Ohio | 001-8519 | 31-1056105 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(c) | Exhibit No. | Description | ||||
Exhibit 99.1 | Press release dated May 7, 2015 | |||||
Exhibit 99.2 | Presentation made during the Cincinnati Bell first quarter 2015 earnings conference call on May 7, 2015 |
CINCINNATI BELL INC. | ||||
Date: | May 7, 2015 | By: | /s/ Christopher J. Wilson | |
Christopher J. Wilson | ||||
Vice President, General Counsel and Secretary |
Exhibit No. | Description | ||||
99.1 | Press release dated May 7, 2015 | ||||
99.2 | Presentation made during the Cincinnati Bell first quarter 2015 earnings conference call on May 7, 2015 |
• | Year-over-year consolidated revenue growth of 4 percent |
• | Revenue from strategic products totaled $125 million, up 22 percent compared to prior year |
• | Fioptics revenue totaled $42 million, up 36 percent from a year ago |
• | Strong first quarter Adjusted EBITDA1 of $79 million |
• | Net income of $49 million resulted in diluted earnings per share of $0.22 |
• | Announced the agreement to sell 14 million CyrusOne partnership units |
• | Entertainment and Communications revenue for the quarter totaled $188 million, up $4 million compared to the prior year. |
◦ | Fioptics revenue for the quarter was $42 million, up 36 percent from the prior year. |
◦ | Strategic revenue for business customers totaled $43 million (including $2 million of Fioptics revenue) for the quarter, up 10 percent compared to the prior year. |
• | Operating income and Adjusted EBITDA for the quarter totaled $41 million and $75 million, respectively. |
• | Adjusted EBITDA margin4 for the quarter was 40 percent. |
◦ | Decrease from prior year due to $3 million of costs absorbed from shutting down wireless operations and increased costs associated with accelerating Fioptics expansion. |
• | Fioptics internet subscribers totaled 123,100, adding a record 9,400 new Fioptics high-speed internet subscribers in the quarter. |
• | Video subscribers totaled 95,800 at the end of the first quarter, an increase of 18,300 subscribers compared to a year ago. |
• | Fioptics is now available to 357,600 addresses, or approximately 44 percent of Greater Cincinnati, passing 22,600 new addresses during the first quarter of 2015. |
• | Revenue of $108 million for the quarter was up $6 million compared to prior year. |
◦ | Strategic managed and professional services revenue was $41 million in the quarter, up 24 percent compared to the prior year. |
◦ | Hardware revenue was $65 million for the quarter, compared to $68 million in the first quarter of 2014. |
• | Operating income totaled $1 million for the quarter and Adjusted EBITDA was $8 million. |
• | Sold 14 million partnership units in April for cash proceeds totaling $426 million - remaining 22 percent ownership of CyrusOne valued at approximately $450 million. |
Category | 2015 Guidance |
Revenue | $1.1 billion |
Adjusted EBITDA | $297 million* |
Cincinnati Bell Inc. | |||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(Dollars in millions, except per share amounts) | |||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, | Change | ||||||||||||||||
2015 | 2014 | $ | % | ||||||||||||||
Revenue | $ | 292.9 | $ | 282.2 | $ | 10.7 | 4% | ||||||||||
Costs and expenses | |||||||||||||||||
