UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
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Item 2.01 Completion of Acquisition or Disposition of Assets.
On November 1, 2021, WideOpenWest, Inc. (the “Company”) completed the previously announced sale of the Company’s Illinois, Indiana, and Anne Arundel, Maryland service areas pursuant to that certain Asset Purchase Agreement dated June 30, 2021 between the Company and Radiate HoldCo, LLC, a telecommunications holding company affiliated with RCN Telecom Services LLC, Grande Communications Networks, LLC and WaveDivision Holdings, LLC (collectively, “Astound Broadband”) (the “Astound Purchase Agreement”), whereby Radiate HoldCo, LLC acquired the Company’s Illinois, Indiana, and Anne Arundel, Maryland service areas for approximately $661 million, subject to adjustments, including customary working capital adjustments, as specified in the Astound Purchase Agreement (the “Astound Broadband Transaction”).
A description of and a copy of the Astound Purchase Agreement was contained in and filed as an exhibit to a Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 2021.
Item 8.01 Other Events.
On November 1, 2021, the Company issued a press release announcing the completion of the Astound Broadband Transaction, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.
Certain statements in this Current Report on Form 8-K that are not historical facts contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “anticipate,” “expect,” “believe,” “estimate,” “plan,” “project,” “predict,” “potential,” or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements. These factors and other risks that could cause our actual results to differ materially are set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2021, and also include the following factors: uncertainties relating to the use of proceeds from the sale of systems to Astound Broadband; the effect of the completion of the Astound Transaction on the Company’s ability to retain key personnel and to maintain relationships with customers, suppliers and other business partners; and risks relating to potential diversion of management attention from the Company’s ongoing business operations. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this report are made as of the date hereof or the date specified herein, based on information available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.
Item 9.01 Financial Statements and Exhibits.
(b) Pro forma Financial Information
The unaudited pro forma condensed combined balance sheet of the Company as of June 30, 2021, and the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2021 and for the years ended December 31, 2020, December 31, 2019, and December 31, 2018 are filed as Exhibit 99.2 to this Current Report on Form 8-K.
(d)
| Exhibit No. | Description | |
| 99.1 | Press Release dated November 1, 2021 | |
| 99.2 | Unaudited Pro Forma Condensed Combined Financial Statements | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WIDEOPENWEST, INC | ||
| Date: November 1, 2021 | By: | /s/ John Rego |
| John Rego | ||
| Chief Financial Officer | ||
Exhibit 99.1
WOW! Completes $661 Million Sale of Three Service Areas to Astound Broadband
Divestiture of WOW!’s Chicago, Evansville, Indiana, and Anne Arundel, Maryland service areas further strengthens WOW!’s financial position and continued ability to execute its broadband-first strategy
Englewood, Colo. – November 1, 2021 – WOW! Internet, Cable & Phone (NYSE: WOW), a leading broadband service provider, today announced the completion of the sale of its Chicago, Evansville, Indiana, and Anne Arundel, Maryland service areas to Radiate HoldCo, LLC, a telecommunications holding company affiliated with RCN Telecom Services, LLC, Grande Communications Networks, LLC and WaveDivision Holdings, LLC (collectively “Astound Broadband”) for $661 million.
The completion of the Astound Broadband transaction follows WOW!’s completed sale of its Cleveland and Columbus, Ohio service areas to Atlantic Broadband, announced in September 2021. Combined, the two transactions have generated gross proceeds of $1.8 billion, enabling WOW! to significantly lower its debt, strengthen the company’s financial position and accelerate its broadband-first strategy.
“The completion of the Astound Broadband transaction is another important step in the execution of our broadband-first strategy,” said Teresa Elder, CEO of WOW!. “We remain committed to providing customers with reliable, accessible and fast broadband solutions, and now we have an even greater ability to enhance our network and expand our footprint through greenfield and Edge-out opportunities.”
Since announcing the sale in June 2021, WOW! has worked with Astound Broadband to ensure a seamless transition of its employees and customers in the Chicago, Evansville, Indiana, and Anne Arundel, Maryland, service areas to Astound Broadband. WOW! has entered into a Transition Services Agreement with Astound Broadband to support continuity of service during the transition period following the completion of the transaction.
