EX-99.1 2 cbb-ex991_15.htm Q3 2019 EARNINGS RELEASE cbb-ex991_15.htm

Cincinnati Bell Reports Third Quarter 2019 Results

 

HIGHLIGHTS

 

Revenue of $383 million and operating income of $23 million— Adjusted EBITDA1 totaled $102 million

 

Entertainment and Communications revenue totaled $249 million, generating Adjusted EBITDA of $93 million, up 2% year-over-year

 

Fiber-to-the-premise (“FTTP”) HSI net activations totaled 3,800 in Cincinnati and 900 in Hawaii during the quarter

 

Hawaiian Telcom generated Adjusted EBITDA of $25 million, an increase of 13% from a year ago

 

IT Services and Hardware revenue totaled $141 million, generating Adjusted EBITDA of $12 million

 

Cash provided by operating activities totaled $189 million year-to-date, and free cash flow2 of $34 million year-to-date

 

CINCINNATI – November 7, 2019 - Cincinnati Bell Inc. (NYSE:CBB), today announced financial results for the third quarter of 2019.

Commenting on the company’s performance, President and Chief Executive Officer Leigh Fox stated, "Our solid third quarter results demonstrate the superior quality of our fiber assets and ability to capitalize on the expanded scale of our IT services business. Looking ahead, we remain committed to our full year 2019 financial guidance.”

Consolidated Results

 

Consolidated revenue totaled $383 million in the third quarter of 2019 and $1,146 million year-to-date

 

Operating income was $23 million in the third quarter of 2019 and $58 million year-to-date

 

Adjusted EBITDA of $102 million in the third quarter of 2019 and $303 million year-to-date

Entertainment and Communications Segment


Entertainment and Communications revenue totaled $249 million for the third quarter of 2019

 

Cincinnati revenue totaled $171 million in the third quarter

 

Fioptics revenue totaled $88 million, up $2 million from a year ago

 

Fioptics internet subscribers totaled 247,100, up 10,500 year-over-year

 

Fioptics is available to approximately 75% of Greater Cincinnati, which includes a combination of fiber-to-the-premise ("FTTP") and fiber-to-the-node ("FTTN") addresses

 

During the first nine months of 2019, 9,700 additional homes and businesses were passed with FTTP, which is available to 482,000 addresses or approximately 60% of Cincinnati's total addressable market

 

Hawaii revenue totaled $78 million in the third quarter of 2019

 

Consumer / SMB Fiber revenue totaled $22 million, up 4% from a year ago

 

Consumer / SMB Fiber internet subscribers totaled 67,800, adding 3,800 customers year-over-year

 

Consumer / SMB Fiber is available to approximately 50% of Hawaii, which includes a combination of FTTP and FTTN addresses

 

During the first nine months of 2019, 3,600 additional homes and businesses were passed with FTTP, which is available to 170,600 addresses, approximately 35% of Hawaii's total addressable market

Adjusted EBITDA was $93 million in the third quarter of 2019, up 2% from a year ago

IT Services and Hardware Segment

IT Services and Hardware revenue totaled $141 million for the third quarter of 2019

 

Communications revenue was $51 million, up $4 million year-over-year

 

Consulting revenue totaled $38 million for the third quarter, up $2 million year-over-year

 

Cloud revenue of $23 million, up $3 million from the prior year excluding insourcing initiatives from General Electric Company (“GE”)

 

Infrastructure Solutions revenue totaled $29 million, down $3 million year-over-year

Adjusted EBITDA was $12 million for the third quarter of 2019, consistent year-over-year excluding the impact of GE’s insourcing initiatives


Cash Flow and Financial Position

Operating cash flows totaled $189 million year-to-date with free cash flow totaling $34 million year-to-date

Liquidity of $162 million as of September 30, 2019, with no significant maturities until 2024

Capital expenditures were $167 million year-to-date

Gross NOL carryforward of approximately $800 million as of September 30, 2019

2019 Outlook

Cincinnati Bell is reaffirming the following guidance for 2019 as initially provided on February 14, 2019:

Category

2019

Guidance Range

Revenue

$1,515M - $1,575M

 

 

Adjusted EBITDA

$400M - $410M

 

 

 

Conference Call/Webcast

Cincinnati Bell will host a conference call on Thursday, November 7, 2019 at 9:00 a.m. (ET) to discuss its financial results for the third quarter of 2019. A live webcast of the call will be available via the Investor Relations section of www.cincinnatibell.com. Callers can dial toll-free (888) 254-3590 or toll (929) 477-0448. A taped replay of the conference call will be available starting at 12:00 p.m. (ET) on Thursday, November 7, 2019 until 12:00 p.m. (ET) on Thursday, November 21, 2019. To access the telephone replay, please dial toll-free (888) 203-1112 or toll (719) 457-0820, and then enter the conference ID number 5338917. An archived webcast will be available for replay following the conclusion of the live event in the Investor Relations section of www.cincinnatibell.com.

