Document and Entity Information
Document and Entity Information Document | 3 Months Ended | ||
Mar. 31, 2019$ / shares | Apr. 30, 2019shares | Dec. 31, 2018$ / shares | |
Class of Stock [Line Items] | |||
Entity Registrant Name | CINCINNATI BELL INC. | ||
Entity Central Index Key | 0000716133 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Document Type | 10-Q | ||
Document Period End Date | Mar. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | Q1 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | shares | 50,367,297 | ||
Fractional Interest in Cumulative Convertible Preferred Stock, Depositary Shares | 0.05 | ||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | |
Common Stock [Member] | |||
Class of Stock [Line Items] | |||
Trading Symbol | CBB | ||
Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Trading Symbol | CBB.PB |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | $ 379.6 | $ 295.7 |
Costs and expenses | ||
Cost of services and products, excluding items below | 197.7 | 149.4 |
Selling, general and administrative, excluding items below | 86.1 | 68.4 |
Depreciation and amortization | 79.4 | 51.2 |
Restructuring and severance related charges | 3.3 | 0.3 |
Transaction and integration cost | 3 | 2.2 |
Total operating costs and expenses | 369.5 | 271.5 |
Operating income | 10.1 | 24.2 |
Interest expense | 35.1 | 30.8 |
Other components of pension and postretirement benefit plans expense | 2.6 | 3.3 |
Other income, net | (1) | (0.4) |
Loss before income taxes | (26.6) | (9.5) |
Income tax expense (benefit) | 0.3 | (1.2) |
Net loss | (26.9) | (8.3) |
Preferred stock dividends | 2.6 | 2.6 |
Net loss applicable to common shareowners | $ (29.5) | $ (10.9) |
Basic and diluted net loss per common share | $ (0.59) | $ (0.26) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net loss | $ (26.9) | $ (8.3) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation gain (loss) | 1.6 | (1.8) |
Cash flow hedges: | ||
Unrealized loss on cash flow hedges arising during the period, net of tax of ($1.0) | (3.1) | 0 |
Reclassification adjustment for net losses included in net income, net of tax of $0.1 | 0.2 | 0 |
Defined benefit plans: | ||
Amortization of prior service benefits included in net income, net of tax of ($0.1), ($0.2) | (0.5) | (0.6) |
Amortization of net actuarial loss included in net income, net of tax of $0.8, $1.2 | 3 | 4.1 |
Total other comprehensive income | 1.2 | 1.7 |
Total comprehensive loss | $ (25.7) | $ (6.6) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income Parenthetical - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Unrealized loss on cash flow hedges arising during the period, tax | $ (1) | $ 0 |
Reclassification adjustment for net losses included in net income, tax | 0.1 | 0 |
Amortization of prior service benefits included in net income, tax | (0.1) | (0.2) |
Amortization of net actuarial loss included in net income, tax | $ 0.8 | $ 1.2 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareowners' Deficit Statement - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance, Shareowners' Equity (Deficit) | $ (75) | $ (117.9) |
Net loss | (26.9) | (8.3) |
Other comprehensive income | 1.2 | 1.7 |
Ending Balance, Shareowners' Equity (Deficit) | $ (102.3) | $ (127.9) |
Preferred Stock [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance, Shares | 3.1 | 3.1 |
Beginning Balance, Shareowners' Equity (Deficit) | $ 129.4 | $ 129.4 |
Ending Balance, Shares | 3.1 | 3.1 |
Ending Balance, Shareowners' Equity (Deficit) | $ 129.4 | $ 129.4 |
Common Stock [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance, Shares | 50.2 | 42.2 |
Beginning Balance, Shareowners' Equity (Deficit) | $ 0.5 | $ 0.4 |
Shares issued under employee plans | 0.2 | 0.2 |
Shares issued under employee plans | $ 0 | $ 0 |
Ending Balance, Shares | 50.4 | 42.4 |
Ending Balance, Shareowners' Equity (Deficit) | $ 0.5 | $ 0.4 |
Additional Paid-in Capital [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance, Shareowners' Equity (Deficit) | 2,680 | 2,565.6 |
Shares issued under employee plans | 0 | 0 |
Shares purchased under employee plans and other | (0.8) | (2) |
Stock-based compensation | 1.8 | 1.2 |
Dividends on preferred stock | (2.6) | (2.6) |
Ending Balance, Shareowners' Equity (Deficit) | 2,678.4 | 2,562.2 |
Retained Earnings [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance, Shareowners' Equity (Deficit) | (2,709.4) | (2,639.6) |
Net loss | (26.9) | (8.3) |
Ending Balance, Shareowners' Equity (Deficit) | (2,736.3) | (2,647.9) |
AOCI Attributable to Parent [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance, Shareowners' Equity (Deficit) | (175.5) | (173.7) |
Other comprehensive income | 1.2 | 1.7 |
Ending Balance, Shareowners' Equity (Deficit) | $ (174.3) | $ (172) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 3.9 | $ 15.4 |
Receivables, less allowances of $13.1 and $13.0 | 260 | 342.8 |
Inventory, materials and supplies | 38.9 | 46.5 |
Prepaid expenses | 31.7 | 30.7 |
Other current assets | 9.9 | 10.5 |
Total current assets | 344.4 | 445.9 |
Property, plant and equipment, net | 1,832.8 | 1,844 |
Operating lease right-of-use assets | 37.2 | 0 |
Goodwill | 158.6 | 157 |
Intangible assets, net (excluding goodwill) | 165.2 | 168.1 |
Deferred income taxes, net | 47.4 | 47.5 |
Other noncurrent assets | 63.7 | 67.7 |
Total assets | 2,649.3 | 2,730.2 |
Current liabilities | ||
Current portion of long-term debt | 22.4 | 20.2 |
Accounts payable | 259.3 | 331.9 |
Unearned revenue and customer deposits | 49.3 | 55.9 |
Accrued taxes | 18.2 | 24.8 |
Accrued interest | 24.8 | 26.8 |
Accrued payroll and benefits | 42.3 | 42.9 |
Other current liabilities | 44.5 | 39.2 |
Total current liabilities | 460.8 | 541.7 |
Long-term debt, less current portion | 1,909.9 | 1,909.6 |
Operating lease liabilities | 34.5 | 0 |
Pension and postretirement benefit obligations | 226.7 | 230.6 |
Pole license agreement obligation | 38.8 | 39.1 |
Deferred income tax liabilities | 12.4 | 11.4 |
Other noncurrent liabilities | 68.5 | 72.8 |
Total liabilities | 2,751.6 | 2,805.2 |
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, 2019 and December 31, 2018; liquidation preference $1,000 per share ($50 per depositary share) | 129.4 | 129.4 |
Common shares, $.01 par value; 96,000,000 shares authorized; 50,360,602 and 50,184,114 shares issued and outstanding at March 31, 2019 and December 31, 2018 | 0.5 | 0.5 |
Additional paid-in capital | 2,678.4 | 2,680 |
Accumulated deficit | (2,736.3) | (2,709.4) |
Accumulated other comprehensive loss | (174.3) | (175.5) |
Total shareowners' deficit | (102.3) | (75) |
Total liabilities and shareowners' deficit | $ 2,649.3 | $ 2,730.2 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets Parenthetical - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Allowance for receivables | $ 13,100,000 | $ 13,000,000 | |
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 | 50,360,602 | 50,184,114 | |
Common Stock, Shares, Outstanding | 50,360,602 | 50,184,114 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (26.9) | $ (8.3) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 79.4 | 51.2 |
Provision for loss on receivables | 2.9 | 1 |
Noncash portion of interest expense | 1.9 | 0.8 |
Deferred income taxes | 0.5 | (1.2) |
Pension and other postretirement payments (in excess of) less than expense | (0.3) | 0.4 |
Stock-based compensation | 1.8 | 1.2 |
Other, net | (1.3) | (2) |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Decrease in receivables | 82.3 | 6.5 |
Decrease (increase) in inventory, materials, supplies, prepaid expenses and other current assets | 7.5 | (4.4) |
(Decrease) increase in accounts payable | (74.8) | 3.6 |
(Decrease) increase in accrued and other current liabilities | (17.9) | 9.6 |
Decrease in other noncurrent assets | 2.3 | 0.5 |
Decrease in other noncurrent liabilities | (0.6) | (0.4) |
Net cash provided by operating activities | 56.8 | 58.5 |
Cash flows from investing activities | ||
Capital expenditures | (56.5) | (32.7) |
Acquisitions of businesses | 0 | (2.8) |
Other, net | (0.1) | (0.1) |
Net cash used in investing activities | (56.6) | (35.6) |
Cash flows from financing activities | ||
Net decrease in corporate credit and receivables facilities with initial maturities less than 90 days | (3.8) | 0 |
Repayment of debt | (4.5) | (3) |
Debt issuance costs | (0.1) | (0.4) |
Dividends paid on preferred stock | (2.6) | (2.6) |
Other, net | (0.8) | (2) |
Net cash used in financing activities | (11.8) | (8) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0.1 | 0.8 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (11.5) | 15.7 |
Cash, cash equivalents and restricted cash at beginning of period | 15.4 | 396.5 |
Cash, cash equivalents and restricted cash at end of period | 3.9 | 412.2 |
Noncash investing and financing transactions: | ||
Acquisition of property by assuming debt and other noncurrent liabilities | 9.8 | 0 |
Acquisition of property on account | $ 33.2 | $ 17.6 |
Description of Business and Acc
Description of Business and Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
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") provide diversified telecommunications and technology services. 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 had receivables with one customer, Verizon Communications Inc., which made up 18% of the outstanding accounts receivable balance at December 31, 2018. At March 31, 2019, no individual customer exceeded 10% of the outstanding accounts receivable balance. Revenue derived from foreign operations was approximately 5% and 6% of consolidated revenue for the three months ended March 31, 2019 and 2018, respectively. 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. The Condensed Consolidated Balance Sheet as of December 31, 2018 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 2018 Annual Report on Form 10-K. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results expected for the full year or any other interim period. 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. Business Combinations — In accounting for business combinations, we apply the accounting requirements of Accounting Standards Codification ("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. 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. See Note 4 for disclosures related to mergers and acquisitions. Leases - The Company determines if an arrangement is a lease at inception based on the facts and circumstances present. In lease transactions where the Company acts as the lessor, the lease component is accounted for in accordance with ASC 842, and the non-lease component is accounted for in accordance with ASC 606. Although separation of lease and non-lease components is required, certain practical expedients are available that release the Company from this requirement. Adoption of the practical expedient allows the Company to account for each lease component and the related non-lease component together as a single component provided that the timing and patterns of revenue recognition for the components are the same and the combined, single unit of account would be classified as an operating lease. The Company's operating leases for certain services that include Customer Premise Equipment, including handsets and set-top boxes, have lease and non-lease components. In these arrangements, management has concluded that the non-lease components are the predominant characteristic and as a result the Company has elected to account for these arrangements as one single non-lease component recorded as "Revenue" on the Condensed Consolidated Statements of Operations in accordance with ASC 606. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The Company's lease terms include options to extend, terminate or buyout the lease when it is reasonably certain that we will exercise that option. Leases that have contract prices based on variable factors, such as power usage, are recognized as variable lease expense in the period in which the obligation for those payments are incurred. Lease expense for variable lease payments is recognized on a straight-line basis over the lease term. Income and Operating Taxes 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 expects its annual effective tax rate to be lower than statutory rates as a result of permanent items and current items requiring a valuation allowance. The Tax Cuts and Jobs Act of 2017 limits the Company’s interest deduction to 30% of tax earnings before interest, tax, depreciation and amortization for years beginning before January 1, 2022. Thereafter, the interest deduction is limited to 30% of tax earnings before interest and taxes. Any disallowed interest in a year becomes a separate deferred tax asset with an indefinite carryforward period that can be utilized by the Company in a future tax year by an amount equal to its interest limitation in excess of its interest expense for that year. As the Company does not anticipate utilizing the current excess interest expense in the foreseeable future, the Company is establishing a valuation allowance for this excess interest in the estimated annual rate, which in turn lowers the effective tax rate. Operating taxes — The Company elected to record certain operating taxes such as property, sales, use, and gross receipts taxes including telecommunications surcharges as expenses, primarily within cost of services and products. 