UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
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(Address of principal executive offices) (Zip Code)
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(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( § 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Securities Registered Pursuant to Section 12(b) of the Act:
TABLE OF CONTENTS
PART I. Financial Information
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Description |
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Item 1. |
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Financial Statements |
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1 |
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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) |
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Condensed Consolidated Statements of Equity (Deficit) (Unaudited) |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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26 |
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Item 3. |
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41 |
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Item 4. |
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41 |
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PART II. Other Information |
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Item 1. |
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42 |
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Item 1A. |
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42 |
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Item 2. |
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42 |
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Item 3. |
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42 |
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Item 4. |
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42 |
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Item 5. |
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42 |
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Item 6. |
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43 |
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44 |
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Cincinnati Bell Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenue |
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$ |
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$ |
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Costs and expenses |
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Cost of services and products, excluding items below |
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Selling, general and administrative, excluding items below |
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Depreciation and amortization |
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Loss on impairment of long-lived assets |
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Restructuring and severance related charges |
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Transaction and integration costs |
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Total operating costs and expenses |
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Operating loss |
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Interest expense |
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Other components of pension and postretirement benefit plans expense (benefit) |
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Other income, net |
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Loss before income taxes |
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Income tax benefit |
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Net loss |
$ |
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$ |
( |
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$ |
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$ |
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The accompanying notes are an integral part of the condensed consolidated financial statements.
1
Cincinnati Bell Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Net loss |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss), net of tax: |
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Foreign currency translation (loss) gain |
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Defined benefit plans: |
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Net loss arising from remeasurement during the period, net of tax of ($ |
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Amortization of prior service benefits included in net income, net of tax of ($ |
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Amortization of net actuarial gain included in net income, net of tax of ($ |
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Total other comprehensive loss |
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Total comprehensive loss |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of the condensed consolidated financial statements.
2
Cincinnati Bell Inc.
(Dollars in millions)
(Unaudited)
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Additional Paid-in |
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Accumulated Other |
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Capital |
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Accumulated Deficit |
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Income (Loss) |
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Total |
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Balance at June 30, 2023 |
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$ |
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$ |
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Net loss |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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( |
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Capital contributions by Red Fiber Parent LLC |
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— |
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— |
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Balance at September 30, 2023 |
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$ |
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$ |
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$ |
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Balance at June 30, 2022 |
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$ |
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$ |
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Net loss |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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( |
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Balance at September 30, 2022 |
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$ |
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$ |
( |
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$ |
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$ |
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Additional Paid-in |
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Accumulated Other |
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Capital |
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Accumulated Deficit |
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Income (Loss) |
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Total |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
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Net loss |
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— |
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( |
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— |
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( |
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Other comprehensive loss |
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— |
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— |
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( |
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Capital contributions by Red Fiber Parent LLC |
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— |
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— |
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Balance at September 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
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Net loss |
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— |
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( |
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— |
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Other comprehensive loss |
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— |
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— |
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( |
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Balance at September 30, 2022 |
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$ |
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$ |
( |
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$ |
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$ |
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The accompanying notes are an integral part of the condensed consolidated financial statements.
3
Cincinnati Bell Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
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September 30, 2023 |
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December 31, 2022 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Receivables, less allowances of $ |
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Inventory, materials and supplies |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets |
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Goodwill |
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Intangible assets, net |
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Deferred income tax assets |
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Other noncurrent assets |
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Total assets |
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$ |
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$ |
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Liabilities and Shareowners’ Equity |
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Current liabilities |
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Current portion of long-term debt |
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$ |
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$ |
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Accounts payable |
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Unearned revenue and customer deposits |
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Accrued taxes |
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Accrued interest |
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Accrued payroll and benefits |
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Other current liabilities |
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Total current liabilities |
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Long-term debt, less current portion |
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Operating lease liabilities |
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Pension and postretirement benefit obligations |
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Pole license agreement obligation |
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Deferred income tax liability |
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Other noncurrent liabilities |
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Total liabilities |
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Shareowners’ equity |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive income |
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Total shareowners' equity |
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Total liabilities and shareowners’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of the condensed consolidated financial statements.
4
Cincinnati Bell Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(Unaudited)
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Nine Months Ended September 30, |
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2023 |
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2022 |
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Cash flows from operating activities |
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Net loss |
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$ |
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$ |
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Adjustments to reconcile net loss to net cash provided by operating activities: |
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Depreciation and amortization |
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Loss on impairment of long-lived assets |
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Provision for loss on receivables |
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Unrealized gain on interest rate swaps |
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Noncash portion of interest expense |
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Deferred income taxes |
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Pension and other postretirement payments in excess of expense |
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Other, net |
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Changes in operating assets and liabilities: |
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Decrease in receivables |
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Increase in inventory, materials, supplies, prepaid expenses and other current assets |
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(Decrease) increase in accounts payable |
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Decrease in accrued and other current liabilities |
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Decrease (increase) in other noncurrent assets |
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Decrease in other noncurrent liabilities |
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Net cash provided by operating activities |
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Cash flows from investing activities |
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Capital expenditures |
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Acquisition of businesses, net of cash acquired |
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Acquisition of fiber assets |
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Other, net |
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Net cash used in investing activities |
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Cash flows from financing activities |
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Capital contributions by Red Fiber Parent LLC |
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Proceeds from issuance of long-term debt |
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Net (decrease) increase in corporate credit facility with initial maturities less than 90 days |
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Proceeds from borrowings on receivables facilities |
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Payments on receivables facilities |
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Repayment of debt |
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( |
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Payment of debt issuance costs |
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Net cash provided by financing activities |
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Effect of exchange rate changes on cash, cash equivalents and restricted cash |
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Net (decrease) increase in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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Noncash investing and financing transactions: |
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Acquisition of property by assuming debt and other noncurrent liabilities |
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$ |
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$ |
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Acquisition of property on account |
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$ |
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$ |
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The accompanying notes are an integral part of the condensed consolidated financial statements.
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Description of Business and Accounting Policies
Description of Business — Cincinnati Bell Inc. and its consolidated subsidiaries ("Cincinnati Bell," "we," "our," "us" or the "Company") provides diversified telecommunications and technology services. The Company generates a large portion of its revenue by serving customers in Cincinnati, Ohio, Dayton, Ohio and the islands of Hawaii. An economic downturn or natural disaster occurring in these, or a portion of these, limited operating territories 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 had receivables with
In August 2023, Red Fiber Parent LLC ("Parent") committed to make capital contributions of $
Basis of Presentation — The Condensed Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations of the SEC and, in the opinion of management, include all adjustments necessary for a fair statement 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.
The Company’s Condensed Consolidated Balance Sheet as of December 31, 2022 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 2022 Annual Report on Form 10-K.
Business Combinations — In accounting for business combinations, we apply the accounting requirements of Accounting Standards Codification 805 (“ASC 805”), “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. In developing fair value estimates for 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. The Company reports in its Condensed Consolidated Financial Statements provisional amounts for the items for which accounting is incomplete. Goodwill is adjusted for any changes to provisional amounts made within the measurement period. See Note 2 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.
Accounting Policies — The complete summary of significant accounting policies is included in the notes to the consolidated financial statements as presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
6
Cash, Cash Equivalents and Restricted Cash — Cash consists of funds held in bank accounts. Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. Restricted cash as of September 30, 2023 and December 31, 2022 consists of funds held in an escrow account related to a cost method investment and funds held by DAO. Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Condensed Consolidated Statements of Cash Flows.
(dollars in millions) |
September 30, 2023 |
|
|
December 31, 2022 |
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Restricted cash included in Other noncurrent assets |
|
|
|
|
|
||
Cash, cash equivalents and restricted cash per Condensed Consolidated Statements of Cash Flows |
$ |
|
|
$ |
|
||
Goodwill — Goodwill represents the excess of the purchase price consideration over the fair value of net assets acquired and recorded in connection with business acquisitions. Goodwill is allocated at the business segment level. Goodwill is tested for impairment on an annual basis or when events or changes in circumstances indicate that such assets may be impaired. If the net book value of the reporting unit exceeds its fair value, an impairment loss is recognized. An impairment loss is measured as the excess of the carrying value of goodwill of a reporting unit over its fair value.
Accounting for Impacts of Involuntary Events and Contingencies — Assets destroyed or damaged as a result of involuntary events are written off or reduced in carrying value to their salvage value. When recovery of all or a portion of the amount of property damage loss or other covered expenses through insurance proceeds is demonstrated to be probable, a receivable is recorded and offsets the loss or expense up to the amount of the total loss or expense. Proceeds ultimately received from insurance claims for business interruption, direct expenditures and amounts for capital assets in excess of net book value will be recorded to results of operations when collected. No gain is recorded until all contingencies related to the insurance claim have been resolved.
In August 2023, wildfires ignited on Maui and Hawaii islands and spread rapidly due to extreme wind conditions caused in part by Hurricane Dora which traveled 800 miles offshore west of Maui. The fires caused widespread damage to Lahaina town on the island of Maui and the surrounding area, including physical loss and damage to certain of the Company’s fiber and copper assets and Company owned equipment located on customer premises. The Company experienced the loss of business income immediately following the fires and is expected to continue to experience loss of business income for an unknown amount of time. The Company expects to file insurance claims for the physical loss and damages experienced in Lahaina and for business income losses resulting from the matter. As of September 30, 2023, no receivable associated with insurance proceeds has been recorded. Expenditures in the quarter ended September 30, 2023 as a result of the fire have been primarily capital in nature. Additionally, due to the age of certain of the impacted assets, the net book value that was disposed in the quarter due to fire damage was nominal in nature.
In October 2023, attorneys filed a Second Amended Complaint in a proposed class action lawsuit filed in Hawaii state court, adding the Company along with other telecommunications companies and private and public landowners. Legal expenses related to this matter are not material in the third quarter of 2023, but it is possible the Company may incur significant expenses in legal fees, damages awards, or settlements in future periods.
7
Income and Operating Taxes
Income taxes — In accordance with ASC 740-270, 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/loss plus or minus the tax effects of discrete items. Based on the estimated annual effective tax rate, the Company’s tax benefit was lower than the period’s loss at the statutory rate, due primarily to federal and state valuation allowances recorded against deferred tax assets, offset in part by state income tax benefit. Discrete tax items in the reporting period, most notably a $
Operating taxes — Certain operating taxes such as property, sales, use, and gross receipts taxes are reported as expenses in operating income primarily within cost of services. 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, in accordance with ASC 606, revenue associated with these charges is excluded from the transaction price.
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.” 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" 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. All cash flows associated with the Company’s derivative instruments are classified as operating activities in the Condensed Consolidated Statements of Cash Flows.
Recently Issued Accounting Standards
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 condensed consolidated financial statements upon adoption.
8
2. Mergers and Acquisitions
Acquisition of Bridgewired Fiber Assets
In the third quarter of 2023, the Company acquired fiber network assets from Bridgewired, LLC ("Bridgewired") for an aggregate purchase price of $
Acquisition of Ohio Transparent Telecom Inc.
On April 17, 2023 ("OTT Acquisition Date"), the Company acquired
The valuation of the assets acquired and liabilities assumed is based on estimated fair values at the OTT Acquisition Date and recorded to the Network segment. The Company considers the allocation and fair value estimates of property, plant and equipment, goodwill, other assets and other liabilities to be preliminary in nature as of September 30, 2023. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired as of the OTT Acquisition Date while the measurement period remains open. Measurement period adjustments related to the acquisition of OTT will be applied retrospectively to the OTT Acquisition Date.
In connection with this acquisition, the Company recorded goodwill of $
Acquisition of Lawrenceburg Fiber Assets
In the first quarter of 2023, the Company acquired fiber network assets from the City of Lawrenceburg for an aggregate purchase price of $
Acquisition of Agile IWG Holdings, LLC
On May 2, 2022 (“Agile Acquisition Date”), the Company acquired Agile IWG Holdings, LLC ("Agile"), based in Canton, Ohio for total cash consideration of $
The purchase price was funded through borrowings under the Company's former Receivables Facility and the Revolving Credit Facility (see Note 5).
The valuation of the assets acquired and liabilities assumed was based on estimated fair values at the Agile Acquisition Date. The allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed reflects various fair value estimates and analyses, including work performed by third-party valuation specialists. The determination of the final purchase price allocation to specific assets acquired and liabilities assumed is complete.
9
Based on fair value estimates, the purchase price has been allocated to individual assets acquired and liabilities assumed as follows:
(dollars in millions) |
|
Agile |
|
|
Assets acquired |
|
|
|
|
Receivables and other current assets |
|
$ |
|
|
Property, plant and equipment |
|
|
|
|
Operating lease right-of-use assets |
|
|
|
|
Intangible assets |
|
|
|
|
Goodwill |
|
|
|
|
Total assets acquired |
|
|
|
|
Liabilities assumed |
|
|
|
|
Accrued expenses and other current liabilities |
|
|
|
|
Operating lease liabilities |
|
|
|
|
Other noncurrent liabilities |
|
|
|
|
Total liabilities assumed |
|
|
|
|
Net assets acquired |
|
$ |
|
|
In connection with this acquisition, the Company recorded goodwill attributable to a diversified customer base and acquired workforce with industry expertise. The amount of goodwill related to this acquisition is deductible for income tax purposes.
In the second quarter of 2023, the Company recorded a measurement period adjustment to reflect the tax impact on the fair value of property, plant and equipment and intangible assets acquired which resulted in a decrease to "Deferred income tax liability" and to "Goodwill" of $
Based on fair value estimates, the identifiable intangible assets acquired are as follows:
(dollars in millions) |
|
Fair Value |
|
|
Useful Lives |
|
Customer relationships |
|
$ |
|
|
||
Trade names |
|
|
|
|
||
Technology |
|
|
|
|
||
Total identifiable intangible assets |
|
$ |
|
|
|
|
10
3. Revenue
The Network segment provides products and services to both residential and commercial customers that can be categorized as 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 residential and commercial customers. Enterprise Fiber revenue includes ethernet and dedicated internet access services that are provided to enterprise customers, as well as revenue associated with the Southeast Asia to United States ("SEA-US") trans-Pacific submarine cable system. Subsequent to the Company’s acquisitions of Agile and OTT, services provided by Agile and OTT are also included in Enterprise Fiber.
Residential customers have implied month-to-month contracts. Commercial customers, with the exception of contracts associated with the SEA-US cable system, typically have contracts with an initial duration of to
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 varied 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 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 for such good or service 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
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. The transaction price identified in the contract 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 transaction price identified in the contract 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 estimated projection of sales volume. Estimates are reassessed quarterly.
Performance obligations are satisfied either 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 these unsatisfied performance obligations that will be billed in future periods has not been disclosed.
11
As of September 30, 2023, our estimated revenue, including a financing component, expected to be recognized in the future related to performance obligations associated with customer contracts that are unsatisfied (or partially unsatisfied) is $
(dollars in millions) |
|
|
|
|
months ended December 31, 2023 |
|
$ |
|
|
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
Network
The Company has identified four distinct performance obligations in the Network 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 Network 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, routed network services, SONET (Synchronous Optical Network), dedicated internet access, wavelength, digital signal and IRU revenue. Voice services include traditional and fiber voice lines, switched access, digital trunking and consumer and business long distance calling. Video services are offered through our fiber network to residential and commercial customers based on various standard plans with the opportunity to add premium channels. To receive video services, customers are required to use the Company's 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, time and materials projects, subsidized fiber build 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 Network segment. For Data, Video and Voice products in Fioptics, market rate is the primary method used to determine stand-alone selling prices. For Data performance obligations under the Enterprise Fiber category, and Voice, Data and Other performance obligations under the Legacy category, 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.
12
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 include storage, backup, disaster recovery, SLA-based monitoring and management, cloud computing and cloud consulting. Consulting services provide customers with IT staffing, consulting and emerging technology solutions. Infrastructure Solutions includes the sale of hardware and maintenance contracts as well as installation projects.
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 vendor 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.
Within the IT Services and Hardware segment, stand-alone selling prices for the four performance obligations are determined based on either a margin percentage range, minimum margin percentage or discount from standard price list if it is determined to be representative of stand-alone selling price.
For hardware sales, revenue is recognized net of the cost of product and is recognized when the hardware is either shipped or delivered in accordance with the terms of the contract. For certain projects within Communications and Consulting, revenue is recognized when the customer communicates acceptance of the services performed. 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.
13
Contract Balances
The Company recognizes incremental fulfillment costs as an asset when installation expenses are incurred as part of performing the agreement for Voice, Video and Data product offerings in the Network segment in 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 also recognize an asset for incremental fulfillment costs for certain Cloud and Communications services in the IT Services and Hardware segment that require us to incur installation and provisioning expenses. The asset recognized for Cloud and 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 Cloud and Communications services meet the requirements to be capitalized. The contract asset established for the costs of acquiring a contract is 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:
|
|
Fulfillment Costs |
|
|
Cost of Acquisition |
|
|
Total Contract Assets |
|
|||||||||||||||||||||||||||
(dollars in millions) |
|
Network |
|
|
IT Services |
|
|
Total |
|
|
Network |
|
|
IT Services |
|
|
Total |
|
|
Network |
|
|
IT Services |
|
|
Total |
|
|||||||||
Balance as of December 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance as of March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance as of September 30, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
The Company recognizes a liability for cash received up-front for IRU contracts. At September 30, 2023 and December 31, 2022, $
14
Disaggregated Revenue
The following table presents revenues disaggregated by product and service lines:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(dollars in millions) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Data |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Video |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Voice |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Network |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cloud |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Communications |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Infrastructure Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total IT Services and Hardware |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Intersegment Revenue |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table presents revenues disaggregated by contract type:
|
|
Three Months Ended September 30, |
|
|||||||||||||||||||||||||||||
(dollars in millions) |
|
Network |
|
|
IT Services and Hardware |
|
|
Intersegment revenue |
|
|
Total |
|
||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||||||
Products and Services transferred at a point in time |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Products and Services transferred over time |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Intersegment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Nine Months Ended September 30, |
|
|||||||||||||||||||||||||||||
(dollars in millions) |
|
Network |
|
|
IT Services and Hardware |
|
|
Intersegment revenue |
|
|
Total |
|
||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||||||
Products and Services transferred at a point in time |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Products and Services transferred over time |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Intersegment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
15
4. Goodwill and Intangible Assets
Goodwill
The changes in the Company's goodwill consisted of the following:
(dollars in millions) |
|
IT Services and |
|
|
Network |
|
|
Total Company |
|
|||
Goodwill, balance as of December 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Activity during the year: |
|
|
|
|
|
|
|
|
|
|||
Adjustments to prior year acquisition of Agile |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Acquisition of OTT |
|
|
|
|
|
|
|
|
|
|||
Currency translations |
|
|
|
|
|
|
|
|
|
|||
Goodwill, balance as of September 30, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
See Note 2 for further information related to the acquisitions of Agile and OTT.
Intangible Assets
The Company’s intangible assets consisted of the following:
|
|
September 30, 2023 |
|
|
December 31, 2022 |
|
||||||||||||||||||
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net |
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net |
|
||||||
(dollars in millions) |
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
||||||
Intangible assets subject to amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Trade names |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Intangible assets not subject to amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
FCC licenses and spectrum usage rights |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Perpetual licenses |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
As a result of the acquisition of OTT, the Company recorded a nominal finite-lived intangible asset representing the preliminary fair value at the OTT Acquisition Date. See Note 2 for additional information regarding the acquisition of OTT. The change in gross carrying amounts for finite-lived intangible assets is also due to foreign currency translation on finite-lived intangible assets denominated in foreign currency. The finite-lived intangible assets are amortized over their useful lives based on a number of assumptions, including the estimated period of economic benefit and utilization.
