[November 05, 2014] |
|
Cincinnati Bell Reports Third Quarter 2014 Results
CINCINNATI --(Business Wire)--
Cincinnati Bell Inc. (NYSE:CBB) today announced financial results for
the third quarter of 2014, highlighted by the completion of the Wireless
spectrum sale and continued revenue growth generated by its strategic
investments. Revenue from strategic products totaled $111 million for
the quarter, up 19 percent over the prior year.
Wireline revenue totaled $184 million in the third quarter, up $3
million compared to a year ago, as demand for Fioptics remains high. In
the third quarter, the company added 8,400 high-speed internet
subscribers and 5,300 new video subscribers. During the quarter we
passed 15,900 homes with Fioptics and the product is now available to 40
percent of Greater Cincinnati. The company has also expanded the number
of households capable of receiving at least 10 megabits of speed to
468,700, more than 55 percent of our market. The number of our internet
customers subscribing to these speeds has grown 37 percent
year-over-year and now accounts for 45 percent of our internet
subscriber base.
"The completion of the Wireless spectrum sale and the initial
monetization of our CyrusOne investment has created an opportunity to
accelerate our fiber investments and capitalize on the growing demand
for our strategic products," said Ted Torbeck, president and chief
executive officer. "Our fiber investments have significantly changed the
perception of Cincinnati Bell and are essential to creating a fiber
based entertainment, communications, and IT solutions company with
growing revenue, growing profits, and significant cash flows," added
Torbeck.
CONSOLIDATED RESULTS1
Consolidated revenue for the third quarter of 2014 was $328 million, up
$17 million from the prior year. Operating income for the quarter
totaled $16 million and Adjusted EBITDA2 was $96 million,
both down compared to third quarter of 2013, primarily due to declining
Wireless results combined with increased Wireline costs associated with
accelerating fiber investments and projects aimed at streamlining
operations and shared service functions.
The 2014 third quarter net loss of $27 million included the following
special items directly related to Wireless: restructuring charges of $9
million, asset impairments of $8 million and transaction costs of $3
million. During the quarter we also recorded a $19 million loss on
extinguishment of debt related to the redemption of $325 million 8 3/4
percent Senior Subordinated Notes due 2018.
Year-to-date consolidated revenue totaled $970 million, up $21 million
from a year ago. Operating income totaled $109 million and Adjusted
EBITDA was $301 million. Net income for the first nine months of 2014
totaled $94 million due primarily to the gain resulting from the initial
monetization of our CyrusOne investment, partially offset by initiating
the wind-down of wireless operations and the loss on extinguishment of
debt.
Wireline Segment
-
Wireline revenue for the quarter totaled $184 million, up $3 million
compared to the prior year.
-
Fioptics revenue for the quarter was $37 million, up 39 percent
from the prior year.
-
Strategic revenue for business customers totaled $42 million
(including $2 million of Fioptics revenue) for the quarter, up 10
percent compared to the prior year.
-
Operating income was $44 million in the quarter and Adjusted EBITDA
totaled $76 million.
-
Adjusted EBITDA margin3 for the third quarter was 41
percent.
-
Decrease from prior year resulted from additional costs to support
our fiber acceleration and projects aimed at streamlining
operations and shared service functions.
-
Fioptics video subscribers totaled 87,800 at the end of the third
quarter, up 26 percent compared to the same period in 2013.
-
Fioptics internet subscribers totaled 106,700, adding 8,400 new
Fioptics high-speed internet subscribers in the quarter.
IT Services and Hardware Segment
-
Revenue of $120 million for the quarter was up 37 percent over the
prior year.
-
Strategic managed and professional services revenue was $35
million in the quarter, up 15 percent compared to the prior year.
-
Hardware revenue was $83 million for the quarter, up 48 percent
year-over-year.
-
Operating income totaled $8 million for the quarter, up 84 percent
compared to the prior year.
-
Adjusted EBITDA was $12 million for the quarter, up 70 percent
compared to the third quarter of 2013.
Wireless Segment
-
Revenue was $30 million for the quarter, down 39 percent from the
prior year.
-
Operating loss totaled $33 million in the quarter, compared to income
of $7 million a year ago.
-
Adjusted EBITDA of $10 million in the quarter was down $4 million
compared to the same period a year ago.
-
During the quarter we lost 99,900 subscribers, ending the quarter with
101,300 postpaid subscribers and 75,500 prepaid subscribers.
Investment in CyrusOne
-
Cincinnati Bell now effectively owns 44 percent of CyrusOne as an
equity method investment, valued at $685 million as of September 30,
2014.
-
CyrusOne reported strong third quarter 2014 revenue of $85 million and
Adjusted EBITDA of $42 million.
2014 Outlook
On September 30, 2014 the Company completed the sale of its wireless
spectrum and has suspended guidance related to this segment. As such,
excluding Wireless, the company is affirming the 2014 Adjusted EBITDA
guidance and increasing its revenue guidance as follows:
Category
|
|
|
|
2014 Guidance
(excluding Wireless)
|
|
|
|
Revised 2014 Guidance (excluding Wireless)
|
Revenue
|
|
|
|
$1.0 billion
|
|
|
|
$1.1 billion
|
Adjusted EBITDA
|
|
|
|
$333 million*
|
|
|
|
$333 million*
|
|
|
|
|
|
|
|
|
|
*Plus or minus 2 percent
|
|
Conference Call/Webcast
Cincinnati Bell will host a conference call on November 5 at 8:00 a.m.
(ET) to discuss its results for the third quarter of 2014. A live
webcast of the call will be available via the Investor Relations section
of www.cincinnatibell.com.
The conference call dial-in number is (888) 468-2440. Callers located
outside of the U.S. and Canada may dial (719) 325-2435. A taped replay
of the conference call will be available one hour after the conclusion
of the call until 8:00 a.m. on Wednesday November 19, 2014. For U.S.
callers, the replay will be available at (888) 203-1112. For callers
outside of the U.S. and Canada, the replay will be available at (719)
457-0820. The replay reference number is 1882669. An archived version of
the webcast will also be available in the Investor Relations section of www.cincinnatibell.com.
Safe Harbor Note
This release and the documents incorporated by reference herein contain
forward-looking statements regarding future events and our future
results that are subject to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. All statements, other than
statements of historical facts, are statements that could be deemed
forward-looking statements. These statements are based on current
expectations, estimates, forecasts, and projections about the industries
in which we operate and the beliefs and assumptions of our management.
Words such as "expects," "anticipates," "predicts," "projects,"
"intends," "plans," "believes," "seeks," "estimates," "continues,"
"endeavors," "strives," "may," variations of such words and similar
expressions are intended to identify such forward-looking statements. In
addition, any statements that refer to projections of our future
financial performance, our anticipated growth and trends in our
businesses, and other characterizations of future events or
circumstances are forward-looking statements. Readers are cautioned
these forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties, which could
cause our actual results to differ materially and adversely from those
reflected in the forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those
discussed in this release and those discussed in other documents we file
with the Securities and Exchange Commission (SEC). More information on
potential risks and uncertainties is available in our recent filings
with the SEC, including Cincinnati Bell's Form 10-K report, Form 10-Q
reports and Form 8-K reports. Actual results may differ materially and
adversely from those expressed in any forward-looking statements. We
undertake no obligation to revise or update any forward-looking
statements for any reason.
Use of Non-GAAP Financial Measures
This press release contains information about adjusted earnings before
interest, taxes, depreciation and amortization (Adjusted EBITDA),
Adjusted EBITDA margin, net debt, net income excluding special items,
and free cash flow. These are non-GAAP financial measures used by
Cincinnati Bell management when evaluating results of operations and
cash flow. Management believes these measures also provide users of the
financial statements with additional and useful comparisons of current
results of operations and cash flows with past and future periods.
Non-GAAP financial measures should not be construed as being more
important than comparable GAAP measures. Detailed reconciliations of
these non-GAAP financial measures to comparable GAAP financial measures
have been included in the tables distributed with this release and are
available in the Investor Relations section of www.cincinnatibell.com.
1Consolidated Results for the nine month period
ended September 30, 2013 includes CyrusOne's results of operations from
January 1, 2013 through January 23, 2013. On January 24, 2013, the
Company successfully completed the initial public offering ("IPO") of
CyrusOne and no longer consolidates its results, but accounts for
CyrusOne as an equity method investment. Results referenced within the
Consolidated Results section for the nine month period ended September
30, 2013 exclude the operations of CyrusOne for the period January 1,
2013 through January 23, 2013, to effectively provide comparative
results to 2014. Excluding CyrusOne results for this period is not
consistent with GAAP and should not be considered as an alternative to
comparable GAAP measures of revenue, operating income, or profitability.
2Adjusted EBITDA provides a useful measure of
operational performance. The company defines Adjusted EBITDA as GAAP
operating income plus depreciation, amortization, transaction-related
compensation, restructuring charges, (gain) loss on sale or disposal of
assets, transaction costs, curtailment gain, asset impairments,
components of pension and other retirement plan costs (including
interest costs, asset returns, and amortization of actuarial gains and
losses), and other special items. Adjusted EBITDA should not be
considered as an alternative to comparable GAAP measures of
profitability and may not be comparable with the measure as defined by
other companies.
CyrusOne defines Adjusted EBITDA as net income (loss) as defined by U.S.
