductions, and therefore could adversely affect our operations, business, financial condition or results of operations.

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We operate our network under franchises that are subject to non-renewal or termination.

        Our network generally operates pursuant to franchises, permits or licenses typically granted by a municipality or state agency with the authority to grant franchises. Additionally, other state or local governmental entities may exercise control over the use of public rights-of-way. Often, franchises are terminable if the franchisee fails to comply with material terms of the franchise agreement or the local franchise authority's regulations. Although none of our existing franchise or license agreements have been terminated, and we have received no threat of such a termination, one or more local authorities may attempt to take such action. We may not prevail in any judicial or regulatory proceeding to resolve such a dispute.

        Further, franchises generally have fixed terms and must be renewed periodically. Local franchising authorities may resist granting a renewal if they consider either past performance or the prospective operating proposal to be inadequate. In a number of jurisdictions, local authorities have attempted to impose rights-of-way fees on providers that have been challenged as violating federal law. A number of FCC and judicial decisions have addressed the issues posed by the imposition of rights-of-way fees on CLECs and on video distributors. To date, the state of the law is uncertain and may remain so for some time. We may become subject to future obligations to pay local rights-of-way fees that are excessive or discriminatory.

        The local franchising authorities can grant franchises to competitors who may build networks in our market areas. Recent FCC decisions facilitate competitive video entry by limiting the actions that local franchising authorities may take when reviewing applications by new competitors and lessen some of the burdens that can be imposed upon incumbent cable operators with which we ourselves compete. Local franchise authorities have the ability to impose regulatory constraints or requirements on our business, including those that could materially increase our expenses. In the past, local franchise authorities have imposed regulatory constraints on the construction of our network either by local ordinance or as part of the process of granting or renewing a franchise. They have also imposed requirements on the level of customer service that we provide, as well as other requirements. The local franchise authorities in our markets may also impose regulatory constraints or requirements that may be found to be consistent with applicable law, but which could increase the cost of operating our business.

Our business may be adversely affected by the application of certain regulatory obligations governing the intellectual property rights of third parties or if we cannot continue to license or enforce the intellectual property rights on which our business depends.

        We rely on patent, copyright, trademark and trade secret laws and licenses that are proprietary to our business, as well as our key vendors, along with other agreements with our employees, customers, suppliers and other parties, to establish and maintain our intellectual property rights in technology and the products and services used in our operations. However, any of our intellectual property rights could be challenged or invalidated, or such intellectual property rights may not be sufficient to permit us to take advantage of current industry trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product or service offerings or other competitive harm. Claims of intellectual property infringement by third parties under applicable agreements, laws and regulations (including the Digital Millennium Copyright Act of 1998) could require us to enter into royalty or licensing agreements on unfavorable terms, incur substantial monetary liability or be enjoined preliminarily or permanently from further use of the intellectual property in question, which could require us to change our business practices or offerings and limit our ability to compete effectively. Even claims without merit can be time-consuming and costly to defend and may divert management's attention and resources away from our business. Also, because of the rapid pace of technological change, we rely on technologies developed or licensed by third parties, and

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we may not be able to obtain or continue to obtain licenses from these third parties on reasonable terms, if at all.

If our trade names are not adequately protected, then we may not be able to build name recognition in our markets and our business may be adversely affected.

        We do not own, either legally or beneficially, any trademarks, service marks or trade names in connection with the operation of our business. We cannot assure you that we can obtain all necessary trademarks to adequately protect our intellectual property. It is possible that a third party could bring suit against us claiming infringement of registered trademarks, and if it did so and if there were a court determination against us, we might then be obligated to pay monetary damages, enter into a license agreement, or cease use of any such marks, all of which could have a material adverse effect on our operations, business, financial condition and results of operations.

We may encounter substantially increased pole attachment costs.

        Under federal law, we have the right to attach cables carrying video and other services to telephone and similar poles of privately-owned utilities at regulated rates. However, because these cables may carry services other than video services, such as high-speed data services or new forms of telephony services, some utility pole owners have sought to impose additional fees for pole attachment. If these rates were to increase significantly or unexpectedly, it would cause our network to be more expensive to operate. It could also place us at a competitive disadvantage with respect to video and telecommunications service providers who do not require or who are less dependent upon pole attachments, such as satellite providers and wireless telephony service providers.

        On June 8, 2011, the FCC enacted revised pole attachment rules to improve the efficiency and reduce the costs of deploying telecommunications, cable and broadband networks in order to accelerate broadband deployment. The formula for calculating the telecommunications attachment rate was revised, lowering the rate and bringing it in-line to the video rate. Many utilities seek to impose the telecommunications rate on us when they carry our services, other than video services, over their attachments. The order is being challenged before the FCC and federal courts. In November 2015, the FCC released another order taking further steps to balance the rates paid by cable operators and telecommunications carriers. Part of the order addressed some industry members' concerns that pole attachment rates might increase sharply now that the FCC has reclassified broadband service as a telecommunications service, as discussed further above. Moreover, the appropriate method for calculating pole attachment rates for cable operators that provide VoIP services remains unclear, and an August 2009 petition from a coalition of electric utility companies asking the FCC to declare that the pole attachment rate for cable companies' digital telephone service should be assessed at the telecommunications service rate is still pending.

        Some states in which we operate have assumed jurisdiction over the regulation of pole attachment rates, and so the federal regulations and the protections provided in those regulations may not apply in those states. In addition, some of the poles we use are exempt from federal regulation because they are owned by utility cooperatives and/or municipal entities or are otherwise exempt from the pole attachment regulations.

        Subject to applicable pole attachment access and rate regulations, the entities that own the poles that we attach to and conduits that we access may not renew our existing agreements when they expire, and they may require us to pay substantially increased fees. Some of these pole and conduit owners have recently imposed or are currently seeking to impose substantial rate increases. Any increase in our pole attachment or conduit access rates or inability to secure continued pole attachment and access agreements on commercially reasonable terms could adversely affect our operations, business, financial condition or results of operations.

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Our business is subject to numerous federal and state laws and regulations regarding privacy and data protection. Existing laws and regulations are evolving and subject to uncertain interpretation, and new laws and regulations affecting our business have been proposed. These laws and regulations could result in legal claims, changes to our business practices, increased cost of operations, or could otherwise impact our business.

        As a provider of high-speed data, video and telephony services, we are subject to an array of privacy-related laws and regulations that are constantly evolving and can be subject to significant change. In the course of providing service, we collect certain information about our subscribers and their use of our services. Our collection and use of personally identifiable information about our subscribers is subject to a variety of federal and state privacy requirements, including those imposed specifically on cable operators by Section 631 of the Communications Act. That section generally restricts the nonconsensual collection and disclosure to third parties of cable customers' personally identifiable information by cable operators, subject to certain specified exceptions. Several states and numerous local jurisdictions have enacted privacy laws or franchise privacy provisions that apply to cable services.

        Section 222 of the Communications Act and FCC regulations also govern our use of customer network information (including, but not limited to, customer proprietary network information and personally identifiable information) related to our telecommunications services. These rules currently are in flux. In October 2016, the FCC adopted new privacy and security requirements for telecommunications services, including broadband Internet access services, and interconnected VoIP services that, once effective, will replace the FCC's exiting customer proprietary network information privacy rules. Certain parts of the new rules are already effective; others have been stayed by the FCC pending FCC reconsideration or are still subject to approval by the Office of Management and Budget under the Paperwork Reduction Act. As we continue to provide interactive and other advanced services, additional privacy considerations may arise. Privacy continues to be a major focus of Congress, the Federal Trade Commission, the FCC, the U.S. Department of Commerce, and the states. Additional laws, regulations, or advisory guidelines could affect our ability to use and share customer information under various additional circumstances.

        We are also subject to state and federal regulations and laws regarding information security. Most of these regulations and laws apply to customer information that could be used to commit identity theft. Nearly all U.S. states and the District of Columbia have enacted security breach notification laws. These laws generally require that we give notice to customers whose financial account information has been disclosed because of a security breach. Congress is considering legislation to enact security breach notification requirements at the federal level, which may preempt or supplement these state laws and impose additional restrictions on us. The Communications Act and FCC rules also impose breach notification and information security requirements, which may require that we give notice to customers of breaches in some circumstances where notice would not be required by state law. Our efforts to protect customer information may be unsuccessful due to the actions of third parties, technical malfunctions, employee error, employee malfeasance or other factors. If any of these events occur, our customers' information could be used, accessed or disclosed improperly.

        Claims resulting from actual or purported violations of these or other federal or state privacy laws could impact our business. For example, litigation related to our now-discontinued use of the NebuAd online advertising service was filed in federal court. Although that litigation was dismissed, adverse rulings in privacy-related litigation or regulatory proceedings could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices. Moreover, any actual or purported incidents involving unauthorized access to or improper use of the information of our customers could damage our reputation and our brand and diminish our competitive position.

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A phase-out of the compulsory copyright license for broadcast programming could adversely affect our ability to carry the programming transmitted by broadcast stations or could increase our programming costs.

        In exchange for filing reports and contributing a percentage of revenue to a federal copyright royalty pool, we obtain a compulsory copyright license allowing us to retransmit copyrighted material contained in broadcast television signals. The U.S. Copyright Office, the U.S. Government Accountability Office and the FCC all issued reports to Congress in 2011 that generally supported an eventual phase-out of the compulsory licenses. Such a change, if made, could adversely affect the ability of our cable television systems to obtain programming carried by broadcast television stations and could increase the cost of such programming.

Regulation of the set-top box market could materially and adversely impact our operations and impose additional costs on us.

        The FCC has adopted regulations to permit consumers to connect televisions and other consumer electronics equipment through a separate security device directly to digital cable television systems to enable receipt of one-way digital programming without requiring a set-top box. Additional FCC regulations promote the manufacture of plug-and-play TV sets and other equipment that can connect directly to a cable system through these separate security devices. Cable operators must provide a credit to customers who use this plug-and-play equipment and allow them to self-install independent security devices rather than having to arrange for professional installation. Additionally, the FCC is considering further action to promote a retail market for cable service navigation devices, including requirements to facilitate access to non-cable multichannel video provider systems and Internet video distributors, which may entail further mandates in connection with the support and deployment of set-top boxes. Although we generally require less up-front capital when our customers buy and self-install their own set-top box, these proposals could impose substantial costs on us and impair our ability to innovate.

Since our business is concentrated in specific geographic locations, our business could be adversely impacted by a depressed economy and natural disasters in these areas.

        We provide our services to areas in Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee, which are in the southeastern and midwestern regions of the United States. A stagnant or depressed economy in the United States, and the southeastern or midwestern United States in particular, could affect all of our markets and could adversely affect our operations, business, financial condition or results of operations.

        Our success depends on the efficient and uninterrupted operation of our communications services. Our network is attached to poles and other structures in many of our service areas, and our ability to provide service depends on the availability of electric power. A tornado, hurricane, flood, mudslide, earthquake or other natural catastrophe in one of these areas could damage our network, interrupt our service and harm our business in the affected area. In addition, many of our markets are close together and a single natural catastrophe could damage our network in more than one market.

We rely on network and information systems and other technology, and a disruption or failure of such networks, systems or technology as a result of computer viruses, "cyber attacks," misappropriation of data or other malfeasance, as well as outages, accidental releases of information or similar events, may disrupt our business.

        Because network and information systems and other technologies are critical to our operating activities, network or information system, shutdowns caused by events such as computer hacking, dissemination of computer viruses, worms and other destructive or disruptive software, "cyber attacks," denial of service attacks and other malicious activity pose increasing risks. Our network and

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information systems are also vulnerable to damage or interruption from power outages, terrorist attacks and other similar events which could have an adverse impact on us and our customers, including degradation of service, service disruption, excessive call volume to call centers and damage to our network, equipment, data and reputation. The occurrence of such an event also could result in large expenditures necessary to repair or replace such networks or information systems or to protect them from similar events in the future. Significant incidents could result in a disruption of our operations, customer dissatisfaction or a loss of customers or revenues.

        Furthermore, our operating activities could be subject to risks caused by misappropriation, misuse, leakage, falsification and accidental release or loss of information maintained in our information technology systems and networks, including customer, personnel and vendor data. We could be exposed to significant costs if such risks were to materialize, and such events could damage the reputation and credibility of our business and have a negative impact on our revenue. We also could be required to expend significant capital and other resources to remedy any such security breach. As a result of the increasing awareness concerning the importance of safeguarding personal information, the potential misuse of such information and legislation that has been adopted or is being considered regarding the protection, privacy and security of personal information, information-related risks are increasing, particularly for businesses like ours that handle a large amount of personal customer data.

Tax legislation and administrative initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.

        We operate cable systems in locations throughout the United States and, as a result, we are subject to the tax laws and regulations of federal, state and local governments. From time to time, various legislative and/or administrative initiatives may be proposed that could adversely affect our tax positions. There can be no assurance that our effective tax rate or tax payments will not be adversely affected by these initiatives. As a result of state and local budget shortfalls due primarily to the recession as well as other considerations, certain states and localities have imposed or are considering imposing new or additional taxes or fees on our services or changing the methodologies or base on which certain fees and taxes are computed. Such potential changes include additional taxes or fees on our services which could impact our customers, and combined reporting and other changes to general business taxes, central/unit-level assessment of property taxes and other matters, which could increase our income, franchise, sales, use and/or property tax liabilities. In addition, federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge. In addition, we have significant NOL carryforwards that are available to offset future operating results, but the availability and value of the NOLs may be impacted by future changes in federal or state law, including corporate law reform alternatives that are currently being discussed.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

        As of December 31, 2016, we had NOLs, for federal income tax purposes, of approximately $833.8 million, which may be available to offset federal income tax liabilities in the future. We expect to utilize between approximately $110 million and $130 million of our NOL carryforwards during 2017 due to the sale of our Lawrence system which closed on January 12, 2017, subject to finalization. In general, under Section 382 ("Section 382") of the Internal Revenue Code of 1986, as amended (the "Code"), a corporation that undergoes an "ownership change" is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. We anticipate that the offering will result in a change of ownership under Section 382 for federal and state income tax purposes. Section 382 provides limitations on the utilization of NOL carryforwards after an ownership change and we have analyzed the potential Section 382 impacts on our NOL carryforwards in the event of a Section 382

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ownership change. We determined that, although the Section 382 limitation would be significant, our anticipated fair market value and our projected net unrealized built-in gain ("NUBIG") position will likely result in a significant increase in our projected Section 382 limitation. Accordingly, we believe that our projected Section 382 limitation will not result in any significant impacts on our ability to utilize our NOL carryforwards to offset future taxable income or will have any significant impact on future operating cash flows. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code. Furthermore, our ability to utilize NOLs of companies that we have acquired or may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities, including for state tax purposes. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we continue to remain profitable.

We depend on the services of key personnel to implement our strategy. Changes in key personnel or loss of services of key personnel may affect our ability to implement our strategy or otherwise adversely affect our operations.

        The loss of members of our key management and certain other members of our operating personnel could adversely affect our business. Our ability to manage our anticipated growth depends on our ability to identify, hire and retain additional qualified management personnel. While we are able to offer competitive compensation to prospective employees, we may still be unsuccessful in attracting and retaining personnel.

        In addition, we regularly evaluate our senior management capabilities in light of, among other things, our business strategy, changes to our capital structure in connection with the acquisition, developments in our industry and markets and our ongoing financial performance. Accordingly, we may consider, where appropriate, supplementing, changing or otherwise enhancing our senior management team and operational and financial management capabilities in order to maximize our performance. Accordingly, our organizational structure and senior management team may change in the future. Changes to our senior management team could result in a material business interruption and material costs, including as a result of severance or other termination payments.

        Any of the foregoing could affect our ability to successfully operate the combined company and implement our strategy and could adversely affect our operations, business, financial condition or results of operations.

We are, or from time to time may become, subject to litigation and regulatory proceedings, which could materially and adversely affect us.

        We are subject to litigation in the normal course of our business. We are also a party to regulatory proceedings affecting the segments of the communications industry generally in which we engage in business. We cannot be certain of the ultimate outcomes of any claims that may arise in the future. Resolution of these types of matters against us may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could adversely impact us.

Applicable laws and regulations pertaining to our industry are subject to change.

        The exact requirements of applicable law are not always clear and the rules affecting our businesses are always subject to change. For example, the FCC may interpret its rules and regulations in enforcement proceedings in a manner that is inconsistent with the judgments we have made. Likewise, regulators and legislators at all levels of government may sometimes change existing rules or

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establish new rules. Congress, for example, considers new legislative requirements for cable operators virtually every year and there is always a risk that such proposals (if unfavorable to us) will ultimately be enacted. In addition, federal, state or local governments and/or tax authorities may change tax laws, regulations or administrative practices that could adversely affect our operations, business, financial condition or results of operations.

The FCC and local franchising authorities exercise authority over cable television systems and the FCC and state PSCs exercise authority over telecommunications services.

        The FCC has promulgated regulations covering many aspects of cable television operations. Failure to comply with those regulations could lead the FCC to impose on us monetary fines, cease-and-desist orders and/or other administrative sanctions. The cable franchises that our systems operate under, which are issued by states, cities, counties or other political subdivisions, may contain similar enforcement mechanisms in the event of any failure to comply with the terms of those franchises.

        The FCC also has promulgated regulations covering the interstate aspects and the regulated telecommunications earnings of our ILEC and CLEC operations. Our local and intrastate products and services and the regulated earnings are subject to regulation by state PSCs. Failure to comply with these regulations could lead the FCC to impose on us monetary fines, cease-and-desist orders and/or other administrative sanctions.

        These fines, cease-and-desist orders and/or other administrative sanctions may adversely affect our operations, business, financial condition or results of operations.

We have substantial indebtedness, which will increase our vulnerability to general adverse economic and industry conditions and may limit our ability to pursue strategic alternatives and react to changes in our business and industry.

