0001564590-20-050802.txt : 20201105 0001564590-20-050802.hdr.sgml : 20201105 20201105061617 ACCESSION NUMBER: 0001564590-20-050802 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20201105 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20201105 DATE AS OF CHANGE: 20201105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINCINNATI BELL INC CENTRAL INDEX KEY: 0000716133 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 311056105 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08519 FILM NUMBER: 201288503 BUSINESS ADDRESS: STREET 1: 221 E FOURTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 513-397-9900 MAIL ADDRESS: STREET 1: P O BOX 2301 CITY: CINCINNATI STATE: OH ZIP: 45201 FORMER COMPANY: FORMER CONFORMED NAME: BROADWING INC DATE OF NAME CHANGE: 20000512 FORMER COMPANY: FORMER CONFORMED NAME: CINCINNATI BELL INC /OH/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CBI INC DATE OF NAME CHANGE: 19830814 8-K 1 cbb-8k_20201105.htm 8-K cbb-8k_20201105.htm
false 0000716133 0000716133 2020-11-05 2020-11-05 0000716133 us-gaap:CommonStockMember 2020-11-05 2020-11-05 0000716133 cbb:DepositarySharesMember 2020-11-05 2020-11-05

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 5, 2020

 

CINCINNATI BELL INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Ohio

001-8519

31-1056105

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

221 East Fourth Street,

Cincinnati, Ohio

 

45202

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (513) 397-9900

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Shares ($0.01 par value)

 

CBB

 

New York Stock Exchange

Depositary Shares, each representing 1/20 interest in a Share of 6 ¾% Cumulative Convertible Preferred Stock, without par value

 

CBB.PB

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. 

 

 

 


 

Item 2.02    Results of Operations and Financial Condition

On November 5, 2020, Cincinnati Bell Inc. (“Cincinnati Bell”) reported its financial results for the third quarter of 2020, which are discussed in more detail in the press release (the “Press Release”) attached to this Current Report on Form 8-K as Exhibit 99.1, which is incorporated herein by reference into this Item 2.02.

 

Item 8.01     Other Events

On November 5, 2020, Cincinnati Bell will make available the Press Release on the “Investor Relations” section of Cincinnati Bell’s website located at https://investor.cincinnatibell.com.

 

Item 9.01      Financial Statements and Exhibits.

 

(d)

Exhibit No.

Description  

 

 

  

 

Exhibit 99.1

Press Release dated November 5, 2020

 

 

 

 

Exhibit 104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1


 

Cautionary Statement Concerning Forward-Looking Statements

 

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 concerning plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans or intentions relating to acquisitions and restructuring, business trends, statements regarding the merger with Macquarie Infrastructure Partners (the “merger”) and the expected timetable for completing the merger, are forward-looking statements. Words such as “expects,” “anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “will,” “may,” “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. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this report. 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 accounts receivable and the loss or significant reduction in business from this customer would cause operating results 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 unions 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;

2


 

 

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 risk that unexpected costs will be incurred;

 

risks and uncertainties relating to the merger, including the timing and likelihood of completion of the merger; the possibility that any or all of the various conditions to the consummation of the merger may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the occurrence of any event, change or other circumstance that could give rise to the termination of the merger; the effect of the announcement or pendency of the merger on our ability to retain and hire key personnel, our ability to maintain relationships with our customers, suppliers and others with whom we do business, or our operating results and business generally; risks related to diverting management’s attention from Cincinnati Bell’s ongoing business operations; and the risk that shareholder litigation in connection with the merger may result in significant costs of defense, indemnification and liability;

 

risks and uncertainties related to the effect of the recent global outbreak of COVID-19 and related government, private sector and individual consumer responsive actions on Cincinnati Bell’s business operations, employee availability, financial performance, liquidity and cash flow;

 

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; and

 

other factors outside Cincinnati Bell's control.  

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.

