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 | ||||
Press release dated November 2, 2017 | ||||||
Presentation made during the Cincinnati Bell third quarter 2017 earnings conference call on November 2, 2017 |
CINCINNATI BELL INC. | ||||
Date: | November 2, 2017 | By: | /s/ Christopher J. Wilson | |
Christopher J. Wilson | ||||
Vice President and General Counsel |
Exhibit No. | Description | ||||
99.1 | Press release dated November 2, 2017 | ||||
99.2 | Presentation made during the Cincinnati Bell third quarter 2017 earnings conference call on November 2, 2017 |
• | Increased video and internet subscribers during the quarter |
– | Video subscribers totaled 143,500, up 10,100 year-over-year |
– | Internet subscribers totaled 307,900, up 8,100 year-over-year |
• | Strategic revenue of $168 million, up 3% year-over-year with Fioptics revenue increasing 21% |
• | Entertainment and Communications revenue of $196 million, up 2% year-over-year |
• | Cash provided by operating activities totaled $157 million year-to-date, up $15 million year-over-year |
• | Free cash flows1 totaled $37 million year-to-date, up $78 million compared to the prior year |
• | Completed acquisition of OnX Enterprise Solutions, creating a leading North American IT services provider |
• | Entertainment and Communications revenue of $196 million, up $3 million year-over-year |
• | Fioptics revenue of $79 million, up 21% year-over-year |
• | Strategic business and carrier revenue of $53 million, up 6% year-over-year |
• | Operating income of $25 million, up 18% year-over-year |
• | Adjusted EBITDA of $73 million, up 5% year-over-year |
• | IT Services and Hardware revenue of $96 million, flat sequentially, and down $27 million year-over-year |
– | Strategic revenue of $41 million, down $9 million year-over-year, reflecting cost cutting initiatives by a large customer |
– | Telecom and IT hardware sales of $44 million, down 33% year-over-year |
• | Operating income of $5 million, compared to $8 million in the prior year, reflecting a decline in revenue and increased costs associated with the expansion of the Company's national footprint |
• | Adjusted EBITDA of $8 million, up $2 million sequentially, and down $3 million year-over-year |
Category | 2017 Previous Guidance Provided on 02/15/17 | 2017 Revised Guidance Provided on 11/02/17 |
Revenue | $1.2 billion | $1.35 billion - $1.40 billion |
Adjusted EBITDA | $295 million* | $305 million* |
Cincinnati Bell Inc. | |||||||||||||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
(Dollars in millions, except per share amounts) | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | ||||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | ||||||||||||||||||||||||
Revenue | $ | 289.2 | $ | 312.4 | $ | (23.2 | ) | (7)% | $ | 861.4 | $ | 900.5 | $ | (39.1 | ) | (4)% | |||||||||||||||
Costs and expenses | |||||||||||||||||||||||||||||||
Cost of services and products | 162.6 | 183.8 | (21.2 | ) | (12)% | 482.8 | 517.3 | (34.5 | ) | (7)% | |||||||||||||||||||||
Selling, general and administrative | 54.5 | 55.5 | (1.0 | ) | (2)% | 166.6 | 164.9 | 1.7 | 1% | ||||||||||||||||||||||
Depreciation and amortization | 47.3 | 46.5 | 0.8 | 2% | 140.1 | 134.7 | 5.4 | 4% | |||||||||||||||||||||||
Restructuring and severance related charges | — | — | — | n/m | 29.2 | — | 29.2 | n/m | |||||||||||||||||||||||
Transaction and integration costs | 12.1 | — | 12.1 | n/m | 14.4 | — | 14.4 | n/m | |||||||||||||||||||||||
Other | — | 1.1 | (1.1 | ) | n/m | — | 1.1 | (1.1 | ) | n/m | |||||||||||||||||||||
Operating income | 12.7 | 25.5 | (12.8 | ) | (50)% | 28.3 | 82.5 | (54.2 | ) | (66)% | |||||||||||||||||||||
Interest expense | 18.8 | 17.9 | 0.9 | 5% | 54.9 | 58.1 | (3.2 | ) | (6)% | ||||||||||||||||||||||
Loss on extinguishment of debt, net | — | 11.4 | (11.4 | ) | n/m | — | 14.2 | (14.2 | ) | n/m | |||||||||||||||||||||
Gain on sale of Investment in CyrusOne | — | (33.3 | ) | 33.3 | n/m | (117.7 | ) | (151.9 | ) | 34.2 | (23)% | ||||||||||||||||||||
