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 such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐☒ No ☒☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☐☒ No ☒☐

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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

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. ☐

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

	Successor			Predecessor			Predecessor			Successor			Predecessor			Predecessor			Successor			Predecessor			Successor			Predecessor
	September 8, 2021 to September 30, 2021			July 1, 2021 to September 7, 2021			Three Months Ended September 30, 2020			September 8, 2021 to September 30, 2021			January 1, 2021 to September 7, 2021			Nine Months Ended September 30, 2020			Three Months Ended June 30, 2022			Three Months Ended June 30, 2021			Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
Revenue	$	111.4		$	314.6		$	389.5		$	111.4		$	1,138.7		$	1,149.5		$	439.5		$	414.2		$	875.3		$	824.1

Costs and expenses
Cost of services and products, excluding items below		60.5			174.6			203.9			60.5			619.5			591.0			241.2			224.8			479.7			444.9
Selling, general and administrative, excluding items below		22.1			74.2			86.0			22.1			243.4			255.3			95.9			85.4			185.5			169.2
Depreciation and amortization		30.2			52.1			71.9			30.2			194.9			220.8			130.1			71.8			249.6			142.8
Restructuring and severance related charges		0			0.3			0.8			0			1.2			16.4			0.4			0.4			1.3			0.9
Transaction and integration costs		0			51.5			2.2			0			54.8			33.8			4.3			1.4			6.6			3.3
Gain on sale of assets, net		0			(2.8	)		0			0			(2.8	)		0
Total operating costs and expenses		112.8			349.9			364.8			112.8			1,111.0			1,117.3			471.9			383.8			922.7			761.1
Operating (loss) income		(1.4	)		(35.3	)		24.7			(1.4	)		27.7			32.2			(32.4	)		30.4			(47.4	)		63.0
Interest expense		6.4			23.2			33.4			6.4			89.1			100.6			18.4			33.5			34.9			65.9
Other components of pension and postretirement benefit plans (benefit) expense		(1.1	)		2.1			2.6			(1.1	)		6.4			9.0			(2.6	)		1.7			(5.2	)		4.3
Loss on extinguishment of debt		0			10.7			0			0			10.7			0
Other (income) expense, net		(0.3	)		19.7			(0.2	)		(0.3	)		19.7			(1.2	)
Other expense (income), net																				11.8			(0.2	)		11.4			0
Loss before income taxes		(6.4	)		(91.0	)		(11.1	)		(6.4	)		(98.2	)		(76.2	)		(60.0	)		(4.6	)		(88.5	)		(7.2	)
Income tax benefit		(1.4	)		(17.3	)		(2.9	)		(1.4	)		(16.9	)		(26.2	)
Income tax (benefit) expense																				(14.0	)		0			(20.5	)		0.4
Net loss		(5.0	)		(73.7	)		(8.2	)		(5.0	)		(81.3	)		(50.0	)		(46.0	)		(4.6	)		(68.0	)		(7.6	)
Preferred stock dividends		0			2.4			2.6			0			7.6			7.8			0			2.6			0			5.2
Net loss applicable to common shareowners	$	(5.0	)	$	(76.1	)	$	(10.8	)	$	(5.0	)	$	(88.9	)	$	(57.8	)	$	(46.0	)	$	(7.2	)	$	(68.0	)	$	(12.8	)

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

Successor

Predecessor

Predecessor

Successor

Predecessor

Predecessor

September 8, 2021 to September 30, 2021

July 1, 2021 to September 7, 2021

Three Months Ended September 30, 2020

September 8, 2021 to September 30, 2021

January 1, 2021 to September 7, 2021

Nine Months Ended September 30, 2020

Net loss

$
(5.0
)

$
(73.7
)

$
(8.2
)

$
(5.0
)

$
(81.3
)

$
(50.0
)
Other comprehensive (loss) income, net of tax:

Foreign currency translation (loss) gain

(1.2
)

(1.4
)

2.0

(1.2
)

1.2

(2.1
)
Cash flow hedges:

Unrealized loss on cash flow hedges arising during the period, net of tax of ($0.2), ($0.1), $0.0, ($3.3)

0

(0.6
)

(0.5
)

0

(0.1
)

(11.3
)
Reclassification adjustment for net losses included in net income, net of tax of $4.7, $0.5, $5.8, $1.4

0

16.2

1.8

0

19.7

4.6

Defined benefit plans:

Net gain (loss) arising from remeasurement during the period, net of tax of $1.0, $1.8, ($3.4)

0

0

3.2

0

6.0

(11.5
)
Amortization of prior service benefits included in net income, net of tax of ($0.1), ($0.1), ($0.4), ($0.4)

0

(0.3
)

(0.5
)

0

(1.3
)

(1.5
)
Amortization of net actuarial loss included in net income, net of tax of $1.0, $1.1, $3.6, $3.3

0

3.1

3.7

0

12.0

11.1

Reclassification adjustment for pension settlement charges included in net income, net of tax of $0.2

0

0

0

0

0

0.9

Total other comprehensive (loss) income

(1.2
)

17.0

9.7

(1.2
)

37.5

(9.8
)
Total comprehensive (loss) income

$
(6.2
)

$
(56.7
)

$
1.5

$
(6.2
)

$
(43.8
)

$
(59.8
)

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended June 30, 2022			Three Months Ended June 30, 2021			Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
Net loss	$	(46.0	)	$	(4.6	)	$	(68.0	)	$	(7.6	)
Other comprehensive income (loss), net of tax:
Foreign currency translation (loss) gain		(3.1	)		1.6			(1.3	)		2.6
Cash flow hedges:
Unrealized (loss) gain on cash flow hedges arising during the period, net of tax of $0.0, $0.2		0			(0.1	)		0			0.5
Reclassification adjustment for net losses included in net income, net of tax of $0.6, $1.1		0			1.7			0			3.5
Defined benefit plans:
Net (loss) gain arising from remeasurement during the period, net of tax of ($0.4), $1.8, ($0.4), $1.8		(1.3	)		6.0			(1.3	)		6.0
Amortization of prior service benefits included in net income, net of tax of ($0.2), ($0.3)		0			(0.5	)		0			(1.0	)
Amortization of net actuarial loss included in net income, net of tax of $1.2, $2.6		0			4.0			0			8.9
Total other comprehensive (loss) income		(4.4	)		12.7			(2.6	)		20.5
Total comprehensive (loss) income	$	(50.4	)	$	8.1		$	(70.6	)	$	12.9

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

	6 3/4 % Cumulative Convertible Preferred Shares				Common Shares				Additional Paid-in			Retained Earnings			Accumulated Other Comprehensive						6 3/4 % Cumulative Convertible Preferred Shares				Common Shares				Additional Paid-in						Accumulated Other Comprehensive
Successor	Shares		Amount		Shares		Amount		Capital			(Accumulated Deficit)			Loss			Total			Shares		Amount		Shares		Amount		Capital			Accumulated Deficit			Income (Loss)			Total
Balance at September 8, 2021 (remeasured upon Merger)		0	$	0		0	$	0	$	0		$	0		$	0		$	0
Balance at March 31, 2022																						0	$	0		0	$	0	$	1,716.1		$	(49.2	)	$	3.0		$	1,669.9
Net loss		—		—		—		—		—			(5.0	)		—			(5.0	)		—		—		—		—		—			(46.0	)		—			(46.0	)
Other comprehensive loss		—		—		—		—		—			—			(1.2	)		(1.2	)		—		—		—		—		—			—			(4.4	)		(4.4	)
Capital contributions by Red Fiber Parent LLC		—		—		0.5		—		1,716.1			—			—			1,716.1
Balance at September 30, 2021		—	$	—		0.5	$	—	$	1,716.1		$	(5.0	)	$	(1.2	)	$	1,709.9
Balance at June 30, 2022																						0	$	0		0	$	0	$	1,716.1		$	(95.2	)	$	(1.4	)	$	1,619.5


Predecessor
Balance at June 30, 2021		3.1	$	129.4		50.9	$	0.5	$	2,665.3		$	(2,839.2	)	$	(139.2	)	$	(183.2	)
Net loss		—		—		—		—		—			(73.7	)		—			(73.7	)
Other comprehensive income		—		—		—		—		—			—			17.0			17.0
Stock-based compensation		—		—		—		—		2.1			—			—			2.1
Equity-based award modification		—		—		—		—		(10.2	)		—			—			(10.2	)
Dividends on preferred stock		—		—		—		—		(2.4	)		—			—			(2.4	)
Balance at September 7, 2021		3.1	$	129.4		50.9	$	0.5	$	2,654.8		$	(2,912.9	)	$	(122.2	)	$	(250.4	)
Predecessor
Balance at June 30, 2020		3.1	$	129.4		50.7	$	0.5	$	2,672.9		$	(2,817.8	)	$	(189.6	)	$	(204.6	)
Balance at March 31, 2021																						3.1	$	129.4		50.9	$	0.5	$	2,667.0		$	(2,834.6	)	$	(151.9	)	$	(189.6	)
Net loss		—		—		—		—		—			(8.2	)		—			(8.2	)		—		—		—		—		—			(4.6	)		—			(4.6	)
Other comprehensive income		—		—		—		—		—			—			9.7			9.7			—		—		—		—		—			—			12.7			12.7
Stock-based compensation		—		—		—		—		1.2			—			—			1.2			—		—		—		—		0.9			—			—			0.9
Dividends on preferred stock		—		—		—		—		(2.6	)		—			—			(2.6	)		—		—		—		—		(2.6	)		—			—			(2.6	)
Balance at September 30, 2020		3.1	$	129.4		50.7	$	0.5	$	2,671.5		$	(2,826.0	)	$	(179.9	)	$	(204.5	)
Balance at June 30, 2021																						3.1	$	129.4		50.9	$	0.5	$	2,665.3		$	(2,839.2	)	$	(139.2	)	$	(183.2	)

	6 3/4 % Cumulative Convertible Preferred Shares				Common Shares				Additional Paid-in			Retained Earnings			Accumulated Other Comprehensive						6 3/4 % Cumulative Convertible Preferred Shares				Common Shares				Additional Paid-in						Accumulated Other Comprehensive
Successor	Shares		Amount		Shares		Amount		Capital			(Accumulated Deficit)			Loss			Total			Shares		Amount		Shares		Amount		Capital			Accumulated Deficit			Income (Loss)				Total
Balance at September 8, 2021 (remeasured upon Merger)		0	$	0		0	$	0	$	0		$	0		$	0		$	0
Balance at December 31, 2021																						0	$	0		0	$	0	$	1,716.1		$	(27.2	)	$	1.2			$	1,690.1
Net loss		—		—		—		—		—			(5.0	)		—			(5.0	)		—		—		—		—		—			(68.0	)		—		��		(68.0	)
Other comprehensive loss		—		—		—		—		—			—			(1.2	)		(1.2	)		—		—		—		—		—			—			(2.6	)			(2.6	)
Capital contributions by Red Fiber Parent LLC		—		—		0.5		—		1,716.1			—			—			1,716.1
Balance at September 30, 2021		—	$	—		0.5	$	—	$	1,716.1		$	(5.0	)	$	(1.2	)	$	1,709.9
Balance at June 30, 2022																						0	$	0		0	$	0	$	1,716.1		$	(95.2	)	$	(1.4	)		$	1,619.5


Predecessor
Balance at December 31, 2020		3.1	$	129.4		50.7	$	0.5	$	2,670.3		$	(2,831.6	)	$	(159.7	)	$	(191.1	)		3.1	$	129.4		50.7	$	0.5	$	2,670.3		$	(2,831.6	)	$	(159.7	)		$	(191.1	)
Net loss		—		—		—		—		—			(81.3	)		—			(81.3	)		—		—		—		—		—			(7.6	)		—				(7.6	)
Other comprehensive income		—		—		—		—		—			—			37.5			37.5			—		—		—		—		—			—			20.5				20.5
Shares issued under employee plans		—		—		0.2		—		—			—			—			—			—		—		0.2		—		—			—			—				—
Shares purchased under employee plans and other		—		—		—		—		(2.0	)		—			—			(2.0	)		—		—		—		—		(2.0	)		—			—				(2.0	)
Stock-based compensation		—		—		—		—		4.3			—			—			4.3			—		—		—		—		2.2			—			—				2.2
Equity-based award modification		—		—		—		—		(10.2	)		—			—			(10.2	)
Dividends on preferred stock		—		—		—		—		(7.6	)		—			—			(7.6	)		—		—		—		—		(5.2	)		—			—				(5.2	)
Balance at September 7, 2021		3.1	$	129.4		50.9	$	0.5	$	2,654.8		$	(2,912.9	)	$	(122.2	)	$	(250.4	)
Predecessor
Balance at December 31, 2019		3.1	$	129.4		50.4	$	0.5	$	2,676.2		$	(2,776.0	)	$	(170.1	)	$	(140.0	)
Net loss		—		—		—		—		—			(50.0	)		—			(50.0	)
Other comprehensive loss		—		—		—		—		—			—			(9.8	)		(9.8	)
Shares issued under employee plans		—		—		0.3		0		0			—			—			—
Shares purchased under employee plans and other		—		—		—		—		(1.1	)		—			—			(1.1	)
Stock-based compensation		—		—		—		—		4.2			—			—			4.2
Dividends on preferred stock		—		—		—		—		(7.8	)		—			—			(7.8	)
Balance at September 30, 2020		3.1	$	129.4		50.7	$	0.5	$	2,671.5		$	(2,826.0	)	$	(179.9	)	$	(204.5	)
Balance at June 30, 2021																						3.1	$	129.4		50.9	$	0.5	$	2,665.3		$	(2,839.2	)	$	(139.2	)		$	(183.2	)

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

	Successor			Predecessor
	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	5.4		$	12.2		$	6.7		$	5.6
Receivables, less allowances of $0.9 and $23.0		337.5			369.6
Receivables, less allowances of $6.2 and $3.6								377.5			450.2
Inventory, materials and supplies		61.5			35.5			68.9			57.1
Prepaid expenses		37.7			33.5			49.6			50.4
Other current assets		7.1			8.3			14.0			9.1
Total current assets		449.2			459.1			516.7			572.4
Property, plant and equipment, net		1,956.9			1,729.1			2,002.0			1,966.6
Operating lease right-of-use assets		41.4			37.4			68.8			44.3
Goodwill		646.3			161.5			687.1			646.3
Intangible assets, net		961.2			148.1			884.9			928.3
Deferred income tax assets		6.9			82.5			5.6			5.3
Other noncurrent assets		28.5			50.9			43.2			35.6
Total assets	$	4,090.4		$	2,668.6		$	4,208.3		$	4,198.8
Liabilities and Shareowners’ Equity (Deficit)
Liabilities and Shareowners’ Equity
Current liabilities
Current portion of long-term debt	$	13.0		$	21.8		$	19.9		$	19.7
Accounts payable		319.9			299.2			375.6			399.2
Unearned revenue and customer deposits		56.3			68.9			81.0			83.2
Accrued taxes		25.3			28.1			22.2			25.3
Accrued interest		24.9			26.7			1.1			1.9
Accrued payroll and benefits		36.3			50.5			45.9			41.9
Other current liabilities		38.9			50.9			55.0			45.5
Total current liabilities		514.6			546.1			600.7			616.7
Long-term debt, less current portion		1,382.9			1,949.9			1,521.9			1,428.9
Operating lease liabilities		38.0			33.6			62.5			40.2
Pension and postretirement benefit obligations		149.6			200.2			133.5			141.1
Pole license agreement obligation		46.7			36.7			45.2			46.2
Deferred income tax liability		147.7			10.9			115.9			139.6
Other noncurrent liabilities		101.0			82.3			109.1			96.0
Total liabilities		2,380.5			2,859.7			2,588.8			2,508.7
Shareowners’ equity (deficit)
Preferred stock, 2,357,299 shares authorized, 155,250 shares (3,105,000,depository shares) of 6 3/4% Cumulative Convertible Preferred Stock issued and outstanding at December 31, 2020; liquidation preference $1,000 per share ($50 per depositary share)		0			129.4
Common shares, $.01 par value; 96,000,000 shares authorized; 500,000 and 50,680,605 shares issued and outstanding at September 30, 2021 and December 31, 2020		0			0.5
Shareowners’ equity
Additional paid-in capital		1,716.1			2,670.3			1,716.1			1,716.1
Accumulated deficit		(5.0	)		(2,831.6	)		(95.2	)		(27.2	)
Accumulated other comprehensive loss		(1.2	)		(159.7	)
Total shareowners’ equity (deficit)		1,709.9			(191.1	)
Total liabilities and shareowners’ equity (deficit)	$	4,090.4		$	2,668.6
Accumulated other comprehensive (loss) income								(1.4	)		1.2
Total shareowners’ equity								1,619.5			1,690.1
Total liabilities and shareowners’ equity							$	4,208.3		$	4,198.8

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

	Successor			Predecessor			Predecessor			Successor			Predecessor
	September 8, 2021 to September 30, 2021			January 1, 2021 to September 7, 2021			Nine Months Ended September 30, 2020			Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
Cash flows from operating activities
Net loss	$	(5.0	)	$	(81.3	)	$	(50.0	)	$	(68.0	)	$	(7.6	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		30.2			194.9			220.8			249.6			142.8
Loss on extinguishment of debt		—			10.7			—
Provision for loss on receivables		0.9			2.1			11.6			2.6			0.8
Noncash portion of interest (income) expense		(0.3	)		4.0			4.1
Unrealized loss on interest rate swaps											11.4			0
Noncash portion of interest expense											2.6			2.9
Deferred income taxes		(1.1	)		(21.1	)		(26.4	)		(23.7	)		(2.3	)
Pension and other postretirement payments (in excess of) less than expense		(1.9	)		(0.2	)		0.3
Pension and other postretirement payments in excess of expense											(9.2	)		(0.7	)
Stock-based compensation		0			4.3			4.2			0			2.2
Other, net		(0.3	)		(5.2	)		(0.7	)		(0.2	)		(0.3	)
Changes in operating assets and liabilities:
(Increase) decrease in receivables		(20.3	)		51.1			14.8
(Increase) decrease in inventory, materials, supplies, prepaid expenses and other current assets		(3.2	)		(29.4	)		12.2
Decrease in receivables											69.3			75.2
Increase in inventory, materials, supplies, prepaid expenses and other current assets											(6.5	)		(20.2	)
(Decrease) increase in accounts payable		(51.7	)		49.1			(56.6	)		(45.5	)		20.5
(Decrease) increase in accrued and other current liabilities		(37.5	)		2.8			(12.2	)
Increase (decrease) in accrued and other current liabilities											4.5			(35.6	)
(Increase) decrease in other noncurrent assets		(2.1	)		2.1			9.9			(6.2	)		0.6
Increase in other noncurrent liabilities		29.9			8.8			6.9
Net cash (used in) provided by operating activities		(62.4	)		192.7			138.9
(Decrease) increase in other noncurrent liabilities											(4.5	)		1.8
Net cash provided by operating activities											176.2			180.1
Cash flows from investing activities
Capital expenditures		(35.4	)		(165.2	)		(159.2	)		(200.9	)		(119.7	)
Acquisition of business		(1,620.7	)		0			0
Acquisition of Paniolo fiber assets		(1.3	)		(50.5	)		0
Acquisition of business, net of cash acquired											(65.1	)		0
Proceeds from sale of assets		0			9.1			0			2.3			0
Other, net		0			(0.1	)		(1.6	)		0.3			0.1
Net cash used in investing activities		(1,657.4	)		(206.7	)		(160.8	)		(263.4	)		(119.6	)
Cash flows from financing activities
Capital contributions by Red Fiber Parent LLC		1,716.1			0			0
Proceeds from issuance of long-term debt		150.0			23.0			0
Net (decrease) increase in corporate credit and receivables facilities with initial maturities less than 90 days		(108.7	)		9.0			48.0
Net increase (decrease) in corporate credit and receivables facilities with initial maturities less than 90 days											100.0			(51.6	)
Repayment of debt		(1.4	)		(13.4	)		(19.3	)		(10.7	)		(9.6	)
Debt issuance costs		(42.0	)		(0.8	)		(0.5	)		(0.7	)		(0.8	)
Dividends paid on preferred stock		0			(7.8	)		(7.8	)		0			(5.2	)
Other, net		0			(2.0	)		(1.1	)		0			(2.0	)
Net cash provided by financing activities		1,714.0			8.0			19.3
Net cash provided by (used in) financing activities											88.6			(69.2	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		0			0			(0.2	)		0			0
Net decrease in cash, cash equivalents and restricted cash		(5.8	)		(6.0	)		(2.8	)
Net increase (decrease) in cash, cash equivalents and restricted cash											1.4			(8.7	)
Cash, cash equivalents and restricted cash at beginning of period		11.2			17.2			11.6			6.1			17.2
Cash, cash equivalents and restricted cash at end of period	$	5.4		$	11.2		$	8.8		$	7.5		$	8.5
Noncash investing and financing transactions:
Acquisition of property by assuming debt and other noncurrent liabilities	$	3.8		$	3.8		$	4.0		$	2.1		$	2.0
Acquisition of property on account	$	46.3		$	54.9		$	23.7		$	65.6		$	42.7

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

Organization — On March 13, 2020, the Company (as defined below), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Red Fiber Parent LLC, a Delaware limited liability company (“Parent”), and RF Merger Sub Inc., an Ohio corporation and directly wholly owned subsidiary of Parent (“Merger Sub”). On September 7, 2021 (the “Closing Date” or “Merger Date”), upon the terms and subject to the conditions set forth in the Merger Agreement, and in accordance with the applicable provisions of the Ohio General Corporation Law (the “OGCL”), Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation (the “Merger”). At the effective time of the Merger (the “Effective Time”), the separate corporate existence of Merger Sub ceased, and the Company survived the Merger as a wholly owned private subsidiary of Parent. As of the date of this filing, the Company has ceased to be a registrant ~~(see Note 11)~~, however due to contractual ~~language~~terms in certain indentures, the Company is required to voluntarily file with the U.S. Securities and Exchange Commission (“SEC”).

As a result of the Merger, for accounting purposes, Parent is the acquirer and Cincinnati Bell Inc. is the acquiree and accounting predecessor. The financial statement presentation includes the financial statements of historical Cincinnati Bell Inc. as “Predecessor” for periods prior to the Closing Date and of the Company as “Successor” for the periods after the Closing Date. In connection with the Merger and the related accounting determination, the Company has elected to apply push-down accounting and reflect in its financial statements the fair value of its assets and liabilities. The Condensed Consolidated Financial Statements and footnotes include a black line division between the columns titled "Predecessor" and "Successor" to signify that the amounts shown for the periods prior to and following the Merger are not comparable. The Company has elected to record all expenses that were contingent on the closing of the Merger in the Predecessor period. See Note 2 for additional information on the Merger.

Description of Business — Cincinnati Bell Inc. and its consolidated subsidiaries ("Cincinnati Bell," "we," "our," "us" or the "Company") provide diversified telecommunications and technology services. For ease of reference, the terms “Cincinnati Bell,” “we,” “our Company,” “the Company,” “us,” or “our” as used in this report refer to both the Predecessor and the Successor and their respective subsidiaries.

The Company generates a large portion of its revenue by serving customers in Cincinnati, Ohio, Dayton, Ohio and the islands of Hawaii. An economic downturn or natural disaster occurring in these, or a portion of these, limited operating territories could have a disproportionate effect on our business, financial condition, results of operations and cash flows compared to similar companies of a national scope and similar companies operating in different geographic areas.

The Company ~~has~~had receivables with 1 customer, Verizon Communications Inc. (“Verizon”), which ~~make~~made up ~~15% and 20%~~26% of the outstanding accounts receivable balance at ~~September 30, 2021 and~~ December 31, ~~2020, respectively.~~2021. NaN customers exceeded 10% of outstanding accounts receivable at June 30, 2022. Revenue derived from foreign operations was approximately 7% of consolidated revenue for the three and six months ended June 30, 2022. Revenue derived from foreign operations was approximately 6% of consolidated revenue for the ~~Successor period and each of the Predecessor periods included within the~~ three and ~~nine~~six months ended ~~September~~June 30, 2021. ~~Revenue derived from foreign operations was approximately 5% of consolidated revenue for the three and nine months ended September 30, 2020.~~

Basis of Presentation — The Condensed Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations of the SEC and, in the opinion of management, include all adjustments necessary for a fair statement of the results of operations, other comprehensive income, financial position and cash flows for each period presented.

The adjustments referred to above are of a normal and recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules and regulations for interim reporting.

The Company’s Condensed Consolidated Balance Sheet as of December 31, ~~2020~~2021 was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s ~~2020~~2021 Annual Report on Form 10-K.

Business Combinations — In accounting for business combinations, we apply the accounting requirements of Accounting Standards Codification 805 (“ASC 805”), “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. In developing fair value estimates for acquired assets and assumed liabilities, management analyzes a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets, and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets. In addition, any contingent consideration is presented at fair value at the date of acquisition, and transaction costs are expensed as incurred. The Company reports in its ~~consolidated financial statements~~ Condensed Consolidated Financial Statements provisional amounts for the items for which accounting is incomplete. Goodwill is adjusted for any changes to provisional amounts made within the measurement period. See Note 2 for disclosures related to mergers and acquisitions.

Use of Estimates — Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. In the normal course of business, the Company is subject to various regulatory and tax proceedings, lawsuits, claims and other matters. The Company believes adequate provision has been made for all such asserted and unasserted claims in accordance with U.S. GAAP. Such matters are subject to many uncertainties and outcomes that are not predictable with assurance.