3


 

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 hereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

 

CINCINNATI BELL INC.

 

 

 

 

Date:   November 5, 2020

By:

/s/ Christopher J. Wilson

 

 

 

Christopher J. Wilson

 

 

 

Vice President and General Counsel

 

4


 

EXHIBIT INDEX

 

Exhibit No.

Description

 

 

99.1

Press Release dated November 5, 2020.

 

 

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

5

EX-99.1 2 cbb-ex991_6.htm Q3 2020 EARNINGS RELEASE cbb-ex991_6.htm

Cincinnati Bell Reports Third Quarter 2020 Results

 

HIGHLIGHTS

 

Consolidated revenue totaled $390 million generating operating income of $25 million

 

Adjusted EBITDA1 was $102 million, consistent with the prior year; results include a one-time $6 million bonus to reward employees due to their efforts in minimizing the impact of the COVID-19 pandemic to the business

 

Entertainment and Communications revenue was $241 million and Adjusted EBITDA totaled $89 million

 

­

Fiber-to-the-premise (“FTTP”) High Speed Internet subscribers were up 20,400 in Cincinnati and 4,000 in Hawaii, compared to a year ago

 

IT Services and Hardware revenue totaled $155 million and Adjusted EBITDA totaled $16 million

 

Year-to-date cash provided by operating activities totaled $139 million with free cash flow2 of $27 million

 

Merger agreement with a controlled subsidiary of Macquarie Infrastructure Partners ("MIP") remains on target to close in the first half of 2021

CINCINNATI – November 5, 2020 - Cincinnati Bell Inc. (NYSE:CBB), today announced financial results for the third quarter of 2020.

Leigh Fox, President and Chief Executive Officer of Cincinnati Bell, commented, “I am extremely proud of the Cincinnati Bell team. Despite the ongoing challenges presented by COVID-19, we continue to execute, delivering strong financial results quarter after quarter. As we approach the end of 2020, demand for fiber and our strategic IT solutions remains robust, and I am confident that we will achieve our goal of generating full year Adjusted EBITDA growth.”

Mr. Fox concluded, “The regulatory approval process is progressing as expected. Our team continues to work closely with MIP to ensure a successful close in the first half of 2021.”

CONSOLIDATED RESULTS

 

Revenue totaled $390 million for the third quarter of 2020 and $1,150 million year-to-date

 

Operating income of $25 million in the third quarter of 2020 and $32 million year-to-date

 

Adjusted EBITDA totaled $102 million for the third quarter of 2020 and $311 million year-to-date

 

 


Entertainment and Communications Segment

 

Entertainment and Communications revenue totaled $241 million for the third quarter of 2020, down 3% year-over-year due to consumers migrating to over-the-top video services and continued legacy decline

 

­

Cincinnati revenue totaled $167 million in the third quarter

 

­

Fioptics revenue totaled $91 million for the third quarter, up $3 million from a year ago

 

­

FTTP internet subscribers totaled 235,000 at the end of the third quarter, adding 4,400 customers during the quarter

 

­

FTTP is available to 60% of Greater Cincinnati, or 494,800 addresses

 

­

Hawaii revenue totaled $74 million in the third quarter

 

­

Consumer / SMB Fiber revenue totaled $21 million in the third quarter, consistent with the prior year

 

­

FTTP internet subscribers totaled 58,600 at the end of the third quarter, adding 1,200 customers during the quarter

 

­

FTTP is available to 36% of Hawaii, or 178,100 addresses

 

Adjusted EBITDA was $89 million for the third quarter, down $4 million year-over-year primarily due to a one-time bonus to reward employees for their efforts during COVID-19

IT Services and Hardware Segment

 

IT Services and Hardware revenue totaled $155 million for the third quarter, up 10% compared to a year ago

 

­

Communications revenue was $54 million in the third quarter, up 5% compared to a year ago

 

­

Consulting revenue totaled $49 million for the third quarter, up 31% year-over-year

