Business Segment Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Business Segment Information

15.Business Segment Information

For the year ended December 31, 2022, the Successor and Predecessor periods in 2021 and the year ended December 31, 2020, we operated two business segments: Network, previously referred to as Entertainment and Communications, and IT Services and Hardware.

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 Network segment or the IT Services and Hardware segment.

The Network segment provides products and services that can be categorized as Fioptics, previously referred to as "Consumer/SMB Fiber" in Hawaii and collectively with Fioptics in Cincinnati, 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. On July 2, 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 the state. On May 2, 2022, the Company acquired Agile. Agile delivers customers, primarily located in Ohio and Pennsylvania, with middle mile, last mile and campus connectivity services through hybrid fiber wireless networks that are designed, built and managed by Agile. Capital expenditures in the Network segment are incurred to expand our Fioptics 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 to customers in the U.S., Canada and the U.K. These solutions include Cloud, Communications and Consulting services along with the sale and maintenance of major branded hardware reported as Infrastructure Solutions. 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 $236.8 million as of December 31, 2022 compared to December 31, 2021. Network assets increased $269.3 million primarily due to increased property, plant and equipment and inventory related to extending the Company's fiber network as well as the addition of assets associated with the acquisition of Agile. IT Services and Hardware assets decreased $29.8 million primarily due to depreciation and amortization of property, plant and equipment and finite-lived intangible assets, respectively, during the year ended December 31, 2022 which was partially offset by increased goodwill due to measurement period adjustments and the adjustment to the Hawaiian Telcom postretirement health and life insurance plans (Note 11). Corporate assets decreased $2.7 million. Deferred tax assets and liabilities on the Consolidated Balance Sheets totaled $2.2 million and $98.2 million as of December 31, 2022, respectively, compared to deferred tax assets and liabilities of $5.3 million and $139.6 million as of December 31, 2021, respectively. The decrease in net deferred tax liabilities is due primarily to higher depreciation and amortization expense reported for GAAP versus tax. This was offset, in part, by the utilization of existing federal and state net operating losses.

Our business segment information is as follows:

	Successor						Predecessor
	Year Ended			September 8, 2021 to			January 1, 2021 to			Year Ended
(dollars in millions)	December 31, 2022			December 31, 2021			September 7, 2021			December 31, 2020
Revenue
Network	$	994.3		$	303.8		$	664.2		$	969.6
IT Services and Hardware		827.9			259.3			492.4			616.6
Intersegment		(26.2	)		(8.7	)		(17.9	)		(26.4	)
Total revenue	$	1,796.0		$	554.4		$	1,138.7		$	1,559.8
Intersegment revenue
Network	$	19.3		$	6.5		$	13.1		$	19.7
IT Services and Hardware		6.9			2.2			4.8			6.7
Total intersegment revenue	$	26.2		$	8.7		$	17.9		$	26.4
Operating (loss) income
Network	$	(56.2	)	$	(6.3	)	$	78.3		$	99.7
IT Services and Hardware		(8.4	)		4.0			25.2			24.6
Corporate		(32.7	)		(6.8	)		(75.8	)		(58.3	)
Total operating (loss) income	$	(97.3	)	$	(9.1	)	$	27.7		$	66.0
Expenditures for long-lived assets*
Network	$	524.9		$	114.8		$	199.8		$	206.4
IT Services and Hardware		30.1			13.9			15.9			23.5
Corporate		0.1			1,620.7			—			0.1
Total expenditures for long-lived assets	$	555.1		$	1,749.4		$	215.7		$	230.0
Depreciation and amortization
Network	$	393.3		$	113.0		$	166.9		$	252.7
IT Services and Hardware		103.5			31.4			27.9			40.6
Corporate		0.3			0.2			0.1			0.1
Total depreciation and amortization	$	497.1		$	144.6		$	194.9		$	293.4

*Includes cost of acquisitions in the year ended December 31, 2022 and in the Predecessor and Successor periods in 2021, purchase of perpetual licenses in the year ended December 31, 2022 and purchase of wireless spectrum assets in the year ended December 31, 2020

	As of December 31,
(dollars in millions)	2022		2021
Assets
Network	$	3,218.5	$	2,949.2
IT Services and Hardware		812.2		842.0
Corporate and eliminations		404.9		407.6
Total assets	$	4,435.6	$	4,198.8