UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

~~FORM 10-Q~~

x~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the quarterly period ended September 30, 2017~~

o~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the transition period from to~~

Commission File Number: 001-38101

WideOpenWest, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or Other Jurisdiction of
Incorporation or Organization)

46-0552948

(IRS Employer
Identification No.)


7887 East Belleview Avenue, Suite 1000 Englewood, Colorado (Address of Principal Executive Offices)		80111 (Zip Code)

~~(720)~~ (720) 479-3500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	WOW	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to ~~file)~~file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o☒ No x☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x☒ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange ~~Act (check one).~~Act.


Large accelerated filer o☐		Accelerated filer o☒

Non-accelerated filer x ~~(Do not check if a~~ ~~smaller reporting company)~~☐		Smaller reporting company o☐
Emerging Growth Company ☐

~~Emerging Growth Company~~ o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No x☒

The number of outstanding shares of the registrant’s common stock as of ~~November 8, 2017~~October 29, 2021 was ~~88,771,710~~87,162,026.

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, ~~2017~~2021

TABLE OF CONTENTS

			Page
PART I. Financial Information
Item 1:	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
~~Item 1:~~	~~Financial Statements (Unaudited)~~
	~~Condensed Consolidated Balance Sheets~~	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated ~~Statement~~Statements of ~~Changes in Stockholders’ Deficit~~Comprehensive Income	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)	4
	Condensed Consolidated Statements of Cash Flows	45
	Notes to the Condensed Consolidated Financial Statements	56
Item 2:2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1520
Item 3:3:	Quantitative and Qualitative Disclosures about Market Risk	3230
Item 4:4:	Controls and Procedures	3330
PART II. Other Information			3431
Item 1:1:	Legal Proceedings	3431
Item ~~1A:~~1A:	Risk Factors	3431
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	3431
Item 3:3:	Defaults Upon Senior Securities	3431
Item 4:4:	Mine Safety Disclosures	3431
Item 5:5:	Other Information	3431
Item 6:6:	Exhibits	3532

This Quarterly Report on Form 10-Q is for the three and nine months ended September 30, ~~2017.~~2021. Any statement contained in a prior periodic report shall be deemed to be modified or superseded for purposes of this Quarterly Report to the extent that a statement contained herein modifies or supersedes such statement. The Securities and Exchange Commission allows us to “incorporate by reference” information that we file with them, which means that we can disclose important information by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. References in this Quarterly Report to “WOW,” “we,” “us,” ~~“our”,~~“our,” or “the Company” are to WideOpenWest, Inc. and its direct and indirect subsidiaries, unless the context specifies or requires otherwise.

Table of Contents

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report that are not historical facts contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Such statements involve certain risks, uncertainties and assumptions. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “anticipate,” “expect,” “believe,” “estimate,” “plan,” “project,” “predict,” “potential,” or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including, but not limited to:

●

the ability to retain and further attract customers due to increased competition, resource abilities of competitiors, and shifts in the entertainment desires of customers;

●

our ability to respond to rapid technological change, including our ability to develop and deploy new products and technologies;

●

increases in programming and retransmission costs and/or programming exclusivity in favor of our competitors;

●

the disruption or failure of our network information systems or technologies as a result of hacking, viruses, outages or natural disasters in one or more of our geographic markets;

●

the effects of new regulations or regulatory changes on our business;

●

our substantial level of indebtedness and our ability to comply with all covenants in our debt agreements;

●

changes in laws and government regulations that may impact the availability and cost of capital;

●

effects of uncertain economic conditions, particularly in light of the current novel coronavirus (“COVID-19”) pandemic, and related factors (e.g., unemployment, decreased disposable income, etc.) which may negatively affect our customers’ demand or ability to pay for our current and future products and services;

●

our ability to manage the risks involved in the foregoing; and

other factors described from time to time in our reports filed or furnished with the Securities and Exchange Commission (“SEC”), and in particular those factors set forth in the section entitled “Risk Factors” in our annual report filed on Form 10-K with the SEC on February 24, 2021 and other reports subsequently filed with the SEC. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this report are made as of the date hereof or the date specified herein, based on information available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.

Table of Contents

PART ~~I—FINANCIAL~~I-FINANCIAL INFORMATION

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

September 30,
2017

December 31,
2016

(in millions, except per share data)

Assets

Current assets:

Cash and cash equivalents

$
36.4

$
30.8

Accounts receivable—trade, net of allowance for doubtful accounts of $6.5 and $9.4, respectively

80.0

87.2

Accounts receivable—other

3.4

0.2

Prepaid expenses and other

15.8

11.3

Total current assets

135.6

129.5

Plant, property and equipment, net (note 3)

1,042.0

995.1

Franchise operating rights

966.5

1,066.6

Goodwill

517.4

568.0

Intangible assets subject to amortization, net

6.0

7.6

Investments

—

0.9

Other noncurrent assets

9.0

3.1

Total assets

$
2,676.5

$
2,770.8

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable—trade

$
29.4

$
21.0

Accrued interest

4.0

47.3

Accrued liabilities (note 5)

84.2

109.8

Current portion of debt and capital lease obligations (note 6)

24.1

22.7

Current portion of unearned service revenue

44.6

50.2

Total current liabilities

186.3

251.0

Long-term debt and capital lease obligations—less current portion, debt issuance costs, and debt discounts (note 6)

2,412.0

2,848.5

Deferred income taxes, net (note 10)

345.2

370.2

Unearned service revenue

15.1

14.5

Other noncurrent liabilities

6.2

4.6

Total liabilities

2,964.8

3,488.8

Commitments and contingencies (note 11)

Stockholders’ deficit:

Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 shares issued and outstanding

—

—

Common stock, $0.01 par value, 700,000,000 shares authorized; issued and outstanding 88,771,710 and 66,498,762 as of September 30, 2017 and December 31, 2016, respectively

0.9

0.7

Additional paid-in capital (deficit)

295.4

(58.8
)
Accumulated deficit

(584.6
)
(659.9
)
Total stockholders’ deficit

(288.3
)
(718.0
)
Total liabilities and stockholders’ deficit

$
2,676.5

$
2,770.8


	September 30,		December 31,
	2021		2020

	(in millions, except share data)
Assets
Current assets
Cash and cash equivalents	$	59.6	$	12.4
Accounts receivable—trade, net of allowance for doubtful accounts of $5.7 and $6.7, respectively		39.5		44.4
Accounts receivable—other, net		10.3		2.8
Prepaid expenses and other		28.3		16.0
Current assets held for sale		15.5		39.2
Total current assets		153.2		114.8
Right-of-use lease assets—operating		18.8		22.1
Property, plant and equipment, net		718.8		720.9
Franchise operating rights		620.2		620.1
Goodwill		225.1		225.1
Intangible assets subject to amortization, net		1.7		1.9
Other non-current assets		42.3		42.1
Non-current assets held for sale		337.1		740.0
Total assets	$	2,117.2	$	2,487.0
Liabilities and stockholders’ equity (deficit)
Current liabilities
Accounts payable—trade	$	49.9	$	32.4
Accrued interest		2.1		4.0
Current portion of long-term lease liability—operating		6.0		5.8
Accrued liabilities and other		185.8		79.7
Current portion of long-term debt and finance lease obligations		33.9		37.5
Current portion of unearned service revenue		28.5		28.6
Current liabilities held for sale		17.5		47.9
Total current liabilities		323.7		235.9
Long-term debt and finance lease obligations, net of debt issuance costs —less current portion		1,109.9		2,228.5
Long-term lease liability—operating		14.9		19.0
Deferred income taxes, net		306.0		200.6
Other non-current liabilities		23.5		13.1
Non-current liabilities held for sale		2.0		2.3
Total liabilities		1,780.0		2,699.4
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 shares issued and outstanding		—		—
Common stock, $0.01 par value, 700,000,000 shares authorized; 95,994,859 and 95,187,161 issued as of September 30, 2021 and December 31, 2020, respectively; 87,191,153 and 86,847,797 outstanding as of September 30, 2021 and December 31, 2020, respectively		1.0		1.0
Additional paid-in capital		345.0		333.8
Accumulated other comprehensive income (loss)		—		(6.5)
Accumulated income (deficit)		79.9		(460.0)
Treasury stock at cost, 8,803,706 and 8,339,364 shares as of September 30, 2021 and December 31, 2020, respectively		(88.7)		(80.7)
Total stockholders’ equity (deficit)		337.2		(212.4)
Total liabilities and stockholders’ equity (deficit)	$	2,117.2	$	2,487.0

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Three months
ended
September 30,

Nine months
ended
September 30,

2017

2016

2017

2016

(in millions, except for per share data)

Revenue

$
297.8

$
311.2

$
895.3

$
921.0

Costs and expenses:

Operating (excluding depreciation and amortization)

153.2

167.1

470.4

499.1

Selling, general and administrative

38.1

32.6

100.9

86.2

Depreciation and amortization

49.0

49.6

150.1

155.0

Management fee to related party

—

0.4

1.0

1.3

240.3

249.7

722.4

741.6

Income from operations

57.5

61.5

172.9

179.4

Other income (expense):

Interest expense

(32.2
)
(52.9
)
(122.0
)
(162.3
)
Loss on early extinguishment of debt (note 6)

(26.1
)
(28.1
)
(32.1
)
(30.6
)
Gain on sale of assets (note 4)

—

—

38.4

—

Unrealized gain on derivative instruments, net

—

—

—

2.3

Other income, net

0.3

1.9

1.7

2.0

Income (loss) before provision for income taxes

(0.5
)
(17.6
)
58.9

(9.2
)
Income tax benefit (expense) (note 10)

(1.6
)
(2.7
)
16.4

7.4

Net income (loss)

$
(2.1
)
$
(20.3
)
$
75.3

$
(1.8
)

Basic and diluted earnings (loss) per common shares

Basic

$
(0.02
)
$
(0.31
)
$
0.99

$
(0.03
)
Diluted

$
(0.02
)
$
(0.31
)
$
0.99

$
(0.03
)
Weighted-average common shares outstanding

Basic

86,973,345

66,525,044

76,014,568

65,605,874

Diluted

86,973,345

66,525,044

76,096,401

65,605,874


	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

	(in millions, except per share data)
Revenue	$	184.0	$	183.1	$	547.4	$	543.2
Costs and expenses:
Operating (excluding depreciation and amortization)		93.4		99.7		286.9		306.6
Selling, general and administrative		44.8		40.2		132.8		125.0
Depreciation and amortization		42.3		38.2		126.0		111.5
		180.5		178.1		545.7		543.1
Income from operations		3.5		5.0		1.7		0.1
Other income (expense):
Interest expense		(22.4)		(32.2)		(82.6)		(98.1)
Gain (loss) on sale of assets, net		0.1		(0.3)		—		0.3
Other income, net		1.8		0.8		2.4		1.5
Loss from continuing operations before provision for income tax		(17.0)		(26.7)		(78.5)		(96.2)
Income tax (expense) benefit		(4.2)		6.4		12.1		21.8
Loss from continuing operations		(21.2)		(20.3)		(66.4)		(74.4)
Discontinued Operations (Note 1)
Income from discontinued operations, net of tax		539.1		29.3		606.3		85.7
Net income	$	517.9	$	9.0	$	539.9	$	11.3

Basic and diluted (loss) per common share - continuing operations
Basic	$	(0.26)	$	(0.28)	$	(0.80)	$	(0.94)
Diluted	$	(0.26)	$	(0.28)	$	(0.80)	$	(0.94)
Basic and diluted earnings per common share - discontinued operations
Basic	$	6.50	$	0.39	$	7.34	$	1.08
Diluted	$	6.50	$	0.39	$	7.34	$	1.08
Basic and diluted earnings per common share
Basic	$	6.24	$	0.11	$	6.54	$	0.14
Diluted	$	6.24	$	0.11	$	6.54	$	0.14
Weighted-average common shares outstanding
Basic		82,973,519		81,771,279		82,615,949		81,475,814
Diluted		82,973,519		81,771,279		82,615,949		81,475,814

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF ~~STOCKHOLDERS’ DEFICIT~~COMPREHENSIVE INCOME

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~(unaudited)


	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

	(in millions)
Net income	$	517.9	$	9.0	$	539.9	$	11.3
Unrealized gain on derivative instrument, net of tax		—		4.5		6.5		4.8
Comprehensive income	$	517.9	$	13.5	$	546.4	$	16.1

~~(unaudited)~~

Common
Shares

Common Stock
par value

Management
D Units

Additional Paid-
in
Capital (Deficit)

Accumulated
Deficit

Total
Stockholders’
Deficit

(in millions, expect per share data)

Balances at January 1, 2017

66,498,762

$
0.7

201,696

$
(58.8
)
$
(659.9
)
$
(718.0
)
Repurchase of old management units (note 12)

—

—

—

(8.8
)
—

(8.8
)
Cancellation of management D units

—

—

(201,696
)
—

—

—

Proceeds from issuance of common stock, net of issuance costs (note 7)

20,970,589

0.2

—

334.5

—

334.7

Contribution from former Parent

—

—

—

20.3

—

20.3

Stock-based compensation

1,302,359

—

—

8.3

—

8.3

Other

—

—

—

(0.1
)
—

(0.1
)
Net income

—

—

—

—

75.3

75.3

Balances at September 30, 2017

88,771,710

$
0.9

—

$
295.4

$
(584.6
)
$
(288.3
)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT

)

(unaudited)

Nine months
ended September 30,

2017

2016

(in millions)

Cash flows from operating activities:

Net income (loss)

$
75.3

$
(1.8
)
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

150.1

155.0

Unrealized gain on derivative instruments

—

(2.3
)
Provision for doubtful accounts

14.3

14.7

Deferred income taxes

(25.0
)
(40.3
)
Gain on sale of assets (note 4)

(38.4
)
—

Amortization of debt issuance costs, premium and discount, net

3.8

6.4

Non-cash compensation expense

8.3

—

Loss on early extinguishment of debt

7.1

5.9

Other non-cash items

0.3

—

Changes in operating assets and liabilities:

Receivables and other operating assets

(23.4
)
(15.4
)
Payables and accruals

(56.0
)
(11.7
)
Net cash flows provided by operating activities

116.4

110.5

Cash flows from investing activities:

Capital expenditures

(224.3
)
(207.2
)
Newnan acquisition

—

(54.3
)
Sale of investment

—

15.7

Proceeds from sale of assets (note 4)

213.0

—

Other investing activities

0.4

1.1

Net cash flows used in investing activities

(10.9
)
(244.7
)

Cash flows from financing activities:

Proceeds from issuance of debt

2,454.3

2,495.1

Payments on debt and capital lease obligations

(2,896.2
)
(2,434.8
)
Contribution from former Parent

20.3

50.0

Proceeds from issuance of common stock, net of issuance costs

334.7

—

Repurchase of old management units

(8.8
)
—

Payment of debt issuance costs

(3.7
)
(1.7
)
Distribution to former Parent

—

(4.8
)
Other

(0.5
)
(0.1
)
Net cash flows provided by (used in) financing activities

(99.9
)
103.7

Increase (decrease) in cash and cash equivalents

5.6

(30.5
)
Cash and cash equivalents, beginning of period

30.8

66.6

Cash and cash equivalents, end of period

$
36.4

$
36.1

Supplemental disclosures of cash flow information:

Cash paid during the periods for interest

$
161.6

$
193.7

Cash paid during the periods for income taxes

$
4.4

$
6.5

Non-cash financing activities:

Changes in capital expenditure accruals

$
(8.6
)
$
2.6


								Accumulated
		Common		Treasury		Additional		Other				Total
	Common	Stock		Stock at		Paid-in		Comprehensive		Accumulated		Stockholders'
	Stock	Par Value		Cost		Capital		Income (Loss)		Income (Deficit)		Equity (Deficit)

	(in millions, except share data)
Balances at January 1, 2021	86,847,797	$	1.0	$	(80.7)	$	333.8	$	(6.5)	$	(460.0)	$	(212.4)
Changes in accumulated other comprehensive gain	—		—		—		—		4.3		—		4.3
Stock-based compensation	—		—		—		3.1		—		—		3.1
Issuance of restricted stock, net	666,127		—		—		—		—		—		—
Purchase of shares	(397,186)		—		(6.6)		—		—		—		(6.6)
Net income	—		—		—		—		—		9.6		9.6
Balances at March 31, 2021(1)	87,116,738	$	1.0	$	(87.3)	$	336.9	$	(2.2)	$	(450.4)	$	(202.0)
Changes in accumulated other comprehensive gain	—		—		—		—		2.2		—		2.2
Stock-based compensation	—		—		—		4.0		—		—		4.0
Issuance of restricted stock, net	34,929		—		—		—		—		—		—
Purchase of shares	(40,473)		—		(0.8)		—		—		—		(0.8)
Net income	—		—		—		—		—		12.4		12.4
Balances at June 30, 2021(1)	87,111,194	$	1.0	$	(88.1)	$	340.9	$	—	$	(438.0)	$	(184.2)
Stock-based compensation	—		—		—		4.1		—		—		4.1
Issuance of restricted stock, net	106,642		—		—		—		—		—		—
Purchase of shares	(26,683)		—		(0.6)		—		—		—		(0.6)
Net income	—		—		—		—		—		517.9		517.9
Balances at September 30, 2021(1)	87,191,153	$	1.0	$	(88.7)	$	345.0	$	—	$	79.9	$	337.2

(1)	Included in outstanding shares as of March 31, 2021, June 30, 2021 and September 30, 2021 are 4,423,885, 4,159,455 and 4,181,731, respectively, of non-vested shares of restricted stock awards granted to employees and directors.


								Accumulated
		Common		Treasury		Additional		Other				Total
	Common	Stock		Stock at		Paid-in		Comprehensive		Accumulated		Stockholders'
	Stock	Par Value		Cost		Capital		Loss		Deficit		Deficit

	(in millions, except share data)
Balances at January 1, 2020	84,103,108	$	0.9	$	(79.7)	$	322.8	$	(15.5)	$	(474.4)	$	(245.9)
Changes in accumulated other comprehensive loss	—		—		—		—		(3.0)		—		(3.0)
Stock-based compensation	—		—		—		2.7		—		—		2.7
Issuance of restricted stock, net	2,858,421		—		—		—		—		—		—
Purchase of shares	(199,520)		—		(0.7)		—		—		—		(0.7)
Net income	—		—		—		—		—		0.1		0.1
Balances at March 31, 2020(1)	86,762,009	$	0.9	$	(80.4)	$	325.5	$	(18.5)	$	(474.3)	$	(246.8)
Changes in accumulated other comprehensive loss	—		—		—		—		3.3		—		3.3
Stock-based compensation	—		—		—		3.0		—		—		3.0
Issuance of restricted stock, net	349,673		—		—		—		—		—		—
Purchase of shares	(46,917)		—		(0.3)		—		—		—		(0.3)
Net income	—		—		—		—		—		2.2		2.2
Balances at June 30, 2020(1)	87,064,765	$	0.9	$	(80.7)	$	328.5	$	(15.2)	$	(472.1)	$	(238.6)
Changes in accumulated other comprehensive loss	—		—		—		—		4.5		—		4.5
Stock-based compensation	—		—		—		2.6		—		—		2.6
Issuance of restricted stock, net	(198,182)		—		—		—		—		—		—
Purchase of shares	(10,105)		—		—		—		—		—		—
Net income	—		—		—		—		—		9.0		9.0
Balances at September 30, 2020(1)	86,856,478	$	0.9	$	(80.7)	$	331.1	$	(10.7)	$	(463.1)	$	(222.5)

(1)	Included in outstanding shares as of March 31, 2020, June, 30, 2020 and September 30, 2020 are 5,292,277, 5,322,864 and 5,072,695, respectively, of non-vested shares of restricted stock awards granted to employees and directors.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine Months Ended
	September 30,
	2021		2020

	(in millions)
Cash flows from operating activities:
Net income	$	539.9	$	11.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		167.0		170.8
Deferred income taxes		103.3		4.5
Provision for doubtful accounts		8.3		14.3
Gain on sale of Ohio markets		(689.6)		—
Gain on sale of assets, net		(0.5)		(0.4)
Amortization of debt issuance costs and discount		3.6		3.6
Non-cash compensation		11.6		8.3
Other non-cash items		(0.2)		—
Changes in operating assets and liabilities:
Receivables and other operating assets		(19.0)		(23.0)
Payables and accruals		115.1		10.7
Net cash provided by operating activities	$	239.5	$	200.1
Cash flows from investing activities:
Capital expenditures	$	(167.4)	$	(166.3)
Proceeds from sale of Ohio markets, net		1,112.5		—
Other investing activities		1.3		(0.6)
Net cash provided by (used in) investing activities	$	946.4	$	(166.9)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	$	37.0	$	91.0
Payments on long-term debt and finance lease obligations		(1,167.8)		(111.3)
Purchase of shares		(7.9)		(1.0)
Net cash used in financing activities	$	(1,138.7)	$	(21.3)
Increase in cash and cash equivalents		47.2		11.9
Cash and cash equivalents, beginning of period		12.4		21.0
Cash and cash equivalents, end of period	$	59.6	$	32.9
Supplemental disclosures of cash flow information:
Cash paid during the periods for interest	$	81.9	$	93.4
Cash paid (received) during the periods for income taxes, net	$	2.2	$	(3.4)
Non-cash operating activities:
Operating lease additions	$	1.0	$	5.5
Non-cash financing activities:
Finance lease additions	$	5.1	$	13.3
Capital expenditure accounts payable and accruals	$	24.7	$	13.7

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017 AND 2016~~2021

(unaudited)

~~(unaudited)~~

Note 1. General Information

WideOpenWest, Inc. (“WOW” or the “Company”) was organized in Delaware in July 2012 as WideOpenWest Kite, Inc. WideOpenWest Kite, Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017. On April 1, 2016, the Company consummated a restructuring (“Restructuring”) whereby WideOpenWest Finance, LLC (“WOW Finance”) became a wholly owned subsidiary of WOW. Previously, WOW Finance was owned by WOW, WideOpenWest Illinois, Inc., WideOpenWest Ohio, Inc. and Sigecom, Inc. (collectively, the “Members”, or WOW and “Affiliates”). Prior to the Restructuring, the Members were wholly owned subsidiaries of Racecar Acquisition, LLC (“Racecar Acquisition”).

~~As a result of the Restructuring, the Affiliates merged with and into WOW, WOW became the sole subsidiary of Racecar Acquisition and WOW Finance became a wholly owned subsidiary of WOW.~~

On May 25, 2017, the Company completed an initial public offering (“IPO”) of shares of its common stock, which are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “WOW”. Prior to its IPO, WOW was wholly owned by Racecar Acquisition, which is a wholly owned subsidiary of WideOpenWest Holdings, LLC (“Parent”). Subsequent to the IPO, Racecar Acquisition and former Parent do not own any shares in the Company as a result of a distribution of shares to their respective owners. In the following context, the terms we, us, WOW, or the Company may refer, as the context requires, to WOW or, collectively, WOW and its subsidiaries.

