On September 7, 2021, pursuant to the Merger Agreement and in accordance with the applicable provisions of the OGCL, Parent completed the acquisition of Cincinnati Bell in an all cash transaction valued at approximately $3.1 billion, including assumption of debt of $1,357.1 million. Upon the Effective Time, the separate existence of Merger Sub ceased and the Company survived the Merger as a wholly owned subsidiary of Parent.

Pursuant to the Merger Agreement, each of Cincinnati Bell’s issued and outstanding Common Shares was converted into the right to receive $15.50 per share in cash, without interest. Effective September 7, 2021, trading of the Company’s Common Shares was suspended on the New York Stock Exchange (“NYSE”) and the Common Shares were subsequently delisted from the NYSE. On September 22, 2021, the Company redeemed Depositary Shares simultaneously with the redemption of the 6 3/4% Preferred Shares, at a redemption price of $50 per Depositary Share (equivalent to $1,000 per 6 3/4% Preferred Share), and the Depositary Shares were subsequently delisted from the NYSE.

The Company accounted for this transaction as a business combination in accordance with the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values, using primarily Level 3 inputs, as described in Note 8, as of the Merger Date. Transaction costs of the acquirer are not included as a component of consideration transferred but are accounted for as expenses in the period in which such costs are incurred, or, if related to the issuance of debt, capitalized as debt issuance costs. Acquisition-related transaction costs incurred as part of the Merger, primarily included advisory, legal and accounting fees.

The valuation of the assets acquired and liabilities assumed was based on estimated fair values at the Merger Date. The preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed reflect various preliminary fair value estimates and analyses, including preliminary work performed by third-party valuation specialists, which are subject to change within the measurement period as valuations are finalized. The determination of the final purchase price allocation to specific assets acquired and liabilities assumed is incomplete at September 30, 2021. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair values of property, plant and equipment, the valuation of intangible assets acquired, income and non-income based taxes and goodwill. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired as of the Merger Date during the measurement period.

Measurement period adjustments will be applied retrospectively to the Merger Date. However, given the circumstances of this acquisition which closed during the third quarter of 2021, as well as the size and complexity of the transaction, the entire purchase price allocation disclosed herein is considered provisional at this time and subject to adjustment to reflect new information obtained about factors and circumstances that existed as of the Closing Date that if known would have affected the measurement of the amounts recognized as of that date, while the measurement period remains open. We have not finalized the allocation of the purchase price as it requires extensive use of accounting estimates and valuation methodologies in the determination of such fair values. Any subsequent changes in the estimated fair values assumed upon the finalization of more detailed analysis within the measurement period will change the allocation of the purchase price and will be adjusted during the period in which the amounts are determined. The allocation of goodwill to our Entertainment and Communications reporting unit and IT Services and Hardware reporting unit is preliminary as of the date of this filing.

Based on fair value estimates, the purchase price has been allocated on a preliminary basis to individual assets acquired and liabilities assumed as follows:

(dollars in millions)	Cincinnati Bell Inc.
Assets acquired
Cash	$	11.2
Receivables		318.5
Inventory, materials and supplies		56.4
Prepaid expenses		5.6
Other current assets		40.5
Property, plant and equipment		1,950.7
Operating lease right-of-use assets		42.3
Goodwill		646.3
Intangible assets		969.6
Deferred tax assets		6.9
Other noncurrent assets		20.2
Total assets acquired		4,068.2
Liabilities assumed
Current portion of long-term debt		11.8
Accounts payable		381.1
Unearned revenue and customer deposits		51.2
Accrued taxes		24.6
Accrued interest		19.4
Accrued payroll and benefits		49.3
Other current liabilities		75.0
Long-term debt, less current portion		1,378.0
Operating lease liabilities		38.6
Pension and postretirement benefit obligations		151.6
Pole license agreement obligation		46.7
Deferred income tax liability		148.8
Other noncurrent liabilities		71.4
Total liabilities assumed		2,447.5
Net assets acquired	$	1,620.7

In connection with this acquisition, the Company recorded goodwill attributable to increased access to a diversified customer base, acquired workforce in the United States, Canada, United Kingdom and India with industry expertise and expected synergies. The goodwill related to this acquisition is not deductible for tax purposes.