Accounting Policies — The complete summary of significant accounting policies is included in the notes to the consolidated financial statements as presented in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021. The Company’s accounting policies in the Successor Period are consistent with the accounting policies in the Predecessor Period.

Cash, Cash Equivalents and Restricted Cash — Cash consists of funds held in bank accounts. Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. Restricted cash consists of funds held in an escrow account ~~associated with the acquisition of substantially all of the operating assets of Paniolo Cable Company, LLC (“Paniolo”). See Note 2 for further information~~ related to ~~this transaction.~~a cost method investment. Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Condensed Consolidated Statements of Cash Flows. A reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets follows:

	Successor		Predecessor
(dollars in millions)	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
Cash and cash equivalents	$	5.4	$	12.2	$	6.7	$	5.6
Restricted cash included in Other noncurrent assets		0		5.0		0.8		0.5
Cash, cash equivalents and restricted cash per Condensed Consolidated Statements of Cash Flows	$	5.4	$	17.2	$	7.5	$	6.1

~~Restructuring Liability~~Goodwill —Goodwill represents the excess of the purchase price consideration over the fair value of net assets acquired and recorded in connection with business acquisitions. Goodwill is allocated at the business segment level. Goodwill is tested for impairment on an annual basis or when events or changes in circumstances indicate that such assets may be impaired. If the net book value of the reporting unit exceeds its fair value, an impairment loss is recognized. An impairment loss is measured as the excess of the carrying value of goodwill of a reporting unit over its fair value.

Indefinite-Lived Intangible Assets — Intangible assets represent purchased assets that lack physical substance but can be separately distinguished from goodwill because of contractual or legal rights, or because the asset is capable of being separately sold or exchanged. Federal Communications Commission ("FCC") licenses for wireless spectrum represent indefinite-lived intangible assets. The Company may renew the wireless licenses in a routine manner every ten years for a nominal fee, provided the Company continues to meet the service and geographic coverage provisions required by the FCC. Intangible assets not subject to amortization are tested for impairment annually, or when events or changes in circumstances indicate that the asset might be impaired.

Long-Lived Assets — AsManagement reviews the carrying value of ~~September 30, 2021, restructuring liabilities have been established for employee separations. As of September 30, 2021~~property, plant and ~~December 31, 2020, $0.1 million~~equipment and ~~$4.5 million, respectively,~~other long-lived assets, including intangible assets with definite lives, when events or changes in circumstances indicate that the carrying amount of the ~~restructuring liabilities was included~~assets may not be recoverable. An impairment loss is recognized when the estimated future undiscounted cash flows expected to result from the use of an asset (or group of assets) and its eventual disposition is less than its carrying amount. An impairment loss is measured as the amount by which the asset’s carrying value exceeds its estimated fair value. Long-lived intangible assets are amortized based on the estimated economic value generated by the asset in ~~“Other current liabilities” in the Condensed Consolidated Balance Sheets~~future years. .

Income taxes — In accordance with ASC 740-270, the Company’s income tax provision for interim periods is determined through the use of an estimated annual effective tax rate applied to year-to-date ordinary income/loss plus or minus the tax effects of discrete items. The Company’s estimated annual effective tax rate benefit is ~~lower~~higher than the U.S. federal statutory ~~rates primarily~~rate due to state income taxes, offset in part by the effect of permanent items such as ~~nondeductible transaction costs, portions of officers’ compensation, and meals~~the GILTI inclusion and entertainment expenses that are not fully deductible for tax.

Operating taxes — Certain operating taxes such as property, sales, use, and gross receipts taxes are reported as expenses in operating income primarily within cost of services. These taxes are not included in income tax expense because the amounts to be paid are not dependent on our level of income. Liabilities for audit exposures are established based on management's assessment of the probability of payment. The provision for such liabilities is recognized as either property, plant and equipment, operating tax expense, or depreciation expense depending on the nature of the audit exposure. Upon resolution of an audit, any remaining liability not paid is released against the account in which it was originally recorded. Certain telecommunication taxes and surcharges that are collected from customers are also recorded as revenue; however, in accordance with ASC 606, revenue associated with these charges is excluded from the transaction price.

~~Stock-Based Compensation —~~ Compensation cost is recognized for all share-based awards to employees and non-employee directors. We value all share-based awards to employees at fair value on the date of grant and expense this amount over the requisite service period, generally defined as the applicable vesting period. For awards which contain a performance condition, compensation expense is recognized over the service period, when achievement of the performance condition is deemed probable. The fair value of stock options and stock appreciation rights is determined using the Black-Scholes option-pricing model using assumptions such as volatility, risk-free interest rate, expected holding period and dividends. The fair value of stock awards is based on the Company’s closing share price on the date of grant. For all share-based payments, the Company accounts for forfeitures as they occur. Actual forfeiture activity reduces the total fair value of the awards to be recognized as compensation expense. When an award is granted to an employee who is retirement eligible, the compensation cost is recognized over the service period up to the date that the employee first becomes eligible to retire.

In connection with the consummation of the Merger, certain previously granted stock-based awards vested on the Closing Date per the terms of the change of control clauses in each plan and were paid at the share purchase price of $15.50. As a result, the following awards vested and were paid on the date of acquisition: (i) time-based restricted stock units and performance-based stock units associated with the 2019 – 2021 long-term incentive plan granted under the 2017 Long-Term Incentive Plan; (ii) time-based restricted stock units granted to non-employee directors in 2020 under the 2017 Stock Plan for Non-Employee Directors; and (iii) time-based restricted stock units granted under the Hawaiian Telcom 2010 Equity Incentive Plan in the first quarter of 2018 which the Company assumed responsibility for the eventual payout upon the acquisition of Hawaiian Telcom. Due to the accelerated vesting and cash payment of these awards, the Company recorded additional compensation expense of $9.3 million to “Selling, general and administrative” expense in the Predecessor period on the Condensed Consolidated Statements of Operations. As of September 30, 2021, there are 0 outstanding awards granted under the 2017 Long-Term Incentive Plan, 2017 Stock Plan for Non-Employee Directors and Hawaiian Telcom 2010 Equity Incentive Plan.

The Company granted cash-settled awards of $10.5 million in 2020 that originally vested at the end of a three year period. In accordance with the terms of these awards, vesting and payment of the first 25% of the award was accelerated with the consummation of the Merger. The awards remain outstanding in the Successor period and will be paid out 25% at the six month anniversary of the Closing Date and 50% will be paid out on the 18 month anniversary of the Closing Date. The remaining unrecognized compensation expense for the cash-settled awards will be recognized ratably over the remaining 18 months of the award.

Derivative Financial Instruments — The Company accounts for derivative financial instruments by recognizing derivative instruments as either assets or liabilities in the Condensed Consolidated Balance Sheets at fair value and recognizing the resulting gains or losses as adjustments to the Condensed Consolidated Statements of Operations or ~~"Accumulated~~“Accumulated Other Comprehensive ~~Loss."~~(Loss) Income.” The Company does not hold or issue derivative financial instruments for trading or speculative purposes.

For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of "Accumulated Other Comprehensive ~~Loss"~~(Loss) Income" in stockholder's equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. Derivatives that do not qualify as hedges are adjusted to fair value through earnings in the current period. All cash flows associated with the Company’s derivative instruments are classified as operating activities in the Condensed Consolidated Statements of Cash Flows.

~~In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):~~Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. These amendments are effective as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating our contracts and the optional expedients provided by the new standard.

~~In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the~~ Accounting ~~for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within~~ ~~Income Taxes (740)~~, and clarifies certain aspects of the current guidance to promote consistency among reporting entities, and is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020. Most amendments within ASU 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted the standard effective January 1, 2021. The Company has evaluated the amendments that must be applied on a retrospective or modified retrospective basis and concluded that no adjustments are necessary. The Company has applied all other amendments on a prospective basis, and the changes did not have a material effect on its condensed consolidated financial statements.

~~Other accounting~~ standards that have been issued or proposed by the FASB or other standard-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption.

On September 7, 2021, pursuant to the Merger Agreement and in accordance with the applicable provisions of the OGCL, Parent completed the acquisition of Cincinnati Bell in an all cash transaction valued at approximately $3.1 billion, including assumption of debt of $1,357.1 million. Upon the Effective Time, the separate existence of Merger Sub ceased and the Company survived the Merger as a wholly owned subsidiary of Parent.

Pursuant to the Merger Agreement, each of Cincinnati Bell’s issued and outstanding Common Shares was converted into the right to receive $15.50 per share in cash, without interest. ~~Effective September 7, 2021, trading~~Trading of the Company’s Common Shares was suspended on the New York Stock Exchange (“NYSE”) and the Common Shares were subsequently delisted from the NYSE. ~~On September 22, 2021,~~Additionally, the Company redeemed Depositary Shares simultaneously with the redemption of the 6 3/4% Preferred Shares, at a redemption price of $50 per Depositary Share (equivalent to $1,000 per 6 3/4% Preferred ~~Share)~~Stock), and the Depositary Shares were subsequently delisted from the NYSE.

The Company accounted for this transaction as a business combination in accordance with the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values, using primarily Level 3 inputs, as described in Note 8,7, as of the Merger Date. Transaction costs of the acquirer are not included as a component of consideration transferred but are accounted for as expenses in the period in which such costs are incurred, or, if related to the issuance of debt, capitalized as debt issuance costs. Acquisition-related transaction costs incurred as part of the Merger, primarily included advisory, legal and accounting fees.Transaction costs were expensed as incurred and recorded to “Transaction and integration costs” on the Condensed Consolidated Statements of Operations.

The valuation of the assets acquired and liabilities assumed was based on estimated fair values at the Merger Date. The preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed reflect various preliminary fair value estimates and analyses, including preliminary work performed by third-party valuation specialists, which are subject to change within the measurement period as valuations are finalized. The determination of the final purchase price allocation to specific assets acquired and liabilities assumed is incomplete at ~~September~~June 30, ~~2021.~~2022. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair values of ~~property, plant and equipment, the valuation of intangible assets acquired,~~ income and non-income based taxes and goodwill. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired as of the Merger Date during the measurement period.

Measurement period adjustments will be applied retrospectively to the Merger Date. ~~However, given~~We have not finalized the ~~circumstances~~allocation of the purchase price as it requires extensive use of accounting estimates and valuation methodologies in the determination of such fair values. Any subsequent changes in the estimated fair values assumed upon the finalization of more detailed analysis within the measurement period will change the allocation of the purchase price and will be adjusted during the period in which the amounts are determined. The allocation of goodwill to our Network reporting unit and IT Services and Hardware reporting unit is preliminary as of the date of this ~~acquisition which closed during~~filing.

The purchase price for Cincinnati Bell Inc. consisted of the ~~third quarter of 2021,~~following:

Based on fair value estimates, the purchase price has been allocated on a preliminary basis to individual assets acquired and liabilities assumed as ~~well as~~follows:

Given the size and complexity of the transaction, the entire purchase price allocation disclosed herein iscontinues to be considered provisional at this time and subject to adjustment to reflect new information obtained about factors and circumstances that existed as of the Closing Date that if known would have affected the measurement of the amounts recognized as of that date, while the measurement period remains open. ~~We have not finalized the allocation of the purchase price as it requires extensive use of accounting estimates and valuation methodologies~~Measurement period adjustments recorded in the ~~determination~~second quarter of ~~such fair values.~~ ~~Any subsequent changes~~2022 are immaterial in ~~the estimated fair values assumed upon the finalization of more detailed analysis within the measurement period will change the allocation of the purchase price~~nature and ~~will be adjusted during the period in which the amounts are determined. The allocation of~~impact property, plant and equipment, goodwill ~~to our Entertainment~~ and ~~Communications reporting unit and IT Services and Hardware reporting unit is preliminary as of the date of this filing.~~deferred income tax liability.

~~Based on fair value estimates, the purchase price has been allocated on a preliminary basis to individual assets acquired and liabilities assumed as follows:~~

In connection with this acquisition, the Company recorded goodwill attributable to increased access to a diversified customer base, acquired workforce in the United States, Canada, United Kingdom and India with industry expertise and expected synergies. The goodwill related to this acquisition is not deductible for tax purposes.

The Company recorded definite-lived intangible assets related to the customer relationships, trade names and technology and an indefinite-lived intangible asset related to FCC licenses. The preliminary fair value of the most significant identified intangible assets, customer relationships and trade names, were valued using the multi-period excess earnings method and relief from royalty method, under the income approach. The Company applied judgment which involved the use of significant assumptions with respect to revenue growth rates, customer attrition rate, discount rate and terminal growth rate in relation to the customer relationships and royalty rates and discount rate in relation to the trade names.The preliminary fair values of the identifiable intangible assets acquired on the Merger Date were as follows:

Transaction costs were expensed as incurred and recorded to “Transaction and integration costs” on the Condensed Consolidated Statements of Operations. Cincinnati Bell Inc. incurred cumulative transaction costs associated with the Merger Agreement of $64.4 million recorded in the Predecessor periods, of which $54.6 million was recorded in the Predecessor period of 2021 and $8.7 million was recorded in the nine months ended September 30, 2020. NaN transaction costs related to the Merger were recorded in the Successor period. Transaction costs of $44.0 million that were paid on the Merger Date were recorded in the Predecessor period and included as an assumed liability. Additionally, $2.9 million of ~~severance associated with a change of control clause in an employee’s contract was recorded in the Predecessor period and is expected to be paid in the fourth quarter of 2021.~~ ~~Transaction-related bonuses of $5.3 million~~ ~~were also recorded in the Predecessor period but due to timing of payroll, were paid prior to the Merger Date.~~

~~Additional expenses recorded in the Predecessor period include~~ certain stock-based compensation awards that were accelerated upon the Merger Date, which resulted in a nonrecurring expense of $9.3 million that was recorded to SG&A, and Loss on Extinguishment of Debt of $10.7 million due to the repayment of the Corporate Credit Agreement at the Effective Time. Stock-based compensation was paid on the Merger Date and included in the cash consideration for Cincinnati Bell Inc. stock.

Subsequent to the Merger Date, the Company issued a new Credit Agreement and Term Loan due 2028 for which note issuance costs of $32.0 million were capitalized as a reduction to the outstanding debt balances and a Revolving Credit Facility due 2026 for which note issuance costs of $6.1 million were capitalized to “Other noncurrent assets” on the Condensed Consolidated Balance Sheets.

~~Prior to entering into the Merger Agreement, the Company previously entered into an Agreement and Plan of Merger, dated December 21, 2019,~~ (as amended from time to time, the “Brookfield Merger Agreement”) with affiliates of the Brookfield Infrastructure Group (“Brookfield”), the infrastructure investment division of Brookfield Asset Management, which was subsequently amended. On March 13, 2020, the Company terminated the Brookfield Merger Agreement and entered into the Merger Agreement. In connection with the termination of the Brookfield Merger Agreement in the first quarter of 2020, the Company paid to an affiliate of Brookfield a termination fee of $24.8 million as required by the terms of the Brookfield Merger Agreement. The termination fee is recorded in “Transaction and integration costs” on the Condensed Consolidated Statements of Operations in the Predecessor period.

On August 31, 2021, the Company acquired substantially all of the operating assets of Paniolo Cable Company, LLC (the “Paniolo Acquisition”), previously held by the bankruptcy estate of Paniolo, which include inter-island submarine and middle-mile terrestrial fiber infrastructure assets in Hawaii as well as central offices and landing stations for the submarine fiber. The Company accounted for the Paniolo Acquisition as an asset acquisition under ASC 805-10-55 “Business Combinations” because the assets acquired from Paniolo do not include an assembled workforce, and the gross value of the assets acquired meets the screen test in ASC 805-10-55-5A related to substantially all of the fair value being concentrated in a single asset or group of assets (i.e., the fiber infrastructure assets) and, thus, the assets are not considered a business. The acquisition of Paniolo’s assets augments the Company’s existing backbone network and increases the Company’s total submarine and terrestrial fiber footprint by more than 400 miles.

The aggregate purchase price paid upon closing of the Paniolo Acquisition after transactional costs was $52.3 million, consisting of $29.3 million in cash and $23.0 million in committed purchase money financing. ~~As of September 30, 2021 an insignificant amount of transaction costs are recorded in “Accounts Payable” on the Condensed Consolidated Balance Sheets.~~ The assets are recorded as network equipment and buildings in “Property, plant and equipment, net” on the Condensed Consolidated Balance Sheets. As of ~~September~~June 30, ~~2021,~~2022, $0.5 million and ~~$22.4~~$22.0 million of the committed purchase money financing was recorded in “Current portion of long-term debt” and “Long-term debt, less current portion,” respectively, on the Condensed Consolidated Balance Sheets. As of December 31, ~~2020,~~2021, $0.5 million and $22.3 million of the committed purchase money financing was recorded in “Current portion of long-term debt” and “Long-term debt, less current portion,” respectively, on the Condensed Consolidated Balance Sheets.

On May 2, 2022 (“Agile Acquisition Date”), the Company ~~funded $5.0 million to an escrow account to fund a~~acquired Agile IWG Holdings, LLC (“Agile”), based in Canton, Ohio for total cash consideration of $65.1 million. Agile delivers customers, primarily located in Ohio and Pennsylvania, with middle mile, last mile and campus connectivity services through hybrid fiber wireless networks that are designed, built and managed by Agile.

The cash portion of the purchase price was funded through borrowings under the Receivables Facility and ~~entered into an agreement with Paniolo to maintain~~ the ~~Paniolo network prior~~Revolving Credit Facility (see Note 5).

Measurement period adjustments related to the ~~close~~acquisition of Agile will be applied retrospectively to the Agile Acquisition Date. However, given the circumstances of this acquisition which closed during the second quarter of 2022, the entire purchase price allocation disclosed herein is considered provisional at this time and subject to adjustment to reflect new information obtained about factors and circumstances that existed as of the ~~acquisition. This escrow amount~~Agile Acquisition Date that if known would have affected the measurement of the amounts recognized as of that date, while the measurement period remains open.

The valuation of the assets acquired and liabilities assumed is based on estimated fair values at the Agile Acquisition Date. The allocation disclosed below is considered preliminary in nature due to the ongoing work by management, with the assistance of third party experts, to refine the fair value estimates as well as the timing of the acquisition close date occurring mid-quarter. The Company considers the allocation and fair value estimates of property, plant and equipment, ROU Assets and Liabilities, Intangible Assets and Goodwill to be preliminary in nature as of June 30, 2022. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired as of the Agile Acquisition Date during the measurement period.

The Company incurred $1.7 million in acquisition expenses related to the Agile acquisition, of which $0.1 million and $1.6 million was ~~classified as restricted cash and~~ recorded in ~~“Other noncurrent assets”~~the three and six months ended June 30, 2022, respectively. NaN expenses were recorded in the prior year comparable periods related to the Agile acquisition. These expenses are recorded in "Transaction and integration costs" on the Condensed Consolidated ~~Balance Sheets~~Statements of Operations.

Based on fair value estimates, the purchase price has been allocated on a preliminary basis to individual assets acquired and liabilities assumed as follows:

The entire purchase price allocation disclosed herein continues to be considered provisional at this time and subject to adjustment to reflect new information obtained about factors and circumstances that existed as of ~~December 31, 2020.~~the Agile Acquisition Date that if known would have affected the measurement of the amounts recognized as of that date, while the measurement period remains open.

Based on fair value estimates, the identifiable intangible assets acquired are as follows:

The ~~Entertainment and Communications~~Network segment provides products and services to both residential and commercial customers that can be categorized as ~~either~~Fioptics, previously referred to as “Consumer/SMB Fiber” in Hawaii and collectively with Fioptics in Cincinnati, ~~or Consumer/SMB Fiber in Hawaii (collectively, "Consumer/SMB Fiber"),~~ Enterprise Fiber or Legacy. The products and services within these three categories can be further categorized as either Data, Voice, Video or Other. ~~Consumer/SMB Fiber~~Fioptics and Legacy revenue include both residential and commercial customers. Enterprise Fiber revenue includes ethernet and dedicated internet access services that are provided to enterprise customers, as well as revenue associated with the Southeast Asia to United States ("SEA-US") trans-Pacific submarine cable system. Subsequent to the Company’s acquisition of Agile, services provided by Agile are also included in Enterprise Fiber.

Residential customers have implied month-to-month contracts. Commercial customers, with the exception of contracts associated with the SEA-US cable system, typically have contracts with a duration of one to five years and automatically renew on a month-to-month basis. Customers are invoiced on a monthly basis for services rendered. Contracts for projects that are included within the Other revenue stream are typically short in duration and less than one year. Contracts associated with the SEA-US cable system typically range from 15 to 25 years and payment is prepaid.

The IT Services and Hardware segment provides a full range of Information Technology ("IT") solutions, including Communications, Cloud and Consulting services. IT Services and Hardware customers enter into contracts that have a typical duration of one to five years, with varied renewal options at the end of the term. Customers are invoiced on a monthly basis for services rendered. The IT Services and Hardware segment also provides enterprise customers with Infrastructure Solutions, which includes the sale of hardware and maintenance contracts. These contracts are typically satisfied in less than twelve months and revenue is recognized at a point in time.

The Company has elected the practical expedient described in ASC 606-10-32-18 that allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects that the period of time between the transfer of a promised good or service to the customer and when the customer pays for such good or service will be one year or less. Customers are typically billed immediately upon the rendering of services or the delivery of products. Payment terms for customers are between 30 and 120 days. Subsequent to the acquisition of Hawaiian Telcom Holdco., Inc. ("Hawaiian Telcom"), the Company began recognizing a financing component associated with the up-front payments for services to be delivered under indefeasible right of use ("IRU") contracts for fiber circuit capacity. The IRU contracts typically have a duration ranging from 15 to 25 years.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, or a series of distinct goods or services, and is the unit of account defined in ASC Topic 606. The transaction price identified in the contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Contract modifications for changes to services provided are routine throughout the term of our contracts. In most instances, contract modifications are for the addition or reduction of services that are distinct, and price changes are based on the stand-alone selling price of the service and, as such, are accounted for on a prospective basis as a new contract.

Goods and services are sold individually, or a contract may include multiple goods or services. For contracts with multiple goods and services, the transaction price identified in the contract is allocated to each performance obligation using the stand-alone selling price of each distinct good or service in the contract.

Certain customers of the Company may receive cash-based rebates based on volume of sales, which are accounted for as variable consideration. Potential rebates are considered at contract inception in our estimate of transaction price based on the estimated projection of sales volume. Estimates are reassessed quarterly.

Performance obligations are satisfied either over time as services are performed or at a point in time. Substantially all of our service revenue is recognized over time. For services transferred over time, the Company has elected the practical expedient to recognize revenue based on amounts invoiced to the customer as the Company has concluded that the invoice amount directly corresponds with the value of services provided to the customer. Management considers this a faithful depiction of the transfer of control as services are provided evenly over the month and are substantially the same over the life of the contract. As the Company has elected the practical expedients detailed at ASC 606-10-50-13, revenue for these unsatisfied performance obligations that will be billed in future periods has not been disclosed.

As of ~~September~~June 30, ~~2021,~~2022, our estimated revenue, including a financing component, expected to be recognized in the future related to performance obligations associated with customer contracts that are unsatisfied (or partially unsatisfied) is ~~$138.0~~$186.8 million. ~~Approximately 75% of this revenue is related to a new IRU contract entered into in the Successor period to provide dedicated fiber routes for a period of 20 years.~~ Certain IRU contracts extend for periods of up to 30 years and are invoiced at the beginning of the contract term. The revenue from such contracts is recognized over time as services are provided over the contract term. The expected revenue to be recognized for existing ~~IRU~~customer contracts is as follows:

The Company has identified four distinct performance obligations in the ~~Entertainment and Communications~~Network segment, namely Data, Voice, Video and Other. For each of the Data, Voice and Video services, service is delivered to the customer continuously and in a substantially similar manner for each period of the agreement, the customer takes full control over the services as the service is delivered, and as such, Data, Voice and Video are identified to be a series of distinct services. Services provided by the ~~Entertainment and Communications~~Network segment can be categorized into three main categories that include ~~Consumer/SMB Fiber,~~Fioptics, Enterprise Fiber and Legacy, each of which may include one or more of the aforementioned performance obligations. Data services include high-speed internet access, digital subscriber lines, ethernet, routed network services, SONET (Synchronous Optical Network), dedicated internet access, wavelength, digital signal and IRU revenue. Voice services include traditional and fiber voice lines, switched access, digital trunking and consumer long distance calling. Video services are offered through our fiber network to residential and commercial customers based on various standard plans with the opportunity to add premium channels. To receive video services, customers are required to use the Company's set top boxes that are billed as part of the monthly recurring service. Set top boxes are not considered a separate performance obligation from video because the equipment is necessary for the service to operate and the customer has no alternative use for the equipment.

Services and products not included in Data, Voice or Video are included in Other revenue and are comprised of wire care, time and materials projects, subsidized fiber build projects and advertising. Transfer of control of these services and products is evaluated on an individual project basis and can occur over time or at a point in time.

The Company uses multiple methods to determine stand-alone selling prices in the ~~Entertainment and Communications~~Network segment. For Data, Video and Voice products in ~~Consumer/SMB Fiber,~~Fioptics, market rate is the primary method used to determine stand-alone selling prices. For Data performance obligations under the Enterprise Fiber category, and Voice, Data and Other performance obligations under the Legacy category, stand-alone selling prices are determined based on a list price, discount off of list price, a tariff rate, a margin percentage range, or a minimum margin percentage.