~~The Company is a fully integrated~~leading broadband services provider ofoffering high-speed data (“HSD”), cable television (“Video”), and digital telephony (“Telephony”) ~~services. The~~services to residential and business customers. At September 30, 2021, the Company ~~serves~~served customers in ~~nineteen~~17 Midwestern and Southeastern markets in the United ~~States. The Company manages and operates~~States, including its Midwestern broadband ~~cable systems~~networks in Detroit and Lansing, Michigan; Chicago, Illinois; ~~Cleveland and Columbus, Ohio;~~ Evansville, Indiana and Baltimore, Maryland. The Southeastern systems are located in Augusta, Columbus, Newnan and West Point, Georgia; Charleston, South Carolina; Dothan, Auburn, Huntsville and Montgomery, Alabama; Knoxville, Tennessee; and Panama City and Pinellas County, Florida.

The Company’s operations are managed and reported to its Chief Executive Officer (“CEO”), the Company’s chief operating decision maker, on a consolidated basis. The CEO assesses performance and allocates resources based on the consolidated results of operations. Under this organizational and reporting structure, the Company operates as 1 reportable segment.

Discontinued Operations – Sale of Service Areas

On June 30, 2021, WOW entered into an Asset Purchase Agreement with Atlantic Broadband (OH), LLC, (“Atlantic”), a U.S. cable operator and subsidiary of Cogeco Communications, Inc. and Atlantic Broadband Finance, LLC, a Delaware limitied liability company (the “Atlantic Purchase Agreement”), whereby Atlantic agreed to acquire the Company’s Cleveland and Columbus, Ohio markets for approximately $1.125 billion, subject to adjustments, including customary working capital adjustments, as specified in the Atlantic Purchase Agreement. The sale was completed on September 1, 2021. Refer to Note 5 – Asset Sales for additional information reguarding the sale.

Additionally, on June 30, 2021, WOW entered into an Asset Purchase Agreement with Radiate HoldCo, LLC, a telecommunications holding company affiliated with RCN Telecom Services LLC, Grande Communications Networks, LLC and WaveDivision Holdings, LLC (collectively, “Astound Broadband”) (the “Astound Purchase Agreement”), whereby Radiate HoldCo, LLC agreed to acquire the Company’s Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets for approximately $661 million, subject to adjustments, including customary working capital adjustments, as specified in the Astound Purchase Agreement. The sale was completed on November 1, 2021. Refer to Note 14 – Subsequent Events for additional information regarding the sale.

The divestiture of these markets represents a strategic shift in WOW’s business as the markets represented approximately 37% of total revenue for the three and six months ended June 30, 2021 and as such were presented as discontinued operations in the Form 10-Q for the period ending June 30, 2021. The Company will continue to present these markets as discontinued operations in the condensed consolidated statements of operations and exclude from continuing operations for all periods in which such discontinued operations are presented. Results of discontinued operations include all revenues and direct expenses of these markets. General corporate overhead is not allocated to discontinued operations. The assets and liabilities associated with these markets, as specified in the asset purchase agreements, are classified as held for sale in our condensed consolidated balance sheets.

In connection with the divestiture of the Ohio markets, the Company has entered into a transition services agreement under which WOW will continue to provide certain services to Atlantic. A similar agreement commenced with Astound Broadband upon close of the Astound Purchase Agreement subsequent to the periods presented. Under the transition services agreements, the buyers may elect a variety of services, including but not limited to: information technology, network, business support services, etc. The term of the transition services agreements are for 12 months following the closing date, with 2 optional three month extensions. NaN of the costs related to the employees, processes or systems that will be utilized to provide the services under the transition services agreements were allocated to discontinued operations.

Table of Contents

The assets and liabilities sold under the Atlantic Purchase Agreement were written off during the third quarter in conjunction with the closing of the transaction and as such, the following table presents the aggregate amounts of the classes of assets and liabilities to be sold under the the Astound Purchase Agreement as of September 30, 2021. The amounts presented for the period ending December 31, 2020 include the assets and liabilities to be sold under the Astound Purchase Agreement and Atlantic Purchase Agreement:


	September 30,		December 31,
	2021		2020

	(in millions)
Assets
Current assets
Accounts receivable—trade, net of allowance for doubtful accounts of $1.1 and $1.8, respectively	$	10.0	$	25.1
Accounts receivable—other, net		—		0.9
Prepaid expenses and other		5.5		13.2
Total current assets		15.5		39.2
Right-of-use lease assets—operating		2.2		2.8
Property, plant and equipment, net		150.8		379.4
Franchise operating rights		111.2		165.4
Goodwill		68.8		183.7
Intangible assets subject to amortization, net		0.1		0.2
Other non-current assets		4.0		8.5
Total assets	$	352.6	$	779.2
Liabilities and stockholders’ deficit
Current liabilities
Accounts payable—trade	$	2.7	$	11.4
Current portion of long-term lease liability—operating		0.4		0.7
Accrued liabilities and other		7.6		18.9
Current portion of unearned service revenue		6.8		16.9
Total current liabilities		17.5		47.9
Long-term lease liability—operating		1.6		2.3
Other non-current liabilities		0.4		—
Total liabilities	$	19.5	$	50.2

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


	Three months ended				Nine months ended
	September 30,				September 30,
	2021 (1)		2020		2021 (1)		2020

	(in millions)
Revenue	$	83.7	$	105.6	$	293.9	$	312.0
Costs and expenses:
Operating (excluding depreciation and amortization)		28.9		40.3		106.1		127.7
Selling, general and administrative		5.2		5.6		10.7		11.5
Depreciation and amortization		—		20.0		41.0		59.3
		34.1		65.9		157.8		198.5
Income from operations		49.6		39.7		136.1		113.5
Other income (expense):
Interest income (expense)		—		—		0.4		—
Gain on sale of assets, net		689.9		—		690.1		0.1
Other income, net		—		—		0.1		0.1
Income from discontinued operations before provision for income tax		739.5		39.7		826.7		113.7
Income tax expense		(200.4)		(10.4)		(220.4)		(28.0)
Income from discontinued operations	$	539.1	$	29.3	$	606.3	$	85.7

(1)

Includes activity for the Cleveland and Columbus, Ohio markets through September 1, 2021.

Table of Contents

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


	Three months ended				Nine months ended
	September 30,				September 30,
	2021 (1)		2020		2021 (1)		2020

	(in millions)
Residential subscription
HSD	$	41.4	$	46.8	$	143.5	$	136.3
Video		27.1		40.0		98.6		119.6
Telephony		3.0		4.2		10.9		12.8
Total Residential subscription	$	71.5	$	91.0	$	253.0	$	268.7
Business subscription
HSD	$	5.0	$	5.7	$	16.7	$	16.8
Video		0.7		0.9		2.5		2.7
Telephony		2.3		2.9		7.9		8.9
Total business subscription	$	8.0	$	9.5	$	27.1	$	28.4
Total subscription services revenue		79.5		100.5		280.1		297.1
Other business services revenue		0.6		0.5		1.6		1.5
Other revenue		3.6		4.6		12.2		13.4
Total revenue	$	83.7	$	105.6	$	293.9	$	312.0

(1)

Includes the activity for the Cleveland and Columbus, Ohio markets through September 1, 2021.

The following table presents specified items of cash flow and significant non-cash items of discontinued operations for the nine months ended:


	September 30,		September 30,
	2021 (1)		2020

	(in millions)
Specified items of cash flow:
Capital expenditures	$	41.2	$	44.9

Non-cash operating activities:
Operating lease additions	$	—	$	0.6
Non-cash investing activities:
Capital expenditure accounts payable and accruals	$	2.3	$	1.9

(1)

Includes the activity for the Cleveland and Columbus, Ohio markets through September 1, 2021.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

Prior to the Restructuring, the Members were all under common control. The financial statements presented herein include the consolidated accounts of WOW and its subsidiaries and the combined accounts of its Affiliates. All significant intercompany accounts and transactions have been eliminated in consolidation and combination. As a result, the unaudited condensed consolidated financial statements of WOW reflect all transactions of the wholly owned subsidiaries of the former Parent and Racecar Acquisition. The Company operates as one operating segment.

Certain employees of WOW participated in equity plans administered by the Company’s former Parent. Because the management units from the equity plan were issued from the former Parent’s ownership structure, the management units’ value directly correlated to the results of WOW, as the primary asset of the former Parent’s investment in WOW. The management units for the equity plan have been “pushed down” to the Company, as the management units had been utilized as equity-based compensation for WOW management. Immediately prior to the Company’s IPO, these management units were cancelled.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. ~~Accordingly, they do not include all~~Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the ~~information required by GAAP or~~ Securities and Exchange Commission (“SEC”) ~~rules and regulations for complete financial statements.~~; however, in the opinion of management, the disclosures made are adequate to ensure the information presented is not misleading. The ~~December 31, 2016 balance and results of operations for the nine months ended September 30, 2016 are presented on a combined condensed consolidated basis. The~~ year-end ~~combined condensed~~ consolidated balance sheet was derived from audited financial statements.

In the opinion of management, all normally recurring adjustments considered necessary for the fair presentation of the financial statements have been included, and the financial statements present fairly the financial position and results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results expected for the full year or any future period. These

unaudited condensed consolidated financial statements should be read in conjunction with the ~~2016 combined consolidated financial statements and notes thereto, together with the Company’s final prospectus~~2020 Annual Report filed with the SEC on ~~May 25, 2017.~~February 24, 2021.

~~Earnings or Loss per Share~~8

~~Basic earnings or loss per share attributable to the Company’s common shareholders is computed by dividing net earnings or loss attributable to common shareholders by the weighted average number~~Table of common shares outstanding for the period. Diluted earnings or loss per share attributable to common shareholders presents the dilutive effect, if any, on a per share basis of potential common shares (such as restricted stock units) as if they had been vested or converted during the periods presented. No such items were included in the computation of diluted loss per share for the three months ended September 30, 2017Contents

All significant intercompany accounts and ~~2016 and the nine months ended September 30, 2016 because the Company incurred a net loss in each of these periods and the effect of inclusion would~~transactions have been ~~anti-dilutive. All of the shares outstanding and per share amounts have been retroactively adjusted to reflect the stock-split~~eliminated in the accompanying unaudited condensed consolidated financial statements. For the nine months ended September 30, 2017, the diluted earnings per share calculation resulted in an immaterial change in the weighted average number of common shares outstanding.consolidation.

Three months
ended
September 30,

Nine months
ended
September 30,

Computation of Income per Share

2017

2016

2017

2016

(in millions, except for per share data)

Net income (loss)

$
(2.1
)
$
(20.3
)
$
75.3

$
(1.8
)

Basic weighted-average shares

86,973,345

66,525,044

76,014,568

65,605,874

Effect of dilutive securities:

Restricted stock awards

—

—

81,833

—

Diluted weighted-average shares

86,973,345

66,525,044

76,096,401

65,605,874

Basic net income (loss) per share

$
(0.02
)
$
(0.31
)
$
0.99

$
(0.03
)
Diluted net income (loss) per share

$
(0.02
)
$
(0.31
)
$
0.99

$
(0.03
)

Use of Estimates

The ~~accompanying unaudited condensed consolidated~~preparation of financial statements ~~have been prepared~~ in accordance with ~~GAAP. These accounting principles require~~GAAP requires management to make assumptions and estimates that affect the reported amounts and disclosures of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts and disclosures of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the ~~circumstances.~~circumstances, including but not limited to the potential impacts arising from COVID-19. To the extent there are differences between those estimates and actual results, the unaudited condensed consolidated financial statements may be materially affected.

Recently Issued Accounting Standards

ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

In ~~January 2017,~~March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~No. 2017-04~~2020-04, Reference Rate Reform (Topic 848), ~~Intangibles—Goodwill~~Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional guidance, expedients and ~~Other~~exceptions for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update apply to all entities, subject to meeting the criteria, which participate in contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 was subsequently amended by ASU 2021-01, Reference Rate Reform (Topic ~~350)~~848), Scope, which refines the scope of Topic 848 and permits optional expendients and exceptions when accounting for derivative contracts and certain hedging relationships. The amendments of these updates are available to all entities as of March 12, 2020 through December 31, 2022. The Company has not yet adopted these amendments, but has determined the impact of adopting this guidance will not have a material impact on its financial position, results of operations and cash flows.

Recently Adopted Accounting Pronouncements

ASU 2019-12, Income Taxes—Income Taxes (Topic 740): Simplifying the ~~Test~~Accounting for ~~Goodwill Impairment~~Income Taxes, which eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new standard is effective for annual and interim goodwill impairment tests in fiscal years beginning after

In December ~~15,~~ 2019, and should be applied on a prospective basis. Early adoption is permitted for annual or interim goodwill impairment testing performed after January 1, 2017. The Company is currently evaluating the impact and timing of adopting this guidance.

~~In August 2016,~~ the FASB issued ASU ~~No. 2016-15 to Topic 230~~2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU ~~2016-15”~~2019-12”), ~~Statement of Cash Flows~~~~, making changes~~. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the ~~classification~~general principles in Topic 740. The amendments also improve consistent application of ~~certain cash receipts~~ and ~~cash payments in order to reduce diversity in presentation. This update~~simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2017. The update addresses eight specific cash flow issues, of which only one is applicable to the Company’s financial statements.~~2020. The Company ~~does not believe that the adoption of this pronouncement will have a material impact on its financial position, results of operations or cash flows.~~
~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~“Leases (Topic 842)”~~ (“ASU 2016-02”). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company will adoptadopted this guidance ~~beginning with its first quarter ending March 31, 2019. The Company is in the process~~prospectively as of ~~evaluating the future impact of ASU 2016-02 on its financial position, results of operations and cash flows.~~
~~In May 2014, the FASB issued ASU 2014-09,~~ ~~“Revenue from Contracts with Customers (Topic 606)”~~ (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of the guidance in Accounting Standards Codification Topic 606 (“ASC 606”) is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity is required to follow five steps which are comprised of (a) identifying the contract(s) with a customer; (b) identifying the performance obligations in the contract; (c) determining the transaction price; (d) allocating the transaction price to the performance obligations in the contract and (e) recognizing revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until January 1, ~~2018.~~
The Company has substantially completed its review of its revenue arrangements. Under current accounting policies, the Company recognizes upfront revenue related to installation activities to the extent of direct selling costs, which generally results in recognition of revenue when the installation related activities have been provided to the customer. Under the new revenue recognition standard, the Company’s installation related activities will be recognized ratably over the period which the customer is expected to benefit from the initial installation fee. In addition, the Company will be required to capitalize direct costs associated with obtaining contracts with customers, primarily sales commissions, and will amortize the costs over a period consistent with the transfer of goods and services to the customer, including anticipated renewals. The Company’s installation revenue and sales commission expense represents approximately 2% of total revenue and expense, respectively and any changes resulting from the adoption are not expected to have a material impact to the Company’s financial position.
The new standard also requires additional disclosures regarding the nature, timing and uncertainty of the Company’s revenue arrangements. The Company intends to adopt the guidance on January 1, 2018 using the cumulative effect transition method.
~~In March 2016, the FASB issued ASU 2016-08,~~ ~~Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net)~~ (“ASU 2016-08”), which amends the principal-versus-agent implementation guidance and illustrations in ASC Topic 606. The FASB issued ASU 2016-08 in response to concerns identified by stakeholders, including those related to determining the appropriate unit of account under the revenue standard’s principal-versus-agent guidance and applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard’s control principle. ASU 2016-08 has the same effective date as ASU 2014-09 and requires adopting ASU 2016-08 by using the same transition method used to adopt ASU 2014-09. The Company does not believe adoption of the pronouncement will have a material impact on the Company’s financial position, results of operations or cash flows.
~~Recently Adopted Accounting Pronouncements~~
~~In March 2016, the FASB issued ASU No. 2016-09,~~ ~~Compensation—Stock Compensation (Topic 718):~~ ~~Improvements to Employee Share-Based Payment Accounting~~ (“ASU 2016-09”) which is intended to simplify certain aspects of the accounting for share-based payments to employees. The guidance in ASU 2016-09 requires all income tax effects of awards to be recognized in the statement of operations when the awards vest or are settled rather than recording excess tax benefits or deficiencies in additional paid-in capital. The guidance in ASU 2016-09 also allows an employer to repurchase more of an employee’s shares than it could under prior guidance for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. For public companies, ASU 2016-09 is effective for interim and annual periods beginning after December 15, 2016, and requires a modified retrospective approach to adoption.2021. The adoption ~~of this pronouncement~~ did not have a material impact on the Company’s financial position, results of operations or cash flows.

Table of Contents

~~In November 2015,~~Note 3. Revenue from Contracts with Customers
Revenue by Service Offering
The following table presents revenue by service offering:

Three months ended

Nine months ended

September 30,

September 30,


2021

2020

2021

2020

(in millions)
Residential subscription

HSD

$
85.6

$
74.0

$
246.6

$
215.7
Video

50.0

60.1

156.1

179.0
Telephony

7.0

8.5

21.9

27.4
Total Residential subscription

$
142.6

$
142.6

$
424.6

$
422.1
Business subscription

HSD

$
17.7

$
16.1

$
52.0

$
47.7
Video

2.8

2.9

8.4

8.5
Telephony

7.2

7.4

21.9

22.6
Total business subscription

$
27.7

$
26.4

$
82.3

$
78.8
Total subscription services revenue

170.3

169.0

506.9

500.9
Other business services revenue(1)

5.6

5.8

16.9

17.7
Other revenue

8.1

8.3

23.6

24.6
Total revenue

$
184.0

$
183.1

$
547.4

$
543.2
(1) Includes wholesale and colocation lease revenue of $4.8 million and $4.9 million for the three months ended September 30, 2021 and 2020, respectively, and $14.6 million for both the nine months ended September 30, 2021 and 2020.
Costs of Obtaining Contracts with Customers
The following table summarizes the ~~FASB issued ASU No. 2015-17,~~ ~~Balance Sheet Classification~~activity of ~~Deferred Taxes~~costs of obtaining contracts with customers:

Three months ended

Nine months ended

September 30,

September 30,

2021

2020

2021

2020

(in millions)
Balance at beginning of period (1)

$
35.4

$
26.2

$
31.8

$
20.9
Deferral

4.3

3.5

12.2

11.7
Amortization

(2.7)

(1.7)

(7.0)

(4.6)
Balance at end of period

$
37.0

$
28.0

$
37.0

$
28.0
(1) Includes adjustment for portion attributable to disposed service areas.

Table of Contents

The following table presents the current and non-current portion of costs of obtaining contracts with customers as of the end of the corresponding periods:

September 30, 2021

December 31, 2020

(in millions)
Current costs of obtaining contracts with customers

$
8.2

$
3.6
Non-current costs of obtaining contracts with customers

28.8

28.2
Total costs of obtaining contracts with customers

$
37.0

$
31.8

The current portion and the non-current portion of costs of obtaining contracts with customers are included in prepaid expenses and other and other non-current assets, respectively, in the Company’s unaudited condensed consolidated balance sheets. Amortization of costs of obtaining contracts with customers is included in selling, general and administrative expense in the Company’s unaudited condensed consolidated statements of operations.

Contract Liabilities ~~(“ASU 2015-17”),~~

The following table summarizes the activity of current and non-current contract liabilities:

Three months ended

Nine months ended

September 30,

September 30,

2021

2020

2021

2020

(in millions)
Balance at beginning of period

$
3.3

$
2.7

$
2.9

$
2.8
Deferral

3.3

2.2

9.1

6.3
Revenue recognized

(3.2)

(2.2)

(8.6)

(6.4)
Balance at end of period

$
3.4

$
2.7

$
3.4

$
2.7

The following table presents the current and non-current portion of contract liabilities as of the end of the corresponding periods:

September 30, 2021

December 31, 2020

(in millions)
Current contract liabilities

$
2.9

$
2.4
Non-current contract liabilities

0.5

0.5
Total contract liabilities

$
3.4

$
2.9

The current and the non-current portion of contract liabilities are included in the current portion of unearned service revenue and other non-current liabilities, respectively, in the Company’s unaudited condensed consolidated balance sheets.

Unsatisfied Performance Obligations

Revenue from month-to-month residential subscription service contracts have historically represented a significant portion of the Company’s revenue and the Company expects that this will continue to be the case in future periods. All residential subscription service performance obligations will be satisfied within one year.

Table of Contents

A summary of expected business subscription and other business services revenue to be recognized in future periods related to performance obligations which ~~requires that all deferred tax liabilities~~have not been satisfied or are partially unsatisfied as of September 30, 2021 is set forth in the table below:


2021

2022

2023

Thereafter

Total

(in millions)
Subscription services

$
12.6

$
31.1

$
14.7

$
6.7

$
65.1
Other business services

0.8

2.6

1.2

0.3

4.9
Total expected revenue

$
13.4

$
33.7

$
15.9

$
7.0

$
70.0

Provision for Doubtful Accounts

The provision for doubtful accounts and ~~assets be classified as noncurrent amounts~~the allowance for doubtful accounts are based on the aging of the individual receivables, historical trends and current and anticipated future economic conditions. The Company manages credit risk by disconnecting services to customers who are delinquent, generally after sixty days of delinquency. The individual receivables are written-off after all reasonable efforts to collect the funds have been made. Actual write-offs may differ from the amounts reserved.

The following table presents the change in the allowance for doubtful accounts for trade accounts receivable:

Three months ended

Nine months ended

September 30,

September 30,


2021

2020


2021

2020

(in millions)
Balance at beginning of period

$
5.2

$
6.2

$
6.9

$
6.4
Provision charged to expense

2.1

2.1

5.7

8.9
Accounts written off, net of recoveries

(1.6)

(2.0)

(6.9)

(9.0)
Balance at end of period

$
5.7

$
6.3

$
5.7

$
6.3

The Company established an allowance for doubtful accounts for non-trade accounts receivable of $0.8 million as of September 30, 2020 that is presented within accounts receivable—other in the Company’s unaudited condensed consolidated balance sheet. ~~ASU 2015-17 became effective for interim and annual periods beginning after December 15, 2016.~~ The Company ~~early adopted this standard during the first quarter~~did 0t have such an allowance as of ~~2016 and has applied prospective treatment. The adoption~~September 30, 2021.

Table of ~~this pronouncement did not have a material impact on the Company’s financial position, results of operations or cash flows.~~Contents

Note 3.4. Property, Plant ~~Property~~ and Equipment, Net
~~Plant, property~~Property, plant and equipment ~~consisted~~consists of the following:

September 30,

December 31,

2021

2020

September 30,
2017

December 31,
2016

(in millions)

(in millions)
Distribution facilities

$
1,447.5

$
1,336.4

$
1,216.2

$
1,148.8
Customer premise equipment

376.1

376.9

264.0

266.2
Head-end equipment

316.3

299.9

220.0

209.5
Telephony infrastructure

127.7

123.8

52.3

52.5
Computer equipment and software

101.3

95.4

119.4

102.5
Vehicles

34.9

32.1

23.1

22.7
Buildings and leasehold improvements

43.9

44.9

32.0

31.0
Office and technical equipment

32.5

36.2

18.7

18.7
Land

6.2

6.7

4.4

4.4
Construction in progress (including material inventory and other)

125.4

110.5

38.1

32.8
Total plant, property and equipment

2,611.8

2,462.8

Total property, plant and equipment

1,988.2

1,889.1
Less accumulated depreciation

(1,569.8
)
(1,467.7
)

(1,269.4)

(1,168.2)
Plant, Property and Equipment, Net

$
1,042.0

$
995.1

��

$
718.8

$
720.9

Depreciation expense for the three months ended September 30, ~~2017~~2021 and ~~2016~~2020 was ~~$48.4~~$42.2 million and ~~$48.1~~$38.0 million, respectively. Depreciation expense for the nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 was ~~$148.6~~$125.7 million and ~~$142.2~~$110.7 million, respectively. ~~Included in depreciation expense were gains (losses) on write-offs or sales~~
Note 5. Asset Sales
Sale of head-end and customer premise equipment totaling nil and $0.1 million for the three months ended September 30, 2017 and 2016, respectively; and $0.3 million and $0.4 million for the nine months ended September 30, 2017 and 2016.
~~Assets Held for Sale~~Ohio Service Areas
On ~~August 1, 2017,~~June 30, 2021, the Company entered into an Asset Purchase Agreement with Atlantic, whereby Atlantic agreed to acquire the Company’s Cleveland and Columbus, Ohio markets for approximately $1.125 billion. Refer to Note 1 – General Information for a ~~definitive agreement to sell~~discussion of the Company’s discontinued operations.