GAAP before noncontrolling interests plus interest expense, income tax
(benefit) expense, depreciation and amortization, non-cash compensation,
transaction costs and transaction-related compensation, including
acquisition pursuit costs, restructuring costs, loss on extinguishment
of debt, asset impairments, (gain) loss on sale of real estate
improvements, and other special items. Other companies may not calculate
Adjusted EBITDA in the same manner as CyrusOne. Accordingly, CyrusOne's
Adjusted EBITDA as presented may not be comparable to others. Detailed
reconciliations of CyrusOne's Adjusted EBITDA to the comparable GAAP
financial measure are available in the Investor Relations section of www.cyrusone.com.
3Adjusted EBITDA margin provides a useful
measure of operational performance. The company defines Adjusted EBITDA
margin as Adjusted EBITDA divided by revenue. Adjusted EBITDA margin
should not be considered as an alternative to comparable GAAP measures
of profitability and may not be comparable with the measure as defined
by other companies.
Net income excluding special items in total and per share provides
a useful measure of operating performance. Net income excluding special
items should not be considered as an alternative to comparable GAAP
measures of profitability and may not be comparable with net income
excluding special items as defined by other companies.
Free cash flow provides a useful measure of operational
performance, liquidity and financial health. The company defines free
cash flow as cash provided by (used in) operating, financing and
investing activities, adjusted for the issuance and repayment of debt,
debt issuance costs, the repurchase of common stock, and the proceeds
from the sale or the use of funds from the purchase of business
operations, including transaction costs. Free cash flow should not be
considered as an alternative to net income (loss), operating income
(loss), cash flow from operating activities, or the change in cash on
the balance sheet and may not be comparable with free cash flow as
defined by other companies. Although the company feels that there is no
comparable GAAP measure for free cash flow, the attached financial
information reconciles free cash flow to the net increase (decrease) in
cash and cash equivalents.
Net debt provides a useful measure of liquidity and financial
health. The company defines net debt as the sum of the face amount of
short-term and long-term debt and unamortized premium and/or discount,
offset by cash and cash equivalents. Net debt should not be considered
as an alternative to comparable GAAP measures of liquidity and may not
be comparable with the measure as defined by other companies.
About Cincinnati Bell Inc.
With headquarters in Cincinnati, Ohio, Cincinnati Bell (NYSE: CBB)
provides integrated communications solutions - including local and long
distance voice, data, high-speed internet, video and wireless services -
that keep residential and business customers in Greater Cincinnati and
Dayton connected with each other and with the world. In addition,
enterprise customers across the United States rely on CBTS, a
wholly-owned subsidiary, for efficient, scalable office communications
systems and end-to-end IT solutions. Cincinnati Bell owns approximately
44% of CyrusOne (NASDAQ: CONE), which specializes in highly reliable
enterprise-class, carrier-neutral data center properties. CyrusOne
provides mission-critical data center facilities that protect and ensure
the continued operation of IT infrastructure for more than 655
customers, including 9 of the Fortune 20 and 141 of the Fortune 1000
companies. For more information, please visit www.cincinnatibell.com
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
|
|
|
|
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
327.5
|
|
|
$
|
310.8
|
|
|
$
|
16.7
|
|
|
5
|
%
|
|
$
|
969.9
|
|
|
$
|
948.5
|
|
|
$
|
21.4
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
179.5
|
|
|
|
159.9
|
|
|
|
19.6
|
|
|
12
|
%
|
|
|
515.4
|
|
|
|
480.5
|
|
|
|
34.9
|
|
|
7
|
%
|
|
|
Selling, general and administrative
|
|
|
57.5
|
|
|
|
53.6
|
|
|
|
3.9
|
|
|
7
|
%
|
|
|
167.4
|
|
|
|
161.4
|
|
|
|
6.0
|
|
|
4
|
%
|
|
|
Depreciation and amortization
|
|
|
61.4
|
|
|
|
39.8
|
|
|
|
21.6
|
|
|
54
|
%
|
|
|
168.6
|
|
|
|
127.6
|
|
|
|
41.0
|
|
|
32
|
%
|
|
|
Transaction-related compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
42.6
|
|
|
|
(42.6
|
)
|
|
n/m
|
|
|
Restructuring charges
|
|
|
9.0
|
|
|
|
-
|
|
|
|
9.0
|
|
|
n/m
|
|
|
15.4
|
|
|
|
10.8
|
|
|
|
4.6
|
|
|
43
|
%
|
|
|
Asset impairment
|
|
|
7.5
|
|
|
|
-
|
|
|
|
7.5
|
|
|
n/m
|
|
|
7.5
|
|
|
|
-
|
|
|
|
7.5
|
|
|
n/m
|
|
|
Curtailment gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
(0.6
|
)
|
|
|
0.6
|
|
|
n/m
|
|
|
(Gain) loss on sale or disposal of assets, net
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
0.2
|
|
|
n/m
|
|
|
(0.1
|
)
|
|
|
2.6
|
|
|
|
(2.7
|
)
|
|
n/m
|
|
|
Amortization of deferred gain
|
|
|
(6.4
|
)
|
|
|
(0.5
|
)
|
|
|
(5.9
|
)
|
|
n/m
|
|
|
(16.5
|
)
|
|
|
(1.7
|
)
|
|
|
(14.8
|
)
|
|
n/m
|
|
|
Transaction costs
|
|
|
3.0
|
|
|
|
0.5
|
|
|
|
2.5
|
|
|
n/m
|
|
|
3.7
|
|
|
|
1.6
|
|
|
|
2.1
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
16.0
|
|
|
|
57.7
|
|
|
|
(41.7
|
)
|
|
(72
|
)%
|
|
|
108.5
|
|
|
|
123.7
|
|
|
|
(15.2
|
)
|
|
(12
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
35.8
|
|
|
|
46.7
|
|
|
|
(10.9
|
)
|
|
(23
|
)%
|
|
|
116.8
|
|
|
|
140.0
|
|
|
|
(23.2
|
)
|
|
(17
|
)%
|
|
Loss on extinguishment of debt
|
|
|
19.4
|
|
|
|
-
|
|
|
|
19.4
|
|
|
n/m
|
|
|
19.4
|
|
|
|
-
|
|
|
|
19.4
|
|
|
n/m
|
|
Loss from CyrusOne equity method investment
|
|
|
-
|
|
|
|
1.5
|
|
|
|
(1.5
|
)
|
|
n/m
|
|
|
1.9
|
|
|
|
8.1
|
|
|
|
(6.2
|
)
|
|
(77
|
)%
|
|
Gain on sale of CyrusOne equity method investment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
(192.8
|
)
|
|
|
-
|
|
|
|
(192.8
|
)
|
|
n/m
|
|
Other (income) expense, net
|
|
|
(0.2
|
)
|
|
|
(1.2
|
)
|
|
|
1.0
|
|
|
83
|
%
|
|
|
0.5
|
|
|
|
(1.4
|
)
|
|
|
1.9
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(39.0
|
)
|
|
|
10.7
|
|
|
|
(49.7
|
)
|
|
n/m
|
|
|
162.7
|
|
|
|
(23.0
|
)
|
|
|
185.7
|
|
|
n/m
|
|
Income tax (benefit) expense
|
|
|
(11.7
|
)
|
|
|
1.4
|
|
|
|
(13.1
|
)
|
|
n/m
|
|
|
68.8
|
|
|
|
3.6
|
|
|
|
65.2
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(27.3