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. 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 Other Comprehensive Loss". 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" 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. Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, Intangibles-Goodwill and Other-Internal-Use Software, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the requirements in ASC 350-40 for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this ASU also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted in any interim period after issuance of the update. The Company early adopted this standard prospectively effective January 1, 2019. The adoption of this standard is not expected to have a material effect on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which represents a wholesale change to lease accounting. Since that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2016-02 but did not change the core principal. The standard introduces a lessee model that brings most leases onto the balance sheet, as well as aligns certain underlying principles of the new lessor model with those in ASC 606. The ASU is effective for public entities for fiscal years beginning after December 15, 2018. The Company adopted the standard and all subsequent amendments effective January 1, 2019, using the modified retrospective transition method, which did not require the Company to adjust comparative periods. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition to the package of practical expedients, the Company elected the practical expedients of using hindsight in determining the lease term and in assessing impairment of the entity’s right-of-use assets as well as not to assess whether existing or expired land easements that were not previously accounted for as leases under ASC 840 are or contain a lease under ASC 842. Upon adoption of this standard, the Company recognized operating lease right-of-use assets of $38.3 million and operating lease liabilities of $46.2 million in the Condensed Consolidated Balance Sheets. The Company elected the practical expedient outlined in ASU 2018-11 allowing entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The adoption of ASU 2016-02 had no impact to retained earnings. The Company implemented internal controls and procured a third-party lease accounting software solution to facilitate the ongoing accounting and financial reporting requirements of the ASU. The standard did not have a material impact on our Condensed Consolidated Statement of Operations. The most significant impact was the recognition of right-of-use assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. See Note 7 for required disclosures as a result of adopting ASC 842. 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. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2019 | |
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: Three Months Ended March 31, (in millions, except per share amounts) 2019 2018 Numerator: Net loss $ (26.9 ) $ (8.3 ) Preferred stock dividends 2.6 2.6 Net loss applicable to common shareowners - basic and diluted $ (29.5 ) $ (10.9 ) Denominator: Weighted average common shares outstanding - basic 50.3 42.3 Stock-based compensation arrangements — — Weighted average common shares outstanding - diluted 50.3 42.3 Basic and diluted net loss per common share $ (0.59 ) $ (0.26 ) For the three months ended March 31, 2019 and 2018, the Company had a net loss available to common shareholders and, as a result, all common stock equivalents were excluded from the computation of diluted EPS as their 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. |
Revenue (Notes)
Revenue (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue The Entertainment and Communications segment provides products and services to both consumer and enterprise customers that can be categorized as either Fioptics in Cincinnati or Consumer/SMB in Hawaii (collectively, "Consumer/SMB"), 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 and Legacy revenue include both consumer and enterprise customers. Enterprise Fiber revenue includes ethernet and dedicated internet access services that are provided to enterprise customers, as well as revenue associated with the trans-Pacific submarine cable ("SEA-US"). Consumer customers have implied month-to-month contracts, while enterprise customers, with the exception of contracts associated with the SEA-US, 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 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 180 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 are primarily associated with the SEA-US. The IRU contracts typically have a duration ranging from 15 to 25 years. Performance Obligations 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 March 31, 2019, 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 $39.3 million . Approximately 80% of this revenue is related to IRU contracts associated with the SEA-US. 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 contracts is as follows: (dollars in millions) Nine months ended December 31, 2019 $ 2.0 2020 2.6 2021 2.5 2022 2.6 2023 2.5 Thereafter 27.1 Entertainment and Communications The Company has identified four distinct performance obligations in the Entertainment and Communications 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 segment can be categorized into three main categories that include Consumer/SMB, 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 consumer and enterprise 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, wire time and materials 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 segment. For Data, Video and Voice products in Consumer/SMB, 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. IT Services and Hardware 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 manufacturer 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 standard price list. For hardware sales, revenue is recognized net of the cost of product. For hardware sales within Infrastructure Solutions, revenue is recognized when the hardware is shipped. 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. Contract Balances 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 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. The following table presents the activity for the Company’s 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 Balance as of December 31, 2018 $ 14.5 $ 2.5 $ 17.0 $ 13.0 $ 2.0 $ 15.0 $ 27.5 $ 4.5 $ 32.0 Additions 0.9 0.7 1.6 2.5 0.4 2.9 3.4 1.1 4.5 Amortization (2.9 ) (0.4 ) (3.3 ) (2.1 ) (0.3 ) (2.4 ) (5.0 ) (0.7 ) (5.7 ) Balance as of March 31, 2019 $ 12.5 $ 2.8 $ 15.3 $ 13.4 $ 2.1 $ 15.5 $ 25.9 $ 4.9 $ 30.8 The Company recognizes a liability for cash received upfront for IRU contracts. At March 31, 2019 and December 31, 2018 , $1.5 million and $1.4 million , respectively, of contract liabilities were included in "Other current liabilities." At March 31, 2019 and December 31, 2018 , $27.8 million and $28.0 million , respectively, of contract liabilities were included in "Other noncurrent liabilities." Disaggregated Revenue The following table presents revenues disaggregated by product and service lines. Three Months Ended March 31, (dollars in millions) 2019 2018 Data $ 117.5 $ 84.9 Video 51.7 39.2 Voice 73.4 47.0 Other 7.7 3.1 Total Entertainment and Communications 250.3 174.2 Consulting 38.9 31.3 Cloud 24.4 22.6 Communications 47.4 40.6 Infrastructure Solutions 25.6 33.1 Total IT Services and Hardware 136.3 127.6 Intersegment revenue (7.0 ) (6.1 ) Total revenue $ 379.6 $ 295.7 In the first quarter of 2019, the Company determined that certain revenue in the IT Services and Hardware segment associated with nonrecurring projects is better aligned with Infrastructure Solutions, rather than Consulting, where it was previously reported. As a result, the Company reclassed revenue of $6.8 million from Consulting to Infrastructure Solutions for the three months ended March 31, 2018. This reclassification of revenue had no impact on the Condensed Consolidated Statements of Operations. The following table presents revenues disaggregated by contract type. Three Months Ended March 31, (dollars in millions) Entertainment and Communications IT Services and Hardware Intersegment revenue elimination Total 2019 2018 2019 2018 2019 2018 2019 2018 Products and Services transferred at a point in time $ 8.1 $ 4.8 $ 27.5 $ 35.3 $ — $ — $ 35.6 $ 40.1 Products and Services transferred over time 236.2 164.2 107.8 91.4 — — 344.0 255.6 Intersegment revenue 6.0 5.2 1.0 0.9 (7.0 ) (6.1 ) — — Total revenue $ 250.3 $ 174.2 $ 136.3 $ 127.6 $ (7.0 ) $ (6.1 ) $ 379.6 $ 295.7 |
Mergers and Acquisitions (Notes
Mergers and Acquisitions (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | Mergers and Acquisitions Acquisition of Hawaiian Telcom Holdco, Inc. On July 2, 2018, the Company acquired Hawaiian Telcom Holdco, Inc. for cash consideration of $218.3 million , stock consideration of $121.2 million and debt repayments, including accrued interest, of $318.2 million . Hawaiian Telcom is the ILEC for the State of Hawaii and the largest full service provider of communication services and products in the state. With the acquisition, the Company gains access to both Honolulu, a well-developed, fiber-rich city, as well as the growing neighbor islands. The companies' combined fiber networks are approximately 16,700 fiber route miles. The purchase price for Hawaiian Telcom consisted of the following: (dollars in millions) Cash consideration plus debt assumed $ 536.5 Cincinnati Bell Inc. stock issued 121.2 Debt repayment (318.2 ) Total purchase price $ 339.5 In order to fund the acquisition, the Company utilized proceeds of $350.0 million from the 8% Senior Notes due 2025 ("8% Notes"), $16.5 million of the cash that was previously restricted to fund interest payments on the 8% Notes, drew $35.0 million on the revolving credit facility and $154.0 million on the accounts receivable securitization facility (see Note 6). In conjunction with the acquisition, the Company issued 7.7 million Common Shares at a price of $15.70 per share as stock consideration. The Company recorded a total of $27.7 million in acquisition expenses related to the acquisition of Hawaiian Telcom, of which $0.5 million and $1.6 million were recorded in the three months ended March 31, 2019 and 2018, respectively. These expenses are recorded in "Transaction and integration costs" on the Condensed Consolidated Statements of Operations. Purchase Price Allocation and Other Items The determination of the final purchase price allocation to specific assets acquired and liabilities assumed is incomplete for the Hawaiian Telcom transaction. The purchase price allocations, based on fair value estimates, may change in future periods as customary post-closing reviews are concluded during the measurement period, and the fair value estimates of assets and liabilities and certain tax aspects of the transaction are finalized. The purchase price for Hawaiian Telcom has been currently allocated to individual assets acquired and liabilities assumed as follows: (dollars in millions) Hawaiian Telcom Assets acquired Cash $ 4.3 Receivables 25.5 Inventory, materials and supplies 6.9 Prepaid expenses and other current assets 5.9 Property, plant and equipment 701.5 Goodwill 9.6 Intangible assets 52.0 Deferred income tax asset 43.8 Other noncurrent assets 2.1 Total assets acquired 851.6 Liabilities assumed Accounts payable 59.2 Current portion of long-term debt 10.2 Unearned revenue and customer deposits 13.5 Accrued expenses and other current liabilities 21.8 Long-term debt, less current portion 304.5 Pension and postretirement benefit obligations 68.9 Other noncurrent liabilities 34.0 Total liabilities assumed 512.1 Net assets acquired $ 339.5 During the first quarter of 2019, the Company recorded immaterial measurement period adjustments for Hawaiian Telcom. The offset of these adjustments were recorded as an increases to "Goodwill." The estimated fair value of identifiable intangible assets and their estimated useful lives are as follows: Hawaiian Telcom (dollars in millions) Fair Value Useful Lives Customer relationships $ 26.0 15 years Trade name 26.0 15 years Total identifiable intangible assets $ 52.0 Identifiable intangible assets are amortized over their useful lives based on a number of assumptions including the estimated period of economic benefit and utilization. Pro Forma Information (Unaudited) The following table provides the unaudited pro forma results of operations for the three months ended March 31, 2018 as if the acquisition of Hawaiian Telcom had taken place as of the beginning of fiscal year 2017. These proforma results include adjustments related to the financing of the acquisition, an increase to depreciation and amortization associated with the higher values of property, plant and equipment and intangible assets, an increase to interest expense for the additional debt incurred to complete the acquisition, and other various related income tax effects. The pro forma information does not necessarily reflect the actual results of operations had the acquisition been consummated at the beginning of the annual reporting period