Discontinued Operations (Notes)

9 Months Ended

Sep. 30, 2015

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations

Cincinnati Bell Wireless LLC ("CBW"), our former Wireless segment, provided digital wireless voice and data communications services to customers in the Company’s licensed service territory, which included Greater Cincinnati and Dayton, Ohio, and areas of northern Kentucky and southeastern Indiana. The Company’s customers were also able to place and receive wireless calls nationally and internationally due to roaming agreements the Company had with other carriers.

In the second quarter of 2014, we entered into agreements to sell our wireless spectrum licenses and certain other assets related to our wireless business, including leases to certain wireless towers and related equipment and other assets. The agreement to sell our spectrum licenses closed on September 30, 2014 for cash proceeds of $194.4 million. Prior to this date, the Company's digital wireless network utilized 50 MHz of licensed spectrum in the Cincinnati area and 40 MHz of licensed spectrum in the Dayton area, which had a carrying value of $88.2 million. Simultaneous with the close of the spectrum sale, the Company entered into a separate agreement to use certain wireless spectrum licenses for $8.00 until we no longer provided wireless service. We ceased providing wireless service effective March 31, 2015. The fair value of the lease, which is considered a Level 3 measurement based on other comparable transactions, totaled $6.4 million and was recorded as a prepaid expense and amortized over a six month period ending March 31, 2015.

As of March 31, 2015, there were no subscribers remaining on the network and we no longer required the use of the spectrum being leased. Therefore, the $112.6 million gain on the sale of the wireless spectrum licenses, which had been previously deferred, was recognized in Income (loss) from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015. On April 1, 2015, we transferred certain other assets related to our wireless business, including leases to certain wireless towers and related equipment and other assets, which resulted in a gain of $15.9 million in the second quarter of 2015. As a result, we removed the following assets and liabilities in the second quarter of 2015.

(dollars in millions)	As of April 1, 2015
Property, plant and equipment, net	$	16.0
Current portion of long-term debt	0.5
Long-term debt, less current portion	24.8
Other non-current liabilities	6.6
Total liabilities	$	31.9

In the third quarter of 2015, we released $2.1 million from the current restructuring reserve as a result of finalizing negotiations on certain contractual obligations and operating lease agreements.

Wireless financial results for the three and nine months ended September 30, 2015 and 2014 reported as Income (loss) from discontinued operations, net of tax on the Condensed Consolidated Statements of Operations are as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(dollars in millions)	2015			2014			2015			2014
Revenue	$	—		$	30.1		$	4.4		$	116.0
Costs and expenses
Cost of products and services	—			13.7			12.0			53.2
Selling, general and administrative	—			4.9			2.2			16.3
Depreciation and amortization expense	—			29.1			28.6			74.2
Restructuring (reversals) charges	(2.1		)	10.3			4.3			15.5
Asset impairment	—			7.5			—			7.5
Transaction costs	—			2.8			—			2.8
Amortization of deferred gain	—			(6.4		)	(6.5		)	(16.5		)
Total operating costs and expenses	(2.1		)	61.9			40.6			153.0
Operating income (loss)	2.1			(31.8		)	(36.2		)	(37.0		)
Interest expense (income)	—			1.1			(1.7		)	3.8
Other (income) expense	(0.1		)	(0.2		)	(0.2		)	1.7
Gain on transfer of tower lease obligations and other assets	—			—			15.9			—
Gain on sale of wireless spectrum licenses	—			—			112.6			—
Income (loss) before income taxes	2.2			(32.7		)	94.2			(42.5		)
Income tax expense (benefit)	1.2			(12.9		)	33.4			(14.3		)
Income (loss) from discontinued operations	$	1.0		$	(19.8	)	$	60.8		$	(28.2	)

Wireless assets and liabilities presented as discontinued operations as of September 30, 2015 and December 31, 2014 are as follows:

(dollars in millions)	September 30, 2015		December 31, 2014
Current assets
Prepaid rent - spectrum license	$	—	$	3.2
Other current assets	—		1.5
Total current assets from discontinued operations	—		4.7
Property, plant and equipment	—		44.1
Other noncurrent assets	—		0.5
Total noncurrent assets from discontinued operations	—		44.6
Total assets from discontinued operations	$	—	$	49.3
Current liabilities
Current portion of long-term debt	$	—	$	1.6
Accounts payable	0.2		5.0
Restructuring liability	8.9		15.4
Deferred gain on sale of wireless spectrum licenses	—		112.6
Other current liabilities	2.8		7.4
Total current liabilities from discontinued operations	11.9		142.0
Long-term debt, less current portion	—		81.6
Deferred gain on sale of towers	—		13.1
Other noncurrent liabilities	—		8.0
Total noncurrent liabilities from discontinued operations	—		102.7
Total liabilities from discontinued operations	$	11.9	$	244.7

Certain capital lease and retirement obligations were reported as liabilities from discontinued operations as of December 31, 2014 as we continued to operate the wireless business at that time. The following capital lease and asset retirement obligations will be retained by the Company and have not been included in liabilities from discontinued operations at September 30, 2015:

	Continuing Operations		Discontinued Operations
	As of September 30, 2015		As of December 31, 2014
(dollars in millions)
Current portion of long-term debt	$	1.2	$	1.1
Long-term debt, less current portion	52.4		57.0
Other noncurrent liabilities	8.2		7.5
Total liabilities	$	61.8	$	65.6

Following is selected operating and investing cash flow activity from discontinued operations included in Condensed Consolidated Statements of Cash Flows:

	Nine Months Ended
	September 30,
(dollars in millions)	2015		2014
Depreciation and amortization	28.6		74.2
Impairment loss	—		7.5
Amortization of deferred gain on sale of towers	(6.5	)	(16.5	)
Non-cash spectrum lease	3.2		—
Deferred gain on sale of spectrum licenses	(112.6	)	—
Gain on transfer of tower lease obligations and other assets	(15.9	)	—
Restructuring payments	(11.2	)	(1.0	)
Capital expenditures	—		(6.5	)
Proceeds from sale of wireless spectrum licenses	—		194.4