 

­

Cloud revenue totaling $21 million during the third quarter, down 7% from the prior year

 

­

Infrastructure Solutions revenue was $31 million during the third quarter, up 6% year-over-year

 

Adjusted EBITDA was $16 million for the third quarter, up 27% from the prior year, including a one-time bonus to reward employees for their efforts during COVID-19

Macquarie Infrastructure Partners Transaction Details

On March 13, 2020, Cincinnati Bell Inc. ("Cincinnati Bell" or the "Company"), together with MIP, announced an agreement through which an MIP-controlled subsidiary will acquire all outstanding shares of Cincinnati Bell for $15.50 per share in a cash transaction valued at approximately $2.9 billion, including debt (the "Transaction").

The Transaction follows the determination by Cincinnati Bell's Board of Directors, after consultation with its legal and financial advisors, that the MIP proposal constituted a "Superior Company Proposal" as defined in


Cincinnati Bell's previously announced Brookfield merger agreement. Consistent with that determination, and following the expiration of the negotiation period during which Brookfield declined to propose an amendment to the Brookfield merger agreement, Cincinnati Bell terminated the Brookfield merger agreement. In connection with the termination, Cincinnati Bell paid Brookfield an approximately $25 million break-up fee.

On May 7, 2020, Cincinnati Bell’s shareholders adopted the MIP merger agreement at a virtual special meeting of shareholders.

MIP is a fund managed by Macquarie Infrastructure and Real Assets ("MIRA"). In addition to MIP, certain Special Opportunities funds or co-investment vehicles managed by the Private Equity Group of Ares Management Corporation (NYSE: ARES) ("Ares Management"), and entities controlled by the Retail Employees Superannuation Trust (“REST”), an Australian superannuation fund managed by Retail Employees Superannuation Pty Limited, have agreed to provide equity financing for the Transaction.

MIRA is a global alternative asset manager with extensive experience in investing in the communications infrastructure industry. For more than two decades, MIRA has partnered with investors, governments, and communities to manage, develop, and enhance assets relied on by more than 100 million people each day. As of March 31, 2020, MIRA had $136.95 billion in assets under management (based on proportionate enterprise value), of which $107.9 billion were invested in infrastructure assets.

Ares Management is a global alternative investment manager operating three integrated businesses across Credit, Private Equity, and Real Estate. Ares Management’s global platform had $149 billion of assets under management as of March 31, 2020 and employs approximately 1,200 employees in over 20 offices in more than 10 countries.

REST is a widely held Australian public offer pension fund managing over AUD 52 billion (USD $36 billion) on behalf of approximately 1.7 million members.

The Transaction is expected to close in the first half of 2021. It is subject to customary closing conditions, including receipt of certain regulatory approvals.

 

 

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 concerning plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans or intentions relating to acquisitions and restructuring, business trends, statements regarding the Transaction and the expected timetable for completing the Transaction, are forward-looking statements. Words such as “expects,” “anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “will,” “may,” “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. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this report. 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 accounts receivable and the loss or significant reduction in business from this customer would cause operating results 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 unions 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 risk that unexpected costs will be incurred;

risks and uncertainties relating to the Transaction, including the timing and likelihood of completion of the Transaction; the possibility that any or all of the various conditions to the consummation of the Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the occurrence of any event, change or other circumstance that could give rise to the termination of the Transaction; the effect of the announcement or pendency of the Transaction on our ability to retain and hire key personnel, our ability to maintain relationships with our customers, suppliers and others with whom we do business, or our operating results and business generally; risks related to diverting management’s attention from the Company’s ongoing business operations; and the risk that shareholder litigation in connection with the Transaction may result in significant costs of defense, indemnification and liability;

risks and uncertainties related to the effect of the recent global outbreak of COVID-19 and related government, private sector and individual consumer responsive actions on the Company’s business operations, employee availability, financial performance, liquidity and cash flow;


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; and

other factors outside the Company's control.

