Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 30, 2017 | |
Document and Entity [Abstract] | ||
Entity Registrant Name | CINCINNATI BELL INC. | |
Entity Central Index Key | 716,133 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 42,134,187 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue | ||
Services | $ 241.9 | $ 241.5 |
Products | 36.3 | 47.4 |
Total revenue | 278.2 | 288.9 |
Costs and expenses | ||
Cost of services, excluding items below | 125.5 | 123.2 |
Cost of products sold, excluding items below | 29.3 | 39.5 |
Selling, general and administrative, excluding items below | 56.7 | 53.2 |
Depreciation and amortization | 45.8 | 43.4 |
Restructuring and severance related charges | 25.6 | 0 |
Other | 0.6 | 0 |
Total operating costs and expenses | 283.5 | 259.3 |
Operating (loss) income | (5.3) | 29.6 |
Interest expense | 18 | 20.3 |
Gain on extinguishment of debt | 0 | (2.4) |
Gain on sale of Investment in CyrusOne | (117.7) | 0 |
Other income, net | (0.4) | 0 |
Income before income taxes | 94.8 | 11.7 |
Income tax expense | 34.4 | 4.7 |
Net income | 60.4 | 7 |
Preferred stock dividends | 2.6 | 2.6 |
Net income applicable to common shareowners | $ 57.8 | $ 4.4 |
Basic and diluted net earnings per common share | $ 1.37 | $ 0.10 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net income | $ 60.4 | $ 7 |
Other comprehensive (loss) income, net of tax: | ||
Unrealized gains on Investment in CyrusOne, net of tax of $4.4 | 8.3 | 0 |
Reclassification adjustment for gain on sale of Investment in CyrusOne included in net income, net of tax of ($41.3) | (76.4) | 0 |
Foreign currency translation loss | 0 | (0.1) |
Defined benefit plans: | ||
Amortization of prior service benefits included in net income, net of tax of ($0.4), ($1.4) | (0.7) | (2.3) |
Amortization of net actuarial loss included in net income, net of tax of $2.0, $2.1 | 3.5 | 3.9 |
Total other comprehensive (loss) income | (65.3) | 1.5 |
Total comprehensive (loss) income | $ (4.9) | $ 8.5 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income Parenthetical - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Unrealized gains on Investment in CyrusOne, tax | $ 4.4 | $ 0 |
Reclassification adjustment for gain on sale of Investment in CyrusOne included in net income, tax | (41.3) | 0 |
Amortization of prior service benefits included in net income, tax | (0.4) | (1.4) |
Amortization of net actuarial loss included in net income, tax | $ 2 | $ 2.1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 44.7 | $ 9.7 |
Receivables, less allowances of $9.5 and $9.9 | 173.2 | 178.6 |
Inventory, materials and supplies | 24.1 | 22.7 |
Prepaid expenses | 20.6 | 15 |
Other current assets | 3.9 | 3.9 |
Total current assets | 266.5 | 229.9 |
Property, plant and equipment, net | 1,107.7 | 1,085.5 |
Investment in CyrusOne | 0 | 128 |
Goodwill | 18.6 | 14.3 |
Deferred income taxes, net | 62.2 | 64.5 |
Other noncurrent assets | 19 | 18.8 |
Total assets | 1,474 | 1,541 |
Current liabilities | ||
Current portion of long-term debt | 8.2 | 7.5 |
Accounts payable | 120.3 | 105.9 |
Unearned revenue and customer deposits | 38.2 | 36.3 |
Accrued taxes | 11.8 | 12.9 |
Accrued interest | 11.9 | 12.7 |
Accrued payroll and benefits | 31.6 | 25.7 |
Other current liabilities | 35.2 | 31.9 |
Total current liabilities | 257.2 | 232.9 |
Long-term debt, less current portion | 1,113.7 | 1,199.1 |
Pension and postretirement benefit obligations | 194.1 | 197.7 |
Other noncurrent liabilities | 36.4 | 33 |
Total liabilities | 1,601.4 | 1,662.7 |
Shareowners' Deficit [Abstract] | ||
Preferred stock, 2,357,299 shares authorized, 155,250 shares (3,105,000 depositary shares) of 6 3/4% Cumulative Convertible Preferred Stock issued and outstanding at March 31, 2017 and December 31, 2016; liquidation preference $1,000 per share ($50 per depositary share) | 129.4 | 129.4 |
Common shares, $.01 par value; 96,000,000 shares authorized; 42,133,326 and 42,056,237 shares issued; 42,133,326 and 42,056,237 shares outstanding at March 31, 2017 and December 31, 2016 | 0.4 | 0.4 |
Additional paid-in capital | 2,570.1 | 2,570.9 |
Accumulated deficit | (2,671.7) | (2,732.1) |
Accumulated other comprehensive loss | (155.6) | (90.3) |
Total shareowners' deficit | (127.4) | (121.7) |
Total liabilities and shareowners' deficit | $ 1,474 | $ 1,541 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets Parenthetical - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Allowance for receivables | $ 9,500,000 | $ 9,900,000 |
Preferred Stock, Shares Authorized | 2,357,299 | 2,357,299 |
Preferred Stock, 6 3/4% Cumulative Convertible, Shares Issued | 155,250 | 155,250 |
Preferred Stock, 6 3/4% Cumulative Convertible, Shares Outstanding | 155,250 | 155,250 |
Preferred Stock, Depositary Shares | 3,105,000 | 3,105,000 |
Preferred Stock, Dividend Rate, Percentage | 6.75% | 6.75% |
Preferred Stock, Liquidation Preference Per Share | $ 1,000 | $ 1,000 |
Preferred Stock Liquidation Depositary Per Share | $ 50 | $ 50 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 96,000,000 | 96,000,000 |
Common Stock, Shares, Issued | 42,133,326 | 42,056,237 |
Common Stock, Shares, Outstanding | 42,133,326 | 42,056,237 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities | ||
Net income | $ 60.4 | $ 7 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 45.8 | 43.4 |
Gain on extinguishment of debt | 0 | (2.4) |
Gain on sale of Investment in CyrusOne | (117.7) | 0 |
Provision for loss on receivables | 1.8 | 1.9 |
Noncash portion of interest expense | 0.5 | 1 |
Deferred income taxes | 34.4 | 4.4 |
Pension and other postretirement payments less than (in excess of) expense | 1 | (1.3) |
Stock-based compensation | 2.9 | 1.2 |
Other, net | (1.2) | (1.8) |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Decrease in receivables | 14.6 | 17.2 |
Increase in inventory, materials, supplies, prepaid expenses and other current assets | (5.6) | (4.7) |
Increase (decrease) in accounts payable | 5.8 | (3.2) |
Increase in accrued and other current liabilities | 7.1 | 2.8 |
Decrease in other noncurrent assets | 0.8 | 0.5 |
Increase (decrease) in other noncurrent liabilities | 3.3 | (0.3) |
Net cash provided by operating activities | 53.9 | 65.7 |
Cash flows from investing activities | ||
Capital expenditures | (55.1) | (62.4) |
Proceeds from sale of Investment in CyrusOne | 140.7 | 0 |
Acquisitions of businesses | (9.2) | 0 |
Dividends received from Investment in CyrusOne (equity method investment) | 0 | 2.1 |
Other, net | 0.5 | (0.1) |
Net cash provided by (used in) investing activities | 76.9 | (60.4) |
Cash flows from financing activities | ||
Net (decrease) increase in corporate credit and receivables facilities with initial maturities less than 90 days | (89.5) | 28.9 |
Repayment of debt | (2.1) | (30.9) |
Debt issuance costs | (0.5) | 0 |
Dividends paid on preferred stock | (2.6) | (2.6) |
Other, net | (1.1) | (0.2) |
Net cash used in financing activities | (95.8) | (4.8) |
Net increase in cash and cash equivalents | 35 | 0.5 |
Cash and cash equivalents at beginning of period | 9.7 | 7.4 |
Cash and cash equivalents at end of period | 44.7 | 7.9 |
Noncash investing and financing transactions: | ||
Accrual of CyrusOne dividends | 0 | 2.7 |
Acquisition of property by assuming debt and other noncurrent liabilities | 6.9 | 7.1 |