 

INVESTOR RELATIONS CONTACT:

Kei Lawson, 513-565-0510

E-mail: Takeitha.Lawson@cinbell.com

 


or

 

MEDIA CONTACT:

Josh Pichler, 513-565-0310

E-mail: Josh.Pichler@cinbell.com


Safe Harbor Note

This release may contain “forward-looking” statements, as defined in federal securities laws including the Private Securities Litigation Reform Act of 1995, which are based on our current expectations, estimates, forecasts and projections. Statements that are not historical facts, including statements about the beliefs, expectations and future plans and strategies of the Company, are forward-looking statements. Actual results may differ materially from those expressed in any forward-looking statements. The following important factors, among other things, could cause or contribute to actual results being materially and adversely different from those described or implied by such forward-looking statements including, but not limited to: those discussed in this release; we operate in highly competitive industries, and customers may not continue to purchase products or services, which would result in reduced revenue and loss of market share; we may be unable to grow our revenues and cash flows despite the initiatives we have implemented; failure to anticipate the need for and introduce new products and services or to compete with new technologies may compromise our success in the telecommunications industry; our access lines, which generate a significant portion of our cash flows and profits, are decreasing in number and if we continue to experience access line losses similar to the past several years, our revenues, earnings and cash flows from operations may be adversely impacted; our failure to meet performance standards under our agreements could result in customers terminating their relationships with us or customers being entitled to receive financial compensation, which would lead to reduced revenues and/or increased costs; we generate a substantial portion of our revenue by serving a limited geographic area; a large customer accounts for a significant portion of our revenues and accounts receivable and the loss or significant reduction in business from this customer would cause operating revenues to decline and could negatively impact profitability and cash flows; maintaining our telecommunications networks requires significant capital expenditures, and our inability or failure to maintain our telecommunications networks could have a material impact on our market share and ability to generate revenue; increases in broadband usage may cause network capacity limitations, resulting in service disruptions or reduced capacity for customers; we may be liable for material that content providers distribute on our networks; cyber attacks or other breaches of network or other information technology security could have an adverse effect on our business; natural disasters, terrorists acts or acts of war could cause damage to our


infrastructure and result in significant disruptions to our operations; the regulation of our businesses by federal and state authorities may, among other things, place us at a competitive disadvantage, restrict our ability to price our products and services and threaten our operating licenses; we depend on a number of third party providers, and the loss of, or problems with, one or more of these providers may impede our growth or cause us to lose customers; a failure of back-office information technology systems could adversely affect our results of operations and financial condition; if we fail to extend or renegotiate our collective bargaining agreements with our labor union when they expire or if our unionized employees were to engage in a strike or other work stoppage, our business and operating results could be materially harmed; the loss of any of the senior management team or attrition among key sales associates could adversely affect our business, financial condition, results of operations and cash flows; our debt could limit our ability to fund operations, raise additional capital, and fulfill our obligations, which, in turn, would have a material adverse effect on our businesses and prospects generally; our indebtedness imposes significant restrictions on us; we depend on our loans and credit facilities to provide for our short-term financing requirements in excess of amounts generated by operations, and the availability of those funds may be reduced or limited; the servicing of our indebtedness is dependent on our ability to generate cash, which could be impacted by many factors beyond our control; we depend on the receipt of dividends or other intercompany transfers from our subsidiaries and investments; the trading price of our common shares may be volatile, and the value of an investment in our common shares may decline; the uncertain economic environment, including uncertainty in the U.S. and world securities markets, could impact our business and financial condition; our future cash flows could be adversely affected if we are unable to fully realize our deferred tax assets; adverse changes in the value of assets or obligations associated with our employee benefit plans could negatively impact shareowners’ deficit and liquidity; third parties may claim that we are infringing upon their intellectual property, and we could suffer significant litigation or licensing expenses or be prevented from selling products; third parties may infringe upon our intellectual property, and we may expend significant resources enforcing our rights or suffer competitive injury; we could be subject to a significant amount of litigation, which could require us to pay significant damages or settlements; we could incur significant costs resulting from complying with, or potential violations of, environmental, health and human safety laws; the possibility that the expected synergies and


value creation from our acquisition of Hawaiian Telcom will not be realized or will not be realized within the expected time period; the risk that the businesses of the Company and Hawaiian Telcom will not be integrated successfully; the risk that unexpected costs will be incurred; and the other risks and uncertainties detailed in our filings with the SEC, including our Form 10-K report, Form 10-Q reports and Form 8-K reports.

These forward-looking statements are based on information, plans and estimates as of the date hereof and there may be other factors that may cause our actual results to differ materially from these forward-looking statements. We assume no obligation to update the information contained in this release except as required by applicable law.

Use of Non-GAAP Financial Measures

This press release contains information about adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), Adjusted EBITDA margin, net debt, net income (loss) applicable to common shareholders excluding special items and free cash flow. These are non-GAAP financial measures used by Cincinnati Bell management when evaluating results of operations and cash flow. Management believes these measures also provide users of the financial statements with additional and useful comparisons of current results of operations and cash flows with past and future periods. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. Detailed reconciliations of these non-GAAP financial measures to comparable GAAP financial measures have been included in the tables distributed with this release and are available in the Investor Relations section of www.cincinnatibell.com.

1Adjusted EBITDA provides a useful measure of operational performance. The company defines Adjusted EBITDA as GAAP operating income plus depreciation, amortization, stock based compensation, restructuring and severance related charges, (gain) loss on sale or disposal of assets, transaction and integration costs, asset impairments, and other special items. Adjusted EBITDA should not be considered as an alternative to comparable GAAP measures of profitability and may not be comparable with the measure as defined by other companies.



Adjusted EBITDA margin provides a useful measure of operational performance. The company defines Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. Adjusted EBITDA margin should not be considered as an alternative to comparable GAAP measures of profitability and may not be comparable with the measure as defined by other companies.

2Free cash flow provides a useful measure of operational performance, liquidity and financial health. The company defines free cash flow as cash provided by (used in) operating activities, adjusted for restructuring and severance related payments, transaction and integration payments, less capital expenditures and preferred stock dividends. Free cash flow should not be considered as an alternative to net income (loss), operating income (loss), cash flow from operating activities, or the change in cash on the balance sheet and may not be comparable with free cash flow as defined by other companies. Although the company believes there is no comparable GAAP measure for free cash flow, the attached financial information reconciles cash provided by operating activities to free cash flow.