Amortization expense for finite-lived intangible assets was $
The estimated useful lives for each finite-lived intangible asset class are as follows:
Customer relationships |
|
|
Trade names |
|
|
Technology |
|
16
The annual estimated amortization expense for future years is as follows:
(dollars in millions) |
|
|
|
|
Three months ended December 31, 2023 |
|
$ |
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
5. Debt and Other Financing Arrangements
The Company’s debt consists of the following:
(dollars in millions) |
|
September 30, 2023 |
|
|
December 31, 2022 |
|
||
Current portion of long-term debt: |
|
|
|
|
|
|
||
Credit Agreement - Term B-1 Loans |
|
$ |
|
|
$ |
|
||
Credit Agreement - Term B-2 Loans |
|
|
|
|
|
|
||
Credit Agreement - Term B-3 Loans |
|
|
|
|
|
|
||
% Notes due 2023 (1) |
|
|
|
|
|
|
||
Paniolo Fiber Assets Financing Arrangement |
|
|
|
|
|
|
||
Other financing arrangements |
|
|
|
|
|
|
||
Finance lease liabilities |
|
|
|
|
|
|
||
Current portion of long-term debt |
|
|
|
|
|
|
||
Long-term debt, less current portion: |
|
|
|
|
|
|
||
Receivables Facility |
|
|
|
|
|
|
||
Network Receivables Facility |
|
|
|
|
|
|
||
CBTS Receivables Facility |
|
|
|
|
|
|
||
Credit Agreement - Revolving Credit Facility |
|
|
|
|
|
|
||
Credit Agreement - Term B-1 Loans |
|
|
|
|
|
|
||
Credit Agreement - Term B-2 Loans |
|
|
|
|
|
|
||
Credit Agreement - Term B-3 Loans |
|
|
|
|
|
|
||
Various Cincinnati Bell Telephone notes (1) |
|
|
|
|
|
|
||
Paniolo Fiber Assets Financing Arrangement |
|
|
|
|
|
|
||
Digital Access Ohio Advance |
|
|
|
|
|
|
||
Other financing arrangements |
|
|
|
|
|
|
||
Finance lease liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net unamortized discount |
|
|
( |
) |
|
|
( |
) |
Unamortized note issuance costs |
|
|
( |
) |
|
|
( |
) |
Long-term debt, less current portion |
|
|
|
|
|
|
||
Total debt |
|
$ |
|
|
$ |
|
||
17
Credit Agreement
The Company had $
In May 2023, the Company entered into an Incremental Amendment to the Credit Agreement (the "Incremental Amendment”) to provide for the incurrence of a new tranche of $
One of the syndicated lenders of the Term B-1 Loans and Term B-3 Loans in the Credit Agreement is a cooperative bank owned by its customers. Annually, this bank distributes patronage in the form of cash and stock in the cooperative based on the Company’s average outstanding loan balance. The Company will recognize the patronage, generally as declared, in “Other (income) expense, net.” The stock component will be recognized at its stated cost basis.
Accounts Receivable Securitization Facility
On January 31, 2023, the Company, together with certain of its U.S. and Canadian subsidiaries, made certain amendments (the “Amendments”) to the Company’s accounts receivable securitization facility ("Receivables Facility"). The Amendments amend the Receivables Facility to, among other things: (i) increase the total maximum borrowing capacity to $
As of September 30, 2023, the Company had $
Under the Network Receivables Facility and the CBTS Receivables Facility, certain U.S. and Canadian subsidiaries, as originators, sell their respective trade receivables on a continuous basis to Cincinnati Bell Funding LLC (“CBF”), Cincinnati Bell Funding Canada Ltd. ("CBFC"), or CBTS Funding LLC (“CBTSF”), wholly-owned consolidated subsidiaries of the Company. Although CBF, CBFC and CBTSF are wholly-owned consolidated subsidiaries of the Company, CBF, CBFC and CBTSF 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, CBFC or CBTSF, such accounts receivable are legally assets of CBF, CBFC and CBTSF and, as such, are not available to creditors of other subsidiaries or the parent company. As a result of the Amendments, the CBTS Receivables Facility includes an option for CBTSF to sell, rather than borrow against, certain receivables on a non-recourse basis. As of September 30, 2023, the outstanding balance of certain accounts receivable sold, rather than borrowed against, was $
Paniolo Fiber Assets Financing Arrangement
In the third quarter of 2023, the Company executed an amendment to the Paniolo fiber assets financing arrangement to replace LIBOR, the benchmark rate of interest, with Adjusted Term SOFR which is defined in the amendment as Term SOFR plus
Repayment of Notes
In the second quarter of 2023, the Company repaid the remaining $
18
6. Leases
Lessee Disclosures
The Company primarily leases real estate for offices, retail stores and central offices, as well as equipment, cell towers, designated space on third party towers and fleet vehicles. Upon adoption of ASC 842, the Company elected not to recognize leases with terms of one-year or less on the balance sheet.
Supplemental balance sheet information related to the Company's leases is as follows:
(dollars in millions) |
|
Balance Sheet Location |
|
September 30, 2023 |
|
|
December 31, 2022 |
|
||
Operating lease assets, net of amortization |
|
Operating lease right-of-use assets |
|
$ |
|
|
$ |
|
||
Finance lease assets, net of amortization |
|
|
|
|
|
|
|
|||
Operating lease liabilities: |
|
|
|
|
|
|
|
|
||
Current operating lease liabilities |
|
|
|
|
|
|
|
|||
Noncurrent operating lease liabilities |
|
Operating lease liabilities |
|
|
|
|
|
|
||
Total operating lease liabilities |
|
|
|
|
|
|
|
|
||
Finance lease liabilities: |
|
|
|
|
|
|
|
|
||
Current finance lease liabilities |
|
Current portion of long-term debt |
|
|
|
|
|
|
||
Noncurrent finance lease liabilities |
|
Long-term debt, less current portion |
|
|
|
|
|
|
||
Total finance lease liabilities |
|
|
|
$ |
|
|
$ |
|
||
.
Supplemental cash flow information related to leases is as follows:
|
|
Nine Months Ended September 30, |
|
|||||
(dollars in millions) |
|
2023 |
|
|
2022 |
|
||
Supplemental Cash Flows Information |
|
|
|
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Operating cash flows from finance leases |
|
$ |
|
|
$ |
|
||
Operating cash flows from operating leases |
|
$ |
|
|
$ |
|
||
Financing cash flows from finance leases |
|
$ |
|
|
$ |
|
||
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
||
New operating leases |
|
$ |
|
|
$ |
|
||
New finance leases |
|
$ |
|
|
$ |
|
||
19
7. 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.
Cash Flow Hedging
Cash Flow Hedges Not Designated as Hedging Instruments
The Company uses non-designated cash flow hedges including interest rate swap agreements and interest rate cap 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. Interest rate caps provide that the counterparty will pay the purchaser at the end of each contractual period in which the index interest rate exceeds the contractually agreed upon cap rate.
In the first quarter of 2023, the Company entered into three forward starting non-amortizing interest rate swaps to convert variable rate debt to fixed rate debt. The interest rate swaps have notional amounts of $
In the second quarter of 2022, the Company entered into three forward starting non-amortizing interest rate swaps to convert variable rate debt to fixed rate debt. The interest rate swaps have notional amounts of $
In the second quarter of 2022, the Company entered into two interest rate cap agreements to limit exposure to interest rate risk on variable rate debt. The interest rate caps each have a cap rate of
The fair value of the Company's interest rate swaps and interest rate caps are impacted by the credit risk of both the Company and its counterparties. The Company has agreements with its derivative financial instrument counterparties that contain provisions providing that 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 instruments obligations. In addition, the Company minimizes nonperformance risk on its derivative instruments by evaluating the creditworthiness of its counterparties, which are limited to major banks and financial institutions.
The Company does not apply hedge accounting to the interest rate swaps and interest rate caps and records all mark-to-market adjustments directly to “Other income, net” in the Condensed Consolidated Statements of Operations. The fair values of the interest rate swaps and interest rate caps are categorized as Level 2 in the fair value hierarchy as they are based on well-recognized financial principles and available market data.
20
As of September 30, 2023, the fair values of the interest rate swaps and interest rate caps are recorded in the Condensed Consolidated Balance Sheets as follows:
(dollars in millions) |
|
Balance Sheet Location |
|
September 30, 2023 |
|
|
Quoted Prices in |
|
|
Significant |
|
|
Significant |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Rate Swap |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Interest Rate Swap |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Interest Rate Cap |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Interest Rate Cap |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of December 31, 2022, the fair values of the interest rate swaps and interest rate caps are recorded in the Condensed Consolidated Balance Sheets as follows:
(dollars in millions) |
|
Balance Sheet Location |
|
December 31, 2022 |
|
|
Quoted Prices in |
|
|
Significant |
|
|
Significant |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Rate Swap |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Interest Rate Swap |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Interest Rate Cap |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Rate Cap |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The following table summarizes the location of gains in the Condensed Consolidated Statements of Operations that were recognized during the three and nine months ended September 30, 2023 and 2022, in addition to the derivative contract type:
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(dollars in millions) |
|
Statement of Operations Location |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Interest Rate Swap |
|
Other income, net |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Interest Rate Cap |
|
Other income, net |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Disclosure on Financial Instruments
The carrying values of the Company's financial instruments approximate the estimated fair values as of September 30, 2023 and December 31, 2022, except for the Company's long-term debt and other financing arrangements.
|
|
September 30, 2023 |
|
|
December 31, 2022 |
|
||||||||||
(dollars in millions) |
|
Carrying Value |
|
|
Fair Value |
|
|
Carrying Value |
|
|
Fair Value |
|
||||
Long-term debt, including current portion* |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other financing arrangements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
*
The fair value of our long-term debt was based on closing or estimated market prices of the Company’s debt at September 30, 2023 and December 31, 2022, which is considered Level 2 of the fair value hierarchy. The fair value of the 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 September 30, 2023, the current borrowing rate was estimated by applying the Company's credit spread to the risk-free rate for a similar duration borrowing.
21
8. Pension and Postretirement Plans
As of September 30, 2023, the Company sponsors
In the three and nine months ended September 30, 2022, Hawaiian Telcom's pension plans made lump sum payments of $
In the third quarter of 2022, the Company identified a correction related to the Hawaiian Telcom postretirement health and life insurance plans liability. The adjustment resulted in an increase to the "Postretirement and Other Benefits liability" of $
In accordance with ASC 715, only the service cost component of net benefit cost is eligible for capitalization, which was immaterial for the nine months ended September 30, 2023 and 2022.
Pension and postretirement costs (benefits) are as follows:
|
|
Three Months Ended September 30, |
|
|||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
(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 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected return on plan assets |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Amortization of: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prior service benefit |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Actuarial gain |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Pension / postretirement cost (benefit) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
|
|
Nine Months Ended September 30, |
|
|||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
(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 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected return on plan assets |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Amortization of: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prior service benefit |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Actuarial gain |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Pension / postretirement cost (benefit) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
Amortization of prior service benefit and actuarial gain in the three and nine months ended September 30, 2023 represent reclassifications from accumulated other comprehensive income.
For the nine months ended September 30, 2023, contributions to the qualified pension plans were
For the nine months ended September 30, 2023 and 2022, contributions to our postretirement plans were $
22
9. Equity
Accumulated Other Comprehensive Income (Loss)
The changes in accumulated other comprehensive income (loss) by component were as follows:
(dollars in millions) |
|
Unrecognized |
|
|
Foreign |
|
|
Total |
|
|||
Balance as of June 30, 2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Reclassifications, net |
|
|
( |
) |
(a) |
|
|
|
|
( |
) |
|
Foreign currency loss |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance as of September 30, 2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|||
Balance as of June 30, 2022 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Remeasurement of benefit obligations |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign currency loss |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance as of September 30, 2022 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
(dollars in millions) |
|
Unrecognized |
|
|
Foreign |
|
|
Total |
|
|||
Balance as of December 31, 2022 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Reclassifications, net |
|
|
( |
) |
(a) |
|
|
|
|
( |
) |
|
Foreign currency gain |
|
|
|
|
|
|
|
|
|
|||
Balance as of September 30, 2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|||
Balance as of December 31, 2021 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Remeasurement of benefit obligations |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign currency loss |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance as of September 30, 2022 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
23
10. Business Segment Information
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 Company operates
The Network 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, digital signal and IRU. Video services provide our customers access to over 400 entertainment channels, over 150 high-definition channels, parental controls, HD DVR, Video On-Demand and access to a live TV streaming application. Voice represents traditional voice lines as well as fiber voice lines, consumer and business long distance, switched access and digital trunking. Other services consist of revenue generated from wiring projects for enterprise customers, advertising, directory assistance, maintenance, information services and subsidized fiber build project revenue related to extending the Company’s fiber network in the Greater Cincinnati territory subsidized through our UniCity program and in Hawaii subsidized through a customer contract. In May 2022, the Company acquired Agile and includes Agile’s financial results in the Network segment.
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:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
||||||||||
(dollars in millions) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Network |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
IT Services and Hardware |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Intersegment |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
Intersegment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Network |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
IT Services and Hardware |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total intersegment revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
Operating (loss) income |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Network |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
IT Services and Hardware |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Corporate |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Total operating loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Expenditures for long-lived assets* |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Network |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
IT Services and Hardware |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total expenditures for long-lived assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Network |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
IT Services and Hardware |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total depreciation and amortization |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
*
24
(dollars in millions) |
|
September 30, 2023 |
|
|
December 31, 2022 |
|
||
Assets |
|
|
|
|
|
|
||
Network |
|
$ |
|
|
$ |
|
||
IT Services and Hardware |
|
|
|
|
|
|
||
Corporate and eliminations |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
25
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain forward-looking statements regarding future events and results that are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “may,” “will,” “proposes,” “potential,” “could,” “should,” “outlook” or variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of future financial performance, anticipated growth and trends in businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned these forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause actual results to differ materially and adversely from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q and, in particular, the risks discussed under the caption “Risk Factors” in Part II, Item 1A, and those discussed in other documents the Company filed with the Securities and Exchange Commission (“SEC”). Actual results may differ materially and adversely from those expressed in any forward-looking statements. The Company undertakes no obligation to revise or update any forward-looking statements for any reason.
Introduction
This Management’s Discussion and Analysis section provides an overview of Cincinnati Bell Inc.’s financial condition as of September 30, 2023 and the results of operations for the three and nine months ended September 30, 2023 and 2022. This discussion should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and accompanying notes as well as the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Results for interim periods may not be indicative of results for the full year or any other interim period.
altafiber Brand
In March 2022, the Company announced that we will begin doing business as “altafiber” in Ohio, Kentucky and Indiana as we continue to expand our geographic reach and invest in our fiber network that delivers broadband connectivity. The branding change will not impact our Hawaiian Telcom business or our IT Services business, which is branded as CBTS in the U.S. and Europe and OnX in Canada.
26
Executive Summary
Segment results described in the Executive Summary are net of intercompany eliminations.
Cincinnati Bell Inc. and its consolidated subsidiaries ("altafiber," "Cincinnati Bell," "we," "our," "us" or the "Company") provide integrated communications and IT solutions that keep consumer and enterprise customers connected with each other and with the world. Through our Network segment, the Company provides Data, Video, and Voice solutions to consumer and enterprise customers over an expanding fiber network and a legacy copper network. In addition, enterprise customers across the United States, Canada and Europe rely on the IT Services and Hardware segment for the sale and service of efficient, end-to-end communications and IT systems and solutions.
Consolidated revenue totaling $448.3 million for the three months ended September 30, 2023 decreased $13.8 million compared to the same period in 2022 primarily due to the decrease in Infrastructure Solutions revenue which was impacted by declines in professional services projects and the sale of hardware. Fioptics revenue increased $8.0 million for the three months ended September 30, 2023 compared to the same period in the prior year as the Company's continued focus on high-speed internet activations was partially offset by lower subsidized fiber build revenue while Legacy revenue decreased $10.1 million compared to the comparable period in 2022.
Consolidated revenue totaling $1,354.9 million for the nine months ended September 30, 2023 increased $17.5 million compared to the same period in the prior year due to strategic revenue growth in both segments offsetting declines in Legacy revenue and Infrastructure Solutions revenue. Fioptics revenue increased $28.8 million for the nine months ended September 30, 2023 compared to the same period in 2022 due to similar trends that impacted the quarter while Legacy revenue decreased $29.4 million compared to the comparable period in 2022. Additionally, Agile IWG Holdings, LLC ("Agile") contributed incremental revenue of $7.0 million for the nine months ended September 30, 2023 compared to the same period in the prior year. IT Services and Hardware revenue growth was primarily due to services for existing customers which continue to bill and grow in 2023 partially offset by a decrease in professional services projects.
Operating loss for the three and nine months ended September 30, 2023 was $22.0 million and $71.5 million, respectively, compared to operating loss of $36.7 million and $84.1 million for the three and nine months ended September 30, 2022, respectively. Lower operating loss for the three and nine months ended September 30, 2023 compared to the comparable periods in the prior year is primarily due to lower depreciation and amortization expenses, primarily in the Network segment, due to certain assets that were given a shorter useful life when recorded at fair value on the Company's merger date, September 7, 2021, and were fully depreciated by March 31, 2023, as well as declining amortization expense on certain intangibles. In addition, transaction and integration costs decreased in the three and nine months ended September 30, 2023 compared to the same periods in the prior year. These decreases in the three and nine months ended September 30, 2023 compared to the same periods in 2022 were partially offset by higher SG&A expenses to support strategic revenue growth. In addition, Corporate SG&A costs in the nine months ended September 30, 2023 include $3.1 million related to employee contract termination costs.
Interest expense increased $19.0 million and $60.8 million for the three and nine months ended September 30, 2023, respectively, compared to the comparable periods in the prior year. The increase is primarily due to higher interest rates on the Company's variable-rate borrowings in addition to interest expense incurred on the Term B-3 Loans entered into in the second quarter of 2023 and increased borrowings on the Revolving Credit Facility due 2026 and accounts receivable securitization facilities.
Other components of pension and postretirement benefit plans expense increased for the three and nine months ended September 30, 2023 compared to the same periods in 2022 due to the annual remeasurement of the pension and postretirement projected benefit obligations that resulted in additional expense due to higher interest cost on projected benefit obligations and less benefit from expected return on plan assets.
Other income, net totaled income of $14.6 million and $38.6 million for the three and nine months ended September 30, 2023, respectively, primarily due to recording gains associated with the Company's interest rate swap agreements and interest rate cap agreements of $14.1 million and $33.6 million in the three and nine months ended September 30, 2023, respectively. In addition, the Company recorded a patronage distribution of $5.0 million from one of the syndicated lenders in the Company's Credit Agreement in the nine months ended September 30, 2023.
Other income, net totaled $25.7 million and $14.3 million for the three and nine months ended September 30, 2022, respectively, due to recording gains associated with the Company's interest rate swap agreements and interest rate cap agreements of $24.7 million and $12.5 million in the three and nine months ended September 30, 2022, respectively.
Loss before income taxes totaled $50.8 million for the three months ended September 30, 2023 resulting in an increase in the loss of $16.2 million compared to the same period in 2022 as the decrease in operating loss and decrease to gains associated with interest rate swap agreements and interest rate cap agreements were more than offset by higher interest expense in the three months ended September 30, 2023 compared to the same period in the prior year.