indicated, nor is it necessarily indicative of future operating results. The pro forma information does not include any (i) potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition or (ii) transaction or integration costs relating to the acquisition. Three Months Ended March 31, (dollars in millions, except per share amounts) 2018 Revenue $ 384.9 Net loss applicable to common shareholders (14.3 ) Earnings per share: Basic and diluted loss per common share $ (0.29 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Intangible Assets Goodwill The changes in the Company's goodwill consisted of the following: IT Services and Hardware Entertainment and Communications Total Company (dollars in millions) Goodwill, balance as of December 31, 2018 $ 146.0 $ 11.0 $ 157.0 Activity during the year: Adjustments to prior year acquisitions — 0.8 0.8 Currency translations 0.8 — 0.8 Goodwill, balance as of March 31, 2019 $ 146.8 $ 11.8 $ 158.6 No impairment losses were recognized in goodwill for the three months ended March 31, 2019 and 2018. Intangible Assets The Company’s intangible assets consisted of the following: March 31, 2019 December 31, 2018 Gross Carrying Accumulated Net Gross Carrying Accumulated Net (dollars in millions) Amount (a) Amortization Amount Amount (a) Amortization Amount Customer relationships $ 140.0 $ (20.5 ) $ 119.5 $ 139.4 $ (17.8 ) $ 121.6 Trade names 40.9 (3.5 ) 37.4 40.7 (2.8 ) 37.9 Technology 9.8 (1.5 ) 8.3 9.9 (1.3 ) 8.6 Total $ 190.7 $ (25.5 ) $ 165.2 $ 190.0 $ (21.9 ) $ 168.1 (a) Change in gross carrying amounts is due to foreign currency translation on certain intangible assets. Amortization expense for intangible assets was $3.6 million and $2.6 million for the three months ended March 31, 2019 and 2018, respectively. No impairment losses were recognized for the three months ended March 31, 2019 and 2018. The estimated useful lives for each intangible asset class are as follows: Customer relationships 8 to 15 years Trade names 10 to 15 years Technology 10 years The annual estimated amortization expense for future years is as follows: (dollars in millions) Nine months ended December 31, 2019 $ 11.0 2020 14.4 2021 14.1 2022 13.9 2023 13.5 Thereafter 98.3 Total $ 165.2 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt and Other Financing Arrangements The Company’s debt consists of the following: March 31, December 31, (dollars in millions) 2019 2018 Current portion of long-term debt: Credit Agreement - Tranche B Term Loan due 2024 $ 6.0 $ 6.0 Other financing arrangements 1.1 0.8 Capital lease obligations 15.3 13.4 Current portion of long-term debt 22.4 20.2 Long-term debt, less current portion: Receivables Facility 175.8 176.6 Credit Agreement - Revolving Credit Facility 15.0 18.0 Credit Agreement - Tranche B Term Loan due 2024 591.0 592.5 7 1/4% Senior Notes due 2023 22.3 22.3 7% Senior Notes due 2024 625.0 625.0 8% Senior Notes due 2025 350.0 350.0 Various Cincinnati Bell Telephone notes 87.9 87.9 Other financing arrangements 2.0 2.3 Capital lease obligations 65.4 60.5 1,934.4 1,935.1 Net unamortized premium 1.6 1.7 Unamortized note issuance costs (26.1 ) (27.2 ) Long-term debt, less current portion 1,909.9 1,909.6 Total debt $ 1,932.3 $ 1,929.8 Credit Agreement The Company had $15.0 million of outstanding borrowings on the Credit Agreement's revolving credit facility, leaving $185.0 million available for borrowings as of March 31, 2019 . This revolving credit facility expires in October 2022. Accounts Receivable Securitization Facility Under the terms of the accounts receivable securitization facility ("Receivables Facility"), the maximum borrowing limit for loans and letters of credit is $225.0 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. As of March 31, 2019 , the available borrowing capacity was $187.1 million . Of the total borrowing capacity of $187.1 million at March 31, 2019, there were $175.8 million of outstanding borrowings and $9.9 million of outstanding letters of credit, leaving $1.4 million remaining availability from the total borrowing capacity. The Receivables Facility is subject to renewal every 364 days and has a termination date to May 2021. The Company expects to complete the next renewal period in May 2019. Under the agreement, 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 to sell certain receivables on a non-recourse basis. As of March 31, 2019, the Company sold approximately $16.3 million of certain accounts receivables. Other Installment Financing Arrangements The Company has other installment financing arrangements that are recorded in "Other current liabilities" and "Other noncurrent liabilities" in the Condensed Consolidated Balance Sheets. The IT Services and Hardware segment entered into a lease in June 2018 for a building to use in its data center operations. Structural improvements were made to the leased facility in excess of normal tenant improvements and, as such, we are deemed the accounting owner of this facility. As of March 31, 2019 and December 31, 2018, the liability related to this financing arrangement was $4.5 million , which was recognized within "Other noncurrent liabilities" in the Condensed Consolidated Balance Sheets. Prior to the acquisition of Hawaiian Telcom in July 2018, Hawaiian Telcom had an open dispute related to jointly-owned utility poles. In October 2018, the Company entered into the Pole License Agreement that provided for the transfer of the Company's ownership responsibility of the utility poles to Hawaiian Electric Company (HEC) and for the Company to pay a fixed annual fee to HEC for continued use of the poles. Due to the continuing involvement by the Company, this transaction did not meet the requirements to be accounted for as a sale-leaseback, and therefore it has been treated as a financing obligation. As of March 31, 2019, the Company has a liability recorded of $39.8 million , of which $1.0 million is recognized within "Other current liabilities" and $38.8 million is recognized within "Other noncurrent liabilities" in the Condensed Consolidated Balance Sheets. As of December 31, 2018, the Company has a liability recorded of $40.1 million , of which $1.0 million is recognized within "Other current liabilities" and $39.1 million is recognized within "Other noncurrent liabilities" in the Condensed Consolidated Balance Sheets. |
Leases (Notes)
Leases (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases Disclosure [Text Block] | Leases Lessee Disclosures The Company primarily leases real estate for offices, retail stores and central offices, as well as equipment, cell towers and fleet vehicles. The Company leases its real estate for terms between 1 and 55 years, its equipment for terms between 1 and 6 years, its cell towers for terms between 4 and 21 years and its vehicles for terms of 5 years. Our leases have various expiration dates through 2066 , some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within one year. Upon adoption, the Company elected not to recognize leases with terms of one-year or less on the balance sheet. The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. Supplemental unaudited balance sheet information relate to the Company's leases were as follows: (dollars in millions) Balance Sheet Location March 31, 2019 Operating lease assets, net of amortization Operating lease right-of-use assets $ 37.2 Finance lease assets, net of amortization Property, plant and equipment, net 28.1 Operating lease liabilities: Current operating lease liabilities Other current liabilities 9.8 Noncurrent operating lease liabilities Operating lease liabilities 34.5 Total operating lease liabilities 44.3 Finance lease liabilities: Current finance lease liabilities Current portion of long-term debt 15.3 Noncurrent finance lease liabilities Long-term debt, less current portion 65.4 Total finance lease liabilities $ 80.7 The components of lease expense was as follows: Three Months Ended (dollars in millions) March 31, 2019 Operating lease cost $ 3.1 Short-term lease cost 0.1 Variable lease cost 0.5 Finance lease cost: Depreciation on leased assets 1.9 Interest on lease liabilities 1.2 Total lease cost $ 6.8 Under ASC 840 the Company recorded lease expense of $3.3 million for the three months ended March 31, 2018. Other information related to leases were as follows: Three Months Ended (dollars in millions) March 31, 2019 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1.2 Operating cash flows from operating leases 3.2 Financing cash flows from finance leases 3.0 Right-of-use assets obtained in exchange for lease obligations: New operating leases 1.3 New finance leases 9.8 Weighted Average Remaining Lease Term Operating leases 8.21 years Finance leases 7.59 years Weighted Average Discount Rate Operating leases 7.08 % Finance leases 6.86 % Future minimum lease payments under non-cancellable leases as of March 31, 2019 are as follows: (dollars in millions) Operating Leases Finance Leases Nine months ended December 31, 2019 $ 12.7 $ 19.5 2020 10.3 17.3 2021 6.3 13.2 2022 4.7 8.1 2023 4.2 7.4 Thereafter 23.0 40.9 Total future minimum lease payments 61.2 106.4 Less imputed interest (15.6 ) (25.7 ) Total $ 45.6 $ 80.7 As of March 31, 2019, we have additional operating leases for buildings that have not yet commenced for $1.3 million . These operating leases will commence in the second quarter of 2019 with lease terms of up to 5 years. Lessor Disclosures The Company has operating leases related to its dark fiber arrangements for terms between 3 and 29 years. Our leases have various expiration dates through 2046, some of which include options to extend the lease. During the three months ended March 31, 2019, the Company recorded $0.8 million in lease income related to operating lease payments. The Company owns the underlying assets associated with its operating leases and records them in "Property, plant and equipment, net" on the Condensed Consolidated Balance Sheets. Future minimum lease payments to be received under non-cancellable leases as of March 31, 2019 are as follows: (dollars in millions) Operating Leases Nine months ended December 31, 2019 $ 2.4 2020 3.1 2021 2.4 2022 1.7 2023 1.7 Thereafter 18.6 Total future minimum lease payments 29.9 Less imputed interest (11.0 ) Total $ 18.9 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Financial Instruments and Fair Value Measurements Fair Value Measurements 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 1 — Quoted market prices for identical instruments in an active market; 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. Interest Rate Swaps The Company uses interest rate swap 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. 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 and expires in June 2023. The interest rate swap results in interest payments based on an average fixed rate of 2.938% plus the applicable margin per the requirements in the Credit Agreement (see Note 6). In the three months ended March 31, 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 and expire in March 2024. The interest rate swaps result 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 Credit Agreement (see Note 6). During the next twelve months, the Company estimates that $1.4 million will be reclassified as an increase to interest expense. The fair value of the Company's interest rate swaps are impacted by the the credit risk of both the Company and its counter-parties. The Company has agreements with its derivative financial instrument counter-parties 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 counter-parties, which are limited to major banks and financial institutions. 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 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 March 31, 2019, the fair value of the interest rate swaps was $8.8 million and is recorded in the Condensed Consolidated Balance Sheets as of March 31, 2019 as follows: (dollars in millions) Balance Sheet Location March 31, 2019 Quoted Prices in active markets Level 1 Significant observable inputs Level 2 Significant unobservable inputs Level 3 Assets: Interest Rate Swap Other current assets $ 0.3 $ — $ 0.3 $ — Liabilities: Interest Rate Swap Other current liabilities $ 1.7 $ — $ 1.7 $ — Interest Rate Swap Other noncurrent liabilities $ 7.4 $ — $ 7.4 $ — As of December 31, 2018, the fair value of the interest rate swap liability was $5.0 million and is recorded in the Condensed Consolidated Balance Sheets as of December 31, 2018 as follows: (dollars in millions) Balance Sheet Location December 31, 2018 Quoted Prices in active markets Level 1 Significant observable inputs Level 2 Significant unobservable inputs Level 3 Liabilities: Interest Rate Swap Other current liabilities $ 1.2 $ — $ 1.2 $ — Interest Rate Swap Other noncurrent liabilities $ 3.8 $ — $ 3.8 $ — The amount of losses recognized in Accumulated Other Comprehensive Income ("AOCI") net of reclassifications into earnings is as follows: Three Months Ended March 31, (dollars in millions) 2019 Interest Rate Swap $ 3.8 The amount of losses reclassified from AOCI into earnings is as follows: Three Months Ended March 31, (dollars in millions) Statement of Operations Location 2019 Interest Rate Swap Interest expense $ (0.3 ) Disclosure on Financial Instruments The carrying values of the Company's financial instruments approximate the estimated fair values as of March 31, 2019 and December 31, 2018 , except for the Company's long-term debt and other installment financing arrangements. The carrying and fair values of these items are as follows: March 31, 2019 December 31, 2018 (dollars in millions) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, including current portion* $ 1,874.6 $ 1,772.7 $ 1,880.0 $ 1,673.6 Other installment financing arrangements 44.3 46.8 44.6 43.6 *Excludes capital leases, other financing arrangements 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, 2019 and December 31, 2018 , which is considered Level 2 of the fair value hierarchy. The fair value of the other installment 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 March 31, 2019, the current borrowing rate was estimated by applying the Company's credit spread to the risk-free rate for a similar duration borrowing. |