|
)
|
|
|
9.3
|
|
|
|
(36.6
|
)
|
|
n/m
|
|
|
93.9
|
|
|
|
(26.6
|
)
|
|
|
120.5
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
2.6
|
|
|
|
2.6
|
|
|
|
-
|
|
|
0
|
%
|
|
|
7.8
|
|
|
|
7.8
|
|
|
|
-
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income applicable to common shareowners
|
|
$
|
(29.9
|
)
|
|
$
|
6.7
|
|
|
$
|
(36.6
|
)
|
|
n/m
|
|
$
|
86.1
|
|
|
$
|
(34.4
|
)
|
|
$
|
120.5
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (loss) earnings per common share
|
|
$
|
(0.14
|
)
|
|
$
|
0.03
|
|
|
|
|
|
|
$
|
0.41
|
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
|
208.7
|
|
|
|
207.0
|
|
|
|
|
|
|
|
208.4
|
|
|
|
205.6
|
|
|
|
|
|
|
|
- Diluted
|
|
|
208.7
|
|
|
|
208.5
|
|
|
|
|
|
|
|
209.4
|
|
|
|
205.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Income Statements by Segment
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
September 30,
|
|
Change
|
|
September 30,
|
|
Change
|
|
|
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
Wireline
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data
|
|
$
|
84.1
|
|
|
$
|
79.6
|
|
|
$
|
4.5
|
|
|
6
|
%
|
|
$
|
251.3
|
|
|
$
|
236.9
|
|
$
|
14.4
|
|
|
6
|
%
|
|
|
Voice - local service
|
|
|
49.6
|
|
|
|
56.6
|
|
|
|
(7.0
|
)
|
|
(12
|
)%
|
|
|
154.6
|
|
|
|
174.4
|
|
|
(19.8
|
)
|
|
(11
|
)%
|
|
|
Long distance and VoIP
|
|
|
26.9
|
|
|
|
26.8
|
|
|
|
0.1
|
|
|
0
|
%
|
|
|
80.6
|
|
|
|
80.5
|
|
|
0.1
|
|
|
0
|
%
|
|
|
Entertainment
|
|
|
19.5
|
|
|
|
14.4
|
|
|
|
5.1
|
|
|
35
|
%
|
|
|
54.9
|
|
|
|
39.4
|
|
|
15.5
|
|
|
39
|
%
|
|
|
Other
|
|
|
3.9
|
|
|
|
4.0
|
|
|
|
(0.1
|
)
|
|
(3
|
)%
|
|
|
10.9
|
|
|
|
11.5
|
|
|
(0.6
|
)
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
184.0
|
|
|
|
181.4
|
|
|
|
2.6
|
|
|
1
|
%
|
|
|
552.3
|
|
|
|
542.7
|
|
|
9.6
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
76.9
|
|
|
|
72.4
|
|
|
|
4.5
|
|
|
6
|
%
|
|
|
221.9
|
|
|
|
213.4
|
|
|
8.5
|
|
|
4
|
%
|
|
|
Selling, general and administrative
|
|
|
35.2
|
|
|
|
31.7
|
|
|
|
3.5
|
|
|
11
|
%
|
|
|
98.2
|
|
|
|
94.4
|
|
|
3.8
|
|
|
4
|
%
|
|
|
Depreciation and amortization
|
|
|
29.3
|
|
|
|
29.7
|
|
|
|
(0.4
|
)
|
|
(1
|
)%
|
|
|
85.6
|
|
|
|
83.8
|
|
|
1.8
|
|
|
2
|
%
|
|
|
Other*
|
|
|
(1.3
|
)
|
|
|
(0.2
|
)
|
|
|
(1.1
|
)
|
|
n/m
|
|
|
(0.4
|
)
|
|
|
4.3
|
|
|
(4.7
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
140.1
|
|
|
|
133.6
|
|
|
|
6.5
|
|
|
5
|
%
|
|
|
405.3
|
|
|
|
395.9
|
|
|
9.4
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
43.9
|
|
|
$
|
47.8
|
|
|
$
|
(3.9
|
)
|
|
(8
|
)%
|
|
$
|
147.0
|
|
|
$
|
146.8
|
|
$
|
0.2
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT Services and Hardware
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom and IT equipment distribution
|
|
$
|
83.2
|
|
|
$
|
56.2
|
|
|
$
|
27.0
|
|
|
48
|
%
|
|
$
|
217.0
|
|
|
$
|
169.2
|
|
$
|
47.8
|
|
|
28
|
%
|
|
|
Managed and professional services
|
|
|
36.8
|
|
|
|
31.3
|
|
|
|
5.5
|
|
|
18
|
%
|
|
|
106.5
|
|
|
|
88.8
|
|
|
17.7
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
120.0
|
|
|
|
87.5
|
|
|
|
32.5
|
|
|
37
|
%
|
|
|
323.5
|
|
|
|
258.0
|
|
|
65.5
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
94.4
|
|
|
|
69.4
|
|
|
|
25.0
|
|
|
36
|
%
|
|
|
259.7
|
|
|
|
209.5
|
|
|
50.2
|
|
|
24
|
%
|
|
|
Selling, general and administrative
|
|
|
14.5
|
|
|
|
11.2
|
|
|
|
3.3
|
|
|
29
|
%
|
|
|
38.9
|
|
|
|
33.7
|
|
|
5.2
|
|
|
15
|
%
|
|
|
Depreciation and amortization
|
|
|
3.0
|
|
|
|
2.5
|
|
|
|
0.5
|
|
|
20
|
%
|
|
|
8.6
|
|
|
|
7.5
|
|
|
1.1
|
|
|
15
|
%
|
|
|
Other*
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
0.7
|
|
|
(0.7
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
111.9
|
|
|
|
83.1
|
|
|
|
28.8
|
|
|
35
|
%
|
|
|
307.2
|
|
|
|
251.4
|
|
|
55.8
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
8.1
|
|
|
$
|
4.4
|
|
|
$
|
3.7
|
|
|
84
|
%
|
|
$
|
16.3
|
|
|
$
|
6.6
|
|
$
|
9.7
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
|
$
|
29.6
|
|
|
$
|
45.0
|
|
|
$
|
(15.4
|
)
|
|
(34
|
)%
|
|
$
|
109.6
|
|
|
$
|
141.8
|
|
$
|
(32.2
|
)
|
|
(23
|
)%
|
|
|
Equipment
|
|
|
0.5
|
|
|
|
4.1
|
|
|
|
(3.6
|
)
|
|
(88
|
)%
|
|
|
6.4
|
|
|
|
12.3
|
|
|
(5.9
|
)
|
|
(48
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
30.1
|
|
|
|
49.1
|
|
|
|
(19.0
|
)
|
|
(39
|
)%
|
|
|
116.0
|
|
|
|
154.1
|
|
|
(38.1
|
)
|
|
(25
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
13.5
|
|
|
|
24.7
|
|
|
|
(11.2
|
)
|
|
(45
|
)%
|
|
|
52.6
|
|
|
|
73.2
|
|
|
(20.6
|
)
|
|
(28
|
)%
|
|
|
Selling, general and administrative
|
|
|
6.3
|
|
|
|
10.5
|
|
|
|
(4.2
|
)
|
|
(40
|
)%
|
|
|
20.7
|
|
|
|
29.3
|
|
|
(8.6
|
)
|
|
(29
|
)%
|
|
|
Depreciation and amortization
|
|
|
29.1
|
|
|
|
7.4
|
|
|
|
21.7
|
|
|
n/m
|
|
|
74.2
|
|
|
|
30.7
|
|
|
43.5
|
|
|
n/m
|
|
|
Other*
|
|
|
14.2
|
|
|
|
(0.5
|
)
|
|
|
14.7
|
|
|
n/m
|
|
|
9.3
|
|
|
|
1.8
|
|
|
7.5
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
63.1
|
|
|
|
42.1
|
|
|
|
21.0
|
|
|
50
|
%
|
|
|
156.8
|
|
|
|
135.0
|
|
|
21.8
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
$
|
(33.0
|
)
|
|
$
|
7.0
|
|
|
$
|
(40.0
|
)
|
|
n/m
|
|
$
|
(40.8
|
)
|
|
$
|
19.1
|
|
$
|
(59.9
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Center Colocation**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
n/m
|
|
$
|
-
|
|
|
$
|
15.6
|
|
$
|
(15.6
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
4.8
|
|
|
(4.8
|
)
|
|
n/m
|
|
|
Selling, general and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
2.4
|
|
|
(2.4
|
)
|
|
n/m
|
|
|
Depreciation and amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
5.2
|
|
|
(5.2
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
12.4
|
|
|
(12.4
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
n/m
|
|
$
|
-
|
|
|
$
|
3.2
|
|
$
|
(3.2
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Other includes restructuring charges, asset impairment, curtailment
gain, (gain) loss on sale or disposal of assets, amortization of
deferred gain and transaction costs.
|
|
**Results for 2013 only include CyrusOne's results through January
23, 2013. Effective January 24, 2013, the completion date of
CyrusOne's IPO, the company accounts for CyrusOne as an equity
method investment, and therefore does not consolidate the CyrusOne
results of operations in the total company or segment results.
|
|
Cincinnati Bell Inc.