Net debt provides a useful measure of liquidity and financial health. The company defines net debt as the sum of the face amount of short-term and long-term debt, unamortized premium and/or discount and unamortized note issuance costs, offset by cash and cash equivalents.

Net income (loss) applicable to common shareholders excluding special items in total and per share provides a useful measure of operating performance. Net income (loss) applicable to common shareholders excluding special items should not be considered as an alternative to comparable GAAP measures of profitability and may not be comparable with net income (loss) excluding special items as defined by other companies.



About Cincinnati Bell Inc.

With headquarters in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) delivers integrated communications solutions to residential and business customers over its fiber-optic and copper networks including high-speed internet, video, voice and data.  Cincinnati Bell provides service in areas of Ohio, Kentucky, Indiana and Hawaii. In addition, enterprise customers across the United States and Canada rely on CBTS and OnX, wholly-owned subsidiaries, for efficient, scalable office communications systems and end-to-end IT solutions. For more information, please visit www.cincinnatibell.com. The information on the Company’s website is not incorporated by reference in this press release.



Cincinnati Bell Inc.

Consolidated Statements of Operations

(Unaudited)

(Dollars in millions, except per share amounts)

 

 

Three Months Ended September 30,

 

 

Change

 

 

Nine Months Ended September 30,

 

 

Change

 

 

 

2019

 

 

2018

 

 

$

 

 

%

 

 

2019

 

 

2018

 

 

$

 

 

%

 

Revenue

 

$

382.5

 

 

$

386.7

 

 

$

(4.2

)

 

 

(1

)%

 

$

1,146.3

 

 

$

979.2

 

 

$

167.1

 

 

 

17

%

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products

 

 

194.7

 

 

 

197.7

 

 

 

(3.0

)

 

 

(2

)%

 

 

587.9

 

 

 

499.4

 

 

 

88.5

 

 

 

18

%

Selling, general and administrative

 

 

88.0

 

 

 

85.7

 

 

 

2.3

 

 

 

3

%

 

 

261.3

 

 

 

220.2

 

 

 

41.1

 

 

 

19

%

Depreciation and amortization

 

 

75.5

 

 

 

75.5

 

 

 

-

 

 

 

0

%

 

 

229.1

 

 

 

177.6

 

 

 

51.5

 

 

 

29

%

Restructuring and severance related charges

 

 

1.3

 

 

 

-

 

 

 

1.3

 

 

n/m

 

 

 

6.4

 

 

 

4.9

 

 

 

1.5

 

 

 

31

%

Transaction and integration costs

 

 

0.2

 

 

 

13.3

 

 

 

(13.1

)

 

 

(98

)%

 

 

3.8

 

 

 

18.2

 

 

 

(14.4

)

 

 

(79

)%

Operating income

 

 

22.8

 

 

 

14.5

 

 

 

8.3

 

 

 

57

%

 

 

57.8

 

 

 

58.9

 

 

 

(1.1

)

 

 

(2

)%

Interest expense

 

 

35.0

 

 

 

33.7

 

 

 

1.3

 

 

 

4

%

 

 

105.0

 

 

 

96.3

 

 

 

8.7

 

 

 

9

%

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

n/m

 

 

 

-

 

 

 

1.3

 

 

 

(1.3

)

 

n/m

 

Other components of pension and postretirement benefit plans expense

 

 

2.8

 

 

 

3.0

 

 

 

(0.2

)

 

 

(7

)%

 

 

8.4

 

 

 

9.5

 

 

 

(1.1

)

 

 

(12

)%

Other expense (income), net

 

 

0.5

 

 

 

(1.2

)

 

 

1.7

 

 

n/m

 

 

 

(0.4

)

 

 

(2.4

)

 

 

2.0

 

 

 

(83

)%

Loss before income taxes

 

 

(15.5

)

 

 

(21.0

)

 

 

5.5

 

 

 

(26

)%

 

 

(55.2

)

 

 

(45.8

)

 

 

(9.4

)

 

 

21

%

Income tax benefit

 

 

(1.9

)

 

 

(3.3

)

 

 

1.4

 

 

 

(42

)%

 

 

(9.2

)

 

 

(6.0

)

 

 

(3.2

)

 

 

53

%

Net loss

 

 

(13.6

)

 

 

(17.7

)

 

 

4.1

 

 

 

(23

)%

 

 

(46.0

)

 

 

(39.8

)

 

 

(6.2

)

 

 

16

%

Preferred stock dividends

 

 

2.6

 

 

 

2.6

 

 

 

-

 

 

 

-

 

 

 

7.8

 

 

 

7.8

 

 

 

-

 

 

 

-

 

Net loss applicable to common shareowners

 

$

(16.2

)

 

$

(20.3

)

 

$

4.1

 

 

 

(20

)%

 

$

(53.8

)

 

$

(47.6

)

 

$

(6.2

)

 

 

13

%

Basic and diluted net loss per common share

 

$

(0.32

)

 

$

(0.41

)

 

 

 

 

 

 

 

 

 

$

(1.07

)

 

$

(1.06

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Basic

 

 

50.4

 

 

 

50.1

 

 

 

 

 

 

 

 

 

 

 

50.4

 

 

 

45.0

 

 

 

 

 

 

 

 

 

- Diluted

 

 

50.4

 

 

 

50.1

 

 

 

 

 

 

 

 

 

 

 

50.4

 

 

 

45.0

 

 

 

 

 

 

 

 

 


Cincinnati Bell Inc.