Pension and Postretirement Plan
Pension and Postretirement Plans | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits, Description [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Pension and Postretirement Plans As of March 31, 2019, the Company sponsors three 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 accordance with ASC 715, only the service cost component of net benefit cost is eligible for capitalization, which was immaterial for the three months ended March 31, 2019 and 2018. For the three months ended March 31, 2019 and 2018 , pension and postretirement benefit costs (benefits) were as follows: Three Months Ended March 31, 2019 2018 2019 2018 (dollars in millions) Pension Benefits Postretirement and Other Benefits Service cost $ — $ — $ 0.2 $ 0.1 Other components of pension and postretirement benefit plans expense: Interest cost on projected benefit obligation 6.0 4.2 1.2 0.8 Expected return on plan assets (7.8 ) (6.2 ) — — Amortization of: Prior service benefit — — (0.6 ) (0.8 ) Actuarial loss 3.4 4.3 0.4 1.0 Total amortization 3.4 4.3 (0.2 ) 0.2 Pension / postretirement costs $ 1.6 $ 2.3 $ 1.2 $ 1.1 Amortizations of prior service benefit and actuarial loss represent reclassifications from accumulated other comprehensive income. Based on current assumptions, contributions are expected to be approximately $3 million to both the qualified and non-qualified pension plans in 2019. Management expects to make cash payments of approximately $11 million related to its postretirement health plans in 2019. For the three months ended March 31, 2019, contributions to the pension plans were $1.1 million and contributions to the postretirement plans were $1.9 million . For the three months ended March 31, 2018, contributions to the pension plans were $1.3 million and contributions to the postretirement plan were $1.6 million . |
Restructuring and Severance
Restructuring and Severance | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 $ 9.5 $ 0.7 $ 10.2 Hawaiian Telcom opening balance sheet adjustment 0.1 — 0.1 Charges 3.3 — 3.3 Utilizations (6.7 ) (0.1 ) (6.8 ) Balance as of March 31, 2019 $ 6.2 $ 0.6 $ 6.8 Restructuring and severance charges recorded in the first quarter of 2019 are related to a voluntary severance program ("VSP") for certain management employees in the Entertainment and Communications segment as the Company continues its efforts to realize synergies that can be achieved due to the acquisition of Hawaiian Telcom. Lease abandonment costs represent future minimum lease obligations, net of expected sublease income, for abandoned facilities. Lease payments on abandoned facilities will continue through 2020. 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, 2018 $ 8.6 $ 1.3 $ 0.3 $ 10.2 Hawaiian Telcom opening balance sheet adjustment 0.1 — — 0.1 Charges 3.3 — — 3.3 Utilizations (6.3 ) (0.5 ) — (6.8 ) Balance as of March 31, 2019 $ 5.7 $ 0.8 $ 0.3 $ 6.8 At March 31, 2019 and December 31, 2018 , $6.4 million and $9.6 million , respectively, of the restructuring liabilities were included in “Other current liabilities.” At March 31, 2019 and December 31, 2018, $0.4 million and $0.6 million , respectively, were included in "Other noncurrent liabilities." |
Shareowners' Deficit
Shareowners' Deficit | 3 Months Ended |
Mar. 31, 2019 | |
Shareowners' Deficit [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Shareowners' Deficit Accumulated Other Comprehensive Loss For the three months ended March 31, 2019 , the changes in accumulated other comprehensive loss by component were as follows: (dollars in millions) Unrecognized Net Periodic Pension and Postretirement Benefit Cost Unrealized Loss on Cash Flow Hedges, Net Foreign Currency Translation Loss Total Balance as of December 31, 2018 $ (164.5 ) $ (3.9 ) $ (7.1 ) $ (175.5 ) Reclassifications, net 2.5 (a) 0.2 (b) — 2.7 Unrealized loss on cash flow hedges arising during the period, net — (3.1 ) (c) — (3.1 ) Foreign currency gain — — 1.6 1.6 Balance as of March 31, 2019 $ (162.0 ) $ (6.8 ) $ (5.5 ) $ (174.3 ) (a) These reclassifications are included in the other components of net periodic pension and postretirement benefit plans expense and represent amortization of prior service benefit and actuarial loss, net of tax. The other components of net periodic pension and postretirement benefit plans expense are recorded in "Other components of pension and postretirement benefit plans expense" on the Condensed Consolidated Statements of Operations. See Note 9 for further disclosures. (b) These reclassifications are reported within "Interest expense" on the Condensed Consolidated Statements of Operations when the hedged transactions impact earnings. (c) The unrealized loss, net on cash flow hedges represents the change in the fair value of the derivative instruments that occurred during the period, net of tax. This unrealized gain or loss is recorded in "Other current assets," "Other current liabilities" and "Other noncurrent liabilities" on the Condensed Consolidated Balance Sheets. See Note 8 for further disclosures. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
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 the Company's internal management structure and reporting. The Company operates two business segments identified as Entertainment and Communications and IT Services and Hardware. The Entertainment and Communications 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 140 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 consists of revenue generated from wiring projects for enterprise customers, advertising, directory assistance, maintenance and information services. 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: Three Months Ended March 31, (dollars in millions) 2019 2018 Revenue Entertainment and Communications $ 250.3 $ 174.2 IT Services and Hardware 136.3 127.6 Intersegment (7.0 ) (6.1 ) Total revenue $ 379.6 $ 295.7 Intersegment revenue Entertainment and Communications $ 6.0 $ 5.2 IT Services and Hardware 1.0 0.9 Total intersegment revenue $ 7.0 $ 6.1 Operating income (loss) Entertainment and Communications $ 24.5 $ 28.6 IT Services and Hardware (6.8 ) 1.4 Corporate (7.6 ) (5.8 ) Total operating income $ 10.1 $ 24.2 Expenditures for long-lived assets* Entertainment and Communications $ 51.1 $ 27.6 IT Services and Hardware 5.4 7.9 Total expenditures for long-lived assets $ 56.5 $ 35.5 Depreciation and amortization Entertainment and Communications $ 62.7 $ 40.9 IT Services and Hardware 16.7 10.2 Corporate — 0.1 Total depreciation and amortization $ 79.4 $ 51.2 * Includes cost of acquisitions March 31, December 31, (dollars in millions) 2019 2018 Assets Entertainment and Communications $ 1,907.4 $ 1,898.8 IT Services and Hardware 460.7 468.1 Corporate and eliminations 281.2 363.3 Total assets $ 2,649.3 $ 2,730.2 |
Description of Business and A_2
Description of Business and Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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. The Condensed Consolidated Balance Sheet as of December 31, 2018 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 2018 Annual Report on Form 10-K. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results expected for the full year or any other interim period. |
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. |
Business Combinations | Business Combinations — In accounting for business combinations, we apply the accounting requirements of Accounting Standards Codification ("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. 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. See Note 4 for disclosures related to mergers and acquisitions. |
Leases | Leases - The Company determines if an arrangement is a lease at inception based on the facts and circumstances present. In lease transactions where the Company acts as the lessor, the lease component is accounted for in accordance with ASC 842, and the non-lease component is accounted for in accordance with ASC 606. Although separation of lease and non-lease components is required, certain practical expedients are available that release the Company from this requirement. Adoption of the practical expedient allows the Company to account for each lease component and the related non-lease component together as a single component provided that the timing and patterns of revenue recognition for the components are the same and the combined, single unit of account would be classified as an operating lease. The Company's operating leases for certain services that include Customer Premise Equipment, including handsets and set-top boxes, have lease and non-lease components. In these arrangements, management has concluded that the non-lease components are the predominant characteristic and as a result the Company has elected to account for these arrangements as one single non-lease component recorded as "Revenue" on the Condensed Consolidated Statements of Operations in accordance with ASC 606. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The Company's lease terms include options to extend, terminate or buyout the lease when it is reasonably certain that we will exercise that option. Leases that have contract prices based on variable factors, such as power usage, are recognized as variable lease expense in the period in which the obligation for those payments are incurred. Lease expense for variable lease payments is recognized on a straight-line basis over the lease term. |
Income Taxes | 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 expects its annual effective tax rate to be lower than statutory rates as a result of permanent items and current items requiring a valuation allowance. The Tax Cuts and Jobs Act of 2017 limits the Company’s interest deduction to 30% of tax earnings before interest, tax, depreciation and amortization for years beginning before January 1, 2022. Thereafter, the interest deduction is limited to 30% of tax earnings before interest and taxes. Any disallowed interest in a year becomes a separate deferred tax asset with an indefinite carryforward period that can be utilized by the Company in a future tax year by an amount equal to its interest limitation in excess of its interest expense for that year. As the Company does not anticipate utilizing the current excess interest expense in the foreseeable future, the Company is establishing a valuation allowance for this excess interest in the estimated annual rate, which in turn lowers the effective tax rate. |
Operating Taxes | Operating taxes — The Company elected to record certain operating taxes such as property, sales, use, and gross receipts taxes including telecommunications surcharges as expenses, primarily within cost of services and products. 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. |
Derivative Financial Instruments | 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 Other Comprehensive Loss". 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" 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. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, Intangibles-Goodwill and Other-Internal-Use Software, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the requirements in ASC 350-40 for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this ASU also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted in any interim period after issuance of the update. The Company early adopted this standard prospectively effective January 1, 2019. The adoption of this standard is not expected to have a material effect on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which represents a wholesale change to lease accounting. Since that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2016-02 but did not change the core principal. The standard introduces a lessee model that brings most leases onto the balance sheet, as well as aligns certain underlying principles of the new lessor model with those in ASC 606. The ASU is effective for public entities for fiscal years beginning after December 15, 2018. The Company adopted the standard and all subsequent amendments effective January 1, 2019, using the modified retrospective transition method, which did not require the Company to adjust comparative periods. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition to the package of practical expedients, the Company elected the practical expedients of using hindsight in determining the lease term and in assessing impairment of the entity’s right-of-use assets as well as not to assess whether existing or expired land easements that were not previously accounted for as leases under ASC 840 are or contain a lease under ASC 842. Upon adoption of this standard, the Company recognized operating lease right-of-use assets of $38.3 million and operating lease liabilities of $46.2 million in the Condensed Consolidated Balance Sheets. The Company elected the practical expedient outlined in ASU 2018-11 allowing entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The adoption of ASU 2016-02 had no impact to retained earnings. The Company implemented internal controls and procured a third-party lease accounting software solution to facilitate the ongoing accounting and financial reporting requirements of the ASU. The standard did not have a material impact on our Condensed Consolidated Statement of Operations. The most significant impact was the recognition of right-of-use assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. See Note 7 for required disclosures as a result of adopting ASC 842. 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. |