        We have incurred substantial indebtedness. This amount of indebtedness may:

    subject us to increased sensitivity to increases in prevailing interest rates;

    place us at a disadvantage to competitors with relatively less debt in economic downturns, adverse industry conditions or catastrophic external events;

    limit our flexibility as a result of our debt service requirements or financial and operational covenants;

    limit our access to additional capital and our ability to make capital expenditures and other investments in our business;

    increase our vulnerability to general adverse economic and industry conditions and interest rate increases;

    result in an event of default if we fail to satisfy our obligations under the notes or our other debt or fail to comply with the financial and other restrictive covenants contained in the indenture governing the notes or our other debt, which event of default could result in the notes and all of our debt becoming immediately due and payable and, in the case of our secured debt, could permit the lenders to foreclose on our assets securing such debt;

    limit our ability to pursue strategic alternatives, including merger or acquisition transactions; and

    limit our ability to plan for or react to changes in our business and industry.

        Additionally, our ability to comply with the financial and other covenants contained in our debt instruments may be affected by changes in economic or business conditions or other events beyond our control. If we do not comply with these covenants and restrictions, we may be required to take actions

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such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing all or part of our existing debt, or seeking additional equity capital. Failure to comply could also cause a default, which may result in our substantial indebtedness becoming immediately due and payable. If this were to occur, we may be unable to adequately finance our operations. See "Description of Certain Indebtedness."

We may not be able to generate sufficient cash to service our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

        Our ability to make scheduled payments on or refinance our anticipated debt obligations will depend on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory and other factors beyond our control. We might not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to affect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. We expect that the agreements governing our indebtedness will restrict our ability to dispose of assets and use the proceeds from those dispositions and will also restrict our ability to raise debt capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, could have a material adverse effect on our operations, business, financial condition or results of operations.

We may not be able to access the credit and capital markets at the times and in the amounts needed and on acceptable terms.

        From time to time we may need to access the long-term and short-term capital markets to obtain financing. Our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including our financial performance, our credit ratings or absence of a credit rating, the liquidity of the overall capital markets and the state of the economy. There can be no assurance that we will have access to the capital markets on terms acceptable to us.

We are a holding company, which has no operations and depends on its operating subsidiaries for cash. Our subsidiaries may be limited in their ability to make funds available for the payment of our debt and other obligations.

        We are a holding company whose principal asset is a 100% equity interest and a 100% voting interest in WideOpenWest Finance, LLC ("WOW! Finance"). WOW! Finance is also a holding company whose operations are conducted through its subsidiaries. Neither we nor WOW! Finance hold any significant assets other than our direct and indirect interests in our subsidiaries. The cash flow to these two entities depends upon the cash flow of our operating subsidiaries and the payment of funds by these operating subsidiaries to such entities. This could adversely affect the ability of such entities to meet their obligations, including:

    existing and future debt obligations or any preferred equity obligations that we may issue in the future;

    obligations under employment and consulting agreements; and

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    dividends or other distributions to holders of common stock.

        Our operating subsidiaries are not obligated to make funds available for payment of these obligations in the form of loans, distributions or otherwise. In addition, our operating subsidiaries' ability to make any such loans, distributions or other payments to WOW! Finance or to us will depend on their earnings, business and tax considerations and legal restrictions. Furthermore, covenants in the indentures and credit agreements governing the indebtedness of WOW! Finance's subsidiaries restrict their ability to make loans, distributions or other payments to WOW! Finance or to us.

The anticipated benefits of future acquisitions may not be realized fully and may take longer to realize than expected and we may experience integration and transition difficulties.

        In order to obtain all of the anticipated benefits of future acquisitions, management will be required to devote significant attention and resources to integrating the businesses and assets acquired. Delays in this process could adversely affect the combined company's business, financial results and financial condition. Even if we are able to integrate our business operations successfully, there can be no assurance that the integration will result in the realization of the full benefits of synergies, cost savings, innovation and operational efficiencies that we expect to realize or that these benefits will be achieved within a reasonable period of time.

        There is a risk that integration difficulties may cause us not to realize expected benefits from acquisitions and may affect our results, including adversely impacting the carrying value of the acquisition premium or goodwill. The long-term success of the acquisitions will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining the two businesses.

        In addition, it is possible that the integration process could result in the loss of key employees, the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies, which adversely affect our ability to maintain relationships with customers, providers and employees or to achieve the anticipated benefits of acquisitions. Integration and transition efforts also may divert management attention and resources.

We have experienced net losses and may generate net losses in the future.

        We experienced net losses for fiscal years 2015 and 2014 and may report net losses in the future. We reported net income of $26.3 million, or net margin of 2.1%, in the year ended December 31, 2016. In general, these prior net losses and $26.3 million of net income for the year ended December 31, 2016 have been impacted by interest expenses related to our indebtedness, acquisitions and depreciation and amortization expenses associated with capital expenditures related to expanding and upgrading of our cable systems. If we report net losses in the future, these losses may limit our ability to attract needed financing, and to do so on favorable terms, as such losses may prevent some investors from investing in our securities.

The accounting treatment of goodwill and other identified intangibles could result in future asset impairments, which would be recorded as operating losses.

        Authoritative guidance issued by the Financial Accounting Standards Board (the "FASB") requires that goodwill, including the goodwill included in the carrying value of investments accounted for using the equity method of accounting, and other intangible assets deemed to have indefinite useful lives, such as cable franchise rights, be tested annually for impairment or upon the occurrence of a triggering event. If the carrying value of goodwill or a certain intangible asset exceeds its estimated fair value, an impairment charge is recognized in an amount equal to that excess. Any such impairment is required to be recorded as a noncash operating loss.

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Risks Related to the Ownership of Our Common Stock and this Offering

Following this offering, we will be classified as a "controlled company" and, as a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

        Upon completion of this offering, the Sponsors will continue to control a majority of the voting power of our outstanding common stock. As a result, we expect to be a "controlled company" within the meaning of the applicable stock exchange corporate governance standards. Under the rules of the                        , a company of which more than 50% of the outstanding voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain stock exchange corporate governance requirements, including:

    the requirement that a majority of the board of directors consists of independent directors;

    the requirement that nominating and corporate governance matters be decided solely by independent directors; and

    the requirement that employee and officer compensation matters be decided solely by independent directors.

        Following this offering, we intend to utilize these exemptions. As a result, we may not have a majority of independent directors and our nominating and corporate governance and compensation functions may not be decided solely by independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the stock exchange corporate governance requirements.

Our stock price could be extremely volatile or decline regardless of our operating performance and, as a result, you may not be able to resell your shares at or above the price you paid for them.

        Volatility or declines, regardless of our operating performance, in the market price of our common stock may prevent you from being able to sell your shares at or above the price you paid for your shares. The stock market in general has been highly volatile, and this may be especially true for our common stock given our growth strategy and stage of development. As a result, the market price of our common stock is likely to be similarly volatile. You may experience a decrease, which could be substantial, in the value of your stock, including decreases unrelated to our operating performance or prospects, and could lose part or all of your investment. The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere in this prospectus, including in this "Risk Factors" section, and other factors such as:

    actual or anticipated fluctuations in our quarterly or annual operating results and the performance of our competitors;

    publication of research reports by securities analysts about us, our competitors or our industry;

    our failure or the failure of our competitors to meet analysts' projections or guidance that we or our competitors may give to the market;

    additions and departures of key personnel, including our executives and senior management team;

    sales, or anticipated sales, of large blocks of our stock or of shares held by our stockholders, directors or executive officers;

    strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;

    the passage of legislation or other regulatory developments affecting us or our industry;

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    speculation in the press or investment community, whether or not correct, involving us or our competitors;

    changes in accounting principles;

    litigation and governmental investigations;

    terrorist acts, acts of war or periods of widespread civil unrest;

    natural disasters and other calamities; and

    changes in general market and economic conditions.

        As we operate in a single industry, we are especially vulnerable to these factors to the extent that they affect our industry or our business. In addition, historically, stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many telecommunications companies. In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management's attention and resources, and could require us to make substantial payments to satisfy judgments or to settle litigation.

There is no existing market for our common stock, and we do not know if one will develop.

        Prior to this offering, there has not been a public market for our common stock. Although we have applied to list our common stock on         , an active trading market for our common stock may not develop following the completion of this offering, or if it does develop, may not be maintained. If an active trading market does not develop or is not maintained, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the shares of our common stock will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price you paid in this offering. Further, an inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategic transactions by using our shares of common stock as consideration.

A significant portion of our common stock will continue to be held by the Sponsors, whose interests may differ from yours.

        Upon completion of this offering, the Sponsors will beneficially own, in the aggregate, approximately        % of our outstanding shares of common stock. The Sponsors may have interests that are different from or adverse to yours. For example, these stockholders may support proposals and actions with which you may disagree or which are not in your interests or which adversely impact the value of your investment. These stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, amendment of our amended and restated certificate of incorporation and approval of significant corporate transactions and, through our Board of Directors, the ability to control decision-making with respect to our business direction and policies. This control could have the effect of delaying or preventing a change of control in us or changes in management and could also make the approval of certain transactions difficult or impossible without the support of these stockholders, which in turn could reduce the price of our common stock.

        Even if the Sponsors' ownership of our shares falls below a majority, they may continue to be able to strongly influence or effectively control our decisions. Under our amended and restated certificate of incorporation, the Sponsors and their affiliates will not have any obligation to present to us, and they may separately pursue, corporate opportunities of which they become aware, even if those opportunities

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are ones that we would have pursued if granted the opportunity. See "Description of Capital Stock—Corporate Opportunity."

Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.

        Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this offering, we will have           shares of common stock outstanding. The shares of common stock offered in this offering will be freely tradable without restriction under the Securities Act of 1933, as amended (the "Securities Act"), except for any shares of our common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

        We, our officers and directors, the Sponsors, and certain other security holders have agreed, subject to certain exceptions, not to (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of common stock or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of common stock or such other securities, in cash or otherwise), in each case without the prior written consent of        , for a period of          days after the date of this prospectus. See "Underwriting."

        All of our shares of common stock outstanding as of the date of this prospectus may be sold in the public market by existing stockholders          days after the date of this prospectus (subject to extension in certain circumstances) and applicable volume and other limitations imposed under federal securities laws. In addition, see "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling shares of our common stock after this offering.

        After this offering, subject to any lock-up restrictions described above with respect to certain holders, holders of approximately          shares of our common stock will have the right to require us to register the sales of their shares under the Securities Act, under the terms of an agreement between us and the holders of these securities. See "Shares Eligible for Future Sale—Registration Rights" for a more detailed description of these rights.

        In the future, we may also issue our securities in connection with acquisitions or investments. The amount of shares of our common stock issued in connection with an acquisition or investment could constitute a material portion of our then-outstanding shares of our common stock.

Anti-takeover provisions contained in our amended and restated certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair, discourage or delay a takeover attempt, including a takeover attempt that you might consider favorable.

        Our amended and restated certificate of incorporation and amended and restated bylaws contain and Delaware law contains provisions which could have the effect of rendering more difficult, delaying

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or preventing an acquisition deemed undesirable by our Board of Directors. Our corporate governance documents include provisions:

    creating a classified Board of Directors whose members serve staggered three-year terms;

    authorizing "blank check" preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;

    limiting the liability of, and providing indemnification to, our directors and officers;

    limiting the ability of our stockholders to call and bring business before special meetings;

    requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board of Directors;

    requiring all stockholder actions be taken at a meeting of our stockholders, upon the Sponsors no longer controlling a majority of the voting power of our common stock, and prohibiting stockholder action by written consent;

    requiring a vote by greater than 662/3% of our stockholders to amend our certificate of incorporation and bylaws, upon the Sponsors no longer controlling a majority of the voting power of our common stock;

    controlling the procedures for the conduct and scheduling of Board of Directors and stockholder meetings; and

    providing our Board of Directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings.

        These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

        Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of impairing, discouraging or delaying a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return or enhance the price of our common stock.

        The net proceeds from the sale of our shares of common stock by us in this offering will be used (i) to repay outstanding indebtedness, including any redemption premiums thereon, and to pay related fees and expenses, (ii) for general corporate purposes and (iii) to pay fees and expenses in connection with this offering and other related expenses. See "Use of Proceeds." However, we do not have any agreements or commitments for any acquisitions at this time. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be invested with a view towards the long-term benefit for our stockholders and this may not increase our results of operations or market value. Until the net proceeds are used, they may be placed in investments that do not produce significant income or that may lose value.

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If securities or industry analysts issue an adverse or misleading opinion regarding our common stock or do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, our stock price and trading volume could decline.

        The trading market for our common stock will be influenced, to some extent, by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. We do not control these analysts or the content and opinions included in their reports. If any of the analysts who cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who covers us were to cease coverage of us or fail to publish reports on us regularly or if analysts elect not to provide research coverage of our common stock, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

We do not expect to declare any dividends in the foreseeable future.

        We do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future. Consequently, investors may need to rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock. See "Dividend Policy."

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution.

        If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the amount of $      per share because the initial public offering price of $      is substantially higher than the pro forma net tangible book value per share of our outstanding common stock. Dilution results from the fact that the initial public offering price per share of the common stock is substantially in excess of the book value per share of common stock attributable to the existing stockholders for the presently outstanding shares of common stock. In addition, you may also experience additional dilution upon future equity issuances or the exercise of stock options to purchase common stock granted to our employees and directors under our management incentive plan. See "Dilution."

You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.

        After this offering we will have approximately       million shares of common stock authorized but unissued under our amended and restated certificate of incorporation upon the consummation of this offering. We will be authorized to issue these shares of common stock and options, rights, warrants and appreciation rights relating to common stock for consideration and on terms and conditions established by our Board of Directors in its sole discretion, whether in connection with acquisitions or otherwise. Any common stock that we issue, including under our equity incentive plans, would dilute the percentage ownership held by the investors who purchase common stock in this offering.

        In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

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Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

        Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law ("DGCL"), our amended and restated certificate of incorporation or our amended and restated bylaws, or (iv) any other action asserting a claim against us that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our operations, business, financial condition or results of operations.

The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain qualified board members.

        As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and stock exchange rules promulgated in response to the Sarbanes-Oxley Act. The requirements of these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. While one of the Company's subsidiaries currently files annual, quarterly and current reports with respect to our business and financial condition with the SEC, the Company does not currently file annual, quarterly and current reports and will have to file proxy statements pursuant to Section 14(a) of the Exchange Act of 1934, as amended (the "Exchange Act") as a public company. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required, and management's attention may be diverted from other business concerns. These rules and regulations could also make it more difficult for us to attract and retain qualified independent members of our Board. Additionally, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. Furthermore, because we have not operated as a company with equity listed on a national securities exchange in the past, we might not be successful in implementing these requirements. The increased costs of compliance with public company reporting requirements and our potential failure to satisfy these requirements could have a material adverse effect on our operations, business, financial condition or results of operations.

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FORWARD-LOOKING STATEMENTS

        This prospectus contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this prospectus are forward-looking statements. Forward-looking statements discuss our plans, strategies, prospects and industry estimates. These statements identify prospective information and can generally be identified by the use of forward-looking terminology, including the terms "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "might," "should," "could," "would," "project," "predict," "potential" or similar expressions or the negative of these terms. The foregoing is not an exclusive list of all forward-looking statements we make. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The matters referred to in the forward-looking statements contained in this prospectus may not in fact occur. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:

    the wide range of competition we face;

    competitors that are larger and possess more resources;

    competition for the leisure and entertainment time of audiences;

    whether our edge-out strategy will succeed;

    dependence upon a business services strategy, including our ability to secure new businesses as customers;

    conditions in the economy, including potentially uncertain economic conditions, high unemployment levels and turbulent developments in the housing market;

    demand for our bundled broadband communications services may be lower than we expect;

    our ability to respond to rapid technological change;

    increases in programming and retransmission costs;

    a decline in advertising revenues;

    the effects of regulatory changes in our business;

    our substantial level of indebtedness;

    certain covenants in our debt documents;

    programming exclusivity in favor of our competitors;

    inability to obtain necessary hardware, software and operational support;

    loss of interconnection arrangements;

    failure to receive support from various funds established under federal and state law;

    exposure to credit risk of customers, vendors and third parties;

    strain on business and resources from future acquisitions or joint ventures, or the inability to identify suitable acquisitions;

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    other risks referenced in the section of this prospectus entitled "Risk Factors"; and

    our ability to manage the risks involved in the foregoing.

        While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Our Business" in this prospectus. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect.

        All forward-looking statements speak only as of the date on which they are made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. If we do update one or more forward-looking statements, there should be no inference that we will make additional updates with respect to those or other forward-looking statements.

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USE OF PROCEEDS

        We estimate that the net proceeds to us from this offering, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, will be approximately $       million (or $       million if the underwriters' option to purchase additional shares is exercised in full), assuming the shares offered by us are sold for $      per share, the midpoint of the price range set forth on the cover of this prospectus.

        We intend to use the net proceeds from the sale of common stock by us in this offering:

    to repay outstanding indebtedness;

    for general corporate purposes; and

    to pay fees and expenses in connection with this offering and other related expenses.

        A $1.00 increase or decrease in the assumed initial public offering price of $      per share would increase or decrease the net proceeds we receive from this offering by approximately $       million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same. Similarly, each increase or decrease of one million shares in the number of shares of common stock offered by us would increase or decrease the net proceeds we receive from this offering by approximately $       million, assuming the assumed initial public offering price remains the same.

        Pending use of the net proceeds from this offering as described above, we may invest the net proceeds in short- and intermediate-term interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States government.

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DIVIDEND POLICY

        We currently intend to retain all available funds and any future earnings to fund the development and growth of our business, and therefore we do not anticipate paying any cash dividends in the foreseeable future. Additionally, our ability to pay dividends on our common stock will be limited by restrictions on the ability of our subsidiaries and us to pay dividends or make distributions under the terms of current and any future agreements governing our indebtedness. Any future determination to pay dividends will be at the discretion of our Board of Directors, subject to compliance with covenants in our current and future agreements governing our indebtedness, and will depend upon our results of operations, financial condition, capital requirements and other factors that our Board of Directors deems relevant.

