Business Segment Information

For the years ended December 31, 2018, 2017, and 2016, we operated two business segments: Entertainment and Communications and IT Services and Hardware. 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 and 2016 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 recast to present the impact of adopting these standards.

In July 2018, the Company acquired Hawaiian Telcom. Based on the nature of the products and services offered, financial results are presented in either the Entertainment and Communications segment or the IT Services and Hardware segment.

The Entertainment and Communications segment provides products and services that can be categorized as either Fioptics in Cincinnati or Consumer/SMB Fiber in Hawaii (collectively, "Consumer/SMB Fiber"), Enterprise Fiber or Legacy. Cincinnati Bell Telephone Company LLC ("CBT"), a subsidiary of the Company, is the incumbent local exchange carrier ("ILEC") for a geography that covers a radius of approximately 25 miles around Cincinnati, Ohio, and includes parts of northern Kentucky and southeastern Indiana. Voice and data services in the Enterprise Fiber and Legacy categories that are delivered beyond the Company's ILEC territory, particularly in Dayton and Mason, Ohio, are provided through the operations of Cincinnati Bell Extended Territories LLC ("CBET"), a subsidiary of CBT. In the second quarter of 2018, the Company acquired Hawaiian Telcom. Hawaiian Telcom is the ILEC for the State of Hawaii and the largest full service provider of communications services and products in that state. Revenue in 2018 includes a contribution by Hawaiian Telcom of $159.2 million. Capital expenditures in the Entertainment and Communications segment are incurred to expand our Consumer/SMB Fiber product suite, upgrade and increase capacity for our internet and data networks, and to maintain our wireline network.

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 and maintenance of major branded hardware reported as Infrastructure Solutions. In the fourth quarter of 2017 the Company acquired OnX, a privately held company that provides technology services and solutions to enterprise customers in the U.S., Canada and the U.K. In July 2018 the Company completed the acquisition of Hawaiian Telcom and products such as UCaaS, hardware and enterprise long distance delivered by Hawaiian Telcom are included in the IT Services and Hardware segment.

Total assets for the Company increased $542.6 million as of December 31, 2018 as compared to December 31, 2017. Entertainment and Communications assets increased $787.4 million primarily due to net assets acquired with Hawaiian Telcom. IT Services and Hardware assets decreased by $14.6 million. Corporate assets decreased $230.2 million as a result of the utilization of restricted cash to fund the acquisition of Hawaiian Telcom. Deferred tax assets and liabilities totaled $47.5 million and $11.4 million as of December 31, 2018, respectively. Deferred tax assets and liabilities totaled $12.2 million and $11.2 million as of December 31, 2017, respectively. The increase in deferred tax assets is due the acquisition of Hawaiian Telcom.

Our business segment information is as follows:



	Year Ended December 31,
(dollars in millions)	2018			2017			2016
Revenue
Entertainment and Communications	$	853.4		$	706.1		$	691.3
IT Services and Hardware	550.9			385.1			352.7
Intersegment	(26.1		)	(25.5		)	(26.4		)
Total revenue	$	1,378.2		$	1,065.7		$	1,017.6
Intersegment revenue
Entertainment and Communications	$	22.3		$	21.2		$	21.0
IT Services and Hardware	3.8			4.3			5.4
Total intersegment revenue	$	26.1		$	25.5		$	26.4
Operating income
Entertainment and Communications	$	103.3		$	86.1		$	100.1
IT Services and Hardware	17.2			5.3			17.4
Corporate	(37.2		)	(36.0		)	(18.7		)
Total operating income	$	83.3		$	55.4		$	98.8
Expenditures for long-lived assets*
Entertainment and Communications	$	408.0		$	186.3		$	260.8
IT Services and Hardware	29.2			191.2			25.4
Corporate	0.2			—			0.2
Total expenditures for long-lived assets	$	437.4		$	377.5		$	286.4
Depreciation and amortization
Entertainment and Communications	$	210.8		$	163.7		$	159.1
IT Services and Hardware	41.0			29.1			23.0
Corporate	0.2			0.2			0.1
Total depreciation and amortization	$	252.0		$	193.0		$	182.2

* Includes cost of acquisitions
	As of December 31,
(dollars in millions)	2018			2017
Assets
Entertainment and Communications	$	1,898.8		$	1,111.4
IT Services and Hardware	468.1			482.7
Corporate and eliminations	363.3			593.5
Total assets	$	2,730.2		$	2,187.6