The Company has identified four distinct performance obligations in the IT Services and Hardware segment. These performance obligations are Communications, Cloud, Consulting and Infrastructure Solutions. Communications services are monthly services that include data and VoIP services, tailored solutions that include converged IP communications of data, voice, video and mobility applications, enterprise long distance, MPLS (Multi-Protocol Label Switching) and conferencing services. Cloud services include storage, backup, disaster recovery, SLA-based monitoring and management, cloud computing and cloud consulting. Consulting services provide customers with IT staffing, consulting and emerging technology solutions. Infrastructure Solutions includes the sale of hardware and maintenance contracts as well as installation projects.

For the sale of hardware, the Company evaluated whether it is the principal or the agent. The Company has concluded it acts as an agent because it does not control the inventory before it is transferred to customers, it does not have the ability to direct the product to anyone besides the purchasing customer, and it does not integrate the hardware with any of its own goods or services. Based on this assessment, the performance obligation is to arrange a sale of hardware between the vendor and the customer. In the instance where there is an issue with the hardware, the Company coordinates with the manufacturer to facilitate a return in accordance with the standard manufacturer warranty. Hardware returns are not significant to the Company.

Within the IT Services and Hardware segment, stand-alone selling prices for the four performance obligations are determined based on either a margin percentage range, minimum margin percentage or discount from standard price list if it is determined to be representative of stand-alone selling price.

For hardware sales, revenue is recognized net of the cost of product and is recognized when the hardware is either shipped or delivered in accordance with the terms of the contract. For certain projects within Communications and Consulting, revenue is recognized when the customer communicates acceptance of the services performed. For contracts with freight on board shipping terms, management has elected to account for shipping and handling as activities to fulfill the promise to transfer the good, and, therefore, has not evaluated whether shipping and handling activities are promised services to its customers.

The Company recognizes incremental fulfillment costs as an asset when installation expenses are incurred as part of performing the agreement for Voice, Video and Data product offerings in the ~~Entertainment and Communications~~Network segment in which the contract life is longer than one year. These fulfillment costs are amortized ratably over the expected life of the customer, which is representative of the expected period of benefit of the asset capitalized. The expected life of the customer is determined utilizing the average churn rate for each product. The Company calculates average churn based on the historical average customer life. We also recognize an asset for incremental fulfillment costs for certain Communications services in the IT Services and Hardware segment that require us to incur installation and provisioning expenses. The asset recognized for Communication services is amortized over the average contract life. Churn rates and average contract life are reviewed on an annual basis. Fulfillment costs are capitalized to “Other noncurrent assets.” The related amortization expense is recorded to “Cost of services and products.”

The Company recognizes an asset for the incremental costs of acquiring a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs related to Voice, Video, Data and certain Communications and Cloud services meet the requirements to be capitalized. The contract asset established for the costs of acquiring a contract is recorded to “Other noncurrent assets.” Sales incentives are amortized ratably over the period that services are delivered using either an average churn rate or average contract term, both representative of the expected period of benefit of the asset capitalized. Customer churn rates and average contract term assumptions are reviewed on an annual basis. The related amortization expense is recorded to “Selling, general and administrative.”

Management has elected to use the practical expedient detailed in ASC 340-40-25-4 to expense any costs to fulfill a contract and costs to obtain a contract as they are incurred when the amortization period would have been one year or less. This practical expedient has been applied to fulfillment costs that include installation costs associated with wiring projects and certain Cloud services. In addition, this practical expedient has been applied to acquisition costs associated with revenue from certain Communications projects.

	Successor
	Fulfillment Costs									Cost of Acquisition									Total Contract Assets									Fulfillment Costs									Cost of Acquisition									Total Contract Assets
(dollars in millions)	Entertainment and Communications			IT Services and Hardware			Total Company			Entertainment and Communications			IT Services and Hardware			Total Company			Entertainment and Communications			IT Services and Hardware			Total Company			Network			IT Services and Hardware			Total Company			Network			IT Services and Hardware			Total Company			Network			IT Services and Hardware			Total Company
Balance as of September 8, 2021 (remeasured upon Merger)	$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0
Balance as of December 31, 2021																												$	0.7		$	0.7		$	1.4		$	3.3		$	0.3		$	3.6		$	4.0		$	1.0		$	5.0
Additions		0.2			0.3			0.5			0.8			0			0.8			1.0			0.3			1.3			0.5			0.5			1.0			2.6			0.7			3.3			3.1			1.2			4.3
Amortization		0			0			0			0			0			0			0			0			0			(0.1	)		(0.1	)		(0.2	)		(0.4	)		(0.1	)		(0.5	)		(0.5	)		(0.2	)		(0.7	)
Balance as of September 30, 2021	$	0.2		$	0.3		$	0.5		$	0.8		$	0		$	0.8		$	1.0		$	0.3		$	1.3


	Predecessor
	Fulfillment Costs									Cost of Acquisition									Total Contract Assets
(dollars in millions)	Entertainment and Communications			IT Services and Hardware			Total Company			Entertainment and Communications			IT Services and Hardware			Total Company			Entertainment and Communications			IT Services and Hardware			Total Company
Balance as of December 31, 2020	$	3.5		$	3.9		$	7.4		$	15.8		$	3.6		$	19.4		$	19.3		$	7.5		$	26.8
Balance as of March 31, 2022																													1.1			1.1			2.2			5.5			0.9			6.4			6.6			2.0			8.6
Additions		0.9			1.0			1.9			2.6			0			2.6			3.5			1.0			4.5			0.6			0.9			1.5			2.4			0.3			2.7			3.0			1.2			4.2
Amortization		(1.9	)		(0.7	)		(2.6	)		(2.7	)		(0.4	)		(3.1	)		(4.6	)		(1.1	)		(5.7	)		(0.1	)		(0.1	)		(0.2	)		(0.4	)		(0.4	)		(0.8	)		(0.5	)		(0.5	)		(1.0	)
Balance as of March 31, 2021		2.5			4.2			6.7			15.7			3.2			18.9			18.2			7.4			25.6
Additions		0.9			0.8			1.7			2.6			0.2			2.8			3.5			1.0			4.5
Amortization		(1.9	)		(0.7	)		(2.6	)		(2.3	)		(0.3	)		(2.6	)		(4.2	)		(1.0	)		(5.2	)
Balance as of June 30, 2021		1.5			4.3			5.8			16.0			3.1			19.1			17.5			7.4			24.9
Additions		0.7			0.8			1.5			2.0			0.2			2.2			2.7			1.0			3.7
Amortization		(1.4	)		(0.5	)		(1.9	)		(1.7	)		(0.4	)		(2.1	)		(3.1	)		(0.9	)		(4.0	)
Balance as of September 7, 2021	$	0.8		$	4.6		$	5.4		$	16.3		$	2.9		$	19.2		$	17.1		$	7.5		$	24.6
Balance as of June 30, 2022																												$	1.6		$	1.9		$	3.5		$	7.5		$	0.8		$	8.3		$	9.1		$	2.7		$	11.8

~~Fulfillment costs and costs of acquisition were remeasured in the Successor period in accordance with ASC 805.~~

The Company recognizes a liability for cash received ~~upfront~~up-front for IRU contracts. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020, $1.7~~2021, $2.6 million and ~~$1.6~~$2.2 million, respectively, of contract liabilities were included in "Other current liabilities." At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020, $58.1~~2021, $55.8 million and ~~$26.2~~$57.2 million, respectively, of contract liabilities were included in "Other noncurrent liabilities."

The following table presents revenues disaggregated by product and service lines:

	Successor			Predecessor			Predecessor			Successor			Predecessor			Predecessor			Successor			Predecessor			Successor			Predecessor
(dollars in millions)	September 8, 2021 to September 30, 2021			July 1, 2021 to September 7, 2021			Three Months Ended September 30, 2020			September 8, 2021 to September 30, 2021			January 1, 2021 to September 7, 2021			Nine Months Ended September 30, 2020			Three Months Ended June 30, 2022			Three Months Ended June 30, 2021			Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
Data	$	31.6		$	91.7		$	119.8		$	31.6		$	334.6		$	358.8		$	129.5		$	121.6		$	255.6		$	242.9
Video		12.2			35.3			48.1			12.2			131.8			145.1			48.4			47.9			97.0			96.5
Voice		15.8			46.8			65.5			15.8			177.3			197.6			57.7			64.6			117.0			130.5
Other		2.1			6.6			7.6			2.1			20.5			23.0			11.4			6.9			20.9			13.9
Total Entertainment and Communications		61.7			180.4			241.0			61.7			664.2			724.5
Total Network																				247.0			241.0			490.5			483.8
Consulting		21.6			56.5			49.4			21.6			193.6			138.5			83.5			71.6			166.9			137.1
Cloud		6.6			18.7			21.1			6.6			66.4			63.0			25.1			24.3			49.7			47.7
Communications		14.2			40.1			53.9			14.2			149.1			160.3			54.3			55.0			109.2			109.0
Infrastructure Solutions		9.6			23.4			30.8			9.6			83.3			82.7			36.1			29.0			72.0			59.9
Total IT Services and Hardware		52.0			138.7			155.2			52.0			492.4			444.5			199.0			179.9			397.8			353.7
Intersegment revenue		(2.3	)		(4.5	)		(6.7	)		(2.3	)		(17.9	)		(19.5	)		(6.5	)		(6.7	)		(13.0	)		(13.4	)
Total revenue	$	111.4		$	314.6		$	389.5		$	111.4		$	1,138.7		$	1,149.5		$	439.5		$	414.2		$	875.3		$	824.1

	Successor									Successor									Predecessor
	September 8, 2021 to September 30, 2021									Three Months Ended June 30, 2022									Three Months Ended June 30, 2021
(dollars in millions)	Entertainment and Communications		IT Services and Hardware		Intersegment revenue elimination			Total		Network		IT Services and Hardware		Intersegment revenue elimination			Total		Network		IT Services and Hardware		Intersegment revenue elimination			Total
Products and Services transferred at a point in time	$	2.1	$	11.1	$	0		$	13.2	$	6.1	$	38.1	$	0		$	44.2	$	5.8	$	31.6	$	0		$	37.4
Products and Services transferred over time		58.0		40.2		0			98.2		236.1		159.2		0			395.3		230.3		146.5		0			376.8
Intersegment revenue		1.6		0.7		(2.3	)		—		4.8		1.7		(6.5	)		—		4.9		1.8		(6.7	)		—
Total revenue	$	61.7	$	52.0	$	(2.3	)	$	111.4	$	247.0	$	199.0	$	(6.5	)	$	439.5	$	241.0	$	179.9	$	(6.7	)	$	414.2


	Predecessor
	July 1, 2021 to September 7, 2021
(dollars in millions)	Entertainment and Communications		IT Services and Hardware		Intersegment revenue elimination			Total
Products and Services transferred at a point in time	$	4.1	$	25.1	$	0		$	29.2
Products and Services transferred over time		172.9		112.5		0			285.4
Intersegment revenue		3.4		1.1		(4.5	)		—
Total revenue	$	180.4	$	138.7	$	(4.5	)	$	314.6

	Predecessor
	Three Months Ended September 30, 2020
(dollars in millions)	Entertainment and Communications		IT Services and Hardware		Intersegment revenue elimination			Total
Products and Services transferred at a point in time	$	6.6	$	34.1	$	0		$	40.7
Products and Services transferred over time		229.5		119.3		0			348.8
Intersegment revenue		4.9		1.8		(6.7	)		—
Total revenue	$	241.0	$	155.2	$	(6.7	)	$	389.5

	Successor									Successor									Predecessor
	September 8, 2021 to September 30, 2021									Six Months Ended June 30, 2022									Six Months Ended June 30, 2021
(dollars in millions)	Entertainment and Communications		IT Services and Hardware		Intersegment revenue elimination			Total		Network		IT Services and Hardware		Intersegment revenue elimination			Total		Network		IT Services and Hardware		Intersegment revenue elimination			Total
Products and Services transferred at a point in time	$	2.1	$	11.1	$	0		$	13.2	$	13.5	$	76.6	$	0		$	90.1	$	11.7	$	65.0	$	0		$	76.7
Products and Services transferred over time		58.0		40.2		0			98.2		467.3		317.9		0			785.2		462.4		285.0		0			747.4
Intersegment revenue		1.6		0.7		(2.3	)		—		9.7		3.3		(13.0	)		—		9.7		3.7		(13.4	)		—
Total revenue	$	61.7	$	52.0	$	(2.3	)	$	111.4	$	490.5	$	397.8	$	(13.0	)	$	875.3	$	483.8	$	353.7	$	(13.4	)	$	824.1


	Predecessor
	January 1, 2021 to September 7, 2021
(dollars in millions)	Entertainment and Communications		IT Services and Hardware		Intersegment revenue elimination			Total
Products and Services transferred at a point in time	$	15.8	$	90.1	$	0		$	105.9
Products and Services transferred over time		635.3		397.5		0			1,032.8
Intersegment revenue		13.1		4.8		(17.9	)		—
Total revenue	$	664.2	$	492.4	$	(17.9	)	$	1,138.7

	Predecessor
	Nine Months Ended September 30, 2020
(dollars in millions)	Entertainment and Communications		IT Services and Hardware		Intersegment revenue elimination			Total
Products and Services transferred at a point in time	$	19.1	$	93.2	$	0		$	112.3
Products and Services transferred over time		690.6		346.6		0			1,037.2
Intersegment revenue		14.8		4.7		(19.5	)		—
Total revenue	$	724.5	$	444.5	$	(19.5	)	$	1,149.5

In connection with the Merger, a fair value step-up of $162.1 million was recorded to property, plant and equipment (“PP&E”). The estimated fair value of the PP&E was determined using Level 3 inputs within the fair value hierarchy, as described in Note 8. A combination of cost and market approaches were used to estimate the fair values of the PP&E as of the Merger Date. The depreciable lives of property, plant and equipment remained consistent in the Successor period as compared to the Predecessor period. See Note 2 for additional information regarding the Merger.

Depreciation expense on property, plant and equipment, including assets accounted for as finance leases, totaled $21.8 million in the Successor period and $49.4 million and $185.0 million, respectively, in the Predecessor periods included within the three and nine months ended September 30, 2021. Depreciation expense on property, plant and equipment, including assets accounted for as finance leases, totaled $68.3 million and $210.0 million, respectively, for the three and nine months ended September 30, 2020.

NaN asset impairment losses were recognized for the Successor period, the Predecessor periods included within the three and nine months ended September 30, 2021 and the three and nine months ended September 30, 2020.

	Successor
(dollars in millions)	IT Services and Hardware		Entertainment and Communications		Total Company		IT Services and Hardware			Network		Total Company
Goodwill, balance as of September 8, 2021 (remeasured upon Merger)	$	0	$	0	$	0
Goodwill, balance as of December 31, 2021							$	157.4		$	488.9	$	646.3
Activity during the year:
Merger		157.4		488.9		646.3
Goodwill, balance as of September 30, 2021	$	157.4	$	488.9	$	646.3

	Predecessor
(dollars in millions)	IT Services and Hardware		Entertainment and Communications		Total Company
Goodwill, balance as of December 31, 2020	$	149.1	$	12.4	$	161.5
Activity during the year:
Adjustments to prior year Merger								(0.4	)		0.8		0.4
Acquisition of Agile								0			40.9		40.9
Currency translations		0.7		0		0.7		(0.5	)		0		(0.5	)
Goodwill, balance as of September 7, 2021	$	149.8	$	12.4	$	162.2
Goodwill, balance as of June 30, 2022							$	156.5		$	530.6	$	687.1

As mentioned in Note 2, in connection with the Merger, the Company’s assets and liabilities were measured at fair value as of the date of the Merger. The allocation of goodwill to our ~~Entertainment and Communications~~Network reporting unit and IT Services and Hardware reporting unit iscontinues to be preliminary as of the date of this filing. In addition, goodwill in the Network segment increased by $40.9 million due to the acquisition of Agile. See Note 2 for further information related to the Agile acquisition.

NaN impairment losses were recognized in goodwill for the ~~Successor period, the Predecessor periods included within the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~the three and nine months ended September 30, 2020.~~2021.

	Successor							Predecessor
	September 30, 2021							December 31, 2020							June 30, 2022							December 31, 2021
	Gross Carrying		Accumulated			Net		Gross Carrying		Accumulated			Net		Gross Carrying		Accumulated			Net		Gross Carrying		Accumulated			Net
(dollars in millions)	Amount		Amortization			Amount		Amount		Amortization			Amount		Amount		Amortization			Amount		Amount		Amortization			Amount
Intangible assets subject to amortization
Customer relationships	$	850.0	$	(7.1	)	$	842.9	$	141.6	$	(38.9	)	$	102.7	$	863.1	$	(88.0	)	$	775.1	$	850.0	$	(36.2	)	$	813.8
Trade names		108.0		(1.2	)		106.8		41.7		(9.4	)		32.3		110.3		(12.7	)		97.6		108.0		(5.0	)		103.0
Technology		5.0		(0.1	)		4.9		9.9		(3.2	)		6.7		6.0		(0.6	)		5.4		5.0		(0.2	)		4.8
Total		963.0		(8.4	)		954.6		193.2		(51.5	)		141.7		979.4		(101.3	)		878.1		963.0		(41.4	)		921.6
Intangible assets not subject to amortization
FCC licenses and spectrum usage rights		6.6		—			6.6		6.4		—			6.4		6.8		—			6.8		6.7		—			6.7
Total intangible assets	$	969.6	$	(8.4	)	$	961.2	$	199.6	$	(51.5	)	$	148.1	$	986.2	$	(101.3	)	$	884.9	$	969.7	$	(41.4	)	$	928.3

In connection with the Merger, the company recorded ~~$969.6~~$963.0 million of finite-lived intangible assets ~~as shown in the table above,~~and $6.6 million of indefinite-lived intangible assets representing the fair values at the Merger Date. As a result of the acquisition of Agile, the Company recorded $17.5 million of finite-lived intangible assets representing the preliminary fair value at the Agile Acquisition date. See Note 2 for additional information regarding the ~~Merger.~~Merger and acquisition of Agile. ~~They~~The change in gross carrying amounts for finite-lived intangible assets is also due to foreign currency translation on finite-lived intangible assets denominated in foreign currency. The finite-lived intangible assets are amortized over their useful lives based on a number of assumptions including the estimated period of economic benefit and utilization.

~~In the Successor period, amortization~~Amortization expense for finite-lived intangible assets was ~~$8.4 million. In the Predecessor periods included within~~$29.9 million and $60.0 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, amortization expense for finite-lived intangible assets was $2.7 million and $9.9 million,~~2022, respectively. ~~In the three and nine months ended September 30, 2020, amortization~~Amortization expense for finite-lived intangible assets was $3.6 million and ~~$10.8~~$7.2 million for the three and six months ended June 30, 2021, respectively. In addition to amortization expense, the changes in finite-lived intangible assets from December 31, 2021 to June 30, 2022 are due to foreign currency translation.NaN impairment losses were recognized on intangible assets for the ~~Successor period, the Predecessor periods included within the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~the three and nine months ended September 30, 2020.~~2021.

The estimated useful lives for each finite-lived intangible asset class are as follows:

(dollars in millions)
Three months ended December 31, 2021	$	33.0
2022		120.0
Six months ended December 31, 2022			$	61.8
2023		112.9		115.5
2024		103.8		106.2
2025		92.1		93.9
2026				86.3
Thereafter		492.8		414.4
Total	$	954.6	$	878.1

	Successor			Predecessor
(dollars in millions)	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Current portion of long-term debt:
Corporate Credit Agreement - Tranche B Term Loan due 2024	$	0		$	6.0
Credit Agreement - Term Loan due 2028		1.5			0
Credit Agreement - Term B-1 Loans							$	5.0		$	5.0
Credit Agreement - Term B-2 Loans								6.5			6.5
Paniolo Fiber Assets Financing Arrangement		0.5			0			0.5			0.5
Other financing arrangements		0.9			1.9			0.4			0.5
Finance lease liabilities		10.1			13.9			7.5			7.2
Current portion of long-term debt		13.0			21.8			19.9			19.7
Long-term debt, less current portion:
Receivables Facility		75.1			182.0			176.4			153.6
Corporate Credit Agreement - Revolving Credit Facility		0			67.0
Credit Agreement - Revolving Credit Facility due 2026		0			0
Credit Agreement - Tranche B Term Loan due 2024		0			580.5
Credit Agreement - Term Loan due 2028		148.5			0
7 1/4% Senior Notes due 2023 ⁽¹⁾		24.3			22.3
7% Senior Notes due 2024 ⁽¹⁾		637.2			625.0
8% Senior Notes due 2025 ⁽¹⁾		365.5			350.0
Credit Agreement - Revolving Credit Facility								77.0			0
Credit Agreement - Term B-1 Loans								492.5			495.0
Credit Agreement - Term B-2 Loans								640.3			643.5
7 1/4% Senior Notes due 2023 ⁽¹⁾								23.4			24.0
Various Cincinnati Bell Telephone notes ⁽¹⁾		97.8			87.9			96.9			97.5
Paniolo Fiber Assets Financing Arrangement		22.4			0			22.0			22.3
Other financing arrangements		0.5			0.9			0			0.4
Finance lease liabilities		47.1			52.1			39.6			42.3
		1,418.4			1,967.7			1,568.1			1,478.6
Net unamortized premium ⁽²⁾		—			1.1
Unamortized note issuance costs ⁽³⁾		(35.5	)		(18.9	)
Net unamortized discount								(4.6	)		(4.9	)
Unamortized note issuance costs								(41.6	)		(44.8	)
Long-term debt, less current portion		1,382.9			1,949.9			1,521.9			1,428.9
Total debt	$	1,395.9		$	1,971.7		$	1,541.8		$	1,448.6

The estimated fair value of the Company’s borrowings, was determined using Level 2 inputs within the fair value hierarchy, as described in Note 8. Based on closing or estimated market prices of the Company’s debt, a fair-value step-up of $39.6 million was recorded as of the Merger Date.

~~Consent Solicitation for 7.000% Senior Notes due 2024 and 8.000% Senior Notes due 2025~~

On July 2, 2020, the Company announced the successful completion of the consent solicitations with respect to certain proposed amendments to the change of control provisions contained in the (i) indenture, dated as of September 22, 2016 (as supplemented and amended, the “2024 Notes Indenture”) governing its 7.000% Senior Notes due 2024 (the “2024 Notes”) and (ii) indenture, dated as of October 6, 2017 (as supplemented and amended, the “2025 Notes Indenture,” and together with the 2024 Notes Indenture, the “Indentures”) governing its 8.000% Senior Notes due 2025 (the “2025 Notes,” and together with the 2024 Notes, the “Notes”).

On July 2, 2020, the Company, certain of the Company’s subsidiaries, as guarantors, and Regions Bank, as trustee, entered into supplemental indentures to the Indentures to effectuate the amendments, which became operative substantially concurrently with the consummation of the Merger on September 7, 2021, when the Company paid the consent fees that totaled $3.9 million to the holders of the Notes. These fees were capitalized as a reduction to the outstanding debt balances as of the Merger Date.

~~In connection with~~The Company had $77.0 million of outstanding borrowings on the ~~Merger Agreement, at the Effective Time (the date on which the Effective Time occurred, the “Closing Date”) the Company entered into a new~~ Credit ~~Agreement (the "Credit Agreement") and terminated the existing Corporate Credit Agreement. The Credit Agreement provides for (i) a~~ ~~five-year~~ ~~$275 million senior secured~~Agreement’s revolving credit facility, ~~including both a letter~~leaving $323.0 million available for borrowings as of June 30, 2022. The revolving credit ~~subfacility of up to $40 million and a swingline loan subfacility of up to $10 million (the “Revolving Credit Facility due 2026”) and (ii) a~~ ~~seven-year~~ ~~$150 million senior secured term loan~~ facility ~~(the “Term Loan due 2028”). The Revolving Credit Facility due 2026 expires~~matures in September 2026, and the Term ~~Loan due 2028 expires in September 2028. Borrowings under the~~B-1 Loans and Term Loan due 2028 were used in part to finance a portion of the fees and expenses relating to the acquisition of the Company and the establishment of the Credit Agreement, to refinance existing company indebtedness, and for working capital and general corporate purposes. Borrowings under the Revolving Credit Facility due 2026 may be used to provide ongoing working capital as well as for other general corporate purposes of the Company.

~~Borrowings under the~~ ~~Term Loan due 2028~~ ~~will bear interest, initially, at a rate equal to, at the Company’s option, either:~~

From and after the delivery by the Company to the administrative agent for the Credit Agreement of financial statements for the first fiscal quarter ended after the Closing Date, the applicable margin over the base rate or Eurocurrency rate for the ~~Term Loan due 2028~~ will be in the range of (x) 3.75% and 4.75% (for Eurocurrency loans) and (y) 2.75% and 3.75% (for base rate loans) based on a pricing grid as determined by reference to the applicable Secured Net Leverage Ratio (as defined in the Credit Agreement) for the most recent four fiscal quarter period for which financial statements have been delivered.

The Company incurred deferred financing costs of $32.0 million related to the issuance of the Term Loan due 2028 and capitalized as a reduction to the outstanding debt balances as of the Merger Date.