The transaction closed on September 1, 2021, as a ~~portion~~result of ~~its fiber network~~which the Company received net proceeds of $1.1 billion and recorded a gain of $689.6 million. The gain is reported within discontinued operations in the ~~Company’s Chicago market to a subsidiary~~condensed consolidated statement of ~~Verizon~~operations for ~~$225.0 million in cash. The~~the period ending September 30, 2021.

As of September 30, 2021, the Company ~~anticipates~~has utilized the net proceeds from the sale to ~~be completed in the fourth quarter~~repay approximately $1,087.0 million of ~~2017.~~ its Term B loans and $9.3 million to buyout specific finance lease agreements.

In ~~addition, at~~connection with the closing of the ~~definitive agreement,~~Atlantic Purchase Agreement, the Company and ~~Verizon will enter~~Atlantic entered into a ~~new agreement pursuant to~~one year Transition Services Agreement (“TSA”) in which the Company will ~~complete the build-out of the network in exchange for approximately $50.0 million, which represented the estimated remaining build-out costs~~provide certain transition services to ~~complete the network at the time the definitive agreement was entered into.~~Atlantic. The ~~$50.0 million will be payable as such network elements are completed. The Company anticipates such network would be completed in the second half of 2018.~~
~~As a result of the definitive agreement, the Company concluded that as of September 30, 2017, the assets and liabilities associated with the fiber network met the criteria~~services to be ~~classified as held for sale. As~~provided under the TSA relate primarily to information technology, network, sales and business support services.

Table of ~~September 30, 2017, the Chicago fiber network has $149.2 million in total assets~~Contents

Note 6. Accrued Liabilities and $15.5 million in total liabilities held for sale that are included in the Company’s unaudited condensed consolidated balance sheets which includes approximately $7.0 million the Company has spent on construction subsequent to the signing of the definitive agreement on August 1, 2017.
~~Note 4. Sale of Lawrence, Kansas System~~Other
On January 12, 2017, the Company and Midcontinent Communications (“MidCo”) consummated an asset purchase agreement under which MidCo acquired the Company’s Lawrence, Kansas system for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. As a result of the asset purchase agreement, the Company recorded a gain on sale of assets of $38.4 million, subject to the adjustment as described above. The results of the Company’s Lawrence, Kansas system are included in the three and nine months ended September 30, 2016 unaudited condensed consolidated financial statements but not included in the three and nine months ended September 30, 2017 unaudited condensed consolidated financial statements. The Company and MidCo also entered into a transition services agreement under which the Company provided certain services to MidCo on a transitional basis. The transition services agreement, originally
expiring on July 1, 2017, was extended to September 28, 2017. Charges for the transition services generally allowed the Company to fully recover all allowed costs and allocated expenses incurred in connection with providing these services, generally without profit.
~~Note 5. Accrued Liabilities~~
Accrued liabilities ~~consist~~and other consists of the following:

September 30,
2017

December 31,
2016

(in millions)

Programming costs

$
32.3

$
39.9

Franchise, copyright and revenue sharing fees

11.4

13.2

Property, income, sales and use taxes

13.2

8.1

Payroll and employee benefits

7.2

16.4

Construction

5.6

17.4

Utility pole rentals

3.1

3.7

Other accrued liabilities

11.4

11.1

Accrued Liabilities

$
84.2

$
109.8

September 30,

December 31,


2021

2020

(in millions)
Property, income, sales and use taxes(1)

$
96.2

$
5.6
Payroll and employee benefits

32.1

28.0
Programming costs

19.8

19.7
Customer cash collections (Atlantic TSA agreement)

19.7

—
Other accrued liabilities

9.0

8.2
Franchise and revenue sharing fees

7.3

7.1
Utility pole costs

1.7

1.7
Interest rate swaps

—

9.4

$
185.8

$
79.7
(1) Includes the current income tax payable associated with the sale of the Cleveland and Columbus, Ohio markets.

Note 6.7. Long-Term Debt and ~~Capital~~Finance Leases
The following table summarizes the Company’s long-term debt and ~~capital~~finance leases:

September 30, 2017

December 31,
2016

Available

Weighted

borrowing
capacity

average
interest rate (1)

Outstanding
balance

Outstanding
balance

(in millions)

Long-term debt:

Term B Loans (2)

$
—

4.55
%
$
2,266.5

$
2,048.3

Revolving Credit Facility (3)

112.1

4.29
%
180.0

10.0

Senior Notes

—

N/A

—

830.9

Total long-term debt

$
112.1

4.57
%
2,446.5

2,889.2

Capital lease obligations

3.2

4.9

Total long-term debt and capital lease obligations

2,449.7

2,894.1

Less debt issuance costs (4)

(13.6
)
(22.9
)
Sub-total

2,436.1

2,871.2

Less current portion

(24.1
)
(22.7
)
Long-term portion

$
2,412.0

$
2,848.5

December 31,

September 30, 2021

2020


Available




borrowing

Effective

Outstanding

Outstanding

capacity

interest rate(1)


balance

balance

(in millions)
Long-term debt:








Term B Loans, net(2)

$
—

4.25
%

$
1,103.1

$
2,199.9
Revolving Credit Facility(3)

270.7

3.08
%

24.0

38.0
Total long-term debt

$
270.7

1,127.1

2,237.9
Other Financing

0.5

0.8
Finance lease obligations





19.9

32.9
Total long-term debt, finance lease obligations and other





1,147.5

2,271.6
Debt issuance costs, net(4)





(3.7)

(5.6)
Sub-total





1,143.8

2,266.0
Less current portion





(33.9)

(37.5)
Long-term portion



$
1,109.9

$
2,228.5
~~(1)~~                                 ~~Represents the weighted average effective interest rate in effect for all borrowings outstanding as of September 30, 2017 pursuant to each debt instrument including the applicable margin.~~
~~(2)~~                                 ~~At September 30, 2017 includes $13.5 million of net discounts.~~
~~(3)~~                                 Available borrowing capacity at September 30, 2017 represents $300.0 million of total availability less outstanding letters of credit of $7.9 million and borrowing on revolving credit facility of $180.0 million. Letters of credit are used in the ordinary course of business and are released when the respective contractual obligations have been fulfilled by the Company.
~~(4)~~                                 ~~At September 30, 2017, debt issuance costs include $9.8~~
(1) Represents the effective interest rate in effect for all borrowings outstanding as of September 30, 2021 pursuant to each debt instrument including the applicable margin.
(2) At September 30, 2021 and December 31, 2020 includes $4.4 million and $6.1 million of net discounts, respectively.
(3) Available borrowing capacity at September 30, 2021 represents $300.0 million of total availability less borrowing of $24.0 million on the Revolving Credit Facility and outstanding letters of credit of $5.3 million. Letters of credit are used in the ordinary course of business and are released when the respective contractual obligations have been fulfilled by the Company.
(4) At September 30, 2021 and December 31, 2020, debt issuance costs include $3.2 million and $4.4 million related to Term B Loans and $0.5 million and $1.2 million related to the Revolving Credit Facility, respectively.
The Company’s Term B Loans ~~and $3.8 million related to Revolving Credit Facility.~~
~~Refinancing of the Term B Loans and Revolving Credit Facility~~
On July 17, 2017, the Company entered into an eighth amendment (“Eighth Amendment”) to its Credit Agreement, with JPMorgan Chase Bank, N.A., as the administrative agent and revolver agent. Under the Eighth Amendment, (i) the Company borrowed new Term B loans in an aggregate principal amount of $230.5 million, for a total outstanding Term B loan principal amount
of $2.28 billion and (ii) the revolving credit commitments were increased by an aggregate principal amount of $100.0 million, for a total outstanding revolving credit commitment of $300.0 million available to the Company under the revolving credit facility. The new Term B loans will mature on August 19, 2023 and bear interest, at the Company’s option, at a rate equal to ABR plus 2.25% or LIBOR plus 3.25%. ~~Loans~~Borrowings under the revolving credit facility will mature on May 31, 2022 and bear interest, at the ~~Company’s~~Company's option, at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. The guarantees, collateral and covenants in the Eighth Amendment remain unchanged from those contained in the credit agreement prior to the Eighth Amendment. The Company recorded a $6.3 million loss on early extinguishment of debt in the three months ended September 30, 2017 related to the write off of unamortized debt issuance costs and third party costs. As of September 30, ~~2017,~~2021, the Company was in compliance with all debt covenants.

~~On May 31, 2017, the Company entered into~~ ~~a seventh amendment (“Seventh Amendment”) to its Credit Agreement. The Seventh Amendment (i) refinanced the then-existing $200.0 million~~Table of borrowings available to the Company under the revolving credit facility and (ii) extended the maturity date of the revolving credit facility to May 31, 2022, unless an earlier date was triggered under certain circumstances. The interest rate margins applicable to the revolving credit facility bore interest at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. Additionally, the Company entered into an Incremental Commitment Letter to its revolving credit facility that increased the available borrowings to $300.0 million that became available upon compliance by the Company with certain conditions (see redemption of 10.25% senior notes whereby such conditionality was subsequently achieved as a result of the eighth amendment). The guarantees, collateral and covenants in the Seventh Amendment remained unchanged from those contained in the credit agreement prior to the Seventh Amendment. The Company recorded a $1.0 million loss on early extinguishment of debt in the three months ended June 30, 2017, primarily related to the write-off of deferred financing costs and third party costs.Contents

On August 19, 2016, the Company entered into a sixth amendment (“Sixth Amendment”) to its Credit Agreement. The Sixth Amendment provided for the addition of a $2.065 billion seven year Term B Loan which bore interest at LIBOR plus 3.50% or ABR plus 2.50% and included a 1.00% LIBOR floor. The Term B Loan had a maturity date of August 19, 2023, unless the earlier maturity dates set forth below was triggered under the following circumstances: the Term B Loan matured on April 15, 2019 if (i) any of the Company’s existing outstanding Senior Notes were outstanding on April 15, 2019, or (ii) any future indebtedness with a final maturity date prior to the date that is 91 days after August 19, 2023 was incurred to refinance the Company’s existing Senior Notes. The Term B Loan matured on July 15, 2019 if (i) any of the Company’s existing Senior Subordinated Notes were outstanding on July 15, 2019, or (ii) any indebtedness with a final maturity prior to the date that is 91 days after August 19, 2023 was incurred to refinance the Company’s existing Senior Subordinated Notes. As described below, the Senior Subordinated Notes were fully redeemed on December 18, 2016 and the Senior Notes were fully redeemed on July 17, 2017.

Proceeds from the issuance of the Term B Loans pursuant to the Sixth Amendment were used to repay in full the existing $1.825 billion Term B Loan, which had a maturity date of April 15, 2019 and which bore interest at the same rates described above. The Company used the remaining $240.0 million in proceeds to fund the Company’s acquisition of HC Cable Opco, LLC (“NuLink”) and to redeem a portion of the Company’s 13.38% Senior Subordinated Notes. The Company recorded a loss on early extinguishment of debt of $32.1 million during the three months ended September 30, 2016. The loss primarily relates to the write off of the unamortized debt issuance costs and third part costs associated with the pre-existing Term B Loans.

On May 11, 2016, the Company entered into a fifth amendment (“Fifth Amendment”) to its Credit Agreement. The Fifth Amendment provided for the addition of an incremental $432.5 million Term B Loan with a maturity date of April 2019 and which bore interest, at the Company’s option, at LIBOR plus 3.50% or ABR plus 2.50% and included a 1.00% LIBOR floor. Proceeds from the issuance of the Term B Loans were used to repay all remaining $382.5 million outstanding principal under the Company’s Term B-1 Loans which had a maturity date of July 2017 and which bore interest at LIBOR plus 3.00% or ABR plus 2.00% and included a 0.75% LIBOR floor.

~~Partial Redemption of 10.25% Senior Notes~~

On March 20, 2017, the Company utilized cash on hand to redeem $95.1 million in aggregate principal amount outstanding of the 10.25% Senior Notes. In addition to the partial redemption, the Company paid accrued interest on the 10.25% Senior Notes of $1.7 million and a call premium of $4.9 million. The Company recorded a loss on early extinguishment of debt of $5.0 million, primarily representing the cash call premium paid.

~~Redemption of 10.25% Senior Notes~~

On July 17, 2017, the Company used the proceeds of the new Term B loans under the Eighth Amendment, and borrowed $180.0 million under its revolving credit facility and cash on hand to fully redeem all of the Company’s remaining outstanding 10.25% Senior Notes due 2019 (the “Senior Notes”) and to pay certain fees and expenses. In connection with the redemption of the 10.25% Senior Notes, the Company satisfied and discharged the indenture governing the Senior Notes. The Company paid $729.9

million in principal amount, incurred prepayment fees of $18.7 million and paid accrued interest of $37.6 million. The Company recorded a loss on early extinguishment of debt of $19.8 million related to the write-off of deferred financing costs, premium, and prepayment fees.
~~Retirement of 13.38% Senior Subordinated Notes~~
~~During the year ended December 31, 2016, the Company made two redemption payments to early retire its 13.38% Senior Subordinated Notes. The final redemption payment was made on December 18, 2016.~~
~~Note 7. Equity~~
~~Initial Public Offering~~
~~On May 25, 2017, the Company completed an IPO of shares of its common stock, which are listed on the NYSE under the ticker symbol “WOW”.~~
The Company sold 20,970,589 shares of its common stock at a price of $17 per share (including the exercise of the overallotment) for $356.5 million in gross proceeds. The Company incurred costs directly associated with the IPO of $21.8 million. Proceeds from the IPO (net of issuance costs) of $334.7 million are reflected in the Company’s unaudited condensed consolidated statement of stockholders’ deficit during the nine months ended September 30, 2017. Outstanding shares and per-share amounts disclosed as of September 30, 2017 and for all other comparative periods presented have been retroactively adjusted to reflect the effects of the May 25, 2017, 66,498.762 to 1 stock-split.
Note 8. Stock-Based Compensation
WOW’s 2017 Omnibus Incentive ~~Plan~~
In connection with the Company’s IPO, the Company’s Board of Directors adopted and approved the 2017 Omnibus Incentive Plan (“2017 Plan”) and cancelled its former management D units equity incentive plan (“2016 Profit Interest Plan”). ~~The 2017~~ Plan provides for grants of stock options, restricted stock and performance awards. The Company’s directors, officers and other employees and persons who engage in services for the Company are eligible for grants under the 2017 Omnibus Incentive Plan. The ~~purpose of the~~ 2017 Plan is to provide the individuals with incentives to maximize stockholder value and otherwise contribute to the Company’s success and to enable the Company to attract, retain and reward the best available persons for positions of responsibility. The 2017Omnibus Incentive Plan has authorized ~~6,355,054~~12,074,128 shares of ~~its~~ common stock to be available for issuance, ~~under the 2017 Plan,~~ subject to adjustment in the event of a reorganization, stock split, merger or similar change in the Company’s corporate structure orof the outstanding shares of common stock. The Company’s Compensation Committee will administer the 2017 Plan. The Board of Directors also has the authority to administer the 2017 Plan and to take all actions that the Company’s Compensation Committee is otherwise authorized to take under the 2017 Plan. The terms and conditions of each award made under the 2017 Plan, including vesting requirements, will be set forth consistent with the 2017 Plan in a written agreement with the grantee.
~~Employee Grants~~
Senior management that had participated in the 2016 Profit Interest Plan were granted (based on a conversion factor of management units to new common shares) new restricted stock to replace the shares that were cancelled in the 2016 Profit Interest Plan. Under the 2017 Plan, 394,052 shares of restricted stock were granted that will vest ratably at 33% per year beginning on June 30, 2018 assuming the award recipient continues to be employed by the Company. Senior management also received 450,356 shares of restricted stock in connection with long-term incentive compensation under the 2017 Plan. These restricted stock grants will vest ratably at 33% per year beginning on June 30, 2018 assuming the award recipient continues to be employed by the Company.
Employees that had participated in the 2016 Director Appreciation Rights Plan were granted new restricted stock (based on a conversion factor of the then calculated value of such pool). These employees were granted 78,050 shares of restricted stock under the 2017 Plan that will vest ratably at 33% per year beginning on June 30, 2018 assuming the award recipient continues to be employed by the Company.
Each year, the Company’s Compensation Committee, in consultation with the Company’s Chief Executive Officer (“CEO”), establishes an annual incentive bonus plan. In 2017, the 2017 Management Bonus Plan (“2017 MBP”) was established, which provides incentive cash bonuses for the majority of the Company’s employees based upon the achievement of certain business and individual or department objectives, including most prominently adjusted consolidated earnings before interest, tax, depreciation and amortization. Bonus payouts were established based on a percentage of the participant’s base salary based on the title/position. In connection with the Company’s IPO, the Compensation Committee, in consultation with the Company’s CEO, granted restricted shares out of the 2017 Plan. The Compensation Committee granted restricted shares equal to 100% to 150% achievement of the 2017
~~MBP. Such grant in aggregate totaled 866,708 shares and will vest 100% on June 30, 2018 assuming the participant continues to be employed by the Company.~~
~~Furthermore, the members of the Company’s Board of Directors received 54,361 shares, in aggregate, of restricted stock that will vest 100% beginning on June 30, 2018.~~
The following table ~~summarizes the~~presents restricted stock ~~awards granted~~activity during the nine months ended September 30, ~~2017.~~
2021:

Number of
~~Restricted Stock~~
~~Shares~~

Unvested

Restricted Stock

Shares
Outstanding, ~~January 1, 2017~~beginning of period

—
4,990,971
Granted

~~1,843,527~~
1,083,963
~~Cancelled~~Vested

—
(1,616,938)
Forfeited

~~(45,162~~
)(276,265)
Outstanding, end of period(1)

4,181,731
(1) The total outstanding unvested shares of restricted stock awards granted to employees and directors are included in total outstanding shares as of September 30, ~~2017~~
~~1,798,365~~
2021.
The above table includes 472,102 of restricted shares that were granted from plans prior to the 2017 Plan, thus these restricted shares do not count towards the 6,355,054 shares authorized by the plan. These shares represented the unvested shares from the old 2016 Profit Interest Plan that will vest ratably at 33% per year beginning on June 30, 2018.
For restricted stock awards that contain only service conditions for vesting, the Company calculates the award fair value based on the Company’s closing stock price on the accounting grant date. The Company’s restricted stock awards generally vest ratably over a four year period based on the date of grant.
Nonvested Performance Shares
~~For~~On March 3, 2021, the Company granted 209,621 performance shares which will vest based on the Company’s achievement level relative to the following performance measures at December 31, 2023: 50% based upon the Company’s Total Shareholder Return (“TSR”) relative to the TSRs of the Company’s peer group and 50% based on the Company’s three-year cumulative EBITDA metric. EBITDA is defined as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), impairment losses on intangibles and goodwill, the write-off of any asset, loss on early extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including stock compensation expense) and certain other income and expenses. Upon achievement of the minimum threshold performance metric, the grantee may earn 50% to 200% of their respective target shares based on the performance goal.

The performance shares based on relative TSR performance have a market condition and are valued using a Monte Carlo simulation model on the grant date, which resulted in a grant date fair value of $27.76 per share. The estimated fair value is amortized to expense over the requisite service period, which ends on December 31, 2023. The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the performance shares with a market condition: risk-free interest rate of 0.26%, volatility factors in the expected market price of the Company's common shares of 59.77% and an expected life of three years.

The performance shares based on three-year cumulative EBITDA have a performance condition. The probability of achieving the performance condition is assessed at each reporting period. If it is deemed probable that the performance condition will be met, compensation cost will be recognized based on the closing price per share of the Company's common stock on the date of the grant multiplied by the number of awards expected to be earned. If it is deemed that it is not probable that the performance condition will be met, the Company will discontinue the recognition of compensation cost and any compensation cost previously recorded will be reversed.

Table of Contents

The Company recorded $4.5 million and $2.6 million for the three months ended September 30, ~~2017~~2021 and ~~2016 the Company~~2020, respectively, and recorded ~~$5.2~~$11.6 million and ~~$0.4~~$8.3 million for the nine months ended September 30, 2021 and 2020, respectively, of non-cash stock-based compensation expense which is reflected in selling, general and administrative expense and operating expenses (excluding depreciation and amortization), depending on the recipients’ duties, in the Company’s unaudited condensed consolidated statements of operations. During the nine months ended September 30, 2017 and 2016, the Company recorded $8.3 million and $0.5 million, respectively, of non-cash compensation expense which is reflected in selling, general and administrative expense and operating (excluding depreciation and amortization), depending on participants’ duties, in the Company’s unaudited condensed consolidated statements of operations.

Note 9. Earnings (Loss) per Common Share
Basic earnings or loss per share attributable to the Company’s common stockholders is computed by dividing net earnings or loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings or loss per share attributable to common stockholders presents the dilutive effect, if any, on a per share basis of potential common shares (such as restricted stock units) as if they had been vested or converted during the periods presented. No such items were included in the computation of diluted loss or earnings per share for the periods presented because the Company incurred a net loss from continuing operations and the effect of inclusion would have been anti-dilutive.