The Company recorded definite-lived intangible assets related to the customer relationships, trade names and technology and an indefinite-lived intangible asset related to FCC licenses. The preliminary fair value of the most significant identified intangible assets, customer relationships and trade names, were valued using the multi-period excess earnings method and relief from royalty method, under the income approach. The Company applied judgment which involved the use of significant assumptions with respect to revenue growth rates, customer attrition rate, discount rate and terminal growth rate in relation to the customer relationships and royalty rates and discount rate in relation to the trade names. The preliminary fair values of the identifiable intangible assets acquired on the Merger Date were as follows:

(dollars in millions)	Fair Value		Useful Lives
Customer relationships	$	850.0	15 years
Trade names		108.0	3 to 10 years
Technology		5.0	7 years
FCC licenses and spectrum usage rights		6.6	Indefinite
Total identifiable intangible assets	$	969.6

Transaction costs were expensed as incurred and recorded to “Transaction and integration costs” on the Condensed Consolidated Statements of Operations. Cincinnati Bell Inc. incurred cumulative transaction costs associated with the Merger Agreement of $64.4 million recorded in the Predecessor periods, of which $54.6 million was recorded in the Predecessor period of 2021 and $8.7 million was recorded in the nine months ended September 30, 2020. No transaction costs related to the Merger were recorded in the Successor period. Transaction costs of $44.0 million that were paid on the Merger Date were recorded in the Predecessor period and included as an assumed liability. Additionally, $2.9 million of severance associated with a change of control clause in an employee’s contract was recorded in the Predecessor period and is expected to be paid in the fourth quarter of 2021. Transaction-related bonuses of $5.3 million were also recorded in the Predecessor period but due to timing of payroll, were paid prior to the Merger Date.

Additional expenses recorded in the Predecessor period include certain stock-based compensation awards that were accelerated upon the Merger Date, which resulted in a nonrecurring expense of $9.3 million that was recorded to SG&A, and Loss on Extinguishment of Debt of $10.7 million due to the repayment of the Corporate Credit Agreement at the Effective Time. Stock-based compensation was paid on the Merger Date and included in the cash consideration for Cincinnati Bell Inc. stock.

Subsequent to the Merger Date, the Company issued a new Credit Agreement and Term Loan due 2028 for which note issuance costs of $32.0 million were capitalized as a reduction to the outstanding debt balances and a Revolving Credit Facility due 2026 for which note issuance costs of $6.1 million were capitalized to “Other noncurrent assets” on the Condensed Consolidated Balance Sheets.

Prior to entering into the Merger Agreement, the Company previously entered into an Agreement and Plan of Merger, dated December 21, 2019, (as amended from time to time, the “Brookfield Merger Agreement”) with affiliates of the Brookfield Infrastructure Group (“Brookfield”), the infrastructure investment division of Brookfield Asset Management, which was subsequently amended. On March 13, 2020, the Company terminated the Brookfield Merger Agreement and entered into the Merger Agreement. In connection with the termination of the Brookfield Merger Agreement in the first quarter of 2020, the Company paid to an affiliate of Brookfield a termination fee of $24.8 million as required by the terms of the Brookfield Merger Agreement. The termination fee is recorded in “Transaction and integration costs” on the Condensed Consolidated Statements of Operations in the Predecessor period.

On August 31, 2021, the Company acquired substantially all of the operating assets of Paniolo Cable Company, LLC (the “Paniolo Acquisition”), previously held by the bankruptcy estate of Paniolo, which include inter-island submarine and middle-mile terrestrial fiber infrastructure assets in Hawaii as well as central offices and landing stations for the submarine fiber. The Company accounted for the Paniolo Acquisition as an asset acquisition under ASC 805-10-55 “Business Combinations” because the assets acquired from Paniolo 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 acquisition of Paniolo’s assets augments the Company’s existing backbone network and increases the Company’s total submarine and terrestrial fiber footprint by more than 400 miles.

The aggregate purchase price paid upon closing of the Paniolo Acquisition after transactional costs was $52.3 million, consisting of $29.3 million in cash and $23.0 million in committed purchase money financing. As of September 30, 2021 an insignificant amount of transaction costs are recorded in “Accounts Payable” on the Condensed Consolidated Balance Sheets. The assets are recorded as network equipment and buildings in “Property, plant and equipment, net” on the Condensed Consolidated Balance Sheets. As of September 30, 2021, $0.5 million and $22.4 million of the committed purchase money financing was recorded in “Current portion of long-term debt” and “Long-term debt, less current portion,” respectively, on the Condensed Consolidated Balance Sheets. As of December 31, 2020, the Company funded $5.0 million to an escrow account to fund a portion of the purchase price and entered into an agreement with Paniolo to maintain the Paniolo network prior to the close of the acquisition. This escrow amount was classified as restricted cash and recorded in “Other noncurrent assets” on the Condensed Consolidated Balance Sheets as of December 31, 2020.