Other expense (income), net | 4.5 | (0.1 | ) | 4.6 | n/m | 3.5 | (1.2 | ) | 4.7 | n/m | |||||||||||||||||||||
(Loss) income before income taxes | (10.6 | ) | 29.6 | (40.2 | ) | n/m | 87.6 | 163.3 | (75.7 | ) | (46)% | ||||||||||||||||||||
Income tax expense | 0.6 | 10.8 | (10.2 | ) | (94)% | 36.3 | 59.9 | (23.6 | ) | (39)% | |||||||||||||||||||||
Net (loss) income | (11.2 | ) | 18.8 | (30.0 | ) | n/m | 51.3 | 103.4 | (52.1 | ) | (50)% | ||||||||||||||||||||
Preferred stock dividends | 2.6 | 2.6 | — | 0% | 7.8 | 7.8 | — | 0% | |||||||||||||||||||||||
Net (loss) income applicable to common shareowners | $ | (13.8 | ) | $ | 16.2 | $ | (30.0 | ) | n/m | $ | 43.5 | $ | 95.6 | $ | (52.1 | ) | (54)% | ||||||||||||||
Basic net (loss) earnings per common share | $ | (0.33 | ) | $ | 0.39 | $ | 1.03 | $ | 2.28 | ||||||||||||||||||||||
Diluted net (loss) earnings per common share | $ | (0.33 | ) | $ | 0.38 | $ | 1.03 | $ | 2.27 | ||||||||||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||
- Basic | 42.2 | 42.0 | 42.1 | 42.0 | |||||||||||||||||||||||||||
- Diluted | 42.2 | 42.1 | 42.3 | 42.1 |
Cincinnati Bell Inc. | |||||||||||||||||||||||||||||||
Revenues by Segment | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | ||||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | ||||||||||||||||||||||||
Entertainment and Communications | |||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||
Strategic | |||||||||||||||||||||||||||||||
Data | $ | 32.2 | $ | 26.5 | $ | 5.7 | 22% | $ | 93.2 | $ | 75.2 | $ | 18.0 | 24% | |||||||||||||||||
Voice | 6.2 | 5.4 | 0.8 | 15% | 18.2 | 16.0 | 2.2 | 14% | |||||||||||||||||||||||
Video | 37.2 | 31.7 | 5.5 | 17% | 109.1 | 90.6 | 18.5 | 20% | |||||||||||||||||||||||
Services and other | 0.4 | 0.8 | (0.4 | ) | (50)% | 1.2 | 2.6 | (1.4 | ) | (54)% | |||||||||||||||||||||
76.0 | 64.4 | 11.6 | 18% | 221.7 | 184.4 | 37.3 | 20% | ||||||||||||||||||||||||
Legacy | |||||||||||||||||||||||||||||||
Data | 8.4 | 10.4 | (2.0 | ) | (19)% | 27.0 | 34.4 | (7.4 | ) | (22)% | |||||||||||||||||||||
Voice | 16.1 | 18.2 | (2.1 | ) | (12)% | 50.8 | 56.7 | (5.9 | ) | (10)% | |||||||||||||||||||||
Services and other | 0.7 | 1.0 | (0.3 | ) | (30)% | 2.2 | 3.2 | (1.0 | ) | (31)% | |||||||||||||||||||||
25.2 | 29.6 | (4.4 | ) | (15)% | 80.0 | 94.3 | (14.3 | ) | (15)% | ||||||||||||||||||||||
Integration | |||||||||||||||||||||||||||||||
Services and other | 0.2 | 0.9 | (0.7 | ) | (78)% | 0.3 | 3.0 | (2.7 | ) | (90)% | |||||||||||||||||||||
Total consumer revenue | $ | 101.4 | $ | 94.9 | $ | 6.5 | 7% | $ | 302.0 | $ | 281.7 | $ | 20.3 | 7% | |||||||||||||||||
Business | |||||||||||||||||||||||||||||||
Strategic | |||||||||||||||||||||||||||||||
Data | $ | 25.1 | $ | 24.3 | $ | 0.8 | 3% | $ | 74.9 | $ | 71.9 | $ | 3.0 | 4% | |||||||||||||||||
Voice | 16.3 | 13.3 | 3.0 | 23% | 46.3 | 37.8 | 8.5 | 22% | |||||||||||||||||||||||
Video | 0.6 | 0.5 | 0.1 | 20% | 1.9 | 1.5 | 0.4 | 27% | |||||||||||||||||||||||
Services and other | 0.5 | 0.6 | (0.1 | ) | (17)% | 1.6 | 1.5 | 0.1 | 7% | ||||||||||||||||||||||
42.5 | 38.7 | 3.8 | 10% | 124.7 | 112.7 | 12.0 | 11% | ||||||||||||||||||||||||
Legacy | |||||||||||||||||||||||||||||||
Data | 4.1 | 4.9 | (0.8 | ) | (16)% | 13.3 | 15.4 | (2.1 | ) | (14)% | |||||||||||||||||||||
Voice | 24.4 | 27.7 | (3.3 | ) | (12)% | 74.5 | 85.1 | (10.6 | ) | (12)% | |||||||||||||||||||||
Services and other | 0.1 | 0.4 | (0.3 | ) | (75)% | 0.6 | 1.0 | (0.4 | ) | (40)% | |||||||||||||||||||||
28.6 | 33.0 | (4.4 | ) | (13)% | 88.4 | 101.5 | (13.1 | ) | (13)% | ||||||||||||||||||||||
Integration | |||||||||||||||||||||||||||||||
Services and other | 0.4 | 0.4 | — | 0% | 1.1 | 1.3 | (0.2 | ) | (15)% | ||||||||||||||||||||||
Total business revenue | $ | 71.5 | $ | 72.1 | $ | (0.6 | ) | (1)% | $ | 214.2 | $ | 215.5 | $ | (1.3 | ) | (1)% | |||||||||||||||
Carrier | |||||||||||||||||||||||||||||||
Strategic | |||||||||||||||||||||||||||||||
