|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Ohio
|
|
31-1056105
|
(State of Incorporation)
|
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
|
|
|
|
|
Non-accelerated filer
|
o
|
|
Smaller reporting company
|
o
|
|
|
|
|
|
Emerging growth company
|
o
|
|
|
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Description
|
|
Page
|
Item 1.
|
Financial Statements
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
|
|
|
|
|
Item 4.
|
|
|
|
|
|
Item 5.
|
|
|
|
|
|
Item 6.
|
||
|
|
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Revenue
|
$
|
295.7
|
|
|
$
|
249.6
|
|
|
|
|
|
||||
Costs and expenses
|
|
|
|
||||
Cost of services and products, excluding items below
|
149.4
|
|
|
124.1
|
|
||
Selling, general and administrative, excluding items below
|
68.4
|
|
|
55.3
|
|
||
Depreciation and amortization
|
51.2
|
|
|
45.8
|
|
||
Restructuring and severance related charges
|
0.3
|
|
|
25.6
|
|
||
Transaction and integration cost
|
2.2
|
|
|
0.6
|
|
||
Total operating costs and expenses
|
271.5
|
|
|
251.4
|
|
||
Operating income (loss)
|
24.2
|
|
|
(1.8
|
)
|
||
Interest expense
|
30.8
|
|
|
18.0
|
|
||
Other components of pension and postretirement benefit plans expense
|
3.3
|
|
|
3.2
|
|
||
Gain on sale of Investment in CyrusOne
|
—
|
|
|
(117.7
|
)
|
||
Other income, net
|
(0.4
|
)
|
|
(0.4
|
)
|
||
(Loss) income before income taxes
|
(9.5
|
)
|
|
95.1
|
|
||
Income tax (benefit) expense
|
(1.2
|
)
|
|
34.5
|
|
||
Net (loss) income
|
(8.3
|
)
|
|
60.6
|
|
||
Preferred stock dividends
|
2.6
|
|
|
2.6
|
|
||
Net (loss) income applicable to common shareowners
|
$
|
(10.9
|
)
|
|
$
|
58.0
|
|
|
|
|
|
||||
Basic net (loss) earnings per common share
|
$
|
(0.26
|
)
|
|
$
|
1.38
|
|
Diluted net (loss) earnings per common share
|
$
|
(0.26
|
)
|
|
$
|
1.37
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net (loss) income
|
$
|
(8.3
|
)
|
|
$
|
60.6
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Unrealized gains on Investment in CyrusOne, net of tax of $4.4
|
—
|
|
|
8.3
|
|
||
Reclassification adjustment for gain on sale of Investment in CyrusOne included in net income, net of tax of ($41.3)
|
—
|
|
|
(76.4
|
)
|
||
Foreign currency translation loss
|
(1.8
|
)
|
|
—
|
|
||
Defined benefit plans:
|
|
|
|
||||
Amortization of prior service benefits included in net income, net of tax of ($0.2), ($0.4)
|
(0.6
|
)
|
|
(0.7
|
)
|
||
Amortization of net actuarial loss included in net income, net of tax of $1.2, $2.0
|
4.1
|
|
|
3.5
|
|
||
Total other comprehensive income (loss)
|
1.7
|
|
|
(65.3
|
)
|
||
Total comprehensive loss
|
$
|
(6.6
|
)
|
|
$
|
(4.7
|
)
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
32.4
|
|
|
$
|
17.8
|
|
Restricted Cash
|
379.8
|
|
|
378.7
|
|
||
Receivables, less allowances of $9.6 and $10.4
|
232.4
|
|
|
239.8
|
|
||
Inventory, materials and supplies
|
45.0
|
|
|
44.3
|
|
||
Prepaid expenses
|
23.7
|
|
|
22.2
|
|
||
Other current assets
|
9.4
|
|
|
7.6
|
|
||
Total current assets
|
722.7
|
|
|
710.4
|
|
||
Property, plant and equipment, net
|
1,118.8
|
|
|
1,129.0
|
|
||
Goodwill
|
150.7
|
|
|
151.0
|
|
||
Intangible assets, net
|
128.7
|
|
|
132.3
|
|
||
Deferred income tax assets
|
13.1
|
|
|
12.2
|
|
||
Other noncurrent assets
|
52.0
|
|
|
52.7
|
|
||
Total assets
|
$
|
2,186.0
|
|
|
$
|
2,187.6
|
|
Liabilities and Shareowners’ Deficit
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
18.2
|
|
|
$
|
18.4
|
|
Accounts payable
|
195.7
|
|
|
185.6
|
|
||
Unearned revenue and customer deposits
|
39.3
|
|
|
36.3
|
|
||
Accrued taxes
|
18.0
|
|
|
21.2
|
|
||
Accrued interest
|
33.1
|
|
|
29.9
|
|
||
Accrued payroll and benefits