~~Borrowings under the~~ ~~Revolving Credit Facility due 2026~~ ~~will bear interest, initially, at a rate equal to, at the Company’s option, either:~~

From and after the delivery by the Company to the administrative agent for the Credit Agreement of financial statements for the first fiscal quarter ended after the Closing Date, the applicable margin over the base rate or Eurocurrency rate for the ~~Revolving Credit Facility due 2026~~ will be in the range of (x) 3.75% and 4.25% (for Eurocurrency loans) and (y) 2.75% and 3.25% (for base rate loans) based on a pricing grid as determined by reference to the applicable Secured Net Leverage Ratio for the most recent four fiscal quarter period for which financial statements have been delivered.

~~The base rate and Eurodollar rate for the~~ ~~Term Loan due 2028 and the Revolving Credit Facility due 2026 (collectively, the “Facilities”)~~ ~~are subject to a 0.00% floor.~~

~~In addition, the Company will be required to pay a commitment fee on any unused portion of the Revolving Credit Facility due 2026 at a rate of 0.50% per annum, or, if the Secured Net Leverage Ratio~~ ~~for the most recent four fiscal quarter period for which financial statements have been delivered~~ is equal to or less than 3.25 to 1.00, 0.375% per annum. The Company will also pay customary letter of credit fees, including a fronting fee equal to 0.125% per annum of the dollar equivalent of the maximum amount available to be drawn under all outstanding letters of credit, as well as customary issuance and administration fees. At September 30, 2021, there were 0 borrowings under the Revolving Credit Facility due 2026, leaving $275.0 million available.

One of the syndicated lenders in the Credit Agreement is a cooperative bank owned by its customers. Annually, this bank distributes patronage in the form of cash and stock in the cooperative based on the Company’s average outstanding loan balance. The Company will recognize the patronage, generally as declared, in “Other (income) expense, net.” The stock component will be recognized at its stated cost basis.

~~The Company may voluntarily repay and reborrow outstanding~~B-2 loans ~~under the Revolving Credit Facility due 2026 at any time without a premium or a penalty, other than customary “breakage” costs with respect to LIBOR revolving loans.~~

~~In addition, certain of our variable rate debt, including debt~~ under the Credit Agreement and the Receivables Facility, uses LIBOR as one of the benchmarks for establishing the rate of interest and may be hedged with LIBOR-based interest rate derivatives. LIBOR is the subject of recent regulatory guidance and proposals for reform. These reforms and other pressures may cause LIBOR to be replaced with a new benchmark in the future or to perform differently than in the past. The consequences of these developments cannot be entirely predicted, but could include an increase in the cost of our variable rate indebtedness.

~~The Company incurred deferred financing costs of $6.1 million related to the issuance of the Revolving Credit Facility due 2026 and~~ ~~capitalized to “Other noncurrent assets” on the Condensed Consolidated Balance Sheets as of the Merger Date~~.

In November 2021, the Company entered into an Amendment (the “Amendment No. 1”) to its current Credit Agreement to provide for, among other things, (i) a $125 million upsize to the Revolving Credit Facility, increasing the Revolving Credit Facility to $400 million, (ii) a $350 million incremental increase to its existing Term Loan (the “Incremental Term Loan Increase”), increasing the total existing Term Loan facility to $500 million and (iii) the incurrence of a new tranche of $650 million senior secured term loans (the “Term B-2 Loans”). The proceeds of the Incremental Term Loan Increase and the Term B-2 Loans were deposited into an escrow account and will be used by the Company to satisfy, discharge and redeem in full all of the Company’s existing (x) 7.000% Senior Notes due 2024 (the “2024 Notes”) and (y) 8.000% Senior Notes due 2025 (the “2025 Notes”), and to pay fees and expenses in connection with the redemption of the 2024 Notes and the 2025 Notes. The Term B-2 Loans mature in November ~~2028. The Amendment No. 1 also extended the maturity of the Term Loans (including the Incremental Term Loan Increase) to November~~ 2028 ~~and reduced the interest applicable to the Term Loans and the Revolving Credit Facility.~~.

All obligations under the Facilities are unconditionally guaranteed by the direct parent of the Company and each of the existing and future direct and indirect material, wholly-owned domestic subsidiaries of the Company, subject to certain exceptions (including for Cincinnati Bell Funding LLC, Cincinnati Bell Funding Canada Ltd. (and any other similar special purpose receivables financing subsidiary), the Company's joint ventures, subsidiaries prohibited by applicable law or contractual obligation from becoming guarantors, immaterial subsidiaries, unrestricted subsidiaries, foreign subsidiaries, and other customary exceptions as more fully described in the Credit Agreement. Obligations outstanding under the Credit Agreement are secured by perfected first priority pledges of and security interests in (i) the equity interests of the Company held by its direct parent and (ii) substantially all of the assets of the Company and each subsidiary guarantor (subject to customary exceptions as more fully described in the Credit Agreement), including equity interests of each subsidiary guarantor under the Credit Agreement.

~~In connection with the Merger Agreement, at the Effective Time,~~ the outstanding loans under the Corporate Credit Agreement, dated as of October 2, 2017, were paid in full together with accrued interest and unpaid fees. As a result of the Company terminating the Corporate Credit Agreement, certain previously deferred costs and unamortized discount associated with the Corporate Credit Agreement’s Revolving Credit Facility and Tranche B Term Loan due 2024 were written off in the Predecessor period. The loss on extinguishment of debt associated with the transaction was $10.7 million.

In connection with the Paniolo Acquisition in the third quarter of 2021, the Company’s wholly-owned subsidiary, Hawaiian Telcom Inc. (“HTI”), entered into a purchase money financing agreement to finance a portion of the Paniolo Acquisition. The Paniolo fiber assets financing arrangement provides for a ~~five-year~~ $23.0 million loan secured by the Paniolo assets acquired in the transaction. Borrowings under the Paniolo fiber assets financing arrangement bear interest at a rate per annum equal to LIBOR plus 3.0%. The Company guarantees HTI’s borrowings under the Paniolo fiber assets financing arrangement.

As of ~~September~~June 30, ~~2021,~~2022, the Company had ~~$75.1~~$176.4 million in borrowings and ~~$14.8~~$20.7 million of letters of credit outstanding under the accounts receivable securitization facility ("Receivables Facility”), leaving ~~$125.1~~$17.9 million remaining availability on the total borrowing capacity of $215.0 million. In the second quarter of 2021, the Company executed amendments to its Receivables Facility, which replaced, amended and added certain provisions and definitions to increase the credit availability and renew the facility. The amendments extended the facility’s renewal date until June 2023 and the facility’s termination date to June 2024. The maximum borrowing limit for loans and letters of credit under the Receivables Facility ~~was increased from $200.0 million to~~is $215.0 million in the aggregate. The available borrowing capacity is calculated monthly based on the quantity and quality of outstanding accounts receivable, and thus may be lower than the maximum borrowing limit. ~~In addition, the amendments removed the provision that the LIBOR rate for the~~The Receivables Facility ~~may not fall below 0.75%.~~is subject to renewal in June 2023 and has a termination date in June 2024. In the second quarter of 2022, the Company executed amendments to its Receivables Facility, which replaced, amended and added certain provisions and definitions including the replacement of LIBOR with SOFR, a rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York.

Under the Receivables Facility, certain U.S. and Canadian subsidiaries, as originators, sell their respective trade receivables on a continuous basis to Cincinnati Bell Funding LLC (“CBF”) or Cincinnati Bell Funding Canada Ltd. ("CBFC"), wholly-owned consolidated subsidiaries of the Company. Although CBF and CBFC are wholly-owned consolidated subsidiaries of the Company, CBF and CBFC are legally separate from the Company and each of the Company’s other subsidiaries. Upon and after the sale or contribution of the accounts receivable to CBF or CBFC, such accounts receivable are legally assets of CBF and CBFC and, as such, are not available to creditors of other subsidiaries or the parent company. The Receivables Facility includes an option for CBF to sell, rather than borrow against, certain receivables on a non-recourse basis. As of ~~September~~June 30, ~~2021,~~2022, the outstanding balance of certain accounts receivable sold, rather than borrowed against, was ~~$3.9~~$32.3 million.

The Company primarily leases real estate for offices, retail stores and central offices, as well as equipment, cell towers and fleet vehicles. Upon adoption of ASC 842, the Company elected not to recognize leases with terms of one-year or less on the balance sheet.

Supplemental balance sheet information related to the Company's leases is as follows:

		Successor		Predecessor
(dollars in millions)	Balance Sheet Location	September 30, 2021		December 31, 2020		Balance Sheet Location	June 30, 2022		December 31, 2021
Operating lease assets, net of amortization	Operating lease right-of-use assets	$	41.4	$	37.4	Operating lease right-of-use assets	$	68.8	$	44.3
Finance lease assets, net of amortization	Property, plant and equipment, net		15.4		28.0	Property, plant and equipment, net		9.3		10.7
Operating lease liabilities:
Current operating lease liabilities	Other current liabilities		8.8		9.6	Other current liabilities		11.7		9.6
Noncurrent operating lease liabilities	Operating lease liabilities		38.0		33.6	Operating lease liabilities		62.5		40.2
Total operating lease liabilities			46.8		43.2			74.2		49.8
Finance lease liabilities:
Current finance lease liabilities	Current portion of long-term debt		10.1		13.9	Current portion of long-term debt		7.5		7.2
Noncurrent finance lease liabilities	Long-term debt, less current portion		47.1		52.1	Long-term debt, less current portion		39.6		42.3
Total finance lease liabilities		$	57.2	$	66.0		$	47.1	$	49.5

	Successor		Predecessor		Predecessor		Successor		Predecessor
(dollars in millions)	September 8, 2021 to September 30, 2021		January 1, 2021 to September 7, 2021		Nine Months Ended September 30, 2020		Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	0.3	$	2.9	$	3.3	$	1.6	$	2.1
Operating cash flows from operating leases	$	0.8	$	7.2	$	9.5	$	5.8	$	5.5
Financing cash flows from finance leases	$	1.2	$	9.9	$	13.9	$	4.6	$	6.4
Right-of-use assets obtained in exchange for lease obligations:
New operating leases	$	0	$	11.5	$	6.8	$	7.9	$	2.9
New finance leases	$	0	$	3.8	$	4.0	$	2.1	$	2.0

On August 31, 2021, the Company simultaneously exercised its bargain purchase option on real property located in Cincinnati, Ohio, previously classified as a finance lease, and sold it to a third party for $9.1 million. Net proceeds from the transactions were approximately $6.6 million after transactional costs. Concurrently with the sale, the Company entered into an operating lease arrangement with the third party purchaser of the property for a portion of the building to maintain use of the location as an office space. The transaction qualified for sale-leaseback accounting in accordance with ASC 842, and the Company recognized a gain on the sale of $2.8 million in August, 2021. The Company recorded an operating lease right-of-use asset and liability of $7.7 million related to the leaseback agreement on September 1, 2021.

The Company defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements, the Company uses a three-level hierarchy that prioritizes the use of observable inputs. The three levels are:

Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs); and

Level 3 — Unobservable inputs that reflect management's determination of assumptions that market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including our own data.

The determination of where an asset or liability falls in the hierarchy requires significant judgment.

The Company uses non-designated cash flow hedges including interest rate swap agreements toand interest rate cap agreements to minimize its exposure to interest rate fluctuations on variable rate debt borrowings. Interest rate swaps involve the exchange of fixed and variable rate interest payments and do not represent an actual exchange of the underlying notional amounts between parties. Interest rate caps provide that the counterparty will pay the purchaser at the end of each contractual period in which the index interest rate exceeds the contractually agreed upon cap rate.

In the second quarter of 2022, the Company entered into three forward starting non-amortizing interest rate swaps to convert variable rate debt to fixed rate debt. The interest rate swaps have notional amounts of $175.0 million, $115.0 million and $85.0 million resulting in interest payments based on an average fixed rate per swap of 2.9185%, 2.8520% and 2.8605%, respectively, plus the applicable margin per the requirements in the Credit Agreement. The interest rate swaps expire in May 2026.

In the second quarter of 2022, the Company entered into two interest rate cap agreements to limit exposure to interest rate risk on variable rate debt. The interest rate caps each have a cap rate of 3.0% with notional amounts of $200.0 million and $175.0 million and deferred premiums of $6.7 million and $5.3 million, respectively. The deferred premiums will be paid on a monthly basis over the term of the respective interest rate cap. The interest rate caps expire in May 2026.

The fair value of the Company's interest rate swaps and interest rate caps are impacted by the credit risk of both the Company and its counterparties. The Company has agreements with its derivative financial instrument counterparties that contain provisions providing that if the Company defaults on the indebtedness associated with its derivative financial instruments, then the Company could also be declared in default on its derivative financial instruments obligations. In addition, the Company minimizes nonperformance risk on its derivative instruments by evaluating the creditworthiness of its counterparties, which are limited to major banks and financial institutions.

The Company does not apply hedge accounting to the interest rate swaps and interest rate caps and records all mark-to-market adjustments directly to “Other expense (income), net” in the Condensed Consolidated Statements of Operations. The fair values of the interest rate swaps and interest rate caps are categorized as Level 2 in the fair value hierarchy as they are based on well-recognized financial principles and available market data.

As of June 30, 2022, the fair values of the interest rate swaps and interest rate caps are recorded in the Condensed Consolidated Balance Sheets as follows:

The following table summarizes the location of losses in the Condensed Consolidated Statements of Operations that were recognized during the three and six months ended June 30, 2022, in addition to the derivative contract type:

In the second quarter of 2018, the Company entered into one forward starting non-amortizing interest rate swap with a notional amount of $300.0 million to convert variable rate debt to fixed rate debt. The interest rate swap became effective in June 2018 with an expiration date in June 2023. The interest rate swap resulted in interest payments based on an average fixed rate of 2.938% plus the applicable margin per the requirements in the Company’s former Corporate Credit Agreement.

In the first quarter of 2019, the Company entered into three forward starting non-amortizing interest rate swaps, with a notional amount of $89.0 million each, to convert variable rate debt to fixed rate debt. The interest rate swaps became effective in March 2019 with expiration dates in March 2024. The interest rate swaps resulted in interest payments based on an average fixed rate per swap of 2.275%, 2.244% and 2.328% plus the applicable margin per the requirements in the Company’s former Corporate Credit Agreement.

Upon inception, the interest rate swaps were designated as cash flow hedges under ASC 815, with gains and losses, net of tax, measured on an ongoing basis recorded in accumulated other comprehensive loss. The fair value of the interest rate swaps was categorized as Level 2 in the fair value hierarchy as they were based on well-recognized financial principles and available market data.

The Company terminated four interest rate swaps in the Predecessor period of the third quarter of 2021 in connection with the repayment in full of the Term Loan B under the Company’s former Corporate Credit Agreement that occurred as part of the Merger Agreement. ~~As a result~~

The amount of ~~the repayment, the hedged interest payments were no longer considered probable of occurring and a loss on termination of $20.1 million that had been previously recorded to~~gains recognized in Accumulated Other Comprehensive Income ("AOCI") was recorded in the Predecessor period in “Other (income) expense, net” on the Condensed Consolidated Statements of Operations. Cash payments resulting from the termination of the interest rate swaps are classified as operating activities in the Company’s Condensed Consolidated Statement of Cash Flows.

~~As of December 31, 2020, the fair value of the interest rate swap liability was $25.4 million and is recorded in the Condensed Consolidated Balance Sheets as follows:~~

~~The amount of gains (losses) recognized in AOCI (effective portion)~~ net of reclassifications into earnings is as follows:

	Successor		Predecessor		Predecessor		Successor		Predecessor		Predecessor			Predecessor
(dollars in millions)	September 8, 2021 to September 30, 2021		July 1, 2021 to September 7, 2021		Three Months Ended September 30, 2020		September 8, 2021 to September 30, 2021		January 1, 2021 to September 7, 2021		Nine Months Ended September 30, 2020			Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
Interest Rate Swap	$	0	$	0	$	1.7	$	0	$	5.3	$	(8.6	)	$	2.2	$	5.3

The carrying values of the Company's financial instruments approximate the estimated fair values as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, except for the Company's long-term debt and other financing arrangements. The carrying and fair values of these items are as follows:

	Successor				Predecessor
	September 30, 2021				December 31, 2020				June 30, 2022				December 31, 2021
(dollars in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt, including current portion*	$	1,372.8	$	1,370.5	$	1,921.8	$	1,973.4	$	1,535.9	$	1,482.5	$	1,443.0	$	1,443.0
Other financing arrangements		53.8		53.8		42.1		58.6		51.6		45.3		53.1		51.7

In connection with the Merger, the ~~Successor period~~ carrying values of the Company’s long-term debt and other financing arrangements include fair value adjustments as of the Merger Date. The fair value of our long-term debt was based on closing or estimated market prices of the Company’s debt at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, which is considered Level 2 of the fair value hierarchy. The fair value of the other financing arrangements was calculated using a discounted cash flow model that incorporates current borrowing rates for obligations of similar duration, which is considered Level 3 of the fair value hierarchy. As of ~~September~~June 30, ~~2021,~~2022, the current borrowing rate was estimated by applying the Company's credit spread to the risk-free rate for a similar duration borrowing.

As of ~~September~~June 30, ~~2021,~~2022, the Company sponsors 3 noncontributory defined benefit plans and a postretirement health and life insurance plan in Cincinnati (collectively the "Cincinnati Plans"), and one noncontributory defined benefit plan for union employees, one cash balance pension plan for nonunion employees, and two postretirement health and life insurance plans for Hawaiian Telcom employees (collectively the "Hawaii Plans").

In connection with the Merger, the Company remeasured the pension and postretirement projected benefit obligations as of the Merger Date. As a result, the Company's pension and postretirement benefit obligations decreased $22.3 million and $4.3 million, respectively. The decrease in the benefit obligations is primarily driven by changes in the discount rate as well as gains to record pension assets to fair value. Additionally, actuarial gains (losses) and prior service costs (benefits) recorded in "Accumulated other comprehensive loss" of $101.6 million were remeasured as of the Merger Date.

In the ~~periods July 1, 2021 to September 7, 2021 and January 1, 2021 to September 7, 2021,~~six months ended June 30, 2022, the Hawaii defined benefit plan for union employees made lump sum payments of ~~$0.8~~$5.4 million ~~and $7.4 million, respectively,~~ resulting in a reduction of the benefit obligation of ~~$7.4~~$5.4 million. The lump sum payments to the plan participants exceeded the sum of the service cost and the interest cost component of the net pension cost resulting in a nominal pension settlement cost for the ~~period January 1, 2021 to September 7, 2021.~~three months ended June 30, 2022. In the ~~three and nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Hawaii defined benefit ~~plans~~plan for union employees made lump sum payments of ~~$3.4~~$6.7 million ~~and $10.8 million, respectively,~~ resulting in a reduction of the benefit obligation of ~~$10.8~~$6.7 million. The ~~Company recorded a pension settlement cost of $1.1 million in the nine months ended September 30, 2020 as a result of the~~ lump sum payments to the plan participants ~~exceeding~~exceeded the sum of the service cost and the interest cost component of the net pension ~~cost.~~cost resulting in a nominal pension settlement cost for the three months ended June 30, 2021.

In accordance with ASC 715, only the service cost component of net benefit cost is eligible for capitalization, which was immaterial for ~~all periods presented.~~the six months ended June 30, 2022 and 2021.

Unrecognized actuarial net gains and losses for the Cincinnati Plans and the Hawaii Plans are primarily generated by differences between assumed and actual rates of return on invested assets, changes in discount rates and healthcare costs. Because gains and losses reflect refinements in estimates, as well as real changes in economic values, and because some gains in one period may be offset by losses in another or vice versa, we are not required to recognize these gains and losses in the periods that they occur. Instead, if the gains and losses exceed a 10% corridor defined in the accounting literature, the excess is amortized over a defined term. In conjunction with remeasuring the pension and postretirement benefit obligations, the amortization period for the Cincinnati pension plans in the Successor period was updated to amortize the excess over the average remaining life expectancy of plan participants from the average future working lifetime which was utilized in the Predecessor period. This change is not expected to have an impact in the 2021 Successor period as gains or losses will not be generated until December 31, the next measurement date. Additionally in the Successor period, the market-related value of assets is equal to the fair market value. Previously, the market-related value of assets was determined using a five-year moving market average method. Except for these changes described related to the Cincinnati pension plans, no other changes to methodology were made in the Successor period as a result of the Merger.

	Pension Benefits									Postretirement and Other Benefits								Pension Benefits						Postretirement and Other Benefits
	Successor			Predecessor			Predecessor			Successor		Predecessor			Predecessor			Successor			Predecessor			Successor		Predecessor
(dollars in millions)	September 8, 2021 to September 30, 2021			July 1, 2021 to September 7, 2021			Three Months Ended September 30, 2020			September 8, 2021 to September 30, 2021		July 1, 2021 to September 7, 2021			Three Months Ended September 30, 2020			Three Months Ended June 30, 2022			Three Months Ended June 30, 2021			Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Service cost	$	0		$	0		$	0		$	0	$	0.1		$	0.1		$	0		$	0		$	0.1	$	0.1
Other components of pension and postretirement benefit plans expense:
Interest cost on projected benefit obligation		0.9			2.7			4.6			0.1		0.5			0.9			3.8			3.7			0.7		0.7
Expected return on plan assets		(2.1	)		(5.2	)		(7.1	)		0		0			0			(7.1	)		(7.2	)		0		0
Amortization of:
Prior service benefit		0			0			0			0		(0.4	)		(0.6	)		0			0			0		(0.7	)
Actuarial loss		0			4.5			4.5			0		0			0.3			0			5.2			0		0
Pension / postretirement costs	$	(1.2	)	$	2.0		$	2.0		$	0.1	$	0.2		$	0.7
Pension / postretirement (benefit) cost																		$	(3.3	)	$	1.7		$	0.8	$	0.1

Pension Benefits

Postretirement and
Other Benefits

Successor

Predecessor

Predecessor

Successor

Predecessor

Predecessor

(dollars in millions)

September 8, 2021 to September 30, 2021

January 1, 2021 to September 7, 2021

Nine Months Ended September 30, 2020

September 8, 2021 to September 30, 2021

January 1, 2021 to September 7, 2021

Nine Months Ended September 30, 2020

Service cost

$
0

$
0

$
0

$
0

$
0.3

$
0.3

Other components of pension and postretirement benefit plans expense:

Interest cost on projected benefit obligation

0.9

10.2

14.2

0.1

1.8

2.8

Expected return on plan assets

(2.1
)

(19.9
)

(21.6
)

0

0

0

Amortization of:

Prior service benefit

0

0

0

0

(1.7
)

(1.9
)
Actuarial loss

0

16.0

13.5

0

0

0.9

Pension settlement charges

0

0

1.1

0

0

0

Pension / postretirement costs

$
(1.2
)

$
6.3

$
7.2

$
0.1

$
0.4

$
2.1

Amortizations of prior service benefit and actuarial loss in the ~~Predecessor periods~~three and six months ended June 30, 2021 represent reclassifications from accumulated other comprehensive income.

~~In conjunction with remeasuring~~For the pension and postretirement benefit obligations, the weighted-average assumptions used in accounting for and measuring the projected benefit obligations as of the date of the Merger were reviewed and determined to still be appropriate with the exception of the discount rates. The following are the weighted-average discount rate assumptions used in accounting for and measuring the projected benefit obligations:

~~Contributions to the qualified and non-qualified pension plans in the Predecessor period were $0.9 million and $1.8 million, respectively. In the Successor period,~~six months ended June 30, 2022, there were 0 contributions to the qualified pension plans, and contributions to the non-qualified pension plans were ~~$0.2~~$1.0 million. For the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, contributions to the qualified and non-qualified pension plans were ~~$2.8~~$0.8 million and ~~$2.0~~$1.2 million, respectively. Based on current assumptions, ~~no additional~~0 contributions are expected to be made to the qualified pension plans in ~~2021.~~2022. Contributions to the non-qualified pension plans in ~~2021~~2022 are expected to be approximately $3 million.

For the ~~Predecessor~~six months ended June 30, 2022 and ~~Successor periods in~~ 2021, contributions to our postretirement plans were ~~$4.3~~$3.2 million and ~~$0.5~~$3.1 million, respectively. ~~For the nine months ended September 30, 2020, contributions to our postretirement plans were $4.3 million.~~ Management expects to make total cash payments of approximately $8$7 million related to its postretirement health plans in ~~2021.~~2022.

As of September 30, 2021, the Company had a deferred tax asset of $6.9 million and a deferred tax liability of $147.7 million compared to a deferred tax asset of $82.5 million and a deferred tax liability of $10.9 million as of December 31, 2020. The increase to net deferred tax liabilities is a result of preliminary adjustments on the Merger Date due to the change in fair value of certain assets and liabilities. The most significant adjustments are driven by the increase in value of the Company’s intangibles (other than goodwill) and increase in value related to fixed assets. These were offset, in part, by deferred tax assets related to the initial fair value adjustments which included note issuance and other debt-related costs, costs of acquisition and fulfillment costs that were deferred in accordance with ASC 606, and other deferred tax assets.

As of September 30, 2021, the Company had U.S. federal net operating loss carryforwards of $848.5 million with a deferred tax asset value of $178.2 million. U.S. tax laws place limitations on the annual utilization of tax loss carryforwards of acquired entities, as well as on losses generated in tax years prior to 2018. Approximately $55.8 million of federal tax loss carryforwards will expire in 2022 if unused. Tax law limitations should not materially impact utilization of the Company’s tax loss carryforwards.

