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 for $8.00 until we no longer provided wireless services. 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 during the three months ended March 31, 2015. On April 1, 2015, we transferred certain other wireless assets to the acquirer, 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.

Wireless financial results for the twelve months ended December 31, 2017, 2016 and 2015 reported as "Income from discontinued operations, net of tax" on the Consolidated Statements of Operations are as follows:



	Twelve Months Ended
	December 31,
(dollars in millions)	2017		2016			2015
Revenue	$	—	$	—		$	4.4
Costs and expenses
Cost of products and services	—		—			12.0
Selling, general and administrative	—		—			2.2
Depreciation and amortization expense	—		—			28.6
Restructuring charges	—		—			3.3
Gain on sale or disposal of assets	—		—			(0.4		)
Amortization of deferred gain	—		—			(6.5		)
Total operating costs and expenses	—		—			39.2
Operating Loss	—		—			(34.8		)
Interest income	—		—			(1.7		)
Other income	—		(0.3		)	(2.3		)
Gain on transfer of tower lease obligations and other assets	—		—			15.9
Gain on sale of wireless spectrum licenses	—		—			112.6
Income before income taxes	—		0.3			97.7
Income tax expense	—		—			34.8
Income from discontinued operations, net of tax	$	—	$	0.3		$	62.9

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



	Twelve Months Ended
	December 31,
(dollars in millions)	2017		2016			2015
Depreciation and amortization	$	—	$	—		$	28.6
Gain on sale of assets	—		—			(0.4		)
Deferred gain on sale of spectrum licenses	—		—			(112.6		)
Amortization of deferred gain on sale of towers	—		—			(6.5		)
Gain on transfer of tower lease obligations and other assets	—		—			(15.9		)
Non-cash spectrum lease	—		—			3.2
Restructuring payments	—		(4.4		)	(14.5		)
Repayment of debt	—		—			(0.3		)