Entertainment and Communications Income Statement

(Unaudited)

(Dollars in millions)

 

 

Three Months Ended September 30,

 

 

Change

 

 

Nine Months Ended September 30,

 

 

Change

 

 

 

2019

 

 

2018

 

 

$

 

 

%

 

 

2019

 

 

2018

 

 

$

 

 

%

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

248.5

 

 

$

253.4

 

 

$

(4.9

)

 

 

(2

)%

 

$

749.3

 

 

$

601.5

 

 

$

147.8

 

 

 

25

%

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products

 

 

111.5

 

 

 

118.8

 

 

 

(7.3

)

 

 

(6

)%

 

 

338.8

 

 

 

274.8

 

 

 

64.0

 

 

 

23

%

Selling, general and administrative

 

 

44.2

 

 

 

44.0

 

 

 

0.2

 

 

 

0

%

 

 

133.9

 

 

 

100.1

 

 

 

33.8

 

 

 

34

%

Depreciation and amortization

 

 

64.4

 

 

 

65.6

 

 

 

(1.2

)

 

 

(2

)%

 

 

190.5

 

 

 

147.5

 

 

 

43.0

 

 

 

29

%

Restructuring and severance related charges

 

 

0.7

 

 

 

-

 

 

 

0.7

 

 

n/m

 

 

 

4.9

 

 

 

-

 

 

 

4.9

 

 

n/m

 

Total operating costs and expenses

 

 

220.8

 

 

 

228.4

 

 

 

(7.6

)

 

 

(3

)%

 

 

668.1

 

 

 

522.4

 

 

 

145.7

 

 

 

28

%

Operating income

 

$

27.7

 

 

$

25.0

 

 

$

2.7

 

 

 

11

%

 

$

81.2

 

 

$

79.1

 

 

$

2.1

 

 

 

3

%

 



Cincinnati Bell Inc.

Entertainment and Communications Revenue

(Unaudited)

(Dollars in millions)

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

 

 

Cincinnati

 

 

Hawaii

 

 

Total

 

 

Cincinnati

 

 

Hawaii

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

$

39.3

 

 

$

8.0

 

 

$

47.3

 

 

$

36.0

 

 

$

6.3

 

 

$

42.3

 

Video

 

 

39.5

 

 

 

10.7

 

 

 

50.2

 

 

 

40.7

 

 

 

11.7

 

 

 

52.4

 

Voice

 

 

9.2

 

 

 

2.7

 

 

 

11.9

 

 

 

9.4

 

 

 

2.7

 

 

 

12.1

 

Other

 

 

0.4

 

 

 

0.2

 

 

 

0.6

 

 

 

0.3

 

 

 

0.1

 

 

 

0.4

 

Total Consumer / SMB Fiber

 

 

88.4

 

 

 

21.6

 

 

 

110.0

 

 

 

86.4

 

 

 

20.8

 

 

 

107.2

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

21.6

 

 

 

9.9

 

 

 

31.5

 

 

 

21.0

 

 

 

8.7

 

 

 

29.7

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

26.1

 

 

 

14.6

 

 

 

40.7

 

 

 

27.5

 

 

 

16.5

 

 

 

44.0

 

Voice

 

 

31.5

 

 

 

27.3

 

 

 

58.8

 

 

 

35.0

 

 

 

29.7

 

 

 

64.7

 

Other

 

 

3.2

 

 

 

4.3

 

 

 

7.5

 

 

 

3.8

 

 

 

4.0

 

 

 

7.8

 

Total Legacy

 

 

60.8

 

 

 

46.2

 

 

 

107.0

 

 

 

66.3

 

 

 

50.2

 

 

 

116.5

 

Total Entertainment & Communications

 

$

170.8

 

 

$

77.7

 

 

$

248.5

 

 

$

173.7

 

 

$

79.7

 

 

$

253.4

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

 

 

Cincinnati

 

 

Hawaii

 

 

Total

 

 

Cincinnati

 

 

Hawaii

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

$

115.5

 

 

$

23.8

 

 

$

139.3

 

 

$

106.0

 

 

$

6.3

 

 

$

112.3

 

Video

 

 

120.3

 

 

 

33.2

 

 

 

153.5

 

 

 

119.6

 

 

 

11.7

 

 

 

131.3

 

Voice

 

 

27.6

 

 

 

8.2

 

 

 

35.8

 

 

 

28.0

 

 

 

2.7

 

 

 

30.7

 

Other

 

 

1.1

 

 

 

0.5

 

 

 

1.6

 

 

 

0.9

 

 

 

0.1

 

 

 

1.0

 

Total Consumer / SMB Fiber

 

 

264.5

 

 

 

65.7

 

 

 

330.2

 

 

 

254.5

 

 

 

20.8

 

 

 

275.3

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

63.8

 

 

 

29.3

 

 

 

93.1

 

 

 

62.8

 

 

 

8.7

 

 

 

71.5

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

78.4

 

 

 

45.7

 

 

 

124.1

 

 

 

85.0

 

 

 

16.5

 

 

 

101.5

 

Voice

 

 

96.3

 

 

 

83.3

 

 

 

179.6

 

 

 

109.4

 

 

 

29.7

 

 

 

139.1

 

Other

 

 

10.2

 

 

 

12.1

 

 

 

22.3

 

 

 

10.1

 

 

 

4.0

 

 

 

14.1

 

Total Legacy

 

 

184.9

 

 

 

141.1

 

 

 

326.0

 

 

 

204.5

 

 

 

50.2

 

 

 

254.7

 

Total Entertainment & Communications

 

$

513.2

 

 

$

236.1

 

 

$

749.3

 

 

$

521.8

 

 

$

79.7

 

 

$

601.5

 

 

* Represents Fioptics in Cincinnati


Cincinnati Bell Inc.

