Cincinnati Bell (BDWGP) 8-K Cincinnati Bell Reports Second Quarter 2018 Results

Hawaiian Telcom Holdco, Inc.

Consolidated Statements of Income (Loss)

(Unaudited, dollars in thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Operating revenues	$	89,081		$	91,298		$	178,304		$	185,808
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)	41,881			40,181			83,970			81,372
Selling, general and administrative	29,225			26,713			56,849			56,343
Depreciation and amortization	23,875			21,742			47,208			43,012
Total operating expenses	94,981			88,636			188,027			180,727
Operating income (loss)	(5,900		)	2,662			(9,723		)	5,081
Other income (expense):
Interest expense	(5,646		)	(3,819		)	(9,785		)	(7,812		)
Retirement plan	710			105			1,422			(1,660		)
Loss on early extinguishment of debt	—			(4,826		)	—			(4,826		)
Total other expense	(4,936		)	(8,540		)	(8,363		)	(14,298		)
Loss before income tax benefit	(10,836		)	(5,878		)	(18,086		)	(9,217		)
Income tax benefit	(172		)	(2,402		)	(1,686		)	(3,788		)
Net loss	$	(10,664	)	$	(3,476	)	$	(16,400	)	$	(5,429	)

Hawaiian Telcom Holdco, Inc.

Revenue by Category and Channel

(Unaudited, dollars in thousands)

	Three Months Ended
	June 30,				Change
	2018		2017		Amount			Percentage
Business
Data services:
Ethernet and routed network services	$	4,205	$	4,336	$	(131	)	(3.0	)%
Dedicated Internet access	1,939		2,086		(147		)	(7.0	)%
Internet services	3,056		3,313		(257		)	(7.8	)%
BVoIP	4,295		3,577		718			20.1	%
Legacy data services	1,495		1,690		(195		)	(11.5	)%
Total data services	14,990		15,002		(12		)	(0.1	)%
Voice services	19,344		20,733		(1,389		)	(6.7	)%
Hosted and managed services	1,575		1,642		(67		)	(4.1	)%
Equipment and related services	4,193		4,274		(81		)	(1.9	)%
	40,102		41,651		(1,549		)	(3.7	)%
Consumer
Video services	11,260		10,806		454			4.2	%
Internet services	7,547		6,619		928			14.0	%
Voice services	14,720		16,406		(1,686		)	(10.3	)%
	33,527		33,831		(304		)	(0.9	)%
Wholesale carrier data	12,629		12,601		28			0.2	%
Other	2,823		3,215		(392		)	(12.2	)%
	$	89,081	$	91,298	$	(2,217	)	(2.4	)%

	Six Months Ended
	June 30,				Change
	2018		2017		Amount			Percentage
Business
Data services:
Ethernet and routed network services	$	8,275	$	9,127	$	(852	)	(9.3	)%
Dedicated Internet access	4,018		4,689		(671		)	(14.3	)%
Internet services	6,175		6,667		(492		)	(7.4	)%
BVoIP	8,397		6,903		1,494			21.6	%
Legacy data services	2,971		3,233		(262		)	(8.1	)%
Total data services	29,836		30,619		(783		)	(2.6	)%
Voice services	38,996		41,991		(2,995		)	(7.1	)%
Hosted and managed services	3,174		3,174		—			—	%
Equipment and related services	7,222		9,717		(2,495		)	(25.7	)%
	79,228		85,501		(6,273		)	(7.3	)%
Consumer
Video services	22,485		21,400		1,085			5.1	%
Internet services	14,652		13,300		1,352			10.2	%
Voice services	29,992		33,393		(3,401		)	(10.2	)%
	67,129		68,093		(964		)	(1.4	)%
Wholesale carrier data	26,561		25,430		1,131			4.4	%
Other	5,385		6,784		(1,399		)	(20.6	)%
	$	178,303	$	185,808	$	(7,505	)	(4.0	)%

Hawaiian Telcom Holdco, Inc.

Schedule of Adjusted EBITDA Calculation

(Unaudited, dollars in thousands)

	Three Months Ended						Six Months Ended						LTM Ended
	June 30,						June 30,						June 30,
	2018			2017			2018			2017			2018
Net loss	$	(10,664	)	$	(3,476	)	$	(16,400	)	$	(5,429	)	$	(118,212	)
Income tax provision (credit)	(172		)	(2,402		)	(1,686		)	(3,788		)	90,104
Expense, Net	4,936			8,540			8,363			14,298			17,608
Operating income (loss)	(5,900		)	2,662			(9,723		)	5,081			(10,500		)
Depreciation and amortization	23,875			21,742			47,208			43,012			92,620
Retirement plan expenses	710			105			1,422			(1,660		)	779
Non-cash stock and other performance-based compensation	857			731			1,428			1,456			2,799
SystemMetrics earn-out	—			32			—			32			—
Pension settlement loss	—			314			—			2,270			1,730
Severance	89			—			89			1,743			89
Merger-related expenses	731			—			936			—			3,347
Other special items	1,398			839			2,217			1,553			3,197
Adjusted EBITDA	$	21,760		$	26,425		$	43,577		$	53,487		$	94,061

Hawaiian Telcom Holdco, Inc.

Capital Expenditures

(Unaudited, dollars in thousands)

	Three Months Ended				Six Months Ended				LTM Ended
	June 30,				June 30,				June 30,
	2018		2017		2018		2017		2018
Capital expenditures	(27,688	)	(25,388	)	(52,024	)	(52,630	)	(94,650	)

Hawaiian Telcom Holdco, Inc.

Volume Information

(Unaudited)

	June 30,		Change
	2018	2017	Number		Percentage
Business
Data lines	18,011	18,917	(906	)	(4.8	)%
BVoIP lines	23,433	20,666	2,767		13.4	%
Voice access lines	144,606	155,743	(11,137	)	(7.2	)%
Consumer
Video subscribers	47,423	43,235	4,188		9.7	%
Internet lines	93,886	90,073	3,813		4.2	%
Voice access lines	114,982	127,134	(12,152	)	(9.6	)%
Homes enabled for video	207,000	204,000	3,000		1.5	%

	June 30,	March 31,	Change
	2018	2018	Number		Percentage
Business
Data lines	18,011	18,112	(101	)	(0.6	)%
BVoIP lines	23,433	23,259	174		0.7	%
Voice access lines	144,606	146,752	(2,146	)	(1.5	)%
Consumer
Video subscribers	47,423	45,747	1,676		3.7	%
Internet lines	93,886	93,104	782		0.8	%
Voice access lines	114,982	118,496	(3,514	)	(3.0	)%
Homes enabled for video	207,000	207,000	—		—	%