x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ohio | 31-1056105 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | o | |
Non-accelerated filer | o | Smaller reporting company | o | |
Emerging growth company | o |
Form 10-Q Part I | Cincinnati Bell Inc. |
Description | Page | |
Item 1. | Financial Statements | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 296.8 | $ | 259.4 | $ | 592.5 | $ | 509.0 | |||||||
Costs and expenses | |||||||||||||||
Cost of services and products, excluding items below | 152.3 | 128.9 | 301.7 | 253.0 | |||||||||||
Selling, general and administrative, excluding items below | 66.1 | 53.8 | 134.5 | 109.1 | |||||||||||
Depreciation and amortization | 50.9 | 47.0 | 102.1 | 92.8 | |||||||||||
Restructuring and severance related charges | 4.6 | 3.6 | 4.9 | 29.2 | |||||||||||
Transaction and integration costs | 2.7 | 1.7 | 4.9 | 2.3 | |||||||||||
Total operating costs and expenses | 276.6 | 235.0 | 548.1 | 486.4 | |||||||||||
Operating income | 20.2 | 24.4 | 44.4 | 22.6 | |||||||||||
Interest expense | 31.8 | 18.1 | 62.6 | 36.1 | |||||||||||
Loss on extinguishment of debt | 1.3 | — | 1.3 | — | |||||||||||
Other components of pension and postretirement benefit plans expense | 3.2 | 3.2 | 6.5 | 6.4 | |||||||||||
Gain on sale of Investment in CyrusOne | — | — | — | (117.7 | ) | ||||||||||
Other income, net | (0.8 | ) | (0.6 | ) | (1.2 | ) | (1.0 | ) | |||||||
(Loss) income before income taxes | (15.3 | ) | 3.7 | (24.8 | ) | 98.8 | |||||||||
Income tax (benefit) expense | (1.5 | ) | 1.4 | (2.7 | ) | 35.9 | |||||||||
Net (loss) income | (13.8 | ) | 2.3 | (22.1 | ) | 62.9 | |||||||||
Preferred stock dividends | 2.6 | 2.6 | 5.2 | 5.2 | |||||||||||
Net (loss) income applicable to common shareowners | $ | (16.4 | ) | $ | (0.3 | ) | $ | (27.3 | ) | $ | 57.7 | ||||
Basic net (loss) earnings per common share | $ | (0.39 | ) | $ | (0.01 | ) | $ | (0.64 | ) | $ | 1.37 | ||||
Diluted net (loss) earnings per common share | $ | (0.39 | ) | $ | (0.01 | ) | $ | (0.64 | ) | $ | 1.36 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net (loss) income | $ | (13.8 | ) | $ | 2.3 | $ | (22.1 | ) | $ | 62.9 | |||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||
Unrealized gains on Investment in CyrusOne, net of tax of $4.4 | — | — | — | 8.3 | |||||||||||
Reclassification adjustment for gain on sale of Investment in CyrusOne included in net income, net of tax of ($41.3) | — | — | — | (76.4 | ) | ||||||||||
Foreign currency translation loss | (2.5 | ) | — | (4.3 | ) | — | |||||||||
Unrealized loss on cash flow hedge arising during the period, net of tax of ($0.4), ($0.4) | (1.5 | ) | — | (1.5 | ) | — | |||||||||
Defined benefit plans: | |||||||||||||||
Amortization of prior service benefits included in net income, net of tax of ($0.2), ($0.4), ($0.4), ($0.8) | (0.6 | ) | (0.7 | ) | (1.2 | ) | (1.4 | ) | |||||||
Amortization of net actuarial loss included in net income, net of tax of $1.2, $2.0, $2.4, $4.0 | 4.1 | 3.6 | 8.2 | 7.1 | |||||||||||
Total other comprehensive (loss) income | (0.5 | ) | 2.9 | 1.2 | (62.4 | ) | |||||||||
Total comprehensive (loss) income | $ | (14.3 | ) | $ | 5.2 | $ | (20.9 | ) | $ | 0.5 |
Form 10-Q Part I | Cincinnati Bell Inc. |
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 30.3 | $ | 17.8 | |||
Restricted Cash | 366.5 | 378.7 | |||||
Receivables, less allowances of $8.7 and $10.4 | 241.3 | 239.8 | |||||
Inventory, materials and supplies | 31.9 | 44.3 | |||||
Prepaid expenses | 22.0 | 22.2 | |||||
Other current assets | 7.3 | 7.6 | |||||
Total current assets | 699.3 | 710.4 | |||||
Property, plant and equipment, net | 1,125.8 | 1,129.0 | |||||
Goodwill | 149.4 | 151.0 | |||||
Intangible assets, net | 124.7 | 132.3 | |||||
Deferred income tax assets | 14.2 | 12.2 | |||||
Other noncurrent assets | 52.7 | 52.7 | |||||
Total assets | $ | 2,166.1 | $ | 2,187.6 | |||
Liabilities and Shareowners’ Deficit | |||||||
Current liabilities | |||||||
Current portion of long-term debt | $ | 16.8 | $ | 18.4 | |||
Accounts payable | 205.1 | 185.6 | |||||
Unearned revenue and customer deposits | 40.3 | 36.3 | |||||
Accrued taxes | 17.5 | 21.2 | |||||
Accrued interest | 26.7 | 29.9 | |||||
Accrued payroll and benefits | 30.6 | 28.7 | |||||
Other current liabilities | 31.2 | 37.2 | |||||
Total current liabilities | 368.2 | 357.3 | |||||
Long-term debt, less current portion | 1,727.3 | 1,729.3 | |||||
Pension and postretirement benefit obligations | 168.6 | 177.5 | |||||
Deferred income tax liabilities | 11.4 | 11.2 | |||||
Other noncurrent liabilities | 34.0 | 30.2 | |||||
Total liabilities | 2,309.5 | 2,305.5 | |||||
Shareowners’ deficit | |||||||
Preferred stock, 2,357,299 shares authorized, 155,250 shares (3,105,000 depositary shares) of 6 3/4% Cumulative Convertible Preferred Stock issued and outstanding at June 30, 2018 and December 31, 2017; liquidation preference $1,000 per share ($50 per depositary share) | 129.4 | 129.4 | |||||
Common shares, $.01 par value; 96,000,000 shares authorized; 42,440,157 and 42,197,965 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 0.4 | 0.4 | |||||
Additional paid-in capital | 2,561.0 | 2,565.6 | |||||
Accumulated deficit | (2,661.7 | ) | (2,639.6 | ) | |||
Accumulated other comprehensive loss | (172.5 | ) | (173.7 | ) | |||
Total shareowners’ deficit | (143.4 | ) | (117.9 | ) | |||
Total liabilities and shareowners’ deficit | $ | 2,166.1 | $ | 2,187.6 |
Form 10-Q Part I | Cincinnati Bell Inc. |
Six Months Ended | |||||||
June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities | |||||||
Net (loss) income | $ | (22.1 | ) | $ | 62.9 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 102.1 | 92.8 | |||||
Loss on extinguishment of debt | 1.3 | — | |||||
Gain on sale of Investment in CyrusOne | — | (117.7 | ) | ||||
Provision for loss on receivables | 2.6 | 3.5 | |||||
Noncash portion of interest expense | 2.1 | 1.1 | |||||
Deferred income taxes | (3.8 | ) | 35.4 | ||||
Pension and other postretirement payments less than expense | 0.3 | 1.5 | |||||
Stock-based compensation | 2.6 | 3.9 | |||||
Other, net | (1.4 | ) | (3.0 | ) | |||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||
(Increase) decrease in receivables | (2.8 | ) | 25.4 | ||||
Decrease (increase) in inventory, materials, supplies, prepaid expenses and other current assets | 10.6 | (5.9 | ) | ||||
Increase in accounts payable | 3.0 | 9.9 | |||||
(Decrease) increase in accrued and other current liabilities | (6.3 | ) | 9.0 | ||||
Decrease in other noncurrent assets | 1.8 | 0.3 | |||||
(Decrease) increase in other noncurrent liabilities | (0.1 | ) | 3.8 | ||||
Net cash provided by operating activities | 89.9 | 122.9 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (71.0 | ) | (105.2 | ) | |||
Proceeds from sale of Investment in CyrusOne | — | 140.7 | |||||
Acquisitions of businesses | (2.8 | ) | (9.6 | ) | |||
Other, net | — | 0.4 | |||||
Net cash (used in) provided by investing activities | (73.8 | ) | 26.3 | ||||
Cash flows from financing activities | |||||||
Net decrease in corporate credit and receivables facilities with initial maturities less than 90 days | — | (89.5 | ) | ||||
Repayment of debt | (5.9 | ) | (4.2 | ) | |||
Debt issuance costs | (2.5 | ) | (0.7 | ) | |||
Dividends paid on preferred stock | (5.2 | ) | (5.2 | ) | |||
Other, net | (2.0 | ) | (1.1 | ) | |||
Net cash used in financing activities | (15.6 | ) | (100.7 | ) | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.2 | ) | — | ||||
Net increase in cash, cash equivalents and restricted cash | 0.3 | 48.5 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 396.5 | 9.7 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 396.8 | $ | 58.2 | |||
Noncash investing and financing transactions: | |||||||
Acquisition of property by assuming debt and other noncurrent liabilities | $ | 6.1 | $ | 6.9 | |||
Acquisition of property on account | $ | 28.3 | $ | 24.8 |
Form 10-Q Part I | Cincinnati Bell Inc. |
1. | Description of Business and Accounting Policies |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(in millions, except per share amounts) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Numerator: | |||||||||||||||
Net (loss) income | $ | (13.8 | ) | $ | 2.3 | $ | (22.1 | ) | $ | 62.9 | |||||
Preferred stock dividends | 2.6 | 2.6 | 5.2 | 5.2 | |||||||||||
Net (loss) income applicable to common shareowners - basic and diluted | $ | (16.4 | ) | $ | (0.3 | ) | $ | (27.3 | ) | $ | 57.7 | ||||
Denominator: | |||||||||||||||
Weighted average common shares outstanding - basic | 42.4 | 42.2 | 42.4 | 42.1 | |||||||||||
Stock-based compensation arrangements | — | — | — | 0.2 | |||||||||||
Weighted average common shares outstanding - diluted | 42.4 | 42.2 | 42.4 | 42.3 | |||||||||||
Basic net (loss) earnings per common share | $ | (0.39 | ) | $ | (0.01 | ) | $ | (0.64 | ) | $ | 1.37 | ||||
Diluted net (loss) earnings per common share | $ | (0.39 | ) | $ | (0.01 | ) | $ | (0.64 | ) | $ | 1.36 |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Fulfillment Costs | Cost of Acquisition | Total Contract Assets | |||||||||||||||||||||||||||||||||
(dollars in millions) | Entertainment and Communications | IT Services and Hardware | Total Company | Entertainment and Communications | IT Services and Hardware | Total Company | Entertainment and Communications | IT Services and Hardware | Total Company | ||||||||||||||||||||||||||
Balance as of December 31, 2017 | $ | 17.5 | $ | 2.0 | $ | 19.5 | $ | 11.6 | $ | 1.3 | $ | 12.9 | $ | 29.1 | $ | 3.3 | $ | 32.4 | |||||||||||||||||
Additions | 3.1 | 0.4 | 3.5 | 1.6 | 0.4 | 2.0 | 4.7 | 0.8 | 5.5 | ||||||||||||||||||||||||||
Amortization | (3.3 | ) | (0.3 | ) | (3.6 | ) | (1.7 | ) | (0.2 | ) | (1.9 | ) | (5.0 | ) | (0.5 | ) | (5.5 | ) | |||||||||||||||||
Balance as of March 31, 2018 | 17.3 | 2.1 | 19.4 | 11.5 | 1.5 | 13.0 | 28.8 | 3.6 | 32.4 | ||||||||||||||||||||||||||
Additions | 3.0 | 0.4 | 3.4 | 1.8 | 0.3 | 2.1 | 4.8 | 0.7 | 5.5 | ||||||||||||||||||||||||||
Amortization | (3.3 | ) | (0.3 | ) | (3.6 | ) | (1.6 | ) | (0.2 | ) | (1.8 | ) | (4.9 | ) | (0.5 | ) | (5.4 | ) | |||||||||||||||||
Balance as of June 30, 2018 | $ | 17.0 | $ | 2.2 | $ | 19.2 | $ | 11.7 | 1.6 | $ | 13.3 | $ | 28.7 | $ | 3.8 | $ | 32.5 |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(dollars in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Data | $ | 84.4 | $ | 90.1 | $ | 169.3 | $ | 174.5 | |||||||
Video | 39.7 | 36.9 | 78.9 | 72.8 | |||||||||||
Voice | 46.0 | 50.5 | 93.0 | 102.2 | |||||||||||
Other | 3.8 | 3.5 | 6.9 | 6.6 | |||||||||||
Total Entertainment and Communications | 173.9 | 181.0 | 348.1 | 356.1 | |||||||||||
Consulting | 39.8 | 16.5 | 77.9 | 33.2 | |||||||||||
Cloud | 23.0 | 19.2 | 45.6 | 40.1 | |||||||||||
Communications | 41.5 | 40.3 | 82.1 | 76.8 | |||||||||||
Infrastructure Solutions | 24.0 | 8.8 | 50.3 | 15.7 | |||||||||||
Total IT Services and Hardware | 128.3 | 84.8 | 255.9 | 165.8 | |||||||||||
Intersegment revenue | (5.4 | ) | (6.4 | ) | (11.5 | ) | (12.9 | ) | |||||||
Total revenue | $ | 296.8 | $ | 259.4 | $ | 592.5 | $ | 509.0 |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||
(dollars in millions) | Entertainment and Communications | IT Services and Hardware | Intersegment revenue elimination | Total | |||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
Products and Services transferred at a point in time | $ | 5.6 | $ | 5.1 | $ | 32.1 | $ | 13.6 | $ | — | $ | — | $ | 37.7 | $ | 18.7 | |||||||||||||||
Products and Services transferred over time | 163.6 | 170.6 | 95.5 | 70.1 | — | — | 259.1 | 240.7 | |||||||||||||||||||||||
Intersegment revenue | 4.7 | 5.3 | 0.7 | 1.1 | (5.4 | ) | (6.4 | ) | — | — | |||||||||||||||||||||
Total revenue | $ | 173.9 | $ | 181.0 | $ | 128.3 | $ | 84.8 | $ | (5.4 | ) | $ | (6.4 | ) | $ | 296.8 | $ | 259.4 |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||
(dollars in millions) | Entertainment and Communications | IT Services and Hardware | Intersegment revenue elimination | Total | |||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
Products and Services transferred at a point in time | $ | 10.4 | $ | 10.2 | $ | 67.4 | $ | 24.3 | $ | — | $ | — | $ | 77.8 | $ | 34.5 | |||||||||||||||
Products and Services transferred over time | 327.8 | 335.2 | 186.9 | 139.3 | — | — | 514.7 | 474.5 | |||||||||||||||||||||||
Intersegment revenue | 9.9 | 10.7 | 1.6 | 2.2 | (11.5 | ) | (12.9 | ) | — | — | |||||||||||||||||||||
Total revenue | $ | 348.1 | $ | 356.1 | $ | 255.9 | $ | 165.8 | $ | (11.5 | ) | $ | (12.9 | ) | $ | 592.5 | $ | 509.0 |
Form 10-Q Part I | Cincinnati Bell Inc. |
(dollars in millions) | |||
Cash consideration | $ | 241.2 | |
Debt repayment | (77.6 | ) | |
Working capital adjustment | 2.8 | ||
Total purchase price | $ | 166.4 |
(dollars in millions) | |||
Assets acquired | |||
Cash | $ | 6.5 | |
Receivables | 69.9 | ||
Prepaid expenses and other current assets | 11.8 | ||
Property, plant and equipment | 11.6 | ||
Goodwill | 133.1 | ||
Intangible assets | 134.0 | ||
Other noncurrent assets | 3.2 | ||
Total assets acquired | 370.1 | ||
Liabilities assumed | |||
Accounts payable | 63.6 | ||
Current portion of long-term debt | 1.3 | ||
Accrued expenses and other current liabilities | 18.3 | ||
Deferred income tax liabilities | 42.3 | ||
Long-term debt, less current portion | 76.7 | ||
Other noncurrent liabilities | 1.5 | ||
Total liabilities assumed | 203.7 | ||
Net assets acquired | $ | 166.4 |
Form 10-Q Part I | Cincinnati Bell Inc. |
(dollars in millions) | Fair Value | Useful Lives | |||
Customer relationships | $ | 108.0 | 15 years | ||
Trade name | 16.0 | 10 years | |||
Technology | 10.0 | 10 years | |||
Total identifiable intangible assets | $ | 134.0 |
Three Months Ended | Six Months Ended | |||||
June 30, | June 30, | |||||
(dollars in millions, except per share amounts) | 2017 | 2017 | ||||
Revenue | $ | 313.1 | $ | 611.6 | ||
Net (loss) income applicable to common shareholders | (5.5 | ) | 48.6 | |||
Earnings per share: | ||||||
Basic and diluted earnings (loss) per common share | (0.13 | ) | 1.15 |
Form 10-Q Part I | Cincinnati Bell Inc. |
IT Services and Hardware | Entertainment and Communications | Total Company | ||||||||||
(dollars in millions) | ||||||||||||
Goodwill, balance as of December 31, 2017 | $ | 148.8 | $ | 2.2 | $ | 151.0 | ||||||
Activity during the year | ||||||||||||
Adjustments to prior year acquisitions | 0.7 | — | 0.7 | |||||||||
Currency translations | (2.3 | ) | — | (2.3 | ) | |||||||