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, transaction related employee retention agreements, 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 feels 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

 

 

 

2020

 

 

2019

 

 

$

 

 

%

 

 

2020

 

 

2019

 

 

$

 

 

%

 

Revenue

 

$

389.5

 

 

$

382.5

 

 

$

7.0

 

 

 

2

%

 

$

1,149.5

 

 

$

1,146.3

 

 

$

3.2

 

 

 

0

%

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products

 

 

203.9

 

 

 

194.7

 

 

 

9.2

 

 

 

5

%

 

 

591.0

 

 

 

587.9

 

 

 

3.1

 

 

 

1

%

Selling, general and administrative

 

 

86.0

 

 

 

88.0

 

 

 

(2.0

)

 

 

(2

)%

 

 

255.3

 

 

 

261.3

 

 

 

(6.0

)

 

 

(2

)%

Depreciation and amortization

 

 

71.9

 

 

 

75.5

 

 

 

(3.6

)

 

 

(5

)%

 

 

220.8

 

 

 

229.1

 

 

 

(8.3

)

 

 

(4

)%

Restructuring and severance related charges

 

 

0.8

 

 

 

1.3

 

 

 

(0.5

)

 

 

(38

)%

 

 

16.4

 

 

 

6.4

 

 

 

10.0

 

 

n/m

 

Transaction and integration costs

 

 

2.2

 

 

 

0.2

 

 

 

2.0

 

 

n/m

 

 

 

33.8

 

 

 

3.8

 

 

 

30.0

 

 

n/m

 

Operating income

 

 

24.7

 

 

 

22.8

 

 

 

1.9

 

 

 

8

%

 

 

32.2

 

 

 

57.8

 

 

 

(25.6

)

 

 

(44

)%

Interest expense

 

 

33.4

 

 

 

35.0

 

 

 

(1.6

)

 

 

(5

)%

 

 

100.6

 

 

 

105.0

 

 

 

(4.4

)

 

 

(4

)%

Other components of pension and postretirement benefit plans expense

 

 

2.6

 

 

 

2.8

 

 

 

(0.2

)

 

 

(7

)%

 

 

9.0

 

 

 

8.4

 

 

 

0.6

 

 

 

7

%

Other (income) expense, net

 

 

(0.2

)

 

 

0.5

 

 

 

(0.7

)

 

n/m

 

 

 

(1.2

)

 

 

(0.4

)

 

 

(0.8

)

 

n/m

 

Loss before income taxes

 

 

(11.1

)

 

 

(15.5

)

 

 

4.4

 

 

 

(28

)%

 

 

(76.2

)

 

 

(55.2

)

 

 

(21.0

)

 

 

38

%

Income tax benefit

 

 

(2.9

)

 

 

(1.9

)

 

 

(1.0

)

 

 

53

%

 

 

(26.2

)

 

 

(9.2

)

 

 

(17.0

)

 

n/m

 

Net loss

 

 

(8.2

)

 

 

(13.6

)

 

 

5.4

 

 

 

(40

)%

 

 

(50.0

)

 

 

(46.0

)

 

 

(4.0

)

 

 

9

%

Preferred stock dividends

 

 

2.6

 

 

 

2.6

 

 

 

-

 

 

 

-

 

 

 

7.8

 

 

 

7.8

 

 

 

-

 

 

 

-

 

Net loss applicable to common shareowners

 

$

(10.8

)

 

$

(16.2

)

 

$

5.4

 

 

 

(33

)%

 

$

(57.8

)

 

$

(53.8

)

 

$

(4.0

)

 

 

7

%

Basic and diluted net loss per common share

 

$

(0.21

)

 

$

(0.32

)

 

 

 

 

 

 

 

 

 

$

(1.14

)

 

$

(1.07

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Basic

 

 

50.7

 

 

 

50.4

 

 

 

 

 

 

 

 

 

 

 

50.6

 

 

 

50.4

 

 

 

 

 

 

 

 

 

- Diluted

 

 

50.7

 

 

 

50.4

 

 

 

 

 

 

 

 

 

 

 

50.6

 

 

 

50.4

 

 

 

 

 

 

 

 

 

 


Cincinnati Bell Inc.