        In addition, since we are a holding company, substantially all of the assets shown on our consolidated balance sheet are held by our subsidiaries. Accordingly, our earnings, cash flow and ability to pay dividends are largely dependent upon the earnings and cash flows of our subsidiaries and the distribution or other payment of such earnings to us in the form of dividends.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents, indebtedness and our capitalization as of December 31, 2016 on:

    an actual basis; and

    an adjusted basis to give effect to the following:

    i.
    the sale of      shares of our common stock in this offering by us at an assumed initial public offering price of $      per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us; and

    ii.
    the application of the net proceeds from this offering to us as described under "Use of Proceeds."

        You should read the following table in conjunction with the sections entitled "Use of Proceeds," "Selected Historical Combined Consolidated Financial and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our combined consolidated financial statements and related notes included elsewhere in this prospectus.

 
  December 31, 2016  
(in millions)
  Actual   As Adjusted  

Cash and cash equivalents(1)(2)

  $ 30.8   $    

Debt:

             

Senior Notes(3)

    830.9        

Term B Loans(4)

    2,048.3        

Revolving Credit Facility(4)

    10.0        

Capital lease obligations

    4.9        

Total debt and capital lease obligations

    2,894.1        

Debt issuance costs, net

    (22.9 )      

Total debt and capital lease obligations, net of debt issuance costs

  $ 2,871.2   $    

Stockholders' Deficit:

   
 
   
 
 

Common stock ($0.01 par value;          shares authorized,           shares issued and          outstanding on an actual basis;          shares authorized,           shares issued and          outstanding on an as adjusted basis)

           

Total stockholders' deficit

    (718.0 )      

Total capitalization

  $ 2,153.2   $    

(1)
Does not include $20.1 million of cash held by Parent as of December 31, 2016, which Parent intends to contribute to the Company prior to the consummation of the offering.

(2)
Does not reflect cash proceeds from the January 12, 2017 divestiture of our Lawrence, Kansas system, which resulted in net proceeds of $210.9 million in cash. On March 20, 2017, we used a total of $101.7 million of cash on hand for the partial redemption of $95.1 million in aggregate principal amount of Senior Notes.

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(3)
Includes $5.9 million of net premium. On March 20, 2017, we redeemed approximately $95.1 million in aggregate principal amount of Senior Notes using cash on hand.

(4)
The Senior Secured Credit Facilities consist of (i) the $2,048.3 million Term B Loans, which includes $11.5 million of net discounts, and (ii) the $200.0 million Revolving Facility, of which $182.7 million was available at December 31, 2016 after reflecting $7.3 million outstanding letters of credit and $10.0 million in borrowings outstanding. For more information, see "Description of Certain Indebtedness—Senior Secured Credit Facilities."

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DILUTION

        If you invest in our common stock, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock and the net tangible book value per share of our common stock after this offering. Dilution results from the fact that the initial public offering price per share of the common stock is substantially in excess of the book value per share of common stock attributable to the existing stockholders for the presently outstanding shares of common stock.

        Our net tangible book deficit as of                        was $             million, or $            per share of common stock (before giving effect to this offering). Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the basic weighted average number of shares of common stock outstanding.

        After giving effect to the sale of                        shares of common stock offered by us in this offering at an assumed initial public offering price of $            , which is the midpoint of the price range set forth on the cover of this prospectus, less estimated underwriting discounts and commissions and estimated offering expenses, our pro forma net tangible book value (deficit) as of                        would have been approximately $             million, or $            per share of common stock. This represents an immediate increase in net tangible book value to our existing stockholders of $            per share and an immediate dilution to new investors in this offering of $            per share. The following table illustrates this pro forma per share dilution in net tangible book value to new investors.

Assumed initial public offering price per share

        $    

Pro forma net tangible book value (deficit) per share as of common stock of

  $          

Increase per share attributable to new investors

             

Pro forma net tangible book value per share after this offering

             

Dilution per share to new investors

        $    

        A $1.00 increase or decrease in the assumed initial public offering price of $            per share, the mid-point of the price range set forth on the cover of this prospectus, would increase or decrease net tangible book value by $             million, or $            per share, and would increase or decrease the dilution per share to new investors by $            based on the assumptions set forth above.

        The following table summarizes as of                        ,             on an as adjusted basis, the number of shares of common stock purchased, the total consideration paid and the average price per share paid by the equity grant recipients and by new investors, based upon an assumed initial public offering price of $            per share (the mid-point of the initial public offering price range), before deducting estimated underwriting discounts and commissions and offering expenses:

 
  Shares Purchased   Total Consideration    
 
 
  Number   Percent   Amount
(in thousands)
  Percent   Average Price
Per Share
 

Existing stockholders

            % $         % $    

New investors

                               

Total

          100 % $       100 %      

        Except as otherwise indicated, the discussion and tables above assume no exercise of the underwriters' option to purchase additional shares and no exercise of any outstanding options. If the underwriters' option to purchase additional shares is exercised in full, our existing stockholders would own approximately        % and our new investors would own approximately         % of the total number of shares of our common stock outstanding after this offering. If the underwriters exercise their option

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to purchase additional shares in full, the pro forma net tangible book value per share after this offering would be $            per share, and the dilution in the pro forma net tangible book value per share to new investors in this offering would be $            per share.

        The tables and calculations above are based on                shares of common stock outstanding as of            , and assume no exercise by the underwriters of their option to purchase up to an additional                        shares from us. This number excludes, as of                        , an aggregate of                        shares of common stock reserved for issuance under our equity incentive plan that we intend to adopt in connection with this offering.

        To the extent that any outstanding options are exercised, new investors will experience further dilution. As of                        ,                         shares of common stock were issuable upon the exercise of outstanding options at a weighted-average exercise price of $            per share. If all of our outstanding options had been exercised as of            , our pro forma net tangible book value as of            would have been approximately $             million or $            per share of our common stock, and the pro forma net tangible book value after giving effect to this offering would have been $            per share, representing dilution in our pro forma net tangible book value per share to new investors of $            .

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SELECTED HISTORICAL COMBINED CONSOLIDATED FINANCIAL AND OTHER DATA

        The following table sets forth our selected financial data for the periods presented. The balance sheet data as of December 31, 2015 and 2016 and the statement of operations data for the years ended December 31, 2014, 2015 and 2016 set forth below are derived from our audited combined consolidated financial statements included elsewhere in this prospectus. The balance sheet data as of December 31, 2012, 2013 and 2014 and the statement of operations data for the years ended December 31, 2012 and 2013 are derived from our audited combined consolidated financial statements not included in this prospectus.

        The selected financial data below should be read in conjunction with the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," included elsewhere in this prospectus. Our historical operating results are not necessarily indicative of future operating results.

 
  Year Ended December 31,  
(in millions)
  2012(1)   2013(2)   2014(3)(4)   2015   2016(5)  

Statement of Operations Data:

                               

Revenue

  $ 910.4   $ 1,199.7   $ 1,264.3   $ 1,217.1   $ 1,237.0  

Costs and expenses:

                               

Operating (excluding depreciation and amortization)

    515.0     663.9     737.0     678.6     668.3  

Selling, general and administrative

    104.4     135.8     135.8     110.6     116.4  

Depreciation and amortization

    203.9     256.4     251.3     221.1     207.0  

Management fee to related party          

    1.4     1.7     1.7     1.9     1.7  

    824.7     1,057.8     1,125.8     1,012.2     993.4  

Income from operations

    85.7     141.9     138.5     204.9     243.6  

Other income (expense):

                               

Interest expense

    (180.4 )   (242.0 )   (237.0 )   (226.0 )   (211.1 )

Realized and unrealized gain (loss) on derivative instruments, net

    (9.4 )   3.4     4.1     5.6     2.3  

Gain on sale of assets

            52.9          

Loss on early extinguishment of debt

    (8.3 )   (58.1 )       (22.9 )   (38.0 )

Other income (expense), net

    0.2     (0.3 )   3.4     (0.4 )   2.2  

Loss before provision for income tax

    (112.2 )   (155.1 )   (38.1 )   (38.8 )   (1.0 )

Income tax benefit (expense), net          

    (0.7 )   (5.0 )   10.8     (9.9 )   27.3  

Net income (loss)

  $ (112.9 ) $ (160.1 ) $ (27.3 ) $ (48.7 ) $ 26.3  

Balance Sheet Data:

                               

Total assets

  $ 2,814.6   $ 2,810.3   $ 2,874.7   $ 2,684.7   $ 2,770.8  

Total debt, including capital lease obligations

  $ 2,806.3   $ 2,941.1   $ 3,019.3   $ 2,882.2   $ 2,871.2  

Total liabilities

  $ 3,441.5   $ 3,597.3   $ 3,690.9   $ 3,550.7   $ 3,488.8  

Other Financial Data:

   
 
   
 
   
 
   
 
   
 
 

Capital expenditures

  $ 158.2   $ 221.9   $ 251.9   $ 231.9   $ 287.5  

(1)
Includes balance sheet data, financial results and operations data relating to Knology for the periods subsequent to our acquisition of Knology on July 17, 2012.

(2)
Includes balance sheet data, financial results and operations data relating to Bluemile, Inc. ("Bluemile") for the periods subsequent to our acquisition of certain assets from Bluemile on September 27, 2013.

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(3)
Includes balance sheet data, financial results and operations data relating to AAB for the periods subsequent to our increased investment in AAB on April 30, 2014.

(4)
Excludes balance sheet data, financial results and operations data relating to our South Dakota systems for the periods subsequent to our divestiture of such assets on September 30, 2014.

(5)
Includes balance sheet data, financial results and operations data relating to NuLink for the period subsequent to our acquisition of substantially all of the operating assets of NuLink on September 9, 2016.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the "Selected Historical Combined Consolidated Financial and Other Data" and our condensed consolidated financial statements, including the notes thereto, appearing elsewhere in this prospectus.

        In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations, and intentions set forth under the sections entitled "Risk Factors" and "Forward-Looking Statements." Our actual results and the timing of events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section entitled "Risk Factors" and elsewhere in this prospectus.

        Unless otherwise noted, all financial, statistical and operating information in this section is presented on an actual basis and does not give effect to acquisitions or divestitures that were completed after the periods presented.

Overview

        We are the sixth largest cable operator in the United States ranked by number of customers as of December 31, 2016. We provide HSD, Video, Telephony, and business-class services to approximately 3.1 million homes and businesses. Our services are delivered across 20 markets via our advanced HFC cable network. Our footprint covers over 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Kansas, Maryland, Michigan, Ohio, South Carolina and Tennessee. Led by our robust HSD offering, our products are available either as a bundle or as an individual service to residential and business services customers. As of December 31, 2016, 803,400 customers subscribed to our services.

        Since commencing operations in 2001, our focus has been to offer a competitive alternative cable service and establish a brand with a strong market position. We have scaled our business through (i) organic subscriber growth and increased penetration within our existing markets and footprint, (ii) edge-outs to grow our footprint, (iii) upgrades to introduce enhanced broadband services to networks we have acquired, (iv) entry into business services, with a broad range of HSD, Video and Telephony products, and (v) acquisitions and integration of cable systems.

        We believe we have one of the most technologically advanced, fiber-rich networks in our service areas. We have designed our network with the goal of maximizing Internet speeds and accommodating future broadband demand. Our all-digital HFC infrastructure operates with a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable to 1.2 Ghz throughout. All of our new communities are built with a capacity of 1.2 Ghz. Our HFC network is fully upgraded with DOCSIS 3.0 and is capable of being upgraded to DOCSIS 3.1 in all of our markets. According to CableLabs, a non-profit innovation and research and development lab founded by members of the cable industry, DOCSIS 3.1 technology has the capacity to support network speeds up to 10 Gbps downstream and up to 1 Gbps upstream. We serve an average of 313 homes per node, enabling us to deliver quality HSD service and the capability to provide broadband speeds of 1 Gbps and higher. Our HFC network consists of a high-bandwidth, multi-use service provider backbone, which allows us to centrally source data, voice and video services for both residential and business traffic. We believe the quality and uniform architecture of our next-generation network is a competitive advantage that enables us to offer high-quality broadband services that meet our current and future customers' needs without incurring significant upgrade capital expenditures.

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        We operate primarily in economically stable suburbs that are adjacent to large metropolitan areas as well as secondary and tertiary markets, which we believe have favorable competitive and demographic profiles and include businesses operating across a range of industries. We benefit from the ability to augment our footprint by pursuing value-accretive network extensions, or edge-outs, to increase our addressable market and grow our customer base. We have historically made selective capital investments in edge-outs to facilitate growth in residential and business services.

        We are focused on efficient capital spending and maximizing Adjusted EBITDA through an Internet-centric growth strategy while maintaining a profitable video subscriber base. Based on its per subscriber economics, we believe that HSD represents the greatest opportunity to enhance profitability across our residential and business markets. We believe that our advanced network is designed to meet our current and future customers' HSD needs. We offer HSD speeds up to 500 Mbps in over 90% of our footprint with the capability to offer 1 Gbps or more in all of our markets. HSD services generated revenues of $373.1 million, or approximately 30.2% of total revenues, and gross profit of $358.6 million, or approximately 45.4% of total gross profit, in the year ended December 31, 2016.

        We offer a full suite of digital video services, including VOD, high-definition video and DVR. In approximately 77% of our footprint, we also offer our "Ultra" video product, which is a technologically advanced, IP enabled, whole-home DVR solution that integrates traditional linear video, an advanced user interface and direct access to OTT content, such as Netflix and other applications. Video service is a competitive business with declining margins as programming costs have increased over time. We have historically offset the revenue impact of RGU declines in Video through rate increases and other surcharges. Video services generated revenues of $547.1 million, or approximately 44.2% of total revenues, and gross profit of $188.7 million, or approximately 23.9% of total gross profit, in the year ended December 31, 2016.

        Telephony services generated revenues of $155.2 million, or approximately 12.5% of total revenues, and gross profit of $138.2 million, or approximately 17.5% of total gross profit, in the year ended December 31, 2016. We have experienced declines in Telephony customers over time and we expect this trend will continue given competition from wireless voice service providers.

        Our technologically advanced network enables us to provide business services customers with a broad portfolio of carrier-class data and voice services, including Direct Internet Access, Ethernet over fiber and HFC, virtual private networks, VoIP solutions, wholesale fiber connectivity, cell backhaul solutions, disaster recovery, cloud back-up, and SIP and PRI trunking services. Our advanced business services product offering continues to evolve, as we leverage our investment in next generation software enabled infrastructure to launch new services such as a full suite of managed and other virtual services. We believe that we have a significant market penetration growth opportunity in several of our markets with the capability to target small, medium and large businesses within our footprint with our robust business services product suite. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015.

Ownership and Basis of Presentation

        Our business commenced operations in 2001. WideOpenWest, Inc. ("WOW!") was founded in 2012 as WideOpenWest Kite, Inc., a Delaware corporation. WideOpenWest Kite, Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017. It is wholly owned by Racecar Acquisition, LLC, which is a wholly owned subsidiary of WideOpenWest Holdings, LLC (the "Parent"). In the following context, the terms we, us, WOW!, or the "Company" may refer, as the context requires, to WOW! or, collectively, WOW! and its subsidiaries.

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        On April 1, 2016, the Company consummated a restructuring (the "Restructuring") whereby WideOpenWest Finance, LLC ("WOW! Finance") became a wholly owned subsidiary of WOW!. Previously, WOW! Finance was owned by WideOpenWest Illinois, Inc., WideOpenWest Ohio, Inc., WideOpenWest Cleveland, Inc., WOW! Sigecom, Inc. and WOW! (collectively, the "Members"). Prior to the Restructuring, the Members were wholly owned subsidiaries of Racecar Acquisition, LLC.

        As a result of the Restructuring, each of the Members, other than WOW!, merged with and into WOW!, WOW! became the sole subsidiary of Racecar Acquisition and WOW! Finance became a wholly owned subsidiary of WOW!.

        The financial statements presented herein include the consolidated accounts of WOW! and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Parent wholly owns all subsidiary Members. Because transactions among entities under common control do not result in a change in control, the combined consolidated financial statements are not affected by a common control transaction. As a result, the consolidated financial statements of WOW! reflect all transactions of all the wholly owned subsidiaries of Parent. The historical financial information has not been adjusted to give effect to transaction adjustments or any other pro forma events.

        Certain employees of WOW! participate in equity plans administered by Parent. Because the management units from the equity plan are issued from Parent's ownership structure, the management units' value directly correlates to the results of WOW!, and as the primary asset of Parent is its investment in WOW!, the management units for the equity plan have been "pushed down" to the Company. All of the Company's ownership units and unit holders discussed herein are legally Parent's.

Distribution

        Prior to the closing of this offering, our indirect parent company, WideOpenWest Holdings, LLC, will be liquidated and the shares of our common stock it holds (indirectly through Racecar Acquisition, LLC) will be distributed to its equity holders based on the relative rights under its limited liability agreement (the "Distribution"), with no issuance of additional shares by us. Certain units of the Parent are intended to qualify as profits interest and are subject to certain vesting conditions. To the extent such profits interest have built-in gain pursuant to the Distribution, holders of vested profits interest will receive shares of our common stock in the Distribution, while holders of unvested profits interest will receive unvested restricted shares of our common stock in the Distribution. For additional information regarding the treatment of outstanding units in the Parent in connection with the Distribution and this offering, see "Executive Compensation—Effect of the Distribution and this Offering."

        The Distribution will not affect our operations, which we will continue to conduct through our operating subsidiaries. The primary purpose of the Distribution is to remove an unnecessary layer of our organizational structure prior to the closing of this offering.

NuLink Acquisition

        On September 9, 2016, we finalized our acquisition of HC Cable Opco, LLC d/b/a NuLink in Newnan, Georgia for $54.3 million, all of which we paid in cash. The acquisition extended our HSD, Video and Telephony service and award-winning customer support experience to more than 34,000 additional homes and businesses. The results of operations related to our NuLink acquisition are included in our combined consolidated financial statements for the year ended December 31, 2016 for the period following our acquisition thereof.

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Sale of our Lawrence, Kansas System

        On October 21, 2016, we entered into a definitive agreement under which Midcontinent Communications ("MidCo") acquired substantially all of the operating assets of our Lawrence, Kansas system for gross proceeds of approximately $215.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. The transaction was consummated on January 12, 2017. The operations of our Lawrence, Kansas system are reflected in our combined consolidated statement of operations for the year ended December 31, 2016.