Goodwill, balance as of June 30, 2018 | $ | 147.2 | $ | 2.2 | $ | 149.4 |
June 30, 2018 | December 31, 2017 | |||||||||||||||||||||||
Gross Carrying | Accumulated | Net | Gross Carrying | Accumulated | Net | |||||||||||||||||||
(dollars in millions) | Amount (a) | Amortization | Amount | Amount (a) | Amortization | Amount | ||||||||||||||||||
Customer relationships | $ | 114.3 | $ | (12.6 | ) | $ | 101.7 | $ | 116.0 | $ | (8.9 | ) | $ | 107.1 | ||||||||||
Trade names | 15.0 | (1.1 | ) | 13.9 | 15.9 | (0.4 | ) | 15.5 | ||||||||||||||||
Technology | 9.8 | (0.7 | ) | 9.1 | 9.9 | (0.2 | ) | 9.7 | ||||||||||||||||
Total | $ | 139.1 | $ | (14.4 | ) | $ | 124.7 | $ | 141.8 | $ | (9.5 | ) | $ | 132.3 |
Form 10-Q Part I | Cincinnati Bell Inc. |
June 30, | December 31, | ||||||
(dollars in millions) | 2018 | 2017 | |||||
Current portion of long-term debt: | |||||||
Credit Agreement - Tranche B Term Loan due 2024 | $ | 4.5 | $ | 6.0 | |||
Capital lease obligations and other debt | 12.3 | 12.4 | |||||
Current portion of long-term debt | 16.8 | 18.4 | |||||
Long-term debt, less current portion: | |||||||
Credit Agreement - Tranche B Term Loan due 2024 | 595.5 | 594.0 | |||||
7 1/4% Senior Notes due 2023 | 22.3 | 22.3 | |||||
7% Senior Notes due 2024 | 625.0 | 625.0 | |||||
8% Senior Notes due 2025 | 350.0 | 350.0 | |||||
Cincinnati Bell Telephone Notes | 87.9 | 87.9 | |||||
Capital lease obligations and other debt | 65.6 | 70.5 | |||||
1,746.3 | 1,749.7 | ||||||
Net unamortized premium | 1.8 | 1.9 | |||||
Unamortized note issuance costs | (20.8 | ) | (22.3 | ) | |||
Long-term debt, less current portion | 1,727.3 | 1,729.3 | |||||
Total debt | $ | 1,744.1 | $ | 1,747.7 |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
(dollars in millions) | Employee Separation | Lease Abandonment | Total | ||||||||
Balance as of December 31, 2017 | $ | 14.4 | $ | 0.1 | $ | 14.5 | |||||
Charges | 0.3 | — | 0.3 | ||||||||
Utilizations | (7.3 | ) | — | (7.3 | ) | ||||||
Balance as of March 31, 2018 | 7.4 | 0.1 | 7.5 | ||||||||
Charges | 3.8 | 0.8 | 4.6 | ||||||||
Utilizations | (0.9 | ) | — | (0.9 | ) | ||||||
Balance as of June 30, 2018 | $ | 10.3 | $ | 0.9 | $ | 11.2 |
(dollars in millions) | Entertainment and Communications | IT Services and Hardware | Corporate | Total | |||||||||||
Balance as of December 31, 2017 | $ | 12.3 | $ | 2.2 | $ | — | $ | 14.5 | |||||||
Charges | — | 0.3 | — | 0.3 | |||||||||||
Utilizations | (5.7 | ) | (1.6 | ) | — | (7.3 | ) | ||||||||
Balance as of March 31, 2018 | 6.6 | 0.9 | — | 7.5 | |||||||||||
Charges | — | 4.6 | — | 4.6 | |||||||||||
Utilizations | (0.3 | ) | (0.6 | ) | — | (0.9 | ) | ||||||||
Balance as of June 30, 2018 | $ | 6.3 | $ | 4.9 | $ | — | $ | 11.2 |
Form 10-Q Part I | Cincinnati Bell Inc. |
June 30, 2018 | |||||||||||||||
(dollars in millions) | June 30, 2018 | Quoted Prices in active markets Level 1 | Significant observable inputs Level 2 | Significant unobservable inputs Level 3 | |||||||||||
Liabilities: | |||||||||||||||
Interest Rate Swap | $ | 1.9 | $ | — | $ | 1.9 | $ | — |
Form 10-Q Part I | Cincinnati Bell Inc. |
June 30, 2018 | December 31, 2017 | ||||||||||||||
(dollars in millions) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Long-term debt, including current portion* | $ | 1,687.0 | $ | 1,607.7 | $ | 1,687.1 | $ | 1,687.5 | |||||||
Other financing arrangements | 5.2 | 5.3 | — | — | |||||||||||
Interest Rate Swap | 1.9 | 1.9 | — | — | |||||||||||
*Excludes capital leases and note issuance costs. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, 2018 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(dollars in millions) | Pension Benefits | Postretirement and Other Benefits | |||||||||||||
Service cost | $ | — | $ | — | $ | — | $ | — | |||||||
Other components of pension and postretirement benefit plans expense: | |||||||||||||||
Interest cost on projected benefit obligation | 4.1 | 4.9 | 0.8 | 0.8 | |||||||||||
Expected return on plan assets | (6.2 | ) | (6.5 | ) | — | — | |||||||||
Amortization of: | |||||||||||||||
Prior service benefit | — | — | (0.8 | ) | (1.1 | ) | |||||||||
Actuarial loss | 4.2 | 4.4 | 1.1 | 1.2 | |||||||||||
Total amortization | 4.2 | 4.4 | 0.3 | 0.1 | |||||||||||
Pension / postretirement costs | $ | 2.1 | $ | 2.8 | $ | 1.1 | $ | 0.9 |
Six Months Ended June 30, 2018 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(dollars in millions) | Pension Benefits | Postretirement and Other Benefits | |||||||||||||
Service cost | $ | — | $ | — | $ | 0.1 | $ | 0.1 | |||||||
Other components of pension and postretirement benefit plans expense: | |||||||||||||||
Interest cost on projected benefit obligation | 8.3 | 9.7 | 1.6 | 1.6 | |||||||||||
Expected return on plan assets | (12.4 | ) | (13.0 | ) | — | — | |||||||||
Amortization of: | |||||||||||||||
Prior service benefit | — | — | (1.6 | ) | (2.2 | ) | |||||||||
Actuarial loss | 8.5 | 8.8 | 2.1 | 2.3 | |||||||||||
Total amortization | 8.5 | 8.8 | 0.5 | 0.1 | |||||||||||
Pension / postretirement costs | $ | 4.4 | $ | 5.5 | $ | 2.2 | $ | 1.8 |
(dollars in millions) | Unrecognized Net Periodic Pension and Postretirement Benefit Cost | Unrealized Loss on Cash Flow Hedge | Foreign Currency Translation Loss | Total | |||||||||||
Balance as of December 31, 2017 | $ | (173.1 | ) | $ | — | $ | (0.6 | ) | $ | (173.7 | ) | ||||
Reclassifications, net | 7.0 | (a) | — | — | 7.0 | ||||||||||
Unrealized loss on cash flow hedge arising during the period, net | — | (1.5 | ) | (b) | — | (1.5 | ) | ||||||||
Foreign currency loss | — | — | (4.3 | ) | (4.3 | ) | |||||||||
Balance as of June 30, 2018 | $ | (166.1 | ) | $ | (1.5 | ) | $ | (4.9 | ) | $ | (172.5 | ) |
(a) | These reclassifications are included in the other components of net periodic pension and postretirement benefit plans expense and represent amortization of prior service benefit and actuarial loss, net of tax (see Note 9 for additional details). The other components of net periodic pension and postretirement benefit plans expense are recorded in "Other components of pension and postretirement benefit plans expense" on the Condensed Consolidated Statements of Operations. See Note 9 for further disclosures. |
(b) | In June 2018, the Company entered into an interest rate swap agreement to minimize its exposure to interest rate fluctuations on variable rate debt. The interest rate swap is considered a derivative instrument and qualifies for cash flow hedge accounting in accordance with ASC 815. The unrealized loss on cash flow hedge represents the change in the fair value of the derivative instrument that occurred during the period, net of tax. This unrealized loss is recorded in "Other noncurrent liabilities" on the Condensed Consolidated Balance Sheets. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(dollars in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenue | |||||||||||||||
Entertainment and Communications | $ | 173.9 | $ | 181.0 | $ | 348.1 | $ | 356.1 | |||||||
IT Services and Hardware | 128.3 | 84.8 | 255.9 | 165.8 | |||||||||||
Intersegment | (5.4 | ) | (6.4 | ) | (11.5 | ) | (12.9 | ) | |||||||
Total revenue | $ | 296.8 | $ | 259.4 | $ | 592.5 | $ | 509.0 | |||||||
Intersegment revenue | |||||||||||||||
Entertainment and Communications | $ | 4.7 | $ | 5.3 | $ | 9.9 | $ | 10.7 | |||||||
IT Services and Hardware | 0.7 | 1.1 | 1.6 | 2.2 | |||||||||||
Total intersegment revenue | $ | 5.4 | $ | 6.4 | $ | 11.5 | $ | 12.9 | |||||||
Operating income (loss) | |||||||||||||||
Entertainment and Communications | $ | 25.5 | $ | 31.4 | $ | 54.1 | $ | 34.5 | |||||||
IT Services and Hardware | (0.2 | ) | (1.5 | ) | 1.2 | (0.6 | ) | ||||||||
Corporate | (5.1 | ) | (5.5 | ) | (10.9 | ) | (11.3 | ) | |||||||
Total operating income (loss) | $ | 20.2 | $ | 24.4 | $ | 44.4 | $ | 22.6 | |||||||
Expenditures for long-lived assets* | |||||||||||||||
Entertainment and Communications | $ | 31.8 | $ | 45.5 | $ | 59.4 | $ | 92.3 | |||||||
IT Services and Hardware | 6.5 | 5.0 | 14.4 | 22.5 | |||||||||||
Total expenditures for long-lived assets | $ | 38.3 | $ | 50.5 | $ | 73.8 | $ | 114.8 | |||||||
Depreciation and amortization | |||||||||||||||
Entertainment and Communications | $ | 41.0 | $ | 40.4 | $ | 81.9 | $ | 79.8 | |||||||
IT Services and Hardware | 9.9 | 6.5 | 20.1 | 12.9 | |||||||||||
Corporate | — | 0.1 | 0.1 | 0.1 | |||||||||||
Total depreciation and amortization | $ | 50.9 | $ | 47.0 | $ | 102.1 | $ | 92.8 | |||||||
* Includes cost of acquisitions | |||||||||||||||
June 30, | December 31, | ||||||||||||||
(dollars in millions) | 2018 | 2017 | |||||||||||||
Assets | |||||||||||||||
Entertainment and Communications | $ | 1,103.8 | $ | 1,111.4 | |||||||||||
IT Services and Hardware | 395.9 | 482.7 | |||||||||||||
Corporate and eliminations | 666.4 | 593.5 | |||||||||||||
Total assets | $ | 2,166.1 | $ | 2,187.6 |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
(dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||
Entertainment and Communications | $ | 169.2 | $ | 175.7 | $ | (6.5 | ) | (4 | )% | $ | 338.2 | $345.4 | $ | (7.2 | ) | (2 | )% | ||||||||||||
IT Services and Hardware | 127.6 | 83.7 | 43.9 | 52 | % | 254.3 | 163.6 | 90.7 | 55 | % | |||||||||||||||||||
Total revenue | $ | 296.8 | $ | 259.4 | $ | 37.4 | 14 | % | $ | 592.5 | $ | 509.0 | $ | 83.5 | 16 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
(dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||
Cost of services and products | |||||||||||||||||||||||||||||
Entertainment and Communications | $ | 77.8 | $ | 77.0 | $ | 0.8 | 1 | % | $ | 154.2 | $ | 151.4 | $ | 2.8 | 2 | % | |||||||||||||
IT Services and Hardware | 74.5 | 51.9 | 22.6 | 44 | % | 147.5 | 101.6 | 45.9 | 45 | % | |||||||||||||||||||
Total cost of services and products | $ | 152.3 | $ | 128.9 | $ | 23.4 | 18 | % | $ | 301.7 | $ | 253.0 | $ | 48.7 | 19 | % |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||
(dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||||||
Entertainment and Communications | $ | 29.0 | — | $ | 29.8 | $ | (0.8 | ) | (3 | )% | $ | 56.1 | $ | 61.1 | $ | (5.0 | ) | (8 | )% | |||||||||||
IT Services and Hardware | 34.8 | 20.4 | 14.4 | 71 | % | 72.5 | 39.2 | 33.3 | 85 | % | ||||||||||||||||||||
Corporate | 2.3 | 3.6 | (1.3 | ) | (36 | )% | 5.9 | 8.8 | (2.9 | ) | (33 | )% | ||||||||||||||||||
Total selling, general and administrative | $ | 66.1 | $ | 53.8 | $ | 12.3 | 23 | % | $ | 134.5 | $ | 109.1 | $ | 25.4 | 23 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||
(dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||
Depreciation and amortization expense | ||||||||||||||||||||||||||||||
Entertainment and Communications | $ | 41.0 | $ | 40.4 | $ | 0.6 | 1 | % | $ | 81.9 | $ | 79.8 | $ | 2.1 | 3 | % | ||||||||||||||
IT Services and Hardware | 9.9 | 6.5 | 3.4 | 52 | % | 20.1 | 0.0 | 12.9 | 7.2 | 56 | % | |||||||||||||||||||
Corporate | — | 0.1 | (0.1 | ) | n/m | 0.1 | 0.1 | 0.0 | n/m | |||||||||||||||||||||
Total depreciation and amortization expense | $ | 50.9 | $ | 47.0 | $ | 3.9 | 8 | % | $ | 102.1 | $ | 92.8 | $ | 9.3 | 10 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
(dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||
Other operating costs | |||||||||||||||||||||||||||||
Restructuring and severance related charges | $ | 4.6 | $ | 3.6 | $ | 1.0 | 28 | % | $ | 4.9 | $ | 29.2 | $ | (24.3 | ) | (83 | )% | ||||||||||||
Transaction and integration costs | 2.7 | 1.7 | 1.0 | 59 | % | 4.9 | 2.3 | 2.6 | n/m | ||||||||||||||||||||
Total other operating costs | $ | 7.3 | $ | 5.3 | $ | 2.0 | 38 | % | $ | 9.8 | $ | 31.5 | $ | (21.7 | ) | (69 | )% |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
(dollars in millions) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||
Non-operating costs | |||||||||||||||||||||||||||||
Interest expense | $ | 31.8 | $ | 18.1 | $ | 13.7 | 76 | % | $ | 62.6 | $ | 36.1 | $ | 26.5 | 73 | % | |||||||||||||
Loss on extinguishment of debt | 1.3 | — | 1.3 | n/m | 1.3 | — | 1.3 | n/m | |||||||||||||||||||||
Other components of pension and postretirement benefit plans expense | 3.2 | 3.2 | — | — | 6.5 | 6.4 | 0.1 | 2 | % | ||||||||||||||||||||
Gain on sale of Investment in CyrusOne | — | — | — | n/m | — | (117.7 | ) | 117.7 | n/m | ||||||||||||||||||||
Other income, net | (0.8 | ) | (0.6 | ) | (0.2 | ) | 33 | % | (1.2 | ) | (1.0 | ) | (0.2 | ) | 20 | % | |||||||||||||
Income tax (benefit) expense | (1.5 | ) | 1.4 | (2.9 | ) | n/m | (2.7 | ) | 35.9 | (38.6 | ) | n/m |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
(dollars in millions) | 2018 | 2017 | Change | % Change | 2018 | 2017 | Change | % Change | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||
Data | $ | 84.4 | $ | 90.1 | $ | (5.7 | ) | (6 | )% | $ | 169.3 | $ | 174.5 | $ | (5.2 | ) | (3 | )% | |||||||||||
Video | 39.7 | 36.9 | 2.8 | 8 | % | 78.9 | 72.8 | 6.1 | 8 | % | |||||||||||||||||||
Voice | 46.0 | 50.5 | (4.5 | ) | (9 | )% | 93.0 | 102.2 | (9.2 | ) | (9 | )% | |||||||||||||||||
Other | 3.8 | 3.5 | 0.3 | 9 | % | 6.9 | 6.6 | 0.3 | 5 | % | |||||||||||||||||||
Total Revenue | 173.9 | 181.0 | (7.1 | ) | (4 | )% | 348.1 | 356.1 | (8.0 | ) | (2 | )% | |||||||||||||||||
Operating costs and expenses: | |||||||||||||||||||||||||||||
Cost of services and products | 78.4 | 78.3 | 0.1 | — | 156.0 | 154.0 | 2.0 | 1 | % | ||||||||||||||||||||
Selling, general and administrative | 29.0 | 29.8 | (0.8 | ) | (3 | )% | 56.1 | 61.1 | (5.0 | ) | (8 | )% | |||||||||||||||||
Depreciation and amortization | 41.0 | 40.4 | 0.6 | 1 | % | 81.9 | 79.8 | 2.1 | 3 | % | |||||||||||||||||||
Restructuring and severance charges | — | 1.1 | (1.1 | ) | n/m | — | 26.7 | (26.7 | ) | n/m | |||||||||||||||||||
Total operating costs and expenses | 148.4 | 149.6 | (1.2 | ) | (1 | )% | $ | 294.0 | 321.6 | (27.6 | ) | (9 | )% | ||||||||||||||||
Operating income | $ | 25.5 | $ | 31.4 | $ | (5.9 | ) | (19 | )% | $ | 54.1 | $ | 34.5 | $ | 19.6 | 57 | % | ||||||||||||
Operating margin | 14.7 | % | 17.3 | % | (2.6) pts | 15.5 | % | 9.7 | % | 6.0 pts | |||||||||||||||||||
Capital expenditures | $ | 31.8 | $ | 45.5 | $ | (13.7 | ) | (30 | )% | $ | 59.4 | $ | 92.3 | $ | (32.9 | ) | (36 | )% |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, | ||||||||||||
Metrics information (in thousands): | 2018 | 2017 | Change | % Change | ||||||||
Fioptics | ||||||||||||
Data | ||||||||||||
Internet FTTP | 192.7 | 168.1 | 24.6 | 15 | % | |||||||
Internet FTTN | 42.6 | 46.0 | (3.4 | ) | (7 | )% | ||||||
Total Fioptics Internet | 235.3 | 214.1 | 21.2 | 10 | % | |||||||