Three months ended

Nine months ended

September 30,

September 30,


2021

2020

2021

2020

(in millions, except share data)
Loss from continuing operations

$
(21.2)

$
(20.3)

$
(66.4)

$
(74.4)

Income from discontinued operations

$
539.1

$
29.3

$
606.3

$
85.7

Net income

$
517.9

$
9.0

$
539.9

$
11.3

Basic weighted-average shares

82,973,519

81,771,279

82,615,949

81,475,814
Effect of dilutive securities:

Restricted stock awards

—

—

—

—
Diluted weighted-average shares

82,973,519

81,771,279

82,615,949

81,475,814

Basic and diluted (loss) per
common share - continuing operations

Basic

$
(0.26)

$
(0.28)

$
(0.80)

$
(0.94)
Diluted

$
(0.26)

$
(0.28)

$
(0.80)

$
(0.94)

Basic and diluted earnings per
common share - discontinued operations

Basic

$
6.50

$
0.39

$
7.34

$
1.08
Diluted

$
6.50

$
0.39

$
7.34

$
1.08

Basic and diluted earnings per common share

Basic

$
6.24

$
0.11

$
6.54

$
0.14
Diluted

$
6.24

$
0.11

$
6.54

$
0.14

Table of Contents

Note 10. Fair Value Measurements
The fair values of cash and cash equivalents, receivables and trade payables ~~short-term borrowings and the current portions of long-term debt~~ approximate their carrying values due to the short-term nature of these instruments. For assets and liabilities of a long-term nature, the Company determines fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. The Company applies the following hierarchy in determining fair value:

·
● Level 1, defined as observable inputs being quoted prices in active markets for identical assets;
● Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
● Level 3, defined as values determined using models that utilize significant unobservable inputs for which little or no market data exists, discounted cash flow methodologies or similar techniques, or other determinations requiring significant management judgment or estimation.
The Company’s derivative instrument expired in ~~active markets~~May 2021; however, prior to expiration the derivative instrument was accounted for ~~identical assets;~~
·at fair value on a recurring basis and classified within Level 2 ~~defined~~of the valuation hierarchy and was valued at $9.4 million at December 31, 2020. The fair value of the derivative instrument was measured as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significantthe present value ~~drivers are observable in active markets; and~~
· ~~Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions~~of all expected future cash flows based on the ~~best information available.~~LIBOR-based swap yield curves as of the measurement date. The present value calculation utilized discount rates that were adjusted to reflect the credit quality of the Company and its counterparties.

The estimated fair value of the Company’s long-term debt ~~which includes debt subject to the effects of interest rate risk, was~~is based on dealer quotes considering current market rates for the Company’s credit facility and ~~was approximately $2,457.2 million compared~~is classified as Level 2. The inputs used to ~~carrying~~determine the fair value of ~~$2,460.0 million, not including debt issuance costs, discount and premium as of September 30, 2017. As~~ the Company’s ~~ratio of its~~ aggregate debt balance has trended from quoted market prices in active markets to quoted prices in non-active ~~markets,~~markets. The fair value of the Company’s long-term debt was valued at $1,111.0 million and $2,203.1 million as of September 30, 2021 and December 31, 2020, respectively. Long-term debt fair value does not include debt issuance costs and discounts.

There were 0 transfers in or out of Level 1, 2 or 3 during the periods ended September 30, 2021 and December 31, 2020.

The Company’s non-financial assets such as franchise operating rights, property, plant, and equipment, and other intangible assets are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. When such impairments are recorded, fair values are generally classified within Level 3 of the valuation hierarchy.

Note 11. Derivative Instruments and Hedging Activities
The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in interest rates. The Company selectively uses derivative financial instruments (“derivatives”), including interest rate swaps, to manage interest rate risk. The Company does not hold or issue derivative instruments for speculative purposes. Fluctuations in interest rates can be volatile, and the Company’s risk management activities do not totally eliminate these risks. Consequently, these fluctuations could have a significant effect on the Company’s financial results.

The Company’s exposure to interest rate risk results primarily from its variable rate borrowings. On May 9, 2018, the Company ~~has concluded that~~entered into variable to fixed interest rate swap agreements for a notional amount of $1,361.2 million to hedge a portion of the outstanding principal balance of its variable rate term loan debt. The Company’s outstanding derivatives had a notional amount of $1,323.5 million and the fair value was presented within accured liabilities and other of ~~debt should be~~$9.4 million within the unaudited condensed consolidated balance sheet as of December 31, 2020. The Company did 0t have such amounts as of September 30, 2021 as the interest rate swap contracts expired in May of 2021.

Table of Contents

Gains (losses) on derivatives designated as cash flow hedges included in the unaudited condensed consolidated statements of comprehensive income (loss) are shown in the table below.

Three months ended

Nine months ended

September 30,

September 30,


2021

2020

2021

2020
Interest rate swap contracts(1)

(in millions)
Gain recorded in AOCL on derivatives, before tax

$
—

$
5.7

$
8.5

$
6.1
Tax impact

—

(1.2)

(2.0)

(1.3)
Gain recorded in AOCL on derivatives, net

—

4.5

6.5

4.8
(1) Gains (losses) on derivatives reclassified from AOCL into income are included in “Interest expense” in the unaudited condensed consolidated statements of operations, the same line item as the earnings effect of the hedged item. Losses recognized for the three and nine months ended September 30, 2021 total NaN and $9.5 million, respectively.
For the periods presented, all cash flows associated with derivatives are classified as ~~a Level 2.~~
operating cash flows in the unaudited condensed consolidated statements of cash flows.
Note ~~10.~~12. Income Taxes
The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax ~~liabilities~~assets and ~~assets~~liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact on deferred tax assets and liabilities of changes in ~~the~~ tax rates ~~and laws on deferred taxes, if any,~~ is reflected in the ~~unaudited condensed consolidated~~ financial statements in the period that includes the date of enactment.
The Company assesses the available positive and negative evidence to estimate whether sufficient taxable income will be generated to permit the utilization of existing deferred tax assets. On the basis of this evaluation, as of September 30, 2017, a valuation allowance of $128.0 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The valuation allowance is based on the Company’s existing positive and negative evidence. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased based on the Company’s future operating results.

The Company reported ~~total~~ income tax expense of ~~$1.6~~$204.6 million and ~~$2.7~~$4.0 million for the three months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively and ~~reported total income tax benefit of $16.4~~$208.3 million and ~~$7.4~~$6.2 million for the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively. ~~On January 12, 2017,~~As a result of the closure of the sale of the Company’s Cleveland and Columbus, Ohio markets to Atlantic on September 1, 2021, the Company recognized certain deferred tax liabilities associated with fixed assets and ~~MidCo consummated~~intangibles of the sold markets, with an ~~asset purchase agreement pursuant~~offsetting realization of deferred tax assets of net operating losses and research and development credits to ~~which MidCo acquired~~reduce the ~~Company’s Lawrence, Kansas system for net proceeds~~tax effect of ~~approximately $213.0 million~~the transaction.

The effective income tax rate increase from the three months ended June 30, 2021 was primarily driven by the expensing of goodwill attributed to the sold markets, where there was no corresponding tax basis, and state tax expense and state deferred rate remeasurement related to the sale. The effective tax rate decrease from the three months ended September 30, 2020 was primarily related to an increase in ~~cash, subject to certain normal and customary purchase price adjustments set forth in~~income before tax resulting from the ~~agreement.~~ sale.

As a result of utilizing available net operating losses and research and development credits to offset the tax effect of the sale, the Company has ~~recorded $11.1 million of~~reclassed uncertain tax positions that had previously been offset by these deferred tax assets to the long-term income tax ~~expense. In addition, a deferred income tax benefit~~payable account.

Table of ~~$36.3 million was recognized~~Contents

Note 13. Commitments and Contingencies

IPO Shareholder Class Action. Beginning in June 2018, 4 different plaintiffs’ firms filed 5 separate class-action lawsuits against WOW, certain individual defendants, and the private equity sponsors and underwriters of the May 2017 initial public offering. The actions allege violations of Sections 11, 12, and 15 of the 1933 Securities Act. The 3 actions filed in New York have been consolidated as ~~a result~~Kirkland. et al. v. WideOpenWest, Inc., et al., 653248/2018. The other 2 actions, which were filed in Colorado state court, have been stayed by agreement until final resolution of the Kirkland action. The Plaintiffs in Kirkland allege that Defendants made or caused misstatements to be made in the ~~change~~Registration Statement and Prospectus (“Offering Materials”) issued in connection with the IPO. On January 17, 2019, Defendants filed an omnibus motion to dismiss all claims for failure to state causes of ~~valuation allowance. The change~~action which the court denied in ~~valuation allowance was due primarily~~part and granted in part on May 18, 2020, with the Company thereafter appealing those claims not dismissed. Prior to an anticipated trial in 2022 or 2023, the parties undertook mediation on November 6, 2020 which, in turn, resulted in a soon-to-be-filed Stipulation of Settlement with the court. Upon approval of the Court to the ~~utilization~~Stipulation of ~~NOLs~~Settlement (which is expected in January of 2022), the Company will be dismissed entirely without any admission of wrongdoing in exchange for a payment of substantially less than that sought by plaintiffs, with the funding of such payment to be provided substantially from the ~~disposal of indefinite lived assets related to the Lawrence, Kansas system sale transaction.~~Company’s primary D&O carrier.

~~The~~Sprint Patent Infringement Claim. On March 7, 2018, Sprint Communications Company ~~files income tax returns~~L.P (“Sprint”) filed complaints in the U.S. ~~federal jurisdiction, and various state jurisdictions. For federal tax purposes,~~District Court for the ~~Company’s 2013 through 2016 tax years remain open for examination by the tax authorities under the normal three year statute~~District of ~~limitations. Generally, for state tax purposes, the Company’s 2013 through 2016 tax years remain open for examination by the tax authorities under a three year statute of limitations. Should~~Delaware alleging that the Company ~~utilize any~~(and other industry participants) infringe patents purportedly relating to Sprint’s Voice over Internet Protocol (“VoIP”) services. The lawsuit is part of ~~its U.S. or state loss carryforwards, their carryforward losses, which date~~a pattern of litigation that was initiated as far back ~~to 1995, would be subject to examination.~~

~~As of September 30, 2017, the Company recorded gross unrecognized tax benefits of $31.2 million, all of which, if recognized, would affect the Company’s effective tax rate. Interest~~as 2007 by Sprint against numerous broadband and ~~penalties related to income tax liabilities, if incurred, are included in income tax benefit (expense) in the unaudited condensed consolidated statement of operations.~~telecommunications providers. The Company has ~~accrued gross interest~~multiple legal and ~~penalties~~contractual defenses and is vigorously defending against the claims. Additionally, the Company is pursuing indemnification claims against equipment providers whose equipment is implicated by the claims. Formal discovery was completed in mid-February 2020, with the trial originally scheduled for October 2020, being moved to a yet to be determined date in the middle to second half of ~~$0.5 million. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However,~~2022, with the parties undertaking settlement discussions. The Company is unable at this time to determine whether the outcome of ~~tax audits cannot be predicted with certainty. If any issues are addressed in~~the litigation would have a material impact on the Company’s ~~tax audits in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.~~financial position, results of operations or cash flows.

Unrecognized tax benefits consist primarily of tax positions related to issues associated with the Restructuring of WOW Finance and the acquisition of Knology, Inc. Depending on the resolution with certain state taxing authorities that is expected to occur within the next twelve months, there could be an adjustment to the Company’s unrecognized tax benefits and certain state tax matters.

~~The Company is not currently under examination for U.S. federal income tax purposes, but does have various open tax controversy matters with various state taxing authorities.~~

~~Note 11. Commitments and Contingencies~~

The Company is party to various legal proceedings (including individual, class and putative class actions) arising in the normal course of its business covering a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, programming, taxes, fees and surcharges, consumer protection, trademark and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers.

In accordance with GAAP, ~~WOW~~the Company accrues an expense for pending litigation when it determines that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Legal defense costs are expensed as incurred. None of the Company’s existing accruals for pending matters are material. ~~WOW regularly~~The Company consistently monitors its pending litigation for the purpose of adjusting its accruals and revising its disclosures accordingly, in accordance with GAAP, when required. ~~Litigation~~However, litigation is ~~however,~~ subject to uncertainty, and the outcome of any particular matter is not predictable. The Company will vigorously ~~defends~~defend its interests in pending litigation, and ~~as of this date, WOW~~the Company believes that the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which it is entitled, will not have a material adverse effect on its ~~unaudited condensed~~ consolidated financial position, results of operations, or cash flows.

Note ~~12. Related Party Transactions~~14. Subsequent Events
~~Prior~~On June 30, 2021, the Company entered into an Asset Purchase Agreement with Astound Broadband, whereby Astound Broadband agreed to acquire the Company’s ~~IPO, the Company paid~~Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets for approximately $661 million. Refer to Note 1 – General Information for a ~~quarterly management fee of $0.4 million plus travel and miscellaneous expenses, if any, to Avista Capital Partners (“Avista”) and Crestview Advisors, LLC (“Crestview”), majority owners~~discussion of the Company’s ~~former Parent. In addition, pursuant to~~discontinued operations. The transaction closed on November 1, 2021, and as a ~~consulting agreement dated as~~result of December 18, 2015 by and among Parent, Avista and Crestview, Crestview is entitled to 50% of any management fee actually received by Avista. Such fee will no longer be paid in future periods. The management fee paid bywhich the Company ~~for~~received net proceeds of $653.5 million. The Company utilized approximately $397.0 million of net proceeds to repay its long-term debt.

In connection with the three months ended September 30, 2017 and 2016 amounted to nil and $0.4 million, respectively. The management fee paid by the Company for the nine months ended September 30, 2017 and 2016 amounted to $1.0 million and $1.3 million, respectively.
~~On December 18, 2015, Crestview and the Company’s former Parent consummated a transaction whereby Crestview became the beneficial owner of approximately 35%~~closing of the Company’s former Parent. Under the terms of the agreement, Crestview’s funds purchased units held by Avista and other unit holders, and separately made a $125.0 million primary investment in newly-issued units.
~~On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in the Company’s former Parent.~~
~~As of September 30, 2017, all the proceeds from the funds’ investments of Avista and Crestview in the amount of $143.3 million, net of transaction costs have been contributed to the Company.~~
During the nine months ended September 30, 2017, the Company’s former Parent bought back vested Class A and Class B units from certain former employees of the Company. The former employees had the option to sell their units at a price set by the Company’s former Parent or decline such offer. The cash proceeds used to repurchase such units have been contributed down toAstound Purchase Agreement, the Company and ~~reflected as such.~~Astound Broadband entered into a one year Transition Services Agreement (“Astound TSA”) in which the Company will provide certain transition services to Astound Broadband. The ~~Company repurchased 415,494~~services to be provided under the Astound TSA relate primarily to information technology, network, sales and business support services.

Table of ~~Class A units and 243,270 of Class B units for $8.8 million.~~Contents

~~As a result of the Company’s IPO, the Class A and Class B shares were converted to common shares of the Company.~~

~~As of September 30, 2017 and December 31, 2016, the receivable balance from the former Parent and Members amounted to nil and $0.3 million, respectively.~~

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
~~Forward-Looking Statements~~Overview
Certain statements contained in this Quarterly Report that are not historical facts contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Such statements involve certain risks, uncertainties and assumptions. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “anticipate,” “expect,” “believe,” “estimate,” “plan,” “project,” “predict,” “potential,” or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including, but not limited to:
·                  ~~the wide range of competition we face;~~
·                  ~~competitors that are larger and possess more resources;~~
·                  ~~competition for the leisure and entertainment time of audiences;~~
·                  ~~whether our edge-out strategy will succeed;~~
·                  ~~dependence upon a business services strategy, including our ability to secure new businesses as customers;~~
·                  ~~conditions in the economy, including potentially uncertain economic conditions, unemployment levels and turbulent developments in the housing market;~~
·                  ~~demand for our bundled broadband communications services may be lower than we expect;~~
·                  ~~our ability to respond to rapid technological change;~~
·                  ~~increases in programming and retransmission costs;~~
·                  ~~a decline in advertising revenues;~~
·                  ~~the effects of regulatory changes in our business;~~
·                  ~~our substantial level of indebtedness;~~
·                  ~~certain covenants in our debt documents;~~
·                  ~~programming exclusivity in favor of our competitors;~~
·                  ~~inability to obtain necessary hardware, software and operational support;~~
·                  ~~loss of interconnection arrangements;~~
·                  ~~failure to receive support from various funds established under federal and state law;~~
·                  ~~exposure to credit risk of customers, vendors and third parties;~~
·                  ~~strain on business and resources from future acquisitions or joint ventures, or the inability to identify suitable acquisitions;~~
·                  ~~our ability to manage the risks involved in the foregoing; and~~
other factors described from time to time in our reports filed or furnished with the SEC, and in particular those factors set forth in the section entitled “Risk Factors” in our final prospectus filed with the SEC on May 25, 2017 and other reports subsequently filed with the SEC. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this report are made as of the date hereof or the date specified herein, based on information ~~available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.~~
~~Overview~~

We are ~~the sixth largest~~a leading broadband services provider offering high-speed data (“HSD”), cable ~~operator in the United States ranked by number of customers as of December 31, 2016. We provide HSD, Video, Telephony,~~television (“Video”), and ~~business-class~~digital telephony (“Telephony”) services to residential customers and offer a ~~service area that includes approximately 3.1 million homes~~full range of products and ~~businesses.~~services to business customers. Our services are delivered across ~~nineteen~~14 markets via our advanced ~~HFC cable~~hybrid fiber-coax network. Our footprint covers ~~over 300 communities in~~certain suburban areas within the states of Alabama, Florida, Georgia, ~~Illinois, Indiana, Maryland,~~ Michigan, ~~Ohio,~~ South Carolina and Tennessee. At September 30, 2021, our continuing broadband networks passed 1.9 million homes and businesses and served approximately 531,600 customers.

Our core strategy is to provide outstanding service at affordable prices. We execute this strategy by managing our operations to focus on the customer and our network. We believe that the customer experience should be reliable, easy and pleasantly surprising, every time. To achieve this customer experience, we operate one of the most technically advanced and uniform networks in the industry with approximately 96% of our network at 750 MHz or greater capacity. On September 1, 2021, we completed the sale of our Cleveland and Columbus, Ohio markets and on November 1, 2021, we completed the sale of our Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets. We believe the divestitures will strengthen our financial position and help accelerate our broadband first strategy, which includes additional investments in edge-outs, greenfield strategies and commercial services.

Our advanced network offers HSD speeds up to 1 GIG (1000 Mbps) in approximately 95% of our footprint. Led by our robust HSD offering, our products are available either as ~~a bundle or as~~ an individual service or a bundle to residential and business ~~services~~service customers. ~~As of September 30, 2017, 776,400 customers subscribed~~We continue to ~~our services.~~
~~Since commencing operations in 2001, our focus has been to offer~~operate under a competitive alternative cable service and establish a brand with a strong market position. We have scaled our business through (i) organic subscriber growth and increased penetration within our existing markets and footprint, (ii) edge-outs to grow our footprint, (iii) upgrades to introduce enhanced broadband ~~services to networks we have acquired, (iv) entry into business services, with a broad range of HSD, Video and Telephony products, and (v) acquisitions and integration of cable systems.~~
We operate primarily in economically stable suburbs that are adjacent to large metropolitan areas as well as secondary and tertiary markets, which we believe have favorable competitive and demographic profiles and include businesses operating across a range of industries. We benefit from the ability to augment our footprint by pursuing value-accretive network extensions, or edge-outs, to increase our addressable market and grow our customer base. We have historically made selective capital investments in edge-outs to facilitate growth in residential and business services.
We are focused on efficient capital spending and maximizing adjusted earnings before income taxes, depreciation and amortization (“Adjusted EBITDA”) through an Internet-centric growth strategy while maintaining a profitable video subscriber base.first strategy. Based on our per subscriber economics, we believe that HSD represents the greatest opportunity to enhance profitability across our residential and business markets. ~~We believe that our advanced~~

During the third quarter of 2021, the trends the Company experienced during the first half of the year continued with HSD only new connections consistent with the prior four quarters at approximately 87% of total new connections and demand for higher internet speeds with 87% of new HSD only connections purchasing 200MB or higher speeds during the third quarter of 2021, representing an approximate 8% increase from the third quarter of 2020.

In order to support these trends, we are managing network ~~is designed~~bandwidth to meet the needs of our ~~current~~customers and ~~future customers’ HSD needs.~~ expect to meet capacity demands as network traffic continues to increase. To meet this objective, we continue to invest in our network to ensure speed and reliability, and obtain a better understanding of how customers utilize our network. Through this understanding, we can make certain capacity improvements and enhance the network to improve the customer experience; as well as introduce more self-help and self-care options to increase flexibility and choice for our customers.

We ~~offer HSD speeds~~continue to monitor the impact of the global health crisis related to the outbreak of coronavirus, or COVID-19, on our business. The primary impact to the Company was its election to participate in several initiatives focused on keeping customers impacted by COVID-19 connected to services. These initiatives include the Federal Communications Commission (“FCC”) Keep Americans Connected Pledge, which expired on June 30, 2020, and the America’s Communications Association (“ACA”) Connects “K-12 Bridge to Broadband” program to help school districts and states provide internet access for students in low-income households. The Company is currently participating in the FCC’s Emergency Broadband Benefit (“EBB”) Program as outlined under the Consolidated Appropriations Act of 2021. Under this program, eligible households may apply for a discount of up to ~~500 Mbps in over 94%~~$50 per month towards broadband service. As of ~~our footprint and will be expanding our 1 Gbps service in more than 95% of our markets beginning in 2018.~~September 30, 2021, the Company had approximately 11,000 customers enrolled under the EBB program.

~~Our most significant competitors are~~We have identified other cable television operators, direct broadcast satellite providers and certain telephone companies that offer services that provide features and functionality similar to our HSD, Video and Telephony services. We believe that our strategy of operating primarily in suburban areas provides better operating and financial stability comparedpotential impacts to the ~~more competitive environments~~business as the potential for increases in large metropolitan markets. We have a history of successfully competing in chosen markets despite the presence of competing incumbent providers through attractive high value bundling of our services and investments in new service offerings.
~~We believe that a prolonged economic downturn, especially any downturn in the housing market, may negatively impact~~delinquent customer payments and/or adverse effects on our ability to ~~attract new subscribers~~procure materials and ~~generate increased revenues. Additional capital and credit market disruptions could cause broader economic downturns, which could also lead to lower demand for our products and lower levels~~equipment. Thus far, we have not experienced either of ~~advertising sales. A slowdown in growth~~these adverse effects throughout the duration of the ~~housing market could severely affect consumer confidence and may cause increased delinquencies~~global health crisis. However, we are not able to fully predict the overall impact of the global health crisis on our business if these events or ~~cancellations by our customers or lead to unfavorable changes~~other events occur in the ~~mix~~future.

Table of ~~products purchased.~~Contents

~~In addition, we are susceptible to risks associated with the potential financial instability of our vendors~~Key Transactions Impacting Operating Results and third parties on which we rely to provide products and services or to which we delegate certain functions. The same economic conditions that may affect our customers, as well as volatility and disruption in the capital and credit markets, also could adversely affect vendors and third parties and lead to significant increases in prices, reduction in output or the bankruptcy of our vendors or third parties upon which we rely. In addition, programming costs are a significant part of our operating expenses and are expected to continue to increase primarily as a result of contractual rate increases and additional service offerings.

~~Ownership and Basis of Presentation~~Financial Condition

Our business commenced operations in 2001. WideOpenWest, Inc. (“WOW”) was founded in 2012 as WideOpenWest Kite, Inc., a Delaware corporation. WideOpenWest Kite, Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017.