Entertainment and Communications Income Statement

(Unaudited)

(Dollars in millions)

 

Three Months Ended

September 30,

 

 

Change

 

 

Nine Months Ended

September 30,

 

 

Change

 

 

 

2020

 

 

2019

 

 

$

 

 

%

 

 

2020

 

 

2019

 

 

$

 

 

%

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

241.0

 

 

$

248.5

 

 

$

(7.5

)

 

 

(3

)%

 

$

724.5

 

 

$

749.3

 

 

$

(24.8

)

 

 

(3

)%

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products

 

 

107.8

 

 

 

111.5

 

 

 

(3.7

)

 

 

(3

)%

 

 

319.7

 

 

 

338.8

 

 

 

(19.1

)

 

 

(6

)%

Selling, general and administrative

 

 

44.4

 

 

 

44.2

 

 

 

0.2

 

 

 

0

%

 

 

130.2

 

 

 

133.9

 

 

 

(3.7

)

 

 

(3

)%

Depreciation and amortization

 

 

61.6

 

 

 

64.4

 

 

 

(2.8

)

 

 

(4

)%

 

 

190.0

 

 

 

190.5

 

 

 

(0.5

)

 

 

0

%

Restructuring and severance related charges

 

 

-

 

 

 

0.7

 

 

 

(0.7

)

 

n/m

 

 

 

14.8

 

 

 

4.9

 

 

 

9.9

 

 

n/m

 

Total operating costs and expenses

 

 

213.8

 

 

 

220.8

 

 

 

(7.0

)

 

 

(3

)%

 

 

654.7

 

 

 

668.1

 

 

 

(13.4

)

 

 

(2

)%

Operating income

 

$

27.2

 

 

$

27.7

 

 

$

(0.5

)

 

 

(2

)%

 

$

69.8

 

 

$

81.2

 

 

$

(11.4

)

 

 

(14

)%

 


Cincinnati Bell Inc.

Entertainment and Communications Revenue

(Unaudited)

(Dollars in millions)

 

 

Three Months Ended

September 30, 2020

 

 

Three Months Ended

September 30, 2019

 

 

 

Cincinnati

 

 

Hawaii

 

 

Total

 

 

Cincinnati

 

 

Hawaii

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

$

43.0

 

 

$

9.1

 

 

$

52.1

 

 

$

39.3

 

 

$

8.0

 

 

$

47.3

 

Video

 

 

38.7

 

 

 

9.4

 

 

 

48.1

 

 

 

39.5

 

 

 

10.7

 

 

 

50.2

 

Voice

 

 

8.9

 

 

 

2.7

 

 

 

11.6

 

 

 

9.2

 

 

 

2.7

 

 

 

11.9

 

Other

 

 

0.4

 

 

 

0.2

 

 

 

0.6

 

 

 

0.4

 

 

 

0.2

 

 

 

0.6

 

Total Consumer / SMB Fiber

 

 

91.0

 

 

 

21.4

 

 

 

112.4

 

 

 

88.4

 

 

 

21.6

 

 

 

110.0

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

21.4

 

 

 

10.6

 

 

 

32.0

 

 

 

21.6

 

 

 

9.9

 

 

 

31.5

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

23.4

 

 

 

12.3

 

 

 

35.7

 

 

 

26.1

 

 

 

14.6

 

 

 

40.7

 

Voice

 

 

27.9

 

 

 

26.0

 

 

 

53.9

 

 

 

31.5

 

 

 

27.3

 

 

 

58.8

 

Other

 

 

3.1

 

 

 