|
Segment Information
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
September 30,
|
|
Change
|
|
September 30,
|
|
Change
|
|
|
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
184.0
|
|
|
$
|
181.4
|
|
|
$
|
2.6
|
|
|
1
|
%
|
|
$
|
552.3
|
|
|
$
|
542.7
|
|
|
$
|
9.6
|
|
|
2
|
%
|
|
|
IT Services and Hardware
|
|
|
120.0
|
|
|
|
87.5
|
|
|
|
32.5
|
|
|
37
|
%
|
|
|
323.5
|
|
|
|
258.0
|
|
|
|
65.5
|
|
|
25
|
%
|
|
|
Wireless
|
|
|
30.1
|
|
|
|
49.1
|
|
|
|
(19.0
|
)
|
|
(39
|
)%
|
|
|
116.0
|
|
|
|
154.1
|
|
|
|
(38.1
|
)
|
|
(25
|
)%
|
|
|
Data Center Colocation**
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
15.6
|
|
|
|
(15.6
|
)
|
|
n/m
|
|
|
Eliminations
|
|
|
(6.6
|
)
|
|
|
(7.2
|
)
|
|
|
0.6
|
|
|
8
|
%
|
|
|
(21.9
|
)
|
|
|
(21.9
|
)
|
|
|
-
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
327.5
|
|
|
$
|
310.8
|
|
|
$
|
16.7
|
|
|
5
|
%
|
|
$
|
969.9
|
|
|
$
|
948.5
|
|
|
$
|
21.4
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Services and Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
76.9
|
|
|
$
|
72.4
|
|
|
$
|
4.5
|
|
|
6
|
%
|
|
$
|
221.9
|
|
|
$
|
213.4
|
|
|
$
|
8.5
|
|
|
4
|
%
|
|
|
IT Services and Hardware
|
|
|
94.4
|
|
|
|
69.4
|
|
|
|
25.0
|
|
|
36
|
%
|
|
|
259.7
|
|
|
|
209.5
|
|
|
|
50.2
|
|
|
24
|
%
|
|
|
Wireless
|
|
|
13.5
|
|
|
|
24.7
|
|
|
|
(11.2
|
)
|
|
(45
|
)%
|
|
|
52.6
|
|
|
|
73.2
|
|
|
|
(20.6
|
)
|
|
(28
|
)%
|
|
|
Data Center Colocation**
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
4.8
|
|
|
|
(4.8
|
)
|
|
n/m
|
|
|
Eliminations
|
|
|
(5.3
|
)
|
|
|
(6.6
|
)
|
|
|
1.3
|
|
|
20
|
%
|
|
|
(18.8
|
)
|
|
|
(20.4
|
)
|
|
|
1.6
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of services and products
|
|
$
|
179.5
|
|
|
$
|
159.9
|
|
|
$
|
19.6
|
|
|
12
|
%
|
|
$
|
515.4
|
|
|
$
|
480.5
|
|
|
$
|
34.9
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
35.2
|
|
|
$
|
31.7
|
|
|
$
|
3.5
|
|
|
11
|
%
|
|
$
|
98.2
|
|
|
$
|
94.4
|
|
|
$
|
3.8
|
|
|
4
|
%
|
|
|
IT Services and Hardware
|
|
|
14.5
|
|
|
|
11.2
|
|
|
|
3.3
|
|
|
29
|
%
|
|
|
38.9
|
|
|
|
33.7
|
|
|
|
5.2
|
|
|
15
|
%
|
|
|
Wireless
|
|
|
6.3
|
|
|
|
10.5
|
|
|
|
(4.2
|
)
|
|
(40
|
)%
|
|
|
20.7
|
|
|
|
29.3
|
|
|
|
(8.6
|
)
|
|
(29
|
)%
|
|
|
Data Center Colocation**
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
2.4
|
|
|
|
(2.4
|
)
|
|
n/m
|
|
|
Corporate and eliminations
|
|
|
1.5
|
|
|
|
0.2
|
|
|
|
1.3
|
|
|
n/m
|
|
|
9.6
|
|
|
|
1.6
|
|
|
|
8.0
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative
|
|
$
|
57.5
|
|
|
$
|
53.6
|
|
|
$
|
3.9
|
|
|
7
|
%
|
|
$
|
167.4
|
|
|
$
|
161.4
|
|
|
$
|
6.0
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
29.3
|
|
|
$
|
29.7
|
|
|
$
|
(0.4
|
)
|
|
(1
|
)%
|
|
$
|
85.6
|
|
|
$
|
83.8
|
|
|
$
|
1.8
|
|
|
2
|
%
|
|
|
IT Services and Hardware
|
|
|
3.0
|
|
|
|
2.5
|
|
|
|
0.5
|
|
|
20
|
%
|
|
|
8.6
|
|
|
|
7.5
|
|
|
|
1.1
|
|
|
15
|
%
|
|
|
Wireless
|
|
|
29.1
|
|
|
|
7.4
|
|
|
|
21.7
|
|
|
n/m
|
|
|
74.2
|
|
|
|
30.7
|
|
|
|
43.5
|
|
|
n/m
|
|
|
Data Center Colocation**
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
5.2
|
|
|
|
(5.2
|
)
|
|
n/m
|
|
|
Corporate
|
|
|
-
|
|
|
|
0.2
|
|
|
|
(0.2
|
)
|
|
n/m
|
|
|
0.2
|
|
|
|
0.4
|
|
|
|
(0.2
|
)
|
|
(50
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
$
|
61.4
|
|
|
$
|
39.8
|
|
|
$
|
21.6
|
|
|
54
|
%
|
|
$
|
168.6
|
|
|
$
|
127.6
|
|
|
$
|
41.0
|
|
|
32
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
(1.3
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(1.1
|
)
|
|
n/m
|
|
$
|
(0.4
|
)
|
|
$
|
4.3
|
|
|
$
|
(4.7
|
)
|
|
n/m
|
|
|
IT Services and Hardware
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
0.7
|
|
|
|
(0.7
|
)
|
|
n/m
|
|
|
Wireless
|
|
|
14.2
|
|
|
|
(0.5
|
)
|
|
|
14.7
|
|
|
n/m
|
|
|
9.3
|
|
|
|
1.8
|
|
|
|
7.5
|
|
|
n/m
|
|
|
Data Center Colocation**
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
Corporate
|
|
|
0.2
|
|
|
|
0.5
|
|
|
|
(0.3
|
)
|
|
n/m
|
|
|
1.1
|
|
|
|
48.5
|
|
|
|
(47.4
|
)
|
|
(98
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
|
|
$
|
13.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
13.3
|
|
|
n/m
|
|
$
|
10.0
|
|
|
$
|
55.3
|
|
|
$
|
(45.3
|
)
|
|
(82
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
$
|
43.9
|
|
|
$
|
47.8
|
|
|
$
|
(3.9
|
)
|
|
(8
|
)%
|
|
$
|
147.0
|
|
|
$
|
146.8
|
|
|
$
|
0.2
|
|
|
0
|
%
|
|
|
IT Services and Hardware
|
|
|
8.1
|
|
|
|
4.4
|
|
|
|
3.7
|
|
|
84
|
%
|
|
|
16.3
|
|
|
|
6.6
|
|
|
|
9.7
|
|
|
n/m
|
|
|
Wireless
|
|
|
(33.0
|
)
|
|
|
7.0
|
|
|
|
(40.0
|
)
|
|
n/m
|
|
|
(40.8
|
)
|
|
|
19.1
|
|
|
|
(59.9
|
)
|
|
n/m
|
|
|
Data Center Colocation**
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
n/m
|
|
|
-
|
|
|
|
3.2
|
|
|
|
(3.2
|
)
|
|
n/m
|
|
|
Corporate
|
|
|
(3.0
|
)
|
|
|
(1.5
|
)
|
|
|
(1.5
|
)
|
|
n/m
|
|
|
(14.0
|
)
|
|
|
(52.0
|
)
|
|
|
38.0
|
|
|
(73
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
$
|
16.0
|
|
|
$
|
57.7
|
|
|
$
|
(41.7
|
)
|
|
(72
|
)%
|
|
$
|
108.5
|
|
|
$
|
123.7
|
|
|
$
|
(15.2
|
)
|
|
(12
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Other includes transaction-related compensation, restructuring
charges, asset impairment, curtailment gain, (gain) loss on sale or
disposal of assets, amortization of deferred gain, and transaction
costs.
|
|
**Results for 2013 only include CyrusOne's results through January
23, 2013. Effective January 24, 2013, the completion date of
CyrusOne's IPO, the company accounts for CyrusOne as an equity
method investment, and therefore does not consolidate the CyrusOne
results of operations in the total company or segment results.
|
|
Cincinnati Bell Inc.
|
Segment Metric Information
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local access lines
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
246.8
|
|
255.7
|
|
263.5
|
|
271.4
|
|
278.1
|
|
|
Business
|
|
246.0
|
|
250.1
|
|
255.3
|
|
259.3
|
|
263.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
492.8
|
|
505.8
|
|
518.8
|
|
530.7
|
|
541.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long distance lines
|
|
371.4
|
|
378.6
|
|
386.9
|
|
394.1
|
|
400.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet subscribers
|
|
|
|
|
|
|
|
|
|
|
|
|
DSL
|
|
163.8
|
|
172.0
|
|
178.4
|
|
188.5
|
|
191.3
|
|
|
Fioptics
|
|
106.7
|
|
98.3
|
|
91.6
|
|
79.9
|
|
74.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
270.5
|
|
270.3
|
|
270.0
|
|
268.4
|
|
265.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fioptics video subscribers
|
|
87.8
|
|
82.5
|
|
77.5
|
|
74.2
|
|
69.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fioptics units passed
|
|
323.0
|
|
307.1
|
|
288.0
|
|
276.0
|
|
258.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid wireless subscribers
|
|
101.3
|
|
163.4
|
|
183.6
|
|
197.4
|
|
209.4
|
|
|
Prepaid wireless subscribers
|
|
75.5
|
|
113.3
|
|
136.2
|
|
142.3
|
|
145.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
176.8
|
|
276.7
|
|
319.8
|
|
339.7
|
|
355.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell Inc.
|
Net Debt and Common Shares Outstanding
|
(Unaudited)
|
(Dollars and shares in millions)
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Corporate Credit Agreement
|
|
$
|
-
|
|
|
$
|
40.0
|
|
Receivables Facility
|
|
|
112.4
|
|
|
|
106.2
|
|
8 3/4% Senior Subordinated Notes due 2018*
|
|
|
300.0
|
|
|
|
625.0
|
|
Corporate Credit Agreement - Tranche B Term Loan
|
|
|
534.6
|
|
|
|
538.6
|
|
8 3/8% Senior Notes due 2020
|
|
|
683.9
|
|
|
|
683.9
|
|
7 1/4% Senior Notes due 2023
|
|
|
40.0
|
|
|
|
40.0
|
|
Various Cincinnati Bell Telephone notes
|
|
|
134.5
|
|
|
|
134.5
|
|
Capital lease obligations and other debt
|
|
|
96.9
|
|
|
|
103.3
|
|
Net unamortized discount
|
|
|
(3.4
|
)
|
|
|
(6.3
|
)
|
|
|
|
|
|
|
|
Total debt
|
|
|
1,898.9
|
|
|
|
2,265.2
|
|
|
|
|
|
|
|
Less: Cash and cash equivalents**
|
|
|
(181.5
|
)
|
|
|
(4.6
|
)
|
|
|
|
|
|
|
|
Net debt (as defined by the company)
|
|
$
|
1,717.4
|
|
|
$
|
2,260.6
|
|
|
|
|
|
|
|
Corporate Credit Agreement availability:
|
|
$
|
150.0
|
|
|
$
|
160.0
|
|
|
|
|
|
|
|
Common shares outstanding
|
|
|
209.2
|
|
|
|
208.2
|
|
|
|
|
|
|
|
|
|
|
* On August 8, 2014, the company redeemed $325.0 million outstanding
on its 8 3/4% Senior Subordinated Notes due 2018 at a redemption
price of 104.375%
|
|
|
** On September 30, 2014, the company completed the sale of its
wireless spectrum licenses for cash consideration of $194.4 million.