Pursuant to the Merger Agreement, Parent acquired all of the equity interests in the Company. In connection with the consummation of the Merger Agreement, each of our issued and outstanding Common Shares was converted to $15.50 in cash per Common Share and paid to the shareholders.

~~On September 22, 2021,~~Additionally, the Company redeemed each of our issued and outstanding Depositary Shares simultaneously with the redemption of the 6 ¾% Preferred Shares at a redemption price of $50 per Depositary Share (equivalent to $1,000 per 6 ¾% Preferred Share).

As of September 30, 2021, Parent is the sole shareholder of the Company’s 500,000 Common Shares, each with $0.01 par value. No other shares remain issued and outstanding subsequent to the Closing Date.

~~Subsequent to September 30,~~Effective October 18, 2021, Parent amended and restated the ~~articles~~Articles of ~~incorporation~~Incorporation of Cincinnati Bell ~~effective October 18, 2021~~ to reduce the number of authorized shares from 96,000,000 Common Shares to 100 Common Shares, each with $0.01 par value. As of both June 30, 2022 and December 31, 2021, Parent is the sole shareholder of the Company’s 100 Common Shares.

The changes in accumulated other comprehensive ~~loss~~income (loss) by component were as follows:

(dollars in millions)
Successor	Unrecognized Net Periodic Pension and Postretirement Benefit Cost				Unrealized Loss on Cash Flow Hedges, Net				Foreign Currency Translation (Loss) Gain			Total			Unrecognized Net Periodic Pension and Postretirement Benefit (Cost)				Unrealized Loss on Cash Flow Hedges, Net				Foreign Currency Translation Gain (Loss)			Total
Balance as of September 8, 2021 (remeasured upon Merger)	$	0			$	0			$	0		$	0
Balance as of March 31, 2022															$	2.6			$	0			$	0.4		$	3.0
Remeasurement of benefit obligations																(1.3	)			0				0			(1.3	)
Foreign currency loss		0				0				(1.2	)		(1.2	)		0				0				(3.1	)		(3.1	)
Balance as of September 30, 2021	$	0			$	0			$	(1.2	)	$	(1.2	)
Balance as of June 30, 2022															$	1.3			$	0			$	(2.7	)	$	(1.4	)


Predecessor
Balance as of June 30, 2021	$	(124.9	)		$	(15.7	)		$	1.4		$	(139.2	)
Reclassifications, net		2.8		(a)		16.2		(b)		0			19.0
Unrealized loss on cash flow hedges arising during the period, net		0				(0.6	)	(c)		0			(0.6	)
Foreign currency loss		0				0				(1.4	)		(1.4	)
Balance as of September 7, 2021	$	(122.1	)		$	(0.1	)		$	0		$	(122.2	)


Balance as of June 30, 2020	$	(159.4	)		$	(22.7	)		$	(7.5	)	$	(189.6	)
Balance as of March 31, 2021															$	(134.4	)		$	(17.3	)		$	(0.2	)	$	(151.9	)
Remeasurement of benefit obligations		3.2				0				0			3.2			6.0				0				0			6.0
Reclassifications, net		3.2		(a)		1.8		(b)		0			5.0			3.5		(a)		1.7		(b)		0			5.2
Unrealized loss on cash flow hedges arising during the period, net		0				(0.5	)	(c)		0			(0.5	)		0				(0.1	)	(c)		0			(0.1	)
Foreign currency gain		0				0				2.0			2.0			0				0				1.6			1.6
Balance as of September 30, 2020	$	(153.0	)		$	(21.4	)		$	(5.5	)	$	(179.9	)
Balance as of June 30, 2021															$	(124.9	)		$	(15.7	)		$	1.4		$	(139.2	)

(dollars in millions)

Successor

Unrecognized
Net Periodic
Pension and
Postretirement
Benefit Cost

Unrealized Loss on Cash Flow
Hedges, Net

Foreign
Currency
Translation (Loss) Gain

Total

Balance as of September 8, 2021 (remeasured upon Merger)

$
0

$
0

$
0

$
0

Foreign currency loss

0

0

(1.2
)

(1.2
)
Balance as of September 30, 2021

$
0

$
0

$
(1.2
)

$
(1.2
)

Predecessor

Balance as of December 31, 2020

$
(138.8
)

$
(19.7
)

$
(1.2
)

$
(159.7
)
Remeasurement of benefit obligations

6.0

0

0

6.0

Reclassifications, net

10.7

(a)

19.7

(b)

0

30.4

Unrealized loss on cash flow hedges arising during the period, net

0

(0.1
)
(c)

0

(0.1
)
Foreign currency gain

0

0

1.2

1.2

Balance as of September 7, 2021

$
(122.1
)

$
(0.1
)

$
0

$
(122.2
)

Balance as of December 31, 2019

$
(152.0
)

$
(14.7
)

$
(3.4
)

$
(170.1
)
Remeasurement of benefit obligations

(11.5
)

0

0

(11.5
)
Reclassifications, net

10.5

(a)

4.6

(b)

0

15.1

Unrealized loss on cash flow hedges arising during the period, net

0

(11.3
)
(c)

0

(11.3
)
Foreign currency loss

0

0

(2.1
)

(2.1
)
Balance as of September 30, 2020

$
(153.0
)

$
(21.4
)

$
(5.5
)

$
(179.9
)

(dollars in millions)
Successor	Unrecognized Net Periodic Pension and Postretirement Benefit (Cost)				Unrealized Loss on Cash Flow Hedges, Net				Foreign Currency Translation Gain (Loss)			Total
Balance as of December 31, 2021	$	2.6			$	0			$	(1.4	)	$	1.2
Remeasurement of benefit obligations		(1.3	)			0				0			(1.3	)
Foreign currency loss		0				0				(1.3	)		(1.3	)
Balance as of June 30, 2022	$	1.3			$	0			$	(2.7	)	$	(1.4	)


Predecessor
Balance as of December 31, 2020	$	(138.8	)		$	(19.7	)		$	(1.2	)	$	(159.7	)
Remeasurement of benefit obligations		6.0				0				0			6.0
Reclassifications, net		7.9		(a)		3.5		(b)		0			11.4
Unrealized gain on cash flow hedges arising during the period, net		0				0.5		(c)		0			0.5
Foreign currency gain		0				0				2.6			2.6
Balance as of June 30, 2021	$	(124.9	)		$	(15.7	)		$	1.4		$	(139.2	)

The Company’s segments are strategic business units that offer distinct products and services and are aligned with the Company's internal management structure and reporting. The Company operates 2 business segments identified as ~~Entertainment and Communications~~Network and IT Services and Hardware.

The ~~Entertainment and Communications~~Network segment provides products and services that can be categorized as Data, Video, Voice or Other. Data products include high-speed internet access, digital subscriber lines, ethernet, SONET, dedicated internet access, wavelength, digital signal and IRU. Video services provide our customers access to over 400 entertainment channels, over 150 high-definition channels, parental controls, HD DVR, Video On-Demand and access to a live TV streaming application. Voice represents traditional voice lines as well as fiber voice lines, consumer long distance, switched access and digital trunking. Other services consist of revenue generated from wiring projects for enterprise customers, advertising, directory assistance, maintenance, information services and ~~information services.~~subsidized fiber build project revenue related to extending the Company’s fiber network in the Greater Cincinnati territory subsidized through our UniCity program. In May 2022, the Company acquired Agile and includes Agile’s financial results in the Network segment.

The IT Services and Hardware segment provides end-to-end solutions from consulting to implementation to ongoing optimization. These solutions include Cloud, Communications and Consulting services along with the sale, installation and maintenance of major branded Telecom and IT hardware reported as Infrastructure Solutions.

Certain corporate administrative expenses have been allocated to the segments based upon the nature of the expense and the relative size of the segment. Intercompany transactions between segments have been eliminated.

Selected financial data for the Company’s business segment information is as follows:

	Successor			Predecessor			Predecessor			Successor			Predecessor			Predecessor			Successor			Predecessor			Successor			Predecessor
(dollars in millions)	September 8, 2021 to September 30, 2021			July 1, 2021 to September 7, 2021			Three Months Ended September 30, 2020			September 8, 2021 to September 30, 2021			January 1, 2021 to September 7, 2021			Nine Months Ended September 30, 2020			Three Months Ended June 30, 2022			Three Months Ended June 30, 2021			Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
Revenue
Entertainment and Communications	$	61.7		$	180.4		$	241.0		$	61.7		$	664.2		$	724.5
Network																			$	247.0		$	241.0		$	490.5		$	483.8
IT Services and Hardware		52.0			138.7			155.2			52.0			492.4			444.5			199.0			179.9			397.8			353.7
Intersegment		(2.3	)		(4.5	)		(6.7	)		(2.3	)		(17.9	)		(19.5	)		(6.5	)		(6.7	)		(13.0	)		(13.4	)
Total revenue	$	111.4		$	314.6		$	389.5		$	111.4		$	1,138.7		$	1,149.5		$	439.5		$	414.2		$	875.3		$	824.1
Intersegment revenue
Entertainment and Communications	$	1.6		$	3.4		$	4.9		$	1.6		$	13.1		$	14.8
Network																			$	4.8		$	4.9		$	9.7		$	9.7
IT Services and Hardware		0.7			1.1			1.8			0.7			4.8			4.7			1.7			1.8			3.3			3.7
Total intersegment revenue	$	2.3		$	4.5		$	6.7		$	2.3		$	17.9		$	19.5		$	6.5		$	6.7		$	13.0		$	13.4
Operating (loss) income
Entertainment and Communications	$	(2.3	)	$	18.9		$	27.2		$	(2.3	)	$	78.3		$	69.8
Network																			$	(18.9	)	$	28.1		$	(22.0	)	$	59.4
IT Services and Hardware		1.7			9.0			4.6			1.7			25.2			11.5			(5.1	)		7.6			(10.0	)		16.2
Corporate		(0.8	)		(63.2	)		(7.1	)		(0.8	)		(75.8	)		(49.1	)		(8.4	)		(5.3	)		(15.4	)		(12.6	)
Total operating (loss) income	$	(1.4	)	$	(35.3	)	$	24.7		$	(1.4	)	$	27.7		$	32.2		$	(32.4	)	$	30.4		$	(47.4	)	$	63.0
Expenditures for long-lived assets*
Entertainment and Communications	$	33.4		$	92.0		$	57.6		$	33.4		$	199.8		$	144.2
Network																			$	171.1		$	52.8		$	252.6		$	107.8
IT Services and Hardware		3.3			4.0			3.9			3.3			15.9			16.7			7.1			6.2			13.4			11.9
Corporate		1,620.7			0			0			1,620.7			0			0
Total expenditures for long-lived assets	$	1,657.4		$	96.0		$	61.5		$	1,657.4		$	215.7		$	160.9		$	178.2		$	59.0		$	266.0		$	119.7
Depreciation and amortization
Entertainment and Communications	$	24.3		$	44.5		$	61.6		$	24.3		$	166.9		$	190.0
Network																			$	103.4		$	61.6		$	196.8		$	122.4
IT Services and Hardware		5.8			7.6			10.2			5.8			27.9			30.7			26.6			10.2			52.6			20.3
Corporate		0.1			0			0.1			0.1			0.1			0.1			0.1			0			0.2			0.1
Total depreciation and amortization	$	30.2		$	52.1		$	71.9		$	30.2		$	194.9		$	220.8		$	130.1		$	71.8		$	249.6		$	142.8

* Includes cost of acquisitions in the Successor and Predecessor periods of 2021 and deposit for the purchase of wireless licenses in the three and nine months ended September 30, 2020

On May 2, 2022, the Company acquired Agile Networks LLC, based in Canton, Ohio, for approximately $65 million. Agile Networks LLC provides internet, co-location and data transport services primarily to customers in Ohio and Pennsylvania. We are currently in the process of assessing the accounting for this transaction and will disclose our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed in the second quarter ended June 30, 2022.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain forward-looking statements regarding future events and results that are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “may,” “will,” “proposes,” “potential,” “could,” “should,” “outlook” or variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of future financial performance, anticipated growth and trends in businesses, and other characterizations of future events or circumstances ~~including but not limited to, the possible impacts of the current adverse economic conditions associated with the COVID-19 global health pandemic,~~ are forward-looking statements. Readers are cautioned these forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause actual results to differ materially and adversely from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q and, in particular, the risks discussed under the caption “Risk Factors” in Part II, Item 1A, and those discussed in other documents the Company filed with the Securities and Exchange Commission (“SEC”). Actual results may differ materially and adversely from those expressed in any forward-looking statements. The Company undertakes no obligation to revise or update any forward-looking statements for any reason.

This Management’s Discussion and Analysis section provides an overview of Cincinnati Bell Inc.'s’s financial condition as of ~~September~~June 30, ~~2021~~2022 and the results of operations for the ~~periods January 1, 2021 through September 7, 2021, July 1, 2021 through September 7, 2021, September 8, 2021 through September 30, 2021 and the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2022 and 2021. References in this Quarterly Report to “Successor” refer to the Company on or after September 8, 2021 and references to “Predecessor” refer to the results prior to September 8, 2021. This discussion should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and accompanying notes as well as the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Results for interim periods may not be indicative of results for the full year or any other interim period.

~~Our results of operations~~In March 2022, the Company announced that we will begin doing business as ~~reported~~“altafiber” in Ohio, Kentucky and Indiana as we continue to expand our geographic reach and invest in our ~~Consolidated Financial Statements for these periods are prepared in accordance with GAAP. Although GAAP requires~~fiber network that ~~we report on~~delivers broadband connectivity. The branding change will not impact our results for the period from January 1, 2021 through September 7, 2021 and the period from September 8, 2021 through September 30, 2021 separately, management views the Company’s operating results for the year ended December 31, 2021 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison of our results to prior periods.

To enhance the analysis of our operating results for the periods presented, we have included a discussion of selected financial and operating data of the Predecessor and Successor on a combined basis for the three and nine months ended September 30, 2021. This presentation consists of the mathematical addition of selected financial and operating data of the Predecessor for the period from January 1, 2021 to September 7, 2021 plus the comparable financial and operating data of the Successor for the period from September 8, 2021 to September 30, 2021. There are no other adjustments made in the combined presentation. The mathematical combination of selected financial and operating dataHawaiian Telcom business or IT Services business, which is included below under the heading "Three Months Ended September 30, 2021" and “Nine Months Ended September 30, 2021” and this data is a non-GAAP presentation. Management believes that this selected financial and operating data provides investors with useful information upon which to assess our operating performance because the results of operations for a three and nine-month period correspond to how we have reported our results in the past and how we will report our results in the future.branded as CBTS.

On March 13, 2020, ~~Cincinnati Bell~~the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Red Fiber Parent LLC, a Delaware limited liability company (“Parent”), and RF Merger Sub Inc., an Ohio corporation and directly wholly owned subsidiary of Parent (“Merger Sub”). On September 7, 2021 (the “Closing Date” or “Merger Date”), upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the ~~OGCL,~~Ohio General Corporation Law (the “OGCL”), Merger Sub merged with and into the ~~Merger was completed.~~Company, with the Company continuing as the surviving corporation (the “Merger”). At the effective time of the Merger (the “Effective Time”), the separate corporate existence of Merger Sub ceased, and the Company survived the Merger as a wholly owned subsidiary of Parent.

Upon completion of the Merger, Parent was deemed the accounting acquirer and Cincinnati Bell Inc. the accounting acquiree. Under the acquisition method of accounting, the assets and liabilities associated with Cincinnati Bell Inc. were recorded at their ~~preliminary~~ fair values measured as of the acquisition date. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill. The capital contribution as a result of the Merger included cash from Parent in the amount of $1,716.1 million. These proceeds were used to pay on the date of the Merger (1) $807.3 million of consideration payable to Common Shareholders, including restricted stock awards that vested upon Closing Date to certain employees, (2) $155.2 million of consideration payable to Preferred Shareholders, (3) $658.2 million of existing debt and accrued interest under the Corporate Credit Agreement and (4) transaction costs of $44.0 million primarily related to legal costs and acquisition-related advisory fees associated with the Merger. The Company also incurred note issuance costs of $38.1 million related to the Credit Agreement entered into in connection with the Merger. The Note issuance costs were capitalized as a reduction to the outstanding debt balances or to “Other noncurrent assets” for costs associated with the Revolving Credit Facility due 2026 in the Successor period. In addition, certain stock-based compensation awards were accelerated upon the Closing Date, which resulted in expense of approximately $9.3 million recorded to SG&A in the Predecessor period.

~~Prior to entering into the Merger Agreement, the Company previously entered~~ the Brookfield Merger Agreement with affiliates of Brookfield, the infrastructure investment division of Brookfield Asset Management, which was subsequently amended. On March 13, 2020, the Company terminated the Brookfield Merger Agreement and entered into the Merger Agreement. In connection with the termination of the Brookfield Merger Agreement, the Company paid to an affiliate of Brookfield a termination fee of $24.8 million as required by the terms of the Brookfield Merger Agreement. The termination fee is recorded in “Transaction and integration costs” on the Condensed Consolidated Statements of Operations in the nine months ended September 30, 2020.

Segment results described in the Executive Summary ~~and Consolidated Results of Operations sections~~ are net of intercompany eliminations.

Cincinnati Bell Inc. and its consolidated subsidiaries ("~~Cincinnati~~altafiber," "Cincinnati Bell," "we," "our," "us" or the "Company") provide integrated communications and IT solutions that keep consumer and enterprise customers connected with each other and with the world. Through ~~its~~our Network segment, previously referred to as Entertainment and Communications, ~~segment,~~ the Company provides Data, Video, and Voice solutions to consumer and enterprise customers over an expanding fiber network and a legacy copper network. In addition, enterprise customers across the United States, Canada and Europe rely on the IT Services and Hardware segment for the sale and service of efficient, end-to-end communications and IT systems and solutions.

Consolidated revenue ~~for the combined Predecessor~~totaling $439.5 million and ~~Successor periods included within~~$875.3 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 increased ~~$36.5~~$25.3 million and ~~$100.6~~$51.2 million, respectively, as compared to the same periods in the prior year due to strategic revenue growth in both segments offsetting declines in Legacy revenue.

For ~~the combined Predecessor and Successor periods included within~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, Consumer/SMB Fiber~~2022, Fioptics revenue increased ~~$7.4~~$13.4 million and ~~$19.4~~$23.4 million, respectively, as compared to the same periods in ~~2020~~2021 as the Company continues to focus on high-speed internet activations while Legacy revenue decreased ~~$6.4~~$10.6 million and ~~$18.2~~$21.5 million, respectively, as compared to the comparable periods in the prior year. IT Services and Hardware ~~experienced~~ revenue growth ~~in all practices in both comparable periods, with the~~was impacted most ~~significant growth~~significantly in the Consulting practice in which revenue increased ~~58%~~17% and ~~55%~~22% for ~~the combined Predecessor and Successor periods included within~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, as compared to the same periods in the prior year. In addition, for the three and six months ended June 30, 2022, Infrastructure Solutions revenue increased $7.1 million and $12.1 million, respectively, compared to the same periods in 2021.

Operating loss for the ~~combined Predecessor~~three and ~~Successor periods included within the three~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$36.7~~$32.4 million and $47.4 million, respectively, compared to operating income of ~~$24.7~~$30.4 million and $63.0 million in the three and six months ended ~~September~~June 30, ~~2020.~~2021, respectively. Revenue growth in both segments was more than offset ~~by transaction and integration charges,~~due most significantly to higher depreciation and amortization expenses related to the increased value of property, plant and equipment and intangibles as a result of fair value adjustments recorded as of the Merger Date in addition to increases in cost of services and ~~increased~~products and SG&A expenses to support revenue growth as well as increased transaction and integration costs.

Interest expense decreased $15.1 million and $31.0 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 primarily due to the ~~accelerated vesting~~extinguishment of ~~certain stock-based awards on~~ the ~~Closing Date resulting~~7% Senior Notes due 2024 and 8% Senior Notes due 2025 in ~~additional~~the fourth quarter of 2021 and the termination of interest rate swaps in the Predecessor period of 2021. These decreases were partially offset by interest expense incurred related to the $350 million incremental increase to the Term B-1 Loans and issuance of ~~$9.3 million.~~the Term B-2 Loans in the fourth quarter of 2021.

~~Operating income~~Other components of pension and postretirement benefit plans expense decreased for the ~~combined Predecessor~~three and ~~Successor periods included within the nine~~six months ended ~~September~~June 30, ~~2021 totaled $26.3 million, down $5.9 million~~2022 compared to the ~~nine~~comparable periods in the prior year due to remeasuring the pension and postretirement projected benefit obligations, actuarial gains (losses) and prior service costs (benefits) as of the Merger Date as well as favorable asset returns in 2021 also favorably impacting the annual remeasurement performed in December and the Merger Date remeasurement.

Other expense (income), net totaled expense of $11.8 million and $11.4 million for the three and six months ended ~~September~~June 30, ~~2020. The decrease in operating income is~~2022, respectively, due to ~~similar trends that impacted the quarter. In addition, transaction~~entering into interest rate swap agreements and ~~integration charges recorded~~interest rate cap agreements in the ~~nine months ended September 30, 2020 include a termination fee of $24.8 million paid to an affiliate of Brookfield in the first~~second quarter of ~~2020, and lower restructuring and severance related charges are due to the voluntary severance program (“VSP”) finalized in~~2022. In the three months ended ~~March 31, 2020.~~June 30, 2022, the Company recorded losses of $1.9 million and $10.3 million associated with the interest rate swaps and interest rate caps, respectively.

Loss before income taxes totaled ~~$97.4~~$60.0 million and ~~$104.6~~$88.5 million for the ~~combined Predecessor and Successor periods included within the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2021, respectively,~~2022 resulting in ~~an increase~~increases in the loss asof $55.4 million and $81.3 million, respectively, compared to the ~~comparable~~same periods in ~~2020.~~2021. Lower interest expense and pension and postretirement benefit plans expense in ~~each of~~ the ~~comparable~~three and six months ended June 30, 2022 compared to the same periods ~~were~~in the prior year was more than offset by the decrease in operating income.

The income tax provision for the three and ~~recording~~six months ended June 30, 2022 was a ~~loss on termination~~benefit of ~~interest rate swaps of $20.1~~$14.0 million and ~~loss on extinguishment of debt of $10.7~~$20.5 million, inrespectively, which is slightly higher than the ~~Predecessor period included within~~period’s income at the statutory rate, due primarily to state tax benefit. The income tax provision for the three months ended ~~September~~June 30, ~~2021.~~2021 was a nominal expense, and for the six months ended June 30, 2021, the income tax provision was an expense of $0.4 million. The expense recorded in each of the comparable periods in 2021 was lower than the current periods due to a smaller loss before income taxes in the comparable periods and a low estimated annual effective tax rate applied to that loss as the result of a valuation allowance on deferred tax assets related to disallowed interest expense.

~~The~~Beginning in March 2020 and continuing through the first quarter of 2021, our business experienced the effects of the COVID-19 pandemic most significantly due to increased bad debt expense and reduced revenue in certain of our revenue streams. Subsequent to the first quarter of 2021, bad debt expense has ~~resulted,~~returned to pre-pandemic levels and ~~is likely~~strategic revenue trends are normalized and improving. Starting in 2021, we began to continue to result, in significant economic disruption. As of the date of this filing, significant uncertainty continues to exist concerning the magnitude of the impact and duration of the COVID-19 pandemic. ~~We have begun to see~~ experience logistics challenges in obtaining inventory in a timely manner due to demand exceeding the supply of certain inventory products. Logistics challenges continue to impact operations in the six months ended June 30, 2022. Additionally, access to skilled employees and contractors ~~could~~may create delays or increased costs in the planned build-out of the fiber network in both geographies. As a business with employees greater than 100 and who provides services to certain government agencies, the reaction by employees to the vaccine requirement may create additional negative impacts on the Company’s existing employee base.

On March 13, 2020, in response to the COVID-19 pandemic, the Federal Communications Commission (“FCC”) called on broadband and telephone service providers to keep Americans connected as the country reacted to the serious disruptions caused by the coronavirus outbreak. Cincinnati Bell, on behalf of all of its affiliates, including Hawaiian Telecom, signed on to the Keep Americans Connected Pledge (the “Pledge”) and committed ~~to waive late fees for, and not terminate service to, any of our consumer or small business customers who did not pay their bills timely due to an inability to pay caused by the COVID-19 crisis.~~ The impacts to revenue as a result of these commitments primarily occurred during the second quarter of 2020 and included a decline in revenue related to late payment fees and certain other one-time fees. The impacts to revenue as a result of these commitments were limited in the nine months ended September 30, 2021. The Pledge expired on June 30, 2020, and customer accounts in the Cincinnati market that were not cured were disconnected during the third and fourth quarters of 2020. Balances associated with accounts that have been disconnected were fully reserved ~~as of December 31, 2020 and were written off during the first quarter of 2021.~~

We expect the ultimate significance of the impact on our financial condition, results of operations, or cash flows will be dictated by the length of time that such circumstances continue, which will depend on the currently unknowable extent and duration of the COVID-19 pandemic, effectiveness of the vaccine and timeliness that individuals receive the vaccine. COVID-19 also makes it more challenging for management to estimate future performance of our businesses, particularly over the near term. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, suppliers and shareholders.

Entertainment and Communications revenue for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 increased compared to the same periods in 2020 primarily due to revenue growth associated with our Consumer/SMB Fiber products as well as revenue from late payment fees and other one-time charges that were temporarily suspended in 2020 more than offsetting Legacy decline.