Acquisition of property on account | $ 27.3 | $ 27.3 |
Description of Business and Acc
Description of Business and Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Description of Business and Accounting Policies Description of Business — Cincinnati Bell Inc. and its consolidated subsidiaries ("Cincinnati Bell", "we", "our", "us" or the "Company") provides diversified telecommunications and technology services. The Company generates a large portion of its revenue by serving customers in the Greater Cincinnati and Dayton, Ohio areas. An economic downturn or natural disaster occurring in this, or a portion of this, limited operating territory 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 receivables with one large customer, General Electric Company, that makes up 18% and 21% of the outstanding accounts receivable balance at March 31, 2017 and December 31, 2016. This same customer represented 11% of consolidated revenue for the three months ended March 31, 2016. Basis of Presentation — The Condensed Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair presentation 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. On October 4, 2016, the Company filed an amendment to its Amended and Restated Articles of Incorporation to affect a one-for-five reverse split of its issued common stock (the “Reverse Split”) which had the effect of reducing the number of issued shares of common stock from 210,275,005 to 42,055,001 . Any fractional shares of common stock resulting from the Reverse Split were settled in cash equal to the fraction of a share to which the holder was entitled. As a result of the Reverse Split, the Company reduced total par value from common stock by $1.7 million and increased the additional paid-in capital by the same amount. The Condensed Consolidated Balance Sheet as of December 31, 2016 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 2016 Annual Report on Form 10-K. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results expected for the full year or any other interim period. Business Combinations — In accounting for business combinations, we apply the accounting requirements of ASC 805, “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. In developing estimates of fair value of 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, contingent consideration is presented at fair value at the date of acquisition. Transaction costs are expensed as incurred. On February 28, 2017 we acquired SunTel Services, a private company that provides network security, data connectivity, and unified communications solutions to commercial and enterprise customers across multiple sectors throughout Michigan for cash consideration of $10.0 million . Based on preliminary estimates of fair value the acquired assets and liabilities assumed consisted primarily of property plant and equipment of $0.4 million , customer relationship intangible assets of $1.2 million , working capital of $4.1 million and goodwill of $4.3 million . These assets and liabilities are included in the IT Services and Hardware segment. We are in the process of finalizing the preliminary purchase price and the valuation of the net assets acquired. Upon completion of the final fair value assessment, the fair values of the net assets acquired may differ from the preliminary assessment. 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. Investment in CyrusOne — As of December 31, 2016, "Investment in CyrusOne" on the Condensed Consolidated Balance Sheets was recorded at fair value, which was determined based on closing market price of CyrusOne at December 31, 2016 . This investment is classified as Level 1 in the fair value hierarchy. Unrealized gains and losses on our investment in CyrusOne are included in "Accumulated other comprehensive loss", net of taxes on the Condensed Consolidated Balance Sheets. When evaluating the investments for other-than-temporary impairment, the Company reviews such factors as the financial condition of the issuer, severity and duration of the fair value decline and evaluation of factors that could cause the investment to have an other-than-temporary decline in fair value. In the first quarter of 2017, we sold our remaining 2.8 million shares of CyrusOne Inc. common stock for net proceeds totaling $140.7 million that resulted in a realized gain of $117.7 million . As of March 31, 2017 we no longer have an investment in CyrusOne Inc. Income Taxes — 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, as well as the tax effects associated with discrete items. The Company expects its effective rate to exceed statutory rates primarily due to non-deductible expenses. During 2016, the Company reclassed $14.5 million of Alternative Minimum tax ("AMT") refundable tax credits from "Deferred income taxes, net" to "Receivables" as these credits are now expected to be utilized during 2017. In the first quarter of 2017, the Company reclassed an additional $3.4 million from "Deferred income taxes, net" to "Receivables." Acceleration of the AMT refundable tax credits was the result of the Company's decision to make an election on its 2016 federal income tax return to claim the credits in lieu of claiming bonus depreciation. New tax legislation enacted in 2015 increased the amount of AMT credits that can be claimed beginning with the 2016 tax year. Recently Issued Accounting Standards — In March 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-07, Improving the Presentation of Net Period Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements in Accounting Standards Codification ("ASC") 715 related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. The ASU requires entities to disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented on a retrospective basis as of the date of adoption. In addition, only the service-cost component of net benefit cost is eligible for capitalization. The ASU is effective for public business entities for annual periods beginning after December 15, 2017. The Company is currently in the process of evaluating the impact of adoption of this ASU and plans to adopt the standard effective January 1, 2018. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. Under the amended guidance, the Company shall now recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit's fair value. The new standard is effective for public entities for annual reporting periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company early adopted the amended guidance effective January 1, 2017 and will apply the guidance when performing the annual impairment test in the fourth quarter of 2017. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flow - Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The FASB issued the ASU with the intent of reducing diversity in practice. The new standard is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company’s consolidated statement of cash flows and plans to adopt the standard effective January 1, 2018. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation, which simplifies various aspects related to how share-based payments are accounted for and presented in the financial statements. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The standard also allows us to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. The new standard was adopted effective January 1, 2017. The primary impact of adoption is the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital starting in the first quarter of fiscal year 2017. Additional amendments to the accounting for income taxes and minimum statutory withholding tax requirements had no impact to retained earnings as of the date of adoption. Effective January 1, 2017 we adopted a company-wide policy change due to the change in accounting principle and now record forfeitures as they are incurred on a go forward basis. As a result of the change in accounting principle the cumulative-effect adjustment to retained earnings to account for the accounting policy election was immaterial to the financial statements. The presentation requirements for cash flows related to excess tax benefits were applied retrospectively to all periods presented and did not result in a material impact to prior period net cash provided by operations and net cash used in financing. The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in our consolidated cash flows statements since such cash flows have historically been presented as a financing activity. In February 2016, the FASB issued ASU 2016-02, Leases, which represents a wholesale change to lease accounting. The standard introduces a lessee model that brings most leases on the balance sheet as well as aligns certain underlying principles of the new lessor model with those in ASC 606. The new standard is effective for public entities for fiscal years beginning after December 15, 2018, and lessees and lessors are required to use a modified retrospective transition method for existing leases. The Company is in the process of evaluating the impact of adoption of this ASU on the Company’s consolidated financial statements. The FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the guidance in GAAP on the classification and measurement of financial instruments in January 2016. The amended guidance requires entities to carry all investments in equity securities at fair value through net income unless the entity has elected the practicability exception to fair value measurement. This standard will be effective for the fiscal year ending December 31, 2018 and will require a cumulative-effect adjustment to beginning retained earnings on this date. The Company is currently in the process of evaluating the impact of adoption of this ASU on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This standard also includes expanded disclosure requirements that result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. In August 2015, ASU 2015-14 was issued deferring the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017 with an optional early application date for annual reporting periods beginning after December 15, 2016. The Company will adopt the standard and all subsequent amendments in the first quarter of the fiscal year ending December 31, 2018. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). We currently anticipate adopting the standard using the full retrospective method to restate each prior reporting period presented. Our ability to adopt using the full retrospective method is dependent on the successful and timely implementation of a revenue software application that has been procured from a third-party provider and the completion of our analysis of information necessary to restate prior period financial statements. While we are continuing to assess all potential impacts of the standard, we currently believe the standard will not have a material impact on our consolidated financial statements with the possible exception of our gross treatment of hardware revenue. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations focusing on a control model rather than a risk and reward model. We are in the process of evaluating whether the standard will have an impact on our historical practice of recording our hardware sales on a gross basis. We will continue to monitor discussions and interpretations by the Transition Resource Group and the FASB throughout 2017. No other new accounting pronouncement issued or effective during the year had, or is expected to have, a material impact on the consolidated financial statements. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Earnings Per Common Share Basic earnings per common share (“EPS”) is based upon the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur upon issuance of common shares for awards under stock-based compensation plans or conversion of preferred stock, but only to the extent that they are considered dilutive. The following table shows the computation of basic and diluted EPS after consideration of the Reverse Split: Three Months Ended March 31, (in millions, except per share amounts) 2017 2016 Numerator: Net income $ 60.4 $ 7.0 Preferred stock dividends 2.6 2.6 Net income applicable to common shareowners - basic and diluted $ 57.8 $ 4.4 Denominator: Weighted average common shares outstanding - basic 42.1 42.0 Stock-based compensation arrangements 0.2 0.1 Weighted average common shares outstanding - diluted 42.3 42.1 Basic and diluted earnings per common share $ 1.37 $ 0.10 For the three months ended March 31, 2017 and 2016, awards under the Company's stock-based compensation plans for common shares of 0.2 million and 0.6 million , respectively, were excluded from the computation of diluted EPS as the inclusion would have been anti-dilutive. For all periods presented, preferred stock convertible into 0.9 million common shares was excluded as it was anti-dilutive. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt The Company’s debt consists of the following: March 31, December 31, (dollars in millions) 2017 2016 Current portion of long-term debt: Capital lease obligations and other debt $ 8.2 $ 7.5 Current portion of long-term debt 8.2 7.5 Long-term debt, less current portion: Receivables Facility — 89.5 Corporate Credit Agreement - Tranche B Term Loan 315.8 315.8 7 1/4% Senior Notes due 2023 22.3 22.3 7% Senior Notes due 2024 625.0 625.0 Cincinnati Bell Telephone Notes 87.9 87.9 Capital lease obligations and other debt 65.8 62.0 1,116.8 1,202.5 Net unamortized premium 8.3 8.5 Unamortized note issuance costs (11.4 ) (11.9 ) Long-term debt, less current portion 1,113.7 1,199.1 Total debt $ 1,121.9 $ 1,206.6 Corporate Credit Agreement There were no outstanding borrowings on the Corporate Credit Agreement's revolving credit facility, leaving $150.0 million available for borrowings as of March 31, 2017 . This revolving credit facility expires in January 2020. Accounts Receivable Securitization Facility As of March 31, 2017 , the Company had no borrowings and $6.3 million of letters of credit outstanding under the accounts receivable securitization facility ("Receivables Facility"), leaving $112.3 million remaining availability on the total borrowing capacity of $118.6 million . In the second quarter of 2016, the Company executed an amendment of its Receivables Facility, which replaced, amended and added certain provisions and definitions to increase the credit availability, renew the facility, which is subject to renewal every 364 days, until May 2017, and extend the facility's termination date to