Entertainment and Communications Metric Information

(Unaudited)

(In thousands)

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

Cincinnati Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fioptics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet FTTP *

 

 

214.6

 

 

 

210.8

 

 

 

207.6

 

 

 

201.5

 

 

 

196.8

 

Internet FTTN *

 

 

32.5

 

 

 

34.0

 

 

 

35.7

 

 

 

37.5

 

 

 

39.8

 

Total Fioptics Internet

 

 

247.1

 

 

 

244.8

 

 

 

243.3

 

 

 

239.0

 

 

 

236.6

 

Video

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video FTTP *

 

 

113.5

 

 

 

114.5

 

 

 

115.2

 

 

 

115.0

 

 

 

115.6

 

Video FTTN *

 

 

23.0

 

 

 

23.5

 

 

 

24.0

 

 

 

24.9

 

 

 

25.9

 

Total Fioptics Video

 

 

136.5

 

 

 

138.0

 

 

 

139.2

 

 

 

139.9

 

 

 

141.5

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fioptics Voice Lines

 

 

108.0

 

 

 

108.8

 

 

 

109.0

 

 

 

107.6

 

 

 

107.0

 

Fioptics Units Passed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units Passed FTTP *

 

 

482.0

 

 

 

480.1

 

 

 

477.6

 

 

 

472.3

 

 

 

459.1

 

Units Passed FTTN *

 

 

138.6

 

 

 

138.7

 

 

 

138.5

 

 

 

138.7

 

 

 

139.5

 

Total Fioptics Units Passed

 

 

620.6

 

 

 

618.8

 

 

 

616.1

 

 

 

611.0

 

 

 

598.6

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ethernet Bandwidth (Gb)

 

 

5,006

 

 

 

4,672

 

 

 

4,540

 

 

 

4,565

 

 

 

4,331

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSL

 

 

65.9

 

 

 

67.9

 

 

 

69.6

 

 

 

72.0

 

 

 

74.1

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Voice Lines

 

 

202.9

 

 

 

210.3

 

 

 

218.0

 

 

 

226.2

 

 

 

232.7

 

 

* Fiber-to-the-Premise (FTTP), Fiber-to-the-Node (FTTN)

 


Cincinnati Bell Inc.

Entertainment and Communications Metric Information

(Unaudited)

(In thousands)

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

Hawaii Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet FTTP *

 

 

54.6

 

 

 

53.7

 

 

 

52.7

 

 

 

51.6

 

 

 

49.5

 

Internet FTTN *

 

 

13.2

 

 

 

13.4

 

 

 

13.9

 

 

 

14.3

 

 

 

14.5

 

Total Consumer / SMB Fiber Internet

 

 

67.8

 

 

 

67.1

 

 

 

66.6

 

 

 

65.9

 

 

 

64.0

 

Video

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video FTTP *

 

 

31.8

 

 

 

33.0

 

 

 

33.5

 

 

 

33.8

 

 

 

33.3

 

Video FTTN *

 

 

13.2

 

 

 

13.9

 

 

 

14.3

 

 

 

15.0

 

 

 

15.3

 

Total Consumer / SMB Fiber Video

 

 

45.0

 

 

 

46.9

 

 

 

47.8

 

 

 

48.8

 

 

 

48.6

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber Voice Lines

 

 

30.1

 

 

 

30.1

 

 

 

30.3

 

 

 

30.3

 

 

 

29.9

 

Consumer / SMB Fiber Units Passed  **

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units Passed FTTP *

 

 

170.6

 

 

 

169.2

 

 

 

168.1

 

 

 

167.0

 

 

 

163.6

 

Units Passed FTTN *

 

 

72.8

 

 

 

72.9

 

 

 

73.4

 

 

 

73.5

 

 

 

73.3

 

Total Consumer / SMB Fiber Units Passed

 

 

243.4

 

 

 

242.1

 

 

 

241.5

 

 

 

240.5

 

 

 

236.9

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ethernet Bandwidth (Gb)

 

 

3,424

 

 

 

2,924

 

 

 

2,413

 

 

 

2,091

 

 

 

1,948

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSL

 

 

44.3

 

 

 

45.7

 

 

 

47.2

 

 

 

48.7

 

 

 

50.4

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Voice Lines

 

 

183.0

 

 

 

187.6

 

 

 

192.8

 

 

 

197.8

 

 

 

203.4

 

 

* Fiber-to-the-Premise (FTTP), Fiber-to-the-Node (FTTN)

** Includes units passed for both consumer and business on Oahu and neighboring islands.


Cincinnati Bell Inc.

IT Services and Hardware Income Statement and Metric Information

(Unaudited)

(Dollars in millions)

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

Change

 

 

September 30,

 

 

Change

 

 

 

2019

 

 

2018

 

 

$

 

 

%

 

 

2019

 

 

2018

 

 

$

 

 

%

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

140.5

 

 

$

141.1

 

 

$

(0.6

)

 

 

0

%

 

$

417.0

 

 

$

397.0

 

 

$

20.0

 

 

 

5

%

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products

 

 

89.4

 

 

 

86.4

 

 

 

3.0

 

 

 

3

%

 

 

268.3

 

 

 

243.1

 

 

 

25.2

 

 

 

10

%

Selling, general and administrative

 

 

38.8

 

 

 

37.5

 

 

 

1.3

 

 

 

3

%

 

 

113.8

 

 

 

110.5

 

 

 

3.3

 

 

 

3

%

Depreciation and amortization

 

 

11.1

 

 