Cost of services and products | 166.2 | 150.7 | 15.5 | 10% | |||||||||||||
Selling, general and administrative | 52.2 | 49.3 | 2.9 | 6% | |||||||||||||
Depreciation and amortization | 32.6 | 31.1 | 1.5 | 5% | |||||||||||||
Restructuring charges | 3.4 | — | 3.4 | n/m | |||||||||||||
Loss on sale or disposal of assets, net | 1.4 | — | 1.4 | n/m | |||||||||||||
Transaction costs | — | 0.7 | (0.7 | ) | n/m | ||||||||||||
Operating income | 37.1 | 50.4 | (13.3 | ) | (26)% | ||||||||||||
Interest expense | 32.7 | 38.8 | (6.1 | ) | (16)% | ||||||||||||
Loss (income) from CyrusOne equity method investment | 3.1 | (0.5 | ) | 3.6 | n/m | ||||||||||||
Other expense (income), net | 0.4 | (0.3 | ) | 0.7 | n/m | ||||||||||||
Income from continuing operations before income taxes | 0.9 | 12.4 | (11.5 | ) | (93)% | ||||||||||||
Income tax expense | 0.6 | 6.5 | (5.9 | ) | (91)% | ||||||||||||
Income from continuing operations | 0.3 | 5.9 | (5.6 | ) | (95)% | ||||||||||||
Income from discontinued operations (net of tax) | 48.9 | 1.1 | 47.8 | n/m | |||||||||||||
Net income | 49.2 | 7.0 | 42.2 | n/m | |||||||||||||
Preferred stock dividends | 2.6 | 2.6 | — | 0% | |||||||||||||
Net income applicable to common shareowners | $ | 46.6 | $ | 4.4 | $ | 42.2 | n/m | ||||||||||
Basic and diluted net earnings (loss) per common share: | |||||||||||||||||
Earnings (loss) from continuing operations * | (0.01 | ) | 0.02 | ||||||||||||||
Earnings from discontinued operations | 0.23 | — | |||||||||||||||
Basic and diluted net earnings per common share | 0.22 | 0.02 | |||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||
(in millions) | |||||||||||||||||
- Basic | 209.2 | 208.0 | |||||||||||||||
- Diluted | 209.2 | 209.0 | |||||||||||||||
* | Includes the effect of preferred stock dividends when calculating basic and diluted earnings (loss) per common share. |
Cincinnati Bell Inc. | ||||||||||||||||
Income Statements by Segment | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
2015 | 2014 | $ | % | |||||||||||||
Entertainment and Communications* | ||||||||||||||||
Revenue | ||||||||||||||||
Data | $ | 87.3 | $ | 83.0 | $ | 4.3 | 5% | |||||||||
Voice - local service | 47.4 | 53.1 | (5.7 | ) | (11)% | |||||||||||
Long distance and VoIP | 27.2 | 26.9 | 0.3 | 1% | ||||||||||||
Entertainment | 21.5 | 17.0 | 4.5 | 26% | ||||||||||||
Other | 4.7 | 3.6 | 1.1 | 31% | ||||||||||||
Total revenue | 188.1 | 183.6 | 4.5 | 2% | ||||||||||||
Operating costs and expenses | ||||||||||||||||
Cost of services and products | 81.5 | 71.6 | 9.9 | 14% | ||||||||||||
Selling, general and administrative | 35.0 | 32.2 | 2.8 | 9% | ||||||||||||
Depreciation and amortization | 29.5 | 28.1 | 1.4 | 5% | ||||||||||||
Other** | 0.8 | (0.1 | ) | 0.9 | n/m | |||||||||||
Total operating costs and expenses | 146.8 | 131.8 | 15.0 | 11% | ||||||||||||
Operating income | $ | 41.3 | $ | 51.8 | $ | (10.5 | ) | (20)% | ||||||||
IT Services and Hardware | ||||||||||||||||
Revenue | ||||||||||||||||
Telecom and IT equipment distribution | $ | 65.3 | $ | 67.9 | $ | (2.6 | ) | (4)% | ||||||||
Managed and professional services | 42.3 | 34.0 | 8.3 | 24% | ||||||||||||
Total revenue | 107.6 | 101.9 | 5.7 | 6% | ||||||||||||
Operating costs and expenses | ||||||||||||||||
Cost of services and products | 86.4 | 81.7 | 4.7 | 6% | ||||||||||||