BofA Securities acted as financial advisor to WOW!, and Wachtell, Lipton, Rosen & Katz, as well as Honigman LLP, served as legal counsel. Simpson Thacher & Bartlett LLP and Kelley Drye & Warren LLP served as legal counsel to Astound Broadband.
About WOW! Internet, Cable & Phone
WOW! is one of the nation’s leading broadband providers, with an efficient, high-performing network that passes 1.9 million residential, business and wholesale consumers. WOW! provides services in 14 markets, primarily in the Midwest and Southeast, including Michigan, Alabama, Tennessee, South Carolina, Florida and Georgia. With an expansive portfolio of advanced services, including high-speed Internet services, cable TV, phone, business data, voice, and cloud services, the company is dedicated to providing outstanding service at affordable prices. WOW! also serves as a leader in exceptional human resources practices, having been recognized seven times by the National Association for Business Resources as a Best & Brightest Company to Work For, winning the award for the last three consecutive years. Visit wowway.com for more information.
###
WOW! Contacts
Investors:
Andrew Posen
Vice President, Head of Investor Relations
303-927-4935; andrew.posen@wowinc.com
Media:
Debra Havins
Senior Director, Corporate Communications
720-527-8214; debra.havins@wowinc.com
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release that are not historical facts contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “anticipate,” “expect,” “believe,” “estimate,” “plan,” “project,” “predict,” “potential,” or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control that could cause our actual results to differ materially from those in the forward-looking statements. These factors and other risks that could cause our actual results to differ materially are set forth in the section entitled “Risk Factors” in our Annual Report filed on Form 10-K with the Securities and Exchange Commission (“SEC”) on February 24, 2021, and also include the following factors: uncertainties relating to the use of proceeds from the closing of the recent sales of the Illinois, Indiana and Maryland service areas (the “transactions”); the effect of the transactions on the Company’s ability to retain key personnel and to maintain relationships with customers, suppliers and other business partners; and risks relating to potential diversion of management attention from the Company’s ongoing business operations. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this report are made as of the date hereof or the date specified herein, based on information available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On November 1, 2021, WideOpenWest, Inc. (the “Company” or “WOW”) completed the previously announced sale of the Company’s Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets, pursuant to an Asset Purchase Agreement by and between the Company, Radiate HoldCo, LLC, a telecommunications holding company affiliated with RCN Telecom Services LLC, Grande Communications Networks, LLC and WaveDivision Holdings, LLC (collectively, “Astound Broadband”) (the “Astound Purchase Agreement” or the “Astound Transaction”), whereby Astound Broadband acquired the Company’s Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets for approximately $661 million, subject to adjustments, including customary working capital adjustments, as specified in the Astound Purchase Agreement.
As previously announced in our Form 8-K filed with the Securities and Exchange Commission (“SEC”) on September 1, 2021, WOW completed the sale of the Company’s Cleveland and Columbus, Ohio markets, pursuant to an Asset Purchase Agreement by and between the Company, WideOpenWest Ohio LLC, a Delaware limited liability company, WideOpenWest Cleveland LLC, a Delaware limited liability company, Atlantic Broadband (OH), LLC, (“Atlantic”), a U.S. cable operator and subsidiary of Cogeco Communications, Inc. and Atlantic Broadband Finance, LLC, a Delaware limited liability company (the “Atlantic Purchase Agreement” or the “Atlantic Transaction”), whereby Atlantic acquired the Company’s Cleveland and Columbus, Ohio markets for approximately $1.125 billion, subject to adjustments, including customary working capital adjustments, as specified in the Atlantic Purchase Agreement.
The unaudited pro forma condensed consolidated financial statements presented below have been derived from WOW’s historical consolidated financial statements. While the historical consolidated financial statements reflect the past financial results of the WOW business, this pro forma information gives effect to the Atlantic and Astound Transactions.