Partial Redemption of Senior Notes

        On March 20, 2017, we redeemed $95.1 million in aggregate principal amount outstanding of our 10.25% Senior Notes. In addition to the partial principal redemption, we paid accrued interest on the notes of $1.7 million and prepayment penalties of $4.9 million. After this partial redemption, we have $729.9 million in principal outstanding of 10.25% Senior Notes.

Retirement of Senior Subordinated Notes

        On July 15, 2016, we redeemed $46.9 million in aggregate principal amount outstanding of our 13.38% Senior Subordinated Notes. In addition to the partial principal redemption, we paid accrued interest on the notes of $19.7 million and prepayment penalties of $3.1 million.

        On September 15, 2016, we redeemed an additional $159.1 million in principal amount outstanding of our 13.38% Senior Subordinated Notes. In addition to the principal redemption, we paid accrued interest on the notes of $3.5 million and $10.7 million in prepayment penalties.

        On December 18, 2016, we fully redeemed the remaining amounts outstanding under our Senior Subordinated Notes. We paid $89.0 million in outstanding principal, $5.0 million in accrued interest and $6.0 million in prepayment penalties in connection with this redemption. As of December 31, 2016, we have no outstanding Senior Subordinated Notes.

Term B Loans Refinancing

        On August 19, 2016, we entered into a sixth amendment ("Sixth Amendment") to our Credit Agreement, dated as of July 17, 2012, as amended ("Credit Agreement"), among us and the other parties thereto. Capitalized terms used herein without definition shall have the same meanings as set forth in the Credit Agreement.

        The Sixth Amendment, among other provisions, provides for the addition of a new $2.065 billion seven-year Term B Loan, which bears interest, at our option, at LIBOR plus 3.50% or ABR plus 2.50% and includes a 1.00% LIBOR floor. The new Term B Loan has a maturity date of August 19, 2023, unless the earlier maturity dates set forth below are triggered under the following circumstances. The Term B Loan will mature on April 15, 2019 if (i) any of our existing outstanding Senior Notes are outstanding on April 15, 2019, or (ii) any future indebtedness with a final maturity date prior to the date that is 91 days after August 19, 2023 is incurred to refinance our existing Senior Notes. The Term B Loan will mature on July 15, 2019 if (i) any of the Company's existing Senior Subordinated Notes are outstanding on July 15, 2019, or (ii) any indebtedness with a final maturity prior to the date that is 91 days after August 19, 2023 is incurred to refinance the Company's existing Senior Subordinated Notes.

        Proceeds from the issuance of the new Term B Loans were used to repay in full the existing $1.825 billion Term B Loan, which had a maturity date of April 15, 2019 and which bore interest at the same rates described above, and to pay related fees and expenses. We used the remaining $240.0 million in proceeds to fund our NuLink acquisition and to redeem a portion of our 13.38% Senior Subordinated Notes, as described above. The Company recorded a loss on extinguishment of

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debt of $10.5 million, primarily representing the expensing of the unamortized debt issuance costs related to a portion of the former Term B Loans.

Refinancing of Term B Loans and Payoff of Term B-1 Loans

        On May 11, 2016, we entered into a Fifth Amendment (the "Fifth Amendment") to our Credit Agreement, dated as of July 17, 2012, as amended, among us and the other parties thereto.

        The Fifth Amendment, among other provisions, provides for the addition of an incremental $432.5 million in new Term B Loans, which had a maturity date in April 2019 and which bore interest, at the Company's option, at LIBOR plus 3.50% or ABR plus 2.50% and included a 1.00% LIBOR floor. Proceeds from the issuance of the new Term B Loans were used to repay all remaining $382.5 million outstanding principal under the Company's Term B-1 Loans which had a maturity date of July 2017 and which bore interest, at the Company's option, at LIBOR plus 3.00% or ABR plus 2.00% and which included a 0.75% LIBOR floor, and to pay related fees and expenses. The Company recorded a loss on extinguishment of debt of $2.5 million, primarily representing the expensing of the unamortized debt issuance costs related to a portion of the former Term B-1 Loans.

Revolver Extension

        On July 1, 2015, the Company entered into a fourth amendment (the "Fourth Amendment") to its Credit Agreement, dated as of July 17, 2012, as amended on April 1, 2013, November 27, 2013 and May 21, 2015 (the "Original Credit Agreement") among the Company and the other parties thereto.

        Under the Original Credit Agreement, the Company had $200.0 million of borrowings available under its revolving credit facility (the "Revolver"), which was to mature as of July 17, 2017. Under the Fourth Amendment, the maturity date of $180.0 million of the $200.0 million in available borrowings under the Revolver was extended until July 1, 2020, provided that (i) the Company has no Term B Loans outstanding as of January 1, 2019 and (ii) any indebtedness incurred to refinance the Term B Loans has a maturity date no earlier than September 30, 2020. If either condition in provisos (i) and (ii) above were not satisfied as of January 1, 2019, then the Revolver would have matured on January 1, 2019. In addition, in the event the Company were to have outstanding borrowings under the Revolver in excess of $180.0 million as of July 17, 2017, the Company would have been required to pay down such borrowings to the extent of such excess.

Critical Accounting Policies and Estimates

        In the preparation of our consolidated financial statements, we are required to make estimates, judgments and assumptions that we believe are reasonable based upon the information available, in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Critical accounting policies are defined as those policies that are reflective of significant judgments, estimates and uncertainties, which would potentially result in materially different results under different assumptions and conditions. We believe the following accounting policies are the most critical in the preparation of our consolidated financial statements because of the judgment necessary to account for these matters and the significant estimates involved, which are susceptible to change.

Valuation of Plant, Property and Equipment and Intangible Assets

        Carrying Value.    The aggregate carrying value of our plant, property and equipment and intangible assets (including franchise operating rights and goodwill) comprised approximately 95% and 93% of our total assets at December 31, 2016 and December 31, 2015, respectively.

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        Plant, property and equipment are recorded at cost and include costs associated with the construction of cable transmission and distribution facilities and new service installations at customer locations. Capitalized costs include materials, labor and certain indirect costs attributable to the capitalization activity. Maintenance and repairs are expensed as incurred. Upon sale or retirement of an asset, the cost and related depreciation are removed from the related accounts, and resulting gains or losses are reflected in operating results. We make judgments regarding the installation and construction activities to be capitalized. We capitalize direct labor associated with capitalizable activities and indirect cost using standards developed from operational data, including the proportionate time to perform a new installation relative to the total technical operations activities and an evaluation of the nature of the indirect costs incurred to support capitalizable activities. Judgment is required to determine the extent to which indirect costs that have been incurred are related to capitalizable activities and, as a result, should be capitalized. Indirect costs include (i) employee benefits and payroll taxes associated with capitalized direct labor, (ii) direct variable cost of installation and construction vehicle costs, (iii) the direct variable costs of support personnel directly involved in assisting with installation activities, such as dispatchers and (iv) indirect costs directly attributable to capitalizable activities.

        Intangible assets consist primarily of acquired franchise operating rights, franchise-related customer relationships and goodwill. Franchise operating rights represent the value attributable to agreements with local franchising authorities, which allows access to homes in the public right of way. Our franchise operating rights were acquired through business combinations. We do not amortize cable franchise operating rights as we have determined that they have an indefinite life. Costs incurred in negotiating and renewing cable franchise agreements are expensed as incurred. Franchise-related customer relationships represent the value of the benefit to us of acquiring the existing cable subscriber base and are amortized over the estimated life of the subscriber base, generally four years, on a straight-line basis. Goodwill represents the excess purchase price over the fair value of the identifiable net assets we acquired in business combinations.

        Asset Impairments.    Long-lived assets, including plant, property and equipment and intangible assets subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying value of the asset.

        We evaluate the recoverability of our franchise operating rights at least annually on October 1, or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. Franchise operating rights are evaluated for impairment by comparing the carrying value of the intangible asset to its estimated fair value. We calculate the fair value of franchise operating rights using the multi-period excess earnings method, an income approach, which calculates the value of an intangible asset by discounting its future cash flows. The fair value is determined based on estimated discrete discounted future cash flows attributable to each franchise operating right intangible asset using assumptions consistent with internal forecasts. Assumptions key in estimating fair value under this method include, but are not limited to, revenue and subscriber growth rates (less anticipated customer churn), operating expenditures, capital expenditures (including any build out), market share achieved, contributory asset charge rates, tax rates and discount rate. The discount rate used in the model represents a weighted average cost of capital and the perceived risk associated with an intangible asset such as our franchise operating rights. The estimates and assumptions made in our valuations are inherently subject to significant uncertainties, many of which are beyond our control, and there is no assurance that these results can be achieved. The primary assumptions for which there is a reasonable possibility of the occurrence of a variation that would significantly affect the measurement value include the assumptions regarding revenue growth, programming expense growth rates, the amount and timing of capital expenditures and the discount rate utilized.

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        We also, at least annually on October 1, evaluate our goodwill for impairment for each reporting unit (which generally are represented by geographical operations of cable systems managed by us). For evaluation of our goodwill, we utilize discounted cash flow analysis to estimate the fair value of each reporting unit and compare such value to the carrying amount of the reporting unit. In the event that the carrying amount exceeds the fair value, we would be required to estimate the fair value of the assets and liabilities of the reporting unit as if the unit was acquired in a business combination, thereby revaluing goodwill. Any excess of the carrying value of goodwill over the revalued goodwill would be expensed as an impairment loss.

Fair Value Measurements

        GAAP provides guidance for a framework for measuring fair value in the form of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Financial assets and liabilities are classified by level in their entirety based upon the lowest level of input that is significant to the fair value measurement. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability due to the fact there is no market activity. We record our interest rate swaps and interest rate caps at fair value on the balance sheet and perform recurring fair value measurements with respect to these derivative financial instruments. The fair value measurements of our interest rate swaps were determined using cash flow valuation models. The inputs to the cash flow models consist of, or are derived from, observable data for substantially the full term of the swaps. This observable data includes interest and swap rates, yield curves and credit ratings, which are retrieved from available market data. The valuations are then adjusted for our own nonperformance risk as well as the counterparty as required by the provisions of the authoritative guidance using a discounted cash flow technique that accounts for the duration of the interest rate swaps and our and the counterparty's risk profile. The fair value of the interest rate caps are calculated using a cash flow valuation model. The main inputs are obtained from quoted market prices, the LIBOR interest rate and the projected three months LIBOR. The observable market quotes are then input into the valuation and discounted to reflect the time value of cash.

        We also have non-recurring valuations primarily associated with (i) the application of acquisition accounting and (ii) impairment assessments, both of which require that we make fair value determinations as of the applicable valuation date. In making these determinations, we are required to make estimates and assumptions that affect the recorded amounts, including, but not limited to, expected future cash flows, market comparables and discount rates, remaining useful lives of long-lived assets, replacement or reproduction costs of property and equipment and the amounts to be recovered in future periods from acquired NOLs and other deferred tax assets. To assist us in making these fair value determinations, we may engage third-party valuation specialists. Our estimates in this area impact, among other items, the amount of depreciation and amortization, and any impairment charges that we may report. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain. A significant portion of our long-lived assets were initially recorded through the application of acquisition accounting, and all of our long-lived assets are subject to periodic or event-driven impairment assessments.

Legal and Other Contingencies

        Legal and other contingencies have a high degree of uncertainty. When a loss from a contingency becomes estimable and probable, a reserve is established. The reserve reflects management's best estimate of the probable cost of ultimate resolution of the matter and is revised as facts and circumstances change. A reserve is released when a matter is ultimately brought to closure, the statute of limitations lapses or facts and circumstances change. The actual costs of resolving a claim may be

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substantially different from the amount of reserve we recorded. In addition, in the normal course of business, we are subject to various other legal and regulatory claims and proceedings directed at or involving us, which in our opinion will not have a material adverse effect on our financial position or results of operations or liquidity.

Programming Agreements

        We exercise significant judgment in estimating programming expense associated with certain video programming contracts. Our policy is to record video programming costs based on our contractual agreements with our programming vendors, which are generally multi-year agreements that provide for us to make payments to the programming vendors at agreed upon market rates based on the number of customers to which we provide the programming service. If a programming contract expires prior to the parties' entry into a new agreement and we continue to distribute the service, we estimate the programming costs during the period there is no contract in place. In doing so, we consider the previous contractual rates, inflation and the status of the negotiations in determining our estimates. When the programming contract terms are finalized, an adjustment to programming expense is recorded, if necessary, to reflect the terms of the new contract. We also make estimates in the recognition of programming expense related to other items, such as the accounting for free periods, timing of rate increases and credits from service interruptions, as well as the allocation of consideration exchanged between the parties in multiple-element transactions.

Income Taxes

        We account for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        As a result of the Restructuring, WOW! Finance became a single member LLC for U.S. federal income tax purposes. The Restructuring is treated as a change in tax status related to WOW! Finance, since a single member LLC is required to record current and deferred income taxes reflecting the results of its operations.

        From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. Examples of such transactions include business acquisitions and dispositions, including dispositions designed to be tax-deferred transactions for tax purposes, investments and certain financing transactions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. We prepare and file tax returns based on interpretations of tax laws and regulations. In the normal course of business, our tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax, interest and penalty assessments by these taxing authorities. In determining our income tax provision for financial reporting purposes, we establish a reserve for uncertain income tax positions unless such positions are determined to be more likely than not of being sustained upon examination, based on their technical merits, and, accordingly, for financial reporting purposes, we only recognize tax benefits taken on the tax return that we believe are more likely than not of being sustained. There is considerable judgment involved in determining whether positions taken on the tax return are more likely than not of being sustained.

        We adjust our tax reserve estimates periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The consolidated income tax provision of any given year includes adjustments to prior year income tax accruals that are considered appropriate and any related estimated interest. Our policy is to recognize, when applicable, interest and penalties on uncertain income tax positions as part of income tax provision.

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Homes Passed and Subscribers

        We report homes passed as the number of residential units, such as single residence homes, apartments and condominium units passed by our broadband network and listed in our database. We report total subscribers as the number of subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe. We define each of the individual HSD subscribers, Video subscribers and Telephony subscribers as a RGU. The following table summarizes homes passed, total subscribers and total RGUs for our services as of each respective date:

 
   
   
   
   
   
   
   
   
   
  Increase /
(Decrease)(4)(5)
 
 
  Dec. 31,
2014
  Mar. 31,
2015
  Jun. 30,
2015
  Sep. 30,
2015
  Dec. 31,
2015
  Mar. 31,
2016
  Jun. 30,
2016
  Sep. 30,
2016
  Dec. 31,
2016(2)(3)
  Dec. 31,
2014 vs.
Dec. 31,
2015
  Dec. 31,
2015 vs.
Dec. 31,
2016
 

Homes passed

    2,985,000     2,988,600     2,993,100     2,997,200     3,003,100     3,010,700     3,022,800     3,075,000     3,094,300     18,100     91,200  

Total subscribers(1)

    809,100     799,200     787,100     781,700     777,800     784,600     785,600     800,800     803,400     (31,300 )   25,600  

HSD RGUs

   
727,800
   
722,000
   
713,100
   
712,300
   
712,500
   
722,200
   
725,700
   
742,000
   
747,400
   
(15,300

)
 
34,900
 

Video RGUs

    634,700     606,500     582,700     564,500     547,500     537,200     524,300     514,900     501,400     (87,200 )   (46,100 )

Telephony RGUs

    359,400     339,600     324,500     310,600     296,800     286,600     277,500     267,400     258,100     (62,600 )   (38,700 )

Total RGUs

    1,721,900     1,668,100     1,620,300     1,587,400     1,556,800     1,546,000     1,527,500     1,524,300     1,506,900     (165,100 )   (49,900 )

(1)
Defined as the number of subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe.

(2)
Includes the following homes passed and subscriber numbers related to our NuLink acquisition which closed on September 9, 2016: homes passed was 35,700; total subscribers was 14,900; HSD RGUs was 13,400; Video RGUs was 9,400; Telephony RGUs was 3,400; and Total RGUs was 26,200.

(3)
Includes the following homes passed and subscriber numbers related to our Lawrence, Kansas system which was divested on January 12, 2017: homes passed was 68,000; total subscribers was 31,100; HSD RGUs was 28,500; Video RGUs was 15,000; Telephony RGUs was 7,000; and Total RGUs was 50,500.

(4)
Increase (decrease) in homes passed and subscriber numbers during the twelve months ended December 31, 2015 related to edge-outs is zero for all categories as investments in edge-outs did not begin until the fiscal year ended December 31, 2016.

(5)
Increase (decrease) in homes passed and subscriber numbers during the twelve months ended December 31, 2016 related to edge-outs includes the following; homes passed was 38,500; total subscribers was 8,900; HSD RGUs was 8,900; Video RGUs was 5,400; Telephony RGUs was 1,900; and Total RGUs was 16,200.

        Subscriber information for acquired entities is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies. While we take appropriate steps to ensure subscriber information is presented on a consistent and accurate basis at any given balance sheet date, we periodically review our policies in light of the variability we may encounter across our different markets due to the nature and pricing of products and services and billing systems. Accordingly, we may from time to time make appropriate adjustments to our subscriber information based on such reviews.

        For the year ended December 31, 2016, total subscribers increased by approximately 25,600 compared to the year ended December 31, 2015. Excluding the impact of the NuLink acquisition and edge-outs, total subscribers increased by approximately 1,800 over this period.

        For the year ended December 31, 2016, total HSD RGUs increased by approximately 34,900 compared to the year ended December 31, 2015. Excluding the impact of the NuLink acquisition and edge-outs, total HSD RGUs increased by approximately 12,600 over this period.

        For the year ended December 31, 2016, total Video RGUs decreased by approximately 46,100. Excluding the impact of the NuLink acquisition and edge-outs, Video RGUs decreased by approximately 60,900 over this period.

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        For the year ended December 31, 2016, total Telephony RGUs decreased by approximately 38,700. Excluding the impact of the NuLink acquisition and edge-outs, total Telephony RGUs decreased by approximately 44,000 over this period.