May 2019. In the event the Receivables Facility is not renewed, the Company has the ability to refinance any outstanding borrowings with borrowings under the Corporate Credit Agreement. Under the terms of the Receivables Facility, the Company could obtain up to $120.0 million depending on the quantity and quality of accounts receivable. Under this agreement, certain subsidiaries, or originators, sell their respective trade receivables on a continuous basis to Cincinnati Bell Funding LLC (“CBF”). Although CBF is a wholly-owned consolidated subsidiary of the Company, CBF is 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, such accounts receivable are legally assets of CBF and, as such, are not available to creditors of the Company's other subsidiaries or the Company. Cincinnati Bell Telephone Notes In April, 2017, the Company filed a Form 15 with the SEC to de-list the Cincinnati Bell Telephone Notes ("CBT Notes") due to the number of registrants no longer exceeding 300 . Therefore, the Company is no longer required to prepare supplemental guarantor information related to the CBT Notes. |
Restructuring and Severance
Restructuring and Severance | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | Restructuring and Severance Liabilities have been established for employee separations and lease abandonment. A summary of activity in the restructuring and severance liability is shown below: (dollars in millions) Employee Separation Lease Abandonment Total Balance as of December 31, 2016 $ 11.0 $ 0.2 $ 11.2 Charges 25.6 — 25.6 Utilizations (12.7 ) — (12.7 ) Balance as of March 31, 2017 $ 23.9 $ 0.2 $ 24.1 The Company made severance payments during the three months ended March 31, 2017 , for employee separations associated with initiatives to reduce costs within our legacy copper network and headcount reductions in our IT Services and Hardware segment. In the first quarter of 2017, the Company finalized a voluntary severance program for certain bargained employees related to an initiative to reduce field and network costs within our legacy copper network. As a result, a severance charge of $25.6 million was recorded to the Entertainment and Communications segment. Lease abandonment costs represent future minimum lease obligations, net of expected sublease income, for abandoned facilities. Lease payments on abandoned facilities will continue through 2019. A summary of restructuring activity by business segment is presented below: (dollars in millions) Entertainment and Communications IT Services and Hardware Corporate Total Balance as of December 31, 2016 $ 7.5 $ 3.0 $ 0.7 $ 11.2 Charges 25.6 — — 25.6 Utilizations (9.8 ) (2.3 ) (0.6 ) (12.7 ) Balance as of March 31, 2017 $ 23.3 $ 0.7 $ 0.1 $ 24.1 At March 31, 2017 and December 31, 2016 , $13.2 million and $7.4 million , respectively, of the restructuring liabilities were included in “Other current liabilities.” At March 31, 2017 and December 31, 2016, $10.9 million and $3.8 million was included in "Other noncurrent liabilities," respectively. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Financial Instruments and Fair Value Measurements The carrying values of the Company's financial instruments approximate the estimated fair values as of March 31, 2017 and December 31, 2016 , except for the Company's long-term debt. The carrying and fair values of the Company's long-term debt are as follows: March 31, 2017 December 31, 2016 (dollars in millions) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, including current portion* $ 1,059.4 $ 1,082.6 $ 1,149.2 $ 1,177.9 *Excludes capital leases and note issuance costs. The fair value of our long-term debt was based on closing or estimated market prices of the Company’s debt at March 31, 2017 and December 31, 2016 , which is considered Level 2 of the fair value hierarchy. |
Pension and Postretirement Plan
Pension and Postretirement Plans | 3 Months Ended |
Mar. 31, 2017 | |
General Discussion of Pension and Other Postretirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Pension and Postretirement Plans The Company sponsors three noncontributory defined benefit plans and a postretirement health and life insurance plan. For the three months ended March 31, 2017 and 2016 , approximately 12% and 10% , respectively, of the costs were capitalized as a component of property, plant and equipment related to construction of our copper and fiber networks. For the three months ended March 31, 2017 and 2016 , pension and postretirement benefit costs (benefits) were as follows: Three Months Ended March 31, 2017 2016 2017 2016 (dollars in millions) Pension Benefits Postretirement and Other Benefits Service cost $ — $ — $ 0.1 $ 0.1 Interest cost on projected benefit obligation 4.8 4.8 0.8 0.8 Expected return on plan assets (6.5 ) (6.8 ) — — Amortization of: Prior service benefit — — (1.1 ) (3.7 ) Actuarial loss 4.4 4.8 1.1 1.2 Total amortization 4.4 4.8 — (2.5 ) Pension / postretirement costs (benefits) $ 2.7 $ 2.8 $ 0.9 $ (1.6 ) Amortizations of prior service benefit and actuarial loss represent reclassifications from accumulated other comprehensive income. Based on current assumptions, contributions to qualified and non-qualified pension plans in 2017 are expected to be approximately $2 million each. Management expects to make cash payments of approximately $9 million related to its postretirement health plans in 2017 . For the three months ended March 31, 2017 , contributions to the pension plans were $0.6 million and contributions to the postretirement plan were $2.0 million . |
Shareowners' Deficit
Shareowners' Deficit | 3 Months Ended |
Mar. 31, 2017 | |
Shareowners' Deficit [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Shareowners' Deficit Accumulated Other Comprehensive Loss For the three months ended March 31, 2017 , the changes in accumulated other comprehensive loss by component were as follows: (dollars in millions) Unrecognized Net Periodic Pension and Postretirement Benefit Cost Unrealized gain on Investment in CyrusOne Foreign Currency Translation Loss Total Balance as of December 31, 2016 $ (157.6 ) $ 68.1 $ (0.8 ) $ (90.3 ) Unrealized gain on Investment in CyrusOne, net — 8.3 (a) — 8.3 Reclassifications, net 2.8 (b) (76.4 ) (c) — (73.6 ) Balance as of March 31, 2017 $ (154.8 ) $ — $ (0.8 ) $ (155.6 ) (a) The unrealized gain on Investment in CyrusOne, net of tax, represents changes in the fair value of CyrusOne shares of common stock owned by the company during the period, before any subsequent sales of those shares. (b) These reclassifications are included in the components of net periodic pension and postretirement benefit costs (see Note 6 for additional details). The components of net periodic pension and postretirement benefit cost are reported within "Cost of services," "Cost of products sold," and "Selling, general and administrative" expenses on the Condensed Consolidated Statements of Operations. (c) These reclassifications are reported within "Gain on sale of Investment in CyrusOne" on the Condensed Consolidated Statements of Operations. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Business Segment Information The Company’s segments are strategic business units that offer distinct products and services and are aligned with its internal management structure and reporting. The Entertainment and Communications segment provides products and services such as data transport, high-speed internet, video, local voice, long distance, voice over internet protocol ("VoIP") and other services. The IT Services and Hardware segment provides a range of fully managed and outsourced IT and telecommunications services along with the sale, installation and maintenance of major branded Telecom and IT hardware. 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: Three Months Ended March 31, (dollars in millions) 2017 2016 Revenue Entertainment and Communications $ 195.3 $ 190.3 IT Services and Hardware 86.2 102.5 Intersegment (3.3 ) (3.9 ) Total revenue $ 278.2 $ 288.9 Intersegment revenue Entertainment and Communications $ 0.4 $ 0.4 IT Services and Hardware 2.9 3.5 Total intersegment revenue $ 3.3 $ 3.9 Operating (loss) income Entertainment and Communications $ (1.6 ) $ 27.7 IT Services and Hardware 2.5 7.2 Corporate (6.2 ) (5.3 ) Total operating (loss) income $ (5.3 ) $ 29.6 Expenditures for long-lived assets Entertainment and Communications $ 49.5 $ 60.3 IT Services and Hardware 14.8 2.0 Corporate — 0.1 Total expenditures for long-lived assets $ 64.3 $ 62.4 Depreciation and amortization Entertainment and Communications $ 42.0 $ 40.2 IT Services and Hardware 3.8 3.2 Total depreciation and amortization $ 45.8 $ 43.4 March 31, December 31, (dollars in millions) 2017 2016 Assets Entertainment and Communications $ 1,114.0 $ 1,093.5 IT Services and Hardware 84.1 60.0 Corporate and eliminations 275.9 387.5 Total assets $ 1,474.0 $ 1,541.0 |
Description of Business and A16
Description of Business and Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation — The Condensed Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair presentation 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. On October 4, 2016, the Company filed an amendment to its Amended and Restated Articles of Incorporation to affect a one-for-five reverse split of its issued common stock (the “Reverse Split”) which had the effect of reducing the number of issued shares of common stock from 210,275,005 to 42,055,001 . Any fractional shares of common stock resulting from the Reverse Split were settled in cash equal to the fraction of a share to which the holder was entitled. As a result of the Reverse Split, the Company reduced total par value from common stock by $1.7 million and increased the additional paid-in capital by the same amount. The Condensed Consolidated Balance Sheet as of December 31, 2016 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 2016 Annual Report on Form 10-K. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results expected for the full year or any other interim period. |
Business Combinations | Business Combinations — In accounting for business combinations, we apply the accounting requirements of ASC 805, “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. In developing estimates of fair value of 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, contingent consideration is presented at fair value at the date of acquisition. Transaction costs are expensed as incurred. On February 28, 2017 we acquired SunTel Services, a private company that provides network security, data connectivity, and unified communications solutions to commercial and enterprise customers across multiple sectors throughout Michigan for cash consideration of $10.0 million . Based on preliminary estimates of fair value the acquired assets and liabilities assumed consisted primarily of property plant and equipment of $0.4 million , customer relationship intangible assets of $1.2 million , working capital of $4.1 million and goodwill of $4.3 million . These assets and liabilities are included in the IT Services and Hardware segment. We are in the process of finalizing the preliminary purchase price and the valuation of the net assets acquired. Upon completion of the final fair value assessment, the fair values of the net assets acquired may differ from the preliminary assessment. |
Use of Estimates | 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. |
CyrusOne Investment | Investment in CyrusOne — As of December 31, 2016, "Investment in CyrusOne" on the Condensed Consolidated Balance Sheets was recorded at fair value, which was determined based on closing market price of CyrusOne at December 31, 2016 . This investment is classified as Level 1 in the fair value hierarchy. Unrealized gains and losses on our investment in CyrusOne are included in "Accumulated other comprehensive loss", net of taxes on the Condensed Consolidated Balance Sheets. When evaluating the investments for other-than-temporary impairment, the Company reviews such factors as the financial condition of the issuer, severity and duration of the fair value decline and evaluation of factors that could cause the investment to have an other-than-temporary decline in fair value. In the first quarter of 2017, we sold our remaining 2.8 million shares of CyrusOne Inc. common stock for net proceeds totaling $140.7 million that resulted in a realized gain of $117.7 million . As of March 31, 2017 we no longer have an investment in CyrusOne Inc. |
Income Taxes | Income Taxes — 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, as well as the tax effects associated with discrete items. The Company expects its effective rate to exceed statutory rates primarily due to non-deductible expenses. During 2016, the Company reclassed $14.5 million of Alternative Minimum tax ("AMT") refundable tax credits from "Deferred income taxes, net" to "Receivables" as these credits are now expected to be utilized during 2017. In the first quarter of 2017, the Company reclassed an additional $3.4 million from "Deferred income taxes, net" to "Receivables." Acceleration of the AMT refundable tax credits was the result of the Company's decision to make an election on its 2016 federal income tax return to claim the credits in lieu of claiming bonus depreciation. New tax legislation enacted in 2015 increased the amount of AMT credits that can be claimed beginning with the 2016 tax year. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards — In March 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-07, Improving the Presentation of Net Period Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements in Accounting Standards Codification ("ASC") 715 related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. The ASU requires entities to disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented on a retrospective basis as of the date of adoption. In addition, only the service-cost component of net benefit cost is eligible for capitalization. The ASU is effective for public business entities for annual periods beginning after December 15, 2017. The Company is currently in the process of evaluating the impact of adoption of this ASU and plans to adopt the standard effective January 1, 2018. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. Under the amended guidance, the Company shall now recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit's fair value. The new standard is effective for public entities for annual reporting periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company early adopted the amended guidance effective January 1, 2017 and will apply the guidance when performing the annual impairment test in the fourth quarter of 2017. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flow - Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The FASB issued the ASU with the intent of reducing diversity in practice. The new standard is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company’s consolidated statement of cash flows and plans to adopt the standard effective January 1, 2018. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation, which simplifies various aspects related to how share-based payments are accounted for and presented in the financial statements. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The standard also allows us to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. The new standard was adopted effective January 1, 2017. The primary impact of adoption is the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital starting in the first quarter of fiscal year 2017. Additional amendments to the accounting for income taxes and minimum statutory withholding tax requirements had no impact to retained earnings as of the date of adoption. Effective January 1, 2017 we adopted a company-wide policy change due to the change in accounting principle and now record forfeitures as they are incurred on a go forward basis. As a result of the change in accounting principle the cumulative-effect adjustment to retained earnings to account for the accounting policy election was immaterial to the financial statements. The presentation requirements for cash flows related to excess tax benefits were applied retrospectively to all periods presented and did not result in a material impact to prior period net cash provided by operations and net cash used in financing. The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in our consolidated cash flows statements since such cash flows have historically been presented as a financing activity. In February 2016, the FASB issued ASU 2016-02, Leases, which represents a wholesale change to lease accounting. The standard introduces a lessee model that brings most leases on the balance sheet as well as aligns certain underlying principles of the new lessor model with those in ASC 606. The new standard is effective for public entities for fiscal years beginning after December 15, 2018, and lessees and lessors are required to use a modified retrospective transition method for existing leases. The Company is in the process of evaluating the impact of adoption of this ASU on the Company’s consolidated financial statements. The FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the guidance in GAAP on the classification and measurement of financial instruments in January 2016. The amended guidance requires entities to carry all investments in equity securities at fair value through net income unless the entity has elected the practicability exception to fair value measurement. This standard will be effective for the fiscal year ending December 31, 2018 and will require a cumulative-effect adjustment to beginning retained earnings on this date. The Company is currently in the process of evaluating the impact of adoption of this ASU on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This standard also includes expanded disclosure requirements that result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. In August 2015, ASU 2015-14 was issued deferring the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017 with an optional early application date for annual reporting periods beginning after December 15, 2016. The Company will adopt the standard and all subsequent amendments in the first quarter of the fiscal year ending December 31, 2018. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). We currently anticipate adopting the standard using the full retrospective method to restate each prior reporting period presented. Our ability to adopt using the full retrospective method is dependent on the successful and timely implementation of a revenue software application that has been procured from a third-party provider and the completion of our analysis of information necessary to restate prior period financial statements. While we are continuing to assess all potential impacts of the standard, we currently believe the standard will not have a material impact on our consolidated financial statements with the possible exception of our gross treatment of hardware revenue. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations focusing on a control model rather than a risk and reward model. We are in the process of evaluating whether the standard will have an impact on our historical practice of recording our hardware sales on a gross basis. We will continue to monitor discussions and interpretations by the Transition Resource Group and the FASB throughout 2017. No other new accounting pronouncement issued or effective during the year had, or is expected to have, a material impact on the consolidated financial statements. |
Earnings Per Share | Basic earnings per common share (“EPS”) is based upon the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur upon issuance of common shares for awards under stock-based compensation plans or conversion of preferred stock, but only to the extent that they are considered dilutive. |
Fair Value Measurement | The fair value of our long-term debt was based on closing or estimated market prices of the Company’s debt at March 31, 2017 and December 31, 2016 , which is considered Level 2 of the fair value hierarchy. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block] | The following table shows the computation of basic and diluted EPS after consideration of the Reverse Split: Three Months Ended March 31, (in millions, except per share amounts) 2017 2016 Numerator: Net income $ 60.4 $ 7.0 Preferred stock dividends 2.6 2.6 Net income applicable to common shareowners - basic and diluted $ 57.8 $ 4.4 Denominator: Weighted average common shares outstanding - basic 42.1 42.0 Stock-based compensation arrangements 0.2 0.1 Weighted average common shares outstanding - diluted 42.3 42.1 Basic and diluted earnings per common share $ 1.37 $ 0.10 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | The Company’s debt consists of the following: March 31, December 31, (dollars in millions) 2017 2016 Current portion of long-term debt: Capital lease obligations and other debt $ 8.2 $ 7.5 Current portion of long-term debt 8.2 7.5 Long-term debt, less current portion: Receivables Facility — 89.5 Corporate Credit Agreement - Tranche B Term Loan 315.8 315.8 7 1/4% Senior Notes due 2023 22.3 22.3 7% Senior Notes due 2024 625.0 625.0 Cincinnati Bell Telephone Notes 87.9 87.9 Capital lease obligations and other debt 65.8 62.0 1,116.8 1,202.5 Net unamortized premium 8.3 8.5 Unamortized note issuance costs (11.4 ) (11.9 ) Long-term debt, less current portion 1,113.7 1,199.1 Total debt $ 1,121.9 $ 1,206.6 |
Restructuring and Severance (Ta
Restructuring and Severance (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | A summary of activity in the restructuring and severance liability is shown below: (dollars in millions) Employee Separation Lease Abandonment Total Balance as of December 31, 2016 $ 11.0 $ 0.2 $ 11.2 Charges 25.6 — 25.6 Utilizations (12.7 ) — (12.7 ) Balance as of March 31, 2017 $ 23.9 $ 0.2 $ 24.1 |