|
|
Cincinnati Bell Inc.
|
Reconciliation of Net (Loss) Income (GAAP) to Adjusted EBITDA
(Non-GAAP)
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2014
|
|
|
|
|
Wireline
|
|
IT Services & Hardware
|
|
Wireless
|
|
Corporate
|
|
Total
Company
|
|
Less: Wireless
|
|
Total company
(excluding Wireless) *
|
|
Net Loss (GAAP)
|
|
|
|
|
|
|
|
|
|
$
|
(27.3
|
)
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
|
|
|
|
|
|
|
|
(11.7
|
)
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
35.8
|
|
|
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
19.4
|
|
|
|
|
|
|
|
Other income, net
|
|
|
|
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (loss) (GAAP)
|
|
$
|
43.9
|
|
|
$
|
8.1
|
|
|
$
|
(33.0
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
16.0
|
|
|
$
|
(33.0
|
)
|
|
$
|
49.0
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
29.3
|
|
|
|
3.0
|
|
|
|
29.1
|
|
|
|
-
|
|
|
|
61.4
|
|
|
|
29.1
|
|
|
|
32.3
|
|
|
|
Restructuring (reversals) charges
|
|
|
(1.3
|
)
|
|
|
-
|
|
|
|
10.3
|
|
|
|
-
|
|
|
|
9.0
|
|
|
|
10.3
|
|
|
|
(1.3
|
)
|
|
|
Transaction costs
|
|
|
-
|
|
|
|
-
|
|
|
|
2.8
|
|
|
|
0.2
|
|
|
|
3.0
|
|
|
|
2.8
|
|
|
|
0.2
|
|
|
|
Amortization of deferred gain
|
|
|
-
|
|
|
|
-
|
|
|
|
(6.4
|
)
|
|
|
-
|
|
|
|
(6.4
|
)
|
|
|
(6.4
|
)
|
|
|
-
|
|
|
|
Employee contract termination costs
|
|
|
-
|
|
|
|
0.6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.6
|
|
|
|
-
|
|
|
|
0.6
|
|
|
|
Asset Impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
7.5
|
|
|
|
-
|
|
|
|
7.5
|
|
|
|
7.5
|
|
|
|
-
|
|
|
|
Pension and other retirement plan expenses
|
|
|
4.0
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.6
|
|
|
|
4.6
|
|
|
|
-
|
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
75.9
|
|
|
$
|
11.7
|
|
|
$
|
10.3
|
|
|
$
|
(2.2
|
)
|
|
$
|
95.7
|
|
|
$
|
10.3
|
|
|
$
|
85.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
|
|
|
41
|
%
|
|
|
10
|
%
|
|
|
34
|
%
|
|
|
-
|
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2013
|
|
|
|
|
Wireline
|
|
IT Services & Hardware
|
|
Wireless
|
|
Corporate
|
|
Total
Company
|
|
Less: Wireless
|
|
Total company (excluding Wireless) *
|
|
Net Income (GAAP)
|
|
|
|
|
|
|
|
|
|
$
|
9.3
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
46.7
|
|
|
|
|
|
|
|
Loss from CyrusOne equity method investment
|
|
|
|
|
|
|
|
|
|
|
1.5
|
|
|
|
|
|
|
|
Other income, net
|
|
|
|
|
|
|
|
|
|
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (GAAP)
|
|
$
|
47.8
|
|
|
$
|
4.4
|
|
|
$
|
7.0
|
|
|
$
|
(1.5
|
)
|
|
$
|
57.7
|
|
|
$
|
7.0
|
|
|
$
|
50.7
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
29.7
|
|
|
|
2.5
|
|
|
|
7.4
|
|
|
|
0.2
|
|
|
|
39.8
|
|
|
|
7.4
|
|
|
|
32.4
|
|
|
|
Gain on sale or disposal of assets
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
Transaction costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
-
|
|
|
|
0.5
|
|
|
|
Pension and other retirement plan expenses
|
|
|
5.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.3
|
|
|
|
5.5
|
|
|
|
-
|
|
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
82.5
|
|
|
$
|
6.9
|
|
|
$
|
14.4
|
|
|
$
|
(0.5
|
)
|
|
$
|
103.3
|
|
|
$
|
14.4
|
|
|
$
|
88.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
|
|
|
45
|
%
|
|
|
8
|
%
|
|
|
29
|
%
|
|
|
-
|
|
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year dollar change in Adjusted EBITDA
|
|
$
|
(6.6
|
)
|
|
$
|
4.8
|
|
|
$
|
(4.1
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(7.6
|
)
|
|
|
|
$
|
(3.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year percentage change in Adjusted EBITDA
|
|
|
(8
|
)%
|
|
|
70
|
%
|
|
|
(28
|
)%
|
|
|
n/m
|
|
|
|
(7
|
)%
|
|
|
|
|
(4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Total company (excluding Wireless) does not include any pro-forma
adjustments as described by Regulation S-X: Rule 11-02(b)-2 or
consideration of any potential negative synergies.
|
|
Cincinnati Bell Inc.
|
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA
(Non-GAAP)
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2014
|
|
|
|
|
Wireline
|
|
IT Services & Hardware
|
|
Wireless
|
|
Data Center Colocation
|
|
Corporate
|
|
Total
Company
|
|
Less: Wireless
|
|
Total company (excluding Wireless) **
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
93.9
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
68.8
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
116.8
|
|
|
|
|
|
|
|
Loss from CyrusOne equity method investment
|
|
|
|
|
|
|
|
|
|
|
1.9
|
|
|
|
|
|
|
|
Gain on sale of CyrusOne equity method investment
|
|
|
|
|
|
|
|
|
|
|
(192.8
|
)
|
|
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
19.4
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (loss) (GAAP)
|
|
$
|
147.0
|
|
|
$
|
16.3
|
|
|
$
|
(40.8
|
)
|
|
$
|
-
|
|
|
$
|
(14.0
|
)
|
|
$
|
108.5
|
|
|
$
|
(40.8
|
)
|
|
$
|
149.3
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
85.6
|
|
|
|
8.6
|
|
|
|
74.2
|
|
|
|
-
|
|
|
|
0.2
|
|
|
|
168.6
|
|
|
|
74.2
|
|
|
|
94.4
|
|
|
|
Restructuring charges
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
15.5
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
15.4
|
|
|
|
15.5
|
|
|
|
(0.1
|
)
|
|
|
(Gain) loss on sale or disposal of assets
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
(0.1
|
)
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
Transaction costs
|
|
|
-
|
|
|
|
-
|
|
|
|
2.8
|
|
|
|
-
|
|
|
|
0.9
|
|
|
|
3.7
|
|
|
|
2.8
|
|
|
|
0.9
|
|
|
|
Amortization of deferred gain
|
|
|
-
|
|
|
|
-
|
|
|
|
(16.5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(16.5
|
)
|
|
|
(16.5
|
)
|
|
|
-
|
|
|
|
Employee contract termination costs
|
|
|
-
|
|
|
|
0.6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.6
|
|
|
|
-
|
|
|
|
0.6
|
|
|
|
Asset Impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
7.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7.5
|
|
|
|
7.5
|
|
|
|
-
|
|
|
|
Pension and other retirement plan expenses
|
|
|
12.1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.4
|
|
|
|
13.5
|
|
|
|
-
|
|
|
|
13.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
244.3
|
|
|
$
|
25.5
|
|
|
$
|
42.7
|
|
|
$
|
-
|
|
|
$
|
(11.3
|
)
|
|
$
|
301.2
|
|
|
$
|
42.7
|
|
|
$
|
258.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
|
|
|
44
|
%
|
|
|
8
|
%
|
|
|
37
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2013
|
|
|
|
|
Wireline
|
|
IT Services & Hardware
|
|
Wireless
|
|
Data Center Colocation*
|
|
Corporate
|
|
Total
Company
|
|
Less: Wireless
|
|
Total company (excluding Wireless) **
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss (GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(26.6
|
)
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
3.6
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
140.0
|
|
|
|
|
|
|
|
Loss from CyrusOne equity method investment
|
|
|
|
|
|
|
|
|
|
|
|
8.1
|
|
|
|
|
|
|
|
Other income, net
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (GAAP)
|
|
$
|
146.8
|
|
|
$
|
6.6
|
|
|
$
|
19.1
|
|
|
$
|
3.2
|
|
|
$
|
(52.0
|
)
|
|
$
|
123.7
|
|
|
$
|
19.1
|
|
|
$
|
104.6
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
83.8
|
|
|
|
7.5
|
|
|
|
30.7
|
|
|
|
5.2
|
|
|
|
0.4
|
|
|
|
127.6
|
|
|
|
30.7
|
|
|
|
96.9
|
|
|
|
Transaction-related compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42.6
|
|
|
|
42.6
|
|
|
|
-
|
|
|
|
42.6
|
|
|
|
Restructuring charges
|
|
|
5.8
|
|
|
|
0.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4.3
|
|
|
|
10.8
|
|
|
|
-
|
|
|
|
10.8
|
|
|
|
(Gain) loss on sale or disposal of assets
|
|
|
(0.9
|
)
|
|
|
-
|
|
|
|
3.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2.6
|
|
|
|
3.5
|
|
|
|
(0.9
|
)
|
|
|
Transaction costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.6
|
|
|
|
1.6
|
|
|
|
-
|
|
|
|
1.6
|
|
|
|
Curtailment gain
|
|
|
(0.6
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.6
|
)
|
|
|
-
|
|
|
|
(0.6
|
)
|
|
|
Pension and other retirement plan expenses
|
|
|
16.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.0
|
|
|
|
17.3
|
|
|
|
-
|
|
|
|
17.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
251.2
|
|
|
$
|
14.8
|
|
|
$
|
53.3
|
|
|
$
|
8.4
|
|
|
$
|
(2.1
|
)
|
|
$
|
325.6
|
|
|
$
|
53.3
|
|
|
$
|
272.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
|
|
|
46
|
%
|
|
|
6
|
%
|
|
|
35
|
%
|
|
|
54
|
%
|
|
|
-
|
|
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year dollar change in Adjusted EBITDA
|
|
$
|
(6.9
|
)
|
|
$
|
10.7
|
|
|
$
|
(10.6
|
)
|
|
$
|
(8.4
|
)
|
|
$
|
(9.2
|
)
|
|
$
|
(24.4
|
)
|
|
|
|
$
|
(13.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year percentage change in Adjusted EBITDA
|
|
|
(3
|
)%
|
|
|
72
|
%
|
|
|
(20
|
)%
|
|
|
n/m
|
|
|
|
n/m
|
|
|
|
(7
|
)%
|
|
|
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Results for 2013 only include CyrusOne's results through January
23, 2013. Effective January 24, 2013, the completion date of
CyrusOne's IPO, the company accounts for CyrusOne as an equity
method investment, and therefore does not consolidate the CyrusOne
results of operations in the total company or segment results.