Loss before income taxes totaled $153.4 million for the nine months ended September 30, 2023 resulting in an increase in the loss of $30.3 million compared to the comparable period in 2022. The decrease in operating loss and the increase in other income recorded in the nine months September 30, 2023 compared to the same period in the prior year was more than offset by higher interest expense in the nine months ended September 30, 2023 compared to the comparable period in the prior year.
27
The income tax provision for the three months ended September 30, 2023 was a benefit of $8.1 million and is lower than the period’s loss at the statutory rate due to additional valuation allowance recorded in the quarter, offset by discrete tax items recorded in the period, most notably a $2.6 million benefit for research and development tax credits, as well as the effect of state income taxes. The income tax benefit is slightly higher than the $8.0 million income tax benefit recorded in the comparable period in 2022 due to a higher loss in the reporting period than in the comparable period, as well as the net favorable effect of discrete tax items recorded in the reporting period. These were offset, in part, by the valuation allowance recorded in the reporting period.
The income tax provision for the nine months ended September 30, 2023 was a benefit of $30.7 million and is lower than the period’s loss at the statutory rate due to the federal and state valuation allowances recorded against deferred tax assets, offset by discrete tax items recorded in the period, most notably a $2.6 million benefit for research and development tax credits, as well as the effect of state income taxes. The income tax benefit is higher than the $28.5 million benefit recorded in the comparable period in 2022 due to a greater loss in the reporting period than in the comparable period, as well as the net favorable effect of discrete tax items recorded in the reporting period. These were offset, in part, by the valuation allowance recorded in the reporting period.
28
Network
The Network segment provides products and services that are categorized as Fioptics, 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. CBT has operated in this territory for approximately 150 years. In 2022, the Company announced that we will be doing business as "altafiber" and started our network expansion outside of this territory to provide fiber services to adjacent markets. 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. Originally incorporated in Hawaii in 1883 as Mutual Telephone Company, Hawaiian Telcom has a strong heritage of 140 years as Hawaii’s communications carrier. Its services are offered on all of Hawaii’s major islands, except its video service, which currently is only available on the island of Oahu. On May 2, 2022, the Company acquired Agile, based in Canton, Ohio. Agile leases wireless infrastructure assets to third parties and provides connectivity through hybrid fiber wireless data networks primarily to customers in Ohio and Pennsylvania. On April 17, 2023, the Company acquired Ohio Transparent Telecom Inc. ("OTT"). OTT provides network security, data connectivity, and unified communications solutions to commercial and enterprise customers across multiple sectors throughout Ohio and Michigan.
Fioptics products include high-speed internet access, categorized below as data, voice lines and video as well as subsidized fiber build project revenue included in Other related to extending the Company’s fiber network in the Greater Cincinnati territory subsidized through our UniCity program and in Hawaii subsidized through a customer contract. The Company is able to deliver speeds of up to one gigabit per second to approximately 85% of Greater Cincinnati and approximately 50% of Hawaii’s total addressable market.
Enterprise Fiber products include metro-ethernet, dedicated internet access, wavelength, IRU contracts, and wireless backhaul to macro-towers and small cell. Hawaiian Telcom Enterprise Fiber revenue also includes revenue from the SEA-US cable. As enterprise customers migrate from legacy products and copper-based technology, our metro-ethernet product becomes the preferred method of transport due to its ability to support multiple applications on a single physical connection. Subsequent to the Company’s acquisitions of Agile in May 2022 and OTT in April 2023, Enterprise Fiber revenue also includes revenue from Agile and OTT.
Legacy products include traditional voice lines, consumer long distance, switched access, digital trunking, DSL, DS0, DS1, DS3 and other value-added services such as caller identification, voicemail, call waiting and call return.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
(dollars in millions) |
|
2023 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
|
2023 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Data |
|
$ |
139.7 |
|
|
$ |
132.8 |
|
|
$ |
6.9 |
|
|
|
5 |
% |
|
$ |
414.1 |
|
|
$ |
388.4 |
|
|
$ |
25.7 |
|
|
|
7 |
% |
Video |
|
|
47.8 |
|
|
|
47.8 |
|
|
|
— |
|
|
|
0 |
% |
|
|
144.7 |
|
|
|
144.8 |
|
|
|
(0.1 |
) |
|
|
0 |
% |
Voice |
|
|
53.3 |
|
|
|
58.2 |
|
|
|
(4.9 |
) |
|
|
(8 |
)% |
|
|
165.2 |
|
|
|
175.2 |
|
|
|
(10.0 |
) |
|
|
(6 |
)% |
Other |
|
|
9.4 |
|
|
|
12.3 |
|
|
|
(2.9 |
) |
|
|
(24 |
)% |
|
|
26.9 |
|
|
|
33.2 |
|
|
|
(6.3 |
) |
|
|
(19 |
)% |
Total Revenue |
|
|
250.2 |
|
|
|
251.1 |
|
|
|
(0.9 |
) |
|
|
0 |
% |
|
|
750.9 |
|
|
|
741.6 |
|
|
|
9.3 |
|
|
|
1 |
% |
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of services and products |
|
|
115.5 |
|
|
|
115.4 |
|
|
|
0.1 |
|
|
|
0 |
% |
|
|
345.7 |
|
|
|
334.5 |
|
|
|
11.2 |
|
|
|
3 |
% |
Selling, general and administrative |
|
|
57.4 |
|
|
|
55.5 |
|
|
|
1.9 |
|
|
|
3 |
% |
|
|
165.4 |
|
|
|
152.1 |
|
|
|
13.3 |
|
|
|
9 |
% |
Depreciation and amortization |
|
|
84.3 |
|
|
|
104.7 |
|
|
|
(20.4 |
) |
|
|
(19 |
)% |
|
|
279.5 |
|
|
|
301.5 |
|
|
|
(22.0 |
) |
|
|
(7 |
)% |
Loss on impairment of long-lived assets |
|
|
— |
|
|
|
2.7 |
|
|
|
(2.7 |
) |
|
n/m |
|
|
|
— |
|
|
|
2.7 |
|
|
|
(2.7 |
) |
|
n/m |
|
||
Transaction and integration costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
n/m |
|
|
|
0.1 |
|
|
|
— |
|
|
|
0.1 |
|
|
n/m |
|
||
Total operating costs and expenses |
|
|
257.2 |
|
|
|
278.3 |
|
|
|
(21.1 |
) |
|
|
(8 |
)% |
|
|
790.7 |
|
|
|
790.8 |
|
|
|
(0.1 |
) |
|
|
0 |
% |
Operating loss |
|
$ |
(7.0 |
) |
|
$ |
(27.2 |
) |
|
$ |
20.2 |
|
|
|
(74 |
)% |
|
$ |
(39.8 |
) |
|
$ |
(49.2 |
) |
|
$ |
9.4 |
|
|
|
(19 |
)% |
Operating margin |
|
|
(2.8 |
)% |
|
|
(10.8 |
)% |
|
|
|
|
8.0 pts |
|
|
|
(5.3 |
)% |
|
|
(6.6 |
)% |
|
|
|
|
1.3 pts |
|
||||
Capital expenditures |
|
$ |
173.3 |
|
|
$ |
131.3 |
|
|
$ |
42.0 |
|
|
|
32 |
% |
|
$ |
462.7 |
|
|
$ |
318.8 |
|
|
$ |
143.9 |
|
|
|
45 |
% |
29
Network, continued
|
|
September 30, |
|
|||||||||||||
Metrics information (in thousands): |
|
2023 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
||||
Cincinnati |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fioptics |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Data |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Internet FTTP* |
|
|
332.0 |
|
|
|
287.4 |
|
|
|
44.6 |
|
|
|
16 |
% |
Video |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fioptics Video |
|
|
122.9 |
|
|
|
122.7 |
|
|
|
0.2 |
|
|
|
0 |
% |
Voice |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fioptics Voice Lines |
|
|
98.8 |
|
|
|
100.9 |
|
|
|
(2.1 |
) |
|
|
(2 |
)% |
Fioptics Units Passed |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Units passed FTTP* |
|
|
742.9 |
|
|
|
626.5 |
|
|
|
116.4 |
|
|
|
19 |
% |
Enterprise Fiber |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Data |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Ethernet Bandwidth (Gb) |
|
|
12,349 |
|
|
|
8,234 |
|
|
|
4,115 |
|
|
|
50 |
% |
Legacy |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Data |
|
|
|
|
|
|
|
|
|
|
|
|
||||
DSL and FTTN** |
|
|
33.2 |
|
|
|
56.1 |
|
|
|
(22.9 |
) |
|
|
(41 |
)% |
Voice |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Legacy Voice Lines |
|
|
120.0 |
|
|
|
140.4 |
|
|
|
(20.4 |
) |
|
|
(15 |
)% |
* Fiber-to-the-Premise (FTTP)
**Internet speeds of less than 100mbps including Legacy DSL and Fiber-to-the-Node (FTTN) previously included in Fioptics Data
30
Network, continued
|
|
September 30, |
|
|||||||||||||
Metrics information (in thousands): |
|
2023 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
||||
Hawaii |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fioptics |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Data |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Internet FTTP* |
|
|
83.0 |
|
|
|
68.5 |
|
|
|
14.5 |
|
|
|
21 |
% |
Video |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fioptics Video |
|
|
34.4 |
|
|
|
35.7 |
|
|
|
(1.3 |
) |
|
|
(4 |
)% |
Voice |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fioptics Voice Lines |
|
|
30.5 |
|
|
|
28.8 |
|
|
|
1.7 |
|
|
|
6 |
% |
Fioptics Units Passed |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Units passed FTTP** |
|
|
325.5 |
|
|
|
254.3 |
|
|
|
71.2 |
|
|
|
28 |
% |
Enterprise Fiber |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Data |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Ethernet Bandwidth (Gb) |
|
|
6,121 |
|
|
|
4,211 |
|
|
|
1,910 |
|
|
|
45 |
% |
Legacy |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Data |
|
|
|
|
|
|
|
|
|
|
|
|
||||
DSL and FTTN*** |
|
|
31.0 |
|
|
|
33.8 |
|
|
|
(2.8 |
) |
|
|
(8 |
)% |
Voice |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Legacy Voice Lines |
|
|
109.6 |
|
|
|
126.0 |
|
|
|
(16.4 |
) |
|
|
(13 |
)% |
* Fiber-to-the-Premise (FTTP)
** Includes units passed for both consumer and business on Oahu and neighboring islands
***Internet speeds of less than 100mbps including Legacy DSL and Fiber-to-the-Node (FTTN) previously included in Fioptics Data
31
Network, continued
Revenue
|
|
Three Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||
(dollars in millions) |
|
Cincinnati |
|
|
Hawaii |
|
|
Total |
|
|
Cincinnati |
|
|
Hawaii |
|
|
Total |
|
||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fioptics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Data |
|
$ |
63.5 |
|
|
$ |
15.4 |
|
|
$ |
78.9 |
|
|
$ |
55.4 |
|
|
$ |
13.0 |
|
|
$ |
68.4 |
|
Video |
|
|
39.4 |
|
|
|
8.4 |
|
|
|
47.8 |
|
|
|
39.0 |
|
|
|
8.8 |
|
|
|
47.8 |
|
Voice |
|
|
8.6 |
|
|
|
3.0 |
|
|
|
11.6 |
|
|
|
8.8 |
|
|
|
2.8 |
|
|
|
11.6 |
|
Other |
|
|
3.9 |
|
|
|
— |
|
|
|
3.9 |
|
|
|
6.4 |
|
|
|
— |
|
|
|
6.4 |
|
|
|
|
115.4 |
|
|
|
26.8 |
|
|
|
142.2 |
|
|
|
109.6 |
|
|
|
24.6 |
|
|
|
134.2 |
|
Enterprise Fiber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Data |
|
|
25.1 |
|
|
|
13.3 |
|
|
|
38.4 |
|
|
|
24.9 |
|
|
|
12.3 |
|
|
|
37.2 |
|
Legacy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Data |
|
|
14.0 |
|
|
|
8.4 |
|
|
|
22.4 |
|
|
|
17.7 |
|
|
|
9.5 |
|
|
|
27.2 |
|
Voice |
|
|
20.7 |
|
|
|
21.0 |
|
|
|
41.7 |
|
|
|
22.7 |
|
|
|
23.9 |
|
|
|
46.6 |
|
Other |
|
|
1.6 |
|
|
|
3.9 |
|
|
|
5.5 |
|
|
|
3.1 |
|
|
|
2.8 |
|
|
|
5.9 |
|
|
|
|
36.3 |
|
|
|
33.3 |
|
|
|
69.6 |
|
|
|
43.5 |
|
|
|
36.2 |
|
|
|
79.7 |
|
Total Network revenue |
|
$ |
176.8 |
|
|
$ |
73.4 |
|
|
$ |
250.2 |
|
|
$ |
178.0 |
|
|
$ |
73.1 |
|
|
$ |
251.1 |
|
|
|
Nine Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||
(dollars in millions) |
|
Cincinnati |
|
|
Hawaii |
|
|
Total |
|
|
Cincinnati |
|
|
Hawaii |
|
|
Total |
|
||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fioptics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Data |
|
$ |
184.5 |
|
|
$ |
44.1 |
|
|
$ |
228.6 |
|
|
$ |
160.0 |
|
|
$ |
34.6 |
|
|
$ |
194.6 |
|
Video |
|
|
118.9 |
|
|
|
25.8 |
|
|
|
144.7 |
|
|
|
117.8 |
|
|
|
27.0 |
|
|
|
144.8 |
|
Voice |
|
|
25.6 |
|
|
|
9.0 |
|
|
|
34.6 |
|
|
|
25.8 |
|
|
|
8.5 |
|
|
|
34.3 |
|
Other |
|
|
7.1 |
|
|
|
3.4 |
|
|
|
10.5 |
|
|
|
15.9 |
|
|
|
— |
|
|
|
15.9 |
|
|
|
|
336.1 |
|
|
|
82.3 |
|
|
|
418.4 |
|
|
|
319.5 |
|
|
|
70.1 |
|
|
|
389.6 |
|
Enterprise Fiber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Data |
|
|
76.3 |
|
|
|
39.0 |
|
|
|
115.3 |
|
|
|
69.5 |
|
|
|
35.9 |
|
|
|
105.4 |
|
Legacy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Data |
|
|
44.5 |
|
|
|
25.7 |
|
|
|
70.2 |
|
|
|
55.7 |
|
|
|
32.7 |
|
|
|
88.4 |
|
Voice |
|
|
64.7 |
|
|
|
65.9 |
|
|
|
130.6 |
|
|
|
68.9 |
|
|
|
72.0 |
|
|
|
140.9 |
|
Other |
|
|
6.0 |
|
|
|
10.4 |
|
|
|
16.4 |
|
|
|
9.6 |
|
|
|
7.7 |
|
|
|
17.3 |
|
|
|
|
115.2 |
|
|
|
102.0 |
|
|
|
217.2 |
|
|
|
134.2 |
|
|
|
112.4 |
|
|
|
246.6 |
|
Total Network revenue |
|
$ |
527.6 |
|
|
$ |
223.3 |
|
|
$ |
750.9 |
|
|
$ |
523.2 |
|
|
$ |
218.4 |
|
|
$ |
741.6 |
|
Fioptics
Fioptics revenue for the three and nine months ended September 30, 2023 increased $8.0 million and $28.8 million, respectively, compared to the same periods in 2022 primarily due to the increase in the subscriber base for internet. The internet subscriber base continues to increase as we focus attention on growing the internet FTTP subscriber base and accelerating the pace of our fiber build which enabled us to pass 85,700 FTTP addresses in Cincinnati and 57,500 FTTP addresses in Hawaii during the nine months ended September 30, 2023. The Average Revenue Per User (“ARPU”) for the three and nine months ended September 30, 2023 increased for internet in both Cincinnati and Hawaii compared to the comparable periods in 2022 primarily due to price increases and more customers subscribing to higher broadband tiers. Other revenue primarily consists of revenue from nonrecurring subsidized fiber build projects in Cincinnati and Hawaii and totaled $3.9 million and $10.4 million for the three and nine months ended September 30, 2023, respectively, and $6.4 million and $15.6 million for the three and nine months ended September 30, 2022, respectively.
32
Network, continued
Enterprise Fiber
Enterprise Fiber revenue for the three and nine months ended September 30, 2023 increased $1.2 million and $9.9 million, respectively, compared to the same periods in the prior year primarily due to increased revenue contributed by Agile of $1.0 million and $7.0 million for the three and nine months ended September 30, 2023, respectively, compared to the comparable periods in 2022. In addition, revenue increased as a result of customers migrating from legacy product offerings to higher bandwidth fiber solutions as evidenced by the 50% and 45% increases in Ethernet Bandwidth in Cincinnati and Hawaii, respectively. During 2022, significant contracts were signed with large carriers in Cincinnati and Hawaii to upgrade Ethernet Bandwidth across their networks which continue to bill and grow in 2023. Increased revenue was partially offset by pricing pressures to provide higher speeds at a lower cost.
Legacy
Legacy revenue decreased $10.1 million and $29.4 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 due to the decline in voice lines and DSL subscribers. Voice lines declined 15% and 13% in Cincinnati and Hawaii, respectively, as the traditional voice lines become less relevant. DSL subscribers continue to decrease in Cincinnati and Hawaii as subscribers demand the higher speeds that can be provided by fiber.
Operating Costs and Expenses
Cost of services and products increased $0.1 million for the three months ended September 30, 2023 compared to the same period in the prior year as increases in contract services costs of $1.4 million, rent expense of $0.8 million and video content costs of $0.4 million were offset by decreases in operating materials of $1.6 million and operating facilities expenses of $0.9 million. The increase in contract services costs is due to higher utilization of outside contractors on certain specialized projects including the expansion of our fiber network while rent expense increased primarily due to increased expense contributed by Agile in the three months ended September 30, 2023. The decrease in operating materials is primarily due to decreased purchases associated with the expansion of our fiber network in the three months ended September 30, 2023 compared to the same period in 2022, and operating facilities expenses decreased due to lower energy costs.
Cost of services and products increased $11.2 million for the nine months ended September 30, 2023 compared to the same period in 2022. Increased rent expense of $3.8 million, video content costs of $3.6 million and contract services costs of $2.6 million are due to similar trends that impacted the quarter. In addition, operating taxes increased $2.6 million primarily due to higher regulatory fees. These increases were partially offset by the decrease in operating materials of $2.2 million due to decreased purchases associated with the expansion of our fiber network and a significant wiring project completed in the nine months ended September 30, 2022. Payroll related costs also decreased $0.4 million as increased wages due to higher headcount to support our fiber network expansion were more than offset by favorable payroll benefit costs in the nine months ended September 30, 2023 compared to the comparable period in the prior year.
SG&A expenses increased $1.9 million for the three months ended September 30, 2023 compared to the same period in 2022 primarily due to initiatives to support revenue growth in addition to increases in payroll related costs and software development costs. Payroll related costs increased $1.6 million due to additional headcount and higher employee commission expense that is deferred in accordance with ASC 606 and expensed over the average customer life or average contract term. The additional expense is the result of the contract asset increasing subsequent to purchase accounting adjustments recorded as of the Company's merger date, September 7, 2021 as well as increased subscriber counts. Software development costs increased $0.5 million due to internal projects. These increases were partially offset by decreased operating materials of $0.8 million primarily due to purchases associated with the Company's rebranding as altafiber in the three months ended September 30, 2022.