Schedule of Restructuring and Related Costs by Segment [Table Text Block] | A summary of restructuring activity by business segment is presented below: (dollars in millions) Entertainment and Communications IT Services and Hardware Corporate Total Balance as of December 31, 2016 $ 7.5 $ 3.0 $ 0.7 $ 11.2 Charges 25.6 — — 25.6 Utilizations (9.8 ) (2.3 ) (0.6 ) (12.7 ) Balance as of March 31, 2017 $ 23.3 $ 0.7 $ 0.1 $ 24.1 |
Financial Instruments and Fai20
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The carrying and fair values of the Company's long-term debt are as follows: March 31, 2017 December 31, 2016 (dollars in millions) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, including current portion* $ 1,059.4 $ 1,082.6 $ 1,149.2 $ 1,177.9 *Excludes capital leases and note issuance costs. |
Pension and Postretirement Pl21
Pension and Postretirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
General Discussion of Pension and Other Postretirement Benefits [Abstract] | |
Schedule of Net Benefit Costs [Table Text Block] | For the three months ended March 31, 2017 and 2016 , pension and postretirement benefit costs (benefits) were as follows: Three Months Ended March 31, 2017 2016 2017 2016 (dollars in millions) Pension Benefits Postretirement and Other Benefits Service cost $ — $ — $ 0.1 $ 0.1 Interest cost on projected benefit obligation 4.8 4.8 0.8 0.8 Expected return on plan assets (6.5 ) (6.8 ) — — Amortization of: Prior service benefit — — (1.1 ) (3.7 ) Actuarial loss 4.4 4.8 1.1 1.2 Total amortization 4.4 4.8 — (2.5 ) Pension / postretirement costs (benefits) $ 2.7 $ 2.8 $ 0.9 $ (1.6 ) |
Shareowners' Deficit (Tables)
Shareowners' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Shareowners' Deficit [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | For the three months ended March 31, 2017 , the changes in accumulated other comprehensive loss by component were as follows: (dollars in millions) Unrecognized Net Periodic Pension and Postretirement Benefit Cost Unrealized gain on Investment in CyrusOne Foreign Currency Translation Loss Total Balance as of December 31, 2016 $ (157.6 ) $ 68.1 $ (0.8 ) $ (90.3 ) Unrealized gain on Investment in CyrusOne, net — 8.3 (a) — 8.3 Reclassifications, net 2.8 (b) (76.4 ) (c) — (73.6 ) Balance as of March 31, 2017 $ (154.8 ) $ — $ (0.8 ) $ (155.6 ) (a) The unrealized gain on Investment in CyrusOne, net of tax, represents changes in the fair value of CyrusOne shares of common stock owned by the company during the period, before any subsequent sales of those shares. (b) These reclassifications are included in the components of net periodic pension and postretirement benefit costs (see Note 6 for additional details). The components of net periodic pension and postretirement benefit cost are reported within "Cost of services," "Cost of products sold," and "Selling, general and administrative" expenses on the Condensed Consolidated Statements of Operations. (c) These reclassifications are reported within "Gain on sale of Investment in CyrusOne" on the Condensed Consolidated Statements of Operations. |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Selected financial data for the Company’s business segment information is as follows: Three Months Ended March 31, (dollars in millions) 2017 2016 Revenue Entertainment and Communications $ 195.3 $ 190.3 IT Services and Hardware 86.2 102.5 Intersegment (3.3 ) (3.9 ) Total revenue $ 278.2 $ 288.9 Intersegment revenue Entertainment and Communications $ 0.4 $ 0.4 IT Services and Hardware 2.9 3.5 Total intersegment revenue $ 3.3 $ 3.9 Operating (loss) income Entertainment and Communications $ (1.6 ) $ 27.7 IT Services and Hardware 2.5 7.2 Corporate (6.2 ) (5.3 ) Total operating (loss) income $ (5.3 ) $ 29.6 Expenditures for long-lived assets Entertainment and Communications $ 49.5 $ 60.3 IT Services and Hardware 14.8 2.0 Corporate — 0.1 Total expenditures for long-lived assets $ 64.3 $ 62.4 Depreciation and amortization Entertainment and Communications $ 42.0 $ 40.2 IT Services and Hardware 3.8 3.2 Total depreciation and amortization $ 45.8 $ 43.4 March 31, December 31, (dollars in millions) 2017 2016 Assets Entertainment and Communications $ 1,114.0 $ 1,093.5 IT Services and Hardware 84.1 60.0 Corporate and eliminations 275.9 387.5 Total assets $ 1,474.0 $ 1,541.0 |
Description of Business and A24
Description of Business and Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Oct. 05, 2016 | Oct. 04, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of customers, exceeds 10% of total accounts receivable | 1 | ||||
Accounts Receivable from one customer greater than 10%, percentage | 18.00% | 21.00% | |||
Revenue from one customer greater than 10%, percentage | 11.00% | ||||
Common Stock, Shares, Issued | 42,133,326 | 42,056,237 | 42,055,001 | 210,275,005 | |
Total Par Value, Amount, Reclassified | $ 1.7 | ||||
Business Combination, Consideration Transferred | $ 10 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 0.4 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 1.2 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Working Capital | 4.1 | ||||
Goodwill, Acquired During Period | $ 4.3 | ||||
Available-for-Sale Securities, Shares Sold | 2,800,000 | ||||
Proceeds from sale of Investment in CyrusOne | $ 140.7 | $ 0 | |||
Gain on sale of Investment in CyrusOne | 117.7 | $ 0 | |||
AMT refundable tax credits reclassified | $ 3.4 | $ 14.5 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net income | $ 60.4 | $ 7 |
Preferred stock dividends | 2.6 | 2.6 |
Net income applicable to common shareowners - basic and diluted | $ 57.8 | $ 4.4 |
Denominator: | ||
Weighted average common shares outstanding - basic | 42.1 | 42 |
Stock-based compensation arrangements | 0.2 | 0.1 |
Weighted average common shares outstanding - diluted | 42.3 | 42.1 |
Basic and diluted earnings per common share | $ 1.37 | $ 0.10 |
Stock Compensation Plan [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.2 | 0.6 |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.9 | 0.9 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ 8.2 | $ 7.5 |
Long-term debt, less current portion | 1,113.7 | 1,199.1 |
Net unamortized premium | 8.3 | 8.5 |
Unamortized note issuance costs | (11.4) | (11.9) |
Total debt | 1,121.9 | 1,206.6 |
Corporate Credit Agreement | 0 | |
Receivables facility amount outstanding | 0 | 89.5 |
Capital lease Obligations and Other Debt [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 8.2 | 7.5 |
Long-term debt, less current portion | 65.8 | 62 |
Senior Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 22.3 | 22.3 |
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | |
Senior Notes due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 625 | 625 |
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |
Various Cincinnati Bell Telephone Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 87.9 | 87.9 |
Long-term debt, less current portion, before deducting unamortized discount or premium and before deducting unamortized note issuance costs [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, less current portion | 1,116.8 | 1,202.5 |