|
|
** Total company (excluding Wireless) does not include any pro-forma
adjustments as described by Regulation S-X: Rule 11-02(b)-2 or
consideration of any potential negative synergies.
|
|
Cincinnati Bell Inc. Consolidated Statements of
Cash Flows (Unaudited) (Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013**
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities
|
|
$
|
27.0
|
|
|
$
|
30.4
|
|
|
$
|
120.8
|
|
|
$
|
59.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(45.6
|
)
|
|
|
(46.1
|
)
|
|
|
(121.1
|
)
|
|
|
(142.0
|
)
|
|
|
Proceeds from sale of CyrusOne equity method investment
|
|
|
-
|
|
|
|
-
|
|
|
|
355.9
|
|
|
|
-
|
|
|
|
Dividends received from CyrusOne
|
|
|
6.0
|
|
|
|
7.2
|
|
|
|
22.4
|
|
|
|
14.2
|
|
|
|
Proceeds from sale of Wireless spectrum licenses
|
|
|
194.4
|
|
|
|
-
|
|
|
|
194.4
|
|
|
|
-
|
|
|
|
Proceeds from sale of assets
|
|
|
-
|
|
|
|
0.2
|
|
|
|
2.0
|
|
|
|
1.8
|
|
|
|
Release of restricted cash
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
Cash divested from deconsolidation of CyrusOne
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(12.2
|
)
|
|
|
Other, net
|
|
|
-
|
|
|
|
-
|
|
|
|
(5.7
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by (used in) investing activities
|
|
|
154.8
|
|
|
|
(38.7
|
)
|
|
|
447.9
|
|
|
|
(137.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
-
|
|
|
|
536.0
|
|
|
|
-
|
|
|
|
536.0
|
|
|
|
Decrease in corporate credit and receivables facilities, net
|
|
|
(2.4
|
)
|
|
|
(108.8
|
)
|
|
|
(33.8
|
)
|
|
|
(52.0
|
)
|
|
|
Repayment of debt
|
|
|
(342.3
|
)
|
|
|
(1.9
|
)
|
|
|
(350.6
|
)
|
|
|
(6.7
|
)
|
|
|
Debt issuance costs
|
|
|
-
|
|
|
|
(6.4
|
)
|
|
|
-
|
|
|
|
(6.4
|
)
|
|
|
Dividends paid on preferred stock
|
|
|
(2.6
|
)
|
|
|
(2.6
|
)
|
|
|
(7.8
|
)
|
|
|
(7.8
|
)
|
|
|
Proceeds from exercise of options and warrants
|
|
|
-
|
|
|
|
0.2
|
|
|
|
1.2
|
|
|
|
6.8
|
|
|
|
Other, net
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
(0.8
|
)
|
|
|
(1.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (used in) provided by financing activities
|
|
|
(347.5
|
)
|
|
|
416.5
|
|
|
|
(391.8
|
)
|
|
|
468.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(165.7
|
)
|
|
|
408.2
|
|
|
|
176.9
|
|
|
|
390.1
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
347.2
|
|
|
|
5.5
|
|
|
|
4.6
|
|
|
|
23.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
181.5
|
|
|
$
|
413.7
|
|
|
$
|
181.5
|
|
|
$
|
413.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Cash Flow to
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow (as defined by the company)
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(165.7
|
)
|
|
$
|
408.2
|
|
|
$
|
176.9
|
|
|
$
|
390.1
|
|
|
Less adjustments:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
-
|
|
|
|
(536.0
|
)
|
|
|
-
|
|
|
|
(536.0
|
)
|
|
|
Decrease in corporate credit and receivables facilities, net
|
|
|
2.4
|
|
|
|
108.8
|
|
|
|
33.8
|
|
|
|
52.0
|
|
|
|
Cash divested from deconsolidation of CyrusOne
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12.2
|
|
|
|
Repayment of debt
|
|
|
342.3
|
|
|
|
1.9
|
|
|
|
350.6
|
|
|
|
6.7
|
|
|
|
Debt issuance costs
|
|
|
-
|
|
|
|
6.4
|
|
|
|
-
|
|
|
|
6.4
|
|
|
|
Transaction-related compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42.6
|
|
|
|
Transaction costs
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
1.2
|
|
|
|
1.6
|
|
|
|
Proceeds from sale of CyrusOne equity method investment
|
|
|
-
|
|
|
|
-
|
|
|
|
(355.9
|
)
|
|
|
-
|
|
|
|
Proceeds from sale of Wireless spectrum licenses
|
|
|
(194.4
|
)
|
|
|
-
|
|
|
|
(194.4
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
|
(14.9
|
)
|
|
|
(10.2
|
)
|
|
|
12.2
|
|
|
|
(24.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: CyrusOne's free cash flows*
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.3
|
)
|
|
|
Free cash flow excluding CyrusOne
|
|
$
|
(14.9
|
)
|
|
$
|
(10.2
|
)
|
|
$
|
12.2
|
|
|
$
|
(21.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax payments
|
|
$
|
4.6
|
|
|
$
|
0.0
|
|
|
$
|
4.9
|
|
|
$
|
2.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*CyrusOne's free cash flows for 2013 were comprised of cash
generated from operating activities of $4.0 million and cash used in
investing activities of $7.3 million.
|
|
|
**Results for 2013 only include CyrusOne's results through January
23, 2013. Effective January 24, 2013, the completion date of
CyrusOne's IPO, the company accounts for CyrusOne as an equity
method investment, and therefore does not consolidate the CyrusOne
results of operations in the total company or segment results.
|
|
Cincinnati Bell Inc.
|
Free Cash Flow (as defined by the company)
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow for the three months ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(10.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.6
|
)
|
|
Decrease in capital expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
0.5
|
|
|
Increase in interest payments
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.2
|
)
|
|
Decrease in pension and postretirement payments and contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
24.6
|
|
|
Change in working capital and other
|
|
|
|
|
|
|
|
|
|
|
|
|
(20.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow for the three months ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(14.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow for the nine months ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(24.4
|
)
|
|
Less: CyrusOne's free cash flows for the period ended January 23,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
(3.3
|
)
|
|
Free Cash Flow excluding CyrusOne for the nine months ended
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(21.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in Adjusted EBITDA (excluding CyrusOne)*
|
|
|
|
|
|
|
|
|
|
|
|
|
(16.0
|
)
|
|
Decrease in capital expenditures (excluding CyrusOne)*
|
|
|
|
|
|
|
|
|
|
|
|
|
13.2
|
|
|
Decrease in interest payments
|
|
|
|
|
|
|
|
|
|
|
|
|
7.3
|
|
|
Decrease in pension and postretirement payments and contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
25.8
|
|
|
Change in working capital and other
|
|
|
|
|
|
|
|
|
|
|
|
|
3.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow for the nine months ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*CyrusOne's Adjusted EBITDA and capital expenditures totaled $8.4
million and $7.7 million, respectively for the period January 1,
2013 through January 23, 2013. Effective January 24, 2013, the
completion date of CyrusOne's IPO, the company accounts for CyrusOne
as an equity method investment, and therefore does not consolidate
the CyrusOne results of operations in the total company or segment
results.