IT Services and Hardware revenue for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 increased compared to the same periods in the prior year due to revenue growth in each of the practices in each of the comparable periods. The most significant contributor was the Consulting practice in which revenue increased by $28.7 million and $76.7 million in the combined Predecessor and Successor periods included within three and nine months ended September 30, 2021, respectively, as compared to the same periods in 2020.

Entertainment and Communications costs for the combined Predecessor and Successor periods included within the three months ended September 30, 2021 increased $3.6 million and $9.1 million, respectively, as compared to the same periods in 2020 due to increases in operating taxes, contract services and operating materials. The increase in operating taxes is due to increased regulatory fees in addition to lower operating taxes in 2020 due to favorable audit results that resulted in a nonrecurring benefit of $4.2 million in the nine months ended September 30, 2020. Contract services increased $0.7 million and $2.9 million for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021, respectively, as compared to the same periods in the prior year primarily due to a project completed in the prior year to outsource certain functions as well as a significant general liability insurance claim incurred in the first quarter of 2021. The increase in operating materials is due to increased purchases associated with the expansion of our fiber network. These increases were partially offset by a decrease in payroll expense for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 as compared to the same periods in 2020 due to fewer headcount as a result of the restructuring activities executed in prior years and a one-time award granted to employees in the third quarter of 2020.

IT Services and Hardware costs for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 increased $27.6 million and $79.9 million, respectively, as compared to the comparable periods in the prior year due to increases in payroll related costs, contractor costs, software licensing costs and regulatory fees. In the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021, payroll related costs increased $0.5 million and $10.9 million, respectively, and contractor costs increased $25.3 million and $63.2 million, respectively, as compared to the same periods in the prior year. These costs increased due to additional headcount to support the growth in the Communications and Consulting practices. The increase in payroll related costs in the combined Predecessor and Successor periods included within the three months ended September 30, 2021 was partially offset by higher bonus expense recorded in the third quarter of 2020 related to a one-time bonus to reward employees for their efforts during COVID-19. Higher software licensing costs were also incurred to support the revenue growth in the Communications practice.

SG&A costs increased for the combined Predecessor and Successor periods included within the three months ended September 30, 2021 compared to the same period in the prior year. Increases in Entertainment and Communications and IT Services and Hardware as compared to the same period in the prior year are primarily due to cost containment strategies taken in 2020 to reduce the negative impact of the COVID-19 pandemic on the business that were no longer in place for the third quarter of 2021. Higher payroll related costs, increased advertising expense and increased travel expenses contributed to the increase of SG&A costs in both segments. Corporate SG&A increased compared to the same period in the prior year due to unrecognized compensation expense that was accelerated upon the closing of the Merger for previously granted stock awards to officers, key employees and Non-Employee Directors that vested upon the Closing Date of $9.3 million.

Similar trends that impacted the three months ended September 30, 2021 for both segments are impacting SG&A costs for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021. The increases in Entertainment and Communications are more than offset by decreased bad debt expense of $7.7 million ~~due to favorable collections in 2021. Increased~~ Corporate SG&A costs in the nine months ended September 30, 2021 for the combined Predecessor and Successor periods are due to compensation expense partially offset by lower consulting and contractor expenses due to certain expenses that will longer be incurred as a result of becoming a private company.

Depreciation and amortization expense increased for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 compared to the same periods in 2020 primarily due to additional expense recorded in the Successor period in the Entertainment and Communications segment and IT Services and Hardware segment of $9.0 million and $4.2 million, respectively, related to the increased value of property, plant and equipment and intangibles as a result of new intangibles and fair value adjustments due to the Merger.

~~Restructuring and severance charges recorded~~ ~~for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021~~ ~~are primarily due to initiatives to reduce and contain costs in the IT Services and Hardware segment.Restructuring and severance charges recorded in the nine months ended September 30, 2020~~ ~~are primarily related to a VSP for certain bargained and management employees in an effort to reduce costs associated with our copper field and network operations~~ ~~in the Entertainment and Communications segment~~.

~~Transaction and integration costs,~~ ~~recorded~~ ~~as a Corporate expense,~~ ~~for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021,~~ are primarily associated with the Merger Agreement. The Company elected to record all expenses that were triggered by the transaction closing in the Predecessor period. Included in transaction and integration costs are legal and financial advisory costs of $44.0 million that were paid on the Merger Date as well as $2.4 million of costs incurred prior to the Merger Date, transaction-related bonuses of $5.3 million, and severance associated with a change of control termination clause in an employee contract of $2.9 million. Other transaction costs of $0.2 million recorded in the ~~combined Predecessor and Successor periods included within the nine months ended September 30, 2021 are related to other projects.~~ Transaction and integration costs incurred in 2020, recorded as a Corporate expense, are primarily due to the termination fee of $24.8 million paid to an affiliate of Brookfield to terminate the Brookfield Merger Agreement in the first quarter of 2020. The Company also incurred transaction and integration costs in the three and nine months ended September 30, 2020 associated with the Merger Agreement.

The gain on sale of assets, net recorded in the Predecessor period included within the three months ended September 30, 2021 is related to the sale and leaseback of a building in the IT Services and Hardware segment.

Interest expense decreased for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 compared to the same period in the prior year due to the decrease in LIBOR rates.

Loss on extinguishment of debt recorded in the Predecessor period included within the nine months ended September 30, 2021 is due to the termination of the Company’s former Corporate Credit Agreement in connection with the Merger.

Other (income) expense, net recorded in the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 is primarily comprised of loss on termination of the interest rate swaps of $20.1 million recorded in the third quarter of 2021.

The income tax benefit increased for the combined Predecessor and Successor periods included within the three months ended September 30, 2021 compared to the same period in the prior year, primarily due to an increase in the loss before income taxes.

The income tax benefit is lower for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 compared to the same period in the prior year, despite a higher loss before income taxes, primarily due to nondeductible transaction costs incurred in the Predecessor period. The comparable period tax benefit was higher than the statutory rate due most notably to the release of the valuation allowance on previously-disallowed interest expense as a result of favorable temporary provisions in the CARES Act.

The ~~Entertainment and Communications~~Network segment provides products and services that ~~can be~~are categorized as ~~either~~Fioptics, previously referred to as “Consumer/SMB Fiber” in Hawaii and collectively with Fioptics in Cincinnati, ~~or Consumer/SMB Fiber in Hawaii (collectively, "Consumer/SMB Fiber"),~~ Enterprise Fiber or Legacy. Cincinnati Bell Telephone Company LLC ("CBT"), a subsidiary of the Company, is the incumbent local exchange carrier ("ILEC") for a geography that covers a radius of approximately 25 miles around Cincinnati, Ohio, and includes parts of northern Kentucky and southeastern Indiana. CBT has operated in this territory for ~~over 145~~approximately 150 years. Voice and data services in the Enterprise Fiber and Legacy categories that are delivered beyond the Company's ILEC territory, particularly in Dayton and Mason, Ohio, are provided through the operations of Cincinnati Bell Extended Territories LLC ("CBET"), a subsidiary of CBT. In March 2022, both CBT and CBET began doing business as “altafiber” as we continue to expand our geographic reach. On July 2, 2018, the Company acquired Hawaiian Telcom. Hawaiian Telcom is the ILEC for the State of Hawaii and the largest full-service provider of communications services and products in the state. Originally incorporated in Hawaii in 1883 as Mutual Telephone Company, Hawaiian Telcom has a strong heritage of over 135 years as Hawaii’s communications carrier. Its services are offered on all of Hawaii’s major islands, except its video service, which currently is only available on the island of Oahu. On May 2, 2022, the Company acquired Agile IWG Holdings, LLC (“Agile”), based in Canton, Ohio. Agile leases wireless infrastructure assets to third parties and provides connectivity through hybrid fiber wireless data networks primarily to customers in Ohio and Pennsylvania.

~~Consumer/SMB Fiber~~Fioptics products include high-speed internet access, categorized below as data, voice lines and ~~video.~~video as well as subsidized fiber build project revenue included in Other related to extending the Company’s fiber network in the Greater Cincinnati territory subsidized through our UniCity program. The Company is able to deliver speeds of up to 30 megabits or more to ~~approximately 75%~~more than 80% of Greater Cincinnati and up to 20 megabits or more to approximately ~~50%~~60% of Hawaii's total addressable market.

Enterprise Fiber products include metro-ethernet, dedicated internet access, wavelength, IRU contracts, and wireless backhaul to macro-towers and small cell. Hawaiian Telcom Enterprise Fiber revenue also includes revenue from the SEA-US cable. As enterprise customers migrate from legacy products and copper-based technology, our metro-ethernet product becomes the preferred method of transport due to its ability to support multiple applications on a single physical connection. Subsequent to the Company’s acquisition, Enterprise Fiber revenue also includes revenue from Agile.

Legacy products include traditional voice lines, consumer long distance, switched access, digital trunking, DSL, DS0, DS1, DS3 and other value-added services such as caller identification, voicemail, call waiting and call return.

Successor

Predecessor

Non-GAAP Combined

Predecessor

Successor

Predecessor

Non-GAAP Combined

Predecessor

(dollars in millions)

September 8, 2021 to September 30, 2021

July 1, 2021 to September 7, 2021

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

September 8, 2021 to September 30, 2021

January 1, 2021 to September 7, 2021

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Revenue:

Data

$
31.6

$
91.7

$
123.3

$
119.8

$
31.6

$
334.6

$
366.2

$
358.8

Video

12.2

35.3

47.5

48.1

12.2

131.8

144.0

145.1

Voice

15.8

46.8

62.6

65.5

15.8

177.3

193.1

197.6

Other

2.1

6.6

8.7

7.6

2.1

20.5

22.6

23.0

Total Revenue

61.7

180.4

242.1

241.0

61.7

664.2

725.9

724.5

Operating costs and expenses:

Cost of services and products

28.1

83.1

111.2

107.8

28.1

301.2

329.3

319.7

Selling, general and administrative

11.6

33.9

45.5

44.4

11.6

118.3

129.9

130.2

Depreciation and amortization

24.3

44.5

68.8

61.6

24.3

166.9

191.2

190.0

Restructuring and severance charges

—

—

—

—

—

(0.5
)

(0.5
)

14.8

Total operating costs and expenses

64.0

161.5

225.5

213.8

64.0

585.9

649.9

654.7

Operating (loss) income

$
(2.3
)

$
18.9

$
16.6

$
27.2

$
(2.3
)

$
78.3

$
76.0

$
69.8

Operating margin

(3.7
)%

10.5
%

6.9
%

11.3
%

(3.7
)%

11.8
%

10.5
%

9.6
%
Capital expenditures

$
32.1

$
41.5

$
73.6

$
55.9

$
32.1

$
149.3

$
181.4

$
142.5

	Successor			Predecessor									Successor			Predecessor
(dollars in millions)	Three Months Ended June 30, 2022			Three Months Ended June 30, 2021			Change			% Change			Six Months Ended June 30, 2022			Six Months Ended June 30, 2021			Change			% Change
Revenue:
Data	$	129.5		$	121.6		$	7.9			6	%	$	255.6		$	242.9		$	12.7			5	%
Video		48.4			47.9			0.5			1	%		97.0			96.5			0.5			1	%
Voice		57.7			64.6			(6.9	)		(11	)%		117.0			130.5			(13.5	)		(10	)%
Other		11.4			6.9			4.5			65	%		20.9			13.9			7.0			50	%
Total Revenue		247.0			241.0			6.0			2	%		490.5			483.8			6.7			1	%
Operating costs and expenses:
Cost of services and products		111.1			108.0			3.1			3	%		219.1			218.1			1.0			0	%
Selling, general and administrative		51.4			43.8			7.6			17	%		96.6			84.4			12.2			14	%
Depreciation and amortization		103.4			61.6			41.8			68	%		196.8			122.4			74.4			61	%
Restructuring and severance charges		—			(0.5	)		0.5		n/m				—			(0.5	)		0.5		n/m
Total operating costs and expenses		265.9			212.9			52.5			25	%		512.5			424.4			87.6			21	%
Operating (loss) income	$	(18.9	)	$	28.1		$	(46.5	)	n/m			$	(22.0	)	$	59.4		$	(80.9	)	n/m
Operating margin		(7.7	)%		11.7	%				(19.4) pts				(4.5	)%		12.3	%				(16.8) pts
Capital expenditures	$	106.0		$	52.8		$	53.2		n/m			$	187.5		$	107.8		$	79.7			74	%

	Successor		Predecessor								Successor		Predecessor
Metrics information (in thousands):	September 30, 2021		September 30, 2020		Change			% Change			June 30, 2022		June 30, 2021		Change			% Change
Cincinnati
Fioptics
Data
Internet FTTP*		255.4		235.0		20.4			9	%		274.3		249.7		24.6			10	%
Internet FTTN*		23.2		27.7		(4.5	)		(16	)%		17.4		24.6		(7.2	)		(29	)%
Total Fioptics Internet		278.6		262.7		15.9			6	%		291.7		274.3		17.4			6	%
Video
Video FTTP*		106.5		108.7		(2.2	)		(2	)%		107.3		106.1		1.2			1	%
Video FTTN*		18.3		20.8		(2.5	)		(12	)%		14.4		19.3		(4.9	)		(25	)%
Total Fioptics Video		124.8		129.5		(4.7	)		(4	)%		121.7		125.4		(3.7	)		(3	)%
Voice
Fioptics Voice Lines		102.0		104.4		(2.4	)		(2	)%		100.9		102.4		(1.5	)		(1	)%
Fioptics Units Passed
Units passed FTTP*		515.6		494.8		20.8			4	%		590.0		502.7		87.3			17	%
Units passed FTTN*		131.9		138.0		(6.1	)		(4	)%		109.5		135.4		(25.9	)		(19	)%
Total Fioptics units passed		647.5		632.8		14.7			2	%		699.5		638.1		61.4			10	%
Enterprise Fiber
Data
Ethernet Bandwidth (Gb)		7,027		5,978		1,049			18	%		7,480		7,075		405			6	%
Legacy
Data
DSL		55.0		63.3		(8.3	)		(13	)%		45.8		58.0		(12.2	)		(21	)%
Voice
Legacy Voice Lines		160.5		180.3		(19.8	)		(11	)%		145.9		165.2		(19.3	)		(12	)%

	Successor		Predecessor								Successor		Predecessor
Metrics information (in thousands):	September 30, 2021		September 30, 2020		Change			% Change			June 30, 2022		June 30, 2021		Change			% Change
Hawaii
Consumer / SMB Fiber
Fioptics
Data
Internet FTTP*		64.4		58.6		5.8			10	%		67.3		62.6		4.7			8	%
Internet FTTN*		9.1		11.7		(2.6	)		(22	)%		7.8		9.6		(1.8	)		(19	)%
Total Consumer / SMB Fiber Internet		73.5		70.3		3.2			5	%
Total Fioptics Internet												75.1		72.2		2.9			4	%
Video
Video FTTP*		29.7		30.6		(0.9	)		(3	)%		28.5		29.5		(1.0	)		(3	)%
Video FTTN*		8.4		11.4		(3.0	)		(26	)%		7.6		8.9		(1.3	)		(15	)%
Total Consumer / SMB Fiber Video		38.1		42.0		(3.9	)		(9	)%
Total Fioptics Video												36.1		38.4		(2.3	)		(6	)%
Voice
Consumer / SMB Fiber Voice Lines		28.5		29.8		(1.3	)		(4	)%
Consumer / SMB Fiber Units Passed **
Fioptics Voice Lines												28.6		28.7		(0.1	)		0	%
Fioptics Units Passed **
Units passed FTTP*		203.2		178.1		25.1			14	%		237.3		195.0		42.3			22	%
Units passed FTTN*		66.8		72.5		(5.7	)		(8	)%		62.4		68.3		(5.9	)		(9	)%
Total Consumer / SMB Fiber units passed		270.0		250.6		19.4			8	%
Total Fioptics units passed												299.7		263.3		36.4			14	%
Enterprise Fiber
Data
Ethernet Bandwidth (Gb)		4,225		4,063		162			4	%		3,874		4,027		(153	)		(4	)%
Legacy
Data
DSL		31.5		38.2		(6.7	)		(18	)%		27.4		33.3		(5.9	)		(18	)%
Voice
Legacy Voice Lines		140.8		164.2		(23.4	)		(14	)%		129.2		150.4		(21.2	)		(14	)%

Successor

Predecessor

Non-GAAP Combined

Predecessor

September 8, 2021 to September 30, 2021

July 1, 2021 to September 7, 2021

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Revenue

Consumer / SMB Fiber *

Data

$
12.5

$
2.7

$
15.2

$
35.7

$
7.7

$
43.4

$
48.2

$
10.4

$
58.6

$
43.0

$
9.1

$
52.1

Video

9.9

2.3

12.2

28.7

6.6

35.3

38.6

8.9

47.5

38.7

9.4

48.1

Voice

2.1

0.7

2.8

6.5

2.1

8.6

8.6

2.8

11.4

8.9

2.7

11.6

Other

0.2

—

0.2

2.1

—

2.1

2.3

—

2.3

0.4

0.2

0.6

24.7

5.7

30.4

73.0

16.4

89.4

97.7

22.1

119.8

91.0

21.4

112.4

Enterprise Fiber

Data

5.5

2.9

8.4

15.6

8.1

23.7

21.1

11.0

32.1

21.4

10.6

32.0

Legacy

Data

5.1

2.9

8.0

15.3

9.3

24.6

20.4

12.2

32.6

23.4

12.3

35.7

Voice

6.5

6.5

13.0

19.0

19.2

38.2

25.5

25.7

51.2

27.9

26.0

53.9

Other

1.0

0.9

1.9

2.1

2.4

4.5

3.1

3.3

6.4

3.1

3.9

7.0

12.6

10.3

22.9

36.4

30.9

67.3

49.0

41.2

90.2

54.4

42.2

96.6

Total Entertainment and Communications revenue

$
42.8

$
18.9

$
61.7

$
125.0

$
55.4

$
180.4

$
167.8

$
74.3

$
242.1

$
166.8

$
74.2

$
241.0

Successor

Predecessor

Non-GAAP Combined

Predecessor

September 8, 2021 to September 30, 2021

January 1, 2021 to September 7, 2021

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Revenue

Consumer / SMB Fiber *

Data

$
12.5

$
2.7

$
15.2

$
127.3

$
28.1

$
155.4

$
139.8

$
30.8

$
170.6

$
126.0

$
26.5

$
152.5

Video

9.9

2.3

12.2

106.9

24.9

131.8

116.8

27.2

144.0

116.3

28.8

145.1

Voice

2.1

0.7

2.8

23.7

7.9

31.6

25.8

8.6

34.4

25.0

8.1

33.1

Other

0.2

—

0.2

2.6

—

2.6

2.8

—

2.8

1.1

0.6

1.7

24.7

5.7

30.4

260.5

60.9

321.4

285.2

66.6

351.8

268.4

64.0

332.4

Enterprise Fiber

Data

5.5

2.9

8.4

57.8

29.3

87.1

63.3

32.2

95.5

64.3

31.0

95.3

Legacy

Data

5.1

2.9

8.0

59.1

33.0

92.1

64.2

35.9

100.1

71.6

39.4

111.0

Voice

6.5

6.5

13.0

72.9

72.8

145.7

79.4

79.3

158.7

85.7

78.8

164.5

Other

1.0

0.9

1.9

9.0

8.9

17.9

10.0

9.8

19.8

9.3

12.0

21.3

12.6

10.3

22.9

141.0

114.7

255.7

153.6

125.0

278.6

166.6

130.2

296.8

Total Entertainment and Communications revenue

$
42.8

$
18.9

$
61.7

$
459.3

$
204.9

$
664.2

$
502.1

$
223.8

$
725.9

$
499.3

$
225.2

$
724.5

	Successor						Predecessor
	Three Months Ended June 30, 2022						Three Months Ended June 30, 2021
	Cincinnati		Hawaii		Total		Cincinnati		Hawaii		Total
Revenue
Fioptics
Data	$	53.3	$	10.8	$	64.1	$	46.6	$	10.2	$	56.8
Video		39.3		9.1		48.4		38.8		9.1		47.9
Voice		8.5		2.9		11.4		8.6		2.9		11.5
Other		6.0		—		6.0		0.3		—		0.3
		107.1		22.8		129.9		94.3		22.2		116.5
Enterprise Fiber
Data		23.1		11.9		35.0		21.1		10.7		31.8
Legacy
Data		18.7		11.7		30.4		21.3		11.7		33.0
Voice		22.5		23.8		46.3		26.5		26.6		53.1
Other		2.7		2.7		5.4		3.3		3.3		6.6
		43.9		38.2		82.1		51.1		41.6		92.7
Total Network revenue	$	174.1	$	72.9	$	247.0	$	166.5	$	74.5	$	241.0

	Successor						Predecessor
	Six Months Ended June 30, 2022						Six Months Ended June 30, 2021
	Cincinnati		Hawaii		Total		Cincinnati		Hawaii		Total
Revenue
Fioptics
Data	$	104.6	$	21.6	$	126.2	$	91.6	$	20.4	$	112.0
Video		78.8		18.2		97.0		78.2		18.3		96.5
Voice		17.0		5.7		22.7		17.2		5.8		23.0
Other		9.5		—		9.5		0.5		—		0.5
		209.9		45.5		255.4		187.5		44.5		232.0
Enterprise Fiber
Data		44.6		23.6		68.2		42.2		21.2		63.4
Legacy
Data		38.0		23.2		61.2		43.8		23.7		67.5
Voice		46.2		48.1		94.3		53.9		53.6		107.5
Other		6.5		4.9		11.4		6.9		6.5		13.4
		90.7		76.2		166.9		104.6		83.8		188.4
Total Network revenue	$	345.2	$	145.3	$	490.5	$	334.3	$	149.5	$	483.8

~~Cincinnati~~ Fioptics ~~and Hawaii Consumer/SMB Fiber (collectively, "Consumer/SMB Fiber")~~

~~Consumer/SMB Fiber~~ revenue for the ~~combined Predecessor and Successor periods included within the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 increased ~~$7.4~~$13.4 million and ~~$19.4~~$23.4 million, respectively, as compared to the same periods in the prior ~~year. The~~year as the increase in the subscriber base for internet more than offset the decline in video and voice subscribers. The internet subscriber base continues to increase as we focus our attention on growing the internet FTTP subscriber base. In addition, the Average Revenue Per User (“ARPU”) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 increased for internet in Cincinnati by ~~6% and 5%, respectively,~~ 7% in each periodand in Hawaii by 9%3% and ~~11%~~1%, respectively, as compared to the ~~same~~comparable periods in ~~2020~~2021 primarily due to price increases and more customers subscribing to higher broadband tiers. Video ARPU also increased in the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 in Cincinnati by ~~4% and~~ 5%~~, respectively,~~ in each period and in Hawaii by 6%7% and 4%6%, respectively, as compared to the ~~comparable~~same periods in the prior year which ~~partially~~ offset the decline in video subscribers. Video ARPU increases are related to price increases as well as the change in the mix of subscribers. Voice revenue increased in the nine months ended September 30, 2021 as compared to the same period in the prior year primarily due to revenue associated with customer surcharges related to increased regulatory fees which more than offset the decline in voice subscribers. Other revenue increased for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021 as~~2022 compared to the ~~comparable~~same periods in ~~2020~~2021 primarily due to revenue associated with fiber build projects in Cincinnati. Consumer/SMB Fiber revenue was also unfavorably impacted in the nine months ended September 30, 2020 due to a decline in certain nonrecurring revenue as a result of the Company’s participation in the Pledge that expired on June 30, 2020.

Enterprise Fiber revenue for the ~~combined Predecessor and Successor periods included within the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2021 was nearly flat~~2022 increased $3.2 million and $4.8 million, respectively, compared to the comparable periods in the prior year. Increased revenue as a result of customers migrating from legacy product offerings to higher bandwidth fiber solutions ~~as evidenced by the 18% and 4% increases in Ethernet Bandwidth in Cincinnati and Hawaii, respectively, was~~more than offset by pricing pressures to provide higher speeds at a lower cost. Ethernet Bandwidth increased in Cincinnati by 6% while Ethernet Bandwidth decreased in Hawaii by 4% as compared to the prior year. The decrease in Ethernet Bandwidth in Hawaii is due to circuit activations in the six months ended June 30, 2022 only partially offsetting circuit disconnects. In addition, Agile contributed revenue of $2.1 million in the three months ended June 30, 2022.

Legacy revenue decreased ~~for the combined Predecessor~~$10.6 million and ~~Successor periods included within~~$21.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021 as~~2022, respectively, compared to the same periods in ~~the prior year~~2021 due to the decline in voice lines and DSL subscribers. Voice lines declined ~~11%~~12% and 14% in Cincinnati and Hawaii, respectively, as the traditional voice lines become less relevant. DSL subscribers decreased by ~~13%~~21% and 18% in Cincinnati and Hawaii, respectively, as subscribers demand the higher speeds that can be provided by fiber. In addition, declines in DS1, DS3 and digital trunking have contributed to the revenue decline for these products in 2021 compared to the same periods in the prior year as customers migrate away from these solutions to fiber-based solutions.