Video | ||||||||||||
Video FTTP | 118.1 | 112.8 | 5.3 | 5 | % | |||||||
Video FTTN | 27.0 | 30.0 | (3.0 | ) | (10 | )% | ||||||
Total Fioptics Video | 145.1 | 142.8 | 2.3 | 2 | % | |||||||
Voice | ||||||||||||
Consumer Voice Lines | 89.1 | 87.0 | 2.1 | 2 | % | |||||||
Enterprise Voice Lines | 18.5 | 15.2 | 3.3 | 22 | % | |||||||
Total Fioptics Voice Lines | 107.6 | 102.2 | 5.4 | 5 | % | |||||||
Fioptics Units Passed | ||||||||||||
Units passed FTTP | 449.3 | 415.4 | 33.9 | 8 | % | |||||||
Units passed FTTN | 139.9 | 141.3 | (1.4 | ) | (1 | )% | ||||||
Total Fioptics units passed | 589.2 | 556.7 | 32.5 | 6 | % | |||||||
Enterprise Fiber | ||||||||||||
Data | ||||||||||||
Ethernet Bandwidth (Gb) | 4,133 | 3,638 | 495 | 14 | % | |||||||
Legacy | ||||||||||||
Data | ||||||||||||
DSL | 75.2 | 93.0 | (17.8 | ) | (19 | )% | ||||||
Voice | ||||||||||||
Consumer Voice Lines | 85.9 | 104.9 | (19.0 | ) | (18 | )% | ||||||
Enterprise Voice Lines | 154.7 | 177.3 | (22.6 | ) | (13 | )% | ||||||
Total Legacy Voice Lines | 240.6 | 282.2 | (41.6 | ) | (15 | )% | ||||||
*Fiber to the Premise (FTTP), Fiber to the Node (FTTN) |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
(dollars in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Fioptics | ||||||||||||||||||||
Data | $ | 35.6 | $ | 31.3 | $ | 70.0 | $ | 60.9 | ||||||||||||
Video | 39.7 | 36.9 | 78.9 | 72.8 | ||||||||||||||||
Voice | 9.5 | 8.3 | 18.6 | 16.2 | ||||||||||||||||
Other | 0.3 | 0.3 | 0.6 | 0.6 | ||||||||||||||||
85.1 | 76.8 | 168.1 | 150.5 | |||||||||||||||||
Enterprise Fiber | ||||||||||||||||||||
Data | 21.0 | 25.3 | 41.8 | — | 45.0 | |||||||||||||||
Legacy | ||||||||||||||||||||
Data | 27.8 | 33.5 | 57.5 | 68.6 | ||||||||||||||||
Voice | 36.5 | 42.2 | 74.4 | 86.0 | ||||||||||||||||
Other | 3.5 | 3.2 | 6.3 | 6.0 | ||||||||||||||||
67.8 | 78.9 | 138.2 | 160.6 | |||||||||||||||||
Total Entertainment and Communications revenue | $ | 173.9 | $ | 181.0 | $ | 348.1 | $ | 356.1 |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(dollars in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Fioptics capital expenditures | ||||||||||||||||
Construction | $ | 9.3 | $ | 16.2 | $ | 15.4 | $ | 31.4 | ||||||||
Installation | 10.0 | 13.1 | 17.5 | 28.4 | ||||||||||||
Other | 1.6 | 1.3 | 5.2 | 6.5 | ||||||||||||
Total Fioptics | 20.9 | 30.6 | 38.1 | 66.3 | ||||||||||||
Enterprise Fiber | 3.2 | 4.8 | 7.7 | 8.7 | ||||||||||||
Other | 7.7 | 10.1 | 13.6 | 17.3 | ||||||||||||
Total capital expenditures | $ | 31.8 | $ | 45.5 | $ | 59.4 | $ | 92.3 |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
(dollars in millions) | 2018 | 2017 | Change | % Change | 2018 | 2017 | Change | % Change | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||
Consulting | $ | 39.8 | $ | 16.5 | $ | 23.3 | n/m | $ | 77.9 | $ | 33.2 | $ | 44.7 | n/m | |||||||||||||||
Cloud | 23.0 | 19.2 | 3.8 | 20 | % | 45.6 | 40.1 | 5.5 | 14 | % | |||||||||||||||||||
Communications | 41.5 | 40.3 | 1.2 | 3 | % | 82.1 | 76.8 | 5.3 | 7 | % | |||||||||||||||||||
Infrastructure Solutions | 24.0 | 8.8 | 15.2 | n/m | 50.3 | 15.7 | 34.6 | n/m | |||||||||||||||||||||
Total revenue | 128.3 | 84.8 | 43.5 | 51 | % | 255.9 | 165.8 | 90.1 | 54 | % | |||||||||||||||||||
Operating costs and expenses: | |||||||||||||||||||||||||||||
Cost of services and products | 79.0 | 56.7 | 22.3 | 39 | % | 156.7 | 111.4 | 45.3 | 41 | % | |||||||||||||||||||
Selling, general and administrative | 35.0 | 20.6 | 14.4 | 70 | % | 73.0 | 39.6 | 33.4 | 84 | % | |||||||||||||||||||
Depreciation and amortization | 9.9 | 6.5 | 3.4 | 52 | % | 20.1 | 12.9 | 7.2 | 56 | % | |||||||||||||||||||
Restructuring and severance related charges | 4.6 | 2.5 | 2.1 | 84 | % | 4.9 | 2.5 | 2.4 | 96 | % | |||||||||||||||||||
Total operating costs and expenses | 128.5 | 86.3 | 42.2 | 49 | % | 254.7 | 166.4 | 88.3 | 53 | % | |||||||||||||||||||
Operating (loss) income | $ | (0.2 | ) | $ | (1.5 | ) | $ | 1.3 | (87 | )% | $ | 1.2 | $ | (0.6 | ) | $ | 1.8 | n/m | |||||||||||
Operating margin | (0.2 | )% | (1.8 | )% | 1.6 pts | 0.5 | % | (0.4 | )% | 0.9 pts | |||||||||||||||||||
Capital expenditures | $ | 6.5 | $ | 4.6 | $ | 1.9 | 41 | % | $ | 11.6 | $ | 12.9 | $ | (1.3 | ) | (10 | )% |
Metrics information: (as of June 30, 2018) | Consulting | Communications | Communications | Communications | |||
Billable Heads | NaaS Locations | SD - WAN Locations | Hosted UCaaS Profiles | ||||
926 | 782 | 310 | 192,715 |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Form 10-Q Part I | Cincinnati Bell Inc. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
(a) | Evaluation of disclosure controls and procedures. |
(b) | Changes in internal control over financial reporting. |
Form 10-Q Part II | Cincinnati Bell Inc. |
Item 1. | Legal Proceedings |
Form 10-Q Part II | Cincinnati Bell Inc. |
Exhibit | |
Number | Description |
Amended and Restated Articles of Incorporation of Cincinnati Bell Inc. (Exhibit 3.1 to Current Report on Form 8-K, Date of Report April 25, 2008, File No. 1-8519). | |
Amendment to the Amended and Restated Articles of Incorporation of Cincinnati Inc. (Exhibit 3.1 to Current Report on Form 8-K, Date of Report October 4, 2016, File No. 1-8519). | |
Amended and Restated Regulations of Cincinnati Bell Inc. | |
Amendment No. 1 to Credit Agreement dated as of April 5, 2018, by and among Cincinnati Bell Inc., the subsidiary guarantors thereto, Morgan Stanley Senior Funding, Inc. and the tranche B term lenders party thereto (Exhibit 10.1 to Current Report on Form 8-K, Date of Report April 5, 2018, File No. 1-8519). | |
Amendment No. 2 to Credit Agreement dated as of April 5, 2018, by and among Cincinnati Bell Inc., the subsidiary guarantors thereto, Morgan Stanley Senior Funding, Inc. and the revolving lenders party thereto (Exhibit 10.1 to Current Report on Form 8-K, Date of Report April 5, 2018, File No. 1-8519). | |
Cincinnati Bell Inc. Form of 2018-2023 Business Value Award Agreement (Exhibit 10.1 to Current Report on Form 8-K, Date of Report May 7, 2018, File No. 1-8519). | |
Second Amended and Restated Purchase and Sale Agreement dated as of May 10, 2018, among Cincinnati Bell Inc., as Servicer, Cincinnati Bell Funding LLC and the Originators identified therein (Exhibit 99.1 to Current Report on Form 8-K, Date of Report May 10, 2018, File No. 1-8519). | |
Canadian Purchase and Sale Agreement dated as of May 10, 2018, among Cincinnati Bell Funding Canada Ltd., a Purchase, OnX Enterprise Solutions Ltd., as Servicer, and the Originators identified therein (Exhibit 99.2 to Current Report on Form 8-K, Date of Report May 10, 2018, File No. 1-8519). | |
Receivables Financing Agreement dated as of May 10, 2018, among Cincinnati Bell Funding LLC and Cincinnati Bell Funding Canada Ltd., as Borrowers, Cincinnati Bell Inc. and OnX Enterprise Solutions Ltd., as Servicers, the Lenders, Letter of Credit Participants and Group Agents from time to time party thereto, PNC Bank, National Association, as Administrator and Letter of Credit Bank, and PNC Capital Markets LLC, as Structuring Agent (Exhibit 99.3 to Current Report on Form 8-K, Date of Report May 10, 2018, File No. 1-8519). | |
Receivables Purchase Agreement dated as of May 10, 2018, among Cincinnati Bell Funding LLC, as Seller, Cincinnati Bell Inc., as Servicer, PNC Bank, National Association, as Buyer, and PNC Capital Markets LLC, as Structuring Agent (Exhibit 99.4 to Current Report on Form 8-K, Date of Report May 10, 2018, File No. 1-8519). | |
Subsidiaries of the Registrant. | |
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Form 10-Q Part II | Cincinnati Bell Inc. |
(101.INS)** | XBRL Instance Document. |
(101.SCH)** | XBRL Taxonomy Extension Schema Document. |
(101.CAL)** | XBRL Taxonomy Extension Calculation Linkbase Document. |
(101.DEF)** | XBRL Taxonomy Extension Definition Linkbase Document. |
(101.LAB)** | XBRL Taxonomy Extension Label Linkbase Document. |
(101.PRE)** | XBRL Taxonomy Extension Presentation Linkbase Document. |
Form 10-Q Part II | Cincinnati Bell Inc. |
Cincinnati Bell Inc. | ||||
Date: | August 8, 2018 | /s/ Andrew R. Kaiser | ||
Andrew R. Kaiser | ||||
Chief Financial Officer | ||||
Date: | August 8, 2018 | /s/ Shannon M. Mullen | ||
Shannon M. Mullen | ||||
Chief Accounting Officer |
Subsidiary Name | State or Country of Incorporation or Formation | |
Cincinnati Bell Shared Services LLC | Ohio | |
Cincinnati Bell Wireless, LLC | Ohio | |
CBTS LLC | Delaware | |
Cincinnati Bell Entertainment Inc. | Ohio | |
Cincinnati Bell Funding LLC | Delaware | |
Cincinnati Bell Telephone Company LLC | Ohio | |
Cincinnati Bell Extended Territories LLC | Ohio | |
CBTS Technology Solutions LLC | Delaware | |
CBTS Canada Inc. | Ontario | |
OnX Holdings LLC | Delaware | |
CBTS Virginia LLC | Virginia | |
Cincinnati Bell Technology Solutions UK Limited | United Kingdom | |
OnX UK Limited | United Kingdom | |
Momentum Digital Solutions Inc. | Ontario | |
OnX Enterprise Solutions Ltd. | Ontario | |
OnX ExchangeCo. Inc. | Ontario | |
OnX USA LLC | Delaware | |
OnX Managed Services Inc. | Illinois | |
OnX Managed Services Inc. | Ontario | |
OnX Enterprise Solutions India LLP | India | |
Cincinnati Bell Funding Canada LTD. | Ontario | |
Hawaiian Telecom Holdco, Inc. | Delaware | |
Hawaiian Telcom Communications, Inc. | Delaware | |
Hawaiian Telcom, Inc. | (Hawaii) | |
Hawaiian Telcom Services Company, Inc. | Delaware | |
Wavecom Solutions Corporation | (Hawaii) | |
SystemMetrics Corporation | (Hawaii) |
1. | I have reviewed this quarterly report on Form 10-Q of Cincinnati Bell Inc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure control and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 8, 2018 | /s/ Leigh R. Fox |
Leigh R. Fox | ||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Cincinnati Bell Inc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure control and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 8, 2018 | /s/ Andrew R. Kaiser |
Andrew R. Kaiser | ||
Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Leigh R. Fox | |
Leigh R. Fox | |
Chief Executive Officer | |
August 8, 2018 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Andrew R. Kaiser | |
Andrew R. Kaiser | |
Chief Financial Officer | |
August 8, 2018 |
Document and Entity Information Document - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 31, 2018 |
|
Document and Entity [Abstract] | ||
Entity Registrant Name | CINCINNATI BELL INC. | |
Entity Central Index Key | 0000716133 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 50,157,168 |
Condensed Consolidated Statements of Comprehensive Income Parenthetical - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Unrealized gains on Investment in CyrusOne, tax | $ 0.0 | $ 0.0 | $ 0.0 | $ 4.4 |
Reclassification adjustment for gain on sale of Investment in CyrusOne included in net income, tax | 0.0 | 0.0 | 0.0 | (41.3) |
Unrealized loss on cash flow hedge arising during the period, tax | (0.4) | 0.0 | (0.4) | 0.0 |
Amortization of prior service benefits included in net income, tax | (0.2) | (0.4) | (0.4) | (0.8) |
Amortization of net actuarial loss included in net income, tax | $ 1.2 | $ 2.0 | $ 2.4 | $ 4.0 |
Condensed Consolidated Balance Sheets Parenthetical - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Allowance for receivables | $ 8,700,000 | $ 10,400,000 |
Preferred Stock, Shares Authorized | 2,357,299 | 2,357,299 |
Preferred Stock, 6 3/4% Cumulative Convertible, Shares Issued | 155,250 | 155,250 |
Preferred Stock, 6 3/4% Cumulative Convertible, Shares Outstanding | 155,250 | 155,250 |
Preferred Stock, Depositary Shares | 3,105,000 | 3,105,000 |
Preferred Stock, Dividend Rate, Percentage | 6.75% | 6.75% |
Preferred Stock, Liquidation Preference Per Share | $ 1,000 | $ 1,000 |
Preferred Stock Liquidation Depositary Per Share | $ 50 | $ 50 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 96,000,000 | 96,000,000 |
Common Stock, Shares, Issued | 42,440,157 | 42,197,965 |
Common Stock, Shares, Outstanding | 42,440,157 | 42,197,965 |
Description of Business and Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Description of Business and Accounting Policies Description of Business — Cincinnati Bell Inc. and its consolidated subsidiaries ("Cincinnati Bell", "we", "our", "us" or the "Company") provide diversified telecommunications and technology services. The Company generates a large portion of its revenue by serving customers in the Greater Cincinnati and Dayton, Ohio areas. An economic downturn or natural disaster occurring in this, or a portion of this, limited operating territory could have a disproportionate effect on our business, financial condition, results of operations and cash flows compared to similar companies of a national scope and similar companies operating in different geographic areas. The Company has receivables with General Electric Company that make up 10% of the outstanding accounts receivable balance as of June 30, 2018 and December 31, 2017. The Company also has receivables with Verizon Communications Inc. that make up 12% of the outstanding accounts receivable balance as of June 30, 2018. Revenue derived from foreign operations is approximately 6% of consolidated revenue for the three and six months ended June 30, 2018. Basis of Presentation — The Condensed Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair presentation of the results of operations, other comprehensive income, financial position and cash flows for each period presented. The adjustments referred to above are of a normal and recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules and regulations for interim reporting. Effective January 1, 2018, the Company adopted the requirements of Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers and ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. All amounts and disclosures set forth in this Form 10-Q have been updated to comply with the new standards. Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to current period presentation, as a result of adopting the new standards. On January 1, 2018, the Company changed the composition of its operating segments to align more closely with the Company's broader strategy and how it manages business operations. With the exception of consumer long distance revenue, this strategy groups Competitive Local Exchange Carrier ("CLEC") revenue, which was previously included as part of the Entertainment and Communications segment, as part of the IT Services and Hardware segment in order to consolidate all company-wide VoIP sales. Accordingly, the Company recast the previously reported 2017 segment disclosures. See Note 11 for further disclosures. The Condensed Consolidated Balance Sheet as of December 31, 2017 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s 2017 Annual Report on Form 10-K. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results expected for the full year or any other interim period. Business Combinations — In accounting for business combinations, we apply the accounting requirements of ASC 805, “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. In developing estimates of fair value of acquired assets and assumed liabilities, management analyzes a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets, and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets. In addition, any contingent consideration is presented at fair value at the date of acquisition, and transaction costs are expensed as incurred. See Note 4 for disclosures related to mergers and acquisitions. Use of Estimates — Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. In the normal course of business, the Company is subject to various regulatory and tax proceedings, lawsuits, claims and other matters. The Company believes adequate provision has been made for all such asserted and unasserted claims in accordance with U.S. GAAP. Such matters are subject to many uncertainties and outcomes that are not predictable with assurance. Investment in CyrusOne — In the first quarter of 2017, the Company sold its remaining 2.8 million shares of CyrusOne Inc. common stock for net proceeds totaling $140.7 million that resulted in a realized gain of $117.7 million. As of March 31, 2017, we no longer had an investment in CyrusOne Inc. Income and Operating Taxes Income taxes — The Company’s income tax provision for interim periods is determined through the use of an estimated annual effective tax rate applied to year-to-date ordinary income as well as the tax effects associated with discrete items. During 2017, the Company re-classed $14.9 million of Alternative Minimum Tax ("AMT") refundable tax credits from "Deferred income taxes, net" to "Receivables" as these credits were expected to be utilized during 2018. Acceleration of the AMT refundable tax credits was the result of the Company's decision to make an election on its 2017 federal income tax return to claim the credits in lieu of claiming bonus depreciation. The Company received the $14.9 million of payments during the second quarter of 2018. In addition, new tax legislation enacted in 2017 repealed AMT for corporate tax payers. The balance of any remaining AMT credits will be refunded over the next 5 years beginning with the return filed in 2019. In the first quarter of 2018, the Company re-classed $0.7 million from "Deferred income taxes, net" to "Receivables" as it expects to receive this portion of the remaining AMT credits in 2019. The Company filed our 2017 federal income tax return during the quarter ended June 30, 2018 and confirms that the accounting for the income tax effects of the Tax Cuts and Jobs Act signed into law on December 22, 2017 is now complete. Operating taxes — The Company elected to record certain operating taxes such as property, sales, use, and gross receipts taxes including telecommunications surcharges as expenses, primarily within cost of services and products. These taxes are not included in income tax expense because the amounts to be paid are not dependent on our level of income. Liabilities for audit exposures are established based on management's assessment of the probability of payment. The provision for such liabilities is recognized as either property, plant and equipment, operating tax expense, or depreciation expense depending on the nature of the audit exposure. Upon resolution of an audit, any remaining liability not paid is released against the account in which it was originally recorded. Certain telecommunication taxes and surcharges that are collected from customers are also recorded as revenue; however, with the adoption of ASC 606, revenue associated with these charges is excluded from the transaction price. This approach is consistent with how these taxes were previously recorded under ASC Topic 605. Derivative Financial Instruments — The Company accounts for derivative financial instruments by recognizing derivative instruments as either assets or liabilities in the Condensed Consolidated Balance Sheets at fair value and recognizing the resulting gains or losses as adjustments to the Condensed Consolidated Statements of Operations or "Accumulated Other Comprehensive Income (Loss)". The Company does not hold or issue derivative financial instruments for trading or speculative purposes. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of "Accumulated Other Comprehensive Income (Loss)" in stockholder's equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. Derivatives that do not qualify as hedges are adjusted to fair value through earnings in the current period. Recently Issued Accounting Standards In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation - Stock Compensation (Topic 718), which improves financial reporting for non-employee share-based payments by making the guidance consistent with the accounting for employee share-based compensation. The ASU is effective for public entities for annual reporting periods beginning after December 15, 2018, and for interim periods with those fiscal years. Early adoption is permitted. The Company early adopted the guidance effective June 30, 2018. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows entities to elect to make a one-time reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The ASU is effective for public entities for annual reporting periods beginning after December 15, 2018, and for interim periods within those fiscal years. Early adoption is permitted. The Company early adopted this guidance effective December 31, 2017, resulting in a reclassification adjustment of $32.2 million to "Accumulated deficit" from "Other comprehensive loss" on the Condensed Consolidated Balance Sheets. The amount of the reclassification is calculated on the basis of the difference between the historical and newly enacted tax rates on deferred taxes related to our pension and postretirement benefit plans. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which improves the hedge accounting model to facilitate financial reporting that more closely reflects a company’s risk management activities. The FASB’s new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. This update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the update. The Company early adopted the guidance effective April 1, 2018. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation, which amends the scope of modification accounting for share-based payment arrangements. The ASU is effective for public business entities for annual periods beginning after December 15, 2017. The Company prospectively adopted the standard effective January 1, 2018 and has applied the amended guidance to any awards modified on or after this date. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements in ASC 715 related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. The ASU requires entities to disaggregate the current service cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement. The other components shall be presented elsewhere in the income statement and outside of income from operations, if such a subtotal is presented, on a retrospective basis as of the date of adoption. In addition, only the service cost component of net benefit cost is eligible for capitalization on a prospective basis. The ASU is effective for public business entities for annual periods beginning after December 15, 2017. The Company retrospectively adopted the standard effective January 1, 2018. The Company re-classed $1.6 million of other components of net benefit cost from both "Cost of services and products" and "Selling, general and administrative," to a new line below Operating income, "Other components of pension and postretirement benefit plans expense," on the Condensed Consolidated Statements of Operations for the three months ended June 30, 2017. The Company re-classed $3.3 million and $3.1 million of other components of net benefit cost from "Cost of services and products" and "Selling, general and administrative," respectively, to a new line below Operating income, "Other components of pension and postretirement benefit plans expense," on the Condensed Consolidated Statements of Operations for the six months ended June 30, 2017. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flow - Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The FASB issued the ASU with the intent of reducing diversity in practice. The ASU is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this standard effective January 1, 2018. The adoption of this standard did not have a material effect on the Company’s Consolidated Statement of Cash Flows. In February 2016, the FASB issued ASU 2016-02, Leases, which represents a wholesale change to lease accounting. The standard introduces a lessee model that brings most leases on the balance sheet, as well as aligns certain underlying principles of the new lessor model with those in ASC 606. The ASU is effective for public entities for fiscal years beginning after December 15, 2018. As issued, the standard requires lessors and lessees to use a modified retrospective transition method for existing leases. ASU 2016-02 was amended in January 2018 by the provisions of ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842,” and in July 2018 by the provisions of ASU 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU 2018-11, “Targeted Improvements.” We plan to adopt ASU 2016-02, as amended, effective January 1, 2019. As of the second quarter of 2018 the Company has substantially completed procedures to identify the existing lease population to which the new standard is applicable. The Company is also in the process of implementing changes to accounting policies, processes, systems, and internal controls. The Company procured a third-party lease accounting software solution to facilitate the ongoing accounting and financial reporting requirements of the ASU. The new standard will result in increases to the assets and liabilities on the Company’s consolidated balance sheets. The Company is currently evaluating the full impact of adopting the new standard. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This standard also includes expanded disclosure requirements that result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The Company adopted the new standard and all subsequent amendments as of January 1, 2018. The Company utilized the full retrospective method; therefore, each prior reporting period presented was adjusted beginning with the issuance of the Company’s 2018 interim financial statements. The most significant impact of adopting the new standard is the change to the treatment of hardware revenue in the Infrastructure Solutions category from recording hardware revenue as a principal (gross) to recording revenue as an agent (net). Based on our assessment of ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), issued by the FASB in March 2016, the Company acts as an agent and as such will record hardware sales net of the related cost of products. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations focusing on a control model rather than a risk and reward model. As a result of adopting ASU 2014-09, revenue and cost of products for the three and six months ended June 30, 2017, decreased by $34.6 million and $63.2 million, respectively. Changes in accounting policies related to variable consideration or rebates did not have a material effect on the Company's financial statements. Fulfillment and acquisition costs that are now recorded as an asset and amortized on a monthly basis decreased expense for the three and six months ended June 30, 2017 by $0.3 million and $0.6 million, respectively, and increased basic earnings per share for the six months ended June 30, 2017 by $0.01. Adoption of ASU 2014-09 did not result in a change to basic earnings per share for three months ended June 30, 2017. An incremental asset related to fulfillment and acquisition costs of $32.3 million was recorded on the balance sheet as of December 31, 2017, with an offsetting reduction in "Accumulated deficit." As a result of the entry, total contract asset related to fulfillment and acquisition costs was $32.4 million as of December 31, 2017. The impact of these adjustments resulted in a decrease of $7.1 million to "Deferred income tax assets" as of December 31, 2017, with the offset to "Accumulated deficit." See Note 3 for additional disclosures as a result of adopting ASC Topic 606. Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Earnings Per Common Share |
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Earnings Per Share [Text Block] | Earnings Per Common Share Basic earnings per common share (“EPS”) is based upon the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur upon issuance of common shares for awards under stock-based compensation plans or conversion of preferred stock, but only to the extent that they are considered dilutive. The following table shows the computation of basic and diluted EPS:
For the three and six months ended June 30, 2018, the Company had a net loss available to common shareholders and, as a result, all common stock equivalents were excluded from the computation of diluted EPS as their inclusion would have been anti-dilutive. For the three months ended June 30, 2017, the Company had a net loss available to common shareholders and, as a result, all common stock equivalents were excluded from the computation of diluted EPS as their inclusion would have been anti-dilutive. For the six months ended June 30, 2017, awards under the Company's stock-based compensation plans for common shares of 0.3 million were excluded from the computation of diluted EPS as the inclusion would have been anti-dilutive. For all periods presented, preferred stock convertible into 0.9 million common shares was excluded as it was anti-dilutive. |