        For the year ended December 31, 2016, total RGUs decreased by approximately 49,900. Excluding the impact of the NuLink acquisition and edge-outs, total RGUs decreased by approximately 92,300 over this period.

Financial Statement Presentation

    Revenue

        Our operating revenue is primarily derived from monthly charges for HSD, Video, Telephony and other services to residential and business services customers, in addition to advertising and other revenues.

    HSD revenue consists primarily of fixed monthly fees for data service and rental of cable modems.

    Video revenue consists of fixed monthly fees for basic, premium and digital cable television services and rental of video converter equipment, as well as fees from pay-per-view, VOD and other events that involve a charge for each viewing.

    Telephony revenue consists primarily of fixed monthly fees for local service and enhanced services, such as call waiting, voice mail and measured and flat rate long-distance service.

    Other revenue consists primarily of advertising, franchise and other regulatory fees, broadband carrier services, dark fiber sales and installation services.

        Revenues attributable to monthly subscription fees charged to customers for our HSD, Video and Telephony services provided by our cable systems were 87%, 89% and 90% for the years ended December 31, 2016, 2015 and 2014, respectively. Historically, these customer relationships could be discontinued by the customer at any time without penalty. Beginning in March 2016, we began offering one and two year contracts that contain early termination fees upon cancellation prior to the contact terms. The remaining approximately 10% of non-subscription revenue is derived primarily from advertising revenues, franchise and other regulatory fee revenues (which are collected by us but then paid to local authorities), installation fees and commissions related to the sale of merchandise by home shopping services.

    Costs and Expenses

        Our expenses primarily consist of operating, selling, general and administrative expenses, depreciation and amortization expense, interest expense and realized and unrealized gain on derivative instruments, net.

        Operating expenses primarily include programming costs, data costs, transport costs and network access fees related to our HSD and Telephony services, cable service related expenses, costs of dark fiber sales, network operations and maintenance services, customer service and call center expenses, bad debt, billing and collection expenses and franchise and other regulatory fees.

        Selling, general and administrative expenses primarily include salaries and benefits of corporate and field management, sales and marketing personnel, human resources and related administrative costs.

        Operating and selling, general and administrative expenses exclude depreciation and amortization expense, which is presented separately in the accompanying consolidated statement of operations.

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        Depreciation and amortization expenses include depreciation of our broadband networks and equipment, buildings and leasehold improvements and amortization of other intangible assets with definite lives primarily related to acquisitions.

        Realized and unrealized gain on derivative instruments, net includes adjustments to fair value for the various interest rate swaps and caps we enter on the required portions of our outstanding variable debt. As we do not use hedge accounting for financial reporting purposes, the adjustment to fair value of our interest rate swaps and caps are recorded to earnings at the end of each reporting period.

        We control our costs of operations by maintaining strict controls on expenditures. More specifically, we are focused on managing our cost structure by improving workforce productivity, increasing the effectiveness of our purchasing activities and maintaining discipline in customer acquisition. We expect programming expenses to continue to increase due to a variety of factors, including increased demands by owners of some broadcast stations for carriage of other services, payments to those broadcasters for retransmission consent and annual increases imposed by programmers with additional selling power as a result of media consolidation. We have not been able to fully pass these increases on to our customers without the loss of customers nor do we expect to be able to do so in the future.

Results of Operations

    Yearly Comparison

Year Ended December 31, 2016 Compared to Year Ended December 31, 2015

 
  Year Ended
December 31,
  Change  
 
  2016   2015   $   %  
 
  (in millions)
 

Revenue

  $ 1,237.0   $ 1,217.1   $ 19.9     2 %

Costs and expenses:

                         

Operating (excluding depreciation and amortization)

    668.3     678.6     (10.3 )   (2 )%

Selling, general and administrative

    116.4     110.6     5.8     5 %

Depreciation & amortization

    207.0     221.1     (14.1 )   (6 )%

Management fee to related party

    1.7     1.9     (0.2 )   (11 )%

    993.4     1,012.2     (18.8 )   (2 )%

Income from operations

    243.6     204.9     38.7     19 %

Other income (expense):

                         

Interest expense

    (211.1 )   (226.0 )   14.9     7 %

Realized and unrealized gain on derivative instruments, net              

    2.3     5.6     (3.3 )   (59 )%

Loss on early extinguishment of debt

    (38.0 )   (22.9 )   (15.1 )   (66 )%

Other (expense) income, net

    2.2     (0.4 )   2.6       *

Loss before provision for income taxes

    (1.0 )   (38.8 )   37.8     97 %

Income tax benefit (expense)

    27.3     (9.9 )   37.2       *

Net income (loss)

  $ 26.3   $ (48.7 ) $ 75.0       *

*
Not meaningful

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    Revenue

        Revenue for the year ended December 31, 2016 increased $19.9 million, or 2%, compared to revenue for the year ended December 31, 2015.

 
  Year Ended
December 31,
  Change  
 
  2016   2015   $   %  
 
  (in millions)
 

Residential subscription

  $ 966.3   $ 987.3   $ (21.0 )   (2 )%

Business services subscription

    109.1     99.7     9.4     9 %

Total subscription

    1,075.4     1,087.0     (11.6 )   (1 )%

Other business services

    45.6     24.0     21.6     90 %

Other

    116.0     106.1     9.9     9 %

  $ 1,237.0   $ 1,217.1   $ 19.9     2 %

        Total subscription revenue for the year ended December 31, 2016 declined $11.6 million, or 1%, compared to the year ended December 31, 2015. Of this decline, approximately $102.7 million was attributable to a decrease in RGUs compared to the year ended December 31, 2015. Partially offsetting this decrease was an $84.7 million increase in the ARPU of our customer base which is calculated as subscription revenue for each of the HSD, Video and Telephony services divided by the average total RGUs for each service category for the respective period. Additionally, we had an overall increase in subscription revenue of $6.4 million attributable to our NuLink acquisition.

        Other business services revenue for the year ended December 31, 2016 increased $21.6 million, or 90%, compared to the year ended December 31, 2015. The increase in other business services revenue is primarily due to non-recurring revenue generated by our network construction activities and increases in our recurring revenue related to our fiber network.

        The increase in other revenue of $9.9 million, or 9%, is partially due to increases in advertising revenue.

        The following table details subscription revenue by service offering for the years ended December 31, 2016 and December 31, 2015:

 
  Year Ended
December 31,
  Change  
 
  2016   2015   $   %  
 
  (in millions)
 

HSD subscription

  $ 373.1   $ 351.9   $ 21.2     6 %

Video subscription

    547.1     547.4     (0.3 )     *

Telephony subscription

    155.2     187.7     (32.5 )   (17 )%

  $ 1,075.4   $ 1,087.0   $ (11.6 )   (1 )%

*
Not meaningful

        HSD subscription revenue increased $21.2 million, or 6%, during the year ended December 31, 2016 compared to the year ended December 31, 2015. The increase in HSD subscription revenue is primarily attributable to a $16.1 million increase year over year in HSD ARPU, a $1.5 million increase related to a year over year increase in average HSD RGUs and an increase of $3.6 million in HSD subscription revenue related to our NuLink acquisition.

        Video subscription revenue decreased $0.3 million, during the year ended December 31, 2016 compared to the year ended December 31, 2015. The decrease is primarily attributable to a year over

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year decrease of $74.7 million in Video RGUs. This decrease was offset by an increase of $72.0 million in Video ARPU and a $2.4 million increase in Video subscription revenue related to our NuLink acquisition.

        Telephony subscription revenue decreased $32.5 million, or 17%, during the year ended December 31, 2016 compared to the year ended December 31, 2015. The decrease is primarily attributable to a $29.4 million decrease year over year in Telephony RGUs and $3.5 million decrease year over year in Telephony ARPU. Partially offsetting these decreases was an increase of $0.4 million in Telephony subscription revenue related to our NuLink acquisition.

    Operating Expenses (Excluding Depreciation and Amortization)

        Operating expenses (excluding depreciation and amortization) decreased $10.3 million, or 2%, for the year ended December 31, 2016, as compared to the year ended December 31, 2015. The decreases are primarily due to decreased Video programing costs and direct Telephony costs that correlate to the decreases in Video and Telephony RGUs and decrease in our customer bad debt expense when compared to the prior year ended December 31, 2015. Partially offsetting these decreases were increases in employee related costs, the NuLink acquisition and increased costs related to our network construction activities when compared to the prior year ended December 31, 2015. Due to the nature of our construction contracts, we record this expense as a pass-through with the corresponding offset in our other business services revenue. Programming costs for the year ended December 31, 2016 were $358.4 million, compared to $374.1 million for the year ended December 31, 2015, representing a decrease of $15.7 million or 4.2%.

    Selling, General and Administrative Expenses

        Selling, general and administrative expenses increased $5.8 million, or 5%, in the year ended December 31, 2016, as compared to the year ended December 31, 2015. The increases are primarily due to increases in our sales and marketing efforts and employee related costs, as well as overall cost related to our NuLink acquisition.

    Depreciation and Amortization

        Depreciation and amortization expenses decreased $14.1 million, or 6%, in the year ended December 31, 2016, as compared to the year ended December 31, 2015. The decrease is primarily due to certain intangible assets related to our acquisitions becoming fully amortized and an increase in retirements of fully depreciated assets during the year ended December 31, 2016.

    Management Fee to Related Party

        We pay a quarterly management fee of $0.4 million plus any travel and miscellaneous expenses equally to Avista and Crestview. No management fees were paid to Crestview in 2015.

    Interest Expense

        Interest expense decreased $14.9 million, or 7%, in the year ended December 31, 2016, as compared to the year ended December 31, 2015. The decrease resulted from lower average outstanding debt and lower interest rates in connection with the refinancing of our Term B loans and the retirement of our higher interest rate Senior Subordinated Debt during the year ended December 31, 2016.

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    Realized and Unrealized Gain on Derivative Instruments, Net

        Realized and unrealized gain on derivative instruments was $2.3 million and $5.6 million for the years ended December 31, 2016 and 2015, respectively. As we do not use hedge accounting for financial reporting purposes, the adjustments to fair value of our interest rate swaps and caps are recorded to earnings at the end of each reporting period. Our interest rate swap expired on July 1, 2016.

    Loss on Early Extinguishment of Debt

        In connection with our Sixth Amendment and Fifth Amendment to our Credit Agreement related to the refinancing of our Term B loans, we recorded a loss on extinguishment of debt of $16.8 million during the year ended December 31, 2016, representing the expensing of third party arranger fees and write-off of unamortized deferred financing costs. Additionally, on December 18, 2016, September 15, 2016 and July 15, 2016, we made principal payments on our Senior Subordinated Notes and recorded a loss on extinguishment of debt in the amount of $21.2 million, representing early prepayment penalties and write-off of deferred financing costs.

        In connection with our May 21, 2015 Third Amendment refinancing of our Term B loans, we recorded a loss on extinguishment of debt, representing the expensing of prior deferred financing costs of $22.9 million during the year ended December 31, 2015.

    Other (Expense) Income, net

        Other income (expense), net increased $2.6 million for the year ended December 31, 2016 when compared to the same period ended December 31, 2015. During the year ended December 31, 2016, we sold our investment in Tower Cloud Inc. ("Tower Cloud") and recorded a gain on the sale of $2.2 million. In connection with the sale of our investment in Tower Cloud, we may realize future earn-out consideration over the next three years ranging from zero to $10.7 million, dependent upon Tower Cloud's ability to consummate certain transactions. There can be no assurances, however, that we will realize any of this future earn-out consideration.

    Income Taxes Benefit (Expense)

        The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        As a result of the Restructuring, WOW! Finance became a single member LLC for U.S. federal income tax purposes. The Restructuring is treated as a change in tax status related to WOW! Finance, since a single member LLC is required to record current and deferred income taxes reflecting the results of its operations. We do not anticipate that the Restructuring will have any significant impact on future operating cash flows, however, as WOW! has NOL carryforwards that would significantly reduce any required prospective tax payments.

        The Company reported a total income tax benefit of $27.3 million during the fiscal year ended December 31, 2016. The change in WOW! Finance's tax status related to the Restructuring resulted in a deferred tax expense of $57.7 million during the fiscal year ended December 31, 2016. The $57.7 million consisted of $138.9 million in additional deferred tax liabilities that were required as a result of the change in tax status, $14.1 million in additional deferred tax liabilities that were recorded due to state income tax rate impacts and a deferred tax benefit of $95.3 million related to the removal of existing deferred tax liabilities attributable to the Company's investment in C corporation

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subsidiaries. In addition, as a result of the WOW! Finance's change in tax status, the Company recorded a deferred tax benefit of $103.6 million due to a reversal of a portion of its existing valuation allowance.

        At December 31, 2016, the Company had available federal NOL carryforwards of approximately $833.8 million that expire between 2023 and 2036. We expect to utilize between approximately $110 million and $130 million of our NOL carryforwards during 2017 due to the sale of our Lawrence system which closed on January 12, 2017, subject to finalization. Approximately $146.0 million of this NOL carryforward is subject to an annual utilization limitation under Section 382 due to one or more changes in ownership of Knology as of the date of the Company's acquisition of Knology in 2012. The Company has analyzed the potential Section 382 limitation on its NOL carryforwards and determined that, although $146.0 million of this carryforward relating to Knology is subject to an annual Section 382 limitation, based on the fair market value of Knology at the time of the Company's acquisition of Knology and Knology's NUBIG position, the NUBIG has resulted in a significant increase in the Company's annual Section 382 limitation. The NUBIG is determined based on the difference between the fair market value of Knology's assets and the tax basis of Knology's assets as of the ownership change date. Because of the existence of the NUBIG, the annual limitation imposed by Section 382 was significantly increased each year during the five-year period beginning on the date of the Section 382 ownership change (the "recognition period"). The increased annual limitation arising from the NUBIG is available on a cumulative basis during and after the recognition period following the Section 382 ownership change to offset taxable income. Accordingly, the Company expects that the Section 382 limitation relating to the $146.0 million of available NOL carryforwards will not result in any significant impacts on the Company's ability to utilize its NOL carryforwards to offset future taxable income nor will have significant impact on future operating cash flows.

        The Company also had various state NOL carryforwards totaling approximately $646.4 million. Unless utilized, the state carryforwards expire from 2018 to 2036. Of this amount, approximately $166.3 million is subject to an annual limitation due to an ownership change of the Company, as previously noted.

        The Company anticipates that the offering will result in an additional change of ownership under Section 382. The Company has analyzed the potential Section 382 impacts on its NOL carryforwards in the event of an additional Section 382 ownership change due to the offering and determined that, although it is likely there would be additional Section 382 limitation, based on the Company's anticipated fair market value and the Company's projected NUBIG position, a significant increase in the Company's projected Section 382 limitation would result. Accordingly, we believe that a prospective Section 382 limitation as a result of the offering will not result in any significant impacts on the Company's ability to utilize its NOL carryforwards to offset future taxable income nor will have significant impact on future operating cash flows.

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Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

 
  Year Ended
December 31,
  Change  
 
  2015   2014   $   %  
 
  (in millions)
   
   
 

Revenue

  $ 1,217.1   $ 1,264.3   $ (47.2 )   (4 )%

Costs and expenses:

                         

Operating (excluding depreciation and amortization)

    678.6     737.0     (58.4 )   (8 )%

Selling, general and administrative

    110.6     135.8     (25.2 )   (19 )%

Depreciation and amortization

    221.1     251.3     (30.2 )   (12 )%

Management fee to related party

    1.9     1.7     0.2     12 %

    1,012.2     1,125.8     (113.6 )   (10 )%

Income from operations

    204.9     138.5     66.4     48 %

Other income (expense):

                         

Interest expense

    (226.0 )   (237.0 )   11.0     5 %

Realized and unrealized gain on derivative instruments, net

    5.6     4.1     1.5     37 %

Gain on sale of assets

        52.9     (52.9 )     *

Loss on early extinguishment of debt

    (22.9 )       (22.9 )     *

Other income (expense), net

    (0.4 )   3.4     (3.8 )   (112 )%

Loss before provision for income taxes

    (38.8 )   (38.1 )   (0.7 )   (2 )%

Income tax benefit (expense)

    (9.9 )   10.8     (20.7 )     *

Net loss

  $ (48.7 ) $ (27.3 ) $ (21.4 )   (78 )%

*
Not meaningful

    Revenue

        Revenue for the year ended December 31, 2015 decreased $47.2 million, or 4%, compared to revenue for the year ended December 31, 2014.

 
  Year Ended
December 31,
  Change  
 
  2015   2014   $   %  
 
  (in millions)
 

Residential subscription

  $ 987.3   $ 1,038.2   $ (50.9 )   (5 )%

Business services subscription

    99.7     95.8     3.9     4 %

Total subscription

    1,087.0     1,134.0     (47.0 )   (4 )%

Other business services

    24.0     24.6     (0.6 )   (2 )%

Other

    106.1     105.7     0.4     %

  $ 1,217.1   $ 1,264.3   $ (47.2 )   (4 )%

        Total subscription revenue for the year ended December 31, 2015 declined $47.0 million, or 4%, compared to the year ended December 31, 2014. Of this decline, approximately $56.6 million was attributable to the disposition of the South Dakota systems on September 30, 2014. Excluding the impact of the disposition of our South Dakota systems, total subscription revenue decreased $53.9 million as a result of year over year reductions in average total RGUs. Offsetting these decreases was a $63.5 million increase in total subscription revenue as a result of increases in the ARPU of our customer base, which is calculated as subscription revenue for each of the HSD, Video and Telephony services divided by the average total RGUs for each service category for the respective period.

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        The following table details Subscription Revenue by service offering for the years ended December 31, 2015 and December 31, 2014:

 
  Year Ended
December 31,
  Change  
 
  2015   2014   $   %  
 
  (in millions)
 

HSD subscription

  $ 351.9   $ 353.4   $ (1.5 )    

Video subscription

    547.4     557.1     (9.7 )   (2 )%

Telephony subscription

    187.7     223.5     (35.8 )   (16 )%

  $ 1,087.0   $ 1,134.0   $ (47.0 )   (4 )%

        HSD subscription revenue decreased $1.5 million, which includes a $16.8 million decrease attributable to the disposition of our South Dakota systems on September 30, 2014. Excluding the impact of the disposition of our South Dakota systems, HSD subscription revenue increased by a net $10.4 million as a result of a year over year increase in average HSD RGUs and a net $4.9 million increase in HSD ARPU when compared to the prior year ended December 31, 2014.