|
39.5
|
|
|
28.7
|
|
||
Other current liabilities
|
29.2
|
|
|
37.2
|
|
||
Total current liabilities
|
373.0
|
|
|
357.3
|
|
||
Long-term debt, less current portion
|
1,726.9
|
|
|
1,729.3
|
|
||
Pension and postretirement benefit obligations
|
173.2
|
|
|
177.5
|
|
||
Deferred income tax liabilities
|
12.2
|
|
|
11.2
|
|
||
Other noncurrent liabilities
|
28.6
|
|
|
30.2
|
|
||
Total liabilities
|
2,313.9
|
|
|
2,305.5
|
|
||
Shareowners’ deficit
|
|
|
|
||||
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, 2018 and December 31, 2017; liquidation preference $1,000 per share ($50 per depositary share)
|
129.4
|
|
|
129.4
|
|
||
Common shares, $.01 par value; 96,000,000 shares authorized; 42,394,151 and 42,197,965 shares issued and outstanding at March 31, 2018 and December 31, 2017
|
0.4
|
|
|
0.4
|
|
||
Additional paid-in capital
|
2,562.2
|
|
|
2,565.6
|
|
||
Accumulated deficit
|
(2,647.9
|
)
|
|
(2,639.6
|
)
|
||
Accumulated other comprehensive loss
|
(172.0
|
)
|
|
(173.7
|
)
|
||
Total shareowners’ deficit
|
(127.9
|
)
|
|
(117.9
|
)
|
||
Total liabilities and shareowners’ deficit
|
$
|
2,186.0
|
|
|
$
|
2,187.6
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net (loss) income
|
$
|
(8.3
|
)
|
|
$
|
60.6
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
51.2
|
|
|
45.8
|
|
||
Gain on sale of Investment in CyrusOne
|
—
|
|
|
(117.7
|
)
|
||
Provision for loss on receivables
|
1.0
|
|
|
1.8
|
|
||
Noncash portion of interest expense
|
0.8
|
|
|
0.5
|
|
||
Deferred income taxes
|
(1.2
|
)
|
|
34.5
|
|
||
Pension and Other postretirement payments less than expense
|
0.4
|
|
|
1.0
|
|
||
Stock-based compensation
|
1.2
|
|
|
2.9
|
|
||
Other, net
|
(2.0
|
)
|
|
(1.2
|
)
|
||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
||||
Decrease in receivables
|
6.5
|
|
|
14.6
|
|
||
Increase in inventory, materials, supplies, prepaid expenses and other current assets
|
(4.4
|
)
|
|
(5.6
|
)
|
||
Increase in accounts payable
|
3.6
|
|
|
5.8
|
|
||
Increase in accrued and other current liabilities
|
9.6
|
|
|
7.1
|
|
||
Decrease in other noncurrent assets
|
0.5
|
|
|
0.5
|
|
||
(Decrease) increase in other noncurrent liabilities
|
(0.4
|
)
|
|
3.3
|
|
||
Net cash provided by operating activities
|
58.5
|
|
|
53.9
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Capital expenditures
|
(32.7
|
)
|
|
(55.1
|
)
|
||
Proceeds from sale of Investment in CyrusOne
|
—
|
|
|
140.7
|
|
||
Acquisitions of businesses
|
(2.8
|
)
|
|
(9.2
|
)
|
||
Other, net
|
(0.1
|
)
|
|
0.5
|
|
||
Net cash (used in) provided by investing activities
|
(35.6
|
)
|
|
76.9
|
|
||
Cash flows from financing activities
|
|
|
|
||||
Net decrease in corporate credit and receivables facilities with initial maturities less than 90 days
|
—
|
|
|
(89.5
|
)
|
||
Repayment of debt
|
(3.0
|
)
|
|
(2.1
|
)
|
||
Debt issuance costs
|
(0.4
|
)
|
|
(0.5
|
)
|
||
Dividends paid on preferred stock
|
(2.6
|
)
|
|
(2.6
|
)
|
||
Other, net
|
(2.0
|
)
|
|
(1.1
|
)
|
||
Net cash used in financing activities
|
(8.0
|
)
|
|
(95.8
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
0.8
|
|
|
—
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
15.7
|
|
|
35.0
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
396.5
|
|
|
9.7
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
412.2
|
|
|
$
|
44.7
|
|
|
|
|
|
||||
Noncash investing and financing transactions:
|
|
|
|
||||
Acquisition of property by assuming debt and other noncurrent liabilities
|
$
|
—
|
|
|
$
|
6.9
|
|
Acquisition of property on account
|
$
|
17.6
|
|
|
$
|
27.3
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
1.