~~We were wholly owned by Racecar Acquisition, LLC (“Racecar Acquisition”), which is a wholly owned subsidiary~~Sale of ~~WideOpenWest Holdings, LLC (“Parent”).~~Service Areas

On ~~April 1, 2016,~~June 30, 2021, we consummated a restructuring (“Restructuring”) whereby WideOpenWest Finance, LLC (“WOW Finance”) became a wholly owned subsidiary of WOW. Previously, WOW Finance was owned by WideOpenWest Illinois, Inc., WideOpenWest Ohio, Inc., WideOpenWest Cleveland, Inc., WOW Sigecom, Inc. and WOW (collectively, the “Members”). Prior to the Restructuring, the Members were wholly owned subsidiaries of Racecar Acquisition.
As a result of the Restructuring, each of the Members, other than WOW, merged with and into WOW. WOW became the sole subsidiary of Racecar Acquisition and WOW Finance became a wholly owned subsidiary of WOW.
On May 25, 2017, we completed an initial public offering (“IPO”) of shares of our common stock, which are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “WOW”. Prior to our IPO, WOW was wholly owned by Racecar Acquisition, which is a wholly owned subsidiary of the Parent. Subsequent to the IPO, Racecar Acquisition and Parent were liquidated and our shares distributed to their respective members. In the following context, the terms we, us, WOW, or the Company may refer, as the context requires, to WOW or, collectively, WOW and its subsidiaries.
Certain employees of WOW participated in equity plans administered by the Company’s former Parent. The management units from the equity plan were issued from the former Parent’s ownership structure, the management units’ value directly correlated to the results of WOW, as the primary asset of the former Parent’s investment in WOW. The management units for the equity plan have been “pushed down” to the Company, as the management units had been utilized as equity-based compensation for WOW management. Immediately prior to the Company’s IPO, these management units were cancelled.
~~Refinancing of the Term B Loans and Revolving Credit Facility~~
~~On July 17, 2017, the Company~~ entered into an ~~eighth amendment (“Eighth Amendment”) to its Credit~~Asset Purchase Agreement with ~~JPMorgan Chase Bank, N.A.~~Atlantic Broadband (OH), LLC, (“Atlantic”), a U.S. cable operator and subsidiary of Cogeco Communications, Inc. and Atlantic Broadband Finance, LLC, a Delaware limitied liability company (the “Atlantic Purchase Agreement”), whereby Atlantic agreed to acquire the Company’s Cleveland and Columbus, Ohio service areas for approximately $1.125 billion, subject to adjustments, including customary working capital adjustments, as specified in the ~~administrative agent~~Atlantic Purchase Agreement.

On September 1, 2021, we completed the sale for the Ohio service areas receiving approximately $1.1 billion in net proceeds and ~~revolver agent. Under the Eighth Amendment, (i) we borrowed new Term B loans in an aggregate principal amount~~recorded a gain on sale of ~~$230.5~~$689.6 million for a total outstanding Term B loan principal amount of $2.28 billion and (ii) the revolving credit commitments were increased by an aggregate principal amount of $100.0 million, for a total outstanding revolving credit commitment of $300.0 million available to us under the revolving credit facility. The new Term B loans will mature on August 19, 2023 and bear interest, at our option, at a rate equal to ABR plus 2.25% or LIBOR plus 3.25%. Loans under the revolving credit facility will mature on May 31, 2022 and bear interest, at our option, at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. The guarantees, collateral and covenants in the Eighth Amendment remain unchanged from those contained in the credit agreement prior to the Eighth Amendment.
~~On May 31, 2017, the Company entered into~~ a seventh amendment (“Seventh Amendment”) to its Credit Agreement. The Seventh Amendment (i) refinanced the existing $200.0 million of borrowings available to the Company under the revolving credit facility and (ii) extended the maturity date of the revolving credit facility to May 31, 2022, unless an earlier date was triggered under certain circumstances. The interest rate margins applicable to the revolving credit facility bore interest at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. Additionally, the Company entered into an Incremental Commitment Letter to its revolving credit facility that increased the available borrowings to $300.0 million that became available upon compliance by the Company with certain conditions (see redemption of 10.25% senior notes whereby such conditionality was subsequently achieved as a result of the eighth amendment). The guarantees, collateral and covenants in the Seventh Amendment remain unchanged from those contained in the credit agreement prior to the Seventh Amendment.
~~Partial Redemption of 10.25% Senior Notes~~
On March 20, 2017, we utilized cash on hand to redeem $95.1 million in aggregate principal amount outstanding of the 10.25% Senior Notes. In addition to the partial redemption, we paid accrued interest on the 10.25% Senior Notes of $1.7 million and a call premium of $4.9 million. We recorded a loss on early extinguishment of debt of $5.0 million, primarily representing the cash call premium paid.
~~Redemption of 10.25% Senior Notes~~
On July 17, 2017, we used the proceeds of the new Term B loans, and borrowed $180.0 million under our revolving credit facility and cash on hand to fully redeem all of the Company’s remaining outstanding 10.25% Senior Notes due 2019 (the “Senior Notes”) and to pay certain fees and expenses. In connection with the redemption of the 10.25% Senior Notes, we satisfied and discharged the indenture governing the Senior Notes. We paid $729.9 million in principal amount, incurred prepayment fees of $18.7
million and paid accrued interest of $37.6 million. We recorded a loss on early extinguishment of debt of $19.8 million related to the write-off of deferred financing costs, premium, and prepayment fees.
~~Retirement of 13.38% Senior Subordinated Notes~~
~~During the year ended December 31, 2016, we made two redemption payments to early retire our 13.38% Senior Subordinated Notes. The final redemption payment was made on December 18, 2016.~~
~~Sale of Lawrence, Kansas System~~
On January 12, 2017, we and Midcontinent Communications (“MidCo”) consummated an asset purchase agreement under which MidCo acquired our Lawrence, Kansas system for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the Agreement. The results of our Lawrence, Kansas system are included in the three and nine months ended September 30, ~~2016 unaudited condensed consolidated financial statements but not included in~~2021. We utilized the ~~three and nine months ended September 30, 2017 unaudited condensed consolidated financial statements.~~
~~Avista and Crestview Partners Investment~~
~~On December 18, 2015, Crestview Advisors, LLC (“Crestview”) and our former Parent consummated~~net proceeds from the sale to repay a ~~transaction whereby Crestview became the beneficial owner of approximately 35%~~significant portion of our ~~former Parent. Under terms~~Term B loans and certain finance lease agreements. In conjunction with the closing of the ~~agreement (“Crestview~~Atlantic Purchase Agreement, we entered into a Transition Services Agreement with Atlantic to support post-transaction continutity of service during the transition period.

Additionally, on June 30, 2021, we entered into an Asset Purchase Agreement with Radiate HoldCo, LLC, a telecommunications holding company affiliated with RCN Telecom Services LLC, Grande Communications Networks, LLC and WaveDivision Holdings, LLC (collectively, “Astound Broadband”) (the “Astound Purchase Agreement”), ~~Crestview’s funds purchased units held by Avista Capital Partners (“Avista”)~~whereby Radiate HoldCo, LLC agreed to acquire the Company’s Chicago, Illinois, Evansville, Indiana and ~~other unit holders, and separately made a $125.0~~Baltimore, Maryland markets for approximately $661 million, ~~primary investment in newly-issued units.~~
~~On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in our former Parent.~~
~~As of September 30, 2017, all the proceeds from the funds’ investments of Avista and Crestview~~subject to adjustments, including customary working capital adjustments, as specified in the ~~amount of $143.3 million, net of transaction costs have been contributed to the Company.~~Astound Purchase Agreement. The sale was completed on November 1, 2021.

Critical Accounting Policies and Estimates

~~In the preparation~~For a discussion of our ~~unaudited condensed consolidated financial statements, we are required to make estimates, judgments and assumptions we believe are reasonable based upon the information available, in accordance with~~critical accounting ~~principles generally accepted in the United States of America (“GAAP”). The estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements~~policies and the ~~reported amounts~~means by which we develop estimates refer to “Item 7. Management’s Discussion and Analysis of ~~revenues~~Financial Condition and ~~expenses during the periods presented. Critical accounting policies are defined as those policies that are reflective~~Results of ~~significant judgments, estimates and uncertainties, which would potentially result~~Operations” in ~~materially different results under different assumptions and conditions. We believe the following accounting policies are the most critical in the preparation of~~ our ~~unaudited condensed consolidated financial statements because of the judgment necessary to account for these matters and the significant estimates involved, which are susceptible to change.~~
~~Valuation of Plant, Property and Equipment and Intangible Assets~~
~~Carrying Value.~~ The aggregate carrying value of our plant, property and equipment and intangible assets (including franchise operating rights and goodwill) comprised approximately 95% of our total assets at September 30, 2017 and December 31, 2016, respectively.
Plant, property and equipment are recorded at cost and include costs associated with the construction of cable transmission and distribution facilities and new service installations at customer locations. Capitalized costs include materials, labor and certain indirect costs attributable to the capitalization activity. Maintenance and repairs are expensed as incurred. Upon sale or retirement of an asset, the cost and related depreciation are removed2020 Annual Report on Form 10-K. There have been no material changes from the related accounts, and resulting gains or losses are reflected in operating results. We make judgments regarding the installation and construction activities to be capitalized. We capitalize direct labor associated with capitalizable activities and indirect cost using standards developed from operational data, including the proportionate time to perform a new installation relative to the total technical operations activities and an evaluation of the nature of the indirect costs incurred to support capitalizable activities. Judgment is required to determine the extent to which indirect costs that have been incurred are related to capitalizable activities and, as a result, should be capitalized. Indirect costs include (i) employee benefits and payroll taxes associated with capitalized direct labor, (ii) direct variable cost of installation and construction vehicle costs, (iii) the direct variable costs of support personnel directly involved in assisting with installation activities, such as dispatchers and (iv) indirect costs directly attributable to capitalizable activities.
Intangible assets consist primarily of acquired franchise operating rights, franchise-related customer relationships and goodwill. Franchise operating rights represent the value attributable to agreements with local franchising authorities, which allows
access to homes in the public right of way. Our franchise operating rights were acquired through business combinations. We do not amortize cable franchise operating rights as we have determined that they have an indefinite life. Costs incurred in negotiating and renewing cable franchise agreements are expensed as incurred. Franchise-related customer relationships represent the value of the benefit to us of acquiring the existing cable subscriber base and are amortized over the estimated life of the subscriber base, generally four years, on a straight-line basis. Goodwill represents the excess purchase price over the fair value of the identifiable net assets we acquired in business combinations.
~~Asset Impairments.~~ Long-lived assets, including plant, property and equipment and intangible assets subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying value of the asset.
We evaluate the recoverability of our franchise operating rights at least annually on October 1, or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. Franchise operating rights are evaluated for impairment by comparing the carrying value of the intangible asset to its estimated fair value, utilizing both quantitative and qualitative methods. Qualitative analysis is performed for franchise assets in the event the previous analysis indicates that there is a significant margin between carrying value of franchise operating rights and estimated fair value of those rights, and that it is more likely than not that the estimated fair values equal or exceed carrying value. For franchise assets that undergo quantitative analysis, we calculate the fair value of franchise operating rights using the multi-period excess earnings method, an income approach, which calculates the value of an intangible asset by discounting its future cash flows. The fair value is determined based on estimated discrete discounted future cash flows attributable to each franchise operating right intangible asset using assumptions consistent with internal forecasts. Assumptions key in estimating fair value under this method include, but are not limited to, revenue and subscriber growth rates (less anticipated customer churn), operating expenditures, capital expenditures (including any build out), market share achieved, contributory asset charge rates, tax rates and discount rate. The discount rate used in the model represents a weighted average cost of capital and the perceived risk associated with an intangible asset such as our franchise operating rights. The estimates and assumptions madecritical policies described in our valuations are inherently subject to significant uncertainties, many of which are beyond our control, and there is no assurance that these results can be achieved. The primary assumptions for which there is a reasonable possibility of the occurrence of a variation that would significantly affect the measurement value include the assumptions regarding revenue growth, programming expense growth rates, the amount and timing of capital expenditures and the discount rate utilized.Form 10-K.
We conduct our cable operations under the authority of state cable television franchises, except in Alabama and parts of Michigan where we continue to operate under local franchises. Our franchises generally have service terms that last from five to 15 years, but we operate in some states that have perpetual terms. All of our term-limited franchise agreements are subject to renewal. The renewal process for our state franchises is specified by state law and tends to be a simple process, requiring the filing of a renewal application with information no more burdensome than that contained in our original application. Although renewal is not assured, there are provisions in the law that protect the Company from arbitrary or unreasonable denial. This is especially true for competitive cable providers like us. In most areas in which we operate, we are a “competitive” operator, meaning that we compete directly in the service area with at least one other franchised cable operator. The Cable Television Consumer Protection and Competition Act of 1992 (the “Cable Act”) says that “a franchising authority may not unreasonably refuse to award an additional competitive franchise.” The Cable Act also provides a formal renewal process that protects cable operators against arbitrary or unreasonable refusals to renew a franchise. In those few areas where we operate under local franchises, we can use this formal renewal process if needed.
In our experience, state and local franchising authorities encourage our entry into the market, as our competitive presence often leads to overall better service, more service options and lower prices. In our and our expert advisors’ experience, it has not been the practice for a franchising authority to deny a cable franchise renewal. We have never had a renewal denied.
We also, at least annually on October 1, evaluate our goodwill for impairment for each reporting unit (which generally are represented by geographical operations of cable systems managed by us), utilizing both quantitative and qualitative methods. Qualitative analysis is performed for goodwill in the event the previous analysis indicates that there is a significant margin between carrying value of goodwill and estimated fair value of the reporting units, and that it is more likely than not that the estimated fair value equals or exceeds carrying value. For our quantitative evaluation of our goodwill, we utilize both an income approach as well as a market approach. The income approach utilizes a discounted cash flow analysis to estimate the fair value of each reporting unit, while the market approach utilizes multiples derived from actual precedent transactions of similar businesses and market valuations of guideline public companies. In the event that the carrying amount exceeds the fair value, we would be required to estimate the fair value of the assets and liabilities of the reporting unit as if the unit was acquired in a business combination, thereby revaluing goodwill. Any excess of the carrying value of goodwill over the revalued goodwill would be expensed as an impairment loss.
~~Fair Value Measurements~~
GAAP provides guidance for a framework for measuring fair value in the form of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Financial assets and liabilities are classified by level in their entirety based upon the lowest level of input that is significant to the fair value measurement. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability due to the fact there is no market activity. We record our interest rate swaps at fair value on the balance sheet and perform recurring fair value measurements with respect to these derivative financial instruments. The fair value measurements of our interest rate swaps were determined using cash flow valuation models. The inputs to the cash flow models consist of, or are derived from, observable data for substantially the full term of the swaps. This observable data includes interest and swap rates, yield curves and credit ratings, which are retrieved from available market data. The valuations are then adjusted for our own nonperformance risk as well as the counterparty as required by the provisions of the authoritative guidance using a discounted cash flow technique that accounts for the duration of the interest rate swaps and our and the counterparty’s risk profile.
We also have non-recurring valuations primarily associated with (i) the application of acquisition accounting and (ii) impairment assessments, both of which require that we make fair value determinations as of the applicable valuation date. In making these determinations, we are required to make estimates and assumptions that affect the recorded amounts, including, but not limited to, expected future cash flows, market comparables and discount rates, remaining useful lives of long-lived assets, replacement or reproduction costs of plant, property and equipment and the amounts to be recovered in future periods from acquired net operating losses and other deferred tax assets. To assist us in making these fair value determinations, we may engage third- party valuation specialists. Our estimates in this area impact, among other items, the amount of depreciation and amortization, and any impairment charges that we may report. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain. A significant portion of our long-lived assets were initially recorded through the application of acquisition accounting and all of our long-lived assets are subject to periodic or event-driven impairment assessments.

~~Legal and Other Contingencies~~
Legal and other contingencies have a high degree of uncertainty. When a loss from a contingency becomes estimable and probable, a reserve is established. The reserve reflects management’s best estimate of the probable cost of ultimate resolution of the matter and is revised as facts and circumstances change. A reserve is released when a matter is ultimately brought to closure or the statute of limitations lapses. The actual costs of resolving a claim may be substantially different from the amount of reserve we recorded. In addition, in the normal course of business, we are subject to various other legal and regulatory claims and proceedings directed at or involving us, which in our opinion will not have a material adverse effect on our financial position or results of operations or liquidity.
~~Programming Agreements~~
We exercise significant judgment in estimating programming expense associated with certain video programming contracts. Our policy is to record video programming costs based on our contractual agreements with our programming vendors, which are generally multi-year agreements that provide for us to make payments to the programming vendors at agreed upon market rates based on the number of customers to which we provide the programming service. If a programming contract expires prior to the parties’ entry into a new agreement and we continue to distribute the service, we estimate the programming costs during the period there is no contract in place. In doing so, we consider the previous contractual rates, inflation and the status of the negotiations in determining our estimates. When the programming contract terms are finalized, an adjustment to programming expense is recorded, if necessary, to reflect the terms of the new contract. We also make estimates in the recognition of programming expense related to other items, such as the accounting for free periods, timing of rate increases and credits from service interruptions, as well as the allocation of consideration exchanged between the parties in multiple-element transactions.
Significant judgment is also involved when we enter into agreements which result in us receiving cash consideration from the programming vendor, usually in the form of advertising sales, channel positioning fees, launch support or marketing support. In these situations, we must determine based upon facts and circumstances if such cash consideration should be recorded as revenue, a reduction in programming expense or a reduction in another expense category (e.g., marketing).
~~Income Taxes~~
We account for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the unaudited condensed consolidated financial statements in the period of enactment.
As a result of the Restructuring, WOW Finance became a single member LLC for U.S. federal income tax purposes. The Restructuring is treated as a change in tax status related to WOW Finance, since a single member LLC is required to record current and deferred income taxes reflecting the results of its operations.
From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. Examples of such transactions include business acquisitions and dispositions, including dispositions designed to be tax-deferred transactions for tax purposes, investments and certain financing transactions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. We prepare and file tax returns based on interpretations of tax laws and regulations. In the normal course of business, our tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax, interest and penalty assessments by these taxing authorities. In determining our income tax provision for financial reporting purposes, we establish a reserve for uncertain income tax positions unless such positions are determined to be more likely than not of being sustained upon examination, based on their technical merits, and, accordingly, for financial reporting purposes, we only recognize tax benefits taken on the tax return that we believe are more likely than not of being sustained. There is considerable judgment involved in determining whether positions taken on the tax return are more likely than not of being sustained.
We adjust our tax reserve estimates periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The condensed consolidated income tax provision of any given year includes adjustments to prior year income tax accruals that are considered appropriate and any related estimated interest. Our policy is to recognize, when applicable, interest and penalties on uncertain income tax positions as part of income tax provision.
Homes Passed and Subscribers
We report homes passed as the number of serviceable addresses, such as single residence homes, apartments and condominium units, and businesses passed by our broadband network and listed in our database. We report total subscribers as the number of subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe. We define each of the individual HSD subscribers, Video subscribers and Telephony subscribers as a ~~RGU.~~revenue generating unit (“RGU”). The following table summarizes homes passed, total subscribers and total RGUs for our services as of each respective date and ~~does not make adjustment for any of~~represents subscribers associated with the Company’s ~~acquisitions or divestitures:~~continuing operations:

Sep. 30,

Dec. 31,

Mar. 31,

Jun. 30,

Sep. 30,


2020

2020 (1)

2021

2021

2021
Homes passed

1,852,500

1,871,800

1,873,900

1,877,300

1,880,900
Total subscribers

524,800

522,900

528,000

530,500

531,600
HSD RGUs

496,600

498,800

504,900

507,900

509,500
Video RGUs

203,500

189,400

178,800

169,300

158,600
Telephony RGUs

113,900

110,400

108,000

105,600

102,400
Total RGUs

814,000

798,600

791,700

782,800

770,500
(1) The Company combined certain billing systems during the second quarter of 2021, which standardized the statistical reporting of key metrics. The standardized reporting led to the following increases (decreases) at December 31, 2020: Homes passed 15,400, Total subscribers (4,200), HSD RGUs (700), Video RGUs (1,800), Telephony RGUs (600), and Total RGUs (3,100).

Increase/
(decrease) (3)

Dec. 31,
2015

Mar. 31,
2016

Jun. 30,
2016

Sep. 30,
2016 (2)

Dec. 31,
2016

Mar. 31,
2017

Jun. 30,
2017

Sep. 30,
2017

Sep. 30,
2017 vs.
Sep. 30,
2016

Homes passed

3,003,100

3,010,700

3,022,800

3,075,000

3,094,300

3,047,800

3,072,500

3,097,500

22,500

Total subscribers(1)

777,800

784,600

785,600

800,800

803,400

780,100

776,500

776,400

(24,400
)
HSD RGUs

712,500

722,200

725,700

742,000

747,400

729,000

727,600

730,000

(12,000
)
Video RGUs

547,500

537,200

524,300

514,900

501,400

474,000

458,200

442,500

(72,400
)
Telephony RGUs

296,800

286,600

277,500

267,400

258,100

243,000

235,400

226,200

(41,200
)
Total RGUs

1,556,800

1,546,000

1,527,500

1,524,300

1,506,900

1,446,000

1,421,200

1,398,700

(125,600
)

~~(1)~~ ~~Defined as the number~~Table of ~~subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe.~~Contents

~~(2)~~ ~~Includes~~The following table displays the ~~following~~ homes passed and ~~subscriber numbers~~subscribers related to our Lawrence, Kansas system which was divested on January 12, 2017: homes passed was 67,900; total subscribers was 31,100; HSD RGUs was 28,400; Video RGUs was 15,300; Telephony RGUs was 7,200; and Total RGUs was 50,900.the Company’s edge-out activities:

Sep. 30,

Dec. 31,

Mar. 31,

Jun. 30,

Sep. 30,

2020

2020

2021

2021

2021
Homes passed

74,700

76,100

76,500

77,400

78,000
Total subscribers

17,600

18,000

18,400

18,600

19,000
HSD RGUs

17,500

17,900

18,300

18,500

18,900
Video RGUs

6,800

7,200

7,100

6,900

6,900
Telephony RGUs

2,800

2,900

2,900

2,800

2,800
Total RGUs

27,100

28,000

28,300

28,200

28,600

~~(3)~~                                 Increase (decrease) in homes passed and subscriber numbers during the twelve months ended September 30, 2017 related to edge-outs includes the following; homes passed was 70,100; total subscribers was 16,200; HSD RGUs was 16,000; Video RGUs was 8,600; Telephony RGUs was 3,100; and Total RGUs was 27,700.
For the quarter ended September 30, 2017, total subscribers decreased by approximately 24,400 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total subscribers decreased by approximately 9,400 over this period.
For the quarter ended September 30, 2017, total HSD RGUs decreased by approximately 12,000 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total HSD RGUs increased by approximately 400 over this period.
For the quarter ended September 30, 2017, total Video RGUs decreased by approximately 72,400 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total Video RGUs decreased by approximately 65,600 over this period.
For the quarter ended September 30, 2017, total Telephony RGUs decreased by approximately 41,200 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total Telephony RGUs decreased by approximately 37,100 over this period.
For the quarter ended September 30, 2017, total RGUs decreased by approximately 125,600 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total RGUs decreased by approximately 102,300 over this period.
Subscriber information for acquired entities is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies. While we take appropriate steps to ensure subscriber information is presented on a consistent and accurate basis at any given balance sheet date, we periodically review our policies in light of the variability we may encounter across our different markets due to the nature and pricing of products, ~~and~~ services, and billing systems. Accordingly, we may from time to time make appropriate adjustments to our subscriber information based on such reviews.
Financial Statement Presentation
Revenue
Our operating revenue is primarily derived from monthly recurring charges for HSD, Video, Telephony and ~~Telephony~~other business services to residential and business customers, ~~other business services, advertising and~~in addition to other revenues.
·                  ~~HSD revenue consists primarily of fixed monthly fees for data service and rental of cable modems.~~
·                  Video revenue consists of fixed monthly fees for basic, premium and digital cable television services and rental of video converter equipment, as well as fees from pay-per-view, video-on-demand and other events that involve a charge for each viewing.
·                  ~~Telephony revenue consists primarily of fixed monthly fees for local service and enhanced services, such as call waiting, voice mail and measured and flat rate long-distance service.~~
·                  Other business service revenue consists of session initiated protocol, web hosting, metro Ethernet, wireless backhaul, broadband carrier services, dark fiber sales, advanced collocation and cloud infrastructure services.
·                  ~~Other revenue consists primarily of franchise and other regulatory fees, advertising revenue installation services and other ancillary customer fees.~~
● HSD revenue consists primarily of fixed monthly fees for data service and rental of modems.
● Video revenue consists primarily of fixed monthly fees for basic, premium and digital cable television services and rental of video converter equipment, as well as charges from optional services, such as pay-per-view, video-on-demand and other events available to the customer. The Company is required to pay certain cable franchising authorities an amount based on the percentage of gross revenue derived from video services. The Company generally passes these fees on to the customer, which is included in video revenue.
● Telephony revenue consists primarily of fixed monthly fees for local service and enhanced services, such as call waiting, voice mail and measured and flat rate long-distance service.
● Other business service revenue consists primarily of monthly recurring charges for session initiated protocol, web hosting, metro Ethernet, wireless backhaul, broadband carrier services and cloud infrastructure services provided to business customers.
● Other revenue consists primarily of revenue from line assurance warranty services provided to residential and business customers and revenue from late fees and advertising placement.
Revenues attributable to monthly subscription fees charged to customers for our HSD, Video and Telephony services ~~provided by our cable systems~~ were ~~87%~~94% and 93% of total revenue for the nine months ended September 30, ~~2017~~2021 and ~~2016.~~2020. The remaining percentage of non-subscription revenue is derived primarily from ~~franchise~~other business services, line assurance warranty services and ~~other regulatory fees (which are collected by us but then paid to local authorities),~~ advertising ~~revenues and installation services.~~placement.