Long-Term Debt, Less Current Portion [Member] | Tranche B Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 315.8 | $ 315.8 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | ||
Corporate Credit Agreement | $ 0 | |
Line of Credit Facility, Remaining Borrowing Capacity | 150 | |
Receivables facility amount outstanding | 0 | $ 89.5 |
Letters of Credit Outstanding, Amount | 6.3 | |
Receivables Facility Remaining Borrowing Capacity | 112.3 | |
Receivables facility maximum borrowing availability | $ 118.6 | |
Accounts Receivable Facility, Renewal Term | 364 | |
Receivables facility maximum borrowing capacity | $ 120 |
Debt - Cincinnati Bell Telephon
Debt - Cincinnati Bell Telephone Notes (Details) | Apr. 21, 2017 |
Debt Disclosure [Abstract] | |
Debt Instrument, Number of Registrants | 300 |
Restructuring and Severance (De
Restructuring and Severance (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Current | $ 13.2 | $ 7.4 | |
Restructuring Reserve, Noncurrent | 10.9 | $ 3.8 | |
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 11.2 | ||
Charges | 25.6 | $ 0 | |
Utilizations | (12.7) | ||
Ending balance | 24.1 | ||
Entertainment and Communications [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 7.5 | ||
Charges | 25.6 | ||
Utilizations | (9.8) | ||
Ending balance | 23.3 | ||
IT Services and Hardware [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 3 | ||
Charges | 0 | ||
Utilizations | (2.3) | ||
Ending balance | 0.7 | ||
Corporate Segment [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0.7 | ||
Charges | 0 | ||
Utilizations | (0.6) | ||
Ending balance | 0.1 | ||
Employee Severance [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 11 | ||
Charges | 25.6 | ||
Utilizations | (12.7) | ||
Ending balance | 23.9 | ||
Lease Abandonment [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0.2 | ||
Charges | 0 | ||
Utilizations | 0 | ||
Ending balance | $ 0.2 |
Financial Instruments and Fai30
Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, including current portion | $ 1,059.4 | $ 1,149.2 |
Estimate of Fair Value, Fair Value Disclosure [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, including current portion | $ 1,082.6 | $ 1,177.9 |
Pension and Postretirement Pl31
Pension and Postretirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Capitalized portion of defined benefit contribution percent | 12.00% | 10.00% | |
Pension Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension and Other Postretirement Benefit Contributions | $ 0.6 | ||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | |||
Service cost | 0 | $ 0 | |
Interest cost on projected benefit obligation | 4.8 | 4.8 | |
Expected return on plan assets | (6.5) | (6.8) | |
Amortization of: | |||
Prior service benefit | 0 | 0 | |
Actuarial loss | 4.4 | 4.8 | |
Total amortization | 4.4 | 4.8 | |
Pension / postretirement costs (benefits) | 2.7 | 2.8 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | $ 9 | ||
Pension and Other Postretirement Benefit Contributions | 2 | ||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | |||
Service cost | 0.1 | 0.1 | |
Interest cost on projected benefit obligation | 0.8 | 0.8 | |
Expected return on plan assets | 0 | 0 | |
Amortization of: | |||
Prior service benefit | (1.1) | (3.7) | |
Actuarial loss | 1.1 | 1.2 | |
Total amortization | 0 | (2.5) | |
Pension / postretirement costs (benefits) | $ 0.9 | $ (1.6) | |
Qualified Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | 2 | ||
Non-Qualified Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | $ 2 |
Shareowners' Deficit - Accumula
Shareowners' Deficit - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||
Beginning balance | $ (90.3) | ||
Unrealized gain on Investment in CyrusOne, net | 8.3 | $ 0 | |
Reclassifications, net | (73.6) | ||
Ending balance | (155.6) | ||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | |||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||
Beginning balance | (157.6) | ||
Unrealized gain on Investment in CyrusOne, net | 0 | ||
Reclassifications, net | [1] | 2.8 | |
Ending balance | (154.8) | ||
Available-for-sale Securities [Member] | |||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||
Beginning balance | 68.1 | ||
Unrealized gain on Investment in CyrusOne, net | [2] | 8.3 | |
Reclassifications, net | [3] | (76.4) | |
Ending balance | 0 | ||
Accumulated Translation Adjustment [Member] | |||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||
Beginning balance | (0.8) | ||
Unrealized gain on Investment in CyrusOne, net | 0 | ||
Reclassifications, net | 0 | ||
Ending balance | $ (0.8) | ||
[1] | These reclassifications are included in the components of net periodic pension and postretirement benefit costs (see Note 6 for additional details). The components of net periodic pension and postretirement benefit cost are reported within "Cost of services," "Cost of products sold," and "Selling, general and administrative" expenses on the Condensed Consolidated Statements of Operations. | ||
[2] | The unrealized gain on Investment in CyrusOne, net of tax, represents changes in the fair value of CyrusOne shares of common stock owned by the company during the period, before any subsequent sales of those shares. | ||
[3] | These reclassifications are reported within "Gain on sale of Investment in CyrusOne" on the Condensed Consolidated Statements of Operations. |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 278.2 | $ 288.9 | |
Operating (loss) income | (5.3) | 29.6 | |
Expenditures for long-lived assets | 55.1 | 62.4 | |
Depreciation and amortization | 45.8 | 43.4 | |
Assets | 1,474 | $ 1,541 | |
Entertainment and Communications [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 195.3 | 190.3 | |
Operating (loss) income | (1.6) | 27.7 | |
Expenditures for long-lived assets | 49.5 | 60.3 | |
Depreciation and amortization | 42 | 40.2 | |
Assets | 1,114 | 1,093.5 | |
IT Services and Hardware [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 86.2 | 102.5 | |
Operating (loss) income | 2.5 | 7.2 | |
Expenditures for long-lived assets | 2 | ||
Depreciation and amortization | 3.8 | 3.2 | |
Assets | 84.1 | 60 | |
Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating (loss) income | (6.2) | (5.3) | |
Expenditures for long-lived assets | 0 | 0.1 | |
Intersegment Elimination [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | (3.3) | (3.9) | |
Intersegment Elimination [Member] | Entertainment and Communications [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0.4 | 0.4 | |
Intersegment Elimination [Member] | IT Services and Hardware [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 2.9 | 3.5 | |
Intersegment Elimination [Member] | Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Assets | 275.9 | $ 387.5 | |
Sales [Member] | Intersegment Elimination [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 3.3 | $ 3.9 | |
Expenditures for Long-Lived Assets, Including Acquisitions of Businesses [Member] | |||
Segment Reporting Information [Line Items] | |||
Expenditures for long-lived assets | 64.3 | ||
Expenditures for Long-Lived Assets, Including Acquisitions of Businesses [Member] | IT Services and Hardware [Member] | |||
Segment Reporting Information [Line Items] | |||
Expenditures for long-lived assets | $ 14.8 |