Revenue (Notes) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | Revenue The Entertainment and Communications segment provides products and services to both consumer and enterprise customers that can be categorized as either Fioptics, Enterprise Fiber or Legacy. The products and services within these three categories can be further categorized as either Data, Voice, Video or Other. Fioptics and Legacy revenue include both consumer and enterprise customers. Enterprise Fiber revenue includes ethernet and dedicated internet access services that are provided to enterprise customers. Consumer customers have implied month-to-month contracts, while enterprise customers typically have contracts with a duration of one to five years and automatically renew on a month to month basis. Customers are invoiced on a monthly basis for services rendered. Contracts for projects that are included within the Other revenue stream are typically short in duration and less than one year. The IT Services and Hardware segment provides a full range of Information Technology ("IT") solutions, including Communications, Cloud and Consulting services. IT Services and Hardware customers enter into contracts that have a typical duration of one to five years, with renewal options at the end of the term. Customers are invoiced on a monthly basis for services rendered. The IT Services and Hardware segment also provides enterprise customers with Infrastructure Solutions, which includes the sale of hardware and maintenance contracts. These contracts are typically satisfied in less than twelve months and revenue is recognized at a point in time. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which was adopted on January 1, 2018, using the full retrospective method. See below for further discussion of the adoption, including the impact on our 2017 financial statements. The Company has elected the practical expedient described in ASC 606-10-32-18 that allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects that the period of time between the transfer of a promised good or service to the customer and when the customer pays will be one year or less. Customers are typically billed immediately upon the rendering of services or the delivery of products. Payment terms for customers are between 30 and 180 days. In the instance that payment terms are greater than twelve months, the guidance in ASC 606-10-32-15 will be applied to determine the transaction price. Method of Adoption The Company adopted ASC Topic 606 on January 1, 2018, using the full retrospective method. The comparative periods for 2018 and 2017 are reported in accordance with ASC Topic 606. The adoption of ASC Topic 606 primarily affected product revenue and cost of products on our Consolidated Financial Statements. Based on the Company’s assessment of ASC Topic 606 as it relates to the sale of hardware within the Infrastructure Solutions category, the Company considers itself an agent (net) versus as a principal (gross). Based on our assessment of ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), issued by the FASB in March 2016, the Company acts as an agent and as such will record revenue associated with the sale of hardware net of the related cost of products. This conclusion is based on the Company not obtaining control of the inventory since in most cases the Company does not take possession of the inventory, does not have the ability to direct the product to anyone besides the purchasing customer, and does not integrate the hardware with any of our own goods or services. In situations where the Company does take possession, the Company assesses if we act as the principal or the agent. While the Company does perform installation services in certain cases, those services involve installing the hardware into the customer’s existing technology. Installation is considered a separate performance obligation as it is capable of being distinct, and is distinct, within the context of the contract. The reduction to "Revenue" and "Cost of services and products" related to recording these contracts on a net basis is $34.6 million and $63.2 million for the three and six months ended June 30, 2017, respectively. In addition to the changes discussed above as result of recognizing hardware revenue on a net basis, additional contract assets related to fulfillment costs and costs of acquisition of $32.3 million were recorded to "Other noncurrent assets" as of December 31, 2017, with an offsetting reduction in "Accumulated deficit." As a result of the entry, total contract assets related to fulfillment and acquisition costs were $32.4 million as of December 31, 2017. Under the new standard, the Company defers all incremental sales incentives and other costs incurred in order to obtain a contract with a customer. The Company amortizes the contract asset related to both fulfillment costs and cost of acquisition over the period of time the services under the contract are expected to be delivered to the customer. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, or a series of distinct goods or services, and is the unit of account defined in ASC Topic 606. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Contract modifications for changes to services provided are routine throughout the term of our contracts. In most instances, contract modifications are for the addition or reduction of services that are distinct, and price changes are based on the stand-alone selling price of the service and, as such, are accounted for on a prospective basis as a new contract. Goods and services are sold individually, or a contract may include multiple goods or services. For contracts with multiple goods and services, the contract's transaction price is allocated to each performance obligation using the stand-alone selling price of each distinct good or service in the contract. Certain customers of the Company may receive cash-based rebates based on volume of sales, which are accounted for as variable consideration. Potential rebates are considered at contract inception in our estimate of transaction price based on the forecasted volume of sales. Estimates are reassessed quarterly. Performance obligations are either satisfied over time as services are performed or at a point in time. Substantially all of our service revenue is recognized over time. For services transferred over time, the Company has elected the practical expedient to recognize revenue based on amounts invoiced to the customer as the Company has concluded that the invoice amount directly corresponds with the value of services provided to the customer. Management considers this a faithful depiction of the transfer of control as services are provided evenly over the month and are substantially the same over the life of the contract. As the Company has elected the practical expedients detailed at ASC 606-10-50-13, revenue for unsatisfied performance obligations that will be billed in future periods has not been disclosed. Entertainment and Communications The Company has identified four distinct performance obligations in the Entertainment and Communications segment, namely Data, Voice, Video and Other. For each of the Data, Voice and Video services, service is delivered to the customer continuously and in a substantially similar manner for each period of the agreement, the customer takes full control over the services as the service is delivered, and as such Data, Voice and Video are identified to be a series of distinct services. Services provided by the Entertainment and Communications segment can be categorized into three main categories that include Fioptics, Enterprise Fiber and Legacy, each of which may include one or more of the aforementioned performance obligations. Data services include high-speed internet access, digital subscriber lines, ethernet, SONET (Synchronous Optical Network), dedicated internet access, wavelength and digital signal. Voice services include traditional and Fioptics voice lines, switched access, digital trunking and consumer long distance calling. Video services are offered through our fiber network to consumer and enterprise customers based on various standard plans with the opportunity to add premium channels. To receive video services, customers are required to use Cincinnati Bell set top boxes that are billed as part of the monthly recurring service. Set top boxes are not considered a separate performance obligation from video because the equipment is necessary for the service to operate and the customer has no alternative use for the equipment. Services and products not included in Data, Voice or Video are included in Other revenue and are comprised of wire care, wire time and materials projects, and advertising. Transfer of control of these services and products is evaluated on an individual project basis and can occur over time or at a point in time. The Company uses multiple methods to determine stand-alone selling prices in the Entertainment and Communications segment. For Fioptics Data, Video and Voice, market rate is the primary method used to determine stand-alone selling prices. For Enterprise Fiber Data and Legacy Voice, Data, and Other, stand-alone selling prices are determined based on a list price, discount off of list price, a tariff rate, a margin percentage range, or a minimum margin percentage. IT Services and Hardware The Company has identified four distinct performance obligations in the IT Services and Hardware segment. These performance obligations are Communications, Cloud, Consulting, and Infrastructure Solutions. Communications services are monthly services that include data and VoIP services, tailored solutions that include converged IP communications of data, voice, video and mobility applications, enterprise long distance, MPLS (Multi-Protocol Label Switching) and conferencing services. Cloud services includes storage, backup, disaster recovery, SLA-based monitoring and management, cloud computing and cloud consulting. Consulting services provide customers with IT staffing, consulting, emerging technology solutions and installation projects. Infrastructure Solutions includes the sale of hardware and maintenance contracts. For the sale of hardware, the Company evaluated whether it is the principal or the agent. The Company has concluded it acts as an agent because it does not control the inventory before it is transferred to customers, it does not have the ability to direct the product to anyone besides the purchasing customer, and it does not integrate the hardware with any of its own goods or services. Based on this assessment, the performance obligation is to arrange a sale of hardware between the manufacturer and the customer. In the instance where there is an issue with the hardware, the Company coordinates with the manufacturer to facilitate a return in accordance with the standard manufacturer warranty. Hardware returns are not significant to the Company. Stand-alone selling prices for the four performance obligations within the IT Services and Hardware segment were determined based on a margin percentage range, minimum margin percentage or standard price list. Revenue recognized at a point in time includes revenue recognized net of the cost of product for hardware sales within Infrastructure Solutions as well as for certain projects within Communications and Consulting. Revenue generated from these contracts is recognized when the hardware is shipped to the customer, in the case of Infrastructure Solutions when we act as the agent, or when the customer communicates acceptance of services performed, in the case of Communications and Consulting. For contracts with freight on board shipping terms, management has elected to account for shipping and handling as activities to fulfill the promise to transfer the good, and therefore, has not evaluated whether shipping and handling activities are promised services to its customers. Contract Balances The Company recognizes an asset for incremental fulfillment costs that include installation costs associated with Voice, Video, and Data product offerings in the Entertainment and Communications segment for which the contract life is longer than one year. These fulfillment costs are amortized ratably over the expected life of the customer, which is representative of the expected period of benefit of the asset capitalized. The expected life of the customer is determined utilizing the average churn rate for each product. The Company calculates average churn based on the historical average customer life. We recognize an asset for incremental fulfillment costs that include installation and provisioning costs for certain Communications services in the IT Services and Hardware segment. The asset recognized for Communication services is amortized over the average contract life. Churn rates and average contract life are reviewed on an annual basis. Fulfillment costs are capitalized to “Other noncurrent assets.” The related amortization expense is recorded to “Cost of services and products.” The Company recognizes an asset for the incremental costs of acquiring a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs related to Voice, Video, Data and certain Communications and Cloud services meet the requirements to be capitalized. The contract asset established for the costs of acquiring a contract are recorded to “Other noncurrent assets.” Sales incentives are amortized ratably over the period that services are delivered using either an average churn rate or average contract term, both representative of the expected period of benefit of the asset capitalized. Customer churn rates and average contract term assumptions are reviewed on an annual basis. The related amortization expense is recorded to “Selling, general and administrative.” Management has elected to use the practical expedient detailed in ASC 340-40-25-4 to expense any costs to fulfill a contract and costs to obtain a contract as they are incurred when the amortization period would have been one year or less. This practical expedient has been applied to fulfillment costs that include installation costs associated with wiring projects and certain Cloud services. In addition, this practical expedient has been applied to acquisition costs associated with revenue from certain Communications projects. The following table presents the activity for the Company’s contract assets:
Disaggregated Revenue The following table presents revenues disaggregated by product and service lines.
The following table presents revenues disaggregated by contract type.