|
|
Cincinnati Bell Inc.
|
Capital Expenditures
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Sep. 30, 2014
|
|
|
|
|
|
Jun. 30, 2014
|
|
|
|
|
|
Mar. 31, 2014
|
|
|
|
|
|
Dec. 31, 2013
|
|
|
|
|
|
Sep. 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
|
|
|
|
$
|
41.8
|
|
|
|
|
|
$
|
38.1
|
|
|
|
|
|
$
|
26.2
|
|
|
|
|
|
$
|
48.3
|
|
|
|
|
|
$
|
41.2
|
IT Services and Hardware
|
|
|
|
|
|
|
3.5
|
|
|
|
|
|
|
2.5
|
|
|
|
|
|
|
2.5
|
|
|
|
|
|
|
3.0
|
|
|
|
|
|
|
2.7
|
Wireless
|
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
0.6
|
|
|
|
|
|
|
5.6
|
|
|
|
|
|
|
3.6
|
|
|
|
|
|
|
2.2
|
Total capital expenditures
|
|
|
|
|
|
$
|
45.6
|
|
|
|
|
|
$
|
41.2
|
|
|
|
|
|
$
|
34.3
|
|
|
|
|
|
$
|
54.9
|
|
|
|
|
|
$
|
46.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
September 30, 2014
|
|
|
|
|
|
September 30, 2014
|
|
|
|
|
Before Special Items
|
|
|
|
|
|
(GAAP)
|
|
Special Items
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
327.5
|
|
|
$
|
-
|
|
|
|
$
|
327.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
179.5
|
|
|
|
-
|
|
|
|
|
179.5
|
|
|
|
Selling, general and administrative
|
|
|
57.5
|
|
|
|
(0.6
|
)
|
[A]
|
|
|
56.9
|
|
|
|
Depreciation and amortization
|
|
|
61.4
|
|
|
|
-
|
|
|
|
|
61.4
|
|
|
|
Restructuring charges
|
|
|
9.0
|
|
|
|
(9.0
|
)
|
[B]
|
|
|
-
|
|
|
|
Asset impairment
|
|
|
7.5
|
|
|
|
(7.5
|
)
|
[C]
|
|
|
-
|
|
|
|
Amortization of deferred gain
|
|
|
(6.4
|
)
|
|
|
-
|
|
|
|
|
(6.4
|
)
|
|
|
Transaction costs
|
|
|
3.0
|
|
|
|
(3.0
|
)
|
[D]
|
|
|
-
|
|
|
|
|
Operating income
|
|
|
16.0
|
|
|
|
20.1
|
|
|
|
|
36.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
35.8
|
|
|
|
-
|
|
|
|
|
35.8
|
|
|
Loss on extinguishment of debt
|
|
|
19.4
|
|
|
|
(19.4
|
)
|
[E]
|
|
|
-
|
|
|
Other income, net
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(39.0
|
)
|
|
|
39.5
|
|
|
|
|
0.5
|
|
|
Income tax (benefit) expense
|
|
|
(11.7
|
)
|
|
|
15.8
|
|
|
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(27.3
|
)
|
|
|
23.7
|
|
|
|
|
(3.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
2.6
|
|
|
|
-
|
|
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss applicable to common shareowners
|
|
$
|
(29.9
|
)
|
|
$
|
23.7
|
|
|
|
$
|
(6.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares
|
|
|
208.7
|
|
|
|
208.7
|
|
|
|
|
208.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per common share
|
|
$
|
(0.14
|
)
|
|
$
|
0.11
|
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized results have been adjusted for the following (pretax
adjustments are tax effected at 40%):
|
|
|
|
A
|
|
Employee contract termination costs associated with integrating IT
services and Hardware segment with Wireline business markets.
|
|
|
|
B
|
|
Restructuring charges consist of employee severance and contract
terminations as we prepare to shut-down wireless operations.
|
|
|
|
C
|
|
Asset impairment relates to wireless network upgrades abandoned in
conjunction with the close of the agreement to sell wireless
spectrum licenses.
|
|
|
|
D
|
|
Transaction costs relate to expenses incurred to sell wireless
spectrum licenses and certain other assets.
|
|
|
|
E
|
|
Loss on extinguishment of debt related to the redemption of $325.0
million 8 3/4% Senior Subordinated Notes due 2018 on August 8, 2014
at a redemption rate of 104.375%.
|
|
|
|
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
|
|
|
|
|
September 30, 2013
|
|
|
|
|
|
September 30, 2013
|
|
|
|
|
Before Special Items
|
|
|
|
|
|
(GAAP)
|
|
Special Items
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
310.8
|
|
|
$
|
-
|
|
|
|
$
|
310.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
159.9
|
|
|
|
-
|
|
|
|
|
159.9
|
|
|
|
Selling, general and administrative
|
|
|
53.6
|
|
|
|
-
|
|
|
|
|
53.6
|
|
|
|
Depreciation and amortization
|
|
|
39.8
|
|
|
|
-
|
|
|
|
|
39.8
|
|
|
|
Gain on sale or disposal of assets, net
|
|
|
(0.2
|
)
|
|
|
0.2
|
|
[A]
|
|
|
-
|
|
|
|
Amortization of deferred gain
|
|
|
(0.5
|
)
|
|
|
-
|
|
|
|
|
(0.5
|
)
|
|
|
Transaction costs
|
|
|
0.5
|
|
|
|
(0.5
|
)
|
[B]
|
|
|
-
|
|
|
|
|
Operating income
|
|
|
57.7
|
|
|
|
0.3
|
|
|
|
|
58.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
46.7
|
|
|
|
0.3
|
|
[C]
|
|
|
47.0
|
|
|
Loss from CyrusOne equity method investment
|
|
|
1.5
|
|
|
|
-
|
|
|
|
|
1.5
|
|
|
Other income, net
|
|
|
(1.2
|
)
|
|
|
1.1
|
|
[C]
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
10.7
|
|
|
|
(1.1
|
)
|
|
|
|
9.6
|
|
|
Income tax expense
|
|
|
1.4
|
|
|
|
(0.4
|
)
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
9.3
|
|
|
|
(0.7
|
)
|
|
|
|
8.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
2.6
|
|
|
|
-
|
|
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income applicable to common shareowners
|
|
|
6.7
|
|
|
|
(0.7
|
)
|
|
|
|
6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares
|
|
$
|
208.5
|
|
|
$
|
208.5
|
|
|
|
$
|
208.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
|
0.03
|
|
|
|
0.00
|
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
Normalized results have been adjusted for the following (pretax
adjustments are tax effected at 40%):
|
|
|
|
A
|
|
Gain on sale or disposal of wireline network equipment.
|
|
|
|
B
|
|
Transaction costs relate to expenses incurred for exploring
strategic alternatives for our Wireless business and legal and
consulting costs associated with CyrusOne.
|
|
|
|
C
|
|
Use tax refund from assets previously disposed.
|
|
|
|
Cincinnati Bell Inc.
|
Normalized Statements of Operations (Non-GAAP) - Reconciliation
to Reported Results
|
(Unaudited)
|
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
|
|
|
|
|
|
Nine
|
|
|
|
|
Months Ended
|
|
|
|
|
|
Months Ended
|
|
|
|
|
September 30, 2014
|
|
|
|
|
|
September 30, 2014
|
|
|
|
|
Before Special Items
|
|
|
|
|
|
(GAAP)
|
|
Special Items
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
969.9
|
|
|
$
|
-
|
|
|
|
$
|
969.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
515.4
|
|
|
|
-
|
|
|
|
|
515.4
|
|
|
|
Selling, general and administrative
|
|
|
167.4
|
|
|
|
(0.6
|
)
|
[A]
|
|
|
166.8
|
|
|
|
Depreciation and amortization
|
|
|
168.6
|
|
|
|
-
|
|
|
|
|
168.6
|
|
|
|
Restructuring charges
|
|
|
15.4
|
|
|
|
(15.4
|
)
|
[B]
|
|
|
-
|
|
|
|
Asset impairment
|
|
|
7.5
|
|
|
|
(7.5
|
)
|
[C]
|
|
|
-
|
|
|
|
Gain on sale or disposal of assets, net
|
|
|
(0.1
|
)
|
|
|
0.1
|
|
[D]
|
|
|
-
|
|
|
|
Amortization of deferred gain
|
|
|
(16.5
|
)
|
|
|
-
|
|
|
|
|
(16.5
|
)
|
|
|
Transaction costs
|
|
|
3.7
|
|
|
|
(3.7
|
)
|
[E]
|
|
|
-
|
|
|
|
|
Operating income
|
|
|
108.5
|
|
|
|
27.1
|
|
|
|
|
135.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
116.8
|
|
|
|
-
|
|
|
|
|
116.8
|
|
|
Loss from CyrusOne equity method investment
|
|
|
1.9
|
|
|
|
-
|
|
|
|
|
1.9
|
|
|
Gain on sale of CyrusOne equity method investment
|
|
|
(192.8
|
)
|
|
|
192.8
|
|
[F]
|
|
|
-
|
|
|
Loss on extinguishment of debt
|
|
|
19.4
|
|
|
|
(19.4
|
)
|
[G]
|
|
|
-
|
|
|
Other expense, net
|
|
|
0.5
|
|
|
|
-
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
162.7
|
|
|
|
(146.3
|
)
|
|
|
|
16.4
|
|
|
Income tax expense
|
|
|
68.8
|
|
|
|
(58.5
|
)
|
|
|
|
10.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
93.9
|
|
|
|
(87.8
|
)
|
|
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
7.8
|
|
|
|
-
|
|
|
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) applicable to common shareowners
|
|
$
|
86.1
|
|
|
$
|
(87.8
|
)
|
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares
|
|
|
209.4
|
|
|
|
208.4
|
|
[H]
|
|
|
208.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.41
|
|
|
$
|
(0.42
|
)
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized results have been adjusted for the following (pretax
adjustments are tax effected at 40%):
|
|
|
|
A
|
|
Employee contract termination costs associated with integrating IT
services and Hardware segment with Wireline business markets.
|
|
|
|
B
|
|
Restructuring charges consist of employee severance and contract
terminations as we prepare to shut-down wireless operations.