Data | $ | 10.7 | $ | 11.3 | $ | (0.6 | ) | (5)% | $ | 31.5 | $ | 33.9 | $ | (2.4 | ) | (7)% | |||||||||||||||
Services and other | — | — | — | n/m | 5.4 | — | 5.4 | n/m | |||||||||||||||||||||||
10.7 | 11.3 | (0.6 | ) | (5)% | 36.9 | $ | 33.9 | 3.0 | 9% | ||||||||||||||||||||||
Legacy | |||||||||||||||||||||||||||||||
Data | 7.5 | 9.0 | (1.5 | ) | (17)% | 23.4 | 27.6 | (4.2 | ) | (15)% | |||||||||||||||||||||
Voice | 3.7 | 4.1 | (0.4 | ) | (10)% | 11.7 | 12.4 | (0.7 | ) | (6)% | |||||||||||||||||||||
Services and other | 1.4 | 1.6 | (0.2 | ) | (13)% | 4.7 | 4.7 | — | 0% | ||||||||||||||||||||||
12.6 | 14.7 | (2.1 | ) | (14)% | 39.8 | 44.7 | (4.9 | ) | (11)% | ||||||||||||||||||||||
Total carrier revenue | $ | 23.3 | $ | 26.0 | $ | (2.7 | ) | (10)% | $ | 76.7 | $ | 78.6 | $ | (1.9 | ) | (2)% | |||||||||||||||
Total Entertainment and Communications | $ | 196.2 | $ | 193.0 | $ | 3.2 | 2% | $ | 592.9 | $ | 575.8 | $ | 17.1 | 3% |
Cincinnati Bell Inc. | |||||||||||||||||||||||||||||||
Revenues by Segment | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | ||||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | ||||||||||||||||||||||||
IT Services and Hardware | |||||||||||||||||||||||||||||||
Business | |||||||||||||||||||||||||||||||
Strategic | |||||||||||||||||||||||||||||||
Professional Services | $ | 17.5 | $ | 22.9 | $ | (5.4 | ) | (24)% | $ | 54.2 | $ | 68.3 | $ | (14.1 | ) | (21)% | |||||||||||||||
Management and Monitoring | 5.5 | 8.1 | (2.6 | ) | (32)% | 15.6 | 24.1 | (8.5 | ) | (35)% | |||||||||||||||||||||
Unified Communications | 7.2 | 7.3 | (0.1 | ) | (1)% | 21.7 | 22.1 | (0.4 | ) | (2)% | |||||||||||||||||||||
Cloud Services | 10.9 | 12.2 | (1.3 | ) | (11)% | 36.2 | 33.2 | 3.0 | 9% | ||||||||||||||||||||||
41.1 | 50.5 | (9.4 | ) | (19)% | 127.7 | 147.7 | (20.0 | ) | (14)% | ||||||||||||||||||||||
Integration | |||||||||||||||||||||||||||||||
Professional Services | 7.4 | 3.6 | 3.8 | n/m | 15.9 | 11.6 | 4.3 | 37% | |||||||||||||||||||||||
Unified Communications | 3.5 | 2.6 | 0.9 | 35% | 9.9 | 8.0 | 1.9 | 24% | |||||||||||||||||||||||
Telecom and IT hardware | 44.3 | 66.2 | (21.9 | ) | (33)% | 125.0 | 167.9 | (42.9 | ) | (26)% | |||||||||||||||||||||
55.2 | 72.4 | (17.2 | ) | (24)% | 150.8 | 187.5 | (36.7 | ) | (20)% | ||||||||||||||||||||||
Total IT Services and Hardware Revenue | $ | 96.3 | $ | 122.9 | $ | (26.6 | ) | (22)% | $ | 278.5 | $ | 335.2 | $ | (56.7 | ) | (17)% |
Cincinnati Bell Inc. | ||||||||||||||||||||||||||||||
Income Statements by Segment | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | |||||||||||||||||||||||
Entertainment and Communications | ||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||
Data | $ | 88.0 | $ | 86.4 | $ | 1.6 | 2% | $ | 263.3 | $ | 258.4 | $ | 4.9 | 2% | ||||||||||||||||
Voice | 66.7 | 68.7 | (2.0 | ) | (3)% | 201.5 | 208.0 | (6.5 | ) | (3)% | ||||||||||||||||||||
Video | 37.8 | 32.2 | 5.6 | 17% | 111.0 | 92.1 | 18.9 | 21% | ||||||||||||||||||||||
Services and Other | 3.7 | 5.7 | (2.0 | ) | (35)% | 17.1 | 17.3 | (0.2 | ) | (1)% | ||||||||||||||||||||
Total revenue | 196.2 | 193.0 | 3.2 | 2% | 592.9 | 575.8 | 17.1 | 3% | ||||||||||||||||||||||
Operating costs and expenses | ||||||||||||||||||||||||||||||
Cost of services and products | 93.5 | 91.0 | 2.5 | 3% | 282.6 | 267.1 | 15.5 | 6% | ||||||||||||||||||||||
Selling, general and administrative | 33.8 | 37.1 | (3.3 | ) | (9)% | 104.5 | 107.1 | (2.6 | ) | (2)% | ||||||||||||||||||||
Depreciation and amortization | 43.9 | 43.0 | 0.9 | 2% | 129.1 | 124.8 | 4.3 | 3% | ||||||||||||||||||||||
Other* | — | 0.8 | (0.8 | ) | n/m | 26.9 | 0.8 | 26.1 | n/m | |||||||||||||||||||||
Total operating costs and expenses | 171.2 | 171.9 | (0.7 | ) | 0% | 543.1 | 499.8 | 43.3 | 9% | |||||||||||||||||||||
Operating income | $ | 25.0 | $ | 21.1 | $ | 3.9 | 18% | $ | 49.8 | $ | 76.0 | $ | (26.2 | ) | (34)% | |||||||||||||||
IT Services and Hardware | ||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||