SG&A expenses increased $13.3 million for the nine months ended September 30, 2023 compared to the comparable period in the prior year due to initiatives to support revenue growth as well as increases in payroll related costs, software development costs, bad debt expense, advertising costs and contract services costs. Payroll related costs and software development costs increased $5.9 million and $1.6 million, respectively, primarily due to similar trends that impacted the quarter. In addition, payroll related costs were also impacted by incremental headcount associated with the acquisition of Agile which occurred during the second quarter of 2022. Bad debt expense increased $2.4 million primarily due to favorable collection efforts resulting in lower bad debt expense in the nine months ended September 30, 2022. The increase in advertising costs of $1.5 million is due to increased marketing campaigns and promotional events. Contract services costs increased $0.8 million primarily due to higher utilization of outside contractors on certain specialized projects and increased insurance expenses which more than offset a decrease in legal expense due to a legal dispute in Hawaii resulting in higher expense incurred in the nine months ended September 30, 2022.
Depreciation and amortization expense decreased $20.4 million and $22.0 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 primarily due to certain assets that were given a shorter useful life when recorded at fair value on the Company's merger date, September 7, 2021, and were fully depreciated by March 31, 2023 in addition to declining amortization expense on certain intangibles.
33
Network, continued
Capital Expenditures
|
|
Three Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||
(dollars in millions) |
|
Cincinnati |
|
|
Hawaii |
|
|
Total |
|
|
Cincinnati |
|
|
Hawaii |
|
|
Total |
|
||||||
Fioptics Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Construction |
|
$ |
57.1 |
|
|
$ |
23.5 |
|
|
$ |
80.6 |
|
|
$ |
45.1 |
|
|
$ |
12.6 |
|
|
$ |
57.7 |
|
Installation |
|
|
21.2 |
|
|
|
11.9 |
|
|
|
33.1 |
|
|
|
24.5 |
|
|
|
5.4 |
|
|
|
29.9 |
|
Other |
|
|
2.3 |
|
|
|
3.0 |
|
|
|
5.3 |
|
|
|
3.9 |
|
|
|
0.7 |
|
|
|
4.6 |
|
Total Fioptics |
|
|
80.6 |
|
|
|
38.4 |
|
|
|
119.0 |
|
|
|
73.5 |
|
|
|
18.7 |
|
|
|
92.2 |
|
Enterprise Fiber |
|
|
9.9 |
|
|
|
6.8 |
|
|
|
16.7 |
|
|
|
4.8 |
|
|
|
6.7 |
|
|
|
11.5 |
|
Other |
|
|
18.1 |
|
|
|
19.5 |
|
|
|
37.6 |
|
|
|
15.7 |
|
|
|
11.9 |
|
|
|
27.6 |
|
Total Network Capital Expenditures |
|
$ |
108.6 |
|
|
$ |
64.7 |
|
|
$ |
173.3 |
|
|
$ |
94.0 |
|
|
$ |
37.3 |
|
|
$ |
131.3 |
|
|
|
Nine Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||
(dollars in millions) |
|
Cincinnati |
|
|
Hawaii |
|
|
Total |
|
|
Cincinnati |
|
|
Hawaii |
|
|
Total |
|
||||||
Fioptics Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Construction |
|
$ |
148.0 |
|
|
$ |
57.3 |
|
|
$ |
205.3 |
|
|
$ |
100.6 |
|
|
$ |
32.5 |
|
|
$ |
133.1 |
|
Installation |
|
|
64.5 |
|
|
|
28.6 |
|
|
|
93.1 |
|
|
|
53.0 |
|
|
|
15.7 |
|
|
|
68.7 |
|
Other |
|
|
12.4 |
|
|
|
4.5 |
|
|
|
16.9 |
|
|
|
7.6 |
|
|
|
1.3 |
|
|
|
8.9 |
|
Total Fioptics |
|
|
224.9 |
|
|
|
90.4 |
|
|
|
315.3 |
|
|
|
161.2 |
|
|
|
49.5 |
|
|
|
210.7 |
|
Enterprise Fiber |
|
|
24.5 |
|
|
|
20.9 |
|
|
|
45.4 |
|
|
|
12.0 |
|
|
|
14.9 |
|
|
|
26.9 |
|
Other |
|
|
48.3 |
|
|
|
53.7 |
|
|
|
102.0 |
|
|
|
35.0 |
|
|
|
46.2 |
|
|
|
81.2 |
|
Total Network Capital Expenditures |
|
$ |
297.7 |
|
|
$ |
165.0 |
|
|
$ |
462.7 |
|
|
$ |
208.2 |
|
|
$ |
110.6 |
|
|
$ |
318.8 |
|
Capital expenditures in Cincinnati are incurred to expand our Fioptics product suite, upgrade and increase capacity for our networks, and to maintain our fiber and copper networks. The Company is focused on building FTTP addresses, and during the three and nine months ended September 30, 2023, we passed 30,600 and 85,700 FTTP addresses in Cincinnati, respectively. As of September 30, 2023, the Company is able to deliver its Fioptics services with speeds up to one gigabit or more to 742,900 residential and commercial addresses, or approximately 85% of our operating territory in Cincinnati.
Cincinnati construction capital expenditures for the three and nine months ended September 30, 2023 increased $12.0 million and $47.4 million, respectively, compared to the same periods in 2022 due to the timing of capital expenditures, which does not necessarily coincide with the timing of when addresses become available, as well as higher costs to pass addresses. Cincinnati installation capital expenditures decreased $3.3 million for the three months ended September 30, 2023 compared to the same period in the prior year primarily due to the timing of expenditures for customer premise equipment (“CPE”) utilized for installations. In the nine months ended September 30, 2023, Cincinnati installation capital expenditures increased $11.5 million compared to the comparable period in 2022 primarily due to increased activations.
Enterprise Fiber capital expenditures in Cincinnati are related to success-based fiber builds, including associated equipment, for enterprise and carrier projects to provide ethernet services as well as network refresh projects that ensure we continue to grow our capacity and services within the network core. Cincinnati Enterprise Fiber capital expenditures increased $5.1 million and $12.5 million in the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 primarily due to increased capital expenditures contributed by Agile of $5.2 million and $10.2 million for the three and nine months ended September 30, 2023, respectively, compared to the comparable periods in the prior year. Other capital expenditures are related to IT projects, cable and equipment maintenance and capacity additions, real estate upgrades and maintenance, plus other minor capital purchases.
Hawaii construction capital expenditures for the three and nine months ended September 30, 2023 increased $10.9 million and $24.8 million, respectively, compared to the same periods in the prior year due to building out 20,100 and 57,500 FTTP addresses in the three and nine months ended September 30, 2023, respectively. Hawaii installation capital expenditures increased $6.5 million and $12.9 million for the three and nine months ended September 30, 2023, respectively, compared to the comparable periods in 2022 primarily due to increased internet installations and expenditures for CPE. Enterprise Fiber capital in Hawaii is primarily driven by new ethernet customers as well as upgrades to Ethernet Bandwidth for a large carrier across the network due to a significant contract signed in 2022. Hawaii capital expenditures classified as Other include IT projects, real estate projects, road jobs or plant damage projects, and network upgrades or optimization projects.
34
IT Services and Hardware
The IT Services and Hardware segment provides end-to-end solutions ranging from consulting to implementation to ongoing optimization. These solutions include Cloud, Communications and Consulting services along with the sale and maintenance of major branded Telecom and IT hardware reported as Infrastructure Solutions. These services and products are provided through the CBTS brand in various geographic areas throughout the United States and Europe and through the OnX brand in Canada. By offering a full range of equipment and strategic services in conjunction with the Company’s fiber and copper networks, the IT Services and Hardware segment provides our customers personalized solutions designed to meet their business objectives.
Cloud services include the design, implementation and on-going management of the customer’s infrastructure. This includes on-premise, public cloud and private cloud solutions. The Company assists customers with the risk assessment phase through an in-depth understanding of the customer’s business as well as designing and building a solution, using either the customer's existing infrastructure or new cloud based options that transform the way that the customer does business.
Communications solutions help to transform the way our customers do business by connecting employees, customers, and business partners. By upgrading legacy technologies through customized build projects and reducing customer costs, the Company helps to transform the customer’s business. These services include Unified Communications as a Service ("UCaaS"), Software-Defined Wide Area Network ("SD-WAN"), Network as a Service ("NaaS"), Contact Center and Collaboration.
Using our experience and expertise, Infrastructure Solutions are tailored to our customers’ organizational goals. We offer a complete portfolio of services that provide customers with efficient and optimized IT solutions that are agile and responsive to their business and are integrated, simplified and manageable. Through consulting with customers, the Company builds solutions using standard manufacturer equipment to meet our customers’ specific requirements.
Consulting services help customers assess their business and technology needs and provide the talent needed to ensure success. The Company is a premier provider of application services and IT staffing.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
(dollars in millions) |
|
2023 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
|
2023 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consulting |
|
$ |
85.1 |
|
|
$ |
86.9 |
|
|
$ |
(1.8 |
) |
|
|
(2 |
)% |
|
$ |
258.8 |
|
|
$ |
253.8 |
|
|
$ |
5.0 |
|
|
|
2 |
% |
Cloud |
|
|
30.6 |
|
|
|
25.1 |
|
|
|
5.5 |
|
|
|
22 |
% |
|
|
86.3 |
|
|
|
74.8 |
|
|
|
11.5 |
|
|
|
15 |
% |
Communications |
|
|
56.2 |
|
|
|
56.1 |
|
|
|
0.1 |
|
|
|
0 |
% |
|
|
166.4 |
|
|
|
165.3 |
|
|
|
1.1 |
|
|
|
1 |
% |
Infrastructure Solutions |
|
|
32.5 |
|
|
|
49.7 |
|
|
|
(17.2 |
) |
|
|
(35 |
)% |
|
|
110.8 |
|
|
|
121.7 |
|
|
|
(10.9 |
) |
|
|
(9 |
)% |
Total revenue |
|
|
204.4 |
|
|
|
217.8 |
|
|
|
(13.4 |
) |
|
|
(6 |
)% |
|
|
622.3 |
|
|
|
615.6 |
|
|
|
6.7 |
|
|
|
1 |
% |
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of services and products |
|
|
143.1 |
|
|
|
149.1 |
|
|
|
(6.0 |
) |
|
|
(4 |
)% |
|
|
426.9 |
|
|
|
422.3 |
|
|
|
4.6 |
|
|
|
1 |
% |
Selling, general and administrative |
|
|
45.2 |
|
|
|
42.1 |
|
|
|
3.1 |
|
|
|
7 |
% |
|
|
133.4 |
|
|
|
122.8 |
|
|
|
10.6 |
|
|
|
9 |
% |
Depreciation and amortization |
|
|
24.8 |
|
|
|
26.8 |
|
|
|
(2.0 |
) |
|
|
(7 |
)% |
|
|
74.3 |
|
|
|
79.4 |
|
|
|
(5.1 |
) |
|
|
(6 |
)% |
Restructuring and severance related charges |
|
|
0.7 |
|
|
|
0.5 |
|
|
|
0.2 |
|
|
|
40 |
% |
|
|
2.1 |
|
|
|
1.8 |
|
|
|
0.3 |
|
|
|
17 |
% |
Total operating costs and expenses |
|
|
213.8 |
|
|
|
218.5 |
|
|
|
(4.7 |
) |
|
|
(2 |
)% |
|
|
636.7 |
|
|
|
626.3 |
|
|
|
10.4 |
|
|
|
2 |
% |
Operating loss |
|
$ |
(9.4 |
) |
|
$ |
(0.7 |
) |
|
$ |
(8.7 |
) |
|
n/m |
|
|
$ |
(14.4 |
) |
|
$ |
(10.7 |
) |
|
$ |
(3.7 |
) |
|
|
35 |
% |
|
Operating margin |
|
|
(4.6 |
)% |
|
|
(0.3 |
)% |
|
|
|
|
(4.3) pts |
|
|
|
(2.3 |
)% |
|
|
(1.7 |
)% |
|
|
|
|
(0.6) pts |
|
||||
Capital expenditures |
|
$ |
5.4 |
|
|
$ |
9.3 |
|
|
$ |
(3.9 |
) |
|
|
(42 |
)% |
|
$ |
19.1 |
|
|
$ |
22.7 |
|
|
$ |
(3.6 |
) |
|
|
(16 |
)% |
35
IT Services and Hardware, continued
Metrics information: |
|
September 30, 2023 |
|
|
September 30, 2022 |
|
|
Change |
|
|
% Change |
|
||||
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Billable Resources |
|
|
2,304 |
|
|
|
2,411 |
|
|
|
(107 |
) |
|
|
(4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Communications |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NaaS Locations |
|
|
12,789 |
|
|
|
11,738 |
|
|
|
1,051 |
|
|
|
9 |
% |
SD - WAN Locations |
|
|
9,310 |
|
|
|
8,555 |
|
|
|
755 |
|
|
|
9 |
% |
Hosted UCaaS Profiles* |
|
|
313,434 |
|
|
|
314,698 |
|
|
|
(1,264 |
) |
|
|
0 |
% |
* Includes Hawaii Hosted UCaaS Profiles
Revenue
IT Services and Hardware segment revenue decreased $13.4 million for the three months ended September 30, 2023 compared to the same period in the prior year primarily due to decreased Consulting revenue and Infrastructure Solutions revenue partially offset by increased Cloud revenue. Cloud revenue increased $5.5 million for the three months ended September 30, 2023 compared to the same period in 2022 primarily due to providing ongoing monitoring and management services, and to a lesser extent, increased public cloud services as well as increased cloud computing services related to significant customer contracts obtained in prior years which continue to bill and grow in 2023. Communications revenue increased $0.1 million compared to the prior year as a result of customers migrating to newer technologies which has increased the Company’s NaaS locations and SD-WAN locations. These increases were offset by the decline in legacy communications revenue and professional services projects. Additionally, Hosted UCaaS profiles decreased from the prior year due to a shift in sales focus to certain other strategic products in the Communications practice. Consulting revenue decreased $1.8 million as projects that continue to bill and grow in 2023 were more than offset by a reduction in billable resources for two significant consulting projects. Infrastructure Solutions revenue decreased $17.2 million due to decreases in professional services projects and the sale of hardware.
IT Services and Hardware segment revenue increased $6.7 million for the nine months ended September 30, 2023 compared to the same period in the prior year as increases in Consulting, Cloud and Communications revenue more than offset the decrease in Infrastructure Solutions revenue. Consulting revenue increased $5.0 million primarily due to existing projects which continue to bill and grow in 2023 partially offset by a reduction in billable resources for two significant consulting projects in the third quarter of 2023. Cloud and Communications revenue increased $11.5 million and $1.1 million for the nine months ended September 30, 2023, respectively, compared to the same period in 2022 primarily due to similar trends that impacted the quarter. Infrastructure Solutions revenue decreased $10.9 million primarily due to a decrease in professional services projects.
Operating Costs and Expenses
IT Services and Hardware cost of services and products decreased $6.0 million for the three months ended September 30, 2023 compared to the same period in 2022 primarily due to a decrease in contractor costs partially offset by increases in payroll related costs, network related costs and software licensing fees. Contractor costs decreased $10.6 million due to 107 fewer billable resources compared to September 30, 2022 as a result of consulting projects that were reduced in 2023. Payroll related costs increased $3.3 million due to additional headcount to support the growth in the Cloud practice. Network related costs increased $1.0 million primarily due to rate increases and increased ASC 606 related costs. Higher software licensing costs were incurred to support strategic revenue growth in the Communications practice.
Cost of services and products increased $4.6 million for the nine months ended September 30, 2023 compared to the same period in the prior year due to increases in payroll related costs of $5.7 million, software licensing costs of $1.9 million and network related costs of $1.0 million partially offset by decreased contractor costs of $5.8 million due to similar trends that impacted the quarter. In addition, operating taxes increased $1.6 million for the nine months ended September 30, 2023 compared to the same period in 2022 due to an increase in general excise tax.
SG&A expenses increased $3.1 million and $10.6 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in the prior year primarily to support revenue growth, and to a lesser extent, fill roles and implement software that the Company strategically determined will no longer be carried out by shared resources for each of the segments. Payroll related costs increased $2.3 million and $7.1 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022 due to increased headcount and employee commissions. For the three and nine months ended September 30, 2023, software development costs increased $1.8 million and $4.0 million, respectively, compared to the same periods in the prior year due to internal software projects. In addition, non-employee commissions increased $1.4 million for the nine months ended September 30, 2023 compared to the same period in 2022. The increase in SG&A expenses for the three and nine months ended September 30, 2023 compared to the same periods in 2022 was partially offset by a decrease in bad debt expense of $1.0 million and $1.2 million, respectively, primarily due to the favorable resolution of reserved balances.
36
IT Services and Hardware, continued
Depreciation and amortization expense decreased $2.0 million and $5.1 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decrease is due to certain assets that were given a shorter useful life when recorded at fair value on the Company's merger date, September 7, 2021, and were fully depreciated by December 31, 2022 in addition to declining amortization expense on certain intangibles.
Restructuring and severance related charges recorded in the three and nine months ended September 30, 2023 and 2022 are associated with initiatives to reduce and contain costs.
Capital Expenditures
Capital expenditures are dependent on the timing of success-based projects. Capital expenditures for the nine months ended September 30, 2023 were primarily related to projects supporting the Cloud and Communications practices. In addition to success-based projects, the Company incurred $4.0 million for implementation work associated with internal software projects in the nine months ended September 30, 2023.
37
Financial Condition, Liquidity, and Capital Resources
As of September 30, 2023, the Company had an accumulated deficit of $280.8 million and $1,742.3 million of outstanding indebtedness.
The Company’s primary source of cash is generated by operations. The Company generated $59.2 million and $235.0 million of cash flows from operations during the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the Company had $382.5 million of short-term liquidity, comprised of $7.7 million of cash and cash equivalents, $364.0 million of undrawn capacity on our Revolving Credit Facility due 2026, $9.4 million available under the CBTS Receivables Facility (defined below) and $1.4 million available under the Network Receivables Facility (defined below).
In August 2023, Red Fiber Parent LLC ("Parent") committed to make capital contributions of $600.0 million to the Company, of which $400.0 million was received in the third quarter of 2023 and $200.0 million will be received in the fourth quarter of 2024. The capital contribution received was used to repay borrowings on the Company's Revolving Credit Facility due 2026, fund capital expenditures, and fund working capital.
In May 2023, the Company entered into an Incremental Amendment to the Credit Agreement (the "Incremental Amendment”) to provide for the incurrence of a new tranche of $200.0 million senior secured term loans (the “Term B-3 Loans”). The Term B-3 Loans will mature in November 2028 and will bear interest at a floating rate plus a margin equal to (x) 3.00% for Term B-3 Loans bearing interest based on the Base Rate (as defined in the Credit Agreement) and (y) 4.00% for Term B-3 Loans bearing interest based on Term SOFR. All other material terms, conditions and covenants of the Credit Agreement were unchanged by the Incremental Amendment.
One of the syndicated lenders of the Term B-1 Loans and Term B-3 Loans in the Credit Agreement is a cooperative bank owned by its customers. Annually, this bank distributes patronage in the form of cash and stock in the cooperative based on the Company’s average outstanding loan balance. The Company will recognize the patronage, generally as declared, in “Other income, net.” The stock component will be recognized at its stated cost basis. The Company received $5.0 million in patronage dividends in the nine months ended September 30, 2023.