3.9

 

 

 

7.0

 

 

 

3.2

 

 

 

4.3

 

 

 

7.5

 

Total Legacy

 

 

54.4

 

 

 

42.2

 

 

 

96.6

 

 

 

60.8

 

 

 

46.2

 

 

 

107.0

 

Total Entertainment & Communications

 

$

166.8

 

 

$

74.2

 

 

$

241.0

 

 

$

170.8

 

 

$

77.7

 

 

$

248.5

 

 

 

Nine Months Ended

September 30, 2020

 

 

Nine Months Ended

September 30, 2019

 

 

 

Cincinnati

 

 

Hawaii

 

 

Total

 

 

Cincinnati

 

 

Hawaii

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

$

126.0

 

 

$

26.5

 

 

$

152.5

 

 

$

115.5

 

 

$

23.8

 

 

$

139.3

 

Video

 

 

116.3

 

 

 

28.8

 

 

 

145.1

 

 

 

120.3

 

 

 

33.2

 

 

 

153.5

 

Voice

 

 

25.0

 

 

 

8.1

 

 

 

33.1

 

 

 

27.6

 

 

 

8.2

 

 

 

35.8

 

Other

 

 

1.1

 

 

 

0.6

 

 

 

1.7

 

 

 

1.1

 

 

 

0.5

 

 

 

1.6

 

Total Consumer / SMB Fiber

 

 

268.4

 

 

 

64.0

 

 

 

332.4

 

 

 

264.5

 

 

 

65.7

 

 

 

330.2

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

64.3

 

 

 

31.0

 

 

 

95.3

 

 

 

63.8

 

 

 

29.3

 

 

 

93.1

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

71.6

 

 

 

39.4

 

 

 

111.0

 

 

 

78.4

 

 

 

45.7

 

 

 

124.1

 

Voice

 

 

85.7

 

 

 

78.8

 

 

 

164.5

 

 

 

96.3

 

 

 

83.3

 

 

 

179.6

 

Other

 

 

9.3

 

 

 

12.0

 

 

 

21.3

 

 

 

10.2

 

 

 

12.1

 

 

 

22.3

 

Total Legacy

 

 

166.6

 

 

 

130.2

 

 

 

296.8

 

 

 

184.9

 

 

 

141.1

 

 

 

326.0

 

Total Entertainment & Communications

 

$

499.3

 

 

$

225.2

 

 

$

724.5

 

 

$

513.2

 

 

$

236.1

 

 

$

749.3

 

 

*

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,

 

 

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

Cincinnati Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fioptics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet FTTP *

 

 

235.0

 

 

 

230.6

 

 

 

224.3

 

 

 

219.2

 

 

 

214.6

 

Internet FTTN *

 

 

27.7

 

 

 

28.9

 

 

 

30.0

 

 

 

31.4

 

 

 

32.5

 

Total Fioptics Internet

 

 

262.7

 

 

 

259.5

 

 

 

254.3

 

 

 

250.6

 

 

 

247.1

 

Video

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video FTTP *

 

 

108.7

 

 

 

109.7

 

 

 

111.2

 

 

 

112.7

 

 

 

113.5

 

Video FTTN *

 

 

20.8

 

 

 

21.4

 

 

 

21.9

 

 

 

22.4

 

 

 

23.0

 

Total Fioptics Video

 

 

129.5

 

 

 

131.1

 

 

 

133.1

 

 

 

135.1

 

 

 

136.5

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fioptics Voice Lines

 

 

104.4

 

 

 

105.3

 

 

 

105.3

 

 

 

106.8

 

 

 

108.0

 

Fioptics Units Passed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units Passed FTTP *

 

 

494.8

 

 

 

489.6

 

 

 

486.6

 

 

 

484.8

 

 

 

482.0

 

Units Passed FTTN *

 

 

138.0

 

 

 

138.6

 

 

 

138.6

 

 

 

138.6