Professional Services | $ | 24.9 | $ | 26.5 | $ | (1.6 | ) | (6)% | $ | 70.1 | $ | 79.9 | $ | (9.8 | ) | (12)% | ||||||||||||||
Management and Monitoring | 5.5 | 8.1 | (2.6 | ) | (32)% | 15.6 | 24.1 | (8.5 | ) | (35)% | ||||||||||||||||||||
Unified Communications | 10.7 | 9.9 | 0.8 | 8% | 31.6 | 30.1 | 1.5 | 5% | ||||||||||||||||||||||
Cloud Services | 10.9 | 12.2 | (1.3 | ) | (11)% | 36.2 | 33.2 | 3.0 | 9% | |||||||||||||||||||||
Telecom and IT hardware | 44.3 | 66.2 | (21.9 | ) | (33)% | 125.0 | 167.9 | (42.9 | ) | (26)% | ||||||||||||||||||||
Total revenue | 96.3 | 122.9 | (26.6 | ) | (22)% | 278.5 | 335.2 | (56.7 | ) | (17)% | ||||||||||||||||||||
Operating costs and expenses | ||||||||||||||||||||||||||||||
Cost of services and products | 72.4 | 96.2 | (23.8 | ) | (25)% | 209.8 | 260.3 | (50.5 | ) | (19)% | ||||||||||||||||||||
Selling, general and administrative | 15.7 | 15.2 | 0.5 | 3% | 47.6 | 42.9 | 4.7 | 11% | ||||||||||||||||||||||
Depreciation and amortization | 3.4 | 3.4 | — | 0% | 10.9 | 9.8 | 1.1 | 11% | ||||||||||||||||||||||
Other* | — | 0.3 | (0.3 | ) | n/m | 2.3 | 0.3 | 2.0 | n/m | |||||||||||||||||||||
Total operating costs and expenses | 91.5 | 115.1 | (23.6 | ) | (21)% | 270.6 | 313.3 | (42.7 | ) | (14)% | ||||||||||||||||||||
Operating income | $ | 4.8 | $ | 7.8 | $ | (3.0 | ) | (38)% | $ | 7.9 | $ | 21.9 | $ | (14.0 | ) | (64)% | ||||||||||||||
* Other includes restructuring and severance related charges. |
Cincinnati Bell Inc. | ||||||||||||||||||||||||||||||
Segment Information | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | |||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||
Entertainment and Communications | $ | 196.2 | $ | 193.0 | $ | 3.2 | 2% | $ | 592.9 | $ | 575.8 | $ | 17.1 | 3% | ||||||||||||||||
IT Services and Hardware | 96.3 | 122.9 | (26.6 | ) | (22)% | 278.5 | 335.2 | (56.7 | ) | (17)% | ||||||||||||||||||||
Eliminations | (3.3 | ) | (3.5 | ) | 0.2 | (6)% | (10.0 | ) | (10.5 | ) | 0.5 | (5)% | ||||||||||||||||||
Total revenue | $ | 289.2 | $ | 312.4 | $ | (23.2 | ) | (7)% | $ | 861.4 | $ | 900.5 | $ | (39.1 | ) | (4)% | ||||||||||||||
Cost of Services and Products | ||||||||||||||||||||||||||||||
Entertainment and Communications | $ | 93.5 | $ | 91.0 | $ | 2.5 | 3% | $ | 282.6 | $ | 267.1 | $ | 15.5 | 6% | ||||||||||||||||
IT Services and Hardware | 72.4 | 96.2 | (23.8 | ) | (25)% | 209.8 | 260.3 | (50.5 | ) | (19)% | ||||||||||||||||||||
Eliminations | (3.3 | ) | (3.4 | ) | 0.1 | (3)% | (9.6 | ) | (10.1 | ) | 0.5 | (5)% | ||||||||||||||||||
Total cost of services and products | $ | 162.6 | $ | 183.8 | $ | (21.2 | ) | (12)% | $ | 482.8 | $ | 517.3 | $ | (34.5 | ) | (7)% | ||||||||||||||
Selling, General and Administrative | ||||||||||||||||||||||||||||||
Entertainment and Communications | $ | 33.8 | $ | 37.1 | $ | (3.3 | ) | (9)% | $ | 104.5 | $ | 107.1 | $ | (2.6 | ) | (2)% | ||||||||||||||
IT Services and Hardware | 15.7 | 15.2 | 0.5 | 3% | 47.6 | 42.9 | 4.7 | 11% | ||||||||||||||||||||||
Corporate and eliminations | 5.0 | 3.2 | 1.8 | 56% | 14.5 | 14.9 | (0.4 | ) | (3)% | |||||||||||||||||||||
Total selling, general and administrative | $ | 54.5 | $ | 55.5 | $ | (1.0 | ) | (2)% | $ | 166.6 | $ | 164.9 | $ | 1.7 | 1% | |||||||||||||||
Depreciation and Amortization | ||||||||||||||||||||||||||||||
Entertainment and Communications | $ | 43.9 | $ | 43.0 | $ | 0.9 | 2% | $ | 129.1 | $ | 124.8 | $ | 4.3 | 3% | ||||||||||||||||
IT Services and Hardware | 3.4 | 3.4 | — | 0% | 10.9 | 9.8 | 1.1 | 11% | ||||||||||||||||||||||
Corporate | — | 0.1 | (0.1 | ) | n/m | 0.1 | 0.1 | — | 0% | |||||||||||||||||||||
Total depreciation and amortization | $ | 47.3 | $ | 46.5 | $ | 0.8 | 2% | $ | 140.1 | $ | 134.7 | $ | 5.4 | 4% | ||||||||||||||||
Other* | ||||||||||||||||||||||||||||||
Entertainment and Communications | $ | — | $ | 0.8 | $ | (0.8 | ) | n/m | $ | 26.9 | $ | 0.8 | $ | 26.1 | n/m | |||||||||||||||
IT Services and Hardware | — | 0.3 | (0.3 | ) | n/m | 2.3 | 0.3 | 2.0 | n/m | |||||||||||||||||||||