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. |
Revenue | The Entertainment and Communications segment provides products and services to both consumer and enterprise customers that can be categorized as either Fioptics in Cincinnati or Consumer/SMB in Hawaii (collectively, "Consumer/SMB"), 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 and Legacy revenue include both consumer and enterprise customers. Enterprise Fiber revenue includes ethernet and dedicated internet access services that are provided to enterprise customers, as well as revenue associated with the trans-Pacific submarine cable ("SEA-US"). Consumer customers have implied month-to-month contracts, while enterprise customers, with the exception of contracts associated with the SEA-US, 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 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 180 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 are primarily associated with the SEA-US. The IRU contracts typically have a duration ranging from 15 to 25 years. |
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, 2019 and December 31, 2018 , which is considered Level 2 of the fair value hierarchy. The fair value of the other installment 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. The fair value of the interest rate swaps are categorized as Level 2 in the fair value hierarchy as they are based on well-recognized financial principles and available market data. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: Three Months Ended March 31, (in millions, except per share amounts) 2019 2018 Numerator: Net loss $ (26.9 ) $ (8.3 ) Preferred stock dividends 2.6 2.6 Net loss applicable to common shareowners - basic and diluted $ (29.5 ) $ (10.9 ) Denominator: Weighted average common shares outstanding - basic 50.3 42.3 Stock-based compensation arrangements — — Weighted average common shares outstanding - diluted 50.3 42.3 Basic and diluted net loss per common share $ (0.59 ) $ (0.26 ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | (dollars in millions) Nine months ended December 31, 2019 $ 2.0 2020 2.6 2021 2.5 2022 2.6 2023 2.5 Thereafter 27.1 |
Contract with Customer, Assets [Table Text Block] | The following table presents the activity for the Company’s 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 Balance as of December 31, 2018 $ 14.5 $ 2.5 $ 17.0 $ 13.0 $ 2.0 $ 15.0 $ 27.5 $ 4.5 $ 32.0 Additions 0.9 0.7 1.6 2.5 0.4 2.9 3.4 1.1 4.5 Amortization (2.9 ) (0.4 ) (3.3 ) (2.1 ) (0.3 ) (2.4 ) (5.0 ) (0.7 ) (5.7 ) Balance as of March 31, 2019 $ 12.5 $ 2.8 $ 15.3 $ 13.4 $ 2.1 $ 15.5 $ 25.9 $ 4.9 $ 30.8 |
Disaggregation of Revenue [Table Text Block] | The following table presents revenues disaggregated by contract type. Three Months Ended March 31, (dollars in millions) Entertainment and Communications IT Services and Hardware Intersegment revenue elimination Total 2019 2018 2019 2018 2019 2018 2019 2018 Products and Services transferred at a point in time $ 8.1 $ 4.8 $ 27.5 $ 35.3 $ — $ — $ 35.6 $ 40.1 Products and Services transferred over time 236.2 164.2 107.8 91.4 — — 344.0 255.6 Intersegment revenue 6.0 5.2 1.0 0.9 (7.0 ) (6.1 ) — — Total revenue $ 250.3 $ 174.2 $ 136.3 $ 127.6 $ (7.0 ) $ (6.1 ) $ 379.6 $ 295.7 The following table presents revenues disaggregated by product and service lines. Three Months Ended March 31, (dollars in millions) 2019 2018 Data $ 117.5 $ 84.9 Video 51.7 39.2 Voice 73.4 47.0 Other 7.7 3.1 Total Entertainment and Communications 250.3 174.2 Consulting 38.9 31.3 Cloud 24.4 22.6 Communications 47.4 40.6 Infrastructure Solutions 25.6 33.1 Total IT Services and Hardware 136.3 127.6 Intersegment revenue (7.0 ) (6.1 ) Total revenue $ 379.6 $ 295.7 |
Mergers and Acquisitions (Table
Mergers and Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The purchase price for Hawaiian Telcom has been currently allocated to individual assets acquired and liabilities assumed as follows: (dollars in millions) Hawaiian Telcom Assets acquired Cash $ 4.3 Receivables 25.5 Inventory, materials and supplies 6.9 Prepaid expenses and other current assets 5.9 Property, plant and equipment 701.5 Goodwill 9.6 Intangible assets 52.0 Deferred income tax asset 43.8 Other noncurrent assets 2.1 Total assets acquired 851.6 Liabilities assumed Accounts payable 59.2 Current portion of long-term debt 10.2 Unearned revenue and customer deposits 13.5 Accrued expenses and other current liabilities 21.8 Long-term debt, less current portion 304.5 Pension and postretirement benefit obligations 68.9 Other noncurrent liabilities 34.0 Total liabilities assumed 512.1 Net assets acquired $ 339.5 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The estimated fair value of identifiable intangible assets and their estimated useful lives are as follows: Hawaiian Telcom (dollars in millions) Fair Value Useful Lives Customer relationships $ 26.0 15 years Trade name 26.0 15 years Total identifiable intangible assets $ 52.0 |
Business Acquisition, Pro Forma Information [Table Text Block] | The following table provides the unaudited pro forma results of operations for the three months ended March 31, 2018 as if the acquisition of Hawaiian Telcom had taken place as of the beginning of fiscal year 2017. These proforma results include adjustments related to the financing of the acquisition, an increase to depreciation and amortization associated with the higher values of property, plant and equipment and intangible assets, an increase to interest expense for the additional debt incurred to complete the acquisition, and other various related income tax effects. The pro forma information does not necessarily reflect the actual results of operations had the acquisition been consummated at the beginning of the annual reporting period indicated, nor is it necessarily indicative of future operating results. The pro forma information does not include any (i) potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition or (ii) transaction or integration costs relating to the acquisition. Three Months Ended March 31, (dollars in millions, except per share amounts) 2018 Revenue $ 384.9 Net loss applicable to common shareholders (14.3 ) Earnings per share: Basic and diluted loss per common share $ (0.29 ) |
Hawaiian Telcom Holdco, Inc. [Member] | |
Business Acquisition [Line Items] | |
Business Combination Schedule of Consideration [Table Text Block] | The purchase price for Hawaiian Telcom consisted of the following: (dollars in millions) Cash consideration plus debt assumed $ 536.5 Cincinnati Bell Inc. stock issued 121.2 Debt repayment (318.2 ) Total purchase price $ 339.5 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of Goodwill [Table Text Block] | The changes in the Company's goodwill consisted of the following: IT Services and Hardware Entertainment and Communications Total Company (dollars in millions) Goodwill, balance as of December 31, 2018 $ 146.0 $ 11.0 $ 157.0 Activity during the year: Adjustments to prior year acquisitions — 0.8 0.8 Currency translations 0.8 — 0.8 Goodwill, balance as of March 31, 2019 $ 146.8 $ 11.8 $ 158.6 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The Company’s intangible assets consisted of the following: March 31, 2019 December 31, 2018 Gross Carrying Accumulated Net Gross Carrying Accumulated Net (dollars in millions) Amount (a) Amortization Amount Amount (a) Amortization Amount Customer relationships $ 140.0 $ (20.5 ) $ 119.5 $ 139.4 $ (17.8 ) $ 121.6 Trade names 40.9 (3.5 ) 37.4 40.7 (2.8 ) 37.9 Technology 9.8 (1.5 ) 8.3 9.9 (1.3 ) 8.6 Total $ 190.7 $ (25.5 ) $ 165.2 $ 190.0 $ (21.9 ) $ 168.1 (a) Change in gross carrying amounts is due to foreign currency translation on certain intangible assets. |
Finite-Lived Intangible Assets, Tabular Disclosure of Estimated Useful Lives [Table Text Block] | The estimated useful lives for each intangible asset class are as follows: Customer relationships 8 to 15 years Trade names 10 to 15 years Technology 10 years |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The annual estimated amortization expense for future years is as follows: (dollars in millions) Nine months ended December 31, 2019 $ 11.0 2020 14.4 2021 14.1 2022 13.9 2023 13.5 Thereafter 98.3 Total $ 165.2 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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) 2019 2018 Current portion of long-term debt: Credit Agreement - Tranche B Term Loan due 2024 $ 6.0 $ 6.0 Other financing arrangements 1.1 0.8 Capital lease obligations 15.3 13.4 Current portion of long-term debt 22.4 20.2 Long-term debt, less current portion: Receivables Facility 175.8 176.6 Credit Agreement - Revolving Credit Facility 15.0 18.0 Credit Agreement - Tranche B Term Loan due 2024 591.0 592.5 7 1/4% Senior Notes due 2023 22.3 22.3 7% Senior Notes due 2024 625.0 625.0 8% Senior Notes due 2025 350.0 350.0 Various Cincinnati Bell Telephone notes 87.9 87.9 Other financing arrangements 2.0 2.3 Capital lease obligations 65.4 60.5 1,934.4 1,935.1 Net unamortized premium 1.6 1.7 Unamortized note issuance costs (26.1 ) (27.2 ) Long-term debt, less current portion 1,909.9 1,909.6 Total debt $ 1,932.3 $ 1,929.8 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lessor, Operating Lease, Payments to be Received, Maturity [Table Text Block] | Leases Lessee Disclosures The Company primarily leases real estate for offices, retail stores and central offices, as well as equipment, cell towers and fleet vehicles. The Company leases its real estate for terms between 1 and 55 years, its equipment for terms between 1 and 6 years, its cell towers for terms between 4 and 21 years and its vehicles for terms of 5 years. Our leases have various expiration dates through 2066 , some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within one year. Upon adoption, the Company elected not to recognize leases with terms of one-year or less on the balance sheet. The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. Supplemental unaudited balance sheet information relate to the Company's leases were as follows: (dollars in millions) Balance Sheet Location March 31, 2019 Operating lease assets, net of amortization Operating lease right-of-use assets $ 37.2 Finance lease assets, net of amortization Property, plant and equipment, net 28.1 Operating lease liabilities: Current operating lease liabilities Other current liabilities 9.8 Noncurrent operating lease liabilities Operating lease liabilities 34.5 Total operating lease liabilities 44.3 Finance lease liabilities: Current finance lease liabilities Current portion of long-term debt 15.3 Noncurrent finance lease liabilities Long-term debt, less current portion 65.4 Total finance lease liabilities $ 80.7 The components of lease expense was as follows: Three Months Ended (dollars in millions) March 31, 2019 Operating lease cost $ 3.1 Short-term lease cost 0.1 Variable lease cost 0.5 Finance lease cost: Depreciation on leased assets 1.9 Interest on lease liabilities 1.2 Total lease cost $ 6.8 Under ASC 840 the Company recorded lease expense of $3.3 million for the three months ended March 31, 2018. Other information related to leases were as follows: Three Months Ended (dollars in millions) March 31, 2019 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1.2 Operating cash flows from operating leases 3.2 Financing cash flows from finance leases 3.0 Right-of-use assets obtained in exchange for lease obligations: New operating leases 1.3 New finance leases 9.8 Weighted Average Remaining Lease Term Operating leases 8.21 years Finance leases 7.59 years Weighted Average Discount Rate Operating leases 7.08 % Finance leases 6.86 % Future minimum lease payments under non-cancellable leases as of March 31, 2019 are as follows: (dollars in millions) Operating Leases Finance Leases Nine months ended December 31, 2019 $ 12.7 $ 19.5 2020 10.3 17.3 2021 6.3 13.2 2022 4.7 8.1 2023 4.2 7.4 Thereafter 23.0 40.9 Total future minimum lease payments 61.2 106.4 Less imputed interest (15.6 ) (25.7 ) Total $ 45.6 $ 80.7 As of March 31, 2019, we have additional operating leases for buildings that have not yet commenced for $1.3 million . These operating leases will commence in the second quarter of 2019 with lease terms of up to 5 years. Lessor Disclosures The Company has operating leases related to its dark fiber arrangements for terms between 3 and 29 years. Our leases have various expiration dates through 2046, some of which include options to extend the lease. During the three months ended March 31, 2019, the Company recorded $0.8 million in lease income related to operating lease payments. The Company owns the underlying assets associated with its operating leases and records them in "Property, plant and equipment, net" on the Condensed Consolidated Balance Sheets. Future minimum lease payments to be received under non-cancellable leases as of March 31, 2019 are as follows: (dollars in millions) Operating Leases Nine months ended December 31, 2019 $ 2.4 2020 3.1 2021 2.4 2022 1.7 2023 1.7 Thereafter 18.6 Total future minimum lease payments 29.9 Less imputed interest (11.0 ) Total $ 18.9 |