Cost of services and products for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 increased $3.4 million and $9.6 million, respectively, as compared to the comparable periods in 2020 due to increases in operating taxes, contract services and operating materials which were partially offset by a decrease in payroll related costs. The increase in operating taxes is due to increased regulatory fees ~~in addition to lower operating taxes in 2020 due to favorable audit results that resulted in a nonrecurring benefit of $4.2 million in the nine months ended September 30, 2020~~. In the three and nine months ended September 30, 2021, contract services increased $0.7 million and $2.9 million, respectively, as compared to the same periods in 2020 primarily due to outsourcing certain functions in the prior year as well as a significant general liability insurance claim incurred in the first quarter of 2021. Operating materials increased $1.6 million and $1.9 million in the three and nine months ended September 30, 2021, respectively, as compared to the same periods in the prior year as a result of increased purchases associated with the expansion of our fiber network. Payroll related costs decreased $2.1 million and $4.0 million for the three and nine months ended September 30, 2021, respectively, as compared to the comparable periods in the prior year primarily due to lower headcount as a result of restructuring activities executed in prior years in addition to higher bonus expense recorded in the third quarter of 2020 associated with a one-time bonus awarded to employees for their efforts during COVID-19.

SG&A expenses increased $1.1 million for the combined Predecessor and Successor periods included within the three months ended September 30, 2021 as compared to the same period in the prior year due to increased contract services of $0.5 million for higher utilization of outside contractors on certain specialized projects, increased advertising of $1.3 million as the Company delayed certain marketing campaigns and promotional events in 2020 and other nonrecurring savings realized in the three months ended September 30, 2020 as a result of cost containment strategies implemented to reduce the negative impact of the COVID-19 pandemic on the business. The increase was partially offset by decreased bad debt expense of $1.3 million compared to the three months ended September 30, 2020. The decrease in bad debt expense is a result of updating our estimate of the impact of the economic downturn associated with the COVID-19 pandemic on the Company’s receivables in the three months ended September 30, 2020 as well as increased focus on collection efforts.

SG&A expenses decreased $0.3 million for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 as compared to the same period in 2020 primarily due to decreased bad debt expense of $7.7 million compared to the nine months ended September 30, 2020 as a result of updating our estimate in 2020 as well as focus on collection efforts and favorable resolution of reserved balances in the first quarter of 2021 associated with a customer that filed for bankruptcy in a prior period. The decrease in bad debt expense was partially offset by increased payroll related costs due to additional headcount and similar trends impacting the three months ended September 30, 2021.

Depreciation and amortization expense increased $7.2 million and $1.2 million for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021, respectively, as compared to the same periods in 2020 primarily due to additional expense of $9.0 million recorded in the Successor period related to the increased value of property, plant and equipment and intangibles as a result of fair value adjustments. The increase was partially offset due to fewer assets placed in service in connection with the expansion of our fiber network in the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 as compared to the same periods in the prior year.

Restructuring and severance charge reversals recorded in the Predecessor period included within the nine months ended September 30, 2021 are due to employees that transitioned to new positions in the Company and were previously included in the VSP offered in the first quarter of 2020. Restructuring and severance charges recorded in the nine months ended September 30, 2020 are primarily related to a VSP for certain bargained and management employees in an effort to continue to reduce costs associated with our copper field and network operations.

Successor

Predecessor

Non-GAAP Combined

Predecessor

September 8, 2021 to September 30, 2021

July 1, 2021 to September 7, 2021

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Consumer / SMB Fiber capital expenditures *

Construction

$
8.2

$
2.1

$
10.3

$
8.6

$
5.6

$
14.2

$
16.8

$
7.7

$
24.5

$
6.1

$
4.1

$
10.2

Installation

4.7

2.6

7.3

7.3

2.9

10.2

12.0

5.5

17.5

8.4

3.4

11.8

Other

1.0

0.2

1.2

0.8

—

0.8

1.8

0.2

2.0

2.4

0.2

2.6

Total Consumer / SMB Fiber

13.9

4.9

18.8

16.7

8.5

25.2

30.6

13.4

44.0

16.9

7.7

24.6

Enterprise Fiber

2.4

1.4

3.8

1.6

2.1

3.7

4.0

3.5

7.5

4.4

2.7

7.1

Other

5.4

4.1

9.5

6.3

6.3

12.6

11.7

10.4

22.1

9.8

14.4

24.2

Total Entertainment and Communications capital expenditures

$
21.7

$
10.4

$
32.1

$
24.6

$
16.9

$
41.5

$
46.3

$
27.3

$
73.6

$
31.1

$
24.8

$
55.9

Successor

Predecessor

Non-GAAP Combined

Predecessor

September 8, 2021 to September 30, 2021

January 1, 2021 to September 7, 2021

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Cincinnati

Hawaii

Total

Consumer / SMB Fiber capital expenditures *

Construction

$
8.2

$
2.1

$
10.3

$
22.3

$
16.7

$
39.0

$
30.5

$
18.8

$
49.3

$
14.1

$
9.5

$
23.6

Installation

4.7

2.6

7.3

30.6

9.5

40.1

35.3

12.1

47.4

25.1

10.6

35.7

Other

1.0

0.2

1.2

3.3

0.4

3.7

4.3

0.6

4.9

6.9

0.3

7.2

Total Consumer / SMB Fiber

13.9

4.9

18.8

56.2

26.6

82.8

70.1

31.5

101.6

46.1

20.4

66.5

Enterprise Fiber

2.4

1.4

3.8

14.5

9.6

24.1

16.9

11.0

27.9

8.8

8.2

17.0

Other

5.4

4.1

9.5

19.4

23.0

42.4

24.8

27.1

51.9

26.8

32.2

59.0

Total Entertainment and Communications capital expenditures

$
21.7

$
10.4

$
32.1

$
90.1

$
59.2

$
149.3

$
111.8

$
69.6

$
181.4

$
81.7

$
60.8

$
142.5

Capital expenditures in Cincinnati are incurred to expand our Fioptics product suite, upgrade and increase capacity for our networks, and to extend the life of our fiber and copper networks. As of September 30, 2021, the Company is able to deliver its Fioptics services with speeds up to 30 megabits or more to approximately 647,500 residential and commercial addresses, or 75% of our operating territory in Cincinnati. Cincinnati construction capital expenditures for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 increased $10.7 million and $16.4 million, respectively, as compared to the same periods in 2020 due to passing more addresses in 2021 and the timing of capital expenditures, which does not necessarily coincide with the timing of when addresses become available. The increase in Consumer/SMB Fiber units passed in 2021 was partially offset due to decommissioning a legacy video platform, thereby disqualifying approximately 13,200 addresses. Cincinnati installation capital expenditures are primarily related to the timing of expenditures for customer premise equipment (“CPE”) utilized for installations. In the combined Predecessor and Successor periods for the three and nine months ended September 30, 2021, Cincinnati installation capital expenditures increased $3.6 million and $10.2 million, respectively, as compared to the same periods in 2020 primarily due to higher volume of CPE purchased.

Enterprise Fiber capital expenditures in Cincinnati are related to success-based fiber builds, including associated equipment, for enterprise and carrier projects to provide ethernet services as well as ~~network refresh projects that ensure we continue to grow our capacity and services within the network core.~~ Cincinnati Enterprise Fiber capital expenditures increased $8.1 million in the nine months ended September 30, 2021 as compared to the same period in the prior year primarily due to increased spend associated with a scheduled network refresh project in addition to fiber build projects. Other capital expenditures are related to IT projects, cable and equipment maintenance and capacity additions, real estate upgrades and maintenance, plus other minor capital purchases.

Hawaii construction capital expenditures for the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021 increased $3.6 million and $9.3 million, respectively, as compared to the same periods in the prior year due to building out 6,700 new addresses in the third quarter of 2021, primarily in rural areas and on the neighbor islands, and 15,700 new addresses in the nine months ended September 30, 2021. Hawaii installation capital expenditures increased $2.1 million and $1.5 million in the combined Predecessor and Successor periods included within the three and nine months ended September 30, 2021, respectively, as compared to the comparable periods in 2020 primarily due to increased internet installations on the neighbor islands. Enterprise fiber capital in Hawaii is primarily driven by new ethernet customers. Hawaii capital expenditures classified as Other include IT projects, real estate projects, road jobs or plant damage projects, and network upgrades or optimization projects.

The IT Services and Hardware segment provides end-to-end IT solutions ranging from consulting to implementation to ongoing optimization of existing technology. These solutions include Cloud, Communications and Consulting services along with the sale and maintenance of major branded Telecom and IT hardware reported as Infrastructure Solutions. These services and products are provided through the Company's subsidiaries in various geographic areas throughout the United States, Canada and Europe. By offering a full range of equipment and strategic services in conjunction with the Company’s fiber and copper networks, the IT Services and Hardware segment provides our customers personalized solutions designed to meet their business objectives.

Cloud services include the design, implementation and on-going management of the customer’s infrastructure. This includes on-premise, public cloud and private cloud solutions. The Company assists customers with the risk assessment phase through an in-depth understanding of the customer’s business as well as designing and building a solution, using either the customer's existing infrastructure or new cloud based options that transforms the way that the customer does business.

Communications solutions help to transform the way our customers do business by connecting employees, customers, and business partners. By upgrading legacy technologies through customized build projects and reducing customer costs, the Company helps to transform the customer’s business. These services include Unified Communications as a Service ("UCaaS"), Software-Defined Wide Area Network ("SD-WAN"), Network as a Service ("NaaS"), Contact Center and Collaboration.

Using our experience and expertise, Infrastructure Solutions are tailored to our customers’ organizational goals. We offer a complete portfolio of services that provide customers with efficient and optimized IT solutions that are agile and responsive to their business and are integrated, simplified and manageable. Through consulting with customers, the Company will build a solution using standard manufacturer equipment to meet our customers’ specific requirements.

Consulting services help customers assess their business and technology needs and provide the talent needed to ensure success. The Company is a premier provider of application services and IT staffing.

Successor

Predecessor

Non-GAAP Combined

Predecessor

Successor

Predecessor

Non-GAAP Combined

Predecessor

(dollars in millions)

September 8, 2021 to September 30, 2021

July 1, 2021 to September 7, 2021

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

September 8, 2021 to September 30, 2021

January 1, 2021 to September 7, 2021

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Revenue:

Consulting

$
21.6

$
56.5

$
78.1

$
49.4

$
21.6

$
193.6

$
215.2

$
138.5

Cloud

6.6

18.7

25.3

21.1

6.6

66.4

73.0

63.0

Communications

14.2

40.1

54.3

53.9

14.2

149.1

163.3

160.3

Infrastructure Solutions

9.6

23.4

33.0

30.8

9.6

83.3

92.9

82.7

Total revenue

52.0

138.7

190.7

155.2

52.0

492.4

544.4

444.5

Operating costs and expenses:

Cost of services and products

34.6

95.8

130.4

102.7

34.6

335.6

370.2

290.2

Selling, general and administrative

9.9

28.8

38.7

36.9

9.9

104.8

114.7

110.6

Depreciation and amortization

5.8

7.6

13.4

10.2

5.8

27.9

33.7

30.7

Restructuring and severance related charges

—

0.3

0.3

0.8

—

1.7

1.7

1.5

Gain on sale of assets, net

—

(2.8
)

(2.8
)

—

—

(2.8
)

(2.8
)

—

Total operating costs and expenses

50.3

129.7

180.0

150.6

50.3

467.2

517.5

433.0

Operating income

$
1.7

$
9.0

$
10.7

$
4.6

$
1.7

$
25.2

$
26.9

$
11.5

Operating margin

3.3
%

6.5
%

5.6
%

3.0
%

3.3
%

5.1
%

4.9
%

2.6
%
Capital expenditures

$
3.3

$
4.0

$
7.3

$
3.9

$
3.3

$
15.9

$
19.2

$
16.7

IT Services and Hardware segment revenue for the combined Predecessor and Successor periods included within the three months ended September 30, 2021 increased $35.5 million as compared to the comparable period in the prior year. Consulting revenue is the most significant contributor in which revenue increased $28.7 million in the combined Predecessor and Successor periods included within the three months ended September 30, 2021 as compared to the same period in the prior year due to obtaining new projects throughout 2020 which continue to bill and grow in 2021. Cloud revenue increased $4.2 million for the combined Predecessor and Successor periods included within the three months ended September 30, 2021 as compared to the comparable period in 2020 due to providing ongoing monitoring and management services to new customers obtained in 2020 that continue to bill in 2021 in addition to an increase in professional services projects. Communications revenue increased $0.4 million for the combined Predecessor and Successor periods included within the three months ended September 30, 2021 as compared to the same period in the prior year. The increase in revenue as a result of customers migrating to newer technologies which has increased the Company’s Hosted UCaaS profiles, NaaS locations and SD-WAN locations was partially offset by the decline in legacy communications revenue. The increase in Infrastructure Solutions revenue is due primarily to increased revenue associated with professional services projects.

IT Services and Hardware segment revenue increased $99.9 million for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 as compared to the same period in the prior year primarily due to growth in the Consulting practice of $76.7 million and other similar trends that impacted the quarter. In addition, Communications strategic revenue growth in 2021 was also partially offset by usage-based revenue recognized in the nine months ended September 30, 2020 associated with customers mitigating the impact of the COVID-19 pandemic on their businesses. Infrastructure Solutions revenue increased $10.2 million for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 as compared to the same period in the prior year due to lower hardware sales in the nine months ended September 30, 2020 due to the impacts of COVID-19 and higher revenue in 2021 associated with professional services projects.

~~IT Services and Hardware cost~~Cost of services and products for the ~~combined~~three months ended June 30, 2022 increased $3.1 million compared to the comparable period in 2021. Operating and facilities expenses increased $1.8 million due to increased energy costs. Increased contract services costs of $1.7 million are due to higher utilization of outside contractors on certain specialized projects including the expansion of our fiber network. Payroll related costs increased $1.2 million primarily due to additional headcount. Higher software development costs of $0.7 million were incurred related to increased product support and call center costs. Operating materials increased $0.7 million primarily as a result of increased purchases associated with the expansion of our fiber network. These costs were offset by a decrease in operating taxes of $2.0 million for the three months ended June 30, 2022 compared to the same period in the prior year due to lower regulatory fees. In addition, costs deferred in accordance with ASC 606 during the Predecessor period were remeasured as of the Merger Date resulting in a decrease to expense of $1.5 million in the three months ended June 30, 2022 compared to the same period in 2021.

Cost of services and ~~Successor periods included within~~products increased $1.0 million for the six months ended June 30, 2022 compared to the same period in 2021 primarily due to increased operating and facilities expenses of $2.8 million, operating materials costs of $2.6 million, software development costs of $1.1 million and contract services costs of $0.9 million partially offset by decreases in operating taxes of $3.4 million and ASC 606 related costs of $3.1 million. Cost of services and products were impacted by similar trends that impacted the three months ended June 30, 2022 in addition to increased operating materials purchases associated with a significant wiring project completed in the first quarter of 2022.

SG&A expenses increased $7.6 million and $12.2 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021 increased $27.7 million and $80.0 million, respectively, as~~2022 compared to the same periods in ~~2020~~2021 due to increases in contract services costs, payroll related costs, ~~contractor~~advertising, bad debt expense and software development. Contract services costs ~~software licensing costs~~increased $3.4 million and ~~regulatory fees. In the combined Predecessor and Successor periods included within~~$5.0 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, compared to the ~~increases~~comparable periods in the prior year primarily due to higher utilization of outside contractors on certain specialized projects and legal expense incurred associated with a legal dispute in Hawaii. For the three and six months ended June 30, 2022, payroll related costs increased $1.6 million and $1.9 million, respectively, due to additional headcount including headcount associated with the Company’s acquisition of Agile. Advertising expenses increased $1.1 million and $2.2 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 due to increased marketing campaigns, including rebranding the business as altafiber, and promotional events. Bad debt expense increased $0.7 million and $1.5 million for the three and six months ended June 30, 2022, respectively, compared to the comparable periods in 2021 primarily due to lower expense incurred in the three and six months ended June 30, 2021 as a result of focus on collection efforts for aged receivables of customers who did not pay their bills timely due to an inability to pay caused by the COVID-19 pandemic and favorable resolution in the first quarter of 2021 of reserved balances associated with a customer that filed for bankruptcy in a prior period. For the three and six months ended June 30, 2022, software development costs increased $0.5 million and ~~$10.9~~$1.0 million, respectively, ~~and contractor costs of $25.3 million and $63.2 million, respectively, as~~ compared to the same periods in the prior year are due to additional headcount to support the growth in the Communications and Consulting practices. Primarily as a result of the consulting projects obtained in 2020, billable resources increased by 795 persons compared to September 30, 2020. The increase in payroll related costs in both comparable periods was partially offset by higher bonus expense incurred in the third quarter of 2020 related to a one-time bonus to reward employees for their efforts during COVID-19. Higher software licensing costs were also incurred to support the revenue growth in the Communications practice.

~~SG&A expenses increased $1.8 million for the combined Predecessor and Successor periods included within the three months ended September 30, 2021 as compared to the comparable period in 2020~~ primarily due to an increase in payroll related costs and employee related costs. The increase in employee related costs is due to restrictions in certain geographies being eased and employees beginning to travel in the second and third quarters of 2021.

SG&A expenses increased $4.1 million for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 as compared to the same period in the prior year primarily due to an increase in payroll related costs due to additional headcount as well as employee contract termination costs incurred in the first quarter of 2020 that did not recur in 2021. These increases were partially offset by a decrease in bad debt expense due to updating our estimate of the expected impact of the economic downturn associated with the COVID-19 pandemic on the Company’s receivables in the nine months ended September 30, 2020. Employee related and travel activities increased in the nine months ended September 30, 2021 as restrictions eased; however activity continued to be limited in the first quarter of 2021 resulting in a nominal decrease in expense for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 as compared to the same period in 2020.internal projects.

Depreciation and amortization expense increased ~~$3.2~~$41.8 million and ~~$3.0~~$74.4 million for the ~~combined Predecessor and Successor periods included within the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, as compared to the ~~same~~comparable periods in ~~2020~~ the prior year due to additional expense ~~of $4.2 million recorded in~~incurred subsequent to the ~~Successor period~~Merger Date related to the increased value of property, plant and equipment and intangibles as a result of recording amounts at fair value.

Restructuring and severance charge reversals recorded in the three months ended June 30, 2021 are due to employees that transitioned to new positions in the Company and were previously included in the VSP offered in the first quarter of 2020.

Capital expenditures in Cincinnati are incurred to expand our Fioptics product suite, upgrade and increase capacity for our networks, and to extend the life of our fiber and copper networks. The Company is focused on expanding our FTTP footprint, and in the second quarter of 2022, we passed an additional 35,700 FTTP sellable addresses in Cincinnati. As of June 30, 2022, the Company is able to deliver its Fioptics services with speeds up to 30 megabits or more to approximately 699,500 residential and commercial addresses, or more than 80% of our operating territory in Cincinnati. Cincinnati construction capital expenditures for the three and six months ended June 30, 2022 increased $23.2 million and $41.8 million, respectively, compared to the same periods in 2021 due to passing more addresses in 2022 and the timing of capital expenditures, which does not necessarily coincide with the timing of when addresses become available. In the three and six months ended June 30, 2022, Cincinnati installation capital expenditures increased $5.5 million and $5.2 million, respectively, compared to the comparable periods in 2021 primarily due to increased labor and purchases of materials associated with the expansion of our fiber network. Cincinnati installation capital expenditures were also impacted by the timing of expenditures for customer premise equipment (“CPE”) utilized for installations.

Enterprise Fiber capital expenditures in Cincinnati are related to success-based fiber builds, including associated equipment, for enterprise and carrier projects to provide ethernet services as well as network refresh projects that ensure we continue to grow our capacity and services within the network core. Cincinnati Enterprise Fiber capital expenditures increased $0.5 million in the three months ended June 30, 2022 compared to the comparable period in the prior year due to capital expenditures contributed by Agile of $0.5 million. Cincinnati Enterprise Fiber capital expenditures decreased $5.7 million in the six months ended June 30, 2022 compared to the same period in the prior year primarily due to expenditures incurred in the six months ended June 30, 2021 associated with a scheduled network refresh project. Other capital expenditures are related to IT projects, cable and equipment maintenance and capacity additions, real estate upgrades and maintenance, plus other minor capital purchases.

Hawaii construction capital expenditures for the three and six months ended June 30, 2022 increased $4.1 million and $8.8 million, respectively, compared to the same periods in the prior year due to building out 12,800 new sellable addresses in the second quarter of 2022, primarily in rural areas and on the neighbor islands, and 20,400 new sellable addresses in the six months ended June 30, 2022. Hawaii installation capital expenditures increased $1.7 million and $3.7 million in the three and six months ended June 30, 2022, respectively, compared to the comparable periods in 2021 primarily due to increased internet installations on the neighbor islands. Enterprise fiber capital in Hawaii is primarily driven by new ethernet customers. Hawaii capital expenditures classified as Other include IT projects, real estate projects, road jobs or plant damage projects, and network upgrades or optimization projects.

The IT Services and Hardware segment provides end-to-end solutions ranging from consulting to implementation to ongoing optimization. These solutions include Cloud, Communications and Consulting services along with the sale and maintenance of major branded Telecom and IT hardware reported as Infrastructure Solutions. These services and products are provided through the Company's subsidiaries in various geographic areas throughout the United States, Canada and Europe. By offering a full range of equipment and strategic services in conjunction with the Company’s fiber and copper networks, the IT Services and Hardware segment provides our customers personalized solutions designed to meet their business objectives.

	Successor			Predecessor									Successor			Predecessor
(dollars in millions)	Three Months Ended June 30, 2022			Three Months Ended June 30, 2021			Change			% Change			Six Months Ended June 30, 2022			Six Months Ended June 30, 2021			Change			% Change
Revenue:
Consulting	$	83.5		$	71.6		$	11.9			17	%	$	166.9		$	137.1		$	29.8			22	%
Cloud		25.1			24.3			0.8			3	%		49.7			47.7			2.0			4	%
Communications		54.3			55.0			(0.7	)		(1	)%		109.2			109.0			0.2			0	%
Infrastructure Solutions		36.1			29.0			7.1			24	%		72.0			59.9			12.1			20	%
Total revenue		199.0			179.9			19.1			11	%		397.8			353.7			44.1			12	%
Operating costs and expenses:
Cost of services and products		136.4			123.3			13.1			11	%		273.2			239.8			33.4			14	%
Selling, general and administrative		40.7			37.9			2.8			7	%		80.7			76.0			4.7			6	%
Depreciation and amortization		26.6			10.2			16.4		n/m				52.6			20.3			32.3		n/m
Restructuring and severance related charges		0.4			0.9			(0.5	)		(56	)%		1.3			1.4			(0.1	)		(7	)%
Total operating costs and expenses		204.1			172.3			31.8			18	%		407.8			337.5			70.3			21	%
Operating loss (income)	$	(5.1	)	$	7.6		$	(12.7	)	n/m			$	(10.0	)	$	16.2		$	(26.2	)	n/m
Operating margin		(2.6	)%		4.2	%				(6.8) pts				(2.5	)%		4.6	%				(7.1) pts
Capital expenditures	$	7.1		$	6.2		$	0.9			15	%	$	13.4		$	11.9		$	1.5			13	%

IT Services and Hardware segment revenue increased $19.1 million and $44.1 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in the prior year. Consulting revenue is the most significant contributor in which revenue increased $11.9 million and $29.8 million in the three and six months ended June 30, 2022, respectively, compared to the comparable periods in 2021 primarily due to existing customer projects which continue to bill and grow in 2022. Cloud revenue increased $0.8 million and $2.0 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 primarily due to providing ongoing public cloud services to new customers obtained in 2021 that continue to bill in 2022 in addition to an increase in professional services projects in the six months ended June 30, 2022. These increases were partially offset by Cloud virtual data center revenue decreases of $0.7 million and $1.4 million in the three and six months ended June 30, 2022, respectively, compared to the same periods in the prior year as a result of a customer’s insourcing initiatives. Infrastructure Solutions revenue increased $7.1 million and $12.1 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 primarily due to revenue associated with professional services projects and the sale of hardware. An increase in the sale of maintenance services also contributed to the increased revenue in the six months ended June 30, 2022.

IT Services and Hardware cost of services and products increased $13.1 million and $33.4 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in the prior year due to increases in payroll related costs and contractor costs due to additional headcount to support revenue growth in the segment, most significantly in the Consulting practice. Payroll related costs increased by $3.4 million and $7.0 million in the three and six months ended June 30, 2022, respectively, and contractor costs increased by $11.7 million and $29.8 million in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021. Billable resources increased by 297 persons compared to June 30, 2021 primarily as result of existing consulting projects that continue to grow. These increases were partially offset by lower regulatory fees for the three and six months ended June 30, 2022 compared to each of the comparable periods in the prior year.

SG&A expenses increased $2.8 million for the three months ended June 30, 2022 compared to the same period in the prior year primarily due to increases in contract services costs, payroll related costs and bad debt expense. Contract services costs increased $0.9 million due to increased contractors used for special projects in addition to higher insurance expenses. Increased payroll related costs of $0.8 million are due primarily to higher employee commissions. The increase in bad debt expense of $0.5 million for the three months ended June 30, 2022 compared to the same period in the prior year is primarily due to lower expense recorded in the second quarter of 2021 as a result of favorable resolution of reserved balances.

SG&A expenses increased $4.7 million for the six months ended June 30, 2022 compared to the comparable period in the prior year primarily due to similar trends that impacted the three months ended June 30, 2022 in addition to an increase in employee related costs as travel and entertainment activity continued to be low in the six months ended June 30, 2021 as a result of the pandemic.