The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information. Regulation S-X Article 11 requires that pro forma financial information include the following pro forma adjustments to the historical financial information of the registrant:
| · | Transaction Accounting Adjustments – Adjustments that reflect only the application of required accounting to the acquisition, disposition, or other transaction. |
| · | Autonomous Entity Adjustments – Adjustments that are necessary to reflect the operations and financial position of the registrant as an autonomous entity when the registrant was previously part of another entity. There are no autonomous entity adjustments included in the unaudited pro forma condensed consolidated financial statements. |
The transaction accounting adjustments to reflect the Atlantic and Astound Transactions include, but are not limited to:
| · | the separation of the operations, assets and liabilities of the Cleveland and Columbus, Ohio markets and the Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets from WOW and the transfer of those assets and liabilities to Atlantic and Astound, respectively; |
| · | the impact of, and transactions contemplated by the Atlantic Transition Services Agreement and the Astound Transition Services Agreement (collectively, the “TSAs”), and |
| · | the effect of WOW’s anticipated capital structure after the closing of both transactions, including the repayment of approximately $1.0 billion of debt with the proceeds from the closing of the Atlantic Transaction, which was paid in September 2021, and $480.9 million of debt with the proceeds from the Astound Transaction. |
The transaction accounting adjustments are based on available information and assumptions that WOW’s management believes are reasonable. However, such adjustments are estimates and actual experience may differ from expectations. Additionally, Regulation S-X Article 11 permits registrants to reflect in the notes to the pro forma financial information forward-looking information that depicts the synergies and dis-synergies identified by management in determining to consummate or integrate the transaction for which pro forma effect is being given. Such adjustments have not been reflected in the notes to the unaudited pro forma condensed consolidated financial statements because WOW’s management does not believe these adjustments would enhance an understanding of the pro forma effects of the Atlantic and Astound Transactions.
The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2021 and the fiscal years ended December 31, 2020, 2019 and 2018 have been prepared as though the closing of both transactions occurred on January 1, 2018. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2021 have been prepared as though the closing of both transactions occurred on June 30, 2021.
The unaudited pro forma condensed consolidated financial statements are for illustrative purposes only, do not reflect what WOW’s financial position and results of operations would have been had the closing of both transactions occurred on the dates indicated, are not necessarily indicative of WOW’s future financial position and future results of operations and do not reflect all actions that may be taken by WOW after the closing of both transactions.
For example, the unaudited pro forma condensed consolidated statements of operations do not reflect an adjustment for overhead costs WOW expects to decrease as a result of the disposition of these markets and to operate the continuing business following the closing of both transactions. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with WOW’s historical consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 24, 2021, and quarterly reports on Form 10-Q for the periods ending March 31, 2021 and June 30, 2021, filed on May 4, 2021 and August 5, 2021, respectively. The unaudited pro forma condensed consolidated financial statements constitute forward-looking information, are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated and should be read in conjunction with the accompanying notes thereto.
2
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2021
| WOW | Pro Forma Adjustments | WOW | ||||||||||||||||||
| Historical | Atlantic | Astound | Notes | Pro Forma | ||||||||||||||||
