Discontinued Operations

12 Months Ended

Dec. 31, 2022

Discontinued Operations

Discontinued Operations

18. Discontinued Operations

Sale of Five Service Areas

On June 30, 2021, WOW entered into two separate asset sales with two different buyers. On September 1, 2021, WOW completed the sale of its Cleveland and Columbus, Ohio markets and on November 1, 2021, WOW completed the sale of its Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets. The Company presented these markets as discontinued operations in the consolidated statements of operations and excluded from continuing operations for all periods in which such discontinued operations are presented. Results of discontinued operations include all revenues and direct expenses of these markets. General corporate overhead is not allocated to discontinued operations.

The following table presents information regarding certain components of income from discontinued operations:

	Year ended December 31,
	2021		2020
	(in millions)
Revenue	$	308.3	$	418.2
Costs and expenses:
Operating (excluding depreciation and amortization)		112.0		165.0
Selling, general and administrative		11.8		12.3
Depreciation and amortization		41.0		79.6
		164.8		256.9
Income from operations		143.5		161.3
Other income (expense):
Interest income (expense)		0.4		(0.7)
Gain on sale of assets, net		1,001.8		—
Other income, net		0.1		0.5
Income from discontinued operations before provision for income tax		1,145.8		161.1
Income tax expense		(306.7)		(38.4)
Income from discontinued operations	$	839.1	$	122.7

The following table presents revenue by service offering from discontinued operations:

	Year ended December 31,
	2021		2020
	(in millions)
Residential subscription
HSD	$	150.1	$	185.6
Video		103.2		157.4
Telephony		11.5		16.9
Total Residential subscription	$	264.8	$	359.9
Business subscription
HSD	$	17.8	$	22.6
Video		2.7		3.6
Telephony		8.4		11.9
Total business subscription	$	28.9	$	38.1
Total subscription services revenue		293.7		398.0
Other business services revenue		1.6		1.9
Other revenue		13.0		18.3
Total revenue	$	308.3	$	418.2

The following table presents specified items of cash flow and significant non-cash items of discontinued operations:

	Year ended December 31,
	2021		2020
	(in millions)
Specified items of cash flow:
Capital expenditures	$	45.4	$	62.7
Non-cash operating activities:
Operating lease additions	$	0.7	$	0.7
Non-cash investing activities:
Capital expenditure accounts payable and accruals	$	—	$	2.1

In connection with the asset sales, the Company entered into two separate transition services agreements under which WOW will continue to provide certain services to each of the buyers. Under the transition services agreements, the buyers may elect a variety of services, including but not limited to: information technology, network, business support services, etc. The term of the transition services agreements are for 12 months following each closing date, respectively, with two optional three month extensions. As of December 31, 2022, the transition services agreements with both buyers were still in effect for certain limited services. None of the costs related to the employees, processes or systems utilized to provide the services under the transition services agreements were allocated to discontinued operations.

Income earned under these agreements is presented in other income, net in the consolidated statement of operations and associated receivables are presented in accounts receivable – other, net in the consolidated balance sheet. The Company recognized $15.6 million and $8.5 million of income related to the transition service agreements for the years ended December 31, 2022 and 2021, respectively.