 

9.9

 

 

 

1.2

 

 

 

12

%

 

 

38.5

 

 

 

30.0

 

 

 

8.5

 

 

 

28

%

Restructuring and severance related charges

 

 

0.6

 

 

 

-

 

 

 

0.6

 

 

n/m

 

 

 

1.5

 

 

 

4.9

 

 

 

(3.4

)

 

 

(69

)%

Total operating costs and expenses

 

 

139.9

 

 

 

133.8

 

 

 

6.1

 

 

 

5

%

 

 

422.1

 

 

 

388.5

 

 

 

33.6

 

 

 

9

%

Operating income (loss)

 

$

0.6

 

 

$

7.3

 

 

$

(6.7

)

 

 

(92

)%

 

$

(5.1

)

 

$

8.5

 

 

$

(13.6

)

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

37.6

 

 

 

35.9

 

 

 

1.7

 

 

 

5

%

 

 

114.6

 

 

 

100.7

 

 

 

13.9

 

 

 

14

%

Cloud

 

 

22.6

 

 

 

26.2

 

 

 

(3.6

)

 

 

(14

)%

 

 

69.8

 

 

 

71.8

 

 

 

(2.0

)

 

 

(3

)%

Communications

 

 

51.3

 

 

 

47.0

 

 

 

4.3

 

 

 

9

%

 

 

147.0

 

 

 

129.1

 

 

 

17.9

 

 

 

14

%

Infrastructure Solutions

 

 

29.0

 

 

 

32.0

 

 

 

(3.0

)

 

 

(9

)%

 

 

85.6

 

 

 

95.4

 

 

 

(9.8

)

 

 

(10

)%

Total IT Services and Hardware Revenue

 

$

140.5

 

 

$

141.1

 

 

$

(0.6

)

 

 

0

%

 

$

417.0

 

 

$

397.0

 

 

$

20.0

 

 

 

5

%

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

Consulting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Billable Resources

 

 

1,007

 

 

 

1,039

 

 

 

1,039

 

 

 

1,039

 

 

 

999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NaaS Locations

 

 

3,492

 

 

 

2,988

 

 

 

2,550

 

 

 

2,257

 

 

 

1,101

 

SD - WAN Locations

 

 

1,849

 

 

 

1,743

 

 

 

1,002

 

 

 

803

 

 

 

488

 

Hosted UCaaS Profiles*

 

 

270,335

 

 

 

254,679

 

 

 

244,482

 

 

 

239,581

 

 

 

223,311

 

 

* Includes Hawaii Hosted UCaaS Profiles beginning September 30, 2018



Cincinnati Bell Inc.

Net Debt (Non-GAAP)

(Unaudited)

(Dollars in millions)

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Receivables Facility

 

$

141.5

 

 

$

176.6

 

Credit Agreement - Tranche B Term Loan due 2024

 

 

594.0

 

 

 

598.5

 

Credit Agreement - Revolving Credit Facility

 

 

45.0

 

 

 

18.0

 

7 1/4% Senior Notes due 2023

 

 

22.3

 

 

 

22.3

 

7% Senior Notes due 2024

 

 

625.0

 

 

 

625.0

 

8% Senior Notes due 2025

 

 

350.0

 

 

 

350.0

 

Cincinnati Bell Telephone Notes

 

 

87.9

 

 

 

87.9

 

Other financing lease agreements

 

 

5.4

 

 

 

3.1

 

Capital leases

 

 

78.9

 

 

 

73.9

 

Net unamortized premium

 

 

1.4

 

 

 

1.7

 

Unamortized note issuance costs

 

 

(24.0

)

 

 

(27.2

)

Total debt

 

 

1,927.4

 

 

 

1,929.8

 

Less: Cash and cash equivalents

 

 

(6.5

)

 

 

(15.4

)

Net debt (Non-GAAP)

 

$

1,920.9

 

 

$

1,914.4

 

 


Cincinnati Bell Inc.

Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)

(Unaudited)

(Dollars in millions)

 

Three Months Ended September 30, 2019

 

 

 

Entertainment &

Communications

 

 

IT Services &

Hardware

 

 

Corporate

 

 

Total

Company

 

Net loss (GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(13.6

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.9

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35.0

 

Other expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.5

 

Other components of pension and postretirement benefit plans expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) (GAAP)

 

$

27.7

 

 

$

0.6

 

 

$

(5.5

)

 

$

22.8

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

64.4

 

 

 

11.1

 

 

 

-

 

 

 

75.5

 

Restructuring and severance related charges

 

 

0.7

 

 

 

0.6

 

 

 

-

 

 

 

1.3

 

Transaction and integration costs

 

 

-

 

 

 

-

 

 

 

0.2

 

 

 

0.2

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

2.0

 

 

 

2.0

 

Adjusted EBITDA (Non-GAAP)

 

$

92.8

 

 

$

12.3

 

 

$

(3.3

)

 

$

101.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin (Non-GAAP)

 

 

37

%

 

 

9

%

 

 

-

 

 

 

27

%

 

 

 

 

Three Months Ended September 30, 2018

 

 

 

Entertainment &

Communications

 

 

IT Services &

Hardware

 

 

Corporate

 

 

Total

Company

 

Net loss (GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(17.7

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3.3

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33.7

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.2

)

Other components of pension and postretirement benefit plans expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) (GAAP)

 

$

25.0

 

 

$

7.3

 

 

$

(17.8

)

 

$

14.5

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

65.6

 

 

 

9.9

 

 

 

-

 

 

 

75.5

 

Transaction and integration costs

 

 

-

 

 

 

-

 

 

 

13.3

 

 

 

13.3

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

1.9

 

 

 

1.9

 

Adjusted EBITDA (Non-GAAP)

 

$

90.6

 

 

$

17.2

 

 

$

(2.6

)

 

$

105.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin (Non-GAAP)

 

 

36

%

 

 

12

%

 

 

-

 

 

 

27

%

Year-over-year dollar change in Adjusted EBITDA

 

 

2.2

 

 

 

(4.9

)

 

 

(0.7

)

 

 

(3.4

)

Year-over-year percentage change in Adjusted EBITDA

 

 

2

%

 

 

-28

%

 

 

27

%

 

 

-3

%


Cincinnati Bell Inc.

Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)

(Unaudited)

(Dollars in millions)

 

 

Nine Months Ended September 30, 2019

 

 

 

Entertainment &

Communications

 

 

IT Services &

Hardware

 

 

Corporate

 

 

Total

Company

 

Net loss (GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(46.0

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9.2

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

105.0

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.4

)

Other components of pension and postretirement benefit plans expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) (GAAP)

 

$

81.2

 

 

$

(5.1

)

 

$

(18.3

)

 

$

57.8

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

190.5

 

 

 

38.5

 

 

 

0.1

 

 

 

229.1

 

Restructuring and severance related charges

 

 

4.9

 

 

 

1.5

 

 

 

-

 

 

 

6.4

 

Transaction and integration costs

 

 

-

 

 

 

-

 

 

 

3.8

 

 

 

3.8

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

5.4

 

 

 

5.4

 

Adjusted EBITDA (Non-GAAP)

 

$

276.6

 

 

$

34.9

 

 

$

(9.0

)

 

$

302.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin (Non-GAAP)

 

 

37

%

 

 

8

%

 

 

-

 

 

 

26

%

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

 

 

Entertainment &

Communications

 

 

IT Services &

Hardware

 

 

Corporate

 

 

Total

Company

 

Net loss (GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(39.8

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6.0

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

96.3

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.3

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2.4

)

Other components of pension and postretirement benefit plans expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) (GAAP)

 

$

79.1

 

 

$

8.5

 

 

$

(28.7

)

 

$

58.9

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

147.5

 

 

 

30.0

 

 

 

0.1

 

 

 

177.6

 

Restructuring and severance related charges

 

 

-

 

 

 

4.9

 

 

 

-

 

 

 

4.9

 

Transaction and integration costs

 

 

-

 

 

 

-

 

 

 

18.2

 

 

 

18.2

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

4.5

 

 

 

4.5

 

Adjusted EBITDA (Non-GAAP)

 

$

226.6

 

 

$

43.4

 

 

$

(5.9

)

 

$

264.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin (Non-GAAP)

 

 

38

%

 

 

11

%

 

 

-

 

 

 

27

%

Year-over-year dollar change in Adjusted EBITDA

 

 

50.0

 

 

 

(8.5

)

 

 

(3.1

)

 

 

38.4

 

Year-over-year percentage change in Adjusted EBITDA

 

 

22

%

 

 

(20

)%

 

 

53

%

 

 

15

%

Cincinnati Bell Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in millions)

 

 


 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Cash provided by operating activities

 

$

70.1

 

 

$

32.9

 

 

$

188.9

 

 

$

122.8

 

Capital expenditures

 

 

(56.7

)

 

 

(69.7

)

 

 

(167.3

)

 

 

(140.7

)

Acquisitions of businesses

 

 

-

 

 

 

(214.0

)

 

 

-

 

 

 

(216.8

)

Other, net

 

 

0.3

 

 

 

(0.1

)

 

 

0.3

 

 

 

(0.1

)

Cash used in investing activities

 

 

(56.4

)

 

 

(283.8

)

 

 

(167.0

)

 

 

(357.6

)

Net (decrease) increase in corporate credit and receivables facilities with initial maturities less than 90 days

 

 

(9.6

)

 

 

194.2

 

 

 

(8.1

)

 

 

194.2

 

Repayment of debt

 

 

(4.2

)

 

 

(318.4

)

 

 

(13.4

)

 

 

(324.3

)

Debt issuance costs

 

 

(0.1

)

 

 

(8.5

)

 

 

(0.8

)

 

 

(11.0

)

Dividends paid on preferred stock

 

 

(2.6

)

 

 

(2.6

)

 

 

(7.8

)

 

 

(7.8

)

Other, net

 

 

-

 

 

 

(0.1

)

 

 

(0.8

)

 

 

(2.1

)

Cash used in financing activities

 

 

(16.5

)

 

 

(135.4

)

 

 

(30.9

)

 

 

(151.0

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

-

 

 

 

0.1

 

 

 

0.1

 

 

 

(0.1

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(2.8

)

 

 

(386.2

)

 

 

(8.9

)

 

 

(385.9

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

9.3

 

 

 

396.8

 

 

 

15.4

 

 

 

396.5

 

Cash, cash equivalents and restricted cash at end of period

 

$

6.5

 

 

$

10.6

 

 

$

6.5

 

 

$

10.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Cash Provided by Operating Activities (GAAP) to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free Cash Flow (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash provided by operating activities

 

$

70.1

 

 

$

32.9

 

 

$

188.9

 

 

$

122.8

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(56.7

)

 

 

(69.7

)

 

 

(167.3

)

 

 

(140.7

)

Restructuring and severance related payments

 

 

2.4

 

 

 

6.5

 

 

 

13.2

 

 

 

14.7

 

Preferred stock dividends

 

 

(2.6

)

 

 

(2.6

)

 

 

(7.8

)

 

 

(7.8

)

Transaction and integration costs

 

 

2.5

 

 

 

33.7

 

 

 

6.7

 

 

 

37.9

 

Free cash flow (Non-GAAP)

 

$

15.7

 

 

$

0.8

 

 

$

33.7

 

 

$

26.9

 

Income tax payments (refunds)

 

$

0.2

 

 

$

0.4

 

 

$

1.8

 

 

$

(13.2

)

 


Cincinnati Bell Inc.