|
Description of Business and Accounting Policies
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
(in millions, except per share amounts)
|
2018
|
|
2017
|
||||
Numerator:
|
|
|
|
||||
Net (loss) income
|
$
|
(8.3
|
)
|
|
$
|
60.6
|
|
Preferred stock dividends
|
2.6
|
|
|
2.6
|
|
||
Net (loss) income applicable to common shareowners - basic and diluted
|
$
|
(10.9
|
)
|
|
$
|
58.0
|
|
Denominator:
|
|
|
|
||||
Weighted average common shares outstanding - basic
|
42.3
|
|
|
42.1
|
|
||
Stock-based compensation arrangements
|
—
|
|
|
0.2
|
|
||
Weighted average common shares outstanding - diluted
|
42.3
|
|
|
42.3
|
|
||
Basic net (loss) earnings per common share
|
$
|
(0.26
|
)
|
|
$
|
1.38
|
|
Diluted net (loss) earnings per common share
|
$
|
(0.26
|
)
|
|
$
|
1.37
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
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 January 1, 2016
|
$
|
15.0
|
|
|
$
|
1.5
|
|
|
$
|
16.5
|
|
|
$
|
12.7
|
|
|
$
|
1.4
|
|
|
$
|
14.1
|
|
|
$
|
27.7
|
|
|
$
|
2.9
|
|
|
$
|
30.6
|
|
Additions
|
14.5
|
|
|
1.1
|
|
|
15.6
|
|
|
7.3
|
|
|
0.7
|
|
|
8.0
|
|
|
21.8
|
|
|
1.8
|
|
|
23.6
|
|
|||||||||
Amortization
|
(12.5
|
)
|
|
(1.0
|
)
|
|
(13.5
|
)
|
|
(7.9
|
)
|
|
(0.8
|
)
|
|
(8.7
|
)
|
|
(20.4
|
)
|
|
(1.8
|
)
|
|
(22.2
|
)
|
|||||||||
Balance as of December 31, 2016
|
17.0
|
|
|
1.6
|
|
|
18.6
|
|
|
12.1
|
|
|
1.3
|
|
|
13.4
|
|
|
29.1
|
|
|
2.9
|
|
|
32.0
|
|
|||||||||
Additions
|
13.7
|
|
|
1.6
|
|
|
15.3
|
|
|
6.8
|
|
|
1.1
|
|
|
7.9
|
|
|
20.5
|
|
|
2.7
|
|
|
23.2
|
|
|||||||||
Amortization
|
(13.2
|
)
|
|
(1.2
|
)
|
|
(14.4
|
)
|
|
(7.3
|
)
|
|
(1.1
|
)
|
|
(8.4
|
)
|
|
(20.5
|
)
|
|
(2.3
|
)
|
|
(22.8
|
)
|
|||||||||
Balance as of December 31, 2017
|
17.5
|
|
|
2.0
|
|
|
19.5
|
|
|
11.6
|
|
|
1.3
|
|
|
12.9
|
|
|
29.1
|
|
|
3.3
|
|
|
32.4
|
|
|||||||||
Additions
|
3.1
|
|
|
0.4
|
|
|
3.5
|
|
|
1.6
|
|
|
0.4
|
|
|
2.0
|
|
|
4.7
|
|
|
0.8
|
|
|
5.5
|
|
|||||||||
Amortization
|
(3.3
|
)
|
|
(0.3
|
)
|
|
(3.6
|
)
|
|
(1.7
|
)
|
|
(0.2
|
)
|
|
(1.9
|
)
|
|
(5.0
|
)
|
|
(0.5
|
)
|
|
(5.5
|
)
|
|||||||||
Balance as of March 31, 2018
|
$
|
17.3
|
|
|
$
|
2.1
|
|
|
$
|
19.4
|
|
|
$
|
11.5
|
|
|
1.5
|
|
|
$
|
13.0
|
|
|
$
|
28.8
|
|
|
$
|
3.6
|
|
|
$
|
32.4
|
|
|
Three months Ended
|
||||||
|
March 31,
|
||||||
(dollars in millions)
|
2018
|
|
2017
|
||||
Data
|
$
|
84.9
|
|
|
$
|
84.4
|
|
Video
|
39.2
|
|
|
35.9
|
|
||
Voice
|
47.0
|
|
|
51.7
|
|
||
Other
|
3.1
|
|
|
3.1
|
|
||
Total Entertainment and Communications
|
174.2
|
|
|
175.1
|
|
||
Consulting
|
38.1
|
|
|
16.7
|
|
||
Cloud
|
22.6
|
|
|
20.9
|
|
||
Communications
|
40.6
|
|
|
36.5
|
|
||
Infrastructure Solutions
|
26.3
|
|
|
6.9
|
|
||
Total IT Services and Hardware
|
127.6
|
|
|
81.0
|
|
||
Intersegment revenue
|
(6.1
|
)
|
|
(6.5
|
)
|
||
Total revenue
|
$
|
295.7
|
|
|
$
|
249.6
|
|
|
Entertainment and Communications
|
|
IT Services and Hardware
|
|
Intersegment revenue elimination
|
|
Total
|
||||||||||||||||||||||||
|
Three months ended
|
|
Three months ended
|
|
Three months ended
|
|
Three months ended
|
||||||||||||||||||||||||
(dollars in millions)
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Products and Services transferred at a point in time
|
$
|
4.8
|
|
|
$
|
5.1
|
|
|
$
|
35.3
|
|
|
$
|
10.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40.1
|
|
|
$
|
15.8
|
|
Products and Services transferred over time
|
164.2
|
|
|
164.6
|
|
|
91.4
|
|
|
69.2
|
|
|
—
|
|
|
—
|
|
|
255.6
|
|
|
233.8
|
|
||||||||
Intersegment revenue
|
5.2
|
|
|
5.4
|
|
|
0.9
|
|
|
1.1
|
|
|
(6.1
|
)
|
|
(6.5
|
)
|
|
—
|
|
|
—
|
|
||||||||
Total revenue
|
$
|
174.2
|
|
|
$
|
175.1
|
|
|
$
|
127.6
|
|
|
$
|
81.0
|
|
|
$
|
(6.1