| (in millions, except share data) | ||||||||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 23.3 | $ | $ | 24.0 | A | $ | 47.3 | ||||||||||||
| Accounts receivable—trade, net | 38.3 | 38.3 | ||||||||||||||||||
| Accounts receivable—other | 2.4 | 2.4 | ||||||||||||||||||
| Prepaid expenses and other | 35.1 | 35.1 | ||||||||||||||||||
| Current assets held for sale | 29.9 | (18.0 | ) | (11.9 | ) | A | - | |||||||||||||
| Total current assets | 129.0 | (18.0 | ) | 12.1 | 123.1 | |||||||||||||||
| Right-of-use lease assets—operating | 20.3 | 20.3 | ||||||||||||||||||
| Property, plant and equipment, net | 718.6 | 718.6 | ||||||||||||||||||
| Franchise operating rights | 620.1 | 620.1 | ||||||||||||||||||
| Goodwill | 225.1 | 225.1 | ||||||||||||||||||
| Intangible assets subject to amortization, net | 1.8 | 1.8 | ||||||||||||||||||
| Other non-current assets | 42.3 | 42.3 | ||||||||||||||||||
| Non-current assets held for sale | 730.1 | (393.7 | ) | (331.4 | ) | A | - | |||||||||||||
| Total assets | $ | 2,437.3 | $ | (416.7 | ) | $ | (319.3 | ) | $ | 1,751.3 | ||||||||||
| Liabilities and stockholders' deficit | ||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Accounts payable—trade | $ | 29.8 | $ | $ | $ | 29.8 | ||||||||||||||
| Accrued interest | 3.8 | 3.8 | ||||||||||||||||||
| Current portion of long-term lease liability—operating | 6.0 | 6.0 | ||||||||||||||||||
| Accrued liabilities and other | 70.7 | 70.7 | ||||||||||||||||||
| Current portion of long-term debt and finance lease obligations | 70.9 | (2.8 | ) | (22.8 | ) | B | 45.3 | |||||||||||||
| Current portion of unearned service revenue | 30.0 | 30.0 | ||||||||||||||||||
| Current liabilities held for sale | 46.9 | (27.7 | ) | (19.2 | ) | A | - | |||||||||||||
| Total current liabilities | 258.1 | (30.5 | ) | (42.0 | ) | 185.6 | ||||||||||||||
| Long-term debt and finance lease obligations—less current portion | 2,176.8 | (1,015.0 | ) | (458.1 | ) | B | 703.7 | |||||||||||||
| Long-term lease liability—operating | 16.3 | 16.3 | ||||||||||||||||||
| Deferred income taxes, net | 205.0 | 114.4 | (40.6 | ) | F | 278.8 | ||||||||||||||
| Other non-current liabilities | 12.9 | 12.9 | ||||||||||||||||||
| Non-current liabilities held for sale | 2.4 | (0.9 | ) | (1.5 | ) | A | - | |||||||||||||
| Total liabilities | 2,671.5 | (932.0 | ) | (542.2 | ) | 1,197.3 | ||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||
| Total stockholders' equity (deficit) | (184.2 | ) | 515.3 | 222.9 | C | 554.0 | ||||||||||||||
| Total liabilities and stockholders' equity (deficit) | $ | 2,437.3 | $ | (416.7 | ) | $ | (319.3 | ) | $ | 1,751.3 | ||||||||||
Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.
3
Unaudited Pro Forma Condensed Consolidated Statements of Operations
Six months ended June 30, 2021
| WOW | Pro Forma Adjustments | WOW | ||||||||||||||||||
| Historical | Atlantic | Astound | Notes | Pro Forma | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Revenue | $ | 363.4 | $ | $ | $ | 363.4 | ||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Operating (excluding depreciation and amortization) | 193.5 | (2.2 | ) | (1.9 | ) | D | 189.4 | |||||||||||||
| Selling; general and administrative | 88.0 | 88.0 | ||||||||||||||||||
| Depreciation and amortization | 83.7 | 83.7 | ||||||||||||||||||
| 365.2 | (2.2 | ) | (1.9 | ) | 361.1 | |||||||||||||||
| (Loss) income from operations | (1.8 | ) | 2.2 | (1.9 | ) | 2.3 | ||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest (expense) income | (60.2) | 21.6 | 10.7 | B | (27.9 | ) | ||||||||||||||
| Loss on sale of assets, net | (0.1 | ) | (0.1 | ) | ||||||||||||||||
| Other income, net | 0.6 | 9.8 | 6.5 | E | 16.9 | |||||||||||||||
| (Loss) income before provision for income taxes | (61.5 | ) | 33.6 | 19.1 | (8.8 | ) | ||||||||||||||
| Income tax benefit (expense) | 16.3 | (8.0 | ) | (4.6 | ) | F | 3.7 | |||||||||||||
| (Loss) income from continuting operations | $ | (45.2 | ) | $ | 25.6 | $ | 14.5 | $ | (5.1 | ) | ||||||||||
| Basic and diluted loss per share | ||||||||||||||||||||
| Basic | $ | (0.55 | ) | $ | (0.06 | ) | ||||||||||||||
| Diluted | $ | (0.55 | ) | $ | (0.06 | ) | ||||||||||||||
| Weighted-average common shares outstanding | ||||||||||||||||||||
| Basic | 82,433,311 | 82,433,311 | ||||||||||||||||||
| Diluted | 82,433,311 | 82,433,311 | ||||||||||||||||||
Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.