Leases, Balance Sheet Location [Table Text Block] | Supplemental unaudited balance sheet information relate to the Company's leases were as follows: (dollars in millions) Balance Sheet Location March 31, 2019 Operating lease assets, net of amortization Operating lease right-of-use assets $ 37.2 Finance lease assets, net of amortization Property, plant and equipment, net 28.1 Operating lease liabilities: Current operating lease liabilities Other current liabilities 9.8 Noncurrent operating lease liabilities Operating lease liabilities 34.5 Total operating lease liabilities 44.3 Finance lease liabilities: Current finance lease liabilities Current portion of long-term debt 15.3 Noncurrent finance lease liabilities Long-term debt, less current portion 65.4 Total finance lease liabilities $ 80.7 |
Lease, Cost [Table Text Block] | The components of lease expense was as follows: Three Months Ended (dollars in millions) March 31, 2019 Operating lease cost $ 3.1 Short-term lease cost 0.1 Variable lease cost 0.5 Finance lease cost: Depreciation on leased assets 1.9 Interest on lease liabilities 1.2 Total lease cost $ 6.8 |
Schedule Of Supplemental Cash Flow Information Related To Leases [Table Text Block] | Other information related to leases were as follows: Three Months Ended (dollars in millions) March 31, 2019 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1.2 Operating cash flows from operating leases 3.2 Financing cash flows from finance leases 3.0 Right-of-use assets obtained in exchange for lease obligations: New operating leases 1.3 New finance leases 9.8 Weighted Average Remaining Lease Term Operating leases 8.21 years Finance leases 7.59 years Weighted Average Discount Rate Operating leases 7.08 % Finance leases 6.86 % |
Schedule of Future Minimum Rental Payments for Operating and Financing Leases [Table Text Block] | Future minimum lease payments under non-cancellable leases as of March 31, 2019 are as follows: (dollars in millions) Operating Leases Finance Leases Nine months ended December 31, 2019 $ 12.7 $ 19.5 2020 10.3 17.3 2021 6.3 13.2 2022 4.7 8.1 2023 4.2 7.4 Thereafter 23.0 40.9 Total future minimum lease payments 61.2 106.4 Less imputed interest (15.6 ) (25.7 ) Total $ 45.6 $ 80.7 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | As of March 31, 2019, the fair value of the interest rate swaps was $8.8 million and is recorded in the Condensed Consolidated Balance Sheets as of March 31, 2019 as follows: (dollars in millions) Balance Sheet Location March 31, 2019 Quoted Prices in active markets Level 1 Significant observable inputs Level 2 Significant unobservable inputs Level 3 Assets: Interest Rate Swap Other current assets $ 0.3 $ — $ 0.3 $ — Liabilities: Interest Rate Swap Other current liabilities $ 1.7 $ — $ 1.7 $ — Interest Rate Swap Other noncurrent liabilities $ 7.4 $ — $ 7.4 $ — As of December 31, 2018, the fair value of the interest rate swap liability was $5.0 million and is recorded in the Condensed Consolidated Balance Sheets as of December 31, 2018 as follows: (dollars in millions) Balance Sheet Location December 31, 2018 Quoted Prices in active markets Level 1 Significant observable inputs Level 2 Significant unobservable inputs Level 3 Liabilities: Interest Rate Swap Other current liabilities $ 1.2 $ — $ 1.2 $ — Interest Rate Swap Other noncurrent liabilities $ 3.8 $ — $ 3.8 $ — |
Amount of gains recognized in accumulated other comprehensive income net of reclassification into earnings [Table Text Block] | The amount of losses recognized in Accumulated Other Comprehensive Income ("AOCI") net of reclassifications into earnings is as follows: Three Months Ended March 31, (dollars in millions) 2019 Interest Rate Swap $ 3.8 |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The amount of losses reclassified from AOCI into earnings is as follows: Three Months Ended March 31, (dollars in millions) Statement of Operations Location 2019 Interest Rate Swap Interest expense $ (0.3 ) |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The carrying and fair values of these items are as follows: March 31, 2019 December 31, 2018 (dollars in millions) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, including current portion* $ 1,874.6 $ 1,772.7 $ 1,880.0 $ 1,673.6 Other installment financing arrangements 44.3 46.8 44.6 43.6 *Excludes capital leases, other financing arrangements and note issuance costs. |
Pension and Postretirement Pl_2
Pension and Postretirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits, Description [Abstract] | |
Schedule of Net Benefit Costs [Table Text Block] | For the three months ended March 31, 2019 and 2018 , pension and postretirement benefit costs (benefits) were as follows: Three Months Ended March 31, 2019 2018 2019 2018 (dollars in millions) Pension Benefits Postretirement and Other Benefits Service cost $ — $ — $ 0.2 $ 0.1 Other components of pension and postretirement benefit plans expense: Interest cost on projected benefit obligation 6.0 4.2 1.2 0.8 Expected return on plan assets (7.8 ) (6.2 ) — — Amortization of: Prior service benefit — — (0.6 ) (0.8 ) Actuarial loss 3.4 4.3 0.4 1.0 Total amortization 3.4 4.3 (0.2 ) 0.2 Pension / postretirement costs $ 1.6 $ 2.3 $ 1.2 $ 1.1 |
Restructuring and Severance (Ta
Restructuring and Severance (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 $ 9.5 $ 0.7 $ 10.2 Hawaiian Telcom opening balance sheet adjustment 0.1 — 0.1 Charges 3.3 — 3.3 Utilizations (6.7 ) (0.1 ) (6.8 ) Balance as of March 31, 2019 $ 6.2 $ 0.6 $ 6.8 |
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, 2018 $ 8.6 $ 1.3 $ 0.3 $ 10.2 Hawaiian Telcom opening balance sheet adjustment 0.1 — — 0.1 Charges 3.3 — — 3.3 Utilizations (6.3 ) (0.5 ) — (6.8 ) Balance as of March 31, 2019 $ 5.7 $ 0.8 $ 0.3 $ 6.8 |
Shareowners' Deficit (Tables)
Shareowners' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Shareowners' Deficit [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | For the three months ended March 31, 2019 , the changes in accumulated other comprehensive loss by component were as follows: (dollars in millions) Unrecognized Net Periodic Pension and Postretirement Benefit Cost Unrealized Loss on Cash Flow Hedges, Net Foreign Currency Translation Loss Total Balance as of December 31, 2018 $ (164.5 ) $ (3.9 ) $ (7.1 ) $ (175.5 ) Reclassifications, net 2.5 (a) 0.2 (b) — 2.7 Unrealized loss on cash flow hedges arising during the period, net — (3.1 ) (c) — (3.1 ) Foreign currency gain — — 1.6 1.6 Balance as of March 31, 2019 $ (162.0 ) $ (6.8 ) $ (5.5 ) $ (174.3 ) (a) These reclassifications are included in the other components of net periodic pension and postretirement benefit plans expense and represent amortization of prior service benefit and actuarial loss, net of tax. The other components of net periodic pension and postretirement benefit plans expense are recorded in "Other components of pension and postretirement benefit plans expense" on the Condensed Consolidated Statements of Operations. See Note 9 for further disclosures. (b) These reclassifications are reported within "Interest expense" on the Condensed Consolidated Statements of Operations when the hedged transactions impact earnings. (c) The unrealized loss, net on cash flow hedges represents the change in the fair value of the derivative instruments that occurred during the period, net of tax. This unrealized gain or loss is recorded in "Other current assets," "Other current liabilities" and "Other noncurrent liabilities" on the Condensed Consolidated Balance Sheets. See Note 8 for further disclosures. |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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) 2019 2018 Revenue Entertainment and Communications $ 250.3 $ 174.2 IT Services and Hardware 136.3 127.6 Intersegment (7.0 ) (6.1 ) Total revenue $ 379.6 $ 295.7 Intersegment revenue Entertainment and Communications $ 6.0 $ 5.2 IT Services and Hardware 1.0 0.9 Total intersegment revenue $ 7.0 $ 6.1 Operating income (loss) Entertainment and Communications $ 24.5 $ 28.6 IT Services and Hardware (6.8 ) 1.4 Corporate (7.6 ) (5.8 ) Total operating income $ 10.1 $ 24.2 Expenditures for long-lived assets* Entertainment and Communications $ 51.1 $ 27.6 IT Services and Hardware 5.4 7.9 Total expenditures for long-lived assets $ 56.5 $ 35.5 Depreciation and amortization Entertainment and Communications $ 62.7 $ 40.9 IT Services and Hardware 16.7 10.2 Corporate — 0.1 Total depreciation and amortization $ 79.4 $ 51.2 * Includes cost of acquisitions March 31, December 31, (dollars in millions) 2019 2018 Assets Entertainment and Communications $ 1,907.4 $ 1,898.8 IT Services and Hardware 460.7 468.1 Corporate and eliminations 281.2 363.3 Total assets $ 2,649.3 $ 2,730.2 |
Description of Business and A_3
Description of Business and Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Description of Business and Accounting Policies [Line Items] | ||||
Accounts Receivable from one customer greater than 10%, percentage | 10.00% | |||
Number of customers, exceeds 10% of total accounts receivable | 0 | |||
Percentage of Revenue by Foreign Subsidiaries | 5.00% | 6.00% | ||
Operating Lease, Right-of-Use Asset | $ 37.2 | $ 38.3 | $ 0 | |
Operating Lease, Liability | $ 44.3 | $ 46.2 | ||
Verizon Communications Inc. [Member] | ||||
Description of Business and Accounting Policies [Line Items] | ||||
Accounts Receivable from one customer greater than 10%, percentage | 18.00% |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net loss | $ (26.9) | $ (8.3) |
Preferred stock dividends | 2.6 | 2.6 |
Net loss applicable to common shareowners - basic and diluted | $ (29.5) | $ (10.9) |
Denominator: | ||
Weighted average common shares outstanding - basic | 50.3 | 42.3 |
Stock-based compensation arrangements | 0 | 0 |
Weighted average common shares outstanding - diluted | 50.3 | 42.3 |
Earnings Per Share, Basic and Diluted | $ (0.59) | $ (0.26) |
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 |
Revenue - Revenue Disclosure (D
Revenue - Revenue Disclosure (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Customer Contract, Lower Range, in Years | 1 | |
Customer Contract, Upper Range, in Years | 5 | |
SEA-US Contract, Lower Range, in Years | 15 | |
SEA-US Contract, Upper Range, in Years | 25 | |
Payment terms for customers, lower range | 30 | |
Payment term for customers, upper range | 180 | |
Indefeasible Right of Use, Lower Range, in Years | 15 | |
Indefeasible Right of Use, Upper Range, in Years | 25 |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) $ in Millions | Mar. 31, 2019USD ($) | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Nine months ended December 31, 2019 | $ 2 | |
2020 | 2.6 | |
2021 | 2.5 | |
2022 | 2.6 | |
2023 | 2.5 | |
Thereafter | 27.1 | |
Total | $ 39.3 | |
Revenue, Remaining Performance Obligation, Percentage | 80.00% | |
Indefeasible Right of Use, Maximum, in Years | 30 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | $ 32 | |
Capitalized Contract Cost, Additions | 4.5 | |
Capitalized Contract Cost, Amortization | (5.7) | |
Capitalized Contract Cost, Net, Ending Balance | 30.8 | |
Contract with Customer, Liability, Current | 1.5 | $ 1.4 |
Contract with Customer, Liability, Noncurrent | 27.8 | $ 28 |
Fulfillment Costs [Member] | ||
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | 17 | |
Capitalized Contract Cost, Additions | 1.6 | |
Capitalized Contract Cost, Amortization | (3.3) | |
Capitalized Contract Cost, Net, Ending Balance | 15.3 | |
Cost of Acquisition [Member] | ||
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | 15 | |
Capitalized Contract Cost, Additions | 2.9 | |
Capitalized Contract Cost, Amortization | (2.4) | |
Capitalized Contract Cost, Net, Ending Balance | 15.5 | |
Entertainment and Communications [Member] | ||
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | 27.5 | |
Capitalized Contract Cost, Additions | 3.4 | |
Capitalized Contract Cost, Amortization | (5) | |
Capitalized Contract Cost, Net, Ending Balance | 25.9 | |
Entertainment and Communications [Member] | Fulfillment Costs [Member] | ||
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | 14.5 | |
Capitalized Contract Cost, Additions | 0.9 | |
Capitalized Contract Cost, Amortization | (2.9) | |
Capitalized Contract Cost, Net, Ending Balance | 12.5 | |
Entertainment and Communications [Member] | Cost of Acquisition [Member] | ||
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | 13 | |