Selling, general and administrative | 13.4 | 12.0 | 1.4 | 12% | ||||||||||||
Depreciation and amortization | 3.1 | 2.8 | 0.3 | 11% | ||||||||||||
Other** | 3.6 | — | 3.6 | n/m | ||||||||||||
Total operating costs and expenses | 106.5 | 96.5 | 10.0 | 10% | ||||||||||||
Operating income | $ | 1.1 | $ | 5.4 | $ | (4.3 | ) | (80)% | ||||||||
*Former "Wireline" segment renamed "Entertainment and Communications." | ||||||||||||||||
**Other includes restructuring charges and loss (gain) on sale or disposal of assets, net. |
Cincinnati Bell Inc. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
2015 | 2014 | $ | % | |||||||||||||
Revenue | ||||||||||||||||
Entertainment and Communications* | $ | 188.1 | $ | 183.6 | $ | 4.5 | 2% | |||||||||
IT Services and Hardware | 107.6 | 101.9 | 5.7 | 6% | ||||||||||||
Eliminations | (2.8 | ) | (3.3 | ) | 0.5 | (15)% | ||||||||||
Total revenue | $ | 292.9 | $ | 282.2 | $ | 10.7 | 4% | |||||||||
Cost of Services and Products | ||||||||||||||||
Entertainment and Communications* | $ | 81.5 | $ | 71.6 | $ | 9.9 | 14% | |||||||||
IT Services and Hardware | 86.4 | 81.7 | 4.7 | 6% | ||||||||||||
Eliminations | (1.7 | ) | (2.6 | ) | 0.9 | (35)% | ||||||||||
Total cost of services and products | $ | 166.2 | $ | 150.7 | $ | 15.5 | 10% | |||||||||
Selling, General and Administrative | ||||||||||||||||
Entertainment and Communications* | $ | 35.0 | $ | 32.2 | $ | 2.8 | 9% | |||||||||
IT Services and Hardware | 13.4 | 12.0 | 1.4 | 12% | ||||||||||||
Corporate and eliminations | 3.8 | 5.1 | (1.3 | ) | (25)% | |||||||||||
Total selling, general and administrative | $ | 52.2 | $ | 49.3 | $ | 2.9 | 6% | |||||||||
Depreciation and Amortization | ||||||||||||||||
Entertainment and Communications* | $ | 29.5 | $ | 28.1 | $ | 1.4 | 5% | |||||||||
IT Services and Hardware | 3.1 | 2.8 | 0.3 | 11% | ||||||||||||
Corporate | — | 0.2 | (0.2 | ) | n/m | |||||||||||
Total depreciation and amortization | $ | 32.6 | $ | 31.1 | $ | 1.5 | 5% | |||||||||
Other** | ||||||||||||||||
Entertainment and Communications* | $ | 0.8 | $ | (0.1 | ) | $ | 0.9 | n/m | ||||||||
IT Services and Hardware | 3.6 | — | 3.6 | n/m | ||||||||||||
Corporate | 0.4 | 0.8 | (0.4 | ) | (50)% | |||||||||||
Total other | $ | 4.8 | $ | 0.7 | $ | 4.1 | n/m | |||||||||
Operating Income | ||||||||||||||||
Entertainment and Communications* | $ | 41.3 | $ | 51.8 | $ | (10.5 | ) | (20)% | ||||||||
IT Services and Hardware | 1.1 | 5.4 | (4.3 | ) | (80)% | |||||||||||
Corporate | (5.3 | ) | (6.8 | ) | 1.5 | (22)% | ||||||||||
Total operating income | $ | 37.1 | $ | 50.4 | $ | (13.3 | ) | (26)% | ||||||||
*Former "Wireline" segment renamed "Entertainment and Communications." | ||||||||||||||||
** Other includes restructuring charges, (gain) loss on sale or disposal of assets, net and transaction costs. |
Cincinnati Bell Inc. | ||||||||||||||||
Segment Metric Information | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | ||||||||||||
Local access lines | ||||||||||||||||
Residential | 230.5 | 238.3 | 246.8 | 255.7 | 263.5 | |||||||||||
Business | 237.7 | 242.3 | 246.0 | 250.1 | 255.3 | |||||||||||
468.2 | 480.6 | 492.8 | 505.8 | 518.8 | ||||||||||||
Long distance lines | 355.5 | 362.8 | 371.4 | 378.6 | 386.9 | |||||||||||
Internet subscribers | ||||||||||||||||