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
295.7
|
|
|
$
|
249.6
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
(dollars in millions)
|
Fair Value
|
|
Useful Lives
|
||
Customer relationships
|
$
|
108.0
|
|
|
15 years
|
Trade name
|
16.0
|
|
|
10 years
|
|
Technology
|
10.0
|
|
|
10 years
|
|
Total identifiable intangible assets
|
$
|
134.0
|
|
|
|
|
Three Months Ended
|
||
|
March 31,
|
||
(dollars in millions, except per share amounts)
|
2017
|
||
Revenue
|
$
|
298.5
|
|
Net income applicable to common shareholders
|
54.1
|
|
|
Earnings per share:
|
|
||
Basic and diluted earnings per common share
|
1.28
|
|
|
|
IT Services and Hardware
|
|
Entertainment and Communications
|
|
Total Company
|
||||||
(dollars in millions)
|
|
|
|
|
|
|
||||||
Goodwill, balance as of December 31, 2017
|
|
$
|
148.8
|
|
|
$
|
2.2
|
|
|
$
|
151.0
|
|
Activity during the year
|
|
|
|
|
|
|
||||||
Adjustments to prior year acquisitions
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|||
Currency translations
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|||
Goodwill, balance as of March 31, 2018
|
|
$
|
148.5
|
|
|
$
|
2.2
|
|
|
$
|
150.7
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Gross Carrying
|
|
Accumulated
|
|
Gross Carrying
|
|
Accumulated
|
||||||||
(dollars in millions)
|
|
Amount
(a)
|
|
Amortization
|
|
Amount
(a)
|
|
Amortization
|
||||||||
Customer relationships
|
|
$
|
115.4
|
|
|
$
|
(10.8
|
)
|
|
$
|
116.0
|
|
|
$
|
(8.9
|
)
|
Trade names
|
|
15.5
|
|
|
(0.8
|
)
|
|
15.9
|
|
|
(0.4
|
)
|
||||
Technology
|
|
9.9
|
|
|
(0.5
|
)
|
|
9.9
|
|
|
(0.2
|
)
|
||||
Total
|
|
$
|
140.8
|
|
|
$
|
(12.1
|
)
|
|
$
|
141.8
|
|
|
$
|
(9.5
|
)
|
|
March 31,
|
|
December 31,
|
||||
(dollars in millions)
|
2018
|
|
2017
|
||||
Current portion of long-term debt:
|
|
|
|
||||
Credit Agreement - Tranche B Term Loan due 2024
|
$
|
6.0
|
|
|
$
|
6.0
|
|
Capital lease obligations and other debt
|
12.2
|
|
|
12.4
|
|
||
Current portion of long-term debt
|
18.2
|
|
|
18.4
|
|
||
Long-term debt, less current portion:
|
|
|
|
||||
Credit Agreement - Tranche B Term Loan due 2024
|
594.0
|
|
|
594.0
|
|
||
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
|
|
||
Cincinnati Bell Telephone Notes
|
87.9
|
|
|
87.9
|
|
||
Capital lease obligations and other debt
|
67.7
|
|
|
70.5
|
|
||
|
1,746.9
|
|
|
1,749.7
|
|
||
Net unamortized premium
|
1.9
|
|
|
1.9
|
|
||
Unamortized note issuance costs
|
(21.9
|
)
|
|
(22.3
|
)
|
||
Long-term debt, less current portion
|
1,726.9
|
|
|
1,729.3
|
|
||
Total debt
|
$
|
1,745.1
|
|
|
$
|
1,747.7
|
|
(dollars in millions)
|
Employee
Separation
|
|
Lease
Abandonment
|
|
Total
|
||||||
Balance as of December 31, 2017
|
$
|
14.4
|
|
|
$
|
0.1
|
|
|
$
|
14.5
|
|
Charges
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||
Utilizations
|
(7.3
|
)
|
|
—
|
|
|
(7.3
|
)
|
|||
Balance as of March 31, 2018
|
$
|
7.4
|
|
|
$
|
0.1
|
|
|
$
|
7.5
|
|
(dollars in millions)
|
Entertainment and Communications
|
|
IT Services and Hardware
|
|
Corporate
|
|
Total
|
||||||||
Balance as of December 31, 2017
|
$
|
12.3
|
|
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
14.5
|
|
Charges
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Utilizations
|
(5.7
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
(7.3
|
)
|
||||
Balance as of March 31, 2018
|
$
|
6.6
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
7.5
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
(dollars in millions)
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Long-term debt, including current portion*
|
$
|
1,687.1
|
|
|
$
|
1,602.8
|
|
|
$
|
1,687.1
|
|
|
$
|
1,687.5
|
|
*Excludes capital leases and note issuance costs.