Table of Contents

Costs and Expenses

Our expenses primarily consist of operating, selling, general and administrative expenses, depreciation and amortization expense, and interest expense.

Operating expenses primarily include programming costs, data costs, transport costs and network access fees related to our HSD, Video and Telephony services, ~~cable service related~~hardware/software expenses, ~~costs of dark fiber sales,~~ network operations and maintenance services, customer service and call center expenses, bad debt, billing and collection expenses and franchise ~~fees~~ and other regulatory fees.

Selling, general and administrative expenses primarily include salaries and benefits of corporate and field management, sales and marketing personnel, human resources and related administrative costs.

~~Operating~~Depreciation and amortization includes depreciation of our network infrastructure, including associated equipment, hardware and software, buildings and leasehold improvements, and finance lease obligations. Amortization is recognized on other intangible assets with definite lives primarily related to acquisitions. Depreciation and amortization expense is presented separately from operating and selling, general and administrative expenses ~~exclude depreciation and amortization expense, which is presented separately~~ in the accompanying unaudited condensed consolidated statements of operations.
~~Depreciation and amortization~~ ~~includes depreciation of our broadband networks and equipment, buildings and leasehold improvements and amortization of other intangible assets with definite lives primarily related to acquisitions.~~
~~Realized and unrealized gain on derivative instruments, net~~ includes adjustments to fair value for the various interest rate swaps and caps we enter into on the required portions of our outstanding variable debt. As we do not use hedge accounting for financial reporting purposes, at the end of each reporting period, the adjustments to fair value of our interest rate swaps and caps are recorded to earnings.

We control our costs of operations by maintaining strict controls on expenditures. More specifically, we are focused on managing our cost structure by improving workforce productivity, increasing the effectiveness of our purchasing activities and maintaining discipline in customer acquisition. We expect programming expenses to continue to increase per Video subscriber due to a variety of factors, including increased demands by owners of some broadcast stations for carriage of other services or payments to those broadcasters for retransmission consent and annual increases imposed by programmers with additional selling power as a result of media consolidation. We have not been able to fully pass these increases on to our customers without the loss of customers, nor do we expect to be able to do so in the future.

Results of ~~operations~~Operations

The following table summarizes our results of operations for the ~~three months ended September 30, 2017 and 2016:~~periods presented:

Three months ended

Three months ended

September 30, 2021

September 30, 2020


Continuing

Discontinued

Total

Continuing

Discontinued

Total

(in millions)
Revenue

$
184.0

$
83.7

$
267.7

$
183.1

$
105.6

$
288.7
Costs and expenses:









Operating (excluding depreciation and amortization)

93.4

28.9

122.3

99.7

40.3

140.0
Selling, general and administrative

44.8

5.2

50.0

40.2

5.6

45.8
Depreciation and amortization

42.3

—

42.3

38.2

20.0

58.2

180.5

34.1

214.6

178.1

65.9

244.0
Income from operations

3.5

49.6

53.1

5.0

39.7

44.7
Other income (expense):








Interest (expense) income

(22.4)

—

(22.4)

(32.2)

—

(32.2)
Gain (loss) on sale of assets, net

0.1

689.9

690.0

(0.3)

—

(0.3)
Other income, net

1.8

—

1.8

0.8

—

0.8
(Loss) income before provision for income tax

(17.0)

739.5

722.5

(26.7)

39.7

13.0
Income tax benefit (expense)

(4.2)

(200.4)

(204.6)

6.4

(10.4)

(4.0)
Net (loss) income

$
(21.2)

$
539.1

$
517.9

$
(20.3)

$
29.3

$
9.0

Three months
ended September 30,

Change

2017

2016

$

%

(in millions)

Revenue

$
297.8

$
311.2

$
(13.4
)
(4
)%
Costs and expenses:

Operating (excluding depreciation and amortization)

153.2

167.1

(13.9
)
(8
)%
Selling, general and administrative

38.1

32.6

5.5

17
%
Depreciation and amortization

49.0

49.6

(0.6
)
(1
)%
Management fee to related party

—

0.4

(0.4
)
*

240.3

249.7

(9.4
)
(4
)%
Income from operations

57.5

61.5

(4.0
)
(7
)%
Other income (expense):

Interest expense

(32.2
)
(52.9
)
20.7

39
%
Loss on early extinguishment of debt

(26.1
)
(28.1
)
2.0

7
%
Other income, net

0.3

1.9

(1.6
)
(84
)%
Loss before provision for income taxes

(0.5
)
(17.6
)
17.1

97
%
Income tax expense

(1.6
)
(2.7
)
1.1

41
%
Net loss

$
(2.1
)
$
(20.3
)
$
18.2

90
%

~~The results~~Table of ~~our Lawrence, Kansas system are included in the three months ended September 30, 2016 but are not included in the three months ended September 30, 2017.~~Contents

* ~~Not meaningful~~

The following table summarizes our results of operations for the ~~nine months ended September 30, 2017 and 2016:~~periods presented:

Nine months ended

Nine months ended

September 30, 2021

September 30, 2020


Continuing

Discontinued

Total

Continuing

Discontinued

Total

(in millions)
Revenue

$
547.4

$
293.9

$
841.3

$
543.2

$
312.0

$
855.2
Costs and expenses:









Operating (excluding depreciation and amortization)

286.9

106.1

393.0

306.6

127.7

434.3
Selling, general and administrative

132.8

10.7

143.5

125.0

11.5

136.5
Depreciation and amortization

126.0

41.0

167.0

111.5

59.3

170.8

545.7

157.8

703.5

543.1

198.5

741.6
Income from operations

1.7

136.1

137.8

0.1

113.5

113.6
Other income (expense):








Interest (expense) income

(82.6)

0.4

(82.2)

(98.1)

—

(98.1)
Gain (loss) on sale of assets, net

—

690.1

690.1

0.3

0.1

0.4
Other income, net

2.4

0.1

2.5

1.5

0.1

1.6
(Loss) income before provision for income tax

(78.5)

826.7

748.2

(96.2)

113.7

17.5
Income tax benefit (expense)

12.1

(220.4)

(208.3)

21.8

(28.0)

(6.2)
Net (loss) income

$
(66.4)

$
606.3

$
539.9

$
(74.4)

$
85.7

$
11.3

Nine months
ended September 30,

Change

2017

2016

$

%

(in millions)

Revenue

$
895.3

$
921.0

$
(25.7
)
(3
)%
Costs and expenses:

Operating (excluding depreciation and amortization)

470.4

499.1

(28.7
)
(6
)%
Selling, general and administrative

100.9

86.2

14.7

17
%
Depreciation and amortization

150.1

155.0

(4.9
)
(3
)%
Management fee to related party

1.0

1.3

(0.3
)
(23
)%

722.4

741.6

(19.2
)
(3
)%
Income from operations

172.9

179.4

(6.5
)
(4
)%
Other income (expense):

Interest expense

(122.0
)
(162.3
)
40.3

25
%
Loss on early extinguishment of debt

(32.1
)
(30.6
)
(1.5
)
5
%
Gain on sale of assets

38.4

—

38.4

*

Unrealized gain on derivative instruments, net

—

2.3

(2.3
)
*

Other income, net

1.7

2.0

(0.3
)
15
%
Income (Loss) before provision for income taxes

58.9

(9.2
)
68.1

*

Income tax benefit

16.4

7.4

9.0

*

Net income (loss)

$
75.3

$
(1.8
)
$
77.1

*

~~The results of our Lawrence, Kansas system are included in the nine months ended September 30, 2016 but are not included in the nine months ended September 30, 2017.~~Revenue
*                 ~~Not meaningful~~
~~Three months ended September 30, 2017 compared to the three months ended September 30, 2016~~
~~Revenue~~
~~Revenue for the three months ended September 30, 2017 decreased $13.4 million, or 4%, as compared to~~Total revenue for the three months ended September 30, ~~2016~~2021 decreased $21.0 million, or 7%, as compared to the corresponding period in 2020 as follows:

Three months ended

Three months ended

September 30, 2021

September 30, 2020


Continuing

Discontinued

Total

Continuing

Discontinued

Total

(in millions)
Residential subscription

$
142.6

$
71.5

$
214.1

$
142.6

$
91.0

$
233.6
Business services subscription

27.7


8.0

35.7

26.4

9.5

35.9
Total subscription

170.3


79.5

249.8

169.0

100.5

269.5
Other business services

5.6


0.6

6.2

5.8

0.5

6.3
Other

8.1


3.6

11.7

8.3

4.6

12.9

$
184.0

$
83.7

$
267.7

$
183.1

$
105.6

$
288.7

Three months ended
September 30,

Change

2017

2016

$

%

(in millions)

Residential subscription

$
231.9

$
243.4

$
(11.5
)
(5
)%
Business services subscription

29.6

27.5

2.1

8
%
Total subscription

261.5

270.9

(9.4
)
(3
)%
Other business services

9.6

10.0

(0.4
)
(4
)%
Other

26.7

30.3

(3.6
)
(12
)%

$
297.8

$
311.2

$
(13.4
)
(4
)%
Total revenue for the nine months ended September 30, 2021 decreased $13.9 million, or 2%, as compared to the corresponding period in 2020 as follows:

Nine months ended

Nine months ended

September 30, 2021

September 30, 2020


Continuing

Discontinued

Total

Continuing

Discontinued

Total

(in millions)
Residential subscription

$
424.6

$
253.0

$
677.6

$
422.1

$
268.7

$
690.8
Business services subscription

82.3

27.1

109.4

78.8

28.4

107.2
Total subscription

506.9

280.1

787.0

500.9

297.1

798.0
Other business services

16.9

1.6

18.5

17.7

1.5

19.2
Other

23.6

12.2

35.8

24.6

13.4

38.0

$
547.4

$
293.9

$
841.3

$
543.2

$
312.0

$
855.2

Table of Contents

Continuing Operations

Total revenue from continuing operations increased $0.9 million and $4.2 million, or 1%, during the three and nine months ended September 30, 2021, as compared to the corresponding periods in 2020.

Subscription Revenue

Total subscription revenue ~~decreased $9.4~~from continuing operations increased $1.3 million, or 3%1%, and $6.0 million, or 1%, during the three and nine months ended September 30, ~~2017~~2021, as compared to the ~~three months ended September 30, 2016. Contributing to the decrease~~corresponding periods in 2020. The increases were approximately $18.8 million of year over year reductions in average total revenue generating units (“RGUs”) and $10.0 million related to the disposition of our Lawrence, Kansas system on January 12, 2017. Offsetting these decreases wasdriven by a $15.2 million and $45.4 million increase in ~~total subscription revenue as a result of increases in the~~ average revenue per unit (“ARPU”), respectively, as HSD customers continue to purchase higher speed tiers; coupled with HSD and Video rate increases issued in 2021 and a $2.3 million and $8.5 million increase in volume, respectively, attributable exclusively to the addition of ~~our customer base, which~~HSD subscribers. These increases were partially offset by a $16.2 million and $47.9 million shift in the service offering mix, respectively, as we continue to experience a reduction in Video and Telephony RGUs. ARPU is calculated as subscription revenue for each of the HSD, Video and Telephony services divided by the average total RGUs for each service category for the respective period, which increase was driven by customer rate increases to offset the rising cost of programming per subscriber. Additionally, we had an increase of $4.2 million of subscription revenue generated from our NuLink acquisition on September 9, 2016.period.

Other Business Services

~~The decrease in other~~Other business services revenue ~~of $0.4~~from continuing operations decreased $0.2 million, or 3%, and $0.8 million, or 5%, during the three and nine months ended September 30, 2021, as compared to the corresponding periods in 2020. The decreases in each period were primarily due to decreases in data center revenue.

Other

Other revenue from continuing operations decreased $0.2 million, or 2%, and $1.0 million, or 4%, isduring the three and nine months ended September 30, 2021, as compared to the corresponding period in 2020. The decreases were primarily due to ~~decreased~~decreases in line assurance revenue ~~generated by network construction activities,~~and service call fee revenue, partially offset by a slight increase in advertising revenue.

Operating expenses (excluding depreciation and amortization)

Operating expenses (excluding depreciation and amortization) from continuing operations decreased $6.3 million, or 6%, and $19.7 million, or 6%, during the three and nine months ended September 30, 2021, as compared to the corresponding periods in 2020. The decreases were primarily driven by decreases in direct operating expenses, partially offset by decreases in capital eligible expenses and increases in ~~recurring revenue~~third-party service provider expense.

Additionally we recorded additional bad debt expense of $3.7 million from continuing operations during the nine months ended September 30, 2020, related to trade accounts receivable and non-trade accounts receivable as a result of uncertainties around the economic positions of our ~~fiber network.~~customers impacted by the global health crisis. We did not incur such expense for the three and nine months ended September 30, 2021.

~~The decrease~~Incremental contribution

Incremental contribution is defined as subscription services revenue less costs directly incurred from third parties in ~~other revenue~~connection with the provision of ~~$3.6~~such services to our customers (service direct expense). Incremental contribution from continuing operations increased $10.1 million, or ~~12%~~9%, ~~is primarily due to a decrease in advertising revenues and a decrease in franchise fees which correlates with the reduction in subscribers over the same period for~~during the three months ended September 30, ~~2017~~2021 compared to the three months ended September 30, ~~2016.~~

2020 and $27.2 million, or 8%, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

The ~~following table details subscription revenue by service offering~~increases are primarily related to the decrease in programming expense. Programming expense decreased from $50.6 million for the three months ended September 30, ~~2017 and September 30, 2016:~~

Three months ended September 30,

Subscription
Revenue

2017

2016

Change

Subscription
Revenue

Average
RGUs(1)

Subscription
Revenue

Average
RGUs(1)

$

%

(in millions)

(in thousands)

(in millions)

(in thousands)

HSD subscription

$
103.9

728.8

$
93.2

733.9

$
10.7

11
%
Video subscription

124.9

450.4

139.6

519.6

(14.7
)
(11
)%
Telephony subscription

32.7

230.8

38.1

272.4

(5.4
)
(14
)%

$
261.5

$
270.9

$
(9.4
)
(3
)%
~~(1)~~ ~~Average subscribers, presented in thousands, is calculated based on reported subscribers and is not adjusted~~2020 to $42.3 million for ~~changes related to the disposition of our Lawrence, Kansas system and acquisition of NuLink.~~
~~HSD subscription revenue increased $10.7 million, or 11%, during~~ the three months ended September 30, ~~2017~~2021 and $158.2 million for the nine months ended September 30, 2020 to $137.4 million for the nine months ended September 30, 2021, which is attributable to the decline in Video RGUs.

Table of Contents

Selling, general and administrative expenses

Selling, general and administrative expenses from continuing operations increased $4.6 million, or 11%, and $7.8 million, or 6% during the three and nine months ended September 30, 2021, respectively, compared to the corresponding periods in 2020. The increases are primarily attributable to increases in marketing, compensation (including stock compensation), professional service and legal expenses, partially offset by decreases in costs associated with digital transformation initiatives.

Depreciation and amortization expenses

Depreciation and amortization expenses from continuing operations increased $4.1 million, or 11%, and $14.5 million, or 13%, during the three and nine months ended September 30, 2021, respectively, compared to the corresponding periods in 2020. The increases are primarily attributable to the timing of assets placed in service and increases in equipment and vehicle finance lease activity.

Interest expense

Interest expense decreased $9.8 million, or 30%, and $15.5 million, or 16%, during the three and nine months ended September 30, 2021, respectively, compared to the corresponding periods in 2020.The decreases are primarily due to the expiration of the interest rate swap agreement in May 2021 and repayment of approximately $1.1 billion of our long-term debt in September 2021.

Other income

Other income increased $1.0 million and $0.9 million during the three and nine months ended September 30, 2021, respectively, compared to the corresponding periods in 2020. The increases are primarily related to WOW entering into a Transition Services Agreement with Atlantic on September 1, 2021 to support post-transaction continuity of service during a transition period.

Discontinued Operations

On September 1, 2021, we sold our Cleveland and Columbus, Ohio markets to Atlantic for approximately $1.125 billion, subject to adjustments, including customary working capital adjustments, as specified in the Atlantic Purchase Agreement. For the three and nine months ended September 30, 2021, we recognized a gain on sale of $689.6 million resulting from the sale of our Cleveland and Columbus, Ohio markets.

Revenue from discontinued operations decreased $21.9 million, or 21%, and $18.1 million, or 6%, during the three and nine months ended September 30, 2021, respectively, compared to the corresponding periods in 2020. The decreases are primarily due to the completion of the sale of the Cleveland and Columbus, Ohio markets on September 1, 2021.

Operating expense for discontinued operations (excluding depreciation and amortization) decreased $11.4 million, or 28%, and $21.6 million, or 17%, during the three and nine months ended September 30, 2021, respectively, compared to the corresponding periods in 2020. The decreases are primarily due to the completion of the sale of the Cleveland and Columbus, Ohio markets on September 1, 2021, and the decrease in programming expense of $11.2 million and $20.4 million over the corresponding periods, respectively.

Discontinued operations expense does not include general corporate overhead or continuing costs related to providing service per the transition service agreements. Certain costs of providing the transition service agreements will continue during the term of the agreements as services are provided; however, upon termination of the agreements, these costs are expected to be reduced. In addition, general corporate overhead costs are expected to be reduced over a three year period.

Table of Contents

Income Tax Expense

We reported income tax expense of $204.6 million and $4.0 million for the three months ended September 30, ~~2016. The increase in HSD subscription revenue is primarily attributable to a $2.2~~2021 and 2020, respectively, and income tax expense of $208.3 million ~~increase in average HSD RGUs, an $11.0~~and $6.2 million ~~year over year increase in HSD ARPU and a $1.9 million increase in HSD subscription revenue related to our NuLink acquisition. Partially offsetting~~for the ~~overall increase was a $4.4 million decrease related to the disposition of our Lawrence, Kansas system.~~

~~Video subscription revenue decreased $14.7 million, or 11%, during the three~~nine months ended September 30, ~~2017~~2021 and 2020, respectively. The increase in income tax expense for both periods is primarily related to an increase in income before tax resulting from the sale when compared to the ~~three months ended September 30, 2016. The decrease is primarily attributable to a year over year decrease~~corresponding periods in 2020.

Use of $16.1 million in average Video RGUs and $4.4 million related to the disposition of our Lawrence, Kansas system. Partially offsetting the overall decrease was a $3.9 million increase year over year in Video ARPU and a $1.9 million increase in video subscription revenue related to our NuLink acquisition.

Telephony subscription revenue decreased $5.4 million, or 14%, during the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decrease is attributable to a $5.1 million decrease related to a year over year decline in average Telephony RGUs and $1.2 million decrease related to the disposition of our Lawrence, Kansas system. Partially offsetting the overall decreases was a $0.3 million increase in year over year Telephony ARPU and a $0.6 million increase in Telephony subscription revenue related to our NuLink acquisition.

~~Operating expenses (excluding depreciation and amortization)~~

Operating expenses (excluding depreciation and amortization) decreased $13.9 million, or 8%, in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decrease is primarily due to reductions in Video programming costs that correlate to the decreases in Video RGUs, decreased costs related to our fiber network construction activities and overall reduced costs from our disposition of our Lawrence, Kansas system. Partially offsetting the overall decrease were increased employee benefit costs.

Incremental ~~contribution~~

~~A presentation of incremental contribution, a non-GAAP measure, is included below.~~

Contribution

Incremental contribution is included herein because we believe that it is a key metric used by our management to assess the financial performance of the business by showing how the relative relationship of the various components of subscription services contributes to our overall consolidated historical results. Our management further believes that it provides useful information to investors in evaluating our financial condition and results of operations because the additional detail illustrates how an incremental dollar of revenue ~~by particular service type,~~ generates cash, before any unallocated costs are considered, which we believe is a key component of our overall strategy and important for understanding what drives our cash flow position relative to our historical results. We believe that when evaluating our business, investors apply varying degrees of importance to the different types of subscription revenue we generate and providing supplemental detail on these services, as well as third party costs associated with each service, is useful to investors because it allows investors to better evaluate these aspects of our performance. Incremental contribution is defined by ~~WOW~~us as the components of subscription revenue, less costs directly incurred from third parties in connection with the provision of such services to our customers.