DSL | 149.6 | 156.2 | 163.8 | 172.0 | 178.4 | |||||||||||
Fioptics | 123.1 | 113.7 | 106.7 | 98.3 | 91.6 | |||||||||||
272.7 | 269.9 | 270.5 | 270.3 | 270.0 | ||||||||||||
Fioptics video subscribers | 95.8 | 91.4 | 87.8 | 82.5 | 77.5 | |||||||||||
Fioptics units passed | 357.6 | 335.0 | 323.0 | 307.1 | 288.0 | |||||||||||
Cincinnati Bell Inc. | |||||||||
Net Debt and Common Shares Outstanding | |||||||||
(Unaudited) | |||||||||
(Dollars and shares in millions) | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Corporate Credit Agreement | $ | — | $ | — | |||||
Receivables Facility | 26.7 | 19.2 | |||||||
8 3/4% Senior Subordinated Notes due 2018* | 300.0 | 300.0 | |||||||
Corporate Credit Agreement - Tranche B Term Loan | 531.9 | 533.2 | |||||||
8 3/8% Senior Notes due 2020 | 661.2 | 661.2 | |||||||
7 1/4% Senior Notes due 2023 | 40.0 | 40.0 | |||||||
Various Cincinnati Bell Telephone notes | 134.5 | 134.5 | |||||||
Capital leases and other debt | 70.1 | 16.1 | |||||||
Net unamortized discount | (3.0 | ) | (3.2 | ) | |||||
Total debt | 1,761.4 | 1,701.0 | |||||||
Less: Cash and cash equivalents** | (13.4 | ) | (57.9 | ) | |||||
Net debt (as defined by the company) | $ | 1,748.0 | $ | 1,643.1 | |||||
Corporate Credit Agreement availability*** | $ | 150.0 | $ | 150.0 | |||||
Common shares outstanding | 209.6 | 209.3 | |||||||
*On April 7, 2015, the Company notified its trustee of its election to redeem $300.0 million of the outstanding 8 ¾% Senior Subordinated Notes due 2018, at a redemption rate of 102.188% on May 7, 2015. | |||||||||
**On April 7, 2015, the Company consummated the sale of 14.3 million operating partnership units of CyrusOne LP to CyrusOne, Inc. at a price of $29.88 per unit, for cash proceeds of $426.0 million. | |||||||||
***On April 6, 2015, the Company entered into an Incremental Assumption Agreement to the Company's existing Corporate Credit Agreement. Effective with the consummation of the sale of 14.3 million CyrusOne operating partnership units, the aggregate available borrowings on the Corporate Credit Agreement's revolving credit facility increased to $175.0 million for the remainder of the term. |
Cincinnati Bell Inc. | ||||||||||||||||||
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||
Entertainment and Communications* | IT Services & Hardware | Corporate | Total Company | |||||||||||||||
Net Income (GAAP) | $ | 49.2 | ||||||||||||||||
Less: | ||||||||||||||||||
Income from discontinued operations (net of tax) | 48.9 | |||||||||||||||||
Income from continuing operations (GAAP) | $ | 0.3 | ||||||||||||||||
Add: | ||||||||||||||||||
Income tax expense | 0.6 | |||||||||||||||||
Interest expense | 32.7 | |||||||||||||||||
Loss from CyrusOne equity method investment | 3.1 | |||||||||||||||||
Other expense, net | 0.4 | |||||||||||||||||
Operating Income (loss) (GAAP) | $ | 41.3 | $ | 1.1 | $ | (5.3 | ) | $ | 37.1 | |||||||||
Add: | ||||||||||||||||||
Depreciation and amortization | 29.5 | 3.1 | — | 32.6 | ||||||||||||||
Restructuring charges | 0.8 | 2.2 | 0.4 | 3.4 | ||||||||||||||
Loss on sale or disposal of assets | — | 1.4 | — | 1.4 | ||||||||||||||
Pension and other retirement plan expenses | 3.8 | — | 0.5 | 4.3 | ||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 75.4 | $ | 7.8 | $ | (4.4 | ) | $ | 78.8 | |||||||||