        Video subscription revenue decreased $9.7 million, which includes a $19.8 million decrease attributable to the disposition of our South Dakota systems on September 30, 2014. Excluding the impact of the disposition of our South Dakota systems, Video subscription revenue decreased by a net $48.1 million as a result of year over year decreases in average Video RGUs. Offsetting these volume decreases was a net increase of $58.2 million as a result of year over year increases in Video ARPU.

        Telephony subscription revenue decreased $35.8 million, which includes a $19.9 million decrease attributable to the disposition of our South Dakota systems on September 30, 2014. Excluding the impact of the disposition of our South Dakota systems, Telephony subscription revenue decreased by a net $16.3 million as a result of year over year decreases in average Telephony RGUs. Partially offsetting these volume reductions was a net increase of $0.4 million as a result of year over year increases in Telephony ARPU.

    Operating Expenses (Excluding Depreciation and Amortization)

        Operating expenses (excluding depreciation and amortization) decreased $58.4 million, or 8%, in the year ended December 31, 2015, as compared to the year ended December 31, 2014. Approximately $31.0 million of this decrease is related to the sale of our South Dakota systems on September 30, 2014. In addition, operating expenses decreased by $10.0 million as a result of lower subscribers during the year ended December 31, 2015. The remaining $17.4 million decrease is primarily attributable to savings related to our reduction in workforce implemented during the fourth quarter of the fiscal year ended December 31, 2014 and from the efficiencies derived from operational and process enhancements we implemented during the fiscal year ended December 31, 2015. Programming costs for the year ended December 31, 2015 were $374.1 million, compared to $391.3 million for the year ended December 31, 2014, representing a decrease of $17.2 million, or 4%.

    Selling, General and Administrative Expenses

        Selling, general and administrative expenses decreased $25.2 million, or 19%, in the year ended December 31, 2015, as compared to the year ended December 31, 2014. Approximately $3.5 million of this decrease is related to the sale of our South Dakota systems on September 30, 2014. The remaining $21.7 million decrease is primarily attributable to the reduction in integration related expenses associated with our 2012 acquisition of Knology that were incurred during the fiscal year ended December 31, 2014.

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    Depreciation and Amortization

        Depreciation and amortization expenses decreased $30.2 million, or 12%, in the year ended December 31, 2015, as compared to the year ended December 31, 2014, primarily due to the sale of our South Dakota systems on September 30, 2014.

    Management Fee to Related Party

        We pay a quarterly management fee of $0.4 million plus any travel and miscellaneous expenses equally to Avista and Crestview. No management fees were paid to Crestview in 2015 or 2014.

    Interest Expense

        Interest expense decreased $11.0 million, or 5%, in the year ended December, 2015, as compared to the year ended December 31, 2014. This decrease resulted from lower outstanding debt and lower interest rates in connection with the refinancing of our Term B loans and a principal payment of $150.0 million made in May 2015.

    Realized and Unrealized Gain on Derivative Instruments, Net

        Realized and unrealized gain on derivative instruments, net, increased to a net gain of $5.6 million for the year ended December 31, 2015, as compared to a net gain of $4.1 million in the year ended December 31, 2014. As we do not use hedge accounting for financial reporting purposes, the adjustments to fair value of our interest rate swaps and caps are recorded to earnings at the end of each reporting period.

    Gain on Sale of Assets

        For the year ended December 31, 2014, we recorded a gain on sale of assets related to the disposition of our South Dakota systems (see Note 5 to our combined consolidated statements included elsewhere in this prospectus) totaling $52.9 million.

    Loss on Early Extinguishment of Debt

        In connection with our May 21, 2015 Third Amendment refinancing of our Term B loans, we recorded a loss on extinguishment of debt representing the expensing of prior deferred financing costs of $22.9 million during the twelve months ended December 31, 2015.

    Other Income (Expense), net

        Other income (expense), net decreased $3.8 million for the year ended December 31, 2015 when compared to the same period ended December 31, 2014. During the year ended December 31, 2014, we recorded a reduction to the contingent liability related to our Bluemile acquisition in the amount of $2.9 million.

    Income Taxes Benefit (Expense)

        The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        The Company reported total income tax expense of $9.9 million during the fiscal year ended December 31, 2015 which included $16.4 million in deferred tax expense as a result of an increase in the valuation allowance.

        At December 31, 2015, the Company had available federal NOL carryforwards of approximately $797.6 million that expire between 2025 and 2035. Approximately $146.0 million of this NOL

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carryforward is subject to an annual utilization limitation under Section 382 due to one or more changes in ownership of Knology as of the date of the Company's acquisition of Knology in 2012. The Company has analyzed the potential Section 382 limitation on its NOL carryforwards and determined that, although $146.0 million of this carryforward relating to Knology is subject to an annual Section 382 limitation, based on the fair market value of Knology at the time of the Company's acquisition of Knology and Knology's NUBIG position, the NUBIG has resulted in a significant increase in the Company's annual Section 382 limitation. The NUBIG is determined based on the difference between the fair market value of Knology's assets and Knology's tax basis as of the ownership change date. Because of the existence of the NUBIG, the annual limitation imposed by Section 382 was significantly increased each year during the recognition period. The increased annual limitation arising from the NUBIG is available on a cumulative basis during and after the recognition period following the Section 382 ownership change to offset taxable income. Accordingly, the Company expects that the Section 382 limitation relating to the $146.0 million of available NOL carryforwards will not result in any significant impacts on the Company's ability to utilize its NOL carryforwards to offset future taxable income nor will have significant impact on future operating cash flows.

        The Company also had various state NOL carryforwards totaling approximately $656.1 million. Unless utilized, the state carryforwards expire from 2019 to 2035. Of this amount, approximately $151.6 million is subject to an annual limitation due to an ownership change of the Company, as previously noted.

Liquidity and Capital Resources

        On December 18, 2015, under a purchase agreement entered into by Parent, Avista and Crestview (the "Crestview Purchase Agreement"), Crestview's funds purchased units held by Avista and other unitholders, and made a $125.0 million primary investment in newly-issued units. On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in the Parent. As of December 31, 2016, $123.0 million of proceeds from these transactions have been contributed to us while the remaining $20.1 million, net of accrued and paid transaction expenses, have been recorded to the Parent's balance sheet and have not been pushed down and reflected in our condensed consolidated financial statements.

        On July 15, 2016, we utilized existing cash balances and working capital funds to make a $69.7 million payment towards the 13.38% Senior Subordinated Notes. Such payment included a partial redemption totaling $46.9 million of the outstanding principal balance of the notes, call premium of $3.1 million and the payment of accrued interest on the notes of $19.7 million.

        On September 15, 2016, we redeemed an additional $159.1 million in principal amount outstanding of our 13.38% Senior Subordinated Notes. In addition to the principal redemption, we paid $10.7 million in call premium and $3.5 million in accrued interest.

        On December 18, 2016, we used the proceeds that were contributed down from the Parent, borrowed $10.0 million on our revolver and used existing cash balances to redeem our Senior Subordinated Notes in full. We paid $89.0 million in outstanding principal, $5.0 million in accrued interest and $6.0 million in a call premium in connection with such early retirement.

        At December 31, 2016, we had $129.5 million in current assets, including $30.8 million in cash and cash equivalents, and $251.0 million in current liabilities. Our outstanding consolidated debt and capital lease obligations aggregated $2,871.2 million, of which $22.7 million is classified as current in our consolidated balance sheet.

        We are required to prepay principal amounts under our Senior Secured Credit Facilities credit agreement if we generate excess cash flow, as defined in the credit agreement. At December 31, 2016, we had borrowing capacity of $182.7 million under our Revolving Credit Facility and were in compliance with all of our debt covenants. Accordingly, we believe that we have sufficient resources to

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fund our obligations and foreseeable liquidity requirements in the near term and for the foreseeable future.

        On January 12, 2017, we consummated the divestiture of substantially all of the operating assets of our Lawrence, Kansas system to MidCo. In connection with the closing of this transaction, we received $210.9 million in net cash consideration representing gross proceeds of approximately $215.0 million less certain normal and customary purchase price adjustments set forth in the agreement and transaction related fees and expenses.

        On March 20, 2017, we redeemed approximately $95.1 million in aggregate principal amount of Senior Notes using cash on hand. Following such redemption, $729.9 million in aggregate principal amount of 10.25% Senior Notes remain outstanding.

Historical Operating, Investing and Financing Activities

    Operating Activities

        Net cash provided by operating activities decreased $17.0 million from $208.2 million for the year ended December 31, 2015 to $191.2 million for the year ended December 31, 2016. The decrease is primarily due to cash payments associated with fees for the early extinguishment of debt related to our refinancing activities for the year ended December 31, 2016 compared to the year ended December 31, 2015. Partially offsetting this decrease was an increase in operating income for the year ended December 31, 2016 compared to the year ended December 31, 2015.

        Net cash provided by operating activities increased $6.7 million from $201.5 million for the year ended December 31, 2014 to $208.2 million for the year ended December 31, 2015. The increase is due primarily to an increase in operating earnings and changes in operating assets and liabilities.

    Investing Activities

        Net cash used in investing activities increased $88.9 million from $232.5 million cash used in investing activities for the year ended December 31, 2015 to $321.4 million cash used in investing activities for the year ended December 31, 2016. The increase is primarily due to our NuLink acquisition of $54.3 million. Capital expenditures were $287.5 million and $231.9 million for the years ended December 31, 2016 and 2015, respectively. The increase in capital expenditures is primarily due to our build out of our fiber network in our Midwest region and the resumption of our edge-out strategy. Partially offsetting these cash uses was a one-time sale of our investment in Tower Cloud Inc. of $17.7 million.

        Net cash provided by (used in) investing activities decreased $238.1 million from $5.6 million cash provided by investing activities for the year ended December 31, 2014 to $232.5 million cash used in investing activities for the year ended December 31, 2015. The decrease in cash provided by investing activities is due primarily to the receipt of cash proceeds of $262.0 million from the sale of our South Dakota systems during the year ended December 31, 2014. Partially offsetting this decrease was a $20.0 million decrease in our capital expenditures for the year ended December 31, 2015 compared to the same period ended December 31, 2014.

        Capital expenditures will continue to be driven primarily by customer demand for our services. In the event we may have higher-than-expected customer demand for our services, this would result in higher revenue and income from operations, but such increased demand could also increase our projected capital expenditures.

    Financing Activities

        Net cash provided by (used in) financing activities increased $267.4 million from $173.0 million used in financing activities for the year ended December 31, 2015 to $94.4 million provided by financing activities for the year ended December 31, 2016. The increase for the year ended December 31, 2016 is primarily due to the additional $240.0 million of proceeds from the refinancing

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of our Term B loans plus a contribution from the Parent of $123.0 million. Adding to this increase was a pay down of $150.0 million on our Term B-1 loans during the year ended December 31, 2015. Partially offsetting these increases were additional payments and redemptions of approximately $295.0 million on our Senior Subordinated Notes during the year ended December 31, 2016.

        Net cash provided by (used in) financing activities decreased $212.9 million from $39.9 million provided by financing activities for the year ended December 31, 2014 to $173.0 million used in financing activities for the year ended December 31, 2015. The change is primarily due to the payment of $150.0 million on our Term B and Term B-1 loans in May 2015 associated with the refinancing of our Term B Loans.

    Contractual Obligations

        We have obligations to make future payments for goods and services under certain contractual arrangements. These contractual obligations secure the future rights to various assets and services to be used in the normal course of our operations. In accordance with applicable accounting rules, the future rights and obligations pertaining to firm commitments, such as operating lease obligations and certain purchase obligations under contracts, are not reflected as assets or liabilities in the accompanying consolidated balance sheet. The long term debt obligations are our principal payments on cash debt service obligations. Capital lease obligations are future lease payments on certain video equipment and vehicles. Operating lease obligations are the future minimum rental payments required under the operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2016.

        The following table summarizes certain of our obligations as of December 31, 2016 and the estimated timing and effect that such obligations are expected to have on our liquidity and cash flows in future periods (in millions):

 
  Payment due by period  
 
  Total   2017   2018 - 2019   2020 - 2021   Thereafter  

Long term debt obligations

  $ 2,889.2   $ 30.7   $ 872.3   $ 41.4   $ 1,944.8  

Fixed-rate interest(1)

    253.7     84.6     169.1          

Capital lease obligations

    4.9     2.2     2.3     0.4      

Operating lease obligations(2)

    28.8     7.7     11.9     5.7     3.5  

Total

  $ 3,176.6   $ 125.2   $ 1,055.6   $ 47.5   $ 1,948.3  

(1)
The fixed rate interest payments included in the table above assumes that our fixed-rate Notes outstanding as of December 31, 2016 will be held to maturity. Interest payments associated with our variable-rate debt have not been included in the table. Assuming that our $2,059.8 million of variable-rate Senior Secured Credit Facilities as of December 31, 2016 are held to maturity, and utilizing interest rates in effect at December 31, 2016, our annual interest payments (including commitment fees and letter of credit fees) on variable rate Senior Secured Credit Facilities as of December 31, 2016 are anticipated to be approximately $94.6 million for fiscal year 2017, $212.8 million for fiscal years 2018-2019, $225.3 million for fiscal years 2020-2021 and $192.5 million thereafter. The future annual interest obligations noted herein are estimated only in relation to debt outstanding as of December 31, 2016.

(2)
In addition to the above operating lease obligations, we also rent utility poles used in our operations. Generally, pole rentals are cancellable on short notice, but we anticipate that such rentals will recur. Rent expense for pole rental attachments was approximately $6.7 million, $8.0 million and $7.8 million for the years ended December 31, 2016, 2015 and 2014, respectively.

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OUR BUSINESS

Company Overview

        We are the sixth largest cable operator in the United States ranked by number of customers as of December 31, 2016. We provide HSD, Video, Telephony and business-class services to a service area that includes approximately 3.0 million homes and businesses. Our services are delivered across 19 markets via our advanced HFC cable network. Our footprint covers over 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee. Led by our robust HSD offering, our products are available either as a bundle or as an individual service to residential and business services customers. As of December 31, 2016, 772,300 customers subscribed to our services. All statistical and operating information in this section gives effect to the acquisitions of Bluemile, Anne Arundel Broadband and NuLink and the divestitures of the South Dakota systems and Lawrence, Kansas system, except as otherwise noted. For additional detail on these transactions, see "Prospectus Summary—Summary Historical Combined Consolidated Financial Data."

        We believe we have one of the most technologically advanced, fiber-rich networks in our service areas, with approximately 11,500 route miles of intra- and inter-market fiber and approximately 33,500 miles of coaxial cable. We have designed our network with the goal of maximizing Internet speeds and accommodating future broadband demand. Our all-digital HFC infrastructure operates with a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable to 1.2 Ghz throughout. All of our new communities are built with a capacity of 1.2 Ghz. Our HFC network is fully upgraded with DOCSIS 3.0 and is capable of being upgraded to DOCSIS 3.1 in all of our markets. According to CableLabs, a non-profit innovation and research and development lab founded by members of the cable industry, DOCSIS 3.1 technology has the capacity to support network speeds up to 10 Gbps downstream and up to 1 Gbps upstream. We serve an average of 310 homes per node, enabling us to deliver quality HSD service and the capability to provide broadband speeds of 1 Gbps and higher. Our HFC network consists of a high-bandwidth, multi-use service provider backbone, which allows us to centrally source data, voice and video services for both residential and business traffic. We believe the quality and uniform architecture of our next-generation network is a competitive advantage that enables us to offer high-quality broadband services that meet our current and future customers' needs without incurring significant upgrade capital expenditures.

        We operate primarily in economically stable suburbs that are adjacent to large metropolitan areas as well as secondary and tertiary markets, which we believe have favorable competitive and demographic profiles and include businesses operating across a range of industries. We benefit from the ability to augment our footprint by pursuing edge-outs to increase our addressable market and grow our customer base. We have historically made selective capital investments in edge-outs to facilitate growth in residential and business services. Additionally, we provide a range of services to small, medium and large businesses within our footprint, and we believe we have the opportunity to grow our business services market share with our robust product suite.

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Attractive Markets with Favorable Competitive Dynamics

GRAPHIC


Note: "RGUs" represent Revenue Generating Units.

        We are focused on efficient capital spending and maximizing Adjusted EBITDA through an Internet-centric growth strategy while maintaining a profitable video subscriber base. Based on its per subscriber economics, we believe that HSD represents the greatest opportunity to drive increased profitability across our residential and business markets. According to Cisco, North America has experienced significant growth in bandwidth usage in recent years, driven primarily by (i) OTT viewership trends, (ii) a proliferation of connected devices, and (iii) increased customer demand for high-bandwidth business applications, including cloud computing. We believe our superior network infrastructure provides an efficient, scalable platform to meet our current and future customers' needs and deliver services as demand for bandwidth continues to increase. Data compiled by Kagan demonstrates that cable operators have enjoyed an increasing share of new broadband subscribers since 2010, while telephone companies have seen their share of these customers decline year over year. Also based on data compiled by Kagan, from the quarter ended June 30, 2015 through the quarter ended September 30, 2016, the cable industry has captured in excess of a 95% share of wired broadband net subscriber growth in each quarter. We believe the cable industry's net broadband share growth is indicative of a superior product offering relative to other HSD technologies, such as DSL network architecture often utilized in whole or in part by telephone companies.

Our History

        Since commencing operations in 2001, our focus has been to offer a competitive alternative cable service and establish a brand with a strong market position. We have scaled our business through (i) organic subscriber growth and increased penetration within our existing markets and footprint, (ii) edge-outs to grow our footprint, (iii) upgrades to introduce enhanced broadband services to networks we have acquired, (iv) entry into business services, with a broad range of HSD, Video and Telephony products, and (v) acquisitions and integration of cable systems.