Incremental contribution is not made in accordance with GAAP and our use of the term incremental contribution varies from others in our industry. Incremental contribution should be considered in addition to, not as a substitute for, consolidated net income (loss) and operating income (loss) or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows, or as measures of liquidity. Incremental contribution has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP as it does not identify or allocate any other operating costs and expenses that are components of our income from operations to specific subscription revenues as we do not measure or record such costs and expenses in a manner that would allow attribution to a specific component of subscription revenue. Accordingly,

incremental contribution should not be considered as an alternative to operating income or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows, or as ~~measures~~a measure of liquidity.
~~The following tables provide the most comparable GAAP measurements (i.e. income from operations) for the three months ended September 30, 2017 and September 30, 2016:~~

Three months ended
September 30,

2017

2016

(in millions)

Income from operations

$
57.5

$
61.5

~~Incremental contribution for the provision of such services for the three months ended September 30, 2017 and 2016 are as follows:~~

Three months
ended
September 30,

Change

2017

2016

$

%

(in millions)

HSD subscription revenue

$
103.9

$
93.2

$
10.7

11
%
HSD expenses(1)

3.5

3.6

(0.1
)
(3
)%
HSD incremental contribution

$
100.4

$
89.6

$
10.8

Three months
ended
September 30,

Change

2017

2016

$

%

(in millions)

Video subscription revenue

$
124.9

$
139.6

$
(14.7
)
(11
)%
Video expenses(2)

80.1

88.8

(8.7
)
(10
)%
Video incremental contribution

$
44.8

$
50.8

$
(6.0
)

Three months
ended
September 30,

Change

2017

2016

$

%

(in millions)

Telephony subscription revenue

$
32.7

$
38.1

$
(5.4
)
(14
)%
Telephony expenses(3)

1.7

4.0

(2.3
)
(58
)%
Telephony incremental contribution

$
31.0

$
34.1

$
(3.1
)

~~(1)~~                                 ~~HSD expenses represent costs incurred from third-party vendors related to maintaining our network and internet connectivity fees.~~
~~(2)~~                                 ~~Video expenses represent fees paid to content providers for programming.~~
~~(3)~~                                 ~~Telephony expenses represent costs incurred from third-party providers for leased circuits, interconnectivity and switching costs.~~

The following table provides a reconciliation of incremental contribution to income from operations, which is the most directly comparable GAAP measure, for the ~~three months ended September 30, 2017 and September 30, 2016:~~

Three months
ended
September 30,

2017

2016

(in millions)

Income from operations

$
57.5

$
61.5

Revenue (excluding subscription revenue)

(36.3
)
(40.3
)
Other non-allocated operating expense (excluding depreciation and amortization)(1)

67.9

70.7

Selling, general and administrative(1)

38.1

32.6

Depreciation and amortization(1)

49.0

49.6

Management fee to related party(1)

—

0.4

$
176.2

$
174.5

HSD incremental contribution

$
100.4

$
89.6

Video incremental contribution

44.8

50.8

Telephony incremental contribution

31.0

34.1

Total incremental contribution

$
176.2

$
174.5

~~(1)~~                                 Operating expenses (other than third-party direct expenses excluding depreciation and amortization); selling, general and administrative; depreciation and amortization; and management fees to related party are not allocated by product or location for either internal or external reporting.periods presented:

Three months ended

Three months ended

September 30, 2021

September 30, 2020

Continuing

Discontinued

Total

Continuing

Discontinued


Total

(in millions)
Income from operations

$
3.5

$
49.6

$
53.1

$
5.0

$
39.7

$
44.7
Revenue (excluding subscription revenue)

(13.7)

(4.2)

(17.9)

(14.1)

(5.1)

(19.2)
Other non-allocated operating expense (excluding depreciation and amortization)

45.4

6.6

52.0

43.0

6.7

49.7
Selling, general and administrative

44.8

5.2

50.0

40.2

5.6

45.8
Depreciation and amortization

42.3

—

42.3

38.2

20.0

58.2
Incremental contribution

$
122.3

$
57.2

$
179.5

$
112.3

$
66.9

$
179.2
~~Selling, general and administrative (SG&A) expenses~~

Selling, general and administrative expenses increased $5.5 million, or 17%, in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The increase is mainly due to higher employee related non-cash compensation cost and third party professional fees. Partially offsetting these increases was an overall reduction in expenses related to our Lawrence, Kansas system disposition.

~~Depreciation and amortization expenses~~

Depreciation and amortization expenses decreased $0.6 million, or 1%, in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decrease is primarily due to the dispositionTable of ~~our Lawrence, Kansas system.~~Contents

~~Management fee to related party expenses~~

Prior to our IPO, we paid a quarterly management fee of approximately $0.4 million per quarter plus any travel and miscellaneous expenses to Avista. In addition, pursuant to a consulting agreement dated as of December 18, 2015 by and among Parent, Avista and Crestview, Crestview is entitled to 50% of any management fee actually received by Avista. Subsequent to our IPO, we do not pay such management fee to Avista or Crestview.

~~Interest expense~~

Interest expense decreased $20.7 million, or 39%, in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decrease is primarily due lower overall debt and a lower blended rate mainly related to the early extinguishment of the 13.38% Senior Subordinated Notes during the latter part of 2016 and the redemption of the 10.25% Senior Notes on July 17, 2017.

~~Income tax expense~~

We reported total income tax expense of $1.6 million and $2.7 million for the three months ended September 30, 2017 and 2016, respectively. The income tax expense reported during the three months ended September 30, 2017 is primarily due to a change in the state valuation allowance. On January 12, 2017, the Company and MidCo consummated the Asset Purchase Agreement under which MidCo acquired the Company’s Lawrence, Kansas system, for gross proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. As a result of the Lawrence sale, the Company has recorded $11.1 million of associated income tax expense. In addition, a deferred income tax benefit of $36.3 million was recognized as a result of the change in valuation allowance. The change in valuation allowance was due primarily to the utilization of NOLs from the disposal of indefinite lived assets related to the Lawrence, Kansas system sale transaction.

~~Nine months ended September 30, 2017 compared to the nine months ended September 30, 2016~~

~~Revenue~~

~~Revenue for the nine months ended September 30, 2017 decreased $25.7 million, or 3%, as compared to revenue for the nine months ended September 30, 2016 as follows:~~

Nine months ended
September 30,

Change

2017

2016

$

%

(in millions)

Residential subscription

$
695.6

$
722.9

$
(27.3
)
(4
)%
Business services subscription

86.4

80.2

6.2

8
%
Total subscription

782.0

803.1

(21.1
)
(3
)%
Other business services

31.3

31.8

(0.5
)
(2
)%
Other

82.0

86.1

(4.1
)
(5
)%

$
895.3

$
921.0

$
(25.7
)
(3
)%
Total subscription revenue decreased $21.1 million, or 3%, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Contributing to the decrease were approximately $53.1 million of year over year reductions in average RGUs and $28.9 million related to the disposition of our Lawrence, Kansas system on January 12, 2017. Offsetting these decreases was a $45.8 million increase in total subscription revenue as a result of increases in ARPU which was driven by customer rate increases to offset the rising cost of programming per subscriber. Additionally, we had an increase of $15.1 million of subscription revenue generated from our NuLink acquisition on September 9, 2016.
~~The following table details subscription revenue by service offering for the nine months ended September 30, 2017 and September 30, 2016:~~

Nine months ended September 30,

Subscription
Revenue

2017

2016

Change

Subscription
Revenue

Average
RGUs(1)

Subscription
Revenue

Average
RGUs(1)

$

%

(in millions)

(in thousands)

(in millions)

(in thousands)

HSD subscription

$
300.7

738.7

$
276.3

727.2

$
24.4

9
%
Video subscription

379.6

472.0

408.3

531.2

(28.7
)
(7
)%
Telephony subscription

101.7

242.1

118.5

282.1

(16.8
)
(14
)%

$
782.0

$
803.1

$
(21.1
)
(3
)%

~~(1)~~ Average subscribers, presented in thousands, is calculated based on reported subscribers and is not adjusted for changes related to the disposition of our Lawrence, Kansas system and acquisition of NuLink.

HSD subscription revenue increased $24.4 million, or 9%, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The increase in HSD subscription revenue is primarily attributable to a $7.7 million increase in average HSD RGUs, a $22.1 million year over year increase in HSD ARPU and a $7.2 million increase in HSD subscription revenue related to our NuLink acquisition. Partially offsetting the overall increase was a $12.6 million decrease related to the disposition of our Lawrence, Kansas system.

Video subscription revenue decreased $28.7 million, or 7%, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is primarily attributable to a year over year decrease of $45.0 million related to a decline in average Video RGUs and a decrease of $12.7 million related to the disposition of our Lawrence, Kansas system. Partially offsetting the overall decrease was a $23.0 million increase year over year in Video ARPU and a $6.0 million increase in video subscription revenue related to our NuLink acquisition.

Telephony subscription revenue decreased $16.8 million, or 14%, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is attributable to a $15.9 million decrease related to a year over year decline in average Telephony RGUs and a $3.5 million decrease related to the disposition of our Lawrence, Kansas system. Partially offsetting these decreases was a $0.8 million increase in year over year Telephony ARPU and a $1.8 million increase in Telephony subscription revenue related to our NuLink acquisition.

~~Operating expenses (excluding depreciation and amortization)~~

Operating expenses (excluding depreciation and amortization) decreased $28.7 million, or 6%, in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is primarily due to reductions in Video programming costs and direct Telephony costs that correlate to the decreases in Video and Telephony RGUs, decreased costs related to our fiber network construction activities and overall reduced costs from our disposition of our Lawrence, Kansas system. Partially offsetting the decreases were increased repair and maintenance costs.

~~Incremental contribution~~
A presentation of incremental contribution, a non-GAAP measure, is included below. See the prior presentation of incremental contribution for the three months ended September 30, 2017 for an explanation of why we present this metric and the limitations thereof.
~~The following tables provide the most comparable GAAP measurements (i.e. income from operations) for the nine months ended September 30, 2017 and September 30, 2016:~~

Nine months ended
September 30,

2017

2016

(in millions)

Income from operations

$
172.9

$
179.4

~~Incremental contribution for the provision of such services for the nine months ended September 30, 2017 and 2016 are as follows:~~

Nine months
ended
September 30,

Change

2017

2016

$

%

(in millions)

HSD subscription revenue

$
300.7

$
276.3

$
24.4

9
%
HSD expenses(1)

10.3

11.0

(0.7
)
(6
)%
HSD incremental contribution

$
290.4

$
265.3

$
25.1

9
%

Nine months
ended
September 30,

Change

2017

2016

$

%

(in millions)

Video subscription revenue

$
379.6

$
408.3

$
(28.7
)
(7
)%
Video expenses(2)

255.0

270.0

(15.0
)
(6
)%
Video incremental contribution

$
124.6

$
138.3

$
(13.7
)
(10
)%

Nine months
ended
September 30,

Change

2017

2016

$

%

(in millions)

Telephony subscription revenue

$
101.7

$
118.5

$
(16.8
)
(14
)%
Telephony expenses(3)

8.5

12.5

(4.0
)
(32
)%
Telephony incremental contribution

$
93.2

$
106.0

$
(12.8
)
(12
)%
~~(1)~~                                 ~~HSD expenses represent costs incurred from third-party vendors related to maintaining our network and Internet connectivity fees.~~
~~(2)~~                                 ~~Video expenses represent fees paid to content providers for programming.~~
~~(3)~~                                 ~~Telephony expenses represent costs incurred from third-party providers for leased circuits, interconnectivity and switching costs.~~
The following table provides a reconciliation of incremental contribution to income from operations, which is the most directly comparable GAAP measure, for the ~~nine months ended September 30, 2017 and September 30, 2016:~~

Nine months
ended
September 30,

2017

2016

(in millions)

Income from operations

$
172.9

$
179.4

Revenue (excluding subscription revenue)

(113.3
)
(117.9
)
Other non-allocated operating expense (excluding depreciation and amortization)(1)

196.6

205.6

Selling, general and administrative(1)

100.9

86.2

Depreciation and amortization(1)

150.1

155.0

Management fee to related party(1)

1.0

1.3

$
508.2

$
509.6

HSD incremental contribution

$
290.4

$
265.3

Video incremental contribution

124.6

138.3

Telephony incremental contribution

93.2

106.0

Total incremental contribution

$
508.2

$
509.6

~~(1)~~                                 Operating expenses (other than third-party direct expenses excluding depreciation and amortization); selling, general and administrative; depreciation and amortization; and management fees to related party are not allocated by product or location for either internal or external reporting.periods presented:

Nine months ended

Nine months ended

September 30, 2021

September 30, 2020

Continuing

Discontinued

Total

Continuing

Discontinued


Total

(in millions)
Income from operations

$
1.7

$
136.1

$
137.8

$
0.1

$
113.5

$
113.6
Revenue (excluding subscription revenue)

(40.5)

(13.8)

(54.3)

(42.3)

(14.9)

(57.2)
Other non-allocated operating expense (excluding depreciation and amortization)

131.0

22.0

153.0

129.5

23.3

152.8
Selling, general and administrative

132.8

10.7

143.5

125.0

11.5

136.5
Depreciation and amortization

126.0

41.0

167.0

111.5

59.3

170.8
Incremental contribution

$
351.0

$
196.0

$
547.0

$
323.8

$
192.7

$
516.5
~~Selling, general and administrative (SG&A) expenses~~
Selling, general and administrative expenses increased $14.7 million, or 17%, in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The increase is mainly due to higher employee related non-cash compensation cost, an increase in telecom taxes, third party professional fees, and overall costs related to our NuLink acquisition. Partially offsetting these increases were overall reduction in expenses related to our Lawrence, Kansas system disposition.
~~Depreciation and amortization expenses~~
Depreciation and amortization expenses decreased $4.9 million, or 3%, in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is primarily due to certain intangible assets related to our acquisitions becoming fully amortized and the disposition of our Lawrence, Kansas system.
~~Management fee to related party expenses~~
Prior to our IPO, we paid a quarterly management fee of approximately $0.4 million per quarter plus any travel and miscellaneous expenses to Avista. In addition, pursuant to a consulting agreement dated as of December 18, 2015 by and among Parent, Avista and Crestview, Crestview is entitled to 50% of any management fee actually received by Avista. Subsequent to our IPO, we will no longer pay a management fee to Avista or Crestview.
~~Interest expense~~
Interest expense decreased $40.3 million, or 25%, in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is primarily due to lower overall debt and a lower blended rate mainly related to the early extinguishment of the 13.38% Senior Subordinated Notes during the latter part of 2016 and the redemption of the 10.25% Senior Notes on July 17, 2017.
~~Gain on sale of assets~~
On January 12, 2017, we sold our Lawrence, Kansas system to MidCo for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the Agreement. We recorded a gain on sale of assets of $38.4 million, subject to the adjustment as described above. We also entered into a transition services agreement under which we provided certain services to MidCo on a transitional basis. The transition services agreement, originally expiring on July 1, 2017, was extended to September 28, 2017. Charges for the transition services generally allowed us to fully recover all allowed costs and allocated expenses incurred in connection with providing these services, generally without profit.
~~Income tax benefit~~
We reported total income tax benefit of $16.4 million and $7.4 million for the nine months ended September 30, 2017 and 2016, respectively. On January 12, 2017, the Company and MidCo consummated the Asset Purchase Agreement under which MidCo
acquired the Company’s Lawrence, Kansas system, for gross proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. As a result of the Lawrence sale, the Company has recorded $11.1 million of associated income tax expense. In addition, a deferred income tax benefit of $36.3 million was recognized as a result of the change in valuation allowance. The change in valuation allowance was due primarily to the utilization of NOLs from the disposal of indefinite lived assets related to the Lawrence sale transaction.

Liquidity and Capital Resources
Our primary funding requirements are for our ongoing operations, capital expenditures, outstanding debt obligations, including lease agreements, and strategic investments. At September 30, ~~2017, we had $135.6 million in current assets, including $36.4 million in cash and cash equivalents, and $186.3 million in current liabilities. Our~~2021, the principal amount of our outstanding consolidated debt ~~and capital lease obligations~~ aggregated ~~$2,436.1~~to $1,143.8 million, of which ~~$24.1~~$33.9 million is classified as current in our unaudited condensed consolidated balance sheet as of such date.
On July 17, 2017, we entered into the Eighth Amendment to the credit agreement and increased our Term B loan aggregate principal amount by $230.5 million. In addition, we increased the borrowing capacity of the revolving credit commitments by an aggregate principal amount of $100.0 million.
~~On May 25, 2017, we consummated our IPO and received $334.7 million, net of costs associated with this offering.~~
On March 20, 2017, we redeemed approximately $95.1 million in aggregate principal amount of Senior Notes using cash on hand. Following such redemption, $729.9 million in aggregate principal amount of 10.25% Senior Notes remained outstanding. On July 17, 2017, we fully redeemed the 10.25% Senior Notes utilizing the proceeds of the new Term B loans, borrowings of $180.0 million under our revolving credit facility and cash on hand.
On January 12, 2017, we consummated the divestiture of substantially all of the operating assets of our Lawrence, Kansas system to MidCo. In connection with the closing of this transaction, we received $213.0 million in net cash consideration representing gross proceeds.
On December 18, 2015, under a purchase agreement entered into by the Company’s former Parent, Avista and Crestview (the “Crestview Purchase Agreement”), Crestview’s funds purchased units held by Avista and other unit holders, and made a $125.0 million primary investment in newly-issued units of the Company’s former parent. On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in our former Parent. As of September 30, ~~2017, the $143.3~~2021, we had borrowing capacity of $270.7 million under our Revolving Credit Facility representing $300.0 million of ~~proceeds from the funds’ investment~~total availability less borrowings of ~~Avista~~$24.0 million and ~~Crestview, net~~letters of ~~transaction costs have been contributed to us.~~
~~At the closing~~credit of ~~the definitive agreement, we and Verizon expect to enter into a new agreement pursuant to which we would complete the build-out of the network in exchange for approximately $50.0~~$5.3 million. ~~The $50.0 million would be payable as such network elements are completed. We have spent approximately $7.0 million on the construction as of September 30, 2017.~~
We are required to prepay principal amounts ~~under our Senior Secured Credit Facilities credit agreement~~ if we generate excess cash flow, as defined in the ~~credit agreement. As of September 30, 2017, we had~~Credit Agreement.
We believe that existing cash balances, available borrowing capacity ~~of $112.1 million~~ under ~~our~~the Revolving Credit Facility, and ~~were in compliance with all our debt covenants. Accordingly, we believe that we have~~operating cash flows will provide sufficient resources to fund our obligations and anticipated liquidity requirements over the next 12 months. We expect to utilize free cash flow and cash on hand as funding sources, as well as potentially engage in future refinancing transactions to further extend the ~~foreseeable future.~~maturities of our debt obligations. The timing and terms of any refinancing transactions will be subject to market conditions among other considerations. We closed the sale of our Cleveland and Columbus, Ohio markets on September 1, 2021 and utilized the proceeds from the sale to repay $1,087.0 million of our long-term debt. Additionally, we plan to utilize proceeds from our November 1, 2021 completed sale of the Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets to further paydown our debt. We expect to utilize any remaining proceeds from both sales to fund specific capital expenditures and execute against our broadband first strategy.

Our ability to fund operations, make capital expenditures, repay debt obligations and make future acquisitions and strategic investments depends on future operating performance and cash flows, which are subject to prevailing economic conditions and to financial, business and other factors, including the impact of COVID-19, some of which are beyond our control.

Historical Operating, Investing, and Financing Activities

Operating Activities
Net cash provided by operating activities increased from ~~$110.5~~$200.1 million for the nine months ended September 30, ~~2016~~2020 to ~~$116.4~~$239.5 million for the nine months ended September 30, ~~2017.~~2021. The increase is primarily due to ~~working capital fluctuations due to timing of payables partially offset by a decrease~~an increase in operating ~~earnings.~~
income as compared to the corresponding period in 2020.
Investing Activities
Net cash used in investing activities ~~decreased from $244.7~~was $166.9 million for the nine months ended September 30, ~~2016~~2020 compared to ~~$10.9~~net cash provided by investing activities of $946.4 million for the nine months ended September 30, ~~2017.~~2021. The ~~decrease~~change is primarily attributable to ~~net cash~~ proceeds received from the sale of our ~~Lawrence, Kansas system in the amount~~Cleveland and Columbus, Ohio markets.

Table of $213.0 million. Partially offsetting this decrease was an increase in capital expenditures of $17.1 million for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.Contents

We have ongoing capital expenditure requirements related to the maintenance, expansion and technological upgrades of our ~~cable~~ network. Capital expenditures are funded primarily through a combination of cash on hand and cash flow from operations. Our capital expenditures were ~~$224.3~~$167.4 million and ~~$207.2~~$166.3 million for the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively. The ~~$17.1~~$1.1 million increase from the nine months ended September 30, ~~2016~~2020 to the nine months ended September 30, ~~2017~~2021 is primarily ~~due~~related to network enhancements focused on increasing bandwidth capacity, standardization and reliability to meet the ~~increase in investment for edge-out network expansion.~~needs of our customers. These increases are partially offset by decreased expenditures related to customer premise equipment (“CPE”) and edge-outs.