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(dollars in millions)
|
Pension Benefits
|
|
Postretirement and
Other Benefits
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Other components of pension and postretirement benefit plans expense:
|
|
|
|
|
|
|
|
||||||||
Interest cost on projected benefit obligation
|
4.2
|
|
|
4.8
|
|
|
0.8
|
|
|
0.8
|
|
||||
Expected return on plan assets
|
(6.2
|
)
|
|
(6.5
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
(1.1
|
)
|
||||
Actuarial loss
|
4.3
|
|
|
4.4
|
|
|
1.0
|
|
|
1.1
|
|
||||
Total amortization
|
4.3
|
|
|
4.4
|
|
|
0.2
|
|
|
—
|
|
||||
Pension / postretirement costs
|
$
|
2.3
|
|
|
$
|
2.7
|
|
|
$
|
1.1
|
|
|
$
|
0.9
|
|
(dollars in millions)
|
Unrecognized Net Periodic Pension and Postretirement Benefit Cost
|
|
Foreign Currency Translation Loss
|
|
Total
|
||||||
Balance as of December 31, 2017
|
$
|
(173.1
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(173.7
|
)
|
Reclassifications, net
|
3.5
|
|
(a)
|
—
|
|
|
3.5
|
|
|||
Foreign currency loss
|
—
|
|
|
(1.8
|
)
|
|
(1.8
|
)
|
|||
Balance as of March 31, 2018
|
$
|
(169.6
|
)
|
|
$
|
(2.4
|
)
|
|
$
|
(172.0
|
)
|
(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 (see Note 9 for additional details). 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 in accordance with ASU 2017-07, which the Company retrospectively adopted effective January 1, 2018.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
(dollars in millions)
|
2018
|
|
2017
|
||||
Revenue
|
|
|
|
||||
Entertainment and Communications
|
$
|
174.2
|
|
|
$
|
175.1
|
|
IT Services and Hardware
|
127.6
|
|
|
81.0
|
|
||
Intersegment
|
(6.1
|
)
|
|
(6.5
|
)
|
||
Total revenue
|
$
|
295.7
|
|
|
$
|
249.6
|
|
Intersegment revenue
|
|
|
|
||||
Entertainment and Communications
|
$
|
5.2
|
|
|
$
|
5.4
|
|
IT Services and Hardware
|
0.9
|
|
|
1.1
|
|
||
Total intersegment revenue
|
$
|
6.1
|
|
|
$
|
6.5
|
|
Operating income (loss)
|
|
|
|
||||
Entertainment and Communications
|
$
|
28.6
|
|
|
$
|
3.1
|
|
IT Services and Hardware
|
1.4
|
|
|
0.9
|
|
||
Corporate
|
(5.8
|
)
|
|
(5.8
|
)
|
||
Total operating income (loss)
|
$
|
24.2
|
|
|
$
|
(1.8
|
)
|
Expenditures for long-lived assets*
|
|
|
|
||||
Entertainment and Communications
|
$
|
27.6
|
|
|
$
|
46.8
|
|
IT Services and Hardware
|
7.9
|
|
|
17.5
|
|
||
Total expenditures for long-lived assets
|
$
|
35.5
|
|
|
$
|
64.3
|
|
Depreciation and amortization
|
|
|
|
||||
Entertainment and Communications
|
$
|
40.9
|
|
|
$
|
39.4
|
|
IT Services and Hardware
|
10.2
|
|
|
6.4
|
|
||
Corporate
|
0.1
|
|
|
—
|
|
||
Total depreciation and amortization
|
$
|
51.2
|
|
|
$
|
45.8
|
|
* Includes cost of acquisitions
|
|
|
|
||||
|
March 31,
|
|
December 31,
|
||||
(dollars in millions)
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Entertainment and Communications
|
$
|
1,102.5
|
|
|
$
|
1,111.4
|
|
IT Services and Hardware
|
494.4
|
|
|
482.7
|
|
||
Corporate and eliminations
|
589.1
|
|
|
593.5
|
|
||
Total assets
|
$
|
2,186.0
|
|
|
$
|
2,187.6
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
Three months ended March 31,
|
|||||||||||||
(dollars in millions)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Revenue
|
|
|
|
|
|
|
|
|||||||
Entertainment and Communications