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WOW!'s Evolution Over Time

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        After a period of strong growth from 2001 through 2011, we shifted our focus to integrating our acquisitions and strengthening our product offering. Debt service costs associated with the Knology acquisition and capital expenditures necessary for network priorities and integration limited further investment in edge-outs and other growth opportunities through 2015. Through organic growth, normalization of capital expenditures, de-levering and interest cost reduction, we have increased free cash flow generation and renewed our focus on edge-outs and business services. As a result of a stronger balance sheet, we believe we are better positioned to accelerate our growth investments in a meaningful way going forward. The investments we have made in our platform have resulted in overall customer and HSD subscriber growth for the year ended December 31, 2016.

Our Service Offerings

        We offer a complete portfolio of HSD, Video, Telephony and business services products in all of our markets. Our products are available both on an individual and bundled basis across a variety of service tiers tailored to our customers' needs. We have an Internet-centric strategy that focuses on the growth of high-margin HSD subscribers while maintaining the profitability of Video customers.

        A summary of our service offerings is as follows:

Data Services

        As a result of evolving consumer preferences, we are experiencing an increase in customers who purchase HSD-only products. We have made significant investments in our operating platform to offer high-quality HSD services, including speed tiers that allow simultaneous usage of several connected devices in a single household and support high definition ("HD") video streaming. We offer HSD speed tiers up to 500 Mbps in 94% of our footprint with the capability to offer 1 Gbps or more in all of our markets. In the fourth quarter of 2016, we launched a 1 Gbps offering in four of our markets, with additional market launches planned for 2017 in our edge-out communities. As of December 31, 2016, we served approximately 718,900 HSD customers, representing approximately 23.8% penetration of our homes passed. Over the twelve months ended February 28, 2017, our average monthly Internet speed ranking was second out of 62 cable, fiber, DSL, wireless and satellite Internet service providers, or ISPs, according to Netflix's USA ISP Speed Index.

Video Services

        We offer our customers a full array of video services and programming choices. Our Video services include Basic Cable Service, which generally consists of local broadcast television and local community programming, and Digital Cable Service, which offers over 275 channels of digital programming. We offer a full suite of digital video offerings including high-definition TV, DVR and VOD. In

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approximately 79% of our footprint, we also offer our "Ultra" video product, which is a technologically advanced, IP enabled, whole-home DVR solution that integrates traditional linear video, an advanced user interface and direct access to OTT content, such as Netflix and other applications. As of December 31, 2016 we served approximately 486,400 Video customers, representing approximately 16.1% penetration of our homes passed.

Telephony Services

        We provide residential voice services using VoIP. Our Telephony services include local area calling plans, unlimited local and long-distance plans, caller ID and other features. As of December 31, 2016 we served approximately 251,100 Telephony customers, representing approximately 8.3% penetration of our homes passed.

Business Services

        Our broadband network also supports services for small, medium and large businesses within our footprint. We offer our traditional bundled products as well as products that meet the more complex HSD and telephony needs of small, medium and large businesses within our footprint. Our fiber-based services include enhanced telephony services, data speeds of up to 10 Gbps and office-to-office metro Ethernet services, which provide a secure and managed connection between customer locations. We have introduced our Hosted Voice product offering, which can replace customers' legacy private branch exchange ("PBX") products with newer services that offer more flexible features at a lower cost. In addition, we offer SIP trunking services, which are delivered over our fiber services network and terminated via an Ethernet connection at the customer's premise. We have a robust portfolio of colocation infrastructure services, cloud computing, managed backup and recovery services. We serve our business services customers from local customer service offices and network support 24 hours a day, seven days a week.

Our Systems and Markets

        Our systems serve the Midwestern and Southeastern United States. As of December 31, 2016, these networks passed approximately 3.0 million homes and businesses and served approximately 772,300 total customers, reflecting a total customer penetration rate of approximately 25.5%.

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        An overview of our markets as of December 31, 2016 is shown below:

Market(1)
  Homes
Passed
  Network
Miles
< 750 MHz
  Network
Miles 750 to
859 MHz
  Network
Miles
> 860 MHz
  Total
Network
Miles
 

Detroit, MI

    670,865         5,396     633     6,029  

Chicago, IL

    472,432         2,856     347     3,203  

Columbus, OH

    416,829         4,259     352     4,611  

Pinellas, FL

    281,281         3,372         3,372  

Cleveland, OH

    172,877         1,154     665     1,819  

Huntsville, AL

    121,628         1,808     34     1,842  

Baltimore, MD

    111,605         1,225         1,225  

Montgomery, AL

    103,164         1,258         1,258  

Evansville, IN

    100,733             1,218     1,218  

Augusta, GA

    92,675         1,296         1,296  

Charleston, SC

    89,544         1,187         1,187  

Lansing, MI

    87,907     1,000     702     300     2,002  

Columbus, GA

    82,992         1,013         1,013  

Panama City, FL

    76,089         936         936  

Knoxville, TN

    46,542         647         647  

Newnan, GA

    35,723         820         820  

Dothan, AL

    31,837         525         525  

West Point, GA

    17,835         322         322  

Auburn, AL

    13,731         171         171  

    3,026,289     1,000     28,946     3,548     33,495  

(1)
Excludes our Lawrence, Kansas system which we divested on January 12, 2017.

Our Strengths

        We believe the following core competitive strengths enable us to differentiate ourselves:

    Technologically Advanced Platform that Underpins our Competitive Advantage

        Our all-digital, fiber-rich HFC network has a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable throughout the network to 1.2 Ghz to accommodate future broadband demand. The infrastructure is currently operating on DOCSIS 3.0, is capable of being upgraded to DOCSIS 3.1 and serves approximately 310 homes per node. We offer HSD speeds up to 500 Mbps in 94% of our footprint with the capability to offer 1 Gbps or more in all of our markets. In the fourth quarter of 2016, we launched a 1 Gbps offering in four of our markets, with additional market launches planned for 2017 in our edge-out communities. Over the twelve months ended February 28, 2017, our average monthly Internet speed ranking was second out of 62 cable, fiber, DSL, wireless and satellite ISPs, according to Netflix's USA ISP Speed Index.

        We offer a full suite of digital video services, including VOD, high-definition video and DVR. In approximately 79% of our footprint, we also offer our "Ultra" video product, which is a technologically advanced, IP enabled, whole-home DVR solution that integrates traditional linear video, an advanced user interface and direct access to OTT content, such as Netflix and other applications.

        Our technologically advanced network enables us to provide business services customers with a broad portfolio of carrier-class data and voice services, including Direct Internet Access, Ethernet over fiber and HFC, virtual private networks, VoIP solutions, wholesale fiber connectivity, cell backhaul solutions, disaster recovery, cloud back-up and SIP and PRI trunking services. Our advanced business

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services product offering continues to evolve, as we leverage our investment in next generation software enabled infrastructure to launch new services such as a full suite of managed and other virtual services.

        We expect future network-related capital expenditures to be generally stable. We believe that our flexible network architecture will allow us to meet our current and future customers' needs without incurring significant upgrade capital expenditures.

    Value-Accretive Edge-Outs

        We have a proven track record of successful edge-outs. Through network extensions to adjacent communities and increased customer penetration levels over time within these communities, we have increased the number of residential and business services customers that we serve. For the year ended December 31, 2016, we added approximately 8,900 customers from our edge-outs activated in 2016. We have experienced success in this strategy by targeting communities that we believe possess attractive demographic and competitive profiles, making capital-efficient decisions and leveraging our existing operating infrastructure. We have identified a large number of communities near our footprint for edge-out expansion, and believe edge-out expansion has a self-perpetuating effect as each community adjacent to a new edge-out investment presents further expansion opportunities.

        Between 2008 and 2012, we extended our network to over 100,000 new homes passed through edge-outs. During 2016, we expanded our network footprint by approximately 38,000 homes passed in five markets and achieved average customer penetration levels of 23% over an average activation period of 157 days as of December 31, 2016. The edge-outs that we activated in 2016 are continuing to experience net additions, and we expect an increase in penetration levels as they reach full maturity. We continue to selectively evaluate and invest in edge-out opportunities within our markets and believe we are well-positioned based on our historical track record of success in edge-out expansion.

    Business Services Capabilities

        We offer integrated solutions for businesses, including Direct Internet Access, Ethernet over fiber and HFC, hosted and on-premise VoIP solutions, metro Ethernet services, wholesale fiber connectivity, cell backhaul solutions and SIP and PRI trunking services. Recognizing the opportunity in our markets, we have built the necessary infrastructure, processes and sales and support organizations to scale our business services offering. Supported by our robust network, we have developed a full suite of products for small, medium and large businesses within our footprint, including enhanced telephony services and data speeds of up to 10 Gbps. We have built a consistent sales practice across our business services organization while ensuring product competitiveness and local knowledge to drive market share gain. We utilize multiple distribution channels, including direct sales, wholesale and indirect sales to capture opportunities across a variety of customer segments. Additional products within our portfolio include virtual private networks, a complete line of colocation infrastructure, cloud computing, managed backup and disaster recovery services.

        We have also made significant investments in our fiber network in the Chicago area. Since 2014, we have constructed approximately 1,200 miles of fiber in this market, providing connectivity to more than 500 macro and small cell sites as part of a fiber construction project for a leading wireless carrier. While a meaningful portion of the fiber network in this area is under a long-term contract to this carrier, which will generate recurring revenues, there is significant capacity on the network that we expect will support future growth as we connect more business services customers.

        Strong execution has supported our business services expansion to date and will enable us to execute on our growth strategy. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber

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construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015.

    Attractive Geographic Footprint and Favorable Competitive Dynamics

        Our customers are located primarily in economically stable suburbs adjacent to large metropolitan areas, as well as secondary and tertiary markets, in the Midwest and Southeast United States. Our typical market possesses what we believe to be an advantageous mix of size and geographical position with favorable competitive dynamics and demographics, and includes a number of businesses operating across a range of industries. We believe our network footprint insulates us from heightened competition typical of major metropolitan centers. In addition, the diversity of WOW!'s geographic footprint enables us to mitigate the impact of economic downturns our business could face in a particular region.

        Within our geographical areas, we believe we are typically one of the top two providers of HSD and Video services. We have a proven track record of winning customers from other operators by providing superior HSD product offerings, focusing on local marketing efforts, offering competitive pricing and delivering strong customer service while leveraging our advanced network.

        Based on homes passed, we estimate approximately 53% and 39% of our footprint overlaps with Comcast Corp. and Charter, respectively. We estimate systems formerly owned by Time Warner Cable and Bright House Networks (recently acquired by Charter) overlap with approximately 33% of our homes passed. We believe competitive dynamics with telephone companies are favorable in our markets. We estimate that AT&T Corp's U-verse offering is available in approximately 63% of our footprint based on homes passed. We believe competitive dynamics with AT&T U-verse are favorable for WOW!, as AT&T U-verse's network architecture is a mix of fiber and DSL in several markets. Competition from Verizon FiOS and Frontier Communications is estimated to be 3.5% and 2.7% of our overall footprint, respectively.

    Strong Financial Performance Benefiting from the Mix Shift to HSD

        We have delivered growth in our financial results since our inception. Our margin profile is driven by an increase in HSD revenues, which benefit from gross margins in excess of 95%, and our focus on preserving the profitability of our Video customers, which has resulted in increases in Video ARPU. For the year ended December 31, 2016, HSD revenues represented approximately 30.2% of our total revenues and 45.4% of our gross profit. In comparison, Video represented 44.2% of our total revenues and 23.9% of our gross profit over the same period. High content costs associated with the distribution of Video services are the key driver of the increasing divergence in profitability of HSD and Video. As a result of our continued customer mix shifting to HSD, we believe we will benefit from higher free cash flow conversion and margin expansion because HSD requires lower capital expenditures and operating expenses relative to Video. For the year ended December 31, 2016, we generated net income of $26.3 million, which represented a $53.6 million improvement over the year ended December 31, 2014, and approximately $445.7 million of Transaction Adjusted EBITDA, which represented an increase of $47.2 million, or 5.8%, on an annualized basis over the year ended December 31, 2014. See "Prospectus Summary—Summary Historical Combined Consolidated Financial Data" for a reconciliation of net income (loss) to Transaction Adjusted EBITDA.

    Operating Philosophy Founded on a Superior Customer Experience

        We compete strategically by adhering to our operating philosophy, which is: "To deliver an employee and customer experience that lives up to our name." The ongoing pursuit of this philosophy has a strong foundation in the WOW! culture that has been cultivated over time and focuses our organization on four core values: (i) respect: treat others as you wish to be treated; (ii) integrity:

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choose to do what is right; (iii) servanthood: embracing the attitude and honor of serving others rather than being served; and (iv) ownership: act with thought and a focus on the collective good.

        We believe that servanthood in particular is unique to WOW! and exemplifies our commitment to the customer experience—that "how" we treat our customers is just as important as "what" we provide them and ultimately is how we earn customer loyalty. This mindset is what drives our operating philosophy and we believe compels employees and customers alike to choose WOW!.

    Strong and Experienced Management Team

        Our management team is comprised of senior executives who have significant experience in the telecommunications industry, with an average tenure of seven years with the Company and approximately 24 years of relevant industry experience. Our management team has collaborated to establish WOW!'s unique culture and execute on the Company's operating philosophy and commitment to the customer experience. The team's track record of success has translated into numerous independent awards and recognitions. We have been (i) ranked highest in customer satisfaction by J.D. Power and Associates 21 times in the last twelve years, (ii) rated highest by Consumer Reports fifteen times in the last eight years, and (iii) recognized by PC Magazine with the Reader's Choice Award five times in the last six years. Our management team has substantial experience in deploying new products and services and has successfully guided WOW! through various business cycles. In addition, our management team has considerable experience in successfully identifying and completing edge-outs and acquiring and integrating cable assets.

Our Strategy

        The key components of our strategy are as follows:

    Focus on Highly Profitable Internet-Centric Products

        Driven by the increased Internet needs of our customers, we believe we will continue to experience strong demand for HSD services within our markets. The growth of bandwidth-intensive applications, such as mobile and social media applications, OTT video and cloud-based computing, and the proliferation of connected devices, are expected to continue to drive rapidly-increasing consumption of data. We intend to capitalize on these favorable industry trends by continuing to focus on HSD customer growth via increased penetration, driving a greater mix shift toward higher-margin HSD and business services products and transitioning customers to higher-priced HSD speed tiers. While we will continue to provide a robust Video product to satisfy the needs of our bundled customers, our strategy is to maintain profitability by increasing Video pricing in the face of rising content costs. For customers who value the Video product, our marketing approach is to drive adoption of HSD-centric bundles.

        The growth of our HSD business is driven by our ability to offer a range of speeds, packaged and bundled at a competitive value and provisioned to deliver a consistent and high-quality experience. We provide market-leading speed tiers of 10 Mbps, 100 Mbps, 500 Mbps and 1 Gbps. This "good, better, best" approach provides competitive speed and price-value differentiation while simplifying the overall customer value proposition. Our fiber-rich HFC network is fully DOCSIS 3.1-capable, allowing us to remain highly competitive as our customers' bandwidth needs evolve. In addition, we believe that new product development of HSD-adjacent services provides an opportunity for additional growth. Our existing infrastructure enables us to drive new product development initiatives, which could include home security, home automation and other Internet of Things services in the future.

    Accelerate Investment in Highly Accretive Network Edge-Out Builds

        We believe edge-outs are an attractive investment opportunity available to WOW!. We have a track record of successfully identifying and expanding our network in a cost-effective manner to new

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communities and acquiring residential and business services customers. We believe that capital expenditures and operating costs for edge-outs are inherently lower relative to a new greenfield build because we are able to leverage our existing infrastructure and operating platforms to extend our network to communities adjacent to and near our existing footprint. Management evaluates potential edge-out opportunities based on the expected average acquired customer's annual Adjusted EBITDA contribution from such projects relative to the anticipated required capital expenditures. Based on edge-outs activated in 2016, our average capital expenditures per acquired customer represent a mid-single digit multiple of our average customer's annual Adjusted EBITDA contribution as of December 31, 2016. As our edge-outs mature over time, we expect penetration to increase and this multiple to decrease.

        We continue to evaluate new opportunities for edge-outs to increase our residential and business footprint. Edge-outs are expected to add approximately 72,000 homes passed in 2017, and we have identified additional edge-out opportunities that we expect will be prioritized and built over the next several years. We believe that the overall edge-out opportunity within our network extends beyond what we have identified and will continue to expand as we gain access to new adjacent communities.

    Drive Growth in Business Services Market Opportunity

        We believe that business services represent a substantial growth area for WOW! and we have made significant investments in our network and product capabilities to address these opportunities. We believe that we have a significant market penetration growth opportunity in several of our markets, including those in the Midwest and Florida, and that our advanced network positions us to capitalize on the substantial business services opportunity within our footprint. We believe we have developed the product suite and sales expertise to continue to gain share with the small, medium and large businesses we target within our footprint. We estimate there is an approximately $1.3 billion addressable revenue opportunity across our markets. We believe that a substantial part of our target customer base is served by legacy DSL technologies, creating a clear competitive advantage and market opportunity for our HFC-based cable HSD services. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015. We design our networks with additional capacity so that increased bandwidth can be deployed economically and efficiently, allowing us to address our current and future customers' demand. We believe that our robust, customer-centric solutions, experienced sales organization and strong product capabilities have supported our expansion in the business services market and will help us execute on our growth strategy.

    Accelerate Free Cash Flow Generation

        We believe we will achieve accelerating free cash flow generation, which will allow us to continue to pursue enhanced, disciplined levels of investment in our edge-out and business services investment opportunities. We expect growth in income from operations and Adjusted EBITDA to exceed revenue growth over time, benefiting from the mix shift to HSD, the transition of customers to higher-priced HSD speed tiers and the management of Video customer profitability. We also expect the mix shift to drive a reduction in our capital expenditures relative to our revenues over time. We expect our near-term federal corporate income tax payments to be minimal given our federal NOL balance of $833.8 million as of December 31, 2016. See "Risk Factors—Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations."