Adjusted EBITDA Margin | 40 | % | 7 | % | — | 27 | % | |||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||
Entertainment and Communications* | IT Services & Hardware | Corporate | Total Company | |||||||||||||||
Net Income (GAAP) | $ | 7.0 | ||||||||||||||||
Less: | ||||||||||||||||||
Income from discontinued operations (net of tax) | 1.1 | |||||||||||||||||
Income from continuing operations (GAAP) | $ | 5.9 | ||||||||||||||||
Add: | ||||||||||||||||||
Income tax expense | 6.5 | |||||||||||||||||
Interest expense | 38.8 | |||||||||||||||||
Income from CyrusOne equity method investment | (0.5 | ) | ||||||||||||||||
Other income, net | (0.3 | ) | ||||||||||||||||
Operating Income (loss) (GAAP) | $ | 51.8 | $ | 5.4 | $ | (6.8 | ) | $ | 50.4 | |||||||||
Add: | ||||||||||||||||||
Depreciation and amortization | 28.1 | 2.8 | 0.2 | 31.1 | ||||||||||||||
(Gain) loss on sale or disposal of assets | (0.1 | ) | — | 0.1 | — | |||||||||||||
Transaction costs | — | — | 0.7 | 0.7 | ||||||||||||||
Pension and other retirement plan expenses | 4.5 | — | 0.4 | 4.9 | ||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 84.3 | $ | 8.2 | $ | (5.4 | ) | $ | 87.1 | |||||||||
Adjusted EBITDA Margin | 46 | % | 8 | % | — | 31 | % | |||||||||||
Year-over-year dollar change in Adjusted EBITDA | $ | (8.9 | ) | $ | (0.4 | ) | $ | 1.0 | $ | (8.3 | ) | |||||||
Year-over-year percentage change in Adjusted EBITDA | (11 | )% | (5 | )% | (19 | )% | (10 | )% | ||||||||||
*Former "Wireline" segment renamed "Entertainment and Communications." |
Cincinnati Bell Inc. | |||||||||
Consolidated Statements of Cash Flows | |||||||||
(Unaudited) | |||||||||
(Dollars in millions) | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Cash provided by operating activities | $ | 6.3 | $ | 37.8 | |||||
Capital expenditures | (57.9 | ) | (34.3 | ) | |||||
Dividends received from CyrusOne | 6.0 | 7.1 | |||||||
Proceeds from sale of assets | — | 1.9 | |||||||
Other, net | (0.1 | ) | — | ||||||
Cash used in investing activities | (52.0 | ) | (25.3 | ) | |||||
Net increase (decrease) in corporate credit and receivables facilities with initial maturities less than 90 days | 7.5 | (4.1 | ) | ||||||
Repayment of debt | (3.3 | ) | (5.2 | ) | |||||
Dividends paid on preferred stock | (2.6 | ) | (2.6 | ) | |||||
Proceeds from exercise of options and warrants | — | 0.6 | |||||||
Other, net | (0.4 | ) | (1.6 | ) | |||||
Cash provided by (used in) financing activities | 1.2 | (12.9 | ) | ||||||
Net decrease in cash and cash equivalents | (44.5 | ) | (0.4 | ) | |||||
Cash and cash equivalents at beginning of period | 57.9 | 4.6 | |||||||
Cash and cash equivalents at end of period | $ | 13.4 | $ | 4.2 | |||||
Reconciliation of GAAP Cash Flow to | |||||||||
Free Cash Flow (as defined by the company) | |||||||||
Net decrease in cash and cash equivalents | $ | (44.5 | ) | $ | (0.4 | ) | |||
Less adjustments: | |||||||||
Net increase (decrease) in corporate credit and receivables facilities with initial maturities less than 90 days | (7.5 | ) | 4.1 | ||||||
Repayment of debt | 3.3 | 5.2 | |||||||
Discontinued operations* | 13.0 | (4.2 | ) | ||||||
Free cash flow | (35.7 | ) | 4.7 | ||||||
Income tax payments (refunds) | $ | — | $ | (0.9 | ) | ||||