|
$
|
169.0
|
|
|
$
|
169.7
|
|
|
$
|
(0.7
|
)
|
|
0
|
%
|
IT Services and Hardware
|
126.7
|
|
|
79.9
|
|
|
46.8
|
|
|
59
|
%
|
|||
Total revenue
|
$
|
295.7
|
|
|
$
|
249.6
|
|
|
$
|
46.1
|
|
|
18
|
%
|
|
Three months ended March 31,
|
|||||||||||||
(dollars in millions)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Cost of services and products
|
|
|
|
|
|
|
|
|||||||
Entertainment and Communications
|
$
|
76.5
|
|
|
$
|
74.4
|
|
|
$
|
2.1
|
|
|
3
|
%
|
IT Services and Hardware
|
72.9
|
|
|
49.7
|
|
|
23.2
|
|
|
47
|
%
|
|||
Total cost of services and products
|
$
|
149.4
|
|
|
$
|
124.1
|
|
|
$
|
25.3
|
|
|
20
|
%
|
|
Three months ended March 31,
|
|||||||||||||
(dollars in millions)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Selling, general, and administrative
|
|
|
|
|
|
|
|
|||||||
Entertainment and Communications
|
$
|
27.1
|
|
|
$
|
31.3
|
|
|
$
|
(4.2
|
)
|
|
(13
|
)%
|
IT Services and Hardware
|
37.7
|
|
|
18.8
|
|
|
18.9
|
|
|
n/m
|
|
|||
Corporate
|
3.6
|
|
|
5.2
|
|
|
(1.6
|
)
|
|
(31
|
)%
|
|||
Total selling, general and administrative
|
$
|
68.4
|
|
|
$
|
55.3
|
|
|
$
|
13.1
|
|
|
24
|
%
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
Three months ended March 31,
|
|||||||||||||
(dollars in millions)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Depreciation and amortization expense
|
|
|
|
|
|
|
|
|||||||
Entertainment and Communications
|
$
|
40.9
|
|
|
$
|
39.4
|
|
|
$
|
1.5
|
|
|
4
|
%
|
IT Services and Hardware
|
10.2
|
|
|
6.4
|
|
|
3.8
|
|
|
59
|
%
|
|||
Corporate
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
n/m
|
|
|||
Total depreciation and amortization expense
|
$
|
51.2
|
|
|
$
|
45.8
|
|
|
$
|
5.4
|
|
|
12
|
%
|
|
Three months ended March 31,
|
|||||||||||||
(dollars in millions)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Other operating costs
|
|
|
|
|
|
|
|
|||||||
Restructuring and severance related charges
|
$
|
0.3
|
|
|
$
|
25.6
|
|
|
$
|
(25.3
|
)
|
|
(99
|
)%
|
Transaction and integration costs
|
2.2
|
|
|
0.6
|
|
|
1.6
|
|
|
n/m
|
|
|||
Total other operating costs
|
$
|
2.5
|
|
|
$
|
26.2
|
|
|
$
|
(23.7
|
)
|
|
(90
|
)%
|
|
Three months ended March 31,
|
|||||||||||||
(dollars in millions)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Non-operating costs
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
$
|
30.8
|
|
|
$
|
18.0
|
|
|
$
|
12.8
|
|
|
71
|
%
|
Other components of pension and postretirement benefit plans expense
|
3.3
|
|
|
3.2
|
|
|
0.1
|
|
|
3
|
%
|
|||
Gain on sale of Investment in CyrusOne
|
—
|
|
|
(117.7
|
)
|
|
117.7
|
|
|
n/m
|
|
|||
Other income, net
|
(0.4
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
0
|
%
|
|||
Income tax (benefit) expense
|
(1.2
|
)
|
|
34.5
|
|
|
(35.7
|
)
|
|
n/m
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
Three Months Ended March 31,
|
|||||||||||||
(dollars in millions)
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||
Data
|
$
|
84.9
|
|
|
$
|
84.4
|
|
|
$
|
0.5
|
|
|
1
|
%
|
Video
|
39.2
|
|
|
35.9
|
|
|
3.3
|
|
|
9
|
%
|
|||
Voice
|
47.0
|
|
|
51.7
|
|
|
(4.7
|
)
|
|
(9
|
)%
|
|||
Other
|
3.1
|
|
|
3.1
|
|
|
—
|
|
|
0
|
%
|
|||
Total revenue
|
174.2
|
|
|
175.1
|
|
|
(0.9
|
)
|
|
(1
|
)%
|
|||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Cost of services and products