Corporate | 12.1 | — | 12.1 | n/m | 14.4 | — | 14.4 | n/m | ||||||||||||||||||||||
Total other | $ | 12.1 | $ | 1.1 | $ | 11.0 | n/m | $ | 43.6 | $ | 1.1 | $ | 42.5 | n/m | ||||||||||||||||
Operating Income | ||||||||||||||||||||||||||||||
Entertainment and Communications | $ | 25.0 | $ | 21.1 | $ | 3.9 | 18% | $ | 49.8 | $ | 76.0 | $ | (26.2 | ) | (34)% | |||||||||||||||
IT Services and Hardware | 4.8 | 7.8 | (3.0 | ) | (38)% | 7.9 | 21.9 | (14.0 | ) | (64)% | ||||||||||||||||||||
Corporate | (17.1 | ) | (3.4 | ) | (13.7 | ) | n/m | (29.4 | ) | (15.4 | ) | (14.0 | ) | 91% | ||||||||||||||||
Total operating income | $ | 12.7 | $ | 25.5 | $ | (12.8 | ) | (50)% | $ | 28.3 | $ | 82.5 | $ | (54.2 | ) | (66)% | ||||||||||||||
* Other includes restructuring and severance related charges and transaction and integration costs. |
Cincinnati Bell Inc. | ||||||||||||||||
Segment Metric Information | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||
2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||
Residential voice lines | ||||||||||||||||
Legacy voice lines | 99.5 | 104.9 | 111.1 | 117.5 | 124.6 | |||||||||||
Strategic voice lines (Fioptics) | 88.1 | 87.0 | 85.5 | 83.8 | 80.3 | |||||||||||
Total residential voice lines | 187.6 | 191.9 | 196.6 | 201.3 | 204.9 | |||||||||||
Business voice lines | ||||||||||||||||
Legacy voice lines | 172.1 | 177.3 | 183.9 | 190.7 | 197.7 | |||||||||||
Strategic voice lines* | 151.9 | 146.2 | 136.4 | 131.7 | 121.2 | |||||||||||
Total business voice lines | 324.0 | 323.5 | 320.3 | 322.4 | 318.9 | |||||||||||
Total voice lines | 511.6 | 515.4 | 516.9 | 523.7 | 523.8 | |||||||||||
Long distance lines | 299.1 | 304.3 | 311.0 | 317.3 | 323.7 | |||||||||||
Internet subscribers | ||||||||||||||||
DSL | 86.7 | 93.0 | 100.1 | 105.6 | 114.2 | |||||||||||
Fioptics | 221.2 | 214.1 | 207.3 | 197.6 | 185.6 | |||||||||||
Total internet subscribers | 307.9 | 307.1 | 307.4 | 303.2 | 299.8 | |||||||||||
Fioptics video subscribers | 143.5 | 142.8 | 141.1 | 137.6 | 133.4 | |||||||||||
Fioptics units passed | 564.7 | 556.7 | 545.2 | 533.4 | 509.5 | |||||||||||
* Strategic voice lines include VoIP lines and Fioptics voice lines. |
Cincinnati Bell Inc. | |||||||||
Net Debt (Non-GAAP) and Common Shares Outstanding | |||||||||
(Unaudited) | |||||||||
(Dollars and shares in millions) | |||||||||
September 30, | December 31, | ||||||||
2017 | 2016 | ||||||||
Receivables Facility | $ | — | $ | 89.5 | |||||
Corporate Credit Agreement - Tranche B Term Loan | 315.8 | 315.8 | |||||||
7 1/4% Senior Notes due 2023 | 22.3 | 22.3 | |||||||
7% Senior Notes due 2024 | 625.0 | 625.0 | |||||||
Cincinnati Bell Telephone Notes | 87.9 | 87.9 | |||||||
Capital leases and other debt | 84.4 | 69.5 | |||||||
Net unamortized premium | 8.0 | 8.5 | |||||||
Unamortized note issuance costs | (10.6 | ) | (11.9 | ) | |||||
Total debt | 1,132.8 | 1,206.6 | |||||||
Less: Cash and cash equivalents | (43.7 | ) | (9.7 | ) | |||||
Net debt (Non-GAAP: as defined by the company) | $ | 1,089.1 | $ | 1,196.9 | |||||
Corporate Credit Agreement availability | $ | 150.0 | $ | 150.0 | |||||
Common shares outstanding | 42.2 | 42.1 | |||||||
Cincinnati Bell Inc. | ||||||||||||||||||
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||||
Entertainment & Communications | IT Services & Hardware | Corporate | Total Company | |||||||||||||||
Net income (GAAP) | $ | (11.2 | ) | |||||||||||||||
Add: | ||||||||||||||||||
Income tax expense | 0.6 | |||||||||||||||||
Interest expense | 18.8 | |||||||||||||||||
Other income, net | 4.5 | |||||||||||||||||
Operating income (GAAP) | $ | 25.0 | $ | 4.8 | $ | (17.1 | ) | $ | 12.7 | |||||||||
Add: | ||||||||||||||||||
Depreciation and amortization | 43.9 | 3.4 | — | 47.3 | ||||||||||||||
Transaction and integration costs | — | — | 12.1 | 12.1 | ||||||||||||||
Pension and other retirement plan expenses | 3.6 | — | 0.5 | 4.1 | ||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 72.5 | $ | 8.2 | $ | (4.5 | ) | $ | 76.2 | |||||||||