Depreciation and amortization expense increased $16.4 million and $32.3 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 due to additional expense incurred subsequent to the Merger Date related to the increased value ~~adjustments.~~of property, plant and equipment and intangibles as a result of recording amounts at fair value.

Restructuring and severance related charges recorded in the ~~Predecessor periods included within the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are associated with initiatives to reduce and contain costs.

Capital expenditures are dependent on the timing of success-based projects. Capital expenditures for the ~~combined Predecessor and Successor periods included within the three and nine~~six months ended ~~September~~June 30, ~~2021~~2022 were primarily related to projects supporting the Cloud and Communications practices. In addition to success-based projects, the Company incurred ~~$3.0~~$2.4 million for implementation work associated with internal software projects in the ~~combined Predecessor and Successor periods included within the nine~~six months ended ~~September~~June 30, ~~2021.~~

As of ~~September~~June 30, ~~2021,~~2022, the Company had an accumulated deficit of ~~$5.0~~$95.2 million and ~~$1,395.9~~$1,541.8 million of outstanding indebtedness.

The Company’s primary source of cash is generated by operations. The Company generated ~~$130.3~~$176.2 million ~~of cash flows from operations in the combined Predecessor~~ and ~~Successor periods included within the nine months ended September 30, 2021 and $138.9~~$180.1 million of cash flows from operations during the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2022 and 2021, respectively. As of ~~September~~June 30, ~~2021,~~2022, the Company had ~~$405.5~~$347.6 million of short-term liquidity, comprised of ~~$5.4~~$6.7 million of cash and cash equivalents, ~~$275.0~~$323.0 million of undrawn capacity on our Revolving Credit Facility, ~~due 2026 (defined below),~~ and ~~$125.1~~$17.9 million available under the Receivables Facility.

The Receivables Facility permits maximum borrowings of up to $215.0 million. As of ~~September~~June 30, ~~2021,~~2022, the Company had borrowings of ~~$75.1~~$176.4 million and ~~$14.8~~$20.7 million of letters of credit outstanding under the Receivables Facility on a borrowing capacity of $215.0 million. While we expect to continue to renew this facility, we would be required to use cash, our Revolving Credit Facility, ~~due 2026,~~ or other sources to repay any outstanding balance on the Receivables Facility if it was not renewed.

The Company’s primary uses of cash are for capital expenditures and debt service and, to a lesser extent, to fund pension and retiree medical obligations. In connection with the Merger and the initial capitalization by Parent, the Company paid $807.3 million as consideration to Common Shareholders, including restricted stock awards that vested on the Merger Date to certain employees, $155.2 million as consideration to Preferred Shareholders and $44.0 million of transaction costs ~~primarily related to legal costs and acquisition-related advisory fees associated with the Merger. In~~ ~~the first quarter of 2020, as a result of terminating the Brookfield Merger Agreement, we paid an affiliate of Brookfield a termination fee of $24.8 million on March 13, 2020~~.The Company believes that its cash on hand, cash generated from operations, and available funding under its credit facilities will be adequate to meet its cash requirements for the next twelve months.

In ~~connection with the Merger at the Effective Time, the~~ Company entered into a new Credit Agreement (the "Credit Agreement") and terminated the existing Corporate Credit Agreement. The Credit Agreement provides for (i) a five-year $275 million senior secured revolving credit facility including both a letter of credit subfacility of up to $40 million and a swingline loan subfacility of up to $10 million (the “Revolving Credit Facility due 2026”) and (ii) a seven-year $150 million senior secured term loan facility (the “Term Loan due 2028”). The Revolving Credit Facility due 2026 matures in September 2026, and the Term Loan due 2028 matures in September 2028. Borrowings under the Term Loan due 2028 were used in part to refinance existing company indebtedness and for working capital and general corporate purposes. The Company capitalized $32.0 million of costs incurred as a result of the Term Loan due 2028 as a reduction of debt. In addition, $6.1 million of costs incurred as a result of the Revolving Credit Facility due 2026 were capitalized and recorded in “Other noncurrent assets.” Borrowings under the Revolving Credit Facility due 2026 are used to provide ongoing working capital as well as other general corporate cash flow needs of the Company. At September 30, 2021, there were no outstanding borrowings under the Revolving Credit Facility due 2026, leaving $275.0 million available.

The Credit Agreement includes a springing financial covenant that requires the Company to maintain a maximum secured net leverage ratio of 5.75 to 1.00 when utilization under the Revolving Credit Facility due 2026 exceeds 35% of the commitments thereunder. In addition, the Credit Agreement contains customary affirmative and negative covenants, including but not limited to, certain restrictions on the Company's ability to incur additional indebtedness, create liens, pay dividends, make certain investments, prepay other indebtedness, sell, transfer, lease, or dispose of assets and enter into, or undertake, certain liquidations, mergers, consolidations or acquisitions.

The Credit Agreement is subject to customary events of default (which are in some cases subject to certain exceptions, thresholds and grace periods), including, but not limited to, nonpayment of principal or interest, failure to perform or observe covenants, breaches of representations and warranties, cross payment defaults ~~of any indebtedness having an aggregate outstanding principal amount of not less than the greater of~~ ~~$112.0 million and 3.75% of consolidated tangible assets,~~ and cross acceleration to certain other indebtedness, certain bankruptcy-related events or proceedings, the entry of final monetary judgments or orders, ERISA defaults, invalidity of collateral documents or material guarantees and certain change of control events. If the Company were to violate any of its covenants and were unable to cure such default or obtain a waiver, it would be considered a default. If the Company were in default under the Credit Agreement, no additional borrowings under this facility would be available until the default was waived or cured.

In the second quarter of ~~2021,~~ 2022, the Company executed amendments to its Receivables Facility, which replaced, amended and added certain provisions and definitions including the replacement of LIBOR with SOFR, a rate equal to ~~increase~~ the ~~credit availability and renew~~secured overnight financing rate as administered by the ~~facility. The amendments extended the facility’s renewal date until June 2023 and the facility’s termination date to June 2024. The maximum borrowing limit for loans and letters~~Federal Reserve Bank of ~~credit under~~New York. Capacity on the Receivables Facility was increased from $200.0 million to $215.0 million in the aggregate. In addition, the amendments removed the provision that the LIBOR rate for the Receivables Facility may not fall below 0.75%. Capacity on the AR facility is calculated and will continue to be calculated based on the quantity and quality of outstanding accounts receivables. Therefore if the Company experiences declines in revenue or extends discounts to customers, the capacity could be negatively impacted and reduce our short term liquidity. ~~Management is continuously monitoring liquidity to ensure sufficient cash is available.~~

As of ~~September~~June 30, ~~2021,~~2022, the Company was in compliance with the Credit Agreement covenants and ratios.

Cash provided by operating activities during the ~~combined Predecessor and Successor periods included within the nine~~six months ended ~~September~~June 30, ~~2021~~2022 totaled ~~$130.3~~$176.2 million, a decrease of $8.6 million compared to the same period in 2020. The decrease is due primarily to increased transaction and termination costs of $10.7 million, loss on termination of interest rate swaps of $20.1 million and payment to employees for the partial year bonus per the terms of the Merger Agreement, partially offset by cash receipt in the third quarter of 2021 for a long term revenue contract that was paid in advance as well as lower restructuring and severance payments in 2021 compared to the same period in the prior year.

Cash flows used in investing activities during the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 and nine months ended September 30, 2020 totaled $1,864.1 million and $160.8 million, respectively. Cash flows used in investing activities in the Successor period include $1,620.7 million related to consideration transferred associated with the Merger Agreement. Consideration transferred includes payments to Common Shareholders, payments to Preferred Shareholders, and the extinguishment of existing debt and accrued interest under the Corporate Credit Agreement. In addition, cash flows used in investing activities for the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 includes the acquisition of fiber assets from ~~Paniolo~~ ~~Cable Company, LLC~~ ~~for $51.8 million and increased capital expenditures of $41.4~~$3.9 million compared to the same period in the prior year. The decrease is due primarily to increased cash outflow due to working capital which more than offset lower interest payments of $29.3 million for the six months ended June 30, 2022 compared to the comparable period in 2021 primarily due to the extinguishment of the 7% Senior Notes due 2024 and 8% Senior Notes due 2025 in the fourth quarter of 2021 and the termination of the designated interest rate swaps in the Predecessor period of 2021. Increased cash outflow due to working capital is partially due to the timing of vendor payments.

Cash flows used in investing activities during the six months ended June 30, 2022 totaled $263.4 million, an increase of $143.8 million compared to the same period in the prior year due to the increase in capital expenditures as a result of increasing the number of addresses passed with a fiber-to-the-premise product. In addition, cash payments for the acquisition of Agile totaled $65.1 million in the second quarter of 2022.

Cash flows provided by financing activities during the ~~combined Predecessor and Successor periods included within the nine~~six months ended ~~September~~June 30, ~~2021 and nine~~2022 totaled $88.6 million as compared to cash used in financing activities of $69.2 million during the six months ended ~~September~~June 30, ~~2020 totaled $1,722.0~~2021. During the six months ended June 30, 2022, the Company borrowed $23.0 million and ~~$19.3~~$77.0 million respectively. Cash flows provided by financing activities during the combined Predecessor and Successor periods included within the nine months ended September 30, 2021 are primarily related to the Merger and capital contributions by Red Fiber Parent LLC. The issuance of the Term Loan due 2028 and issuance of the Paniolo fiber assets financing also contributed financing cash inflows of $173.0 million. These increases were partially offset by debt issuance costs associated with the Term Loan due 2028 and payments on the Receivables Facility ~~of $106.7 million. In~~and Revolving Credit Facility, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company ~~borrowed $48.0~~utilized cash for payments of $8.6 million and $43.0 million on the Receivables ~~Facility.~~

~~The Company’s Senior Notes are governed by indentures which contain covenants that, among other things, limit~~Facility and the Company’s ~~ability~~former Revolving Credit Facility, respectively, in addition to ~~incur additional debt or liens, pay~~paying dividends ~~or make other restricted payments, sell, transfer, lease or dispose~~on preferred stock of assets and make investments or merge with another company. The Company is in compliance with all of its debt indentures as of September 30, 2021. While the Company is no longer a SEC registrant or issuer following the merger transaction, certain covenants included in the 7 ¼% Notes due 2023 and the Cincinnati Bell Telephone Notes due 2028 require the Company to make ongoing voluntary filings with the SEC. Subsequent to September 30, 2021, the Company filed an extension with the SEC to extend the filing deadline from November 15, 2021, the required filing date for a non-accelerated filer, to November 22, 2021. However, due to the engagement of a new independent auditor and complexity of the evaluation, accounting and financial statement presentation and disclosures as a result of the Merger, the Company’s periodic report on the Form 10-Q was not filed timely causing the Company to no longer be in compliance with these reporting requirements. The Company is actively working to resolve all past due filings with the SEC.

On June 1, 2021, the FCC released an Order addressing Hawaiian Telcom’s Petition for Waiver in which it requested that the FCC modify its CAF II buildout obligation to account for the 523 locations destroyed or isolated by the Kilauea Volcano eruptions that began in May 2018. The FCC granted Hawaiian Telcom’s request relative to the 370 locations for which Hawaiian Telcom had completed its CAF II deployment prior to the locations being destroyed by the volcano. The additional 153 locations included in Hawaiian Telcom’s original request were not included in the FCC Order after Hawaiian Telcom informed the FCC that it had identified CAF II eligible alternate locations in other areas. Hawaiian Telcom anticipates that it will be able to meet its buildout obligation to these alternative locations by the end of 2021.

Refer to the Company’s Annual Report on Form 10-K for the year ended ~~2020~~December 31, 2021 for a complete description of regulatory matters.

In the normal course of business, the Company is subject to various regulatory and tax proceedings, lawsuits, claims and other matters. The Company believes adequate provision has been made for all such asserted and unasserted claims in accordance with accounting principles generally accepted in the United States. Such matters are subject to many uncertainties and outcomes that are not predictable with assurance.

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Application of these principles requires management to make estimates or judgments that affect the amounts reported in the accompanying Condensed Consolidated Financial Statements and information available as of the date of the financial statements. As this information changes, the financial statements could reflect different estimates or judgments.

~~Business Combinations —~~ ~~In accounting for business combinations, we apply the accounting requirements of FASB ASC 805, “Business Combinations,”~~ which requires the recording of net assets of acquired businesses at fair value. In developing fair value estimates for acquired assets and assumed liabilities, management analyzes a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets, and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets. In addition, any contingent consideration is presented at fair value at the date of acquisition, and transaction costs are expensed as incurred. The Company reports in its consolidated financial statements provisional amounts for the items for which accounting is incomplete. Goodwill is adjusted for any changes to provisional amounts made within the measurement period.

The Company’s most critical accounting policies and estimates are described in its Annual Report on Form 10-K for the year ended December 31, 2020. With the exception of the addition of business combinations as discussed above, there have been no other material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Refer to Note 1 of the Condensed Consolidated Financial Statements for further information on recently issued accounting standards. The adoption of new accounting standards did not have a material impact on the Company’s financial results for the ~~combined Predecessor and Successor periods included within the nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for a description of the Company's market risks.

Cincinnati Bell Inc.’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in SEC Rule 13a-15(e)) as of the end of the period covered by this report. Based on this evaluation, Cincinnati Bell Inc.’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, such controls and procedures were effective.

Cincinnati Bell Inc.’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, have evaluated any changes in the Company’s internal control over financial reporting that occurred during the ~~third~~second quarter of ~~2021~~2022 and have concluded that there were no changes to Cincinnati Bell Inc.’s internal control over financial reporting during the ~~third~~second quarter of ~~2021~~2022 that materially affect, or are reasonably likely to materially affect, Cincinnati Bell Inc.’s internal control over financial reporting. ~~We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact to their design and operating effectiveness.~~

Cincinnati Bell and its subsidiaries are involved in a number of legal proceedings. Liabilities are established for legal claims when losses associated with the claims are judged to be probable and the loss can be reasonably estimated. In many lawsuits and arbitrations, including most class action lawsuits, it is not possible to determine whether a liability has been incurred or to estimate the amount of the liability until the case is close to resolution, in which case a liability will not be recognized until that time. Based on information currently available, consultation with counsel, available insurance coverage and recognized liabilities, the Company believes that the eventual outcome of all claims will not, individually or in the aggregate, have a material effect on the Company’s financial position or results of operations.

Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for a comprehensive listing of the Company’s risk factors. ~~With the exception of the risks described below related to our indebtedness, there~~There are no material changes ~~to existing risks~~ for the ~~Successor period and Predecessor period included within the nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

The Company’s debt could limit its ability to fund operations, raise additional capital, and fulfill its obligations, which, in turn, would have a material adverse effect on the Company’s businesses and prospects generally.

~~In connection with the Merger, in September 2021, the~~ Company entered into a new Credit Agreement (the "Credit Agreement") and terminated the Company’s existing corporate credit agreement. The Credit Agreement provides for (i) a five-year $275 million senior secured revolving credit facility including both a letter of credit subfacility of up to $40 million and a swingline loan subfacility of up to $10 million (the “Revolving Credit Facility”) and (ii) a seven-year $150 million senior secured term loan facility (the “Term Loan”). The Revolving Credit Facility matures in September 2026, and the Term Loan matures in September 2028. Borrowings under the Term Loan were used in part to refinance existing company indebtedness, and for working capital and general corporate purposes. At September 30, 2021, there were no outstanding borrowings under the Revolving Credit Facility, leaving $275.0 million available.

~~The Company’s credit agreement and other indebtedness impose significant restrictions on the Company.~~

The Company’s debt instruments impose, and the terms of any future debt may impose, operating and other restrictions on the Company. These restrictions affect, and in many respects limit or prohibit, among other things, the Company’s ability to:

~~The Credit Agreement also requires the Company to achieve and maintain compliance with specified financial ratios.~~

~~The restrictions contained in the terms of the Credit Agreement and our other debt instruments could:~~

A breach of any of the debt's restrictive covenants or the Company’s inability to comply with the required financial ratios would result in a default under some or all of the debt agreements. During the occurrence and continuance of a default, lenders may elect to declare all outstanding borrowings, together with accrued interest and other fees, to be immediately due and payable. Additionally, under the Credit Agreement, the lenders may elect not to provide loans under the Revolving Credit Facility until such default is cured or waived. The Company’s debt instruments also contain cross-acceleration provisions, which generally cause each instrument to be subject to early repayment of outstanding principal and related interest upon a qualifying acceleration of any other debt instrument, subject to certain materiality thresholds. Failure to comply with these covenants, if not cured or waived, would limit the cash available to the Company required to fund operations and our general obligations and could result in the Company’s dissolution, bankruptcy, liquidation or reorganization.

During the Predecessor period of January 1, 2021 to September 7, 2021, the Company had no unregistered sales of equity securities. The Company also had no purchases of its common stock during the Predecessor period of January 1, 2021 to September 7, 2021.None.

The Company's historical reports on Form 10-K, 10-Q, and 8-K are available free of charge in the Investor Relations section of the Company's website: http://www.cincinnatibell.com. The Company ~~will furnish any~~has ceased to be a registrant subsequent to September 7, 2021 but continues to voluntarily file annual, quarterly and certain other ~~exhibit at cost.~~information with the SEC due to contractual provisions included in certain indentures.

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.

Ohio		31-1056105
(State of Incorporation)		(I.R.S. Employer Identification No.)



Description		Page
Item 1.	Financial Statements

	Condensed Consolidated Statements of Operations (Unaudited)	1

	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	2

	Condensed Consolidated Statements of Shareowners' Equity (Deficit) (Unaudited)	3

	Condensed Consolidated Balance Sheets (Unaudited)	54

	Condensed Consolidated Statements of Cash Flows (Unaudited)	65

	Notes to Condensed Consolidated Financial Statements (Unaudited)	76

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3327

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5340

Item 4.	Controls and Procedures	5340

	PART II. Other Information

Item 1.	Legal Proceedings	5441

Item 1A.	Risk Factors	5441

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5541

Item 3.	Default upon Senior Securities	5541

Item 4.	Mine Safety Disclosure	5541

Item 5.	Other Information	5541

Item 6.	Exhibits	5642

	Signatures	5743

	Successor			Predecessor
(dollars in millions)	September 30, 2021			December 31, 2020			Depreciable Lives (Years)
Land and rights-of-way	$	132.3		$	115.7		20 – Indefinite
Buildings and leasehold improvements		184.8			323.8		5 – 40
Network equipment		1,498.6			4,180.0		2 – 50
Office software, furniture, fixtures and vehicles		89.6			243.7		2 – 14
Construction in process		73.4			60.4		n/a
Gross value		1,978.7			4,923.6
Accumulated depreciation		(21.8	)		(3,194.5	)
Property, plant and equipment, net	$	1,956.9		$	1,729.1

	~~Successor~~	~~Predecessor~~
	~~September 30, 2021~~	~~December 31, 2020~~
Customer relationships	~~15 years~~	~~8 to~~ 15 years
Trade names	3 to 10 years	~~10 to 15 years~~
Technology	7 ~~years~~	10 years

	•	~~a base rate determined by reference to the highest of (i)~~ the Federal Funds Rate (determined for any day as the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System of the United States arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the business day next succeeding such day) ~~plus1/2~~ ~~of 1%, (ii)~~ the rate of interest in effect for such day as publicly announced from time to time by Goldman Sachs as its “prime rate” in effect at its principal office in New York City and notified to the Company, ~~and (iii)~~ ~~to the extent ascertainable, the one month Eurocurrency rate plus 1.00%, plus, in any such case, 3.25%; or~~
	•	~~a Eurocurrency rate determined by reference to the London interbank offered rate for dollars for the relevant interest period, adjusted for statutory reserve requirements, plus 4.25%.~~

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐

		Emerging growth company	☐

(dollars in millions)
Cash consideration for Cincinnati Bell Inc. common stock	$	807.3
Cash consideration for preferred stock		155.2
Cash consideration for debt repayment		658.2
Total purchase price	$	1,620.7

(dollars in millions)	Cincinnati Bell Inc.
Assets acquired
Cash	$	11.2
Receivables		318.5
Inventory, materials and supplies		56.4
Prepaid expenses		5.6
Other current assets		40.5
Property, plant and equipment		1,950.8
Operating lease right-of-use assets		42.3
Goodwill		646.7
Intangible assets		969.6
Deferred tax assets		6.9
Other noncurrent assets		20.2
Total assets acquired		4,068.7
Liabilities assumed
Current portion of long-term debt		11.8
Accounts payable		381.1
Unearned revenue and customer deposits		51.2
Accrued taxes		24.6
Accrued interest		19.4
Accrued payroll and benefits		49.3
Other current liabilities		75.0
Long-term debt, less current portion		1,378.0
Operating lease liabilities		38.6
Pension and postretirement benefit obligations		151.6
Pole license agreement obligation		46.7
Deferred income tax liability		149.3
Other noncurrent liabilities		71.4
Total liabilities assumed		2,448.0
Net assets acquired	$	1,620.7

(dollars in millions)	Fair Value		Useful Lives
Customer relationships	$	850.0	15 years
Trade names		108.0	3 to 10 years
Technology		5.0	7 years
FCC licenses and spectrum usage rights		6.6	Indefinite
Total identifiable intangible assets	$	969.6

(dollars in millions)	Agile
Assets acquired
Receivables and other current assets	$	1.5
Property, plant and equipment		10.0
Operating lease right-of-use assets		22.0
Intangible assets		17.5
Goodwill		40.9
Total assets acquired		91.9
Liabilities assumed
Accrued expenses and other current liabilities		2.2
Operating lease liabilities		20.4
Other noncurrent liabilities		4.2
Total liabilities assumed		26.8
Net assets acquired	$	65.1

	•	a base rate determined by reference to the highest of (i) the Federal Funds Rate (determined for any day as the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System of the United States arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the business day next succeeding such day) plus ~~1/2 of 1~~%, (ii) the rate of interest in effect for such day as publicly announced from time to time by Goldman Sachs as its “prime rate” in effect at its principal office in New York City and notified to the Company, and (iii) to the extent ascertainable, the one month Eurocurrency rate plus 1.00%, plus, in any such case, 3.25%; or
	•	a ~~Eurocurrency~~ ~~rate determined by reference to the London interbank offered rate for dollars for the relevant interest period, adjusted for statutory reserve requirements, plus 4.25%.~~

(dollars in millions)	Statement of Operations Location	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
Interest Rate Swap	Other expense (income), net	$	1.9	$	1.9
Interest Rate Cap	Other expense (income), net	$	10.3	$	10.3

(dollars in millions)	June 30, 2022		December 31, 2021
Assets
Network	$	3,073.2	$	2,949.2
IT Services and Hardware		794.4		842.0
Corporate and eliminations		340.7		407.6
Total assets	$	4,208.3	$	4,198.8

	Successor		Predecessor		Non-GAAP Combined		Predecessor		Successor		Predecessor		Non-GAAP Combined		Predecessor
(dollars in millions)	September 8, 2021 to September 30, 2021		July 1, 2021 to September 7, 2021		Three Months Ended September 30, 2021		Three Months Ended to September 30, 2020		September 8, 2021 to September 30, 2021		January 1, 2021 to September 7, 2021		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Revenue
Entertainment and Communications	$	60.1	$	177.0	$	237.1	$	236.1	$	60.1	$	651.1	$	711.2	$	709.7
IT Services and Hardware		51.3		137.6		188.9		153.4		51.3		487.6		538.9		439.8
Total revenue	$	111.4	$	314.6	$	426.0	$	389.5	$	111.4	$	1,138.7	$	1,250.1	$	1,149.5

	Successor		Predecessor
Metrics information:	September 30, 2021		September 30, 2020		Change		% Change
Consulting
Billable Resources		2,232		1,437		795		55	%

Communications
NaaS Locations		10,407		5,419		4,988		92	%
SD - WAN Locations		6,321		2,783		3,538	n/m
Hosted UCaaS Profiles*		301,715		277,610		24,105		9	%


			Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Filing Date	Exhibit No.	SEC File No.	Filed Herewith

2.1	Agreement and Plan of Merger, dated as of March 13, 2020, by and among Cincinnati Bell Inc., Red Fiber Parent LLC and RF Merger Sub Inc.	8-K	3/13/2020	2.1	1-8519
3.1	Amended and Restated Articles of Incorporation of Cincinnati Bell Inc.	8-K	4/30/2008	3.1	1-8519
3.2	Amendment to the Amended and Restated Articles of Incorporation of Cincinnati Bell Inc.	8-K	10/5/2016	3.1	1-8519
3.3	Second Amended and Restated Regulations of Cincinnati Bell Inc.	8-K	9/7/2021	3.1	1-8519
10.1	Credit Agreement, dated as of September 7, 2021, among Red Fiber Parent LLC, RF Merger Sub Inc., Goldman Sachs Bank USA, as administrative and collateral agent, each L/C Issuer and Swing Line Lender; each other Lender, Cincinnati Bell Inc. (and as successor in interest to RF Merger Sub Inc.) and other parties thereto from time to time.	8-K	9/7/2021	10.1	1-8519
31.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					+
31.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					+
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					+
32.2	Certification 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 statements from Cincinnati Bell Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 were formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Condensed Consolidated Statements of Shareholders’ Equity (Deficit), (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

		Cincinnati Bell Inc.

Date:	~~May 13,~~August 4, 2022	/s/ Joshua T. Duckworth
		Joshua T. Duckworth
		Chief Financial Officer

Date:	~~May 13,~~August 4, 2022	/s/ Suzanne E. Maratta
		Suzanne E. Maratta
		Chief Accounting Officer