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Mergers and Acquisitions (Notes) |
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Mergers, Acquisitions and Dispositions Disclosures [Text Block] | Mergers and Acquisitions Acquisition of OnX Holdings LLC On October 2, 2017, the Company acquired 100% of OnX Holdings LLC ("OnX"), a privately held company that provides technology services and solutions to enterprise customers in the United States, Canada and the United Kingdom. The acquisition extends the IT Services and Hardware segment's geographic footprint and accelerates its initiatives in IT cloud migration. The purchase price for OnX consisted of the following:
The cash portion of the purchase price was funded through borrowings under the Credit Agreement (see Note 6). The cash consideration includes $77.6 million related to existing debt that was repaid in conjunction with the close of the acquisition. In addition, a working capital adjustment of $2.8 million was paid in the first quarter of 2018. The Company spent $8.6 million in acquisition expenses related to the OnX acquisition, of which no expense was recorded in three months ended June 30, 2018 and $0.5 million was recorded in the six months ended June 30, 2018. No expenses were recorded in the prior year comparable periods related to the OnX acquisition. These expenses are recorded in "Transaction and integration costs" on the Condensed Consolidated Statements of Operations. Purchase Price Allocation and Other Items Based on fair value estimates, the purchase price for OnX has been allocated to individual assets acquired and liabilities assumed as follows:
During the first quarter of 2018, the Company recorded a purchase price allocation adjustment of $0.2 million to "Goodwill" related to the payment of the working capital adjustment. Also in the first quarter of 2018, the Company recorded purchase price allocation adjustments of $0.1 million to "Deferred income tax liabilities" and $0.4 million to "Other noncurrent liabilities" related to the finalization of certain tax aspects of the acquisition. The offset of these adjustments were recorded as an increase to "Goodwill." The estimated fair value of identifiable intangible assets and their estimated useful lives are as follows:
Identifiable intangible assets are amortized over their useful lives based on a number of assumptions including the estimated period of economic benefit and utilization. The weighted-average amortization period for identifiable intangible assets acquired in the OnX acquisition is 14 years. The goodwill for OnX is attributable to increased access to a diversified customer base and acquired workforce in the United States, Canada and the United Kingdom. The amount of goodwill related to OnX that is expected to be deductible for income tax purposes is $2.3 million. Pro Forma Information (Unaudited) The following table provides the unaudited pro forma results of operations for the three and six months ended June 30, 2017 as if OnX had been acquired as of the beginning of fiscal year 2016. Revenue has been retrospectively adjusted for the adoption of ASC 606 to reflect hardware revenue in the Infrastructure Solutions category net of related cost of products. These results include adjustments related to the financing of the acquisition, to increase depreciation and amortization associated with the higher values of property, plant and equipment and intangible assets, to increase interest expense for the additional debt incurred to complete the acquisition, and to reflect the related income tax effect and change in tax status. The pro forma information does not necessarily reflect the actual results of operations had the acquisition been consummated at the beginning of the annual reporting period indicated nor is it necessarily indicative of future operating results. The pro forma information does not include any (i) potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition or (ii) transaction or integration costs relating to the acquisition.
Other Acquisition Activity On February 28, 2017, the Company acquired 100% of SunTel Services ("SunTel"), a private company that provides network security, data connectivity, and unified communications solutions to commercial and enterprise customers across multiple sectors throughout Michigan for cash consideration of $10.0 million. Based on final fair value assessment and the finalization of the working capital adjustment, the acquired assets and liabilities assumed consisted primarily of property, plant and equipment of $0.4 million, customer relationship intangible assets of $1.2 million, working capital of $4.1 million and goodwill of $4.6 million. These assets and liabilities are included in the IT Services and Hardware segment. |
Goodwill and Intangible Assets (Notes) |
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Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Intangible Assets Goodwill The changes in the Company's goodwill consisted of the following:
On January 1, 2018, the Company changed the composition of its operating segments to align more closely with the Company's broader strategy and how it manages business operations. This strategy groups CLEC revenue, which was previously included as part of the Entertainment and Communications segment, as part of the IT Services and Hardware segment in order to consolidate all company-wide VoIP sales. As a result of the change, $9.7 million of goodwill related to CBTS Technology Solutions LLC ("CBTS TS") was reclassified from the Entertainment and Communications segment to the IT Services and Hardware segment for the period ending December 31, 2017. For further information related to these business segments see Note 11. No impairment losses were recognized in goodwill for the three and six months ended June 30, 2018 and 2017. Intangible Assets The Company’s intangible assets consisted of the following:
(a) Change in gross carrying amounts is due to foreign currency translation. Amortization expense for intangible assets subject to amortization was $2.3 million and $4.9 million for the three and six months ended June 30, 2018, respectively. Amortization expense for the three and six months ended June 30, 2017 was insignificant. No impairment losses were recognized for the three and six months ended June 30, 2018 and 2017. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | Debt and Other Financing Arrangements The Company’s debt consists of the following:
Credit Agreement There were no outstanding borrowings on the Credit Agreement's revolving credit facility, leaving $200.0 million available for borrowings as of June 30, 2018. This revolving credit facility expires in October 2022. In April 2018, the Company amended its Credit Agreement dated as of October 2, 2017 to reduce the applicable margin on the Tranche B Term Loan due 2024 and revolving credit facility with respect to LIBOR borrowings from the previous 3.75% per annum to 3.25% per annum and, with respect to adjusted base rate borrowings, from the previous 2.75% per annum to 2.25% per annum. The letter of credit fees were reduced from the previous 3.75% per annum to 3.25% per annum. As a result of amending the Credit Agreement, a loss on extinguishment of debt is recorded in the second quarter of $1.3 million. Accounts Receivable Securitization Facility As of June 30, 2018, the Company had no borrowings and $6.7 million of letters of credit outstanding under the accounts receivable securitization facility ("Receivables Facility"), leaving $154.2 million remaining availability on the total borrowing capacity of $160.9 million. In the second quarter of 2018, the Company executed an amendment of its Receivables Facility, which replaced, amended and added certain provisions and definitions to increase the credit availability and renew the facility, which is subject to renewal every 364 days, until May 2019. The amended Receivables Facility extends the termination date to May 2021 and includes an option to sell certain receivables on a non-recourse basis. As of June 30, 2018, the Company has not exercised its option to sell such accounts receivable. In the event the Receivables Facility is not renewed, the Company has the ability to refinance any outstanding borrowings with borrowings under the Corporate Credit Agreement. Under the terms of the Receivables Facility, the Company could obtain up to $250.0 million depending on the quantity and quality of accounts receivable. Under this agreement, certain U.S. and Canadian subsidiaries, as originators, sell their respective trade receivables on a continuous basis to Cincinnati Bell Funding LLC (“CBF”) or Cincinnati Bell Funding Canada Ltd. ("CBFC"). Although CBF and CBFC are wholly-owned consolidated subsidiaries of the Company, CBF and CBFC are legally separate from the Company and each of the Company’s other subsidiaries. Upon and after the sale or contribution of the accounts receivable to CBF or CBFC, such accounts receivable are legally assets of CBF and CBFC and, as such, are not available to creditors of other subsidiaries or the parent company. Other Financing Arrangements The IT Services and Hardware segment entered into a lease in June 2018 for a building to use in its data center operations. Structural improvements were made to these leased facilities in excess of normal tenant improvements and, as such, we are deemed the accounting owner of these facilities. As of June 30, 2018, the liability related to these financing arrangements was $5.2 million, which was recognized within "Other noncurrent liabilities" in the Condensed Consolidated Balance Sheets. |
Restructuring and Severance |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | Restructuring and Severance Liabilities have been established for employee separations and lease abandonment. A summary of activity in the restructuring and severance liability is shown below:
Headcount related restructuring and severance charges of $3.8 million recorded in the second quarter of 2018 are related to costs incurred in order to recognize future synergies as the Company continues to identify efficiencies with the integration of OnX. In addition, a restructuring charge associated with lease abandonment of $0.8 million was recorded in the second quarter of 2018 related to an office space that will no longer be utilized. During the three and six months ended June 30, 2018, the Company made severance payments related to employee separations associated with initiatives to reduce costs within our legacy copper network and headcount reductions in our IT Services and Hardware segment. Lease abandonment costs represent future minimum lease obligations, net of expected sublease income, for abandoned facilities. Lease payments on abandoned facilities will continue through 2020. A summary of restructuring activity by business segment is presented below:
At June 30, 2018 and December 31, 2017, $8.8 million and $12.0 million, respectively, of the restructuring liabilities were included in “Other current liabilities.” At June 30, 2018 and December 31, 2017, $2.4 million and $2.5 million, respectively, were included in "Other noncurrent liabilities." |
Financial Instruments and Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | Financial Instruments and Fair Value Measurements Fair Value Measurements The Company defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements, the Company uses a three-level hierarchy that prioritizes the use of observable inputs. The three levels are: Level 1 — Quoted market prices for identical instruments in an active market; Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs); and Level 3 — Unobservable inputs that reflect management's determination of assumptions that market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including our own data. The determination of where an asset or liability falls in the hierarchy requires significant judgment. Interest Rate Swaps The Company uses interest rate swap agreements to minimize its exposure to interest rate fluctuations on variable rate debt borrowings. Interest rate swaps involve the exchange of fixed and variable rate interest payments and do not represent an actual exchange of the underlying notional amounts between parties. The Company has one forward starting non-amortizing interest rate swap with a total notional amount of $300.0 million to convert variable rate debt to fixed rate debt. The interest rate swap became effective in June 2018 and expires in June 2023. The interest rate swap results in interest payments based on an average fixed rate of 2.938% plus the applicable margin per the requirements in the Credit Agreement (see Note 6). During the next twelve months, the Company estimates that $1.6 million will be reclassified as an increase to interest expense. The Company has agreements with its derivative financial instrument counter-parties that contain provisions where if the Company defaults on the indebtedness associated with its derivative financial instruments, then the Company could also be declared in default on its derivative financial instrument obligations. The Company minimizes this risk by evaluating the creditworthiness of our counter-parties, which are limited to major banks and financial institutions. Upon inception, the interest rate swaps were designated as a cash flow hedge under ASC 815, with gains and losses, net of tax, measured on an ongoing basis recorded in accumulated other comprehensive income (loss). As of June 30, 2018, the fair value of the interest rate swap was $1.9 million and is recorded in "Other current liabilities" on the Condensed Consolidated Balance Sheet. The fair value of the interest rate swap is categorized as Level 2 in the fair value hierarchy as it is based on well recognized financial principles and available market data.
Disclosure on Financial Instruments The carrying values of the Company's financial instruments approximate the estimated fair values as of June 30, 2018 and December 31, 2017, except for the Company's long-term debt, certain other financing arrangements and interest rate swap. The carrying and fair values of these items are as follows:
The fair value of our long-term debt was based on closing or estimated market prices of the Company’s debt at June 30, 2018 and December 31, 2017, which is considered Level 2 of the fair value hierarchy. The fair value of other financing arrangements was calculated using a discounted cash flow model that incorporates current borrowing rates for obligations of similar duration, which is considered level 3 of the fair value hierarchy. As of June 30, 2018, the current borrowing rate was estimated by applying Cincinnati Bell's credit spread to the risk-free rate for a similar duration borrowing. |
Pension and Postretirement Plans |
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Retirement Benefits, Description [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits Disclosure [Text Block] | Pension and Postretirement Plans The Company sponsors three noncontributory defined benefit plans and a postretirement health and life insurance plan. For the three and six months ended June 30, 2017, approximately 14% and 13% of the costs, respectively, were capitalized as a component of property, plant and equipment related to construction of our copper and fiber networks. In accordance with ASU 2017-07, retrospectively adopted effective January 1, 2018, only the service cost component of net benefit cost is eligible for capitalization on a prospective basis, which was immaterial for the three and six months ended June 30, 2018. For the three and six months ended June 30, 2018 and 2017, pension and postretirement benefit costs (benefits) were as follows:
Amortizations of prior service benefit and actuarial loss represent reclassifications from accumulated other comprehensive income. Based on current assumptions, contributions to qualified and non-qualified pension plans in 2018 are expected to be approximately $4 million and $3 million, respectively. Management expects to make cash payments of approximately $9 million related to its postretirement health plans in 2018. For the six months ended June 30, 2018, contributions to the pension plans were $2.8 million and contributions to the postretirement plan were $3.5 million. |
Shareowners' Deficit |
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Stockholders' Equity Note Disclosure [Text Block] | Shareowners' Deficit Accumulated Other Comprehensive Loss For the six months ended June 30, 2018, the changes in accumulated other comprehensive loss by component were as follows:
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Business Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | Business Segment Information On January 1, 2018, the Company changed the composition of its operating segments to align more closely with the Company's broader strategy and how it manages business operations. This strategy groups CLEC revenue, which was previously included as part of the Entertainment and Communications segment, as part of the IT Services and Hardware segment in order to consolidate all company-wide VoIP sales. Accordingly, the Company recast the previously reported 2017 segment disclosures to conform to the new segmentation. Effective January 1, 2018, we adopted the requirements of ASU 2014-09, Revenue from Contracts with Customers, and ASU 2017-07, Improving the Presentation of Net Period Pension Cost and Net Periodic Postretirement Benefit Cost. As a result of adopting these standards, certain prior period amounts reported below have been restated to conform to current period presentation. The Company’s segments are strategic business units that offer distinct products and services and are aligned with the Company's internal management structure and reporting. The Entertainment and Communications segment provides products and services that can be categorized as Data, Video, Voice or Other. Data products include high-speed internet access, digital subscriber lines, ethernet, SONET, dedicated internet access, wavelength 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 140 high-definition channels, parental controls, HD DVR, Video On-Demand and access to a Fioptics live TV streaming application. Voice represents traditional voice lines as well as Fioptics voice lines, consumer long distance, switched access and digital trunking. Other services consists of revenue generated from wiring projects for enterprise customers, advertising, directory assistance, maintenance and information services. The IT Services and Hardware segment provides end-to-end solutions from consulting to implementation to ongoing optimization. These solutions include Cloud, Communications and Consulting services along with the sale, installation and maintenance of major branded Telecom and IT hardware reported as Infrastructure Solutions. Certain corporate administrative expenses have been allocated to the segments based upon the nature of the expense and the relative size of the segment. Intercompany transactions between segments have been eliminated. Selected financial data for the Company’s business segment information is as follows:
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Subsequent Events (Notes) |
6 Months Ended |
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Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events On July 2, 2018, the Company completed its previously announced merger of Hawaiian Telcom Holdco, Inc. ("Hawaiian Telcom") for total consideration totaling $657.7 million consisting of $536.5 million in cash, and $121.2 million in stock consideration. In order to fund the acquisition on July 2, 2018, the Company utilized its proceeds from the 8% Senior Notes due 2025 and drew $35.0 million and $154.0 million on the revolving credit facility and the accounts receivable securitization facility, respectively. With the merger, the Company gains access to both Honolulu, a well-developed, fiber-rich city, as well as the growing neighbor islands. The companies' combined fiber networks will exceed 14,000 fiber route miles. In addition, Hawaiian Telcom provides the Company with direct access to the 2.6TB of Trans-Pacific fiber cable capacity linking Asia and the U.S., which expands the Company's route diversity and gives the combined company exposure to demographics on both sides of the Pacific. The initial accounting for the business combination was not complete at the time the financial statements were issued due to the timing of the acquisition and the filing of this Quarterly Report on Form 10-Q. As a result, disclosures required under ASC 805-10-50, Business Combinations, are not possible at this time. |
