Shareowners’ Deficit

Common Shares

The par value of the Company’s common shares is $0.01 per share. At December 31, 2018 and 2017, common shares outstanding were 50,184,114 and 42,197,965, respectively.

In 2010, the Board of Directors approved a plan for repurchase of up to $150.0 million of the Company's common shares. In 2018 and 2017, no shares were repurchased or retired under this plan. In 2016, the Company repurchased and retired approximately 0.2 million shares of its common stock for $4.8 million at an average price of $19.67 per share. As of December 31, 2018, the Company had the authority to repurchase $124.4 million of its common stock.

The Company previously had a deferred compensation plan for certain executives of the Company. The executive deferred compensation plan was terminated in the fourth quarter of 2015. At December 31, 2015, treasury shares of common stock held under the plan were nominal, with a total cost of $0.5 million. In the fourth quarter of 2016, all amounts due under the plan were distributed to plan participants.

On July 2, 2018, the Company completed its acquisition of Hawaiian Telcom. In conjunction with the acquisition, the Company issued 7.7 million common shares as stock consideration, with a total value of $121.2 million.

Preferred Shares

The Company is authorized to issue 1,357,299 shares of voting preferred stock without par value and 1,000,000 shares of nonvoting preferred stock without par value. The Company issued 155,250 voting shares of 6 ³/₄% cumulative convertible preferred stock at stated value. These shares were subsequently deposited into a trust in which the underlying 155,250 shares are equivalent to 3,105,000 depositary shares. Shares of this preferred stock can be converted at any time at the option of the holder into common stock of the Company at a conversion rate of 5.7676 shares of the Company common stock per one share of 6 ³/₄% cumulative convertible preferred stock. Annual dividends of $67.50 per share (or $3.3752 per depositary share) on the outstanding 6 ³/₄% convertible preferred stock are payable quarterly in arrears in cash, or in common stock in certain circumstances if cash payment is not legally permitted. The liquidation preference on the 6 ³/₄% cumulative convertible preferred stock is $1,000 per share (or $50 per depositary share). The Company paid $10.4 million in preferred stock dividends in each of 2018, 2017, and 2016.

Accumulated Other Comprehensive Loss

Shareowners’ deficit includes an accumulated other comprehensive loss that is comprised of pension and postretirement unrecognized prior service cost and unrecognized actuarial losses, unrealized gains on Investment in CyrusOne, unrealized loss on cash flow hedge arising during the period and foreign currency translation losses.

For the years ended December 31, 2018 and 2017, the changes in accumulated other comprehensive loss by component were as follows:



(dollars in millions)	Unrecognized Net Periodic Pension and Postretirement Benefit Cost				Unrealized gain on Investment in CyrusOne				Unrealized Loss on Cash Flow Hedge				Foreign Currency Translation Loss			Total
Balance as of December 31, 2016	$	(157.6	)		$	68.1			$	—			$	(0.8	)	$	(90.3	)
Remeasurement of benefit obligations	2.8				—				—				—			2.8
Unrealized gain on Investment in CyrusOne, net	—				8.3			(a)	—				—			8.3
Reclassifications, net	13.9			(b)	(76.4		)	(c)	—				—			(62.5		)
Reclassification adjustment to accumulated deficit for stranded other comprehensive income taxes arising from tax reform	(32.2		)	(d)	—				—				—			(32.2		)
Foreign currency gain	—				—				—				0.2			0.2
Balance as of December 31, 2017	$	(173.1	)		$	—			$	—			$	(0.6	)	$	(173.7	)
Remeasurement of benefit obligations	(5.5		)		—				—				—			(5.5		)
Reclassifications, net	14.1			(b)	—				0.9			(e)	—			15.0
Unrealized loss on cash flow hedge arising during the period, net	—				—				(4.8		)	(f)	—			(4.8		)
Foreign currency loss	—				—				—				(6.5		)	(6.5		)
Balance as of December 31, 2018	$	(164.5	)		$	—			$	(3.9	)		$	(7.1	)	$	(175.5	)


(a)	The unrealized gain on Investment in CyrusOne, net of tax, represents changes in the fair value of CyrusOne shares of common stock owned by the Company during the period, before any subsequent sales of those shares.

(b)

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 and pension settlement charges, net of tax. 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 Consolidated Statements of Operations. See Note 11 for further disclosures.


(c)	These reclassifications are reported within "Gain on sale of CyrusOne investment" on the Consolidated Statements of Operations.

(d)

This reclassification adjustment resulted from a change in the corporate tax rate arising from tax legislation enacted in December 2017, commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). In February 2018, the FASB issued ASU 2018-02 which allows entities to make a one-time reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from newly enacted corporate tax rates. The Company early adopted the guidance effective December 31, 2017. 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.


(e)	These reclassifications are reported within "Interest expense" on the Consolidated Statements of Operations when the hedged transactions impact earnings.


(f)	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 current liabilities" and "Other noncurrent liabilities" on the Consolidated Balance Sheets. See Note 10 for further disclosures.