Capitalized Contract Cost, Additions | 2.5 | |
Capitalized Contract Cost, Amortization | (2.1) | |
Capitalized Contract Cost, Net, Ending Balance | 13.4 | |
IT Services and Hardware [Member] | ||
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | 4.5 | |
Capitalized Contract Cost, Additions | 1.1 | |
Capitalized Contract Cost, Amortization | (0.7) | |
Capitalized Contract Cost, Net, Ending Balance | 4.9 | |
IT Services and Hardware [Member] | Fulfillment Costs [Member] | ||
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | 2.5 | |
Capitalized Contract Cost, Additions | 0.7 | |
Capitalized Contract Cost, Amortization | (0.4) | |
Capitalized Contract Cost, Net, Ending Balance | 2.8 | |
IT Services and Hardware [Member] | Cost of Acquisition [Member] | ||
Contract Asset [Roll Forward] | ||
Capitalized Contract Cost, Net, Beginning Balance | 2 | |
Capitalized Contract Cost, Additions | 0.4 | |
Capitalized Contract Cost, Amortization | (0.3) | |
Capitalized Contract Cost, Net, Ending Balance | $ 2.1 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue Reclassification Between Practices | $ 6.8 | |
Revenues | 379.6 | $ 295.7 |
Entertainment and Communications [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 250.3 | 174.2 |
IT Services and Hardware [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 136.3 | 127.6 |
Intersegment Eliminations [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | (7) | (6.1) |
Intersegment Eliminations [Member] | Entertainment and Communications [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6 | 5.2 |
Intersegment Eliminations [Member] | IT Services and Hardware [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1 | 0.9 |
Consolidation, Eliminations [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 35.6 | 40.1 |
Transferred at Point in Time [Member] | Entertainment and Communications [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8.1 | 4.8 |
Transferred at Point in Time [Member] | IT Services and Hardware [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 27.5 | 35.3 |
Transferred at Point in Time [Member] | Intersegment Eliminations [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 344 | 255.6 |
Transferred over Time [Member] | Entertainment and Communications [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 236.2 | 164.2 |
Transferred over Time [Member] | IT Services and Hardware [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 107.8 | 91.4 |
Transferred over Time [Member] | Intersegment Eliminations [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Data [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 117.5 | 84.9 |
Video [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 51.7 | 39.2 |
Voice [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 73.4 | 47 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 7.7 | 3.1 |
Consulting [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 38.9 | 31.3 |
Cloud [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 24.4 | 22.6 |
Communications [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 47.4 | 40.6 |
Infrastructure Solutions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 25.6 | $ 33.1 |
Mergers and Acquisitions - Narr
Mergers and Acquisitions - Narratives (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 22 Months Ended | ||||
Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($)shares | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 29, 2018$ / shares | |
Business Acquisition [Line Items] | ||||||
Payments to Acquire Businesses, Gross | $ 0 | $ 2.8 | ||||
Fiber Route Miles | 16,700 | |||||
Business Combination, Consideration Transferred, Cash Previously Restricted | $ 16.5 | |||||
Proceeds from (Repayments of) Lines of Credit | $ (3.8) | 0 | ||||
Business Acquisition, Share Price | $ / shares | $ 15.70 | |||||
Business Combination, Acquisition Related Costs | 3 | 2.2 | ||||
Hawaiian Telcom Holdco, Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Payments to Acquire Businesses, Gross | 218.3 | |||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 121.2 | |||||
Business Combination, Debt Repayment, Including Accrued Interest | $ 318.2 | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 7.7 | |||||
Business Combination, Acquisition Related Costs | 0.5 | $ 1.6 | $ 27.7 | |||
8% Senior Notes due 2025 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Senior Notes, Noncurrent | $ 350 | $ 350 | $ 350 | $ 350 | ||
Revolving Credit Facility [Member] | Hawaiian Telcom Holdco, Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from (Repayments of) Lines of Credit | 35 | |||||
Accounts Receivable Securitization Facility [Member] | Hawaiian Telcom Holdco, Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from (Repayments of) Lines of Credit | $ 154 |
Mergers and Acquisitions - Sche
Mergers and Acquisitions - Schedule of Consideration (Details) - Hawaiian Telcom Holdco, Inc. [Member] $ in Millions | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Business Acquisition [Line Items] | |
Business Combination, Consideration Transferred, Cash Consideration Plus Debt Assumed | $ 536.5 |
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 121.2 |
Business Combination, Debt Repayment, Including Accrued Interest | (318.2) |
Business Combination, Consideration Transferred | $ 339.5 |
Mergers and Acquisitions - Purc
Mergers and Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2018 |
Assets acquired | |||
Goodwill | $ 158.6 | $ 157 | |
Hawaiian Telcom Holdco, Inc. [Member] | |||
Assets acquired | |||
Cash | $ 4.3 | ||
Receivables | 25.5 | ||
Inventory, materials and supplies | 6.9 | ||
Prepaid expenses and other current assets | 5.9 | ||
Property, plant and equipment | 701.5 | ||
Goodwill | 9.6 | ||
Intangible assets | 52 | ||
Deferred income tax asset | 43.8 | ||
Other noncurrent assets | 2.1 | ||
Total assets acquired | 851.6 | ||
Liabilities assumed | |||
Accounts payable | 59.2 | ||
Current portion of long-term debt | 10.2 | ||
Unearned revenue and customer deposits | 13.5 | ||
Accrued expenses and other current liabilities | 21.8 | ||
Long-term debt, less current portion | 304.5 | ||
Pension and postretirement benefit obligations | 68.9 | ||
Other noncurrent liabilities | 34 | ||
Total liabilities assumed | 512.1 | ||
Net assets acquired | $ 339.5 |
Mergers and Acquisitions - Fini
Mergers and Acquisitions - Finite Lived Intangible Assets Acquired (Details) - USD ($) $ in Millions | Jul. 02, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||||
Fair Value | [1] | $ 190.7 | $ 190 | |
Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Fair Value | [1] | 140 | 139.4 | |
Trade name | ||||
Business Acquisition [Line Items] | ||||
Fair Value | [1] | $ 40.9 | $ 40.7 | |
Hawaiian Telcom Holdco, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Fair Value | $ 52 | |||
Hawaiian Telcom Holdco, Inc. [Member] | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Fair Value | $ 26 | |||
Useful Lives | 15 years | |||
Hawaiian Telcom Holdco, Inc. [Member] | Trade name | ||||
Business Acquisition [Line Items] | ||||
Fair Value | $ 26 | |||
Useful Lives | 15 years | |||
[1] | Change in gross carrying amounts is due to foreign currency translation on certain intangible assets |
Mergers and Acquisitions - Pro
Mergers and Acquisitions - Pro Forma Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)$ / shares | |
Business Combinations [Abstract] | |
Revenue | $ 384.9 |
Net loss applicable to common shareholders | $ (14.3) |
Earnings per share: | |
Basic and diluted loss per common share | $ / shares | $ (0.29) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 157,000,000 | |
Adjustments to prior year acquisitions | 800,000 | |
Currency translations | 800,000 | |
Goodwill, Ending Balance | 158,600,000 | |
Goodwill, Impairment Loss | 0 | $ 0 |
IT Services and Hardware [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 146,000,000 | |
Adjustments to prior year acquisitions | 0 | |
Currency translations | 800,000 | |
Goodwill, Ending Balance | 146,800,000 | |
Entertainment and Communications [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 11,000,000 | |
Adjustments to prior year acquisitions | 800,000 | |
Currency translations | 0 | |
Goodwill, Ending Balance | $ 11,800,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | ||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | [1] | $ 190.7 | $ 190 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (25.5) | (21.9) | ||
Amortization of Intangible Assets | 3.6 | $ 2.6 | ||
Impairment of Intangible Assets, Finite-lived | 0 | $ 0 | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||
Nine months ended December 31, 2019 | 11 | |||
2020 | 14.4 | |||
2021 | 14.1 | |||
2022 | 13.9 | |||
2023 | 13.5 | |||
Thereafter | 98.3 | |||
Total | 165.2 | 168.1 | ||
Customer Relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | [1] | 140 | 139.4 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (20.5) | (17.8) | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||
Total | $ 119.5 | 121.6 | ||
Customer Relationships [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 8 years | |||
Customer Relationships [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 15 years | |||
Trade Names [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | [1] | $ 40.9 | 40.7 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (3.5) | (2.8) | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||
Total | $ 37.4 | 37.9 | ||
Trade Names [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Trade Names [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 15 years | |||
Technology-Based Intangible Assets [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | [1] | $ 9.8 | 9.9 | |
Finite-Lived Intangible Assets, Accumulated Amortization | $ (1.5) | (1.3) | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||
Total | $ 8.3 | $ 8.6 | ||
[1] | Change in gross carrying amounts is due to foreign currency translation on certain intangible assets |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Debt Instrument [Line Items] | |||
Current portion of long-term debt | $ 22.4 | $ 20.2 | |
Other Financing Arrangements, Current Portion | 1.1 | 0.8 | |
Capital Lease Obligations, Current | 15.3 | 13.4 | |
Receivables Facility | 175.8 | 176.6 | |
Long-term debt, less current portion | 1,909.9 | 1,909.6 | |
Other Financing Arrangements, Non-Current Portion | 2 | 2.3 | |
Capital Lease Obligations, Noncurrent | 65.4 | 60.5 | |
Credit Agreement - Revolving Credit Facility | 15 | 18 | |
Net unamortized premium | 1.6 | 1.7 | |
Unamortized note issuance costs | (26.1) | (27.2) | |
Total debt | 1,932.3 | 1,929.8 | |
Other Installment Financing Arrangements | 44.3 | 44.6 | |
Tranche B Term Loan due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Current portion of long-term debt | 6 | 6 | |
Long-term debt, less current portion | $ 591 | 592.5 | |
Senior Notes due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | ||
Senior Notes, Noncurrent | $ 22.3 | 22.3 | |
Senior Notes Due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | ||
Senior Notes, Noncurrent | $ 625 | 625 | |
8% Senior Notes due 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||
Senior Notes, Noncurrent | $ 350 | 350 | $ 350 |
Various Cincinnati Bell Telephone Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, less current portion | 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 | 1,934.4 | 1,935.1 | |
Data Center Financing Arrangements [Member] | |||
Debt Instrument [Line Items] | |||
Other Installment Financing Arrangements | $ 4.5 | $ 4.5 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Line of Credit Facility [Line Items] | ||
Credit Agreement | $ 15 | $ 18 |
Line of Credit Facility, Remaining Borrowing Capacity | 185 | |
Receivables facility maximum borrowing capacity | 225 | |
Receivables Facility Maximum Borrowing Availability | 187.1 | |
Receivables facility amount outstanding | 175.8 | $ 176.6 |
Letters of Credit Outstanding, Amount | 9.9 | |
Receivables Facility Remaining Borrowing Capacity | $ 1.4 | |
Accounts Receivable Facility, Renewal Term | 364 | |
Accounts Receivable Sold | $ 16.3 |
Debt Other Financing Arrangemen
Debt Other Financing Arrangements (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Other Installment Financing Arrangements [Line Items] | ||
Other Installment Financing Arrangements | $ 44.3 | $ 44.6 |
Other Liabilities, Current | 44.5 | 39.2 |
Other Liabilities, Noncurrent | 68.5 | 72.8 |
Data Center Financing Arrangements [Member] | ||
Other Installment Financing Arrangements [Line Items] | ||
Other Installment Financing Arrangements | 4.5 | 4.5 |
Pole license agreement obligation [Member] | ||
Other Installment Financing Arrangements [Line Items] | ||
Other Installment Financing Arrangements | 39.8 | 40.1 |
Other Liabilities, Current | 1 | 1 |
Other Liabilities, Noncurrent | $ 38.8 | $ 39.1 |
Leases Lessee Disclosures (Deta
Leases Lessee Disclosures (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating and Finance Lease, Term of Contract | 5 | ||
Lease Expense | $ 3.3 | ||
Lease Expiration Date | Dec. 31, 2066 | ||
Lessee, Finance Lease, Renewal Term | 15 | ||
Operating Lease, Right-of-Use Asset | $ 37.2 | $ 38.3 | $ 0 |
Finance Lease, Right-of-Use Asset | 28.1 | ||
Operating Lease, Liability, Current | 9.8 | ||
Operating Lease, Liability, Noncurrent | 34.5 | $ 0 | |