Employee severance also includes costs associated with outsourcing
portions of our IT department.
|
|
|
|
C
|
|
Asset impairment relates to wireless network upgrades abandoned in
conjunction with the close of the agreement to sell wireless
spectrum licenses.
|
|
|
|
D
|
|
Gain on sale of wireline copper cabling.
|
|
|
|
E
|
|
Transaction costs relate to expenses incurred to sell wireless
spectrum licenses and certain other assets.
|
|
|
|
F
|
|
Gain on sale of CyrusOne equity method investment.
|
|
|
|
G
|
|
Loss on extinguishment of debt related to the redemption of $325.0
million 8 3/4% Senior Subordinated Notes due 2018 on August 8, 2014
at a redemption rate of 104.375%.
|
|
|
|
H
|
|
Dilutive effect of common stock equivalents based on net income
(loss) excluding special items.
|
|
|
|
Cincinnati Bell Inc.
|
Normalized Statements of Operations (Non-GAAP) - Reconciliation
to Reported Results
|
(Unaudited)
|
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
|
|
|
|
|
|
Nine
|
|
|
|
|
Months Ended
|
|
|
|
|
|
Months Ended
|
|
|
|
|
September 30, 2013
|
|
|
|
|
|
September 30, 2013
|
|
|
|
|
Before Special Items
|
|
|
|
|
|
(GAAP)
|
|
Special Items
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
948.5
|
|
|
$
|
-
|
|
|
|
$
|
948.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
480.5
|
|
|
|
-
|
|
|
|
|
480.5
|
|
|
|
Selling, general and administrative
|
|
|
161.4
|
|
|
|
-
|
|
|
|
|
161.4
|
|
|
|
Depreciation and amortization
|
|
|
127.6
|
|
|
|
(8.5
|
)
|
[A]
|
|
|
119.1
|
|
|
|
Transaction-related compensation
|
|
|
42.6
|
|
|
|
(42.6
|
)
|
[B]
|
|
|
-
|
|
|
|
Restructuring charges
|
|
|
10.8
|
|
|
|
(10.8
|
)
|
[C]
|
|
|
-
|
|
|
|
Curtailment gain
|
|
|
(0.6
|
)
|
|
|
0.6
|
|
[D]
|
|
|
-
|
|
|
|
Loss on sale or disposal of assets, net
|
|
|
2.6
|
|
|
|
(2.6
|
)
|
[E]
|
|
|
-
|
|
|
|
Amortization of deferred gain
|
|
|
(1.7
|
)
|
|
|
-
|
|
|
|
|
(1.7
|
)
|
|
|
Transaction costs
|
|
|
1.6
|
|
|
|
(1.6
|
)
|
[F]
|
|
|
-
|
|
|
|
|
Operating income
|
|
|
123.7
|
|
|
|
65.5
|
|
|
|
|
189.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
140.0
|
|
|
|
0.3
|
|
[G]
|
|
|
140.3
|
|
|
Loss from CyrusOne equity method investment
|
|
|
8.1
|
|
|
|
-
|
|
|
|
|
8.1
|
|
|
Other income, net
|
|
|
(1.4
|
)
|
|
|
1.1
|
|
[G]
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(23.0
|
)
|
|
|
64.1
|
|
|
|
|
41.1
|
|
|
Income tax expense
|
|
|
3.6
|
|
|
|
14.9
|
|
[H]
|
|
|
18.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(26.6
|
)
|
|
|
49.2
|
|
|
|
|
22.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
7.8
|
|
|
|
-
|
|
|
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income applicable to common shareowners
|
|
$
|
(34.4
|
)
|
|
$
|
49.2
|
|
|
|
$
|
14.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares
|
|
|
205.6
|
|
|
|
208.3
|
|
[I]
|
|
|
208.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per common share
|
|
$
|
(0.17
|
)
|
|
$
|
0.24
|
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized results have been adjusted for the following (pretax
adjustments are tax effected at 40%):
|
|
|
|
A
|
|
Increased depreciation due to one-time charge associated with a
change in estimated useful lives assigned to wireless network
software.
|
|
|
|
B
|
|
Transaction-related compensation represents incentives related to
the completion of CyrusOne's initial public offering.
|
|
|
|
C
|
|
Restructuring charges consist of lease abandonments and severance.
|
|
|
|
D
|
|
Curtailment gain resulted from elimination of future pension service
credits in the management pension plan.
|
|
|
|
E
|
|
Loss on sale or disposal of wireline and wireless network equipment.
|
|
|
|
F
|
|
Transaction costs relate to expenses incurred for exploring
strategic alternatives for our Wireless business and legal and
consulting costs associated with CyrusOne.
|
|
|
|
G
|
|
Use tax refund from assets previously disposed.
|
|
|
|
H
|
|
Tax effect of above adjustments at 40%, partially offset by a gross
valuation allowance provision of $10.7 million for Texas margin tax
credits.
|
|
|
|
I
|
|
Dilutive effect of common stock equivalents based on net income
excluding special items.
|
|
|
|
Cincinnati Bell Inc.
|
Operating Income excluding CyrusOne
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell
|
|
Data Center
|
|
|
|
|
Cincinnati Bell
|
|
|
|
|
|
including CyrusOne
|
|
Colocation
|
|
Other
|
|
|
excluding CyrusOne
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
948.5
|
|
|
$
|
(15.6
|
)
|
|
$
|
0.4
|
|
[A]
|
|
$
|
933.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
|
480.5
|
|
|
|
(4.8
|
)
|
|
|
0.4
|
|
[A]
|
|
|
476.1
|
|
|
|
Selling, general and administrative
|
|
|
161.4
|
|
|
|
(2.4
|
)
|
|
|
-
|
|
|
|
|
159.0
|
|
|
|
Depreciation and amortization
|
|
|
127.6
|
|
|
|
(5.2
|
)
|
|
|
-
|
|
|
|
|
122.4
|
|
|
|
Transaction-related compensation
|
|
|
42.6
|
|
|
|
-
|
|
|
|
(20.0
|
)
|
[B]
|
|
|
22.6
|
|
|
|
Restructuring charges
|
|
|
10.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
10.8
|
|
|
|
Curtailment gain
|
|
|
(0.6
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(0.6
|
)
|
|
|
Loss on sale or disposal of assets, net
|
|
|
2.6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2.6
|
|
|
|
Amortization of deferred gain
|
|
|
(1.7
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(1.7
|
)
|
|
|
Transaction costs
|
|
|
1.6
|
|
|
|
-
|
|
|
|
(0.4
|
)
|
[C]
|
|
|
1.2
|
|
|
|
|
Operating income
|
|
$
|
123.7
|
|
|
$
|
(3.2
|
)
|
|
$
|
20.4
|
|
|
|
$
|
140.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
Represents intersegment transactions.
|
B
|
|
Transaction-related compensation paid to CyrusOne related to
CyrusOne employees.
|
C
|
|
Transaction costs related to the CyrusOne IPO.
|
|
|
|
Cincinnati Bell Inc.
|
Reconciliation of Operating Income (GAAP) Guidance to Adjusted
EBITDA (Non-GAAP) Guidance
|
(Unaudited)
|
(Dollars in millions)
|
|
|
|
On April 6, 2014, the company announced it had entered into
agreements to sell its wireless spectrum licenses and certain other
assets. At that time, we began planning to discontinue our wireless
operations until the later of April 6, 2015 and 90 days after the
transfer of licenses.
|
|
|
|
On September 30, 2014, the agreement to sell the wireless spectrum
licenses closed and therefore we are suspending any further guidance
related to the Wireless segment. We are reaffirming the 2014
Adjusted EBITDA guidance excluding our Wireless segment as follows:
|
|
2014 Operating Income (GAAP) Guidance
|
|
|
|
$
|
180
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
130
|
|
Restructuring and other
|
|
|
|
|
5
|
|
Pension and other retirement plan expenses
|
|
|
|
|
18
|
|
|
|
|
|
|
|
2014 Adjusted EBITDA (Non-GAAP) Guidance
|
|
|
|
|
333
|
*
|
|
|
|
|
|
|
* Plus or minus 2 percent.
|
|
|
|
|
|
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|