Adjusted EBITDA Margin (Non-GAAP) | 37 | % | 9 | % | 0 | % | 26 | % | ||||||||||
Three Months Ended September 30, 2016 | ||||||||||||||||||
Entertainment & Communications | IT Services & Hardware | Corporate | Total Company | |||||||||||||||
Net income (GAAP) | $ | 18.8 | ||||||||||||||||
Add: | ||||||||||||||||||
Income tax expense | 10.8 | |||||||||||||||||
Interest expense | 17.9 | |||||||||||||||||
Gain on sale of Investment in CyrusOne | (33.3 | ) | ||||||||||||||||
Loss on extinguishment of debt, net | 11.4 | |||||||||||||||||
Other income, net | (0.1 | ) | ||||||||||||||||
Operating income (GAAP) | $ | 21.1 | $ | 7.8 | $ | (3.4 | ) | $ | 25.5 | |||||||||
Add: | ||||||||||||||||||
Depreciation and amortization | 43.0 | 3.4 | 0.1 | 46.5 | ||||||||||||||
Loss on sale or disposal of assets | 0.8 | 0.3 | — | 1.1 | ||||||||||||||
Pension and other retirement plan expenses | 3.9 | — | 0.5 | 4.4 | ||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 68.8 | $ | 11.5 | $ | (2.8 | ) | $ | 77.5 | |||||||||
Adjusted EBITDA Margin (Non-GAAP) | 36 | % | 9 | % | 0 | % | 25 | % | ||||||||||
Year-over-year dollar change in Adjusted EBITDA | $ | 3.7 | $ | (3.3 | ) | $ | (1.7 | ) | $ | (1.3 | ) | |||||||
Year-over-year percentage change in Adjusted EBITDA | 5 | % | (29 | )% | 61 | % | (2 | )% |
Cincinnati Bell Inc. | ||||||||||||||||||
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||
Nine Months Ended September 30, 2017 | ||||||||||||||||||
Entertainment & Communications | IT Services & Hardware | Corporate | Total Company | |||||||||||||||
Net income (GAAP) | $ | 51.3 | ||||||||||||||||
Add: | ||||||||||||||||||
Income tax expense | 36.3 | |||||||||||||||||
Interest expense | 54.9 | |||||||||||||||||
Gain on sale of Investment in CyrusOne | (117.7 | ) | ||||||||||||||||
Other expense, net | 3.5 | |||||||||||||||||
Operating income (GAAP) | $ | 49.8 | $ | 7.9 | $ | (29.4 | ) | $ | 28.3 | |||||||||
Add: | ||||||||||||||||||
Depreciation and amortization | 129.1 | 10.9 | 0.1 | 140.1 | ||||||||||||||
Restructuring and severance related charges | 26.9 | 2.3 | — | 29.2 | ||||||||||||||
Transaction and integration costs | — | — | 14.4 | 14.4 | ||||||||||||||
Pension and other retirement plan expenses | 10.9 | — | 1.4 | 12.3 | ||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 216.7 | $ | 21.1 | $ | (13.5 | ) | $ | 224.3 | |||||||||
Adjusted EBITDA Margin (Non-GAAP) | 37 | % | 8 | % | 0 | % | 26 | % | ||||||||||
Nine Months Ended September 30, 2016 | ||||||||||||||||||
Entertainment and Communications | IT Services & Hardware | Corporate | Total Company | |||||||||||||||
Net income (GAAP) | $ | 103.4 | ||||||||||||||||
Add: | ||||||||||||||||||
Income tax expense | 59.9 | |||||||||||||||||
Interest expense | 58.1 | |||||||||||||||||
Gain on sale of Investment in CyrusOne | (151.9 | ) | ||||||||||||||||
Loss on extinguishment of debt, net | 14.2 | |||||||||||||||||
Other income, net | (1.2 | ) | ||||||||||||||||
Operating income (GAAP) | $ | 76.0 | $ | 21.9 | $ | (15.4 | ) | $ | 82.5 | |||||||||
Add: | ||||||||||||||||||
Depreciation and amortization | 124.8 | 9.8 | 0.1 | 134.7 | ||||||||||||||
Loss on sale or disposal of assets | 0.8 | 0.3 | — | 1.1 | ||||||||||||||
Pension and other retirement plan expenses | 11.3 | — | 1.4 | 12.7 | ||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 212.9 | $ | 32.0 | $ | (13.9 | ) | $ | 231.0 | |||||||||
Adjusted EBITDA Margin (Non-GAAP) | 37 | % | 10 | % | 0 | % | 26 | % | ||||||||||
Year-over-year dollar change in Adjusted EBITDA | $ | 3.8 | $ | (10.9 | ) | $ | 0.4 | $ | (6.7 | ) | ||||||||
Year-over-year percentage change in Adjusted EBITDA | 2 | % | (34 | )% | (3 | )% | (3 | )% |
Cincinnati Bell Inc. | |||||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Cash provided by operating activities | $ | 33.9 | $ | 43.7 | $ | 156.8 | $ | 141.6 | |||||||||
Capital expenditures | (43.0 | ) | (67.2 | ) | (148.2 | ) | (188.8 | ) | |||||||||