Operating Lease, Liability | 44.3 | $ 46.2 | |
Finance Lease, Liability, Current | 15.3 | ||
Finance Lease, Liability, Noncurrent | 65.4 | ||
Finance Lease, Liability | 80.7 | ||
Operating Lease, Cost | 3.1 | ||
Short-term Lease, Cost | 0.1 | ||
Variable Lease, Cost | 0.5 | ||
Finance Lease, Right-of-Use Asset, Amortization | 1.9 | ||
Finance Lease, Interest Expense | 1.2 | ||
Lease, Cost | 6.8 | ||
Finance Lease, Interest Payment on Liability | 1.2 | ||
Operating Lease, Payments | 3.2 | ||
Finance Lease, Principal Payments | 3 | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 1.3 | ||
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 9.8 | ||
Operating Lease, Weighted Average Remaining Lease Term | 8 years 2 months 17 days | ||
Finance Lease, Weighted Average Remaining Lease Term | 7 years 7 months 3 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 7.08% | ||
Finance Lease, Weighted Average Discount Rate, Percent | 6.86% | ||
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 12.7 | ||
Finance Leases, Future Minimum Payments, Remainder of Fiscal Year | 19.5 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 10.3 | ||
Finance Leases, Future Minimum Payments, Due in Two Years | 17.3 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 6.3 | ||
Finance Leases, Future Minimum Payments, Due in Three Years | 13.2 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 4.7 | ||
Finance Leases, Future Minimum Payments, Due in Four Years | 8.1 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 4.2 | ||
Finance Leases, Future Minimum Payments, Due in Five Years | 7.4 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 23 | ||
Finance Leases, Future Minimum Payments, Due Thereafter | 40.9 | ||
Operating Leases, Future Minimum Payments Due | 61.2 | ||
Finance Lease, Future Minimum Payments Due | 106.4 | ||
Operating Lease Imputed Interest | (15.6) | ||
Finance Lease Imputed Interest | (25.7) | ||
Operating Lease Liability, including Not Yet Commenced Leases | 45.6 | ||
Lessee Operating Lease, Lease Not yet Commenced Amount | $ 1.3 | ||
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 5 years | ||
Real Estate [Member] | Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating and Finance Lease, Term of Contract | 1 | ||
Real Estate [Member] | Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating and Finance Lease, Term of Contract | 55 | ||
Equipment [Member] | Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating and Finance Lease, Term of Contract | 1 | ||
Equipment [Member] | Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating and Finance Lease, Term of Contract | 6 | ||
Cell Towers [Member] | Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating and Finance Lease, Term of Contract | 4 | ||
Cell Towers [Member] | Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating and Finance Lease, Term of Contract | 21 |
Leases Lessor Disclosures (Deta
Leases Lessor Disclosures (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessor, Lease, Description [Line Items] | |
Lessor, Operating Lease, Payments to be Received, Remainder of Fiscal Year | $ 2.4 |
Lessor, Operating Lease, Payments to be Received, Two Years | 3.1 |
Lessor, Operating Lease, Payments to be Received, Three Years | 2.4 |
Lessor, Operating Lease, Payments to be Received, Four Years | 1.7 |
Lessor, Operating Lease, Payments to be Received, Five Years | 1.7 |
Lessor, Operating Lease, Payments to be Received, Thereafter | 18.6 |
Lessor, Operating Lease, Payments to be Received | 29.9 |
Lessor, Operating Lease Imputed Interest | (11) |
Lessor, Operating Leases, Amount to be Received Less Imputed Interest | 18.9 |
Lease Income | $ 0.8 |
Minimum [Member] | |
Lessor, Lease, Description [Line Items] | |
Lessor, Operating Lease, Term of Contract | 3 years |
Maximum [Member] | |
Lessor, Lease, Description [Line Items] | |
Lessor, Operating Lease, Term of Contract | 29 years |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2018 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Interest Rate Swap | $ 3.8 | |||
Interest Rate Swap | (0.3) | |||
Long-term debt, including current portion | [1] | 1,874.6 | $ 1,880 | |
Other installment financing arrangements | 44.3 | 44.6 | ||
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] | 1,772.7 | 1,673.6 | |
Other installment financing arrangements | 46.8 | 43.6 | ||
2.938% Interest Rate Contract [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Derivative, Notional Amount | $ 300 | |||
Derivative, Fixed Interest Rate | 2.938% | |||
2.275% Interest Rate Contract [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Derivative, Notional Amount | $ 89 | |||
Derivative, Fixed Interest Rate | 2.275% | |||
2.244% Interest Rate Contract [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Derivative, Notional Amount | $ 89 | |||
Derivative, Fixed Interest Rate | 2.244% | |||
2.328% Interest Rate Contract [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Derivative, Notional Amount | $ 89 | |||
Derivative, Fixed Interest Rate | 2.328% | |||
Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Interest Rate Cash Flow Hedge Derivative at Fair Value, Net | $ 8.8 | 5 | ||
Interest Rate Swap Assets | 0.3 | |||
Interest Rate Swap Liability, Current | 1.7 | 1.2 | ||
Interest Rate Swap Liability, Noncurrent | 7.4 | 3.8 | ||
Fair Value, Inputs, Level 1 [Member] | Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Interest Rate Swap Assets | 0 | |||
Interest Rate Swap Liability, Current | 0 | 0 | ||
Interest Rate Swap Liability, Noncurrent | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Interest Rate Swap Assets | 0.3 | |||
Interest Rate Swap Liability, Current | 1.7 | 1.2 | ||
Interest Rate Swap Liability, Noncurrent | 7.4 | 3.8 | ||
Fair Value, Inputs, Level 3 [Member] | Interest Rate Contract [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Interest Rate Swap Assets | 0 | |||
Interest Rate Swap Liability, Current | 0 | 0 | ||
Interest Rate Swap Liability, Noncurrent | $ 0 | $ 0 | ||
Scenario, Forecast [Member] | Interest Rate Contract [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash Flow Hedge Loss (Gain) to be Reclassified within Twelve Months | $ 1.4 | |||
[1] | *Excludes capital leases, other financing arrangements and note issuance costs. |
Pension and Postretirement Pl_3
Pension and Postretirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Pension Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Payment for Pension and Other Postretirement Benefits | $ 1.1 | $ 1.3 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 0 | 0 | |
Other components of pension and postretirement benefit plans expense: | |||
Interest cost on projected benefit obligation | 6 | 4.2 | |
Expected return on plan assets | (7.8) | (6.2) | |
Amortization of: | |||
Prior service benefit | 0 | 0 | |
Actuarial loss | 3.4 | 4.3 | |
Total amortization | 3.4 | 4.3 | |
Pension / postretirement costs | 1.6 | 2.3 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | 11 | ||
Payment for Pension and Other Postretirement Benefits | 1.9 | 1.6 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 0.2 | 0.1 | |
Other components of pension and postretirement benefit plans expense: | |||
Interest cost on projected benefit obligation | 1.2 | 0.8 | |
Expected return on plan assets | 0 | 0 | |
Amortization of: | |||
Prior service benefit | (0.6) | (0.8) | |
Actuarial loss | 0.4 | 1 | |
Total amortization | (0.2) | 0.2 | |
Pension / postretirement costs | 1.2 | $ 1.1 | |
Qualified Plan [Member] | Pension Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 3 | ||
Nonqualified Plan [Member] | Pension Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 3 |
Restructuring and Severance (De
Restructuring and Severance (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve, Current | $ 6.4 | $ 9.6 |
Restructuring Reserve, Noncurrent | 0.4 | $ 0.6 |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 10.2 | |
Hawaiian Telcom opening balance sheet adjustment | 0.1 | |
Restructuring Charges | 3.3 | |
Utilizations | (6.8) | |
Ending balance | 6.8 | |
Entertainment and Communications [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 8.6 | |
Hawaiian Telcom opening balance sheet adjustment | 0.1 | |
Restructuring Charges | 3.3 | |
Utilizations | (6.3) | |
Ending balance | 5.7 | |
IT Services and Hardware [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 1.3 | |
Hawaiian Telcom opening balance sheet adjustment | 0 | |
Restructuring Charges | 0 | |
Utilizations | (0.5) | |
Ending balance | 0.8 | |
Corporate Segment [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0.3 | |
Hawaiian Telcom opening balance sheet adjustment | 0 | |
Restructuring Charges | 0 | |
Utilizations | 0 | |
Ending balance | 0.3 | |
Employee Severance [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 9.5 | |
Hawaiian Telcom opening balance sheet adjustment | 0.1 | |
Restructuring Charges | 3.3 | |
Utilizations | (6.7) | |
Ending balance | 6.2 | |
Lease Abandonment [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0.7 | |
Hawaiian Telcom opening balance sheet adjustment | 0 | |
Restructuring Charges | 0 | |
Utilizations | (0.1) | |
Ending balance | $ 0.6 |
Shareowners' Deficit - Accumula
Shareowners' Deficit - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||
Beginning balance | $ (175.5) | ||
Reclassifications, net | 2.7 | ||
Unrealized loss on cash flow hedges arising during the period, net | (3.1) | $ 0 | |
Foreign currency gain | 1.6 | $ (1.8) | |
Ending balance | (174.3) | ||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | |||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||
Beginning balance | (164.5) | ||
Reclassifications, net | [1] | 2.5 | |
Unrealized loss on cash flow hedges arising during the period, net | 0 | ||
Foreign currency gain | 0 | ||
Ending balance | (162) | ||
Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest [Member] | |||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||
Beginning balance | (3.9) | ||
Reclassifications, net | [2] | 0.2 | |
Unrealized loss on cash flow hedges arising during the period, net | [3] | (3.1) | |
Foreign currency gain | 0 | ||
Ending balance | (6.8) | ||
Accumulated Foreign Currency Adjustment Attributable to Parent | |||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||
Beginning balance | (7.1) | ||
Reclassifications, net | 0 | ||
Unrealized loss on cash flow hedges arising during the period, net | 0 | ||
Foreign currency gain | 1.6 | ||
Ending balance | $ (5.5) | ||
[1] | These reclassifications are included in the other components of net periodic pension and postretirement benefit plans expense and represent amortization of prior service benefit and actuarial loss, net of tax. The other components of net periodic pension and postretirement benefit plans expense are recorded in "Other components of pension and postretirement benefit plans expense" on the Condensed Consolidated Statements of Operations. See Note 9 for further disclosures. | ||
[2] | These reclassifications are reported within "Interest expense" on the Condensed Consolidated Statements of Operations when the hedged transactions impact earnings. | ||
[3] | The unrealized loss, net on cash flow hedges represents the change in the fair value of the derivative instruments that occurred during the period, net of tax. This unrealized gain or loss is recorded in "Other current assets," "Other current liabilities" and "Other noncurrent liabilities" on the Condensed Consolidated Balance Sheets. See Note 8 for further disclosures. |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 379.6 | $ 295.7 | ||
Operating income | 10.1 | 24.2 | ||
Expenditures for long-lived assets | 56.5 | 32.7 | ||
Depreciation and amortization | 79.4 | 51.2 | ||
Assets | 2,649.3 | $ 2,730.2 | ||
Entertainment and Communications [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 250.3 | 174.2 | ||
Operating income | 24.5 | 28.6 | ||
Expenditures for long-lived assets | 51.1 | 27.6 | ||
Depreciation and amortization | 62.7 | 40.9 | ||
Assets | 1,907.4 | 1,898.8 | ||
IT Services and Hardware [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 136.3 | 127.6 | ||
Operating income | (6.8) | 1.4 | ||
Expenditures for long-lived assets | 5.4 | |||
Depreciation and amortization | 16.7 | 10.2 | ||
Assets | 460.7 | 468.1 | ||
Corporate Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | (7.6) | (5.8) | ||
Depreciation and amortization | 0 | 0.1 | ||
Intersegment Elimination [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (7) | (6.1) | ||
Intersegment Elimination [Member] | Entertainment and Communications [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 6 | 5.2 | ||
Intersegment Elimination [Member] | IT Services and Hardware [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1 | 0.9 | ||
Intersegment Elimination [Member] | Corporate Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Assets | 281.2 | $ 363.3 | ||
Sales [Member] | Intersegment Elimination [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 7 | 6.1 | ||
Expenditures for Long-Lived Assets, Including Acquisitions of Businesses [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Expenditures for long-lived assets | [1] | 35.5 | ||
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 | [1] | $ 7.9 | ||
[1] | Includes cost of acquisitions |