Description of Business and Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation — The Condensed Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair presentation of the results of operations, other comprehensive income, financial position and cash flows for each period presented. The adjustments referred to above are of a normal and recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules and regulations for interim reporting. Effective January 1, 2018, the Company adopted the requirements of Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers and ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. All amounts and disclosures set forth in this Form 10-Q have been updated to comply with the new standards. Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to current period presentation, as a result of adopting the new standards. On January 1, 2018, the Company changed the composition of its operating segments to align more closely with the Company's broader strategy and how it manages business operations. With the exception of consumer long distance revenue, this strategy groups Competitive Local Exchange Carrier ("CLEC") revenue, which was previously included as part of the Entertainment and Communications segment, as part of the IT Services and Hardware segment in order to consolidate all company-wide VoIP sales. Accordingly, the Company recast the previously reported 2017 segment disclosures. See Note 11 for further disclosures. The Condensed Consolidated Balance Sheet as of December 31, 2017 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s 2017 Annual Report on Form 10-K. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results expected for the full year or any other interim period. |
Business Combinations | Business Combinations — In accounting for business combinations, we apply the accounting requirements of ASC 805, “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. In developing estimates of fair value of acquired assets and assumed liabilities, management analyzes a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets, and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets. In addition, any contingent consideration is presented at fair value at the date of acquisition, and transaction costs are expensed as incurred. See Note 4 for disclosures related to mergers and acquisitions. |
Use of Estimates | Use of Estimates — Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. In the normal course of business, the Company is subject to various regulatory and tax proceedings, lawsuits, claims and other matters. The Company believes adequate provision has been made for all such asserted and unasserted claims in accordance with U.S. GAAP. Such matters are subject to many uncertainties and outcomes that are not predictable with assurance. |
Investment in CyrusOne | Investment in CyrusOne — In the first quarter of 2017, the Company sold its remaining 2.8 million shares of CyrusOne Inc. common stock for net proceeds totaling $140.7 million that resulted in a realized gain of $117.7 million. As of March 31, 2017, we no longer had an investment in CyrusOne Inc. |
Income Taxes | Income taxes — The Company’s income tax provision for interim periods is determined through the use of an estimated annual effective tax rate applied to year-to-date ordinary income as well as the tax effects associated with discrete items. During 2017, the Company re-classed $14.9 million of Alternative Minimum Tax ("AMT") refundable tax credits from "Deferred income taxes, net" to "Receivables" as these credits were expected to be utilized during 2018. Acceleration of the AMT refundable tax credits was the result of the Company's decision to make an election on its 2017 federal income tax return to claim the credits in lieu of claiming bonus depreciation. The Company received the $14.9 million of payments during the second quarter of 2018. In addition, new tax legislation enacted in 2017 repealed AMT for corporate tax payers. The balance of any remaining AMT credits will be refunded over the next 5 years beginning with the return filed in 2019. In the first quarter of 2018, the Company re-classed $0.7 million from "Deferred income taxes, net" to "Receivables" as it expects to receive this portion of the remaining AMT credits in 2019. The Company filed our 2017 federal income tax return during the quarter ended June 30, 2018 and confirms that the accounting for the income tax effects of the Tax Cuts and Jobs Act signed into law on December 22, 2017 is now complete |
Operating Taxes | Operating taxes — The Company elected to record certain operating taxes such as property, sales, use, and gross receipts taxes including telecommunications surcharges as expenses, primarily within cost of services and products. These taxes are not included in income tax expense because the amounts to be paid are not dependent on our level of income. Liabilities for audit exposures are established based on management's assessment of the probability of payment. The provision for such liabilities is recognized as either property, plant and equipment, operating tax expense, or depreciation expense depending on the nature of the audit exposure. Upon resolution of an audit, any remaining liability not paid is released against the account in which it was originally recorded. Certain telecommunication taxes and surcharges that are collected from customers are also recorded as revenue; however, with the adoption of ASC 606, revenue associated with these charges is excluded from the transaction price. This approach is consistent with how these taxes were previously recorded under ASC Topic 605. |
Derivative Financial Instruments | Derivative Financial Instruments — The Company accounts for derivative financial instruments by recognizing derivative instruments as either assets or liabilities in the Condensed Consolidated Balance Sheets at fair value and recognizing the resulting gains or losses as adjustments to the Condensed Consolidated Statements of Operations or "Accumulated Other Comprehensive Income (Loss)". The Company does not hold or issue derivative financial instruments for trading or speculative purposes. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of "Accumulated Other Comprehensive Income (Loss)" in stockholder's equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. Derivatives that do not qualify as hedges are adjusted to fair value through earnings in the current period. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation - Stock Compensation (Topic 718), which improves financial reporting for non-employee share-based payments by making the guidance consistent with the accounting for employee share-based compensation. The ASU is effective for public entities for annual reporting periods beginning after December 15, 2018, and for interim periods with those fiscal years. Early adoption is permitted. The Company early adopted the guidance effective June 30, 2018. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows entities to elect to make a one-time reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The ASU is effective for public entities for annual reporting periods beginning after December 15, 2018, and for interim periods within those fiscal years. Early adoption is permitted. The Company early adopted this guidance effective December 31, 2017, resulting in a reclassification adjustment of $32.2 million to "Accumulated deficit" from "Other comprehensive loss" on the Condensed Consolidated Balance Sheets. The amount of the reclassification is calculated on the basis of the difference between the historical and newly enacted tax rates on deferred taxes related to our pension and postretirement benefit plans. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which improves the hedge accounting model to facilitate financial reporting that more closely reflects a company’s risk management activities. The FASB’s new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. This update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the update. The Company early adopted the guidance effective April 1, 2018. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation, which amends the scope of modification accounting for share-based payment arrangements. The ASU is effective for public business entities for annual periods beginning after December 15, 2017. The Company prospectively adopted the standard effective January 1, 2018 and has applied the amended guidance to any awards modified on or after this date. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements in ASC 715 related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. The ASU requires entities to disaggregate the current service cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement. The other components shall be presented elsewhere in the income statement and outside of income from operations, if such a subtotal is presented, on a retrospective basis as of the date of adoption. In addition, only the service cost component of net benefit cost is eligible for capitalization on a prospective basis. The ASU is effective for public business entities for annual periods beginning after December 15, 2017. The Company retrospectively adopted the standard effective January 1, 2018. The Company re-classed $1.6 million of other components of net benefit cost from both "Cost of services and products" and "Selling, general and administrative," to a new line below Operating income, "Other components of pension and postretirement benefit plans expense," on the Condensed Consolidated Statements of Operations for the three months ended June 30, 2017. The Company re-classed $3.3 million and $3.1 million of other components of net benefit cost from "Cost of services and products" and "Selling, general and administrative," respectively, to a new line below Operating income, "Other components of pension and postretirement benefit plans expense," on the Condensed Consolidated Statements of Operations for the six months ended June 30, 2017. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flow - Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The FASB issued the ASU with the intent of reducing diversity in practice. The ASU is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this standard effective January 1, 2018. The adoption of this standard did not have a material effect on the Company’s Consolidated Statement of Cash Flows. In February 2016, the FASB issued ASU 2016-02, Leases, which represents a wholesale change to lease accounting. The standard introduces a lessee model that brings most leases on the balance sheet, as well as aligns certain underlying principles of the new lessor model with those in ASC 606. The ASU is effective for public entities for fiscal years beginning after December 15, 2018. As issued, the standard requires lessors and lessees to use a modified retrospective transition method for existing leases. ASU 2016-02 was amended in January 2018 by the provisions of ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842,” and in July 2018 by the provisions of ASU 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU 2018-11, “Targeted Improvements.” We plan to adopt ASU 2016-02, as amended, effective January 1, 2019. As of the second quarter of 2018 the Company has substantially completed procedures to identify the existing lease population to which the new standard is applicable. The Company is also in the process of implementing changes to accounting policies, processes, systems, and internal controls. The Company procured a third-party lease accounting software solution to facilitate the ongoing accounting and financial reporting requirements of the ASU. The new standard will result in increases to the assets and liabilities on the Company’s consolidated balance sheets. The Company is currently evaluating the full impact of adopting the new standard. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This standard also includes expanded disclosure requirements that result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The Company adopted the new standard and all subsequent amendments as of January 1, 2018. The Company utilized the full retrospective method; therefore, each prior reporting period presented was adjusted beginning with the issuance of the Company’s 2018 interim financial statements. The most significant impact of adopting the new standard is the change to the treatment of hardware revenue in the Infrastructure Solutions category from recording hardware revenue as a principal (gross) to recording revenue as an agent (net). Based on our assessment of ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), issued by the FASB in March 2016, the Company acts as an agent and as such will record hardware sales net of the related cost of products. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations focusing on a control model rather than a risk and reward model. As a result of adopting ASU 2014-09, revenue and cost of products for the three and six months ended June 30, 2017, decreased by $34.6 million and $63.2 million, respectively. Changes in accounting policies related to variable consideration or rebates did not have a material effect on the Company's financial statements. Fulfillment and acquisition costs that are now recorded as an asset and amortized on a monthly basis decreased expense for the three and six months ended June 30, 2017 by $0.3 million and $0.6 million, respectively, and increased basic earnings per share for the six months ended June 30, 2017 by $0.01. Adoption of ASU 2014-09 did not result in a change to basic earnings per share for three months ended June 30, 2017. An incremental asset related to fulfillment and acquisition costs of $32.3 million was recorded on the balance sheet as of December 31, 2017, with an offsetting reduction in "Accumulated deficit." As a result of the entry, total contract asset related to fulfillment and acquisition costs was $32.4 million as of December 31, 2017. The impact of these adjustments resulted in a decrease of $7.1 million to "Deferred income tax assets" as of December 31, 2017, with the offset to "Accumulated deficit." See Note 3 for additional disclosures as a result of adopting ASC Topic 606. Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Earnings Per Share | Basic earnings per common share (“EPS”) is based upon the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur upon issuance of common shares for awards under stock-based compensation plans or conversion of preferred stock, but only to the extent that they are considered dilutive. |
Revenue | The Entertainment and Communications segment provides products and services to both consumer and enterprise customers that can be categorized as either Fioptics, Enterprise Fiber or Legacy. The products and services within these three categories can be further categorized as either Data, Voice, Video or Other. Fioptics and Legacy revenue include both consumer and enterprise customers. Enterprise Fiber revenue includes ethernet and dedicated internet access services that are provided to enterprise customers. Consumer customers have implied month-to-month contracts, while enterprise customers typically have contracts with a duration of one to five years and automatically renew on a month to month basis. Customers are invoiced on a monthly basis for services rendered. Contracts for projects that are included within the Other revenue stream are typically short in duration and less than one year. The IT Services and Hardware segment provides a full range of Information Technology ("IT") solutions, including Communications, Cloud and Consulting services. IT Services and Hardware customers enter into contracts that have a typical duration of one to five years, with renewal options at the end of the term. Customers are invoiced on a monthly basis for services rendered. The IT Services and Hardware segment also provides enterprise customers with Infrastructure Solutions, which includes the sale of hardware and maintenance contracts. These contracts are typically satisfied in less than twelve months and revenue is recognized at a point in time. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which was adopted on January 1, 2018, using the full retrospective method. See below for further discussion of the adoption, including the impact on our 2017 financial statements. The Company has elected the practical expedient described in ASC 606-10-32-18 that allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects that the period of time between the transfer of a promised good or service to the customer and when the customer pays will be one year or less. Customers are typically billed immediately upon the rendering of services or the delivery of products. Payment terms for customers are between 30 and 180 days. In the instance that payment terms are greater than twelve months, the guidance in ASC 606-10-32-15 will be applied to determine the transaction price. |
Fair Value Measurement | The fair value of the interest rate swap is categorized as Level 2 in the fair value hierarchy as it is based on well recognized financial principles and available market data. The fair value of our long-term debt was based on closing or estimated market prices of the Company’s debt at June 30, 2018 and December 31, 2017, which is considered Level 2 of the fair value hierarchy. The fair value of other financing arrangements was calculated using a discounted cash flow model that incorporates current borrowing rates for obligations of similar duration, which is considered level 3 of the fair value hierarchy. |
Earnings Per Common Share (Tables) |
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Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block] | The following table shows the computation of basic and diluted EPS:
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Revenue (Tables) |
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Contract with Customer, Assets [Table Text Block] | The following table presents the activity for the Company’s contract assets:
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Disaggregation of Revenue [Table Text Block] | The following table presents revenues disaggregated by product and service lines.
The following table presents revenues disaggregated by contract type.
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Mergers and Acquisitions (Tables) |
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Business Combination Schedule of Consideration [Table Text Block] | The purchase price for OnX consisted of the following:
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Based on fair value estimates, the purchase price for OnX has been allocated to individual assets acquired and liabilities assumed as follows:
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Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The estimated fair value of identifiable intangible assets and their estimated useful lives are as follows:
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Business Acquisition, Pro Forma Information [Table Text Block] | The following table provides the unaudited pro forma results of operations for the three and six months ended June 30, 2017 as if OnX had been acquired as of the beginning of fiscal year 2016. Revenue has been retrospectively adjusted for the adoption of ASC 606 to reflect hardware revenue in the Infrastructure Solutions category net of related cost of products. These results include adjustments related to the financing of the acquisition, to increase depreciation and amortization associated with the higher values of property, plant and equipment and intangible assets, to increase interest expense for the additional debt incurred to complete the acquisition, and to reflect the related income tax effect and change in tax status. The pro forma information does not necessarily reflect the actual results of operations had the acquisition been consummated at the beginning of the annual reporting period indicated nor is it necessarily indicative of future operating results. The pro forma information does not include any (i) potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition or (ii) transaction or integration costs relating to the acquisition.
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Goodwill and Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | The changes in the Company's goodwill consisted of the following:
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Schedule of Finite-Lived Intangible Assets [Table Text Block] | The Company’s intangible assets consisted of the following:
(a) Change in gross carrying amounts is due to foreign currency translation. |
Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | The Company’s debt consists of the following:
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Restructuring and Severance (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | A summary of activity in the restructuring and severance liability is shown below:
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Schedule of Restructuring and Related Costs by Segment [Table Text Block] | A summary of restructuring activity by business segment is presented below:
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Financial Instruments and Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | The fair value of the interest rate swap is categorized as Level 2 in the fair value hierarchy as it is based on well recognized financial principles and available market data.