4
Unaudited Pro Forma Condensed Consolidated Statements of Operations
Year ended December 31, 2020
| WOW Pro Forma and | ||||||||||||||||||||||||||||
| WOW | Discontinued | WOW | Pro Forma Adjustments | WOW Pro | ||||||||||||||||||||||||
| Historical | Operations (1) | Continuing | Atlantic | Astound | Notes | Forma | ||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||
| Revenue | $ | 1,148.4 | $ | 418.2 | $ | 730.2 | $ | $ | $ | 730.2 | ||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||
| Operating (excluding depreciation and amortization) | 570.2 | 165.0 | 405.2 | (4.5 | ) | (3.7 | ) | D | 397.0 | |||||||||||||||||||
| Selling, general and administrative | 182.5 | 12.3 | 170.2 | 170.2 | ||||||||||||||||||||||||
| Depreciation and amortization | 230.6 | 79.6 | 151.0 | 151.0 | ||||||||||||||||||||||||
| Impairment losses on intangibles and goodwill | 14.0 | - | 14.0 | 14.0 | ||||||||||||||||||||||||
| 997.3 | 256.9 | 740.4 | (45 | ) | (3.7 | ) | 732.2 | |||||||||||||||||||||
| Income (loss) from operations | 151.1 | 161.3 | (10.2 | ) | 4.5 | 3.7 | (2.0 | ) | ||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||||
| Interest (expense) income | (130.7 | ) | (0.7 | ) | (130.0 | ) | 53.7 | 26.7 | B | (49.6 | ) | |||||||||||||||||
| Other income, net | 1.8 | 0.5 | 1.3 | 19.6 | 13.0 | E | 33.9 | |||||||||||||||||||||
| (Loss) income before provision for income taxes | 22.2 | 161.1 | (138.9 | ) | 77.8 | 43.4 | (17.7 | ) | ||||||||||||||||||||
| Income tax (expense) benefit | (7.8 | ) | (38.4 | ) | 30.6 | (18.6 | ) | (10.4 | ) | F | 1.6 | |||||||||||||||||
| Net income (loss) | $ | 14.4 | $ | 122.7 | $ | (108.3 | ) | $ | 59.2 | $ | 33.0 | $ | (16.1 | ) | ||||||||||||||
| Basic and diluted earnings (loss) per share | ||||||||||||||||||||||||||||
| Basic | $ | 0.18 | $ | (1.33 | ) | $ | (0.20 | ) | ||||||||||||||||||||
| Diluted | $ | 0.17 | $ | (1.33 | ) | $ | (0.20 | ) | ||||||||||||||||||||
| Weighted-average common shares outstanding | ||||||||||||||||||||||||||||
| Basic | 81,561,707 | 81,561,707 | 81,561,707 | |||||||||||||||||||||||||
| Diluted | 82,814,310 | 81,561,707 | 81,561,707 | |||||||||||||||||||||||||
(1) This column includes the discontinued operations of the markets sold under the Atlantic Purchase Agreement and the Astound Purchase Agreement and the pro forma effects of the aformentioned agreements. The breakout below presents only income from operations and excludes the line items necessary to calculate net income (loss), as management believes interest expense and income tax expense are not reflective of what stand-alone interest or income tax expense would have been for the markets presented and are therefore immaterial to an investor's understanding of the operations. The breakout is as follows:
| Atlantic | Astound | Total | ||||||||||
| (in millions) | ||||||||||||
| Revenue | $ | 241.5 | $ | 176.7 | $ | 418.2 | ||||||
| Operating (excluding depreciation and amortization) | 93.6 | 71.4 | 165.0 | |||||||||
| Selling, general and administrative | 6.6 | 5.7 | 12.3 | |||||||||
| Depreciation and amortization | 44.9 | 34.7 | 79.6 | |||||||||
| Impairment losses on intangibles and goodwill | - | - | - | |||||||||
| 145.1 | 111.8 | 256.9 | ||||||||||
| Income from operations | $ | 96.4 | $ | 64.9 | $ | 161 .3 | ||||||
Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.