*For the quarter ended March 31, 2015 and 2014, our wireless business generated free cash flow of ($13.0) million and $4.2 million, respectively. Wireless operations are now reported as discontinued operations within the consolidated financial statements. |
Cincinnati Bell Inc. | ||||
Free Cash Flow (as defined by the company) | ||||
(Unaudited) | ||||
(Dollars in millions) | ||||
Free Cash Flow for the three months ended March 31, 2014 | $ | 4.7 | ||
Decrease in Adjusted EBITDA | (8.3 | ) | ||
Increase in capital expenditures from continuing operations | (29.2 | ) | ||
Decrease in interest payments | 15.1 | |||
Decrease in pension and postretirement payments and contributions | 3.2 | |||
Change in working capital and other | (21.2 | ) | ||
Free Cash Flow for the three months ended March 31, 2015 | $ | (35.7 | ) | |
Cincinnati Bell Inc. | ||||||||||||||||||||
Capital Expenditures | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | ||||||||||||||||
Entertainment and Communications* | $ | 54.0 | $ | 57.6 | $ | 41.8 | $ | 38.1 | $ | 26.2 | ||||||||||
IT Services and Hardware | 3.9 | 3.4 | 3.5 | 2.5 | 2.5 | |||||||||||||||
Corporate | — | 0.2 | — | — | — | |||||||||||||||
Total capital expenditures from continuing operations | $ | 57.9 | $ | 61.2 | $ | 45.3 | $ | 40.6 | $ | 28.7 | ||||||||||
Discontinued operations | — | — | 0.3 | 0.6 | 5.6 | |||||||||||||||
Total capital expenditures | $ | 57.9 | $ | 61.2 | $ | 45.6 | $ | 41.2 | $ | 34.3 | ||||||||||
*Former "Wireline" segment renamed "Entertainment and Communications." |
Cincinnati Bell Inc. | ||||||||||||||
Normalized Statements of Operations (Non-GAAP) - Reconciliation to Reported Results | ||||||||||||||
(Unaudited) | ||||||||||||||
(Dollars in millions, except per share amounts) | ||||||||||||||
Three | ||||||||||||||
Three | Months Ended | |||||||||||||
Months Ended | March 31, 2015 | |||||||||||||
March 31, 2015 | Before Special Items | |||||||||||||
(GAAP) | Special Items | (Non-GAAP) | ||||||||||||
Revenue | $ | 292.9 | $ | — | $ | 292.9 | ||||||||
Costs and expenses | ||||||||||||||
Cost of services and products | 166.2 | — | 166.2 | |||||||||||
Selling, general and administrative | 52.2 | — | 52.2 | |||||||||||
Depreciation and amortization | 32.6 | — | 32.6 | |||||||||||
Restructuring charges | 3.4 | (3.4 | ) | [A] | — | |||||||||
Loss on sale or disposal of assets, net | 1.4 | (1.4 | ) | [B] | — | |||||||||
Operating income | 37.1 | 4.8 | 41.9 | |||||||||||
Interest expense | 32.7 | — | 32.7 | |||||||||||
Loss from CyrusOne equity method investment | 3.1 | — | 3.1 | |||||||||||
Other expense, net | 0.4 | — | 0.4 | |||||||||||
Income from continuing operations before income taxes | 0.9 | 4.8 | 5.7 | |||||||||||
Income tax expense | 0.6 | 1.9 | 2.5 | |||||||||||
Income from continuing operations | 0.3 | 2.9 | 3.2 | |||||||||||
Income from discontinued operations (net of tax) | 48.9 | (48.9 | ) | — | ||||||||||
Net income | 49.2 | (46.0 | ) | 3.2 | ||||||||||
Preferred stock dividends | 2.6 | — | 2.6 | |||||||||||
Net income applicable to common shareowners | $ | 46.6 | $ | (46.0 | ) | $ | 0.6 | |||||||
Weighted average diluted common shares | 209.2 | 209.2 | 210.0 | |||||||||||
Diluted earnings per common share* | $ | 0.22 | $ | (0.22 | ) | $ | — | |||||||
Normalized results have been adjusted for the following (pretax adjustments are tax effected at 40%): | ||||||||||||||