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Fair Value, by Balance Sheet Grouping [Table Text Block] | The carrying and fair values of these items are as follows:
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Pension and Postretirement Plans (Tables) |
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Retirement Benefits, Description [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs [Table Text Block] | For the three and six months ended June 30, 2018 and 2017, pension and postretirement benefit costs (benefits) were as follows:
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Shareowners' Deficit (Tables) |
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Shareowners' Deficit [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | For the six months ended June 30, 2018, the changes in accumulated other comprehensive loss by component were as follows:
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Business Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Selected financial data for the Company’s business segment information is as follows:
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Revenue - Revenue Disclosure (Details) |
6 Months Ended |
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Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Customer Contract, Lower Range, in Years | 1 |
Customer Contract, Upper Range, in Years | 5 |
Payment terms for customers, lower range | 30 |
Payment term for customers, upper range | 180 |
Revenue - Method of Adoption (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Revenue from Contract with Customer [Abstract] | |||||
Adjustment to revenue and cost of services and products for adoption of ASC 606 | $ 34,600,000 | $ 63,200,000 | |||
Capitalized Contract Cost, Net, Incremental Assets Related to Fulfillment and Acquisition Costs | $ 32,300,000 | ||||
Capitalized Contract Cost, Net | $ 32,500,000.0 | $ 32,400,000.0 | $ 32,400,000.0 |
Mergers and Acquisitions - Schedule of Consideration (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 9 Months Ended | ||
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Oct. 02, 2017 |
Mar. 31, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
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Business Combination, Consideration Transferred [Abstract] | |||||
Cash consideration | $ 2.8 | $ 9.6 | |||
OnX Holdings LLC [Member] | |||||
Business Combination, Consideration Transferred [Abstract] | |||||
Cash consideration | $ 241.2 | ||||
Debt repayment | $ 77.6 | (77.6) | |||
Working capital adjustment | $ 2.8 | 2.8 | |||
Total purchase price | $ 166.4 |
Mergers and Acquisitions - Finite Lived Intangible Assets Acquired (Details) - OnX Holdings LLC [Member] $ in Millions |
Oct. 02, 2017
USD ($)
|
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Business Acquisition [Line Items] | |
Fair Value | $ 134.0 |
Customer relationships | |
Business Acquisition [Line Items] | |
Fair Value | $ 108.0 |
Useful Lives | 15 years |
Trade name | |
Business Acquisition [Line Items] | |
Fair Value | $ 16.0 |
Useful Lives | 10 years |
Technology | |
Business Acquisition [Line Items] | |
Fair Value | $ 10.0 |
Useful Lives | 10 years |
Mergers and Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2017 |
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Business Combinations [Abstract] | ||
Revenue | $ 313.1 | $ 611.6 |
Net income applicable to common shareholders | $ (5.5) | $ 48.6 |
Earnings per share: | ||
Basic and diluted earnings per common share | $ (0.13) | $ 1.15 |
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
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Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | $ 151,000,000 | ||||
Goodwill, Adjustments to prior year acquisitions | 700,000 | ||||
Goodwill, Currency translations | (2,300,000) | ||||
Goodwill, Ending Balance | $ 149,400,000 | 149,400,000 | |||
Goodwill Reclassification | $ 9,700,000 | ||||
Goodwill, Impairment Loss | 0 | $ 0 | 0 | $ 0 | |
Impairment of Intangible Assets, Finite-lived | 0 | $ 0 | 0 | $ 0 | |
IT Services and Hardware [Member] | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | 148,800,000 | ||||
Goodwill, Adjustments to prior year acquisitions | 700,000 | ||||
Goodwill, Currency translations | (2,300,000) | ||||
Goodwill, Ending Balance | 147,200,000 | 147,200,000 | |||
Entertainment and Communications [Member] | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | 2,200,000 | ||||
Goodwill, Adjustments to prior year acquisitions | 0 | ||||
Goodwill, Currency translations | 0 | ||||
Goodwill, Ending Balance | $ 2,200,000 | $ 2,200,000 |
Debt - Schedule of Debt (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ 16.8 | $ 18.4 |
Long-term debt, less current portion | 1,727.3 | 1,729.3 |
Net unamortized premium | 1.8 | 1.9 |
Unamortized note issuance costs | (20.8) | (22.3) |
Total debt | 1,744.1 | 1,747.7 |
Credit Agreement | 0.0 | |
Receivables facility amount outstanding | 0.0 | |
Tranche B Term Loan due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 4.5 | 6.0 |
Long-term debt, less current portion | 595.5 | 594.0 |
Capital lease Obligations and Other Debt [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 12.3 | 12.4 |
Long-term debt, less current portion | 65.6 | 70.5 |
Senior Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, less current portion | $ 22.3 | 22.3 |
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | |
Senior Notes Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, less current portion | $ 625.0 | 625.0 |
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |
8% Senior Notes due 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, less current portion | $ 350.0 | 350.0 |
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |
Various Cincinnati Bell Telephone Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, less current portion | $ 87.9 | 87.9 |
Long-term debt, less current portion, before deducting unamortized discount or premium and before deducting unamortized note issuance costs [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, less current portion | $ 1,746.3 | $ 1,749.7 |
Debt - Credit Facility (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
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Line of Credit Facility [Line Items] | |||||
Credit Agreement | $ 0.0 | $ 0.0 | |||
Line of Credit Facility, Remaining Borrowing Capacity | 200.0 | 200.0 | |||
Gain (Loss) on Extinguishment of Debt | (1.3) | $ 0.0 | (1.3) | $ 0.0 | |
Receivables facility amount outstanding | 0.0 | 0.0 | |||
Letters of Credit Outstanding, Amount | 6.7 | 6.7 | |||
Receivables Facility Remaining Borrowing Capacity | 154.2 | 154.2 | |||
Receivables Facility Maximum Borrowing Availability | $ 160.9 | 160.9 | |||
Accounts Receivable Facility, Renewal Term | 364 | ||||
Receivables facility maximum borrowing capacity | $ 250.0 | $ 250.0 | |||
London Interbank Offered Rate (LIBOR) [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | 3.25% | 3.75% | ||
Base Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.25% | 2.25% | 2.75% |
Debt Other Financing Arrangements (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Other Financing Arrangements [Abstract] | ||
Financing Arrangement Liability | $ 5.2 | $ 0.0 |
Restructuring and Severance (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Reserve, Current | $ 8.8 | $ 8.8 | $ 12.0 | |||
Restructuring Reserve, Noncurrent | 2.4 | 2.4 | $ 2.5 | |||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 7.5 | $ 14.5 | 14.5 | |||
Charges | 4.6 | 0.3 | $ 3.6 | 4.9 | $ 29.2 | |
Utilizations | (0.9) | (7.3) | ||||
Ending balance | 11.2 | 7.5 | 11.2 | |||
Entertainment and Communications [Member] | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 6.6 | 12.3 | 12.3 | |||
Charges | 0.0 | 0.0 | ||||
Utilizations | (0.3) | (5.7) | ||||
Ending balance | 6.3 | 6.6 | 6.3 | |||
IT Services and Hardware [Member] | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 0.9 | 2.2 | 2.2 | |||
Charges | 4.6 | 0.3 | ||||
Utilizations | (0.6) | (1.6) | ||||
Ending balance | 4.9 | 0.9 | 4.9 | |||
Corporate Segment [Member] | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 0.0 | 0.0 | 0.0 | |||
Charges | 0.0 | 0.0 | ||||
Utilizations | 0.0 | 0.0 | ||||
Ending balance | 0.0 | 0.0 | 0.0 | |||
Employee Severance [Member] | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 7.4 | 14.4 | 14.4 | |||
Charges | 3.8 | 0.3 | ||||
Utilizations | (0.9) | (7.3) | ||||
Ending balance | 10.3 | 7.4 | 10.3 | |||
Lease Abandonment [Member] | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 0.1 | 0.1 | 0.1 | |||
Charges | 0.8 | 0.0 | ||||
Utilizations | 0.0 | 0.0 | ||||
Ending balance | $ 0.9 | $ 0.1 | $ 0.9 |
Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2017 |
||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Long-term debt, including current portion | [1] | $ 1,687.0 | $ 1,687.1 | |||
Other financing arrangments | 5.2 | 0.0 | ||||
Estimate of Fair Value, Fair Value Disclosure [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Long-term debt, including current portion | [1] | 1,607.7 | 1,687.5 | |||
Other financing arrangments | 5.3 | 0.0 | ||||
Interest Rate Contract [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Derivative, Notional Amount | $ 300.0 | |||||
Derivative, Fixed Interest Rate | 2.938% | |||||
Interest Rate Swap, Carrying Value | $ 1.9 | 0.0 | ||||
Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Interest Rate Swap, Fair Value | 1.9 | $ 0.0 | ||||
Fair Value, Inputs, Level 1 [Member] | Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Interest Rate Swap, Fair Value | 0.0 | |||||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Interest Rate Swap, Fair Value | 1.9 | |||||
Fair Value, Inputs, Level 3 [Member] | Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Interest Rate Swap, Fair Value | $ 0.0 | |||||
Scenario, Forecast [Member] | Interest Rate Contract [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Cash Flow Hedge Loss (Gain) to be Reclassified within Twelve Months | $ 1.6 | |||||
|
Pension and Postretirement Plans (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Capitalized portion of defined benefit contribution percent | 14.00% | 13.00% | ||
Pension Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Payment for Pension and Other Postretirement Benefits | $ 2.8 | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 0.0 | $ 0.0 | 0.0 | $ 0.0 |
Other components of pension and postretirement benefit plans expense: | ||||
Interest cost on projected benefit obligation | 4.1 | 4.9 | 8.3 | 9.7 |
Expected return on plan assets | (6.2) | (6.5) | (12.4) | (13.0) |
Amortization of: | ||||
Prior service benefit | 0.0 | 0.0 | 0.0 | 0.0 |
Actuarial loss | 4.2 | 4.4 | 8.5 | 8.8 |
Total amortization | 4.2 | 4.4 | 8.5 | 8.8 |
Pension / postretirement costs | 2.1 | 2.8 | 4.4 | 5.5 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | 9.0 | 9.0 | ||
Payment for Pension and Other Postretirement Benefits | 3.5 | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | 0.0 | 0.0 | 0.1 | 0.1 |
Other components of pension and postretirement benefit plans expense: | ||||
Interest cost on projected benefit obligation | 0.8 | 0.8 | 1.6 | 1.6 |
Expected return on plan assets | 0.0 | 0.0 | 0.0 | 0.0 |
Amortization of: | ||||
Prior service benefit | (0.8) | (1.1) | (1.6) | (2.2) |
Actuarial loss | 1.1 | 1.2 | 2.1 | 2.3 |
Total amortization | 0.3 | 0.1 | 0.5 | 0.1 |
Pension / postretirement costs | 1.1 | $ 0.9 | 2.2 | $ 1.8 |
Qualified Plan [Member] | Pension Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | 4.0 | 4.0 | ||
Nonqualified Plan [Member] | Pension Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | $ 3.0 | $ 3.0 |
Shareowners' Deficit - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
||||||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||||||
Beginning balance | $ (173.7) | ||||||||
Reclassifications, net | 7.0 | ||||||||
Unrealized loss on cash flow hedge arising during the period, net | $ (1.5) | $ 0.0 | (1.5) | $ 0.0 | |||||
Foreign currency loss | (2.5) | $ 0.0 | (4.3) | $ 0.0 | |||||
Ending balance | (172.5) | (172.5) | |||||||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | |||||||||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||||||
Beginning balance | (173.1) | ||||||||
Reclassifications, net | [1] | 7.0 | |||||||
Unrealized loss on cash flow hedge arising during the period, net | 0.0 | ||||||||
Foreign currency loss | 0.0 | ||||||||
Ending balance | (166.1) | (166.1) | |||||||
Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest [Member] | |||||||||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||||||
Beginning balance | 0.0 | ||||||||
Reclassifications, net | 0.0 | ||||||||
Unrealized loss on cash flow hedge arising during the period, net | [2] | (1.5) | |||||||
Foreign currency loss | 0.0 | ||||||||
Ending balance | (1.5) | (1.5) | |||||||
Accumulated Foreign Currency Adjustment Attributable to Parent | |||||||||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||||||
Beginning balance | (0.6) | ||||||||
Reclassifications, net | 0.0 | ||||||||
Unrealized loss on cash flow hedge arising during the period, net | 0.0 | ||||||||
Foreign currency loss | (4.3) | ||||||||
Ending balance | $ (4.9) | $ (4.9) | |||||||
|
Business Segment Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | $ 296.8 | $ 259.4 | $ 592.5 | $ 509.0 | ||||
Operating income (loss) | 20.2 | 24.4 | 44.4 | 22.6 | ||||
Expenditures for long-lived assets | 71.0 | 105.2 | ||||||
Depreciation and amortization | 50.9 | 47.0 | 102.1 | 92.8 | ||||
Assets | 2,166.1 | 2,166.1 | $ 2,187.6 | |||||
Entertainment and Communications [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 173.9 | 181.0 | 348.1 | 356.1 | ||||
Operating income (loss) | 25.5 | 31.4 | 54.1 | 34.5 | ||||
Expenditures for long-lived assets | 31.8 | 45.5 | 59.4 | 92.3 | ||||
Depreciation and amortization | 41.0 | 40.4 | 81.9 | 79.8 | ||||
Assets | 1,103.8 | 1,103.8 | 1,111.4 | |||||
IT Services and Hardware [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 128.3 | 84.8 | 255.9 | 165.8 | ||||
Operating income (loss) | (0.2) | (1.5) | 1.2 | (0.6) | ||||
Depreciation and amortization | 9.9 | 6.5 | 20.1 | 12.9 | ||||
Assets | 395.9 | 395.9 | 482.7 | |||||
Corporate Segment [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Operating income (loss) | (5.1) | (5.5) | (10.9) | (11.3) | ||||
Depreciation and amortization | 0.0 | 0.1 | 0.1 | 0.1 | ||||
Intersegment Elimination [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | (5.4) | (6.4) | (11.5) | (12.9) | ||||
Intersegment Elimination [Member] | Entertainment and Communications [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 4.7 | 5.3 | 9.9 | 10.7 | ||||
Intersegment Elimination [Member] | IT Services and Hardware [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 0.7 | 1.1 | 1.6 | 2.2 | ||||
Intersegment Elimination [Member] | Corporate Segment [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Assets | 666.4 | 666.4 | $ 593.5 | |||||
Sales [Member] | Intersegment Elimination [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 5.4 | 6.4 | 11.5 | 12.9 | ||||
Expenditures for Long-Lived Assets, Including Acquisitions of Businesses [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Expenditures for long-lived assets | [1] | 38.3 | 50.5 | 73.8 | 114.8 | |||
Expenditures for Long-Lived Assets, Including Acquisitions of Businesses [Member] | IT Services and Hardware [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Expenditures for long-lived assets | [1] | $ 6.5 | $ 5.0 | $ 14.4 | $ 22.5 | |||
|
Subsequent Events (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
|
Subsequent Event [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 2.8 | $ 9.6 | |
Proceeds from (Repayments of) Lines of Credit | $ 0.0 | $ (89.5) | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Fiber Route Miles | 14,000 | ||
Hawaiian Telcom Holdco, Inc. [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Business Combination, Consideration Transferred | $ 657.7 | ||
Payments to Acquire Businesses, Gross | 536.5 | ||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 121.2 | ||
Revolving Credit Facility [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from (Repayments of) Lines of Credit | 35.0 | ||
Accounts Receivable Securitization Facility [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from (Repayments of) Lines of Credit | $ 154.0 |
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