Increase in restricted cash | — | (90.7 | ) | — | (90.7 | ) | |||||||||||
Proceeds from sale of Investment in CyrusOne | — | 38.7 | 140.7 | 181.2 | |||||||||||||
Acquisitions of businesses | — | — | (9.6 | ) | — | ||||||||||||
Dividends received from Investment in CyrusOne | — | 1.3 | — | 6.2 | |||||||||||||
Other, net | (0.1 | ) | (0.1 | ) | 0.3 | (0.8 | ) | ||||||||||
Cash used in investing activities | (43.1 | ) | (118.0 | ) | (16.8 | ) | (92.9 | ) | |||||||||
Proceeds from issuance of long-term debt | — | 425.0 | — | 425.0 | |||||||||||||
Net (decrease) increase in corporate credit and receivables facilities with initial maturities less than 90 days | — | (9.5 | ) | (89.5 | ) | 5.9 | |||||||||||
Repayment of debt | (2.2 | ) | (336.4 | ) | (6.4 | ) | (461.0 | ) | |||||||||
Debt issuance costs | (0.6 | ) | (6.5 | ) | (1.3 | ) | (8.4 | ) | |||||||||
Dividends paid on preferred stock | (2.6 | ) | (2.6 | ) | (7.8 | ) | (7.8 | ) | |||||||||
Common stock repurchase | — | (0.2 | ) | — | (4.8 | ) | |||||||||||
Other, net | 0.1 | 3.4 | (1.0 | ) | 3.5 | ||||||||||||
Cash (used in) provided by financing activities | (5.3 | ) | 73.2 | (106.0 | ) | (47.6 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents | (14.5 | ) | (1.1 | ) | 34.0 | 1.1 | |||||||||||
Cash and cash equivalents at beginning of period | 58.2 | 9.6 | 9.7 | 7.4 | |||||||||||||
Cash and cash equivalents at end of period | $ | 43.7 | $ | 8.5 | $ | 43.7 | $ | 8.5 | |||||||||
Reconciliation of Cash Provided by Operating Activities (GAAP) to | |||||||||||||||||
Free Cash Flow (Non-GAAP) | |||||||||||||||||
Cash provided by operating activities | $ | 33.9 | $ | 43.7 | 156.8 | $ | 141.6 | ||||||||||
Adjustments: | |||||||||||||||||
Capital expenditures | (43.0 | ) | (67.2 | ) | (148.2 | ) | (188.8 | ) | |||||||||
Restructuring and severance related payments | 9.9 | 0.3 | 27.0 | 0.9 | |||||||||||||
Preferred stock dividends | (2.6 | ) | (2.6 | ) | (7.8 | ) | (7.8 | ) | |||||||||
Dividends received from Investment in CyrusOne | — | 1.3 | — | 6.2 | |||||||||||||
Decommissioning of wireless towers | — | — | — | 1.9 | |||||||||||||
Cash used by discontinued operations | — | 0.2 | — | 5.0 | |||||||||||||
Transaction and integration costs | 8.2 | — | 8.9 | — | |||||||||||||
Free cash flow (Non-GAAP) | $ | 6.4 | $ | (24.3 | ) | $ | 36.7 | $ | (41.0 | ) | |||||||
Income tax payments (refunds) | $ | 0.1 | $ | — | $ | (16.2 | ) | $ | 1.4 | ||||||||
Cincinnati Bell Inc. | ||||
Free Cash Flow (Non-GAAP) | ||||
(Unaudited) | ||||
(Dollars in millions) | ||||
Free Cash Flow (Non-GAAP) for the three months ended September 30, 2016 | $ | (24.3 | ) | |
Decrease in Adjusted EBITDA (Non-GAAP) | (1.3 | ) | ||
Decrease in capital expenditures | 24.2 | |||
Increase in interest payments | (9.9 | ) | ||
Decrease in dividends received from Investment in CyrusOne | (1.3 | ) | ||
Increase in pension and postretirement payments and contributions | (0.7 | ) | ||
Change in working capital and other | 19.7 | |||
Free Cash Flow (Non-GAAP) for the three months ended September 30, 2017 | $ | 6.4 | ||
Free Cash Flow (Non-GAAP) for the nine months ended September 30, 2016 | $ | (41.0 | ) | |
Decrease in Adjusted EBITDA (Non-GAAP) | (6.7 | ) | ||
Decrease in capital expenditures | 40.6 | |||
Decrease in interest payments | 5.4 | |||
Decrease in dividends received from Investment in CyrusOne | (5.1 | ) | ||
Increase in pension and postretirement payments and contributions | (1.2 | ) | ||
Change in working capital and other | 44.7 | |||
Free Cash Flow (Non-GAAP) for the nine months ended September 30, 2017 | $ | 36.7 | ||
Cincinnati Bell Inc. | ||||||||||||||||||||
Capital Expenditures | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Sep. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | ||||||||||||||||
Entertainment and Communications | $ | 41.4 | $ | 48.0 | $ | 49.5 | $ | 93.8 | $ | 63.1 | ||||||||||
IT Services and Hardware | 1.6 | 2.1 | 5.6 | 3.8 | 4.1 | |||||||||||||||