|
77.6
|
|
|
75.7
|
|
|
1.9
|
|
|
3
|
%
|
|||
Selling, general and administrative
|
27.1
|
|
|
31.3
|
|
|
(4.2
|
)
|
|
(13
|
)%
|
|||
Depreciation and amortization
|
40.9
|
|
|
39.4
|
|
|
1.5
|
|
|
4
|
%
|
|||
Restructuring and severance charges
|
—
|
|
|
25.6
|
|
|
(25.6
|
)
|
|
(100
|
)%
|
|||
Total operating costs and expenses
|
145.6
|
|
|
172.0
|
|
|
(26.4
|
)
|
|
(15
|
)%
|
|||
Operating income
|
$
|
28.6
|
|
|
$
|
3.1
|
|
|
$
|
25.5
|
|
|
n/m
|
|
Operating margin
|
16.4
|
%
|
|
1.8
|
%
|
|
|
|
14.6 pts
|
|
||||
Capital expenditures
|
$
|
27.6
|
|
|
$
|
46.8
|
|
|
$
|
(19.2
|
)
|
|
(41
|
)%
|
|
|
|
|
|
|
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
Three Months Ended March 31,
|
||||||||||
Metrics information (in thousands):
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||
Fioptics
|
|
|
|
|
|
|
|
||||
Data
|
|
|
|
|
|
|
|
|
|
||
Internet FTTP
|
187.8
|
|
|
160.3
|
|
|
27.5
|
|
|
17
|
%
|
Internet FTTN
|
45.0
|
|
|
47.0
|
|
|
(2.0
|
)
|
|
(4
|
)%
|
Total Fioptics Internet
|
232.8
|
|
|
207.3
|
|
|
25.5
|
|
|
12
|
%
|
Video
|
|
|
|
|
|
|
|
||||
Video FTTP
|
118.1
|
|
|
111.1
|
|
|
7.0
|
|
|
6
|
%
|
Video FTTN
|
28.2
|
|
|
30.0
|
|
|
(1.8
|
)
|
|
(6
|
)%
|
Total Fioptics Video
|
146.3
|
|
|
141.1
|
|
|
5.2
|
|
|
4
|
%
|
Voice
|
|
|
|
|
|
|
|
||||
Consumer Voice Lines
|
89.3
|
|
|
85.5
|
|
|
3.8
|
|
|
4
|
%
|
Enterprise Voice Lines
|
17.6
|
|
|
14.1
|
|
|
3.5
|
|
|
25
|
%
|
Total Fioptics Voice Lines
|
106.9
|
|
|
99.6
|
|
|
7.3
|
|
|
7
|
%
|
Fioptics Units Passed
|
|
|
|
|
|
|
|
|
|
||
Units passed FTTP
|
440.5
|
|
|
403.7
|
|
|
36.8
|
|
|
9
|
%
|
Units passed FTTN
|
140.3
|
|
|
141.5
|
|
|
(1.2
|
)
|
|
(1
|
)%
|
Total Fioptics units passed
|
580.8
|
|
|
545.2
|
|
|
35.6
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
||||
Enterprise Fiber
|
|
|
|
|
|
|
|
||||
Data
|
|
|
|
|
|
|
|
||||
Ethernet Bandwidth (Gb)
|
4,046
|
|
|
3,521
|
|
|
525
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
||||
Legacy
|
|
|
|
|
|
|
|
||||
Data
|
|
|
|
|
|
|
|
||||
DSL
|
78.1
|
|
|
100.1
|
|
|
(22.0
|
)
|
|
(22
|
)%
|
Voice
|
|
|
|
|
|
|
|
||||
Consumer Voice Lines
|
90.4
|
|
|
111.1
|
|
|
(20.7
|
)
|
|
(19
|
)%
|
Enterprise Voice Lines
|
161.0
|
|
|
183.9
|
|
|
(22.9
|
)
|
|
(12
|
)%
|
Total Legacy Voice Lines
|
251.4
|
|
|
295.0
|
|
|
(43.6
|
)
|
|
(15
|
)%
|
|
|
|
|
|
|
|
|
||||
*Fiber to the Premise (FTTP), Fiber to the Node (FTTN)
|
|
|
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
|
|
|
Three months ended March 31,
|
||||||
(dollars in millions)
|
2018
|
|
2017
|
|||||||
Revenue:
|
|
|
|
|||||||
|
Fioptics
|
|
|
|
||||||
|
|
|
Data
|
$
|
34.4
|
|
|
$
|
29.6
|
|
|
|
|
Video
|
39.2
|
|
|
35.9
|
|
||
|
|
|
Voice
|
9.1
|
|
|
7.9
|
|
||
|
|
|
Other
|
0.3
|
|
|
0.3
|
|
||
|
|
|
|
83.0
|
|
|
73.7
|
|
||
|
Enterprise Fiber
|
|
|
|
||||||
|
|
|
Data
|
20.8
|
|
|
19.7
|
|
||
|
Legacy
|
|
|
|
||||||
|
|
|
Data
|
29.7
|
|
|
35.1
|
|
||
|
|
|
Voice
|
37.9
|
|
|
43.8
|
|
||
|
|
|
Other
|
2.8
|
|
|
2.8
|
|
||
|
|
|
|
70.4
|
|
|
81.7
|
|
||
Total Entertainment and Communications revenue
|
$
|
174.2
|
|
|
$
|
175.1
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2018
|
|
2017
|
||||
Fioptics capital expenditures
|
|
|
|
|
||||
Construction
|
|
$
|
6.1
|
|