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    Continue Identifying and Successfully Integrating Acquisitions

        We expect to evaluate and pursue opportunistic tuck-in acquisitions. We have acquired six cable companies since 2006. We believe that we have consistently demonstrated an ability to acquire and integrate companies, realize cost synergies and increase the profitability of these businesses post-close. We have pursued these acquisitions for a variety of reasons including: (i) geographic diversity and increased scale; (ii) expansion of WOW!'s network through tuck-ins of smaller adjacent systems; (iii) value creation via upgrading and streamlining undermanaged systems; (iv) enhancement of our business services capabilities; and (v) cost rationalization.

        For example, our acquisition of Sigecom in 2006 (i) expanded WOW!'s footprint into the Evansville, Indiana market, (ii) increased WOW!'s business services presence, and (iii) generated significant cost savings by leveraging Sigecom's infrastructure and expertise, which provided an in-house telephony switch solution throughout our network. Our acquisition of Knology in 2012 provided incremental scale, geographic and competitive diversification and allowed us to consolidate a clustered footprint in the Midwest and Southeast. Most recently, our acquisition of NuLink added approximately 34,000 homes and businesses near WOW!'s existing Georgia footprint, with attractive demographics and meaningful edge-out and business services opportunities given its proximity to Atlanta.

        We believe our acquisition track record provides us with an advantage in future consolidation opportunities. We will continue to evaluate and pursue future acquisition opportunities based on the quality of underlying assets, fit within our existing business, opportunity to expand our network and the ability to create value through the realization of cost efficiencies.

    Operating Philosophy Driving Differentiation in Customer Experience

        Our philosophy is to deliver an employee and customer experience that is consistent with the WOW! name. We are a company comprised of people who derive satisfaction from taking care of each other and our customers. As a result, there is heightened awareness and understanding among our team that it is our employees who ultimately are WOW!'s greatest strategic asset. Our approximately 2,900 employees are brand ambassadors across the communities we serve.

        Our purposeful focus on creating a thriving WOW! culture is all for the benefit of our customers. We have established an enduring record of delivering award-winning customer service and satisfaction. Recognition by a variety of independent third parties, including J.D. Power and Associates, Consumer Reports and PC Magazine, has helped create a winning, competitive spirit amongst employees that drives our success.

Our Interactive Broadband Network

        Our network underpins the implementation of our operating strategy, allowing us to meet our current and future customers' needs without incurring significant upgrade capital expenditures. In addition to providing high capacity and scalability, our network has been specifically engineered with the following features:

    redundant fiber routing, which enables the rapid, automatic redirection of network traffic in the event of a fiber cut;

    back-up power supplies in our network, which ensure continuity of our service in the event of a power outage; and

    network monitoring to the customer premise for all HSD, Video and Telephony services.

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Technical Overview

        Our interactive broadband network consists primarily of an advanced hybrid fiber-coaxial cable network. Fiber-optic cable is a communications medium that uses glass fibers to transmit signals over long distances with minimal signal loss or distortion. In most of our network, our system's main high capacity fiber-optic cables connect to multiple nodes throughout our network. These nodes are connected to individual homes and buildings by coaxial cable and are shared by a number of customers. We have sufficient fibers in our cables to subdivide our nodes if growth so dictates. Our network has excellent broadband frequency characteristics and physical durability, which is conducive to providing HSD, Video and Telephony transmission.

        Our network is designed with redundant fiber-optic cables. Our fiber rings are "self-healing," which means that they provide for very rapid, automatic redirection of network traffic so that our service will continue even if there is a single point of failure on a fiber ring.

        We distribute our services from locations called hub sites, each of which is equipped with a generator and battery back-up power source to allow service to continue during a power outage. Additionally, individual nodes that are served by hubs are equipped with back-up generators or batteries. Our redundant fiber-optic cables and network powering systems allow us to provide circuit-based telephony services consistent with industry reliability standards for traditional telephone systems.

        We monitor our network 24 hours a day, seven days a week from our network operations center in Naperville, Illinois. Technicians in each of our service areas schedule and perform installations and repairs and monitor the performance of our interactive broadband network. We actively maintain the quality of our network to minimize service interruptions and extend the network's operational life.

High-Speed Data Services

        We provide Internet access using high-speed cable modems in the same way customers receive Internet services over modems linked to local telephone networks. We provide our customers with a high level of data transfer rates through multiple peering arrangements with tier-one Internet facility providers.

Video Services

        Our network is designed for an analog and digital two-way interactive transmission with fiber-optic cable carrying signals from the headend to hubs and to distribution points (nodes) within our customers' neighborhoods, where the signals are transferred to our coaxial cable network for delivery to our customers.

Telephony Services

        We offer Telephony services over our broadband network, which interconnects with those of other local phone companies. We install either a network interface box outside a customer's home or an Embedded Multimedia Terminal Adapter in the home to provide dial tone service. In addition, we serve the majority of our Telephony customers with VoIP switching technology. This newer architecture allows for the same enhanced custom calling services as traditional time division multiplexing switching systems, as well as additional advanced business services, such as session initiation protocol, hosted PBX services and other services.

Business Services

        In addition to the HSD, Video and Telephony services outlined above, we utilize our network to provide other business services, including SIP and PRI trunking services, web hosting, metro Ethernet and wireless backhaul services. We also provide advanced colocation and cloud infrastructure services,

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including private cage or cabinet with high-availability power, virtual and physical compute, high-performance storage, dedicated firewall/load balancers, private virtual local area network segmentation, disaster recovery to the cloud and backup and archive as a service.

Programming

        We purchase some of our programming directly from the program networks by entering into affiliation agreements with the programming suppliers. We also benefit from our membership with the National Cable Television Cooperative ("NCTC"), which enables us to take advantage of volume discounts. As of December 31, 2016, approximately 60% of our programming was sourced from the NCTC, which also handles our contracting and billing arrangements for this programming.

Competition

High-Speed Data Services

        We primarily compete against other cable television companies, ILECs that provide dial-up and DSL services and other wireless Internet access services to provide consumers with data services. Competitors' HSD offerings also include a range of services from DSL to gigabit Ethernet. Our competitors primarily provide services over traditional telephone networks or broadband data networks. By contrast, our services are offered over pure and hybrid fiber network connections. Our additional services include spam filtering, email, private web space, online storage and customizable news and entertainment content. Importantly, we compete against other data service providers by offering high-quality HSD services and a differentiated customer service experience.

Video Services

        Cable television systems are operated under non-exclusive franchises granted by local authorities, which may result in more than one cable operator providing Video services in a particular market. Our cable competitors currently include Charter, Comcast and Mediacom. We also encounter competition from direct broadcast satellite systems, including DirecTV and Dish Network, that transmit signals to small dish antennas owned by the end-user.

        The Telecommunications Act of 1996 (the "1996 Act") eliminated many restrictions on local telephone companies offering video programming and we face competition from those companies. AT&T, CenturyLink, Frontier and Verizon currently provide video services to homes in portions of our markets. We also compete with systems that provide multichannel program services directly to hotel, motel, apartment, condominium and other multi-unit complexes through a satellite master antenna—a single satellite dish for an entire building or complex.

        Cable television distributors may, in some markets, compete for customers with other video programming distributors and other providers of entertainment, news and information. Alternative methods of distributing video programming offered by cable television systems include OTT business models such as Netflix, Hulu, Amazon and Apple. Increasingly, content owners are using Internet-based delivery of content directly to consumers, some without charging a fee to access the content. Further, due to consumer electronic innovations, consumers are able to watch such Internet-delivered content on televisions, personal computers, tablets, gaming boxes connected to televisions and mobile devices. HBO and CBS sell their programming directly to consumers over the Internet. Dish Network offers Sling TV, which includes ESPN among other programming, and Sony offers PlayStation Vue. We believe some customers have chosen or will choose to receive video over the Internet rather than through our VOD and subscription video services, thereby reducing our video subscriber base.

        In addition to other means, we compete with these companies by delivering a differentiated customer service experience.

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Telephony Services

        In providing local and long-distance Telephony services, we compete with the incumbent local phone company, various long-distance providers and VoIP telephone providers in each of our markets. AT&T, CenturyLink, Frontier and Verizon are the incumbent local phone companies in our current markets. We also compete with a number of long-distance telephone services providers, such as AT&T, CenturyLink, Frontier and Verizon. In addition, we compete with a variety of smaller, regional competitors that may lease network components from AT&T, CenturyLink, Frontier or Verizon and focus on the commercial segment of our markets.

        Following years of development, VoIP has been deployed by a variety of service providers, including the other Multiple System Operators ("MSOs") that we compete against and independent service providers, such as Vonage Holding Corporation. Unlike circuit switched technology, this technology does not require ownership of the last mile and eliminates the need to rent the last mile from the Regional Bell Operating Companies. VoIP providers have had differing levels of success based on their brand recognition, financial support, technical abilities and legal and regulatory decisions.

        Wireless telephone service is viewed by some consumers as a replacement for traditional telephone service. Wireless service is priced on a flat-rate or usage-sensitive basis and rates are continuously decreasing.

Bundled Services

        Most of our cable competitors have deployed their own versions of the triple-play bundle in our markets. Charter, Comcast, Mediacom and other MSOs offer VoIP, thereby enabling their own versions of a triple-play bundle in our markets.

        AT&T U-verse, Frontier and Verizon FiOS offer bundled services by providing video via their broadband networks in certain markets. AT&T U-verse has deployed video in most of our markets. Additionally, AT&T, through its ownership of DirecTV, provides a satellite video offering. Through its acquisition of Verizon FiOS assets, Frontier offers bundled services in Pinellas. Consequently, we overlap with Verizon FiOS only in our Baltimore market.

        We believe that our advanced network, competitive HSD products and emphasis on customer service will continue to be a strategic initiative and that the best way to retain and attract customers is through an additional focus on technology and deployment of broadband data applications.

Capital Expenditures

        We have ongoing capital expenditure requirements related to the maintenance, expansion and technological upgrades of our cable network. Capital expenditures are funded primarily through a combination of cash on hand and cash flow from operations. Our capital expenditures were $287.5 million, $231.9 million and $251.9 million for the years ended December 31, 2016, 2015 and 2014, respectively. The $55.6 million increase from the year ended December 31, 2015 to the year ended December 31, 2016 is primarily due to our significant investment in our fiber network in the Chicago area. Since 2014, we have constructed approximately 1,200 miles of fiber in this market, providing connectivity to more than 500 macro and small cell sites as part of a fiber construction project for a leading wireless carrier. In addition, we incur capital expenditures in connection with our edge-out strategy. In the year ended December 31, 2016, we extended our network to approximately 8,900 homes and incurred capital expenditures of $30.6 million to support this geographic expansion.

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        The following tables set forth additional information regarding our capital expenditures for the periods presented:

 
  December 31,  
(in millions)
  2014   2015   2016  

Capital Expenditures

                   

Customer premise equipment(a)

  $ 106.8   $ 93.8   $ 98.8  

Scalable infrastructure(b)

    77.7     37.2     37.5  

Line extensions(c)

    20.0     63.3     102.2  

Upgrade / rebuild(d)

    16.5     5.9     0.9  

Support capital(e)

    30.9     31.7     48.1  

Total

  $ 251.9   $ 231.9   $ 287.5  

Capital expenditures included in total related to:

                   

Edge-outs(f)

  $   $ 1.9   $ 30.6  

Business services(g)

  $ 19.6   $ 66.6   $ 76.9  

(a)
Customer premise equipment, or CPE, includes equipment and installation costs incurred to deliver services to residential and business services customers. CPE includes the costs of acquiring and installing our video set-top boxes and modems, as well as the cost of customer connections to our network.

(b)
Scalable infrastructure includes costs, not directly related to customer acquisition activity, to support new customer growth and provide service enhancements (e.g., headend equipment).

(c)
Line extensions include costs associated with new home development within our footprint and edge-outs (e.g., fiber / coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).

(d)
Upgrade / rebuild includes costs to modify or replace existing HFC network, including enhancements.

(e)
Support capital includes all other non-network-related costs to support day-to-day operations, including land, buildings, vehicles, office equipment, tools and test equipment.

(f)
Edge-outs represent costs to extend our network into new adjacent service areas, including the associated CPE.

(g)
Business services represent costs associated with the build-out of our network to support business services customers, including the associated CPE.

Legislation and Regulation

        We operate in highly regulated industries and both our cable television and telecommunications services are subject to broad regulation at the federal, state and local levels. Our Internet services have historically been subject to more limited regulation, although the FCC's 2015 Open Internet Order expanded regulation of Internet services as more fully described below. The following is a summary of laws and regulations affecting the cable television and telecommunications industries. It does not purport to be a complete summary of all present and proposed legislation and regulations pertaining to our operations.

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Regulation of Cable Services

        The FCC, the principal federal regulatory agency with jurisdiction over cable television operators and services, has promulgated regulations covering many aspects of cable television operations. The composition of the FCC changed in January 2017. We anticipate that the newly composed FCC will modify some regulations applicable to our business; however, the impact on our business is unknown. The FCC enforces its regulations through the imposition of monetary fines, the issuance of cease-and-desist orders and/or the imposition of other administrative sanctions. Cable franchises, the principal instrument of governmental authority for our cable television operations, are not issued by the FCC but by states, cities, counties or political subdivisions. A brief summary of certain key federal regulations follows.

    Rate Regulation

        The Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") authorized rate regulation for certain cable services and equipment in certain markets. It also eliminated direct oversight of rates by the FCC and local franchising authorities of all but the basic service tier of cable service. Rate regulation of the basic tier does not apply, however, when a cable operator is subject to effective competition in the relevant community. Under an Order issued by the FCC in 2015, cable operators are presumed to be subject to effective competition. That Order has been appealed to the D.C. Circuit Court. Moreover, some local franchising authorities that could otherwise regulate basic rates for cable systems that are not subject to effective competition choose not to do so. We are not currently subject to cable service rate regulation in any of our markets.

    Program Access

        To promote competition between incumbent cable operators and independent cable programmers, the 1992 Cable Act placed restrictions on dealings between certain cable programmers and cable operators. Satellite video programmers affiliated with cable operators are prohibited in most cases from favoring those cable operators over competing distributors of multi-channel video programming, such as satellite television operators and unaffiliated competitive cable operators such as us. Specifically, the program access regulations generally prohibit exclusive contracts for satellite cable programming or satellite broadcast programming between any cable operator and any cable-affiliated programming vendor. On October 5, 2012, the FCC adopted and released a Further Notice of Proposed Rulemaking in the Matter of Revision of the Commission's Program Access Rules (the "Program Access FNPRM"). The FCC declined to extend the exclusive contract prohibition section of the program access rules beyond its October 5, 2012 sunset date. The prohibition applies only to programming that is delivered via satellite; it does not apply to programming delivered via terrestrial facilities. The FCC determined that a preemptive prohibition on exclusive contracts is no longer "necessary to preserve and protect competition and diversity in the distribution of video programming" considering that a case-by-case process will remain in place after the prohibition expires to assess the impact of individual exclusive contracts. In the Program Access FNPRM, the FCC also requested comment on revisions to the program access rules pertaining to buying groups and rebuttable presumptions in program access complaint proceedings challenging certain exclusive contracts. The Program Access FNPRM is still pending.

    Commercial Leased Access

        The Communications Act requires that cable systems with 36 or more channels make available a portion of their channel capacity for commercial leased access by third parties to facilitate competitive programming efforts. We have not been subject to many requests for carriage under the leased access rules.

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    Carriage of Broadcast Television Signals

        The 1992 Cable Act established broadcast signal carriage (so-called "must carry") requirements that allow local commercial television broadcast stations to elect every three years whether to require the cable systems in the relevant area to carry the station's signal or whether to require the cable system to negotiate for consent to carry the station. The most recent election by broadcasters became effective on January 1, 2015. For local, non-commercial stations, cable systems are also subject to must-carry obligations. We now carry most commercial stations pursuant to retransmission consent agreements and pay fees for such consents.

    Franchise Authority

        Cable television systems operate pursuant to non-exclusive franchises issued by franchising authorities, which, depending on the specific jurisdiction can be the states, cities, counties or political subdivisions in which a cable operator provides cable service. Franchising authority is premised upon the cable operator crossing and using public rights-of-way to construct and maintain its system. The terms of franchises, while variable, typically include requirements concerning services, franchise fees, construction timelines, mandated service areas, customer service standards, technical requirements, public, educational and government access channels and support, and channel capacity. Franchise authorities may terminate a franchise or assess penalties if the franchised cable operator fails to adhere to the conditions of the franchise. Although largely discretionary, the exercise of state and local franchise authority is limited by federal statutes and regulations adopted pursuant thereto. We believe that the requirements imposed by our franchise agreements are fairly typical for the industry. Although they do vary, our franchises generally provide for the payment of fees to the applicable franchise authority of 5% or lower of our gross cable service revenues, which is the current maximum authorized by federal law. Many of our franchises also require that we pay a percentage of our gross revenue in support of public, educational and governmental ("PEG") channels. These so-called PEG fees vary, but generally do not exceed 2% of our gross cable services revenues.

        On December 20, 2006, the FCC established rules and provided guidance (the "2006 Order") pursuant to the Communications Act that prohibit local franchising authorities from unreasonably refusing to award competitive franchises for the provision of cable services. In order to eliminate certain barriers to entry into the cable market, and to encourage investment in broadband facilities, the FCC preempted local laws, regulations, and requirements, including local level-playing-field provisions, to the extent they impose greater restrictions on market entry than those adopted under the order. This order has the potential to benefit us by facilitating our ability to obtain and renew cable service franchises. On January 21, 2015, the FCC issued an Order on Reconsideration of the Second Report and Order. The FCC clarified that the franchising rules and findings it extended to incumbent cable operators in the 2006 Order do not apply to state laws governing cable television operators, or to any state-level cable franchising process.

        Many state legislatures have enacted legislation streamlining the franchising process, including having the state, instead of local governments, issue franchises. Of particular relevance to us, states with laws streamlining the franchising process or authorizing state-wide or uniform franchises currently include Florida, Georgia, Indiana, Illinois, Michigan, Ohio, South Carolina and Tennessee. In some cases, these laws enable us to expand our operations more rapidly by providing for a streamlined franchising process. At the same time, they enable easier entry by additional providers into our service territories.