Total capital expenditures | $ | 43.0 | $ | 50.1 | $ | 55.1 | $ | 97.6 | $ | 67.2 | ||||||||||
Cincinnati Bell Inc. | |||||||||
Reconciliation of Net (Loss) Income Applicable to Common Shareholders (GAAP) to Net Income Applicable to Common Shareholders, Excluding Special Items (Non-GAAP) and Adjusted Diluted Earnings Per Share (Non-GAAP) | |||||||||
(Unaudited) | |||||||||
(Dollars in millions, except per share amounts) | |||||||||
Three Months Ended | |||||||||
September 30, 2017 | September 30, 2016 | ||||||||
Net (loss) income applicable to common shareholders (GAAP) | $ | (13.8 | ) | $ | 16.2 | ||||
Special items: | |||||||||
Loss on sale or disposal of assets | — | 1.1 | |||||||
Transaction and integration costs | 12.1 | — | |||||||
Loss on extinguishment of debt, net | — | 11.4 | |||||||
Gain on sale of Investment in CyrusOne | — | (33.3 | ) | ||||||
Impairment of equity method investment | 4.7 | — | |||||||
Income tax effect of special items * | (1.7 | ) | 7.6 | ||||||
Total special items | 15.1 | (13.2 | ) | ||||||
Net (loss) income applicable to common shareowners, excluding special items (Non-GAAP) | $ | 1.3 | $ | 3.0 | |||||
Weighted average diluted shares outstanding | 42.2 | 42.1 | |||||||
Diluted (loss) earnings per common share (GAAP) | $ | (0.33 | ) | $ | 0.38 | ||||
Adjusted diluted earnings per common share (Non-GAAP) | $ | 0.03 | $ | 0.07 | |||||
* | Special items have been tax effected such that the normalized effective tax rate is 36% with the exception of transaction costs, which are treated as a discrete item in the quarter incurred. | ||||||||
Cincinnati Bell Inc. | |||||||||
Reconciliation of Net Income Applicable to Common Shareholders (GAAP) to Net Income Applicable to Common Shareholders, Excluding Special Items (Non-GAAP) and Adjusted Diluted Earnings Per Share (Non-GAAP) | |||||||||
(Unaudited) | |||||||||
(Dollars in millions, except per share amounts) | |||||||||
Nine Months Ended | |||||||||
September 30, 2017 | September 30, 2016 | ||||||||
Net income applicable to common shareholders (GAAP) | $ | 43.5 | $ | 95.6 | |||||
Special items: | |||||||||
Restructuring and severance related charges | 29.2 | — | |||||||
Loss on sale or disposal of assets | — | 1.1 | |||||||
Transaction and integration costs | 14.4 | — | |||||||
Loss on extinguishment of debt, net | — | 14.2 | |||||||
Gain on sale of Investment in CyrusOne | (117.7 | ) | (151.9 | ) | |||||
Reversal of wireless tower decommissioning accrual | — | (1.1 | ) | ||||||
Impairment of equity method investment | 4.7 | — | |||||||
Income tax effect of special items * | 29.7 | 50.7 | |||||||
Total special items | (39.7 | ) | (87.0 | ) | |||||
Net income applicable to common shareowners, excluding special items (Non-GAAP) | $ | 3.8 | $ | 8.6 | |||||
Weighted average diluted shares outstanding | 42.3 | 42.1 | |||||||
Diluted earnings per common share (GAAP) | $ | 1.03 | $ | 2.27 | |||||
Adjusted diluted earnings per common share (Non-GAAP) | $ | 0.09 | $ | 0.20 | |||||
* | Special items have been tax effected such that the normalized effective tax rate is 36% with the exception of transaction costs, which are treated as a discrete item in the quarter incurred. | ||||||||
Cincinnati Bell Inc. | |||||||||
Reconciliation of Operating Income (GAAP) Guidance to Adjusted EBITDA (Non-GAAP) Guidance | |||||||||
(Unaudited) | |||||||||
(Dollars in millions) | |||||||||
2017 Operating Income (GAAP) Guidance | $ | 64 | |||||||
Add: | |||||||||
Depreciation and amortization | 185 | ||||||||
Restructuring and severance related charges | 30 | ||||||||
Pension and other retirement plan expenses | 16 | ||||||||
2017 Previous Adjusted EBITDA (Non-GAAP) Guidance- Provided on 02/15/17 | $ | 295 | * | ||||||
OnX 4Q17 Contribution | 10 | ||||||||
2017 Revised Adjusted EBITDA (Non-GAAP) Guidance- Provided on 11/02/17 | $ | 305 | * | ||||||
* Plus or minus 2 percent | |||||||||
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