Business Segment Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Business Segment Information

15.    Business Segment Information

For the Successor and Predecessor periods in 2021 and the years ended December 31, 2020, and 2019, we operated two business segments:  Network, previously referred to as Entertainment and Communications, and IT Services and Hardware.

In July 2018, the Company acquired Hawaiian Telcom. Based on the nature of the products and services offered, financial results are presented in either the Network segment or the IT Services and Hardware segment.

The Network segment provides products and services that can be categorized as either Fioptics in Cincinnati or Consumer/SMB Fiber in Hawaii (collectively, "Consumer/SMB Fiber"), Enterprise Fiber or Legacy. Cincinnati Bell Telephone Company LLC ("CBT"), a subsidiary of the Company, is the incumbent local exchange carrier ("ILEC") for a geography that covers a radius of approximately 25 miles around Cincinnati, Ohio, and includes parts of northern Kentucky and southeastern Indiana. Voice and data services in the Enterprise Fiber and Legacy categories that are delivered beyond the Company's ILEC territory, particularly in Dayton and Mason, Ohio, are provided through the operations of Cincinnati Bell Extended Territories LLC ("CBET"), a subsidiary of CBT. On July 2, 2018, the Company acquired Hawaiian Telcom. Hawaiian Telcom is the ILEC for the State of Hawaii and the largest full service provider of communications services and products in the state. Capital expenditures in the Network segment are incurred to expand our Consumer/SMB Fiber product suite, upgrade and increase capacity for our internet and data networks, and to maintain our wireline network.

The IT Services and Hardware segment provides end-to-end solutions from consulting to implementation to ongoing optimization to customers in the U.S., Canada and the U.K. These solutions include Cloud, Communications and Consulting services along with the sale and maintenance of major branded hardware reported as Infrastructure Solutions. In July 2018, the Company completed the acquisition of Hawaiian Telcom, and products such as UCaaS, hardware and enterprise long distance delivered by Hawaiian Telcom are included in the IT Services and Hardware segment.

Total assets for the Company increased $1,530.2 million as of December 31, 2021 as compared to December 31, 2020. Network and IT Services and Hardware assets increased $1,145.9 million and $364.8 million, respectively, primarily due to increases in property, plant and equipment and intangible assets due to recording amounts at fair value as a result of the Merger. In addition, Network assets increased due to goodwill recorded as a result of the Merger. Corporate assets increased $19.5 million primarily due to higher receivables resulting from increased sales partially offset by decrease to deferred tax assets. Deferred tax assets and liabilities on the Consolidated Balance Sheets totaled $5.3 million and $139.6 million as of December 31, 2021, respectively. Deferred tax assets and liabilities on the Consolidated Balance Sheets totaled $82.5 million and $10.9 million as of December 31, 2020, respectively. The increase to net deferred tax liabilities is a result of preliminary adjustments on the Merger Date due to the change in fair value of certain assets and liabilities. The most significant adjustments are driven by the increase in value of the Company’s intangibles (other than goodwill) and increase in value related to fixed assets. These were offset, in part, by deferred tax assets related to the initial fair value adjustments which included note issuance and other debt-related costs, costs of acquisition and fulfillment costs that were deferred in accordance with ASC 606, and other deferred tax assets.

Our business segment information is as follows:

	Successor			Predecessor
	September 8, 2021 to			January 1, 2021 to			Year Ended			Year Ended
(dollars in millions)	December 31, 2021			September 7, 2021			December 31, 2020			December 31, 2019
Revenue
Network	$	303.8		$	664.2		$	969.6		$	995.7
IT Services and Hardware		259.3			492.4			616.6			567.4
Intersegment		(8.7	)		(17.9	)		(26.4	)		(26.4	)
Total revenue	$	554.4		$	1,138.7		$	1,559.8		$	1,536.7
Intersegment revenue
Network	$	6.5		$	13.1		$	19.7		$	21.6
IT Services and Hardware		2.2			4.8			6.7			4.8
Total intersegment revenue	$	8.7		$	17.9		$	26.4		$	26.4
Operating (loss) income
Network	$	(6.3	)	$	78.3		$	99.7		$	105.5
IT Services and Hardware		4.0			25.2			24.6			2.6
Corporate		(6.8	)		(75.8	)		(58.3	)		(35.0	)
Total operating (loss) income	$	(9.1	)	$	27.7		$	66.0		$	73.1
Expenditures for long-lived assets*
Network	$	114.8		$	199.8		$	206.4		$	201.3
IT Services and Hardware		13.9			15.9			23.5			22.4
Corporate		1,620.7			—			0.1			0.1
Total expenditures for long-lived assets	$	1,749.4		$	215.7		$	230.0		$	223.8
Depreciation and amortization
Network	$	113.0		$	166.9		$	252.7		$	255.8
IT Services and Hardware		31.4			27.9			40.6			48.9
Corporate		0.2			0.1			0.1			0.2
Total depreciation and amortization	$	144.6		$	194.9		$	293.4		$	304.9

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

	Successor		Predecessor
(dollars in millions)	December 31, 2021		December 31, 2020
Assets
Network	$	2,949.2	$	1,803.3
IT Services and Hardware		842.0		477.2
Corporate and eliminations		407.6		388.1
Total assets	$	4,198.8	$	2,668.6