|
$
|
15.2
|
|
Installation
|
|
7.5
|
|
|
15.3
|
|
||
Other
|
|
3.6
|
|
|
5.2
|
|
||
Total Fioptics
|
|
17.2
|
|
|
35.7
|
|
||
|
|
|
|
|
||||
Enterprise Fiber
|
|
4.5
|
|
|
3.9
|
|
||
Other
|
|
5.9
|
|
|
7.2
|
|
||
Total capital expenditures
|
|
$
|
27.6
|
|
|
$
|
46.8
|
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
|
Three Months Ended March 31,
|
|||||||||||||
(dollars in millions)
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|||||
Consulting
|
$
|
38.1
|
|
|
$
|
16.7
|
|
|
$
|
21.4
|
|
|
n/m
|
|
Cloud
|
22.6
|
|
|
20.9
|
|
|
1.7
|
|
|
8
|
%
|
|||
Communications
|
40.6
|
|
|
36.5
|
|
|
4.1
|
|
|
11
|
%
|
|||
Infrastructure Solutions
|
26.3
|
|
|
6.9
|
|
|
19.4
|
|
|
n/m
|
|
|||
Total revenue
|
127.6
|
|
|
81.0
|
|
|
46.6
|
|
|
58
|
%
|
|||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||
Cost of services and products
|
77.7
|
|
|
54.7
|
|
|
23.0
|
|
|
42
|
%
|
|||
Selling, general and administrative
|
38.0
|
|
|
19.0
|
|
|
19.0
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
10.2
|
|
|
6.4
|
|
|
3.8
|
|
|
59
|
%
|
|||
Restructuring and severance related charges
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
n/m
|
|
|||
Total operating costs and expenses
|
126.2
|
|
|
80.1
|
|
|
46.1
|
|
|
58
|
%
|
|||
Operating income
|
$
|
1.4
|
|
|
$
|
0.9
|
|
|
$
|
0.5
|
|
|
56
|
%
|
Operating margin
|
1.1
|
%
|
|
1.1
|
%
|
|
|
|
0.0 pts
|
|
||||
Capital expenditures
|
$
|
5.1
|
|
|
$
|
8.3
|
|
|
$
|
(3.2
|
)
|
|
(39
|
)%
|
|
|
||||||
Metrics information:
|
Consulting
|
|
Communications
|
|
Communications
|
|
Communications
|
|
Billable Heads
|
|
NaaS Locations
|
|
SD - WAN Locations
|
|
Hosted UCaaS Profiles
|
|
888
|
|
564
|
|
117
|
|
178,457
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part I
|
|
Cincinnati Bell Inc.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
(a)
|
Evaluation of disclosure controls and procedures.
|
(b)
|
Changes in internal control over financial reporting.
|
Form 10-Q Part II
|
|
Cincinnati Bell Inc.
|
Item 1.
|
Legal Proceedings
|
Form 10-Q Part II
|
|
Cincinnati Bell Inc.
|
Form 10-Q Part II
|
|
Cincinnati Bell Inc.
|
|
|
|
Cincinnati Bell Inc.
|
|
|
|
|
|
|
Date:
|
May 9, 2018
|
|
/s/ Andrew R. Kaiser
|
|
|
|
|
Andrew R. Kaiser
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
Date:
|
May 9, 2018
|
|
/s/ Shannon M. Mullen
|
|
|
|
|
Shannon M. Mullen
|
|
|
|
|
Chief Accounting Officer
|
|
1.
|
“Disability Termination” means, with respect to the Employee, the termination of the Employee’s employment with the Employer because the Employee is unable to perform all of the duties of the Employee’s then current position with the Employer due to a physical or mental condition, provided that such inability to perform such duties is reasonably expected to be permanent.
|
a.
|
The Committee must determine that all of the above conditions are met for the Employee to be deemed to have incurred a Disability Termination.
|
b.
|
In order to make such a determination, the Committee may in its discretion require that the Employee’s condition of disability at the time of the Employee’s termination of employment be certified by a physician chosen or approved by the Committee or that the Employee present evidence that the Employee has been determined by the U