Business Segment Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Business Segment Information [Text Block]

Business Segment Information

As of December 31, 2015, 2014, and 2013, we operated two business segments: Entertainment and Communications and IT Services and Hardware. Effective January 24, 2013, the date of the CyrusOne IPO, we no longer include CyrusOne, our former Data Center Colocation segment, in our consolidated financial statements and now account for our ownership in CyrusOne as a cost method investment. The closing of our wireless operations, effective March 31, 2015, represented a strategic shift in our business. Therefore, certain wireless assets, liabilities and results of operations are reported as discontinued operations in our financial statements. For further details of our investment in CyrusOne, see Note 1 and Note 4 of Notes to Consolidated Financial Statements. For further details of Discontinued Operations, see Notes 1 and 3 of Notes to Consolidated Financial Statements.

The Entertainment and Communications segment provides data, video, voice and other services. These services are primarily provided to customers in southwestern Ohio, northern Kentucky and southeastern Indiana. Data includes products such as high-speed internet access, digital subscriber lines, private line, multi-protocol label switching, SONET, dedicated internet access, wavelength, audio conferencing and digital signal. These products are used to transport large amounts of data over private networks. Video services provide our Fioptics customers access to over 400 entertainment channels, over 120 high-definition channels, parental controls, HD DVR and video On-Demand. In addition, we offer features that deliver high customer satisfaction, including Fioptics TV Everywhere ™ and a Fioptics live TV streaming application. Voice represents local service, including Fioptics voice lines. It also includes VoIP, long distance, digital trunking, switched access and other value-added services such as caller identification, voicemail, call waiting, and call return. VoIP products provide our customers access to widely disbursed communication platforms and access to cloud based services and hosted unified communications products. Other services consists of revenue generated from wiring projects for business customers, advertising, directory assistance, maintenance, information services and commissions received as an authorized sales agent for DirecTV® and Verizon Wireless.

Operating income for Entertainment and Communications for 2015 was down from a year ago due primarily to additional operating expenses associated with accelerating our fiber investment and costs absorbed as a result of shutting down wireless operations. Entertainment and Communications recognized restructuring charges of $1.6 million in 2015 and reversed restructuring charges of $0.5 million in 2014. Restructuring charges were $9.1 million in 2013 for costs associated with employee separation, lease abandonments and contract termination costs. In 2014, Entertainment and Communications recorded an asset impairment charge of $4.6 million related to the abandonment of an internal use software project that was written off in the fourth quarter. There were no impairment charges recorded in 2015 or 2013. Capital expenditures are incurred to expand our Fioptics product suite, upgrade and increase capacity for our internet and data networks, and to maintain our wireline network. In 2015, we increased our Fioptics investment by $86.4 million.

The IT Services and Hardware segment provides a range of fully managed and outsourced IT and telecommunications services along with the sale, installation, and maintenance of major branded IT and telephony equipment. IT Services and Hardware revenue increased $2.4 million from 2014 as a result of an increase in strategic revenue of $40.7 million in 2015. This was partially offset by the $35.1 million decrease in telecom and IT hardware sales in 2015 compared to the prior year. IT Services and Hardware revenue increased $88.9 million from 2013 to 2014 as a result of increases of $20.6 million in strategic revenue and $64.4 million in telecom and IT hardware sales.

As of December 31, 2015 and 2014, the carrying value of our investment in CyrusOne was 55.5 million and 273.6 million, respectively, and is included as an asset of the Corporate segment. Deferred tax assets totaling $182.3 million and $284.7 million as of December 31, 2015 and 2014, respectively, are also reported as assets in the Corporate segment. In 2013, Corporate operating results include compensation expense of $42.6 million associated with awards and other transaction-related incentives associated with the IPO of CyrusOne on January 24, 2013.

Our business segment information is as follows:

	Year Ended December 31,
(dollars in millions)	2015			2014			2013
Revenue
Entertainment and Communications	$	743.7		$	740.7		$	724.8
IT Services and Hardware	435.4			433.0			344.1
Data Center Colocation	—			—			15.6
Intersegment	(11.3		)	(12.2		)	(11.1		)
Total revenue	$	1,167.8		$	1,161.5		$	1,073.4
Intersegment revenue
Entertainment and Communications	$	1.3		$	1.2		$	1.1
IT Services and Hardware	10.0			11.0			9.6
Data Center Colocation	—			—			0.4
Total intersegment revenue	$	11.3		$	12.2		$	11.1
Operating income
Entertainment and Communications	$	129.9		$	178.9		$	186.2
IT Services and Hardware	20.6			19.8			8.5
Data Center Colocation	—			—			3.2
Corporate	(22.5		)	(21.8		)	(58.1		)
Total operating income	$	128.0		$	176.9		$	139.8
Expenditures for long-lived assets
Entertainment and Communications	$	269.5		$	163.7		$	162.6
IT Services and Hardware	14.0			11.9			10.6
Data Center Colocation	—			—			7.7
Corporate	0.1			0.2			—
Total expenditures for long-lived assets	$	283.6		$	175.8		$	180.9
Depreciation and amortization
Entertainment and Communications	$	129.2		$	115.7		$	112.2
IT Services and Hardware	12.3			11.7			10.5
Data Center Colocation	—			—			5.2
Corporate	0.1			0.2			0.5
Total depreciation and amortization	$	141.6		$	127.6		$	128.4
	As of December 31,
(dollars in millions)	2015			2014
Assets
Entertainment and Communications	$	983.3		$	833.2
IT Services and Hardware	58.0			61.4
Total assets from discontinued operations	—			49.3
Corporate and eliminations	413.1			876.8
Total assets	$	1,454.4		$	1,820.7

Details of our service and product revenues including eliminations are as follows:

	Year Ended December 31,
(dollars in millions)	2015		2014		2013
Service revenue
Entertainment and Communications	$	735.0	$	728.8	$	718.0
IT Services and Hardware	198.0		161.4		138.7
Data Center Colocation	—		—		15.2
Total service revenue	$	933.0	$	890.2	$	871.9
Product revenue
Handsets and accessories	$	7.4	$	10.7	$	5.7
Telecom and IT hardware	227.4		260.6		195.8
Total product revenue	$	234.8	$	271.3	$	201.5