5
Unaudited Pro Forma Condensed Consolidated Statements of Operations
Year ended December 31, 2019
| wow | Pro Forma | wow | ||||||||||
| Historical | Adjustments (1) | Pro Forma | ||||||||||
| (in millions) | ||||||||||||
| Revenue | $ | 1,145.8 | $ | 418.8 | $ | 727.0 | ||||||
| Costs and expenses: | ||||||||||||
| Operating (excluding depreciation and amortization) | 575.8 | 178.4 | 397.4 | |||||||||
| Selling, general and administrative | 172.3 | 13.0 | 159.3 | |||||||||
| Depreciation and amortization | 206.2 | 72.8 | 133.4 | |||||||||
| Impairment losses on intangibles and goodwill | 9.7 | - | 9.7 | |||||||||
| Loss on sale of operating assets, net | 5.4 | - | 5.4 | |||||||||
| 969.4 | 264.2 | 705.2 | ||||||||||
| Income from operations | 176.4 | 154.6 | 21.8 | |||||||||
| Other income (expense): | ||||||||||||
| Interest (expense) income | (142.1 | ) | (0.2 | ) | (141.9 | ) | ||||||
| Other income, net | 3.6 | (0.2 | ) | 3.8 | ||||||||
| Income (loss) before provision for income taxes | 37.9 | 154.2 | (116.3 | ) | ||||||||
| Income tax (expense) benefit | (1.5 | ) | (35.4 | ) | 33.9 | |||||||
| Net income (loss) | $ | 36.4 | 118.8 | $ | (82.4 | ) | ||||||
| Basic and diluted earnings (loss) per share | ||||||||||||
| Basic | $ | 0.45 | $ | (1.02 | ) | |||||||
| Diluted | $ | 0.45 | $ | (1.02 | ) | |||||||
| Weighted-average common shares out standing | ||||||||||||
| Basic | 80.713.926 | 80,713,926 | ||||||||||
| Diluted | 81,189,162 | 80,713,926 | ||||||||||
(1) This cobunn includes the markets sold under the Atlantic Purchase Agreement and the Astound Purchase Agreement. The breakout below presents only income from operations and excludes the line items necessary to calculate net income (loss), as management believes interest expense and income tax expense are not reflective of what stand-alone interest of income tax expense would have been for the markets presented and are therefore immaterial to an investor's understanding of the operations. The breakout is as follows:
| Atlantic | Astound | Total | ||||||||||
| (in millions) | ||||||||||||
| Revenue | $ | 237.2 | $ | 181.6 | $ | 418.8 | ||||||
| Operating (excluding depreciation and amortization) | 99.1 | 79.3 | 178.4 | |||||||||
| Selling, general and administrative | 6.6 | 6.4 | 13.0 | |||||||||
| Depreciation and amortization | 39.5 | 33.3 | 72.8 | |||||||||
| Impairment losses on intangibles and goodwill | - | - | - | |||||||||
| Loss on sale of operating assets, net | - | - | - | |||||||||
| 145.2 | 119.0 | 264.2 | ||||||||||
| Income from operations | $ | 92.0 | $ | 62.6 | $ | 154.6 | ||||||
Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.
6
Unaudited Pro Forma Condensed Consolidated Statements of Operations
Year ended December 31, 2018
| wow | Pro Forma | WOW | ||||||||||
| Historical | Adjustments (1) | Pro Forma | ||||||||||
| (in millions) | ||||||||||||
| Revenue | $ | 1,153.8 | $ | 419.1 | $ | 734.7 | ||||||
| Costs and expenses: | ||||||||||||
| Operating (excluding depreciation and amortization) | 617.9 | 185.3 | 432.6 | |||||||||
| Selling, general and administrative | 155.2 | 14.4 | 140. 8 | |||||||||
| Depreciation and amortization | 186.9 | 67.6 | 119.3 | |||||||||
| Impairment losses on intangibles and goodwill | 216.3 | 12.5 | 203.8 | |||||||||
| Gain on sale of operating assets, net | (0.9 | ) | - | (0.9 | ) | |||||||
| 1,175.4 | 279.8 | 895.6 | ||||||||||
| (Loss) income from operations | (21.6 | ) | 139.3 | (160.9 | ) | |||||||
| Other income (expense): | ||||||||||||
| Interest (expense) income | (132.5 | ) | - | (132.5 | ) | |||||||
| Other income, net | 1.7 | - | 1.7 | |||||||||
| (Loss) income before provision for income taxes | (152.4 | ) | 139.3 | (291.7 | ) | |||||||
| Income tax benefit (expense) | 65.1 | (35.7 | ) | 100.8 | ||||||||
| Net (loss) income | $ | (87.3 | ) | 103.6 | $ | (190.9 | ) | |||||
| Basic and diluted loss per share | ||||||||||||
| Basic | $ | (1.07 | ) | $ | (2.33 | ) | ||||||
| Diluted | $ | (1.07 | ) | $ | (2.33 | ) | ||||||
| Weighted-average common shares outstanding | ||||||||||||
| Basic | 81,808,425 | 81,808,425 | ||||||||||
| Diluted | 81,808,425 | 81,808,425 | ||||||||||
(1) This column includes the markets sold under the Atlantic Purchase Agreement and the Astound Purchase Agreement. The breakout below presents only income from operations and excludes the line items necessary to calculate net income (loss), as management believes interest expense and income tax expense are not reflective of what stand-alone interest or income tax expense would have been for the markets presented and are therefore immaterial to an investor's understanding of the operations. The breakout is as follows:
| Atlantic | Astound | Total | ||||||||||
| (in millions) | ||||||||||||
| Revenue | $ | 233.4 | $ | 185.7 | $ | 419.1 | ||||||
| Operating (excluding depreciation and amortization) | 100.7 | 84.6 | 185.3 | |||||||||
| Selling: general and administrative | 7.4 | 7.0 | 14.4 | |||||||||
| Depreciation and amortization | 33.7 | 33.9 | 67.6 | |||||||||
| Impairment losses on intangibles and goodwill | - | 12.5 | 12.5 | |||||||||
| Gain on sale of operating assets, net | - | - | - | |||||||||
| 141.8 | 138.0 | 279.8 | ||||||||||
| Income from operations | $ | 91.6 | $ | 47.7 | $ | 139.3 | ||||||
Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.
7
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information
| A. | Reflects the disposition of the operations, assets and liabilities and the retention of cash as a result of the individual closings of the Atlantic and Astound Purchase Agreements |
| B. | WOW currently estimates it will utilize approximately $1.0 billion and $480.9 million of cash proceeds transferred from the sale of the Columbus and Cleveland, Ohio and the Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets, respectively, to repay a portion of WOW’s Term B loans and finance lease agreements. Accordingly, an adjustment to interest expense related to the debt is presented for the Atlantic Transaction in the amount of $21.6 million and $53.7 million for the six months ended June 30, 2021 and the year ended December 31, 2020, respectively. An adjustment to interest expense of $10.7 million and $26.7 million, respectively, is presented for the Astound Transaction. The actual amount of proceeds used to repay WOW debt may materially differ. |
| C. | The pro forma gain on disposal is based on the sold markets’ historical balance sheet information as of June 30, 2021. The actual gain on disposal will be based on the sold markets’ historical balance sheet information as of the closings and may differ significantly. The pro forma gain on disposal has not been reflected in the unaudited pro forma condensed consolidated statements of operations as this amount pertains to discontinued operations and does not reflect the impact on income from continuing operations. |
| D. | Reflects the estimated expenses to be passed through to the buyers for services provided to customers in markets sold under the Atlantic and Astound Purchase Agreements. |
| E. | Reflects the individual estimated income to be earned by WOW under the TSAs, pursuant to which WOW will provide certain transition services. The services provided under the TSAs will run for the periods of time set forth in the schedules to the TSAs, up to 12 months following the closing with two 6 month renewal periods. The services to be provided under the TSAs relate primarily to information technology, network, sales and business support services and may vary significantly from current estimates. |
| F. | Reflects the estimated tax effects of the pro forma adjustments to pre-tax book income at the applicable statutory income tax rates in the respective jurisdictions except in jurisdictions for which there was a valuation allowance in the historical period. In these instances, a zero rate was utilized. Income tax related adjustments represent current estimates on a discontinued operations basis which could materially change as WOW finalizes its discontinued operations accounting to be reported in Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K to be filed following the closing of both transactions. |
8
Cover |
Nov. 01, 2021 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Nov. 01, 2021 |
| Entity File Number | 001-38101 |
| Entity Registrant Name | WideOpenWest, Inc. |
| Entity Central Index Key | 0001701051 |
| Entity Tax Identification Number | 46-0552948 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 7887 East Belleview Avenue |
| Entity Address, Address Line Two | Suite 1000 |
| Entity Address, City or Town | Englewood |
| Entity Address, State or Province | CO |
| Entity Address, Postal Zip Code | 80111 |
| City Area Code | 720 |
| Local Phone Number | 479-3500 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock |
| Trading Symbol | WOW |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
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