A | Restructuring charges consist of employee severance and project costs to identify opportunities to further integrate the business markets within our Entertainment and Communications segment and IT Services and Hardware segment. | |||||||||||||
B | Loss is attributable to the sale of assets associated with discontinuing our cyber-security product offering. | |||||||||||||
* | Diluted earnings per common share has been calculated independently for the results above. Therefore, the sum of the per share amounts will not necessarily equal the per share results for the Before Special Items (Non-GAAP) results. |
Cincinnati Bell Inc. | ||||||||||||||
Normalized Statements of Operations (Non-GAAP) - Reconciliation to Reported Results | ||||||||||||||
(Unaudited) | ||||||||||||||
(Dollars in millions, except per share amounts) | ||||||||||||||
Three | ||||||||||||||
Three | Months Ended | |||||||||||||
Months Ended | March 31, 2014 | |||||||||||||
March 31, 2014 | Before Special Items | |||||||||||||
(GAAP) | Special Items | (Non-GAAP) | ||||||||||||
Revenue | $ | 282.2 | $ | — | $ | 282.2 | ||||||||
Costs and expenses | ||||||||||||||
Cost of services and products | 150.7 | — | 150.7 | |||||||||||
Selling, general and administrative | 49.3 | — | 49.3 | |||||||||||
Depreciation and amortization | 31.1 | — | 31.1 | |||||||||||
Transaction costs | 0.7 | (0.7 | ) | [A] | — | |||||||||
Operating income | 50.4 | 0.7 | 51.1 | |||||||||||
Interest expense | 38.8 | — | 38.8 | |||||||||||
Income from CyrusOne equity method investment | (0.5 | ) | — | (0.5 | ) | |||||||||
Other income, net | (0.3 | ) | — | (0.3 | ) | |||||||||
Income from continuing operations before income taxes | 12.4 | 0.7 | 13.1 | |||||||||||
Income tax expense | 6.5 | 0.3 | 6.8 | |||||||||||
Income from continuing operations | 5.9 | 0.4 | 6.3 | |||||||||||
Income from discontinued operations (net of tax) | 1.1 | (1.1 | ) | — | ||||||||||
Net income | 7.0 | (0.7 | ) | 6.3 | ||||||||||
Preferred stock dividends | 2.6 | — | 2.6 | |||||||||||
Net income applicable to common shareowners | $ | 4.4 | $ | (0.7 | ) | $ | 3.7 | |||||||
Weighted average diluted common shares | 209.0 | 209.0 | 209.0 | |||||||||||
Diluted earnings per common share* | $ | 0.02 | $ | — | $ | 0.02 | ||||||||
Normalized results have been adjusted for the following (pretax adjustments are tax effected at 40%): | ||||||||||||||
A | Transaction costs relate to expenses incurred by the Corporate segment for the agreement to sell our wireless spectrum licenses and certain other assets. | |||||||||||||
* | Diluted earnings per common share has been calculated independently for the results above. Therefore, the sum of the per share amounts will not necessarily equal the per share results for the Before Special Items (Non-GAAP) results. |
Cincinnati Bell Inc. | |||||||||
Reconciliation of Operating Income (GAAP) Guidance to Adjusted EBITDA (Non-GAAP) Guidance | |||||||||
(Unaudited) | |||||||||
(Dollars in millions) | |||||||||
2015 Operating Income (GAAP) Guidance | $ | 132 | |||||||
Add: | |||||||||
Depreciation and amortization | 145 | ||||||||
Restructuring | 5 | ||||||||
Pension and other retirement plan expenses | 15 | ||||||||
2015 Adjusted EBITDA (Non-GAAP) Guidance | $ | 297 | * | ||||||
* Plus or minus 2 percent |