The following table sets forth additional information regarding our capital expenditures for the periods presented:

For the nine
months ended
September 30,

2017

2016

Capital Expenditures

(in millions)

Customer premise equipment(1)

$
77.9

$
78.1

Scalable infrastructure(2)

27.2

24.1

Line extensions(3)

83.8

69.3

Upgrade / rebuild(4)

0.3

0.7

Support capital(5)

35.1

35.0

Total

$
224.3

$
207.2

Capital expenditures included in total related to:

Edge-outs(6)

$
38.7

$
22.6

Business services(7)

$
55.9

$
59.6

Nine months ended

Nine months ended

September 30, 2021

September 30, 2020

Continuing

Discontinued

Total

Continuing

Discontinued

Total

(in millions)
Capital Expenditures


Customer premise equipment(1)

$
55.2

$
27.6

$
82.8

$
62.9

$
35.0

$
97.9
Scalable infrastructure(2)

30.3

3.2

33.5

21.1

0.8

21.9
Line extensions(3)

11.5

2.9

14.4

11.1

0.8

11.9
Support capital and other(4)

29.2

7.5

36.7

26.3

8.3

34.6
Total

$
126.2

$
41.2

$
167.4

$
121.4

$
44.9

$
166.3
Capital expenditures included in total related to:




Edge-outs(5)

$
3.2

$
1.4

$
4.6

$
5.0

$
1.5

$
6.5
Business services(6)

$
10.8

$
2.7

$
13.5

$
11.2

$
1.0

$
12.2
(1) Customer premise equipment (“CPE”) includes equipment and installation costs incurred to deliver services to residential and business services customers. CPE includes the costs of acquiring and installing our set-top boxes and modems, as well as the cost of customer connections to our network.
(2) Scalable infrastructure includes costs, not directly related to customer acquisition activity, to support new customer growth and provide service enhancements (e.g., headend equipment).
(3) Line extensions include costs associated with new home development within our footprint and edge-outs (e.g., fiber / coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
(4) Support capital and other includes costs to modify or replace existing HFC network, including enhancements, and all other costs to support day-to-day operations, including land, buildings, vehicles, office equipment, tools and test equipment.
(5) Edge-outs represent costs to extend our network into new adjacent service areas, including the associated CPE.
(6) Business services represent costs associated with the build-out of our network to support business services customers, including the associated CPE.
~~(1)~~                                 Customer premise equipment, or CPE, includes equipment and installation costs incurred to deliver services to residential and business services customers. CPE includes the costs of acquiring and installing our set-top boxes and modems, as well as the cost of customer connections to our network.
~~(2)~~                                 ~~Scalable infrastructure includes costs, not directly related to customer acquisition activity, to support new customer growth and provide service enhancements (e.g., headend equipment).~~
~~(3)~~                                 Line extensions include costs associated with new home development within our footprint and edge-outs (e.g., fiber / coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
~~(4)~~                                 ~~Upgrade / rebuild includes costs to modify or replace existing HFC network, including enhancements.~~
~~(5)~~                                 ~~Support capital includes all other non-network-related costs to support day-to-day operations, including land, buildings, vehicles, office equipment, tools and test equipment.~~
~~(6)~~                                 ~~Edge-outs represent costs to extend our network into new adjacent service areas, including the associated CPE.~~
~~(7)~~                                 ~~Business services represent costs associated with the build-out of our network to support business services customers, including the associated CPE.~~
Financing Activities
Net ~~cash provided by financing activities decreased from $103.7 million cash provided by financing activities for the nine months ended September 30, 2016 to $99.9 million~~ cash used in financing activities ~~for the nine months ended September 30, 2017. The decrease is primarily due to cash payments on outstanding debt of $2,896.2~~increased from $21.3 million for the nine months ended September 30, ~~2017 compared~~2020 to ~~$2,434.8~~$1,138.7 million for the nine months ended September 30, ~~2016. The decrease is partially offset by proceeds received from our IPO~~2021, primarily due to an increase in net repayments of ~~$334.7 million.~~$1,110.5 million during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our exposure to market risk is limited and primarily related to fluctuating interest rates associated with our variable rate indebtedness under our Senior Secured Credit Facility. As of September 30, ~~2017,~~2021, borrowings under our Term B Loans and Revolving
Credit Facility bear interest at our option at a rate equal to either an adjusted LIBOR rate (which is subject to a minimum rate of 1.00% for Term B Loans) or an ABR (which is subject to a minimum rate of 1.00% for Term B Loans), plus the applicable margin. The applicable margins for the Term B Loans isare 3.25% for adjusted LIBOR loans and 2.25% for ABR loans. The applicable margin for borrowings under the Revolving Credit Facility is 3.00% for adjusted LIBOR loans and 2.00% for ABR loans. As of September 30, 2021, 100% of our Senior Secured Credit Facility is variable rate debt. A hypothetical 100 basis point (1%) change in LIBOR interest rates (based on the interest rates in effect under our Senior Secured Credit Facility as of September 30, ~~2017)~~2021) would result in an annual interest expense change of up to approximately ~~$22.8~~$11.3 million on our Senior Secured Credit Facility.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of ourWe maintain disclosure controls and procedures ~~with respect~~that are designed to the information generated for use in this quarterly report. The evaluation was based in part upon reports and certifications provided by a number of executives. Based upon, and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective to provide reasonable assurancesensure that information required to be disclosed in ~~the reports we file or submit under the Securities~~our Exchange Act ~~of 1934~~reports is recorded, processed, summarized and reported within the time periods specified in the ~~SEC’s~~U.S. Securities and Exchange Commission rules and ~~forms.~~
forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), as appropriate, to allow for timely decisions regarding required disclosure.
In designing and evaluating ~~the~~ disclosure controls and procedures, ~~our~~ management ~~recognized~~recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance, not absolute assurance of achieving the desired objectives. Also, the design of a control ~~objectives,~~system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Our management, ~~necessarily was required to apply its judgment in evaluating~~with the ~~cost-benefit relationship~~participation of ~~possible~~the Certifying Officers, evaluated the effectiveness of our disclosure controls and ~~procedures.~~procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of September 30, 2021. Based ~~upon~~on these evaluations, the ~~above evaluation, we believe~~Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls ~~provide such reasonable assurances.~~and procedures required by paragraph (b) of Rule 13a-15 or 15d-15 were effective as of September 30, 2021.

Changes in Internal Control over Financial Reporting
There ~~was~~were no ~~change~~changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the third quarter of ~~2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.~~2021.

Table of Contents

PART II
Item 1. Legal Proceedings
~~The Company is party~~Refer to ~~various legal proceedings (including individual, class~~Note 13 – Commitments and ~~putative class actions) arising in the normal course of its business covering~~Contingencies for a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, programming, taxes, fees and surcharges, consumer protection, trademark and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers.
In accordance with GAAP, WOW accrues an expense for pending litigation when it determines an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Legal defense costs are expensed as incurred. Nonediscussion of the Company’s existing accruals for pending matters is material. WOW regularly monitors its pending litigation for the purpose of adjusting its accruals and revising its disclosures accordingly, in accordance with GAAP, when required. Litigation is, however, subject to uncertainty, and the outcome of any particular matter is not predictable. The Company vigorously defends its interest in pending litigation, and as of this date, WOW believes the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which it is entitled, will not have a material adverse effect on the condensed consolidated financial position, results of operations, or our cash flows.legal proceedings.

Item 1A. Risk Factors
Our Annual Report on Form 10-K for the year ended December 31, 2020 includes “Risk Factors” under Item 1A of Part 1.

~~There have been no material changes in our risk factors from those disclosed in our final prospectus relating to our IPO filed with the SEC on May 25, 2017.~~
Item 2. Unregistered Sales of Equity ~~Proceeds~~Securities and Use of Proceeds
~~Use~~Purchases of ~~Proceeds from Initial Public Offering~~Equity Securities by the Issuer
The ~~Registration Statement on Form S-1 (File No. 333-216894) for~~following table presents WOW’s purchases of equity securities completed during the ~~initial public offering~~third quarter of ~~our common stock was declared effective by the Securities and Exchange Commission on May 24, 2017.~~
~~There has been no material change~~2021 (dollars in ~~the planned use of proceeds from our IPO as described in our final prospectus filed with the Securities and Exchange Commission on May 25, 2017 pursuant to Rule 424(b)(4).~~millions, except per share amounts):

Approximate Dollar Value of

Total Number of Shares

Shares that May Yet be

Number of Shares

Average Price

Purchased as Part of Publicly

Purchased Under the Plans
Period

Purchased (1)

Paid per Share

Announced Plans or Programs

or Programs
July 1 - 31, 2021

2,432

$
21.97

—

$
—
August 1 - 31, 2021

14,672

$
21.22

—

$
—
September 1 - 30, 2021

9,579

$
19.85

—

$
—
(1) Shares represent shares withheld from employees for the payment of taxes upon the vesting of restricted stock awards.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.

Table of Contents

Item 6. Exhibits

Exhibit
Number
Exhibit Description
31.1*

Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*

Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101

The following financial information from WideOpenWest, Inc.’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2021, filed with the Securities and Exchange Commission on November 8, 2021, formatted in iXBRL (inline eXtensible Business Reporting Language) includes: (i) the unaudited Condensed Consolidated Balance Sheets; (ii) the unaudited Condensed Consolidated Statements of Operations, (iii) the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) the unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit; (v) the unaudited Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to the unaudited Condensed Consolidated Financial Statements.
104

Cover Page, formatted in iXBRL and contained in Exhibit 101.
*
Exhibit
Number

Exhibit Description

Form

File Number

Date of First
Filing

Exhibit
Number

Filed
Herewith
10.1

Eighth Amendment to Credit Agreement dated as of July 17, 2017

8-K

001-38101

July 17, 2017

10.1

10.2

WideOpenWest, Inc. 2017 Omnibus Incentive Plan

*
31.1

Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*
31.2

Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*
32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*
101.INS

XBRL Instance Document

*
101.SCH

XBRL Taxonomy Extension Schema Document

*
101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

*
101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

*
101.LAB

XBRL Taxonomy Extension Label Linkbase Document

*
101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

*
*Filed herewith.

Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WIDEOPENWEST, INC.

November ~~13, 2017~~8, 2021
By:
/s/ ~~STEVEN COCHRAN~~TERESA ELDER

~~Steven Cochran~~Teresa Elder

Chief Executive Officer

By:
/s/ ~~RICHARD E. FISH, JR.~~JOHN REGO

~~Richard E. Fish, Jr.~~John Rego

Chief Financial Officer

36

	September 30, 2017			December 31, 2016
	(in millions, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	36.4		$	30.8
Accounts receivable—trade, net of allowance for doubtful accounts of $6.5 and $9.4, respectively	80.0			87.2
Accounts receivable—other	3.4			0.2
Prepaid expenses and other	15.8			11.3
Total current assets	135.6			129.5
Plant, property and equipment, net (note 3)	1,042.0			995.1
Franchise operating rights	966.5			1,066.6
Goodwill	517.4			568.0
Intangible assets subject to amortization, net	6.0			7.6
Investments	—			0.9
Other noncurrent assets	9.0			3.1
Total assets	$	2,676.5		$	2,770.8
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable—trade	$	29.4		$	21.0
Accrued interest	4.0			47.3
Accrued liabilities (note 5)	84.2			109.8
Current portion of debt and capital lease obligations (note 6)	24.1			22.7
Current portion of unearned service revenue	44.6			50.2
Total current liabilities	186.3			251.0
Long-term debt and capital lease obligations—less current portion, debt issuance costs, and debt discounts (note 6)	2,412.0			2,848.5
Deferred income taxes, net (note 10)	345.2			370.2
Unearned service revenue	15.1			14.5
Other noncurrent liabilities	6.2			4.6
Total liabilities	2,964.8			3,488.8
Commitments and contingencies (note 11)
Stockholders’ deficit:
Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 shares issued and outstanding	—			—
Common stock, $0.01 par value, 700,000,000 shares authorized; issued and outstanding 88,771,710 and 66,498,762 as of September 30, 2017 and December 31, 2016, respectively	0.9			0.7
Additional paid-in capital (deficit)	295.4			(58.8		)
Accumulated deficit	(584.6		)	(659.9		)
Total stockholders’ deficit	(288.3		)	(718.0		)
Total liabilities and stockholders’ deficit	$	2,676.5		$	2,770.8

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
	(in millions, except for per share data)
Revenue	$	297.8		$	311.2		$	895.3		$	921.0
Costs and expenses:
Operating (excluding depreciation and amortization)	153.2			167.1			470.4			499.1
Selling, general and administrative	38.1			32.6			100.9			86.2
Depreciation and amortization	49.0			49.6			150.1			155.0
Management fee to related party	—			0.4			1.0			1.3
	240.3			249.7			722.4			741.6
Income from operations	57.5			61.5			172.9			179.4
Other income (expense):
Interest expense	(32.2		)	(52.9		)	(122.0		)	(162.3		)
Loss on early extinguishment of debt (note 6)	(26.1		)	(28.1		)	(32.1		)	(30.6		)
Gain on sale of assets (note 4)	—			—			38.4			—
Unrealized gain on derivative instruments, net	—			—			—			2.3
Other income, net	0.3			1.9			1.7			2.0
Income (loss) before provision for income taxes	(0.5		)	(17.6		)	58.9			(9.2		)
Income tax benefit (expense) (note 10)	(1.6		)	(2.7		)	16.4			7.4
Net income (loss)	$	(2.1	)	$	(20.3	)	$	75.3		$	(1.8	)

Basic and diluted earnings (loss) per common shares
Basic	$	(0.02	)	$	(0.31	)	$	0.99		$	(0.03	)
Diluted	$	(0.02	)	$	(0.31	)	$	0.99		$	(0.03	)
Weighted-average common shares outstanding
Basic	86,973,345			66,525,044			76,014,568			65,605,874
Diluted	86,973,345			66,525,044			76,096,401			65,605,874

	Common Shares	Common Stock par value		Management D Units		Additional Paid- in Capital (Deficit)			Accumulated Deficit			Total Stockholders’ Deficit
	(in millions, expect per share data)
Balances at January 1, 2017	66,498,762	$	0.7	201,696		$	(58.8	)	$	(659.9	)	$	(718.0	)
Repurchase of old management units (note 12)	—	—		—		(8.8		)	—			(8.8		)
Cancellation of management D units	—	—		(201,696	)	—			—			—
Proceeds from issuance of common stock, net of issuance costs (note 7)	20,970,589	0.2		—		334.5			—			334.7
Contribution from former Parent	—	—		—		20.3			—			20.3
Stock-based compensation	1,302,359	—		—		8.3			—			8.3
Other	—	—		—		(0.1		)	—			(0.1		)
Net income	—	—		—		—			75.3			75.3
Balances at September 30, 2017	88,771,710	$	0.9	—		$	295.4		$	(584.6	)	$	(288.3	)

	Nine months ended September 30,
	2017			2016
	(in millions)
Cash flows from operating activities:
Net income (loss)	$	75.3		$	(1.8	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	150.1			155.0
Unrealized gain on derivative instruments	—			(2.3		)
Provision for doubtful accounts	14.3			14.7
Deferred income taxes	(25.0		)	(40.3		)
Gain on sale of assets (note 4)	(38.4		)	—
Amortization of debt issuance costs, premium and discount, net	3.8			6.4
Non-cash compensation expense	8.3			—
Loss on early extinguishment of debt	7.1			5.9
Other non-cash items	0.3			—
Changes in operating assets and liabilities:
Receivables and other operating assets	(23.4		)	(15.4		)
Payables and accruals	(56.0		)	(11.7		)
Net cash flows provided by operating activities	116.4			110.5

Cash flows from investing activities:
Capital expenditures	(224.3		)	(207.2		)
Newnan acquisition	—			(54.3		)
Sale of investment	—			15.7
Proceeds from sale of assets (note 4)	213.0			—
Other investing activities	0.4			1.1
Net cash flows used in investing activities	(10.9		)	(244.7		)

Cash flows from financing activities:
Proceeds from issuance of debt	2,454.3			2,495.1
Payments on debt and capital lease obligations	(2,896.2		)	(2,434.8		)
Contribution from former Parent	20.3			50.0
Proceeds from issuance of common stock, net of issuance costs	334.7			—
Repurchase of old management units	(8.8		)	—
Payment of debt issuance costs	(3.7		)	(1.7		)
Distribution to former Parent	—			(4.8		)
Other	(0.5		)	(0.1		)
Net cash flows provided by (used in) financing activities	(99.9		)	103.7
Increase (decrease) in cash and cash equivalents	5.6			(30.5		)
Cash and cash equivalents, beginning of period	30.8			66.6
Cash and cash equivalents, end of period	$	36.4		$	36.1
Supplemental disclosures of cash flow information:
Cash paid during the periods for interest	$	161.6		$	193.7
Cash paid during the periods for income taxes	$	4.4		$	6.5
Non-cash financing activities:
Changes in capital expenditure accruals	$	(8.6	)	$	2.6

	Three months ended September 30,						Nine months ended September 30,
Computation of Income per Share	2017			2016			2017		2016
	(in millions, except for per share data)

Net income (loss)	$	(2.1	)	$	(20.3	)	$	75.3	$	(1.8	)

Basic weighted-average shares	86,973,345			66,525,044			76,014,568		65,605,874
Effect of dilutive securities:
Restricted stock awards	—			—			81,833		—
Diluted weighted-average shares	86,973,345			66,525,044			76,096,401		65,605,874

Basic net income (loss) per share	$	(0.02	)	$	(0.31	)	$	0.99	$	(0.03	)
Diluted net income (loss) per share	$	(0.02	)	$	(0.31	)	$	0.99	$	(0.03	)


	September 30, 2021		December 31, 2020

	(in millions)
Current costs of obtaining contracts with customers	$	8.2	$	3.6
Non-current costs of obtaining contracts with customers		28.8		28.2
Total costs of obtaining contracts with customers	$	37.0	$	31.8


	2021		2022		2023		Thereafter		Total

	(in millions)
Subscription services	$	12.6	$	31.1	$	14.7	$	6.7	$	65.1
Other business services		0.8		2.6		1.2		0.3		4.9
Total expected revenue	$	13.4	$	33.7	$	15.9	$	7.0	$	70.0

	September 30, 2017							December 31, 2016
	Available		Weighted
	borrowing capacity		average interest rate (1)		Outstanding balance			Outstanding balance
	(in millions)
Long-term debt:
Term B Loans (2)	$	—	4.55	%	$	2,266.5		$	2,048.3
Revolving Credit Facility (3)	112.1		4.29	%	180.0			10.0
Senior Notes	—		N/A		—			830.9
Total long-term debt	$	112.1	4.57	%	2,446.5			2,889.2
Capital lease obligations					3.2			4.9
Total long-term debt and capital lease obligations					2,449.7			2,894.1
Less debt issuance costs (4)					(13.6		)	(22.9		)
Sub-total					2,436.1			2,871.2
Less current portion					(24.1		)	(22.7		)
Long-term portion					$	2,412.0		$	2,848.5


		Number of ~~Restricted Stock~~ ~~Shares~~
	Unvested
	Restricted Stock
	Shares
Outstanding, ~~January 1, 2017~~beginning of period	—	4,990,971
Granted	~~1,843,527~~	1,083,963
~~Cancelled~~Vested	—	(1,616,938)
Forfeited	~~(45,162~~	)(276,265)
Outstanding, end of period(1)	4,181,731


	Sep. 30,	Dec. 31,	Mar. 31,	Jun. 30,	Sep. 30,
	2020	2020 (1)	2021	2021	2021
Homes passed	1,852,500	1,871,800	1,873,900	1,877,300	1,880,900
Total subscribers	524,800	522,900	528,000	530,500	531,600
HSD RGUs	496,600	498,800	504,900	507,900	509,500
Video RGUs	203,500	189,400	178,800	169,300	158,600
Telephony RGUs	113,900	110,400	108,000	105,600	102,400
Total RGUs	814,000	798,600	791,700	782,800	770,500

									Increase/ (decrease) (3)
	Dec. 31, 2015	Mar. 31, 2016	Jun. 30, 2016	Sep. 30, 2016 (2)	Dec. 31, 2016	Mar. 31, 2017	Jun. 30, 2017	Sep. 30, 2017	Sep. 30, 2017 vs. Sep. 30, 2016
Homes passed	3,003,100	3,010,700	3,022,800	3,075,000	3,094,300	3,047,800	3,072,500	3,097,500	22,500
Total subscribers(1)	777,800	784,600	785,600	800,800	803,400	780,100	776,500	776,400	(24,400	)
HSD RGUs	712,500	722,200	725,700	742,000	747,400	729,000	727,600	730,000	(12,000	)
Video RGUs	547,500	537,200	524,300	514,900	501,400	474,000	458,200	442,500	(72,400	)
Telephony RGUs	296,800	286,600	277,500	267,400	258,100	243,000	235,400	226,200	(41,200	)
Total RGUs	1,556,800	1,546,000	1,527,500	1,524,300	1,506,900	1,446,000	1,421,200	1,398,700	(125,600	)

	Three months ended September 30,						Change
	2017			2016			$			%
	(in millions)
Revenue	$	297.8		$	311.2		$	(13.4	)	(4	)%
Costs and expenses:
Operating (excluding depreciation and amortization)	153.2			167.1			(13.9		)	(8	)%
Selling, general and administrative	38.1			32.6			5.5			17	%
Depreciation and amortization	49.0			49.6			(0.6		)	(1	)%
Management fee to related party	—			0.4			(0.4		)	*
	240.3			249.7			(9.4		)	(4	)%
Income from operations	57.5			61.5			(4.0		)	(7	)%
Other income (expense):
Interest expense	(32.2		)	(52.9		)	20.7			39	%
Loss on early extinguishment of debt	(26.1		)	(28.1		)	2.0			7	%
Other income, net	0.3			1.9			(1.6		)	(84	)%
Loss before provision for income taxes	(0.5		)	(17.6		)	17.1			97	%
Income tax expense	(1.6		)	(2.7		)	1.1			41	%
Net loss	$	(2.1	)	$	(20.3	)	$	18.2		90	%

	Three months ended September 30,				Change
	2017		2016		$			%
	(in millions)
Residential subscription	$	231.9	$	243.4	$	(11.5	)	(5	)%
Business services subscription	29.6		27.5		2.1			8	%
Total subscription	261.5		270.9		(9.4		)	(3	)%
Other business services	9.6		10.0		(0.4		)	(4	)%
Other	26.7		30.3		(3.6		)	(12	)%
	$	297.8	$	311.2	$	(13.4	)	(4	)%

	Three months ended September 30,						Subscription Revenue
	2017			2016			Change
	Subscription Revenue		Average RGUs(1)	Subscription Revenue		Average RGUs(1)	$			%
	(in millions)		(in thousands)	(in millions)		(in thousands)
HSD subscription	$	103.9	728.8	$	93.2	733.9	$	10.7		11	%
Video subscription	124.9		450.4	139.6		519.6	(14.7		)	(11	)%
Telephony subscription	32.7		230.8	38.1		272.4	(5.4		)	(14	)%
	$	261.5		$	270.9		$	(9.4	)	(3	)%

	Nine months ended September 30,				Change
	2017		2016		$			%
	(in millions)
Residential subscription	$	695.6	$	722.9	$	(27.3	)	(4	)%
Business services subscription	86.4		80.2		6.2			8	%
Total subscription	782.0		803.1		(21.1		)	(3	)%
Other business services	31.3		31.8		(0.5		)	(2	)%
Other	82.0		86.1		(4.1		)	(5	)%
	$	895.3	$	921.0	$	(25.7	)	(3	)%

	Nine months ended September 30,						Subscription Revenue
	2017			2016			Change
	Subscription Revenue		Average RGUs(1)	Subscription Revenue		Average RGUs(1)	$			%
	(in millions)		(in thousands)	(in millions)		(in thousands)
HSD subscription	$	300.7	738.7	$	276.3	727.2	$	24.4		9	%
Video subscription	379.6		472.0	408.3		531.2	(28.7		)	(7	)%
Telephony subscription	101.7		242.1	118.5		282.1	(16.8		)	(14	)%
	$	782.0		$	803.1		$	(21.1	)	(3	)%

	For the nine months ended September 30,
	2017		2016
Capital Expenditures	(in millions)
Customer premise equipment(1)	$	77.9	$	78.1
Scalable infrastructure(2)	27.2		24.1
Line extensions(3)	83.8		69.3
Upgrade / rebuild(4)	0.3		0.7
Support capital(5)	35.1		35.0
Total	$	224.3	$	207.2
Capital expenditures included in total related to:
Edge-outs(6)	$	38.7	$	22.6
Business services(7)	$	55.9	$	59.6


					Approximate Dollar Value of
				Total Number of Shares	Shares that May Yet be
	Number of Shares	Average Price		Purchased as Part of Publicly	Purchased Under the Plans
Period	Purchased (1)	Paid per Share		Announced Plans or Programs	or Programs
July 1 - 31, 2021	2,432	$	21.97	—	$	—
August 1 - 31, 2021	14,672	$	21.22	—	$	—
September 1 - 30, 2021	9,579	$	19.85	—	$	—


Exhibit Number		Exhibit Description
31.1*		Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		The following financial information from WideOpenWest, Inc.’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2021, filed with the Securities and Exchange Commission on November 8, 2021, formatted in iXBRL (inline eXtensible Business Reporting Language) includes: (i) the unaudited Condensed Consolidated Balance Sheets; (ii) the unaudited Condensed Consolidated Statements of Operations, (iii) the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) the unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit; (v) the unaudited Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to the unaudited Condensed Consolidated Financial Statements.
104		Cover Page, formatted in iXBRL and contained in Exhibit 101.


	WIDEOPENWEST, INC.

November ~~13, 2017~~8, 2021	By:	/s/ ~~STEVEN COCHRAN~~TERESA ELDER
		~~Steven Cochran~~Teresa Elder
			Chief Executive Officer

	By:	/s/ ~~RICHARD E. FISH, JR.~~JOHN REGO
		~~Richard E. Fish, Jr.~~John Rego
			Chief Financial Officer