Capital Expenditures

(Unaudited)

(Dollars in millions)

 

 

Three Months Ended

 

 

 

September 30,

2019

 

 

June 30,

2019

 

 

March 31,

2019

 

 

December 31,

2018

 

 

September 30,

2018

 

Entertainment and Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cincinnati

 

$

33.7

 

 

$

34.1

 

 

$

30.8

 

 

$

50.5

 

 

$

41.4

 

Hawaii

 

 

17.6

 

 

 

13.8

 

 

 

20.3

 

 

 

21.8

 

 

 

20.9

 

Total Entertainment and Communications

 

 

51.3

 

 

 

47.9

 

 

 

51.1

 

 

 

72.3

 

 

 

62.3

 

IT Services and Hardware

 

 

5.4

 

 

 

6.1

 

 

 

5.4

 

 

 

7.4

 

 

 

7.4

 

Corporate

 

 

-

 

 

 

0.1

 

 

 

-

 

 

 

0.2

 

 

 

-

 

Total capital expenditures

 

$

56.7

 

 

$

54.1

 

 

$

56.5

 

 

$

79.9

 

 

$

69.7

 

 


Cincinnati Bell Inc.

Reconciliation of Net (Loss) Income Applicable to Common Shareholders (GAAP) to Net (Loss) Income Applicable to Common Shareholders, Excluding Special Items (Non-GAAP) and Adjusted Diluted Earnings Per Share (Non-GAAP)

(Unaudited)

(Dollars in millions, except per share amounts)

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

Net loss applicable to common shareholders (GAAP)

 

$

(16.2

)

 

$

(20.3

)

Special items:

 

 

 

 

 

 

 

 

Restructuring and severance related charges

 

 

1.3

 

 

 

-

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

Transaction and integration costs

 

 

0.2

 

 

 

13.3

 

Income tax effect of special items *

 

 

(0.7

)

 

 

(0.9

)

Total special items

 

 

0.8

 

 

 

12.4

 

Net loss applicable to common shareowners, excluding special items (Non-GAAP)

 

$

(15.4

)

 

$

(7.9

)

Weighted average diluted shares outstanding**

 

 

50.4

 

 

 

50.1

 

Diluted loss per common share (GAAP)

 

$

(0.32

)

 

$

(0.41

)

Adjusted diluted loss per common share (Non-GAAP)

 

$

(0.31

)

 

$

(0.16

)

 

*

Special items have been tax effected utilizing the normalized effective tax rate for the period, with the exception of transaction and integration costs, which are treated as a discrete item.

**

Weighted average diluted shares outstanding based on net (loss) income applicable to common shareowners, excluding special items (Non-GAAP).

 



Cincinnati Bell Inc.

Reconciliation of Net (Loss) Income Applicable to Common Shareholders (GAAP) to Net (Loss) Income Applicable to Common Shareholders, Excluding Special Items (Non-GAAP) and Adjusted Diluted Earnings Per Share (Non-GAAP)

(Unaudited)

(Dollars in millions, except per share amounts)

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

Net loss applicable to common shareholders (GAAP)

 

$

(53.8

)

 

$

(47.6

)

Special items:

 

 

 

 

 

 

 

 

Restructuring and severance related charges

 

 

6.4

 

 

 

4.9

 

Loss on extinguishment of debt

 

 

-

 

 

 

1.3

 

Transaction and integration costs

 

 

3.8

 

 

 

18.2

 

Income tax effect of special items *

 

 

(2.5

)

 

 

(0.6

)

Total special items

 

 

7.7

 

 

 

23.8

 

Net loss applicable to common shareowners, excluding special items (Non-GAAP)

 

$

(46.1

)

 

$

(23.8

)

Weighted average diluted shares outstanding**

 

 

50.4

 

 

 

45.0

 

Diluted loss per common share (GAAP)

 

$

(1.07

)

 

$

(1.06

)

Adjusted diluted loss per common share (Non-GAAP)

 

$

(0.91

)

 

$

(0.53

)

 

 

*

Special items have been tax effected utilizing the normalized effective tax rate for the period, with the exception of transaction and integration costs, which are treated as a discrete item.

**

Weighted average diluted shares outstanding based on net (loss) income applicable to common shareowners, excluding special items (Non-GAAP).



Cincinnati Bell Inc.

Reconciliation of Operating Income (GAAP) Guidance to Adjusted EBITDA (Non-GAAP) Guidance

(Unaudited)

(Dollars in millions)

 

 

Low

 

 

High

 

2019 Operating Income (GAAP) Guidance Range

 

$

72

 

 

$

91

 

Add:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

305

 

 

 

300

 

Restructuring and severance related charges

 

 

10

 

 

 

6

 

Transaction and integration costs

 

 

5

 

 

 

5

 

Stock compensation expense

 

 

8

 

 

 

8

 

 

 

 

 

 

 

 

 

 

2019 Adjusted EBITDA (Non-GAAP) Guidance Range

 

$

400

 

 

$

410

 

 

CONTACT:

 

Cincinnati Bell Inc.

Investor contact:

Kei Lawson, 513-565-0510

Takeitha.Lawson@cinbell.com

 

Media contact:

Josh Pichler, 513-565-0310

Josh.Pichler@cinbell.com