On January 31, 2023, the Company, together with certain of its U.S. and Canadian subsidiaries, made certain amendments (the “Amendments”) to the Company’s accounts receivable securitization facility ("Receivables Facility"). The Amendments amend the Receivables Facility to, among other things: (i) increase the total maximum borrowing capacity to $280.0 million, (ii) separate the Receivables Facility into two separate facilities, with (A) the existing Receivables Facility (the “Network Receivables Facility”), as amended by the Amendments, covering receivables originated by certain U.S. subsidiaries of the Company including Cincinnati Bell Telephone Company LLC, Hawaiian Telcom Communications, Inc. and certain of their respective subsidiaries having a maximum borrowing capacity of $55.0 million and (B) a new facility (the “CBTS Receivables Facility”) covering receivables originated by certain U.S. and Canadian subsidiaries in the Company's IT Services and Hardware segment including CBTS Technology Solutions LLC and OnX Enterprise Solutions Ltd. having a maximum borrowing capacity of $225.0 million, (iii) move the receivables monetization arrangements from the Network Receivables Facility to the CBTS Receivables Facility, and (iv) make applicable technical and conforming changes thereto. In addition, the Amendments extend the renewal dates of each facility to January 2025 and the termination dates of each facility to January 2026.
As of September 30, 2023, the Company had borrowings of $33.9 million and $16.2 million of letters of credit outstanding under the Network Receivables Facility on a borrowing capacity of $51.5 million. As of September 30, 2023, the Company had borrowings of $211.9 million and $0.5 million of letters of credit outstanding under the CBTS Receivables Facility on a borrowing capacity of $221.8 million.
Capacity on the Network Receivables Facility and the CBTS Receivables Facility is calculated and will continue to be calculated based on the quantity and quality of outstanding accounts receivables. Therefore if the Company experiences declines in revenue or extends discounts to customers, the capacity could be negatively impacted and reduce our short term liquidity. While we expect to continue to renew the Network Receivables Facility and CBTS Receivables Facility, we would be required to use cash, our Revolving Credit Facility due 2026, or other sources to repay any outstanding balances on the facilities if they were not renewed.
The Company’s primary uses of cash are for capital expenditures and debt service and, to a lesser extent, to fund pension and retiree medical obligations. The Company believes that cash on hand, operating cash flows, its Revolving Credit Facility due 2026, its Network Receivables Facility and CBTS Receivables Facility, and the expectation that the Company will continue to have access to capital markets to refinance debt and other obligations as they mature and come due, should allow the Company to meet its cash requirements for the foreseeable future.
As of September 30, 2023, the Company was in compliance with the Credit Agreement covenants and ratios.
38
Cash Flows
Cash provided by operating activities during the nine months ended September 30, 2023 totaled $59.2 million, a decrease of $175.8 million compared to the same period in the prior year. The decrease is due to higher interest payments of $63.6 million for the nine months ended September 30, 2023 compared to the same period in 2022 due to higher interest rates and increased borrowings on the Company's credit facilities as well as $46.3 million of accounts receivable sold on the Company's former Receivables Facility as of September 30, 2022 compared to $13.3 million of accounts receivable sold on the CBTS Receivables Facility as of September 30, 2023. In addition, increased cash outflow is due to increased working capital associated with the IT Services and Hardware segment as well as increased inventory by the Network segment to support the accelerated build strategy compared to the same period in the prior year.
Cash used in investing activities during the nine months ended September 30, 2023 totaled $493.9 million, an increase of $89.2 million compared to the same period in the prior year due to the increase in capital expenditures along with acquisitions of fiber assets primarily associated with extending the Company's fiber network. The increase was partially offset by cash payments totaling $65.5 million for the acquisition of Agile in 2022.
Cash provided by financing activities during the nine months ended September 30, 2023 totaled $432.4 million primarily due to a capital contribution from Parent of $400.0 million, the issuance of $200.0 million of Term B-3 Loans and net borrowings on the receivables facilities of $58.9 million. These increases were partially offset by net payments on the Revolving Credit Facility due 2026 of $187.0 million and the repayment of the remaining $22.3 million outstanding principal amount of its 7 1/4% Notes due 2023 upon the maturity date of the notes in the second quarter of 2023. Cash provided by financing activities during the nine months ended September 30, 2022 totaled $173.9 million primarily due to net borrowings on the Revolving Credit Facility due 2026 and the Company's former Receivables Facility of $164.0 million and $26.1 million, respectively.
Regulatory Matters
During the October 2023 FCC meeting, the Commission proposed a net neutrality framework which would reclassify broadband Internet access as a Title II telecommunications service. Although the proposal suggests forbearing from applying certain telecommunications regulations to broadband Internet access, it would subject broadband to significant regulation relative to its current unregulated status. Most notable are the proposals regarding privacy, security and outage reporting. Although outright ex ante price regulation is not proposed, the proposal clearly suggests that the Commission has the right under sections 201 and 202 of the Communications Act to determine in a subsequent period if broadband rates are just and reasonable. The FCC will accept public input on the proposal through January 2024 and it is possible that final rules will be adopted by the end of 2024. The effective date of any rules eventually adopted is uncertain and will depend upon the outcome of any appeals that will inevitably be filed and the 2024 Presidential election. The Company continues to monitor this proceeding very closely to assess the potential impact that any final rules may have on its operations.
Infrastructure Investment and Jobs Act
On November 15, 2021, President Biden signed the $1 trillion Infrastructure Investment and Jobs Act (Public Law No. 117-58) (“IIJA”), which contains $65 billion for various broadband initiatives.
Broadband Equity, Access, and Deployment (“BEAD”) Program: The IIJA includes $42.5 billion which will be distributed by the National Telecommunications and Information Administration (“NTIA”) to states for awards to public and private entities to expand broadband deployment to currently unserved or underserved areas. In June 2023, the NTIA announced its allocation of funds that will be made available to each state based upon the determination of unserved and underserved areas from the FCC’s broadband map released in June 2023. The NTIA is still finalizing its rules for the BEAD grants and the individual state broadband offices are developing their plans for awarding funds within their respective states. The Company is closely monitoring the federal and state procedural rules drafting processes and continues to evaluate initiatives that will lay the foundation for potential participation within each state and will pursue opportunities for funding where it deems it to be beneficial.
Middle Mile Grants (“MMG”) Program: The IIJA appropriated $1 billion for the MMG Program to be used to “encourage the expansion and extension of middle mile infrastructure to reduce the cost of connecting unserved and underserved areas to the backbone of the internet” and to “promote broadband connection resiliency through the creation of alternative network connection paths that can be designed to prevent single points of failure on a broadband network.” The NTIA accepted middle-mile applications through November 1, 2022 and on June 15, 2023 announced that $930 million was awarded for projects covering 35 states and Puerto Rico. Hawaiian Telcom applied for $37.4 million to partially fund an economically and environmentally sustainable open access middle mile infrastructure to benefit unserved and underserved communities and improve the resiliency of existing broadband services in the state of Hawaii by building new terrestrial and undersea fiber routes in the state. The NTIA awarded Hawaiian Telcom $37.4 million for the project.
Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for a complete description of regulatory matters.
39
Contingencies
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 accounting principles generally accepted in the United States. Such matters are subject to many uncertainties and outcomes that are not predictable with assurance.
Critical Accounting Policies
The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Application of these principles requires management to make estimates or judgments that affect the amounts reported in the accompanying Condensed Consolidated Financial Statements and information available as of the date of the financial statements. As this information changes, the financial statements could reflect different estimates or judgments.
The Company’s most critical accounting policies and estimates are described in our Annual Report on Form 10-K for the year ended December 31, 2022.
Recently Issued Accounting Standards
The adoption of new accounting standards did not have a material impact on the Company’s financial results for the nine months ended September 30, 2023. Furthermore, 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 condensed consolidated financial statements upon adoption.
40
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for a description of the Company's market risks.
Item 4. Controls and Procedures
Cincinnati Bell Inc.’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in SEC Rule 13a-15(e)) as of the end of the period covered by this report. Based on this evaluation, Cincinnati Bell Inc.’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, such controls and procedures were effective.
Cincinnati Bell Inc.’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, have evaluated any changes in the Company’s internal control over financial reporting that occurred during the third quarter of 2023 and have concluded that there were no changes to Cincinnati Bell Inc.’s internal control over financial reporting during the third quarter of 2023 that materially affect, or are reasonably likely to materially affect, Cincinnati Bell Inc.’s internal control over financial reporting.
41
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Cincinnati Bell and its subsidiaries are involved in a number of legal proceedings. Liabilities are established for legal claims when losses associated with the claims are judged to be probable and the loss can be reasonably estimated. In many lawsuits and arbitrations, including most class action lawsuits, it is not possible to determine whether a liability has been incurred or to estimate the amount of the liability until the case is close to resolution, in which case a liability will not be recognized until that time. Based on information currently available, consultation with counsel, available insurance coverage and recognized liabilities, the Company believes that the eventual outcome of all claims will not, individually or in the aggregate, have a material effect on the Company’s financial position or results of operations.
Item 1A. Risk Factors
Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for a comprehensive listing of the Company’s risk factors. With the exception of the below described risks, there are no material changes for the nine months ended September 30, 2023.
Damaging wildfires occurring on the Hawaiian islands of Maui and Hawaii have caused damage to our infrastructure and adversely affected, and could continue to adversely affect, our operations.
Beginning on August 8 and 9, 2023, wildfires ignited on Maui and Hawaii islands. The fires caused damage to Lahaina town on the island of Maui and the surrounding area, including physical loss and damage to certain of the Company’s fiber and copper assets and Company owned equipment located on customer premises. The Company experienced the loss of business income immediately following the fires and is expected to continue to experience loss of income for an unknown amount of time.
It is also likely that the Maui economy will be adversely impacted by the damage caused by the fires in Lahaina and will likely have a negative impact on the tourism industry in west Maui. The Company continues to evaluate the extent of the damage to its property and equipment and expects to initiate claims with its insurance carriers. There can be no assurance that the Company’s insurance coverage will fully compensate the Company for its losses incurred in connection with the fire and related devastation, including the replacement cost of the equipment lost in the fire or the loss in revenue from the households that have been impacted by the fires. The Company could experience losses in excess of our insured limits, and further, claims for certain losses could be denied or subject to deductibles or exclusions under our insurance policies.
The Company has been named in litigation associated with the wildfires occurring on the Hawaiian island of Maui, which could require the Company to pay significant amounts in legal expenses, damages, or settlements.
On October 13, 2023, attorneys filed a Second Amended Complaint in a proposed class action lawsuit filed in Hawaii state court, adding the Company along with other telecommunications companies and private and public landowners. The Company was served on October 24, 2023. We may incur significant expenses in legal fees, damages awards, or settlements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosure
None.
Item 5. Other Information
No reportable items.
42
Item 6. Exhibits
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Incorporated by Reference |
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Exhibit Number |
Exhibit Description |
Form |
Filing Date |
Exhibit No. |
SEC File No. |
Filed Herewith |
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Second Amended Articles of Incorporation of Cincinnati Bell Inc.
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10-K |
5/19/2022 |
3.1 |
1-8519 |
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Second Amended and Restated Regulations of Cincinnati Bell Inc.
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8-K |
9/7/2021 |
3.1 |
1-8519 |
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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+ |
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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+ |
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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+ |
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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+ |
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101 |
The following financial statements from Cincinnati Bell Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 were formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Condensed Consolidated Statements of Equity (Deficit), (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.
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104 |
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |
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The Company's historical reports on Form 10-K, 10-Q, and 8-K are available free of charge at the following website: http://www.altafiber.com. The Company has ceased to be a registrant but continues to voluntarily file annual, quarterly and certain other information with the SEC due to contractual provisions included in certain indentures.
43
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Cincinnati Bell Inc. |
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Date: |
November 6, 2023 |
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/s/ Joshua T. Duckworth |
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Joshua T. Duckworth |
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Chief Financial Officer |
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Date: |
November 6, 2023 |
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/s/ Suzanne E. Maratta |
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Suzanne E. Maratta |
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Chief Accounting Officer |
44
Exhibit 31.1
Certifications
I, Leigh R. Fox, Chief Executive Officer, certify that:
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.
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Date: |
November 6, 2023 |
/s/ Leigh R. Fox |
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Leigh R. Fox |
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Chief Executive Officer |
Exhibit 31.2
Certifications
I, Joshua T. Duckworth, Chief Financial Officer, certify that:
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.
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Date: |
November 6, 2023 |
/s/ Joshua T. Duckworth |
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Joshua T. Duckworth |
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Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cincinnati Bell Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Leigh R. Fox, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
/s/ Leigh R. Fox |
Leigh R. Fox |
Chief Executive Officer |
November 6, 2023 |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cincinnati Bell Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joshua T. Duckworth, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
/s/ Joshua T. Duckworth |
Joshua T. Duckworth |
Chief Financial Officer |
November 6, 2023 |
Condensed Consolidated Statements of Operations - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Income Statement [Abstract] | ||||
| Revenue | $ 448.3 | $ 462.1 | $ 1,354.9 | $ 1,337.4 |
| Costs and expenses | ||||
| Cost of services and products, excluding items below | 252.5 | 258.0 | 754.8 | 737.7 |
| Selling, general and administrative, excluding items below | 107.9 | 102.6 | 315.3 | 288.1 |
| Depreciation and amortization | 109.2 | 131.5 | 354.1 | 381.1 |
| Loss on impairment of long-lived assets | 0.0 | 2.7 | 0.0 | 2.7 |
| Restructuring and severance related charges | 0.7 | 0.5 | 2.1 | 1.8 |
| Transaction and integration costs | 0.0 | 3.5 | 0.1 | 10.1 |
| Total operating costs and expenses | 470.3 | 498.8 | 1,426.4 | 1,421.5 |
| Operating loss | (22.0) | (36.7) | (71.5) | (84.1) |
| Interest expense | 43.3 | 24.3 | 120.0 | 59.2 |
| Other components of pension and postretirement benefit plans expense (benefit) | 0.1 | (0.7) | 0.5 | (5.9) |
| Other income, net | (14.6) | (25.7) | (38.6) | (14.3) |
| Loss before income taxes | (50.8) | (34.6) | (153.4) | (123.1) |
| Income tax benefit | (8.1) | (8.0) | (30.7) | (28.5) |
| Net loss | $ (42.7) | $ (26.6) | $ (122.7) | $ (94.6) |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Statement of Comprehensive Income [Abstract] | ||||
| Net loss | $ (42.7) | $ (26.6) | $ (122.7) | $ (94.6) |
| Other comprehensive income (loss), net of tax: | ||||
| Foreign currency translation (loss) gain | (1.8) | (5.9) | 0.6 | (7.2) |
| Defined benefit plans: | ||||
| Net loss arising from remeasurement during the period, net of tax of ($0.3), ($0.7) | 0.0 | (0.8) | 0.0 | (2.1) |
| Amortization of prior service benefits included in net income, net of tax of ($0.1), ($0.2) | (0.1) | 0.0 | (0.4) | 0.0 |
| Amortization of net actuarial gain included in net income, net of tax of ($0.2), ($0.8) | (1.1) | 0.0 | (2.9) | 0.0 |
| Total other comprehensive loss | (3.0) | (6.7) | (2.7) | (9.3) |
| Total comprehensive loss | $ (45.7) | $ (33.3) | $ (125.4) | $ (103.9) |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Statement of Comprehensive Income [Abstract] | ||||
| Net loss arising from remeasurement during the period, net of tax | $ (0.3) | $ (0.7) | ||
| Amortization of prior service benefits included in net income, net of tax | $ (0.1) | $ (0.2) | ||
| Amortization of net actuarial gain included in net income, net of tax | $ (0.2) | $ (0.8) | ||
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Allowance for receivables | $ 17.1 | $ 12.0 |
Description of Business and Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| Description of Business and Accounting Policies | 1. Description of Business and Accounting Policies Description of Business — Cincinnati Bell Inc. and its consolidated subsidiaries ("Cincinnati Bell," "we," "our," "us" or the "Company") provides diversified telecommunications and technology services. The Company generates a large portion of its revenue by serving customers in Cincinnati, Ohio, Dayton, Ohio and the islands of Hawaii. An economic downturn or natural disaster occurring in these, or a portion of these, limited operating territories 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 had receivables with one customer, Verizon Communications Inc. (“Verizon”), which made up 13% and 21% of the outstanding accounts receivable balance at September 30, 2023 and December 31, 2022, respectively. Revenue derived from foreign operations was approximately 7% of consolidated revenue for the three and nine months ended September 30, 2023 and 2022. In August 2023, Red Fiber Parent LLC ("Parent") committed to make capital contributions of $600.0 million to the Company, of which $400.0 million was received by the Company in the third quarter of 2023 and recorded to "Additional paid-in capital" on the Condensed Consolidated Balance Sheets and $200.0 million will be received in the fourth quarter of 2024. The capital contribution received in the third quarter of 2023 was used to repay borrowings on the Company's Revolving Credit Facility due 2026, fund capital expenditures, and fund working capital. Basis of Presentation — The Condensed Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations of the SEC and, in the opinion of management, include all adjustments necessary for a fair statement 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. The Company’s Condensed Consolidated Balance Sheet as of December 31, 2022 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 2022 Annual Report on Form 10-K. Business Combinations — In accounting for business combinations, we apply the accounting requirements of Accounting Standards Codification 805 (“ASC 805”), “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. In developing fair value estimates for 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. The Company reports in its Condensed Consolidated Financial Statements provisional amounts for the items for which accounting is incomplete. Goodwill is adjusted for any changes to provisional amounts made within the measurement period. See Note 2 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. Accounting Policies — The complete summary of significant accounting policies is included in the notes to the consolidated financial statements as presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Variable Interest Entity — The Company holds an interest in a limited liability company, Digital Access Ohio LLC (“DAO”), that is considered a variable interest entity ("VIE") in accordance with the guidance of ASC 810 “Consolidation.” As of September 30, 2023, operations of DAO are nominal in nature. DAO is considered a VIE as it has insufficient equity capital to finance its activities without additional financial support. The Company is the primary beneficiary of DAO as it has the power over the activities that most significantly impact the economic performance of DAO and has the obligation to absorb expected losses and the right to receive expected benefits that could be significant to DAO. As a result, the Company consolidated DAO, and all significant intercompany accounts have been eliminated. Funding of DAO is provided in the form of cash contributions, debt issuance and grants that include a free standing warrant that allows the holder of the warrant at its option to convert the warrant into a class A-2 share of DAO at any time during the period commencing on the 2nd anniversary of the funding agreement and ending on the 10th anniversary of the funding agreement date. The Company has recorded the fair value associated with the warrant to "Other noncurrent liabilities" on the Condensed Consolidated Balance Sheets. The Company will continue to assess whether it has a controlling financial interest and whether it is the primary beneficiary at each reporting period. Cash, Cash Equivalents and Restricted Cash — Cash consists of funds held in bank accounts. Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. Restricted cash as of September 30, 2023 and December 31, 2022 consists of funds held in an escrow account related to a cost method investment and funds held by DAO. Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Condensed Consolidated Statements of Cash Flows. A reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets follows:
Goodwill — Goodwill represents the excess of the purchase price consideration over the fair value of net assets acquired and recorded in connection with business acquisitions. Goodwill is allocated at the business segment level. Goodwill is tested for impairment on an annual basis or when events or changes in circumstances indicate that such assets may be impaired. If the net book value of the reporting unit exceeds its fair value, an impairment loss is recognized. An impairment loss is measured as the excess of the carrying value of goodwill of a reporting unit over its fair value. Indefinite-Lived Intangible Assets — Intangible assets represent purchased assets that lack physical substance but can be separately distinguished from goodwill because of contractual or legal rights, or because the asset is capable of being separately sold or exchanged. Federal Communications Commission ("FCC") licenses for wireless spectrum and other perpetual licenses represent indefinite-lived intangible assets. The Company may renew the wireless licenses in a routine manner every ten years for a nominal fee, provided the Company continues to meet the service and geographic coverage provisions required by the FCC. Intangible assets not subject to amortization are tested for impairment annually, or when events or changes in circumstances indicate that the asset might be impaired. Long-Lived Assets — Management reviews the carrying value of property, plant and equipment and other long-lived assets, including intangible assets with definite lives, when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the estimated future undiscounted cash flows expected to result from the use of an asset (or group of assets) and its eventual disposition is less than its carrying amount. An impairment loss is measured as the amount by which the asset’s carrying value exceeds its estimated fair value. Long-lived intangible assets are amortized based on the estimated economic value generated by the asset in future years. Accounting for Impacts of Involuntary Events and Contingencies — Assets destroyed or damaged as a result of involuntary events are written off or reduced in carrying value to their salvage value. When recovery of all or a portion of the amount of property damage loss or other covered expenses through insurance proceeds is demonstrated to be probable, a receivable is recorded and offsets the loss or expense up to the amount of the total loss or expense. Proceeds ultimately received from insurance claims for business interruption, direct expenditures and amounts for capital assets in excess of net book value will be recorded to results of operations when collected. No gain is recorded until all contingencies related to the insurance claim have been resolved. In August 2023, wildfires ignited on Maui and Hawaii islands and spread rapidly due to extreme wind conditions caused in part by Hurricane Dora which traveled 800 miles offshore west of Maui. The fires caused widespread damage to Lahaina town on the island of Maui and the surrounding area, including physical loss and damage to certain of the Company’s fiber and copper assets and Company owned equipment located on customer premises. The Company experienced the loss of business income immediately following the fires and is expected to continue to experience loss of business income for an unknown amount of time. The Company expects to file insurance claims for the physical loss and damages experienced in Lahaina and for business income losses resulting from the matter. As of September 30, 2023, no receivable associated with insurance proceeds has been recorded. Expenditures in the quarter ended September 30, 2023 as a result of the fire have been primarily capital in nature. Additionally, due to the age of certain of the impacted assets, the net book value that was disposed in the quarter due to fire damage was nominal in nature.
In October 2023, attorneys filed a Second Amended Complaint in a proposed class action lawsuit filed in Hawaii state court, adding the Company along with other telecommunications companies and private and public landowners. Legal expenses related to this matter are not material in the third quarter of 2023, but it is possible the Company may incur significant expenses in legal fees, damages awards, or settlements in future periods.
Income and Operating Taxes Income taxes — In accordance with ASC 740-270, 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/loss plus or minus the tax effects of discrete items. Based on the estimated annual effective tax rate, the Company’s tax benefit was lower than the period’s loss at the statutory rate, due primarily to federal and state valuation allowances recorded against deferred tax assets, offset in part by state income tax benefit. Discrete tax items in the reporting period, most notably a $2.6 million benefit for research and development tax credits, largely offset the estimated annual effective tax rate adjustments. With the current year loss, net operating losses exceed deferred tax liabilities available for offset. Therefore, a $9.6 million partial federal and state valuation allowance has been recorded year-to-date on net operating losses that are primarily non-expiring. Operating taxes — Certain operating taxes such as property, sales, use, and gross receipts taxes are reported as expenses in operating income primarily within cost of services. 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, in accordance with ASC 606, revenue associated with these charges is excluded from the transaction price. 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.” 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" 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. All cash flows associated with the Company’s derivative instruments are classified as operating activities in the Condensed Consolidated Statements of Cash Flows. Recently Issued Accounting Standards 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 condensed consolidated financial statements upon adoption. |
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Mergers and Acquisitions |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mergers and Acquisitions | 2. Mergers and Acquisitions Acquisition of Bridgewired Fiber Assets In the third quarter of 2023, the Company acquired fiber network assets from Bridgewired, LLC ("Bridgewired") for an aggregate purchase price of $6.7 million, consisting of $5.9 million in cash and $0.8 million in contingent consideration. The Company accounted for the Bridgewired fiber asset acquisition as an asset acquisition under ASC 805-10-55 “Business Combinations” because the assets acquired do not include an assembled workforce, and the gross value of the assets acquired meets the screen test in ASC 805-10-55-5A related to substantially all of the fair value being concentrated in a single asset or group of assets (i.e., the fiber infrastructure assets) and, thus, the assets are not considered a business. The fiber network assets will help to support and expand the Company's existing network. The assets are recorded as network equipment in “Property, plant and equipment, net” on the Condensed Consolidated Balance Sheets. Acquisition of Ohio Transparent Telecom Inc. On April 17, 2023 ("OTT Acquisition Date"), the Company acquired 100% of Ohio Transparent Telecom Inc. ("OTT"), a private company that provides network security, data connectivity, and unified communications solutions to commercial and enterprise customers across multiple sectors throughout Ohio and Michigan for an aggregate purchase price of $3.3 million, consisting of $3.2 million in cash and $0.1 million in contingent consideration. The services and solutions provided by OTT will complement the services offered by Agile (defined below), which the Company acquired in the second quarter of 2022. The valuation of the assets acquired and liabilities assumed is based on estimated fair values at the OTT Acquisition Date and recorded to the Network segment. The Company considers the allocation and fair value estimates of property, plant and equipment, goodwill, other assets and other liabilities to be preliminary in nature as of September 30, 2023. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired as of the OTT Acquisition Date while the measurement period remains open. Measurement period adjustments related to the acquisition of OTT will be applied retrospectively to the OTT Acquisition Date. In connection with this acquisition, the Company recorded goodwill of $1.1 million attributable to an acquired workforce with industry expertise in addition to other expected synergies with Agile. The Company is continuing to evaluate the amount of goodwill that is expected to be deductible for income tax purposes. Acquisition of Lawrenceburg Fiber Assets In the first quarter of 2023, the Company acquired fiber network assets from the City of Lawrenceburg for an aggregate purchase price of $3.0 million consisting of $2.7 million in cash and $0.3 million in contingent consideration. The Company accounted for the Lawrenceburg fiber asset acquisition as an asset acquisition under ASC 805-10-55 “Business Combinations” because the assets acquired do not include an assembled workforce, and the gross value of the assets acquired meets the screen test in ASC 805-10-55-5A related to substantially all of the fair value being concentrated in a single asset or group of assets (i.e., the fiber infrastructure assets) and, thus, the assets are not considered a business. The fiber network assets will help to support and expand the Company's existing network. The assets are recorded as network equipment in “Property, plant and equipment, net” on the Condensed Consolidated Balance Sheets. Acquisition of Agile IWG Holdings, LLC On May 2, 2022 (“Agile Acquisition Date”), the Company acquired Agile IWG Holdings, LLC ("Agile"), based in Canton, Ohio for total cash consideration of $65.5 million. 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. The purchase price was funded through borrowings under the Company's former Receivables Facility and the Revolving Credit Facility (see Note 5). The valuation of the assets acquired and liabilities assumed was based on estimated fair values at the Agile Acquisition Date. The allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed reflects various fair value estimates and analyses, including work performed by third-party valuation specialists. The determination of the final purchase price allocation to specific assets acquired and liabilities assumed is complete. No expenses related to the Agile acquisition were recorded in the three months ended September 30, 2023, and nominal expenses related to the Agile acquisition were recorded in the nine months ended September 30, 2023. The Company incurred acquisition expenses related to the Agile acquisition of $0.3 million and $1.9 million in the three and nine months ended September 30, 2022, respectively. These expenses are recorded in "Transaction and integration costs" on the Condensed Consolidated Statements of Operations. Based on fair value estimates, the purchase price has been allocated to individual assets acquired and liabilities assumed as follows:
In connection with this acquisition, the Company recorded goodwill attributable to a diversified customer base and acquired workforce with industry expertise. The amount of goodwill related to this acquisition is deductible for income tax purposes. In the second quarter of 2023, the Company recorded a measurement period adjustment to reflect the tax impact on the fair value of property, plant and equipment and intangible assets acquired which resulted in a decrease to "Deferred income tax liability" and to "Goodwill" of $4.4 million. Measurement period adjustments related to the acquisition of Agile were applied retrospectively to the Agile Acquisition Date. Based on fair value estimates, the identifiable intangible assets acquired are as follows:
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| Revenue | 3. Revenue The Network segment provides products and services to both residential and commercial customers that can be categorized as 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 residential and commercial customers. Enterprise Fiber revenue includes ethernet and dedicated internet access services that are provided to enterprise customers, as well as revenue associated with the Southeast Asia to United States ("SEA-US") trans-Pacific submarine cable system. Subsequent to the Company’s acquisitions of Agile and OTT, services provided by Agile and OTT are also included in Enterprise Fiber. Residential customers have implied month-to-month contracts. Commercial customers, with the exception of contracts associated with the SEA-US cable system, typically have contracts with an initial duration of 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. Contracts associated with the SEA-US cable system typically range from 15 to 25 years and payment is prepaid. 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 varied 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 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 for such good or service 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 120 days. Subsequent to the acquisition of Hawaiian Telcom Holdco., Inc. ("Hawaiian Telcom"), the Company began recognizing a financing component associated with the up-front payments for services to be delivered under indefeasible right of use ("IRU") contracts for fiber circuit capacity. The IRU contracts typically have a duration ranging from 15 to 25 years.
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. The transaction price identified in the contract 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 transaction price identified in the contract 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 estimated projection of sales volume. Estimates are reassessed quarterly. Performance obligations are satisfied either 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 these unsatisfied performance obligations that will be billed in future periods has not been disclosed. As of September 30, 2023, our estimated revenue, including a financing component, expected to be recognized in the future related to performance obligations associated with customer contracts that are unsatisfied (or partially unsatisfied) is $194.6 million. Certain IRU contracts extend for periods of up to 30 years and are invoiced at the beginning of the contract term. The revenue from such contracts is recognized over time as services are provided over the contract term. The expected revenue to be recognized for existing customer contracts is as follows:
Network The Company has identified four distinct performance obligations in the Network 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 Network 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, routed network services, SONET (Synchronous Optical Network), dedicated internet access, wavelength, digital signal and IRU revenue. Voice services include traditional and fiber voice lines, switched access, digital trunking and consumer and business long distance calling. Video services are offered through our fiber network to residential and commercial customers based on various standard plans with the opportunity to add premium channels. To receive video services, customers are required to use the Company's 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, time and materials projects, subsidized fiber build 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 Network segment. For Data, Video and Voice products in Fioptics, market rate is the primary method used to determine stand-alone selling prices. For Data performance obligations under the Enterprise Fiber category, and Voice, Data and Other performance obligations under the Legacy category, 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 include storage, backup, disaster recovery, SLA-based monitoring and management, cloud computing and cloud consulting. Consulting services provide customers with IT staffing, consulting and emerging technology solutions. Infrastructure Solutions includes the sale of hardware and maintenance contracts as well as installation projects. 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 vendor 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. Within the IT Services and Hardware segment, stand-alone selling prices for the four performance obligations are determined based on either a margin percentage range, minimum margin percentage or discount from standard price list if it is determined to be representative of stand-alone selling price. For hardware sales, revenue is recognized net of the cost of product and is recognized when the hardware is either shipped or delivered in accordance with the terms of the contract. For certain projects within Communications and Consulting, revenue is recognized when the customer communicates acceptance of the services performed. 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 incremental fulfillment costs as an asset when installation expenses are incurred as part of performing the agreement for Voice, Video and Data product offerings in the Network segment in 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 also recognize an asset for incremental fulfillment costs for certain Cloud and Communications services in the IT Services and Hardware segment that require us to incur installation and provisioning expenses. The asset recognized for Cloud and 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 Cloud and Communications services meet the requirements to be capitalized. The contract asset established for the costs of acquiring a contract is 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:
The Company recognizes a liability for cash received up-front for IRU contracts. At September 30, 2023 and December 31, 2022, $3.9 million and $3.2 million, respectively, of contract liabilities were included in "Other current liabilities." At September 30, 2023 and December 31, 2022, $71.5 million and $74.2 million, respectively, of contract liabilities were included in "Other noncurrent liabilities." 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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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill
The changes in the Company's goodwill consisted of the following:
See Note 2 for further information related to the acquisitions of Agile and OTT. No impairment losses were recognized in goodwill for the three and nine months ended September 30, 2023 and 2022. Intangible Assets The Company’s intangible assets consisted of the following:
As a result of the acquisition of OTT, the Company recorded a nominal finite-lived intangible asset representing the preliminary fair value at the OTT Acquisition Date. See Note 2 for additional information regarding the acquisition of OTT. The change in gross carrying amounts for finite-lived intangible assets is also due to foreign currency translation on finite-lived intangible assets denominated in foreign currency. The finite-lived intangible assets are amortized over their useful lives based on a number of assumptions, including the estimated period of economic benefit and utilization.
Amortization expense for finite-lived intangible assets was $28.7 million and $86.1 million for the three and nine months ended September 30, 2023, respectively. Amortization expense for finite-lived intangible assets was $31.2 million and $91.2 million for the three and nine months ended September 30, 2022, respectively. In addition to amortization expense, the changes in definite-lived intangible assets from December 31, 2022 to September 30, 2023 are due to foreign currency translation. No impairment losses were recognized on intangible assets for the three and nine months ended September 30, 2023 and 2022. The estimated useful lives for each finite-lived intangible asset class are as follows:
The annual estimated amortization expense for future years is as follows:
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Debt and Other Financing Arrangements |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt and Other Financing Arrangements | 5. Debt and Other Financing Arrangements The Company’s debt consists of the following:
(1) As of September 30, 2023, the net carrying amount of the Various Cincinnati Bell Telephone notes included an unamortized fair value adjustment recorded on the Company's merger date, September 7, 2021, of $7.5 million. As of December 31, 2022, the net carrying amounts of the % Notes due 2023 and Various Cincinnati Bell Telephone notes included unamortized fair value adjustments recorded on the Company's merger date, September 7, 2021, of $0.5 million and $8.5 million, respectively. Each adjustment is amortized over the life of the respective notes and is recorded as a reduction of interest expense.
Credit Agreement The Company had $36.0 million of outstanding borrowings on the Credit Agreement’s revolving credit facility, leaving $364.0 million available for borrowings as of September 30, 2023. The revolving credit facility matures in September 2026, and the Term B-1 Loans and Term B-2 loans under the Credit Agreement mature in November 2028. In May 2023, the Company entered into an Incremental Amendment to the Credit Agreement (the "Incremental Amendment”) to provide for the incurrence of a new tranche of $200.0 million senior secured term loans (the “Term B-3 Loans”). The Term B-3 Loans will mature in November 2028 and will bear interest at a floating rate plus a margin equal to (x) 3.00% for Term B-3 Loans bearing interest based on the Base Rate (as defined in the Credit Agreement) and (y) 4.00% for Term B-3 Loans bearing interest based on Term SOFR. All other material terms, conditions and covenants of the Credit Agreement were unchanged by the Incremental Amendment. One of the syndicated lenders of the Term B-1 Loans and Term B-3 Loans in the Credit Agreement is a cooperative bank owned by its customers. Annually, this bank distributes patronage in the form of cash and stock in the cooperative based on the Company’s average outstanding loan balance. The Company will recognize the patronage, generally as declared, in “Other (income) expense, net.” The stock component will be recognized at its stated cost basis. Accounts Receivable Securitization Facility On January 31, 2023, the Company, together with certain of its U.S. and Canadian subsidiaries, made certain amendments (the “Amendments”) to the Company’s accounts receivable securitization facility ("Receivables Facility"). The Amendments amend the Receivables Facility to, among other things: (i) increase the total maximum borrowing capacity to $280.0 million, (ii) separate the Receivables Facility into two separate facilities, with (A) the existing Receivables Facility (the “Network Receivables Facility”), as amended by the Amendments, covering receivables originated by certain U.S. subsidiaries of the Company including Cincinnati Bell Telephone Company LLC, Hawaiian Telcom Communications, Inc. and certain of their respective subsidiaries having a maximum borrowing capacity of $55.0 million and (B) a new facility (the “CBTS Receivables Facility”) covering receivables originated by certain U.S. and Canadian subsidiaries in the Company's IT Services and Hardware segment including CBTS Technology Solutions LLC and OnX Enterprise Solutions Ltd. having a maximum borrowing capacity of $225.0 million, (iii) move the receivables monetization arrangements from the Network Receivables Facility to the CBTS Receivables Facility, and (iv) make applicable technical and conforming changes thereto. In addition, the Amendments extend the renewal dates of each facility to January 2025 and the termination dates of each facility to January 2026. As of September 30, 2023, the Company had $33.9 million in borrowings and $16.2 million of letters of credit outstanding under the Network Receivables Facility, leaving $1.4 million remaining availability on the total borrowing capacity of $51.5 million. As of September 30, 2023, the Company had $211.9 million in borrowings and $0.5 million of letters of credit outstanding under the CBTS Receivables Facility, leaving $9.4 million remaining availability on the total borrowing capacity of $221.8 million. The maximum borrowing limit for loans and letters of credit under the Network Receivables Facility and the CBTS Receivables Facility is $55.0 million and $225.0 million, respectively, in the aggregate. The available borrowing capacity on each facility is calculated monthly based on the quantity and quality of outstanding accounts receivable, and thus may be lower than the maximum borrowing limit. Under the Network Receivables Facility and the CBTS Receivables Facility, certain U.S. and Canadian subsidiaries, as originators, sell their respective trade receivables on a continuous basis to Cincinnati Bell Funding LLC (“CBF”), Cincinnati Bell Funding Canada Ltd. ("CBFC"), or CBTS Funding LLC (“CBTSF”), wholly-owned consolidated subsidiaries of the Company. Although CBF, CBFC and CBTSF are wholly-owned consolidated subsidiaries of the Company, CBF, CBFC and CBTSF 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, CBFC or CBTSF, such accounts receivable are legally assets of CBF, CBFC and CBTSF and, as such, are not available to creditors of other subsidiaries or the parent company. As a result of the Amendments, the CBTS Receivables Facility includes an option for CBTSF to sell, rather than borrow against, certain receivables on a non-recourse basis. As of September 30, 2023, the outstanding balance of certain accounts receivable sold, rather than borrowed against, was $13.3 million. Paniolo Fiber Assets Financing Arrangement In the third quarter of 2023, the Company executed an amendment to the Paniolo fiber assets financing arrangement to replace LIBOR, the benchmark rate of interest, with Adjusted Term SOFR which is defined in the amendment as Term SOFR plus 0.1%. As a result of the amendment, borrowings under the Paniolo fiber assets financing arrangement bear interest at a rate per annum equal to Adjusted Term SOFR plus 3.0%. All other material terms and conditions of the Paniolo fiber assets financing arrangement were unchanged by the amendment. Repayment of Notes In the second quarter of 2023, the Company repaid the remaining $22.3 million outstanding principal amount of its % Notes due 2023 and related accrued and unpaid interest due upon the maturity date of the notes. |
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Leases |
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | 6. Leases Lessee Disclosures The Company primarily leases real estate for offices, retail stores and central offices, as well as equipment, cell towers, designated space on third party towers and fleet vehicles. Upon adoption of ASC 842, the Company elected not to recognize leases with terms of one-year or less on the balance sheet. Supplemental balance sheet information related to the Company's leases is as follows:
. Supplemental cash flow information related to leases is as follows:
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Financial Instruments and Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments and Fair Value Measurements | 7. 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. Cash Flow Hedging Cash Flow Hedges Not Designated as Hedging Instruments The Company uses non-designated cash flow hedges including interest rate swap agreements and interest rate cap 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. Interest rate caps provide that the counterparty will pay the purchaser at the end of each contractual period in which the index interest rate exceeds the contractually agreed upon cap rate. In the first quarter of 2023, the Company entered into three forward starting non-amortizing interest rate swaps to convert variable rate debt to fixed rate debt. The interest rate swaps have notional amounts of $150.0 million, $150.0 million and $100.0 million resulting in interest payments based on an average fixed rate per swap of 3.6875%, 3.6500% and 3.5095%, respectively. The interest rate swaps expire in March 2027. In the second quarter of 2022, the Company entered into three forward starting non-amortizing interest rate swaps to convert variable rate debt to fixed rate debt. The interest rate swaps have notional amounts of $175.0 million, $115.0 million and $85.0 million resulting in interest payments based on an average fixed rate per swap of 2.9185%, 2.8520% and 2.8605%, respectively. The interest rate swaps expire in May 2026. In the second quarter of 2022, the Company entered into two interest rate cap agreements to limit exposure to interest rate risk on variable rate debt. The interest rate caps each have a cap rate of 3.0% with notional amounts of $200.0 million and $175.0 million and deferred premiums of $6.7 million and $5.3 million, respectively. The deferred premiums will be paid on a monthly basis over the term of the respective interest rate cap. The interest rate caps expire in May 2026. The fair value of the Company's interest rate swaps and interest rate caps are impacted by the credit risk of both the Company and its counterparties. The Company has agreements with its derivative financial instrument counterparties that contain provisions providing that 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 instruments obligations. In addition, the Company minimizes nonperformance risk on its derivative instruments by evaluating the creditworthiness of its counterparties, which are limited to major banks and financial institutions. The Company does not apply hedge accounting to the interest rate swaps and interest rate caps and records all mark-to-market adjustments directly to “Other income, net” in the Condensed Consolidated Statements of Operations. The fair values of the interest rate swaps and interest rate caps are categorized as Level 2 in the fair value hierarchy as they are based on well-recognized financial principles and available market data. As of September 30, 2023, the fair values of the interest rate swaps and interest rate caps are recorded in the Condensed Consolidated Balance Sheets as follows:
As of December 31, 2022, the fair values of the interest rate swaps and interest rate caps are recorded in the Condensed Consolidated Balance Sheets as follows:
The following table summarizes the location of gains in the Condensed Consolidated Statements of Operations that were recognized during the three and nine months ended September 30, 2023 and 2022, in addition to the derivative contract type:
Disclosure on Financial Instruments The carrying values of the Company's financial instruments approximate the estimated fair values as of September 30, 2023 and December 31, 2022, except for the Company's long-term debt and other financing arrangements. The carrying and fair values of these items are as follows:
*Excludes finance leases, other financing arrangements and note issuance costs The fair value of our long-term debt was based on closing or estimated market prices of the Company’s debt at September 30, 2023 and December 31, 2022, which is considered Level 2 of the fair value hierarchy. The fair value of the 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 September 30, 2023, the current borrowing rate was estimated by applying the Company's credit spread to the risk-free rate for a similar duration borrowing. |
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Pension and Postretirement Plans |
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| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension and Postretirement Plans | 8. Pension and Postretirement Plans As of September 30, 2023, the Company sponsors three noncontributory defined benefit plans and a postretirement health and life insurance plan in Cincinnati (collectively, the "Cincinnati Plans"), and one noncontributory defined benefit plan for union employees, one cash balance pension plan for nonunion employees, and two postretirement health and life insurance plans for Hawaiian Telcom employees (collectively, the "Hawaii Plans"). In the three and nine months ended September 30, 2022, Hawaiian Telcom's pension plans made lump sum payments of $1.4 million and $6.8 million, respectively, resulting in a reduction of the benefit obligation of $6.8 million. The lump sum payments to the plan participants exceeded the sum of the service cost and the interest cost component of the net pension cost resulting in a nominal pension settlement cost for the nine months ended September 30, 2022. In the third quarter of 2022, the Company identified a correction related to the Hawaiian Telcom postretirement health and life insurance plans liability. The adjustment resulted in an increase to the "Postretirement and Other Benefits liability" of $45.9 million, an increase to "Goodwill" of $35.0 million and reduction to "Deferred income tax liabilities" of $10.9 million on the Condensed Consolidated Balance Sheets. The impact of the correction is immaterial to current and prior period financial statements. In accordance with ASC 715, only the service cost component of net benefit cost is eligible for capitalization, which was immaterial for the nine months ended September 30, 2023 and 2022. Pension and postretirement costs (benefits) are as follows:
Amortization of prior service benefit and actuarial gain in the three and nine months ended September 30, 2023 represent reclassifications from accumulated other comprehensive income. For the nine months ended September 30, 2023, contributions to the qualified pension plans were nominal, and contributions to the non-qualified pension plans were $1.5 million. For the nine months ended September 30, 2022, there were no contributions to the qualified pension plans, and contributions to the non-qualified pension plans were $1.6 million. Based on current assumptions, contributions are expected to be nominal to the qualified pension plans in 2023. Contributions to the non-qualified pension plans in 2023 are expected to be approximately $2 million. For the nine months ended September 30, 2023 and 2022, contributions to our postretirement plans were $5.0 million and $5.3 million, respectively. Management expects to make total cash payments of approximately $7 million related to its postretirement health plans in 2023. |
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Equity |
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| Equity | 9. Equity Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by component were as follows:
(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 gain, 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 (benefit)" on the Condensed Consolidated Statements of Operations. See Note 8 for further disclosures. |
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Business Segment Information |
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Segment Information | 10. Business Segment Information 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 Company operates two business segments identified as (1) Network and (2) IT Services and Hardware. The Network 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, digital signal and IRU. Video services provide our customers access to over 400 entertainment channels, over 150 high-definition channels, parental controls, HD DVR, Video On-Demand and access to a live TV streaming application. Voice represents traditional voice lines as well as fiber voice lines, consumer and business long distance, switched access and digital trunking. Other services consist of revenue generated from wiring projects for enterprise customers, advertising, directory assistance, maintenance, information services and subsidized fiber build project revenue related to extending the Company’s fiber network in the Greater Cincinnati territory subsidized through our UniCity program and in Hawaii subsidized through a customer contract. In May 2022, the Company acquired Agile and includes Agile’s financial results in the Network segment. 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:
* Includes cost of acquisitions
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Description of Business and Accounting Policies (Policies) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| Description of Business | Description of Business — Cincinnati Bell Inc. and its consolidated subsidiaries ("Cincinnati Bell," "we," "our," "us" or the "Company") provides diversified telecommunications and technology services. The Company generates a large portion of its revenue by serving customers in Cincinnati, Ohio, Dayton, Ohio and the islands of Hawaii. An economic downturn or natural disaster occurring in these, or a portion of these, limited operating territories 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 had receivables with one customer, Verizon Communications Inc. (“Verizon”), which made up 13% and 21% of the outstanding accounts receivable balance at September 30, 2023 and December 31, 2022, respectively. Revenue derived from foreign operations was approximately 7% of consolidated revenue for the three and nine months ended September 30, 2023 and 2022. In August 2023, Red Fiber Parent LLC ("Parent") committed to make capital contributions of $600.0 million to the Company, of which $400.0 million was received by the Company in the third quarter of 2023 and recorded to "Additional paid-in capital" on the Condensed Consolidated Balance Sheets and $200.0 million will be received in the fourth quarter of 2024. The capital contribution received in the third quarter of 2023 was used to repay borrowings on the Company's Revolving Credit Facility due 2026, fund capital expenditures, and fund working capital. |
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| 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 SEC and, in the opinion of management, include all adjustments necessary for a fair statement 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. The Company’s Condensed Consolidated Balance Sheet as of December 31, 2022 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 2022 Annual Report on Form 10-K. |
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| Business Combination | Business Combinations — In accounting for business combinations, we apply the accounting requirements of Accounting Standards Codification 805 (“ASC 805”), “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. In developing fair value estimates for 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. The Company reports in its Condensed Consolidated Financial Statements provisional amounts for the items for which accounting is incomplete. Goodwill is adjusted for any changes to provisional amounts made within the measurement period. See Note 2 for disclosures related to mergers and acquisitions. |
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| 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. |
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| Accounting Policies | Accounting Policies — The complete summary of significant accounting policies is included in the notes to the consolidated financial statements as presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
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| Variable Interest Entity | Variable Interest Entity — The Company holds an interest in a limited liability company, Digital Access Ohio LLC (“DAO”), that is considered a variable interest entity ("VIE") in accordance with the guidance of ASC 810 “Consolidation.” As of September 30, 2023, operations of DAO are nominal in nature. DAO is considered a VIE as it has insufficient equity capital to finance its activities without additional financial support. The Company is the primary beneficiary of DAO as it has the power over the activities that most significantly impact the economic performance of DAO and has the obligation to absorb expected losses and the right to receive expected benefits that could be significant to DAO. As a result, the Company consolidated DAO, and all significant intercompany accounts have been eliminated. Funding of DAO is provided in the form of cash contributions, debt issuance and grants that include a free standing warrant that allows the holder of the warrant at its option to convert the warrant into a class A-2 share of DAO at any time during the period commencing on the 2nd anniversary of the funding agreement and ending on the 10th anniversary of the funding agreement date. The Company has recorded the fair value associated with the warrant to "Other noncurrent liabilities" on the Condensed Consolidated Balance Sheets. The Company will continue to assess whether it has a controlling financial interest and whether it is the primary beneficiary at each reporting period. | ||||||||||||||||||||||||||||||||||||||||
| Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash — Cash consists of funds held in bank accounts. Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. Restricted cash as of September 30, 2023 and December 31, 2022 consists of funds held in an escrow account related to a cost method investment and funds held by DAO. Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Condensed Consolidated Statements of Cash Flows. A reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets follows:
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| Goodwill | Goodwill — Goodwill represents the excess of the purchase price consideration over the fair value of net assets acquired and recorded in connection with business acquisitions. Goodwill is allocated at the business segment level. Goodwill is tested for impairment on an annual basis or when events or changes in circumstances indicate that such assets may be impaired. If the net book value of the reporting unit exceeds its fair value, an impairment loss is recognized. An impairment loss is measured as the excess of the carrying value of goodwill of a reporting unit over its fair value. |
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| Indefinite-Lived Intangible Assets | Indefinite-Lived Intangible Assets — Intangible assets represent purchased assets that lack physical substance but can be separately distinguished from goodwill because of contractual or legal rights, or because the asset is capable of being separately sold or exchanged. Federal Communications Commission ("FCC") licenses for wireless spectrum and other perpetual licenses represent indefinite-lived intangible assets. The Company may renew the wireless licenses in a routine manner every ten years for a nominal fee, provided the Company continues to meet the service and geographic coverage provisions required by the FCC. Intangible assets not subject to amortization are tested for impairment annually, or when events or changes in circumstances indicate that the asset might be impaired. | ||||||||||||||||||||||||||||||||||||||||
| Long-Lived Assets | Long-Lived Assets — Management reviews the carrying value of property, plant and equipment and other long-lived assets, including intangible assets with definite lives, when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the estimated future undiscounted cash flows expected to result from the use of an asset (or group of assets) and its eventual disposition is less than its carrying amount. An impairment loss is measured as the amount by which the asset’s carrying value exceeds its estimated fair value. Long-lived intangible assets are amortized based on the estimated economic value generated by the asset in future years. | ||||||||||||||||||||||||||||||||||||||||
| Accounting for Impacts of Involuntary Events and Contingencies | Accounting for Impacts of Involuntary Events and Contingencies — Assets destroyed or damaged as a result of involuntary events are written off or reduced in carrying value to their salvage value. When recovery of all or a portion of the amount of property damage loss or other covered expenses through insurance proceeds is demonstrated to be probable, a receivable is recorded and offsets the loss or expense up to the amount of the total loss or expense. Proceeds ultimately received from insurance claims for business interruption, direct expenditures and amounts for capital assets in excess of net book value will be recorded to results of operations when collected. No gain is recorded until all contingencies related to the insurance claim have been resolved. In August 2023, wildfires ignited on Maui and Hawaii islands and spread rapidly due to extreme wind conditions caused in part by Hurricane Dora which traveled 800 miles offshore west of Maui. The fires caused widespread damage to Lahaina town on the island of Maui and the surrounding area, including physical loss and damage to certain of the Company’s fiber and copper assets and Company owned equipment located on customer premises. The Company experienced the loss of business income immediately following the fires and is expected to continue to experience loss of business income for an unknown amount of time. The Company expects to file insurance claims for the physical loss and damages experienced in Lahaina and for business income losses resulting from the matter. As of September 30, 2023, no receivable associated with insurance proceeds has been recorded. Expenditures in the quarter ended September 30, 2023 as a result of the fire have been primarily capital in nature. Additionally, due to the age of certain of the impacted assets, the net book value that was disposed in the quarter due to fire damage was nominal in nature.
In October 2023, attorneys filed a Second Amended Complaint in a proposed class action lawsuit filed in Hawaii state court, adding the Company along with other telecommunications companies and private and public landowners. Legal expenses related to this matter are not material in the third quarter of 2023, but it is possible the Company may incur significant expenses in legal fees, damages awards, or settlements in future periods. |
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| Income Taxes | Income taxes — In accordance with ASC 740-270, 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/loss plus or minus the tax effects of discrete items. Based on the estimated annual effective tax rate, the Company’s tax benefit was lower than the period’s loss at the statutory rate, due primarily to federal and state valuation allowances recorded against deferred tax assets, offset in part by state income tax benefit. Discrete tax items in the reporting period, most notably a $2.6 million benefit for research and development tax credits, largely offset the estimated annual effective tax rate adjustments. With the current year loss, net operating losses exceed deferred tax liabilities available for offset. Therefore, a $9.6 million partial federal and state valuation allowance has been recorded year-to-date on net operating losses that are primarily non-expiring. |
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| Operating Taxes | Operating taxes — Certain operating taxes such as property, sales, use, and gross receipts taxes are reported as expenses in operating income primarily within cost of services. 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, in accordance with ASC 606, revenue associated with these charges is excluded from the transaction price. |
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| 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.” 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" 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. All cash flows associated with the Company’s derivative instruments are classified as operating activities in the Condensed Consolidated Statements of Cash Flows. |
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| Recently Issued Accounting Standards | Recently Issued Accounting Standards 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 condensed consolidated financial statements upon adoption. |
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Description of Business and Accounting Policies (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash | A reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets follows:
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Mergers and Acquisitions (Tables) - Agile IWG Holdings, LLC [Member] |
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase Price Allocation | Based on fair value estimates, the purchase price has been allocated to individual assets acquired and liabilities assumed as follows:
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| Fair Values of Identifiable Intangible Assets Acquired | Based on fair value estimates, the identifiable intangible assets acquired are as follows:
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Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Expected Revenue to be Recognized for Existing Customer Contracts | The expected revenue to be recognized for existing customer contracts is as follows:
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| Schedule of Activity of Contract Assets | The following table presents the activity for the Company’s contract assets:
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| Schedule of Revenues Disaggregation by Product and Service Lines | The following table presents revenues disaggregated by product and service lines:
The following table presents revenues disaggregated by contract type:
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Goodwill and Intangible Assets (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill | The changes in the Company's goodwill consisted of the following:
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| Schedule of Intangible Assets | The Company’s intangible assets consisted of the following:
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| Schedule of Estimated Useful Lives for Finite-lived Intangible Assets | The estimated useful lives for each finite-lived intangible asset class are as follows:
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| Schedule of Estimated Amortization Expense | The annual estimated amortization expense for future years is as follows:
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Debt and Other Financing Arrangements (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Debt | The Company’s debt consists of the following:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to the Company's leases is as follows:
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| Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases is as follows:
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Financial Instruments and Fair Value Measurements (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value of Interest rate Swaps and Interest Rate Caps are Recorded in Condensed Consolidated Balance Sheets | As of September 30, 2023, the fair values of the interest rate swaps and interest rate caps are recorded in the Condensed Consolidated Balance Sheets as follows:
As of December 31, 2022, the fair values of the interest rate swaps and interest rate caps are recorded in the Condensed Consolidated Balance Sheets as follows:
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| Schedule of Summarizes the Location of (Gains) Losses in the Condensed Consolidated Statements of Operations in Addition to the Derivative Contract Type | The following table summarizes the location of gains in the Condensed Consolidated Statements of Operations that were recognized during the three and nine months ended September 30, 2023 and 2022, in addition to the derivative contract type:
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| Schedule of Carrying and Fair Values by Balance Sheet Grouping | The carrying and fair values of these items are as follows:
*Excludes finance leases, other financing arrangements and note issuance costs |
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Pension and Postretirement Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Pension and Postretirement Costs (Benefits) | Pension and postretirement costs (benefits) are as follows:
|
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Equity (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component | The changes in accumulated other comprehensive income (loss) by component were as follows:
(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 gain, 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 (benefit)" on the Condensed Consolidated Statements of Operations. See Note 8 for further disclosures. |
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Business Segment Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selected Financial Data for the Company's Business Segment Information | Selected financial data for the Company’s business segment information is as follows:
* Includes cost of acquisitions
|
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Description of Business and Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
| Cash and cash equivalents | $ 7.7 | $ 9.4 | ||
| Restricted cash included in Other noncurrent assets | 2.9 | 3.5 | ||
| Cash, cash equivalents and restricted cash per Condensed Consolidated Statements of Cash Flows | $ 10.6 | $ 12.9 | $ 10.2 | $ 6.1 |
Mergers and Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Apr. 17, 2023 |
Dec. 31, 2022 |
May 02, 2022 |
|---|---|---|---|---|
| Assets acquired | ||||
| Goodwill | $ 720.4 | $ 723.5 | ||
| Agile IWG Holdings, LLC [Member] | ||||
| Assets acquired | ||||
| Receivables and other current assets | $ 1.8 | |||
| Property, plant and equipment | 10.2 | |||
| Operating lease right-of-use assets | 27.8 | |||
| Intangible assets | 19.4 | |||
| Goodwill | 35.0 | |||
| Total assets acquired | 94.2 | |||
| Liabilities assumed | ||||
| Accrued expenses and other current liabilities | 2.5 | |||
| Operating lease liabilities | 25.7 | |||
| Other noncurrent liabilities | 0.5 | |||
| Total liabilities assumed | 28.7 | |||
| Net assets acquired | $ 65.5 | |||
| Ohio Transparent Telecom Inc. [Member] | ||||
| Assets acquired | ||||
| Goodwill | $ 1.1 |
Revenue - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
| Disaggregation Of Revenue [Line Items] | ||
| Payment terms for customers, lower range | 30 days | |
| Payment term for customers, upper range | 120 days | |
| Total | $ 194.6 | |
| Unearned revenue and customer deposits | 66.1 | $ 81.6 |
| Other Current Liabilities [Member] | ||
| Disaggregation Of Revenue [Line Items] | ||
| Unearned revenue and customer deposits | 3.9 | 3.2 |
| Other Noncurrent Liabilities [Member] | ||
| Disaggregation Of Revenue [Line Items] | ||
| Contract liabilities, recognized, noncurrent | $ 71.5 | $ 74.2 |
| Minimum [Member] | ||
| Disaggregation Of Revenue [Line Items] | ||
| Customer contract term | 1 year | |
| SEA-US contract term | 15 years | |
| Indefeasible right of use of contract term | 15 years | |
| Maximum [Member] | ||
| Disaggregation Of Revenue [Line Items] | ||
| Customer contract term | 5 years | |
| SEA-US contract term | 25 years | |
| Indefeasible right of use of contract term | 25 years | |
| Indefeasible Right of Use, Maximum, in Years | 30 years |
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Millions |
9 Months Ended |
|---|---|
|
Sep. 30, 2023
USD ($)
| |
| Goodwill [Roll Forward] | |
| Goodwill, beginning balance | $ 723.5 |
| Adjustments to prior year acquisition of Agile | (4.4) |
| Acquisition of OTT | 1.1 |
| Currency translations | 0.2 |
| Goodwill, ending balance | 720.4 |
| It Services And Hardware [Member] | Operating Segments [Member] | |
| Goodwill [Roll Forward] | |
| Goodwill, beginning balance | 177.6 |
| Adjustments to prior year acquisition of Agile | 0.0 |
| Acquisition of OTT | 0.0 |
| Currency translations | 0.2 |
| Goodwill, ending balance | 177.8 |
| Network [Member] | Operating Segments [Member] | |
| Goodwill [Roll Forward] | |
| Goodwill, beginning balance | 545.9 |
| Adjustments to prior year acquisition of Agile | (4.4) |
| Acquisition of OTT | 1.1 |
| Currency translations | 0.0 |
| Goodwill, ending balance | $ 542.6 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Goodwill [Line Items] | ||||
| Impairment losses recognized in goodwill | $ 0 | $ 0 | $ 0 | $ 0 |
| Amortization of finite-lived intangible assets | 28,700,000 | 31,200,000 | 86,100,000 | 91,200,000 |
| Impairment of intangible assets, finite-lived | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Assets - Schedule of Estimated Useful Lives for Finite-lived Intangible Assets (Details) |
Sep. 30, 2023 |
|---|---|
| Customer Relationships [Member] | |
| Finite Lived Intangible Assets [Line Items] | |
| Finite-Lived Intangible Asset, Useful Life | 15 years |
| Trade Names [Member] | Minimum [Member] | |
| Finite Lived Intangible Assets [Line Items] | |
| Finite-Lived Intangible Asset, Useful Life | 3 years |
| Trade Names [Member] | Maximum [Member] | |
| Finite Lived Intangible Assets [Line Items] | |
| Finite-Lived Intangible Asset, Useful Life | 10 years |
| Technology [Member] | |
| Finite Lived Intangible Assets [Line Items] | |
| Finite-Lived Intangible Asset, Useful Life | 7 years |
Goodwill and Intangible Assets - Schedule of Estimated Amortization Expense (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
| Three months ended December 31, 2023 | $ 28.7 | |
| 2024 | 105.4 | |
| 2025 | 93.7 | |
| 2026 | 86.5 | |
| 2027 | 79.3 | |
| Thereafter | 336.1 | |
| Intangible assets subject to amortization, net amount | $ 729.7 | $ 815.4 |
Debt and Other Financing Arrangements - Schedule of Debt (Parenthetical) (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | |
|---|---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
Jun. 30, 2023 |
|
| 7 1/4% Notes due 2023 [Member] | |||
| Debt Instrument [Line Items] | |||
| Debt instrument, interest rate, stated percentage | 7.25% | 7.25% | 7.25% |
| 7 1/4% Notes due 2023 [Member] | Merger Agreement [Member] | |||
| Debt Instrument [Line Items] | |||
| Unamortized fair value adjustments | $ 0.5 | ||
| Various Cincinnati Bell Telephone Notes [Member] | Merger Agreement [Member] | |||
| Debt Instrument [Line Items] | |||
| Unamortized fair value adjustments | $ 7.5 | $ 8.5 |
Debt and Other Financing Arrangements - Credit Agreement - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | ||
|---|---|---|---|
May 03, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
| Term B-1 Loans [Member] | |||
| Line Of Credit Facility [Line Items] | |||
| Debt instrument updated maturity date | 2028-11 | ||
| Term B-2 Loans [Member] | |||
| Line Of Credit Facility [Line Items] | |||
| Debt instrument expiration date | 2028-11 | ||
| Term B-3 Loans [Member] | |||
| Line Of Credit Facility [Line Items] | |||
| Debt instrument expiration date | 2028-11 | ||
| Senior secured term loans | $ 200.0 | ||
| Term B-3 Loans [Member] | Base Rate [Member] | |||
| Line Of Credit Facility [Line Items] | |||
| Debt Instrument interest rate | 3.00% | ||
| Term B-3 Loans [Member] | SOFR [Member] | |||
| Line Of Credit Facility [Line Items] | |||
| Debt Instrument interest rate | 4.00% | ||
| Revolving Credit Facility [Member] | |||
| Line Of Credit Facility [Line Items] | |||
| Borrowings under the revolving credit facility | $ 36.0 | $ 223.0 | |
| Line of credit facility, remaining borrowing capacity | $ 364.0 | ||
| Debt instrument expiration date | 2026-09 |
Debt and Other Financing Arrangements - Accounts Receivable Securitization Facility - Narrative (Details) |
9 Months Ended | ||
|---|---|---|---|
|
Jan. 31, 2023
USD ($)
Facility
|
Sep. 30, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
| Debt Instrument [Line Items] | |||
| Receivables facility amount outstanding | $ 0 | $ 186,900,000 | |
| Receivables facility maximum borrowing capacity | $ 280,000,000 | ||
| Accounts Receivable Sold | 13,300,000 | ||
| Number of receivable facility | Facility | 2 | ||
| Network Receivables Facility [Member] | |||
| Debt Instrument [Line Items] | |||
| Receivables facility amount outstanding | 33,900,000 | ||
| Letters of Credit Outstanding, Amount | 16,200,000 | ||
| Receivables Facility Remaining Borrowing Capacity | 1,400,000 | ||
| Receivables Facility Maximum Borrowing Availability | 51,500,000 | ||
| Receivables facility maximum borrowing capacity | $ 55,000,000 | 55,000,000 | |
| Receivables facility renewal date | 2025-01 | ||
| Receivables facility termination date | 2026-01 | ||
| CBTS Receivable Facility [Member] | |||
| Debt Instrument [Line Items] | |||
| Receivables facility amount outstanding | 211,900,000 | ||
| Letters of Credit Outstanding, Amount | 500,000 | ||
| Receivables Facility Remaining Borrowing Capacity | 9,400,000 | ||
| Receivables Facility Maximum Borrowing Availability | 221,800,000 | ||
| Receivables facility maximum borrowing capacity | $ 225,000,000 | $ 225,000,000 | |
| Receivables facility renewal date | 2025-01 | ||
| Receivables facility termination date | 2026-01 |
Debt and Other Financing Arrangements - Paniolo Fiber Assets Financing Arrangement - Narrative (Details) - Paniolo Acquisition [Member] |
3 Months Ended |
|---|---|
Sep. 30, 2023 | |
| SOFR [Member] | |
| Debt Instrument [Line Items] | |
| Debt Instrument, Basis Spread on Variable Rate | 0.10% |
| Adjusted Term SOFR [Member] | |
| Debt Instrument [Line Items] | |
| Debt Instrument, Basis Spread on Variable Rate | 3.00% |
Debt and Other Financing Arrangements - Repayment of Notes - Narrative (Details) - 7 1/4% Notes due 2023 [Member] - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Jun. 30, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
| Debt Instrument [Line Items] | |||
| Repayment of notes | $ 22.3 | ||
| Debt instrument, interest rate, stated percentage | 7.25% | 7.25% | 7.25% |
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Leases [Abstract] | ||
| Operating lease assets, net of amortization | $ 75.2 | $ 73.1 |
| Finance lease assets, net of amortization | $ 16.9 | $ 16.5 |
| Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, plant and equipment, net | Property, plant and equipment, net |
| Current operating lease liabilities | $ 11.8 | $ 12.7 |
| Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
| Noncurrent operating lease liabilities | $ 68.9 | $ 66.1 |
| Total operating lease liabilities | 80.7 | 78.8 |
| Current finance lease liabilities | 11.6 | 9.9 |
| Noncurrent finance lease liabilities | 39.5 | 43.1 |
| Total finance lease liabilities | $ 51.1 | $ 53.0 |
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions |
9 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Cash paid for amounts included in the measurement of lease liabilities: | ||
| Operating cash flows from finance leases | $ 3.0 | $ 2.5 |
| Operating cash flows from operating leases | 10.2 | 9.0 |
| Financing cash flows from finance leases | 9.9 | 6.4 |
| Right-of-use assets obtained in exchange for lease obligations: | ||
| New operating leases | 11.8 | 11.6 |
| New finance leases | $ 7.9 | $ 8.1 |
Financial Instruments and Fair Value Measurements - Narrative (Details) - Cash Flow Hedging [Member] - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Jun. 30, 2022 |
|
| 2.9185% Interest Rate Contract [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Notional amount | $ 175,000,000.0 | |
| Average fixed interest rate | 2.9185% | |
| Interest rate swap expiration date | 2026-05 | |
| 2.8520% Interest Rate Contract [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Notional amount | $ 115,000,000.0 | |
| Average fixed interest rate | 2.852% | |
| Interest rate swap expiration date | 2026-05 | |
| 2.8605% Interest Rate Contract [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Notional amount | $ 85,000,000.0 | |
| Average fixed interest rate | 2.8605% | |
| Interest rate swap expiration date | 2026-05 | |
| 3.6875% Interest Rate Contract [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Notional amount | $ 150,000,000.0 | |
| Average fixed interest rate | 3.6875% | |
| Interest rate swap expiration date | 2027-03 | |
| 3.6500% Interest Rate Contract [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Notional amount | $ 150,000,000.0 | |
| Average fixed interest rate | 3.65% | |
| Interest rate swap expiration date | 2027-03 | |
| 3.5095% Interest Rate Contract [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Notional amount | $ 100,000,000.0 | |
| Average fixed interest rate | 3.5095% | |
| Interest rate swap expiration date | 2027-03 | |
| 3.0% Interest Rate Cap One [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Notional amount | $ 200,000,000.0 | |
| Interest rate swap expiration date | 2026-05 | |
| Interest rate | 3.00% | |
| Deferred premiums | $ 6,700,000 | |
| 3.0% Interest Rate Cap Two [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Notional amount | $ 175,000,000.0 | |
| Interest rate swap expiration date | 2026-05 | |
| Interest rate | 3.00% | |
| Deferred premiums | $ 5,300,000 | |
Financial Instruments and Fair Value Measurements - Schedule of Fair Value of Interest rate Swaps and Interest Rate Caps are Recorded in Condensed Consolidated Balance Sheets (Details) - Cash Flow Hedging [Member] - Estimate of Fair Value, Fair Value Disclosure [Member] - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Interest Rate Swap [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Interest Rate Swap Assets, Current | $ 16.0 | $ 7.2 |
| Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Other Assets, Current | Other Assets, Current |
| Interest Rate Swap Assets, Noncurrent | $ 11.4 | $ 5.1 |
| Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
| Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Interest Rate Swap Assets, Current | $ 0.0 | $ 0.0 |
| Interest Rate Swap Assets, Noncurrent | 0.0 | 0.0 |
| Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Interest Rate Swap Assets, Current | 16.0 | 7.2 |
| Interest Rate Swap Assets, Noncurrent | 11.4 | 5.1 |
| Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Interest Rate Swap Assets, Current | 0.0 | 0.0 |
| Interest Rate Swap Assets, Noncurrent | 0.0 | 0.0 |
| Interest Rate Cap [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Interest Rate Swap Assets, Current | $ 5.7 | $ 3.8 |
| Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Other Assets, Current | Other Assets, Current |
| Interest Rate Swap Assets, Noncurrent | $ 2.3 | |
| Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | |
| Interest Rate Cap Liability, Noncurrent | $ 2.4 | |
| Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | |
| Interest Rate Cap [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Interest Rate Swap Assets, Current | $ 0.0 | $ 0.0 |
| Interest Rate Swap Assets, Noncurrent | 0.0 | |
| Interest Rate Cap Liability, Noncurrent | 0.0 | |
| Interest Rate Cap [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Interest Rate Swap Assets, Current | 5.7 | 3.8 |
| Interest Rate Cap Liability, Noncurrent | 2.3 | 2.4 |
| Interest Rate Cap [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
| Interest Rate Swap Assets, Current | 0.0 | 0.0 |
| Interest Rate Swap Assets, Noncurrent | $ 0.0 | |
| Interest Rate Cap Liability, Noncurrent | $ 0.0 |
Financial Instruments and Fair Value Measurements - Schedule of Summarizes the Location of (Gains) Losses in the Condensed Consolidated Statements of Operations in Addition to the Derivative Contract Type (Details) - Cash Flow Hedging [Member] - Other Income, Net [Member] - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Interest Rate Swap [Member] | ||||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
| Interest Rate | $ (10.2) | $ (13.8) | $ (23.8) | $ (11.9) |
| Interest Rate Cap [Member] | ||||
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
| Interest Rate | $ (3.9) | $ (10.9) | $ (9.8) | $ (0.6) |
Financial Instruments and Fair Value Measurements - Schedule of Carrying and Fair Values by Balance Sheet Grouping (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
||
|---|---|---|---|---|
| Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
| Long-term debt, including current portion | [1] | $ 1,726.6 | $ 1,686.5 | |
| Other financing arrangements | 47.3 | 50.1 | ||
| 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] | 1,683.9 | 1,647.0 | |
| Other financing arrangements | $ 40.1 | $ 45.3 | ||
| ||||
Pension and Postretirement Plans - Narrative (Details) |
3 Months Ended | 9 Months Ended | |
|---|---|---|---|
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
Plan
|
Sep. 30, 2022
USD ($)
|
|
| Cincinnati Plans [Member] | |||
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
| Number of noncontributory defined benefit pension plans | Plan | 3 | ||
| Pension Plans, Defined Benefit [Member] | Qualified Plan [Member] | |||
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
| Contributions to pension plans | $ 0 | $ 0 | |
| Pension Plans, Defined Benefit [Member] | Nonqualified Plan [Member] | |||
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
| Contributions to pension plans | 1,500,000 | 1,600,000 | |
| Expected future employer contributions, next fiscal year | 2,000,000 | ||
| Pension Plans, Defined Benefit [Member] | Hawaii Plans [Member] | |||
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
| Settlements | $ 1,400,000 | 6,800,000 | |
| Decrease in benefit obligations | 6,800,000 | 6,800,000 | |
| Other Postretirement Benefits Plan [Member] | |||
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
| Expected future employer contributions, next fiscal year | 7,000,000 | ||
| Contributions to postretirement plans | $ 5,000,000 | $ 5,300,000 | |
| Other Postretirement Benefits Plan [Member] | Hawaii Plans [Member] | |||
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
| Adjustments to postretirement and other benefits liability | 45,900,000 | ||
| Adjustments to goodwill | 35,000,000 | ||
| Adjustments to deferred income tax liabilities | $ 10,900,000 | ||
Pension and Postretirement Plans - Schedule of Pension and Postretirement Costs (Benefits) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Pension Plans, Defined Benefit [Member] | ||||
| 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 | 5.5 | 4.2 | 16.5 | 11.9 |
| Expected return on plan assets | (5.2) | (6.6) | (15.6) | (20.9) |
| Amortization of: | ||||
| Prior service benefit | 0.0 | 0.0 | 0.0 | 0.0 |
| Actuarial gain | (0.1) | 0.0 | (0.2) | 0.0 |
| Pension / postretirement cost (benefit) | 0.2 | (2.4) | 0.7 | (9.0) |
| Other Postretirement Benefits Plan [Member] | ||||
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
| Service cost | 0.1 | 0.4 | 0.3 | 0.6 |
| Other components of pension and postretirement benefit plans expense: | ||||
| Interest cost on projected benefit obligation | 1.3 | 1.7 | 3.9 | 3.1 |
| Expected return on plan assets | 0.0 | 0.0 | 0.0 | 0.0 |
| Amortization of: | ||||
| Prior service benefit | (0.2) | 0.0 | (0.6) | 0.0 |
| Actuarial gain | (1.2) | 0.0 | (3.5) | 0.0 |
| Pension / postretirement cost (benefit) | $ 0.0 | $ 2.1 | $ 0.1 | $ 3.7 |
Equity - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|||
| Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | ||||||
| Beginning balance | $ 19.8 | $ (1.4) | $ 19.5 | $ 1.2 | ||
| Reclassifications, net | (1.2) | (3.3) | ||||
| Remeasurement of benefit obligations | 0.0 | (0.8) | 0.0 | (2.1) | ||
| Foreign currency gain (loss) | (1.8) | (5.9) | 0.6 | (7.2) | ||
| Ending balance | 16.8 | (8.1) | 16.8 | (8.1) | ||
| Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||||
| Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | ||||||
| Beginning balance | 25.0 | 1.3 | 27.1 | 2.6 | ||
| Reclassifications, net | [1] | (1.2) | (3.3) | |||
| Remeasurement of benefit obligations | (0.8) | (2.1) | ||||
| Foreign currency gain (loss) | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Ending balance | 23.8 | 0.5 | 23.8 | 0.5 | ||
| Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||||
| Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | ||||||
| Beginning balance | (5.2) | (2.7) | (7.6) | (1.4) | ||
| Reclassifications, net | 0.0 | 0.0 | ||||
| Remeasurement of benefit obligations | 0.0 | 0.0 | ||||
| Foreign currency gain (loss) | (1.8) | (5.9) | 0.6 | (7.2) | ||
| Ending balance | $ (7.0) | $ (8.6) | $ (7.0) | $ (8.6) | ||
| ||||||
Business Segment Information - Narrative (Details) |
9 Months Ended |
|---|---|
|
Sep. 30, 2023
Segment
| |
| Segment Reporting [Abstract] | |
| Number of operating segments | 2 |
Business Segment Information - Selected Financial Data for the Company's Business Segment Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|||
| Segment Reporting Information [Line Items] | |||||||
| Revenue | $ 448.3 | $ 462.1 | $ 1,354.9 | $ 1,337.4 | |||
| Operating (loss) income | (22.0) | (36.7) | (71.5) | (84.1) | |||
| Expenditures for long-lived assets | [1] | 184.8 | 141.1 | 493.8 | 407.1 | ||
| Depreciation and amortization | 109.2 | 131.5 | 354.1 | 381.1 | |||
| Total assets | 4,567.3 | 4,567.3 | $ 4,435.6 | ||||
| Operating Segments | Network [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenue | 250.2 | 251.1 | 750.9 | 741.6 | |||
| Operating (loss) income | (7.0) | (27.2) | (39.8) | (49.2) | |||
| Expenditures for long-lived assets | [1] | 179.4 | 131.7 | 474.5 | 384.3 | ||
| Depreciation and amortization | 84.3 | 104.7 | 279.5 | 301.5 | |||
| Total assets | 3,449.6 | 3,449.6 | 3,218.5 | ||||
| Operating Segments | IT Services and Hardware [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenue | 204.4 | 217.8 | 622.3 | 615.6 | |||
| Operating (loss) income | (9.4) | (0.7) | (14.4) | (10.7) | |||
| Expenditures for long-lived assets | [1] | 5.4 | 9.3 | 19.1 | 22.7 | ||
| Depreciation and amortization | 24.8 | 26.8 | 74.3 | 79.4 | |||
| Total assets | 979.0 | 979.0 | 812.2 | ||||
| Intersegment Eliminations [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenue | (6.3) | (6.8) | (18.3) | (19.8) | |||
| Intersegment Eliminations [Member] | Sales [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenue | 6.3 | 6.8 | 18.3 | 19.8 | |||
| Intersegment Eliminations [Member] | Network [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenue | 4.0 | 4.8 | 12.3 | 14.5 | |||
| Intersegment Eliminations [Member] | IT Services and Hardware [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenue | 2.3 | 2.0 | 6.0 | 5.3 | |||
| Corporate [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Operating (loss) income | (5.6) | (8.8) | (17.3) | (24.2) | |||
| Expenditures for long-lived assets | [1] | 0.0 | 0.1 | 0.2 | 0.1 | ||
| Depreciation and amortization | 0.1 | $ 0.0 | 0.3 | $ 0.2 | |||
| Corporate and Elimination [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Total assets | $ 138.7 | $ 138.7 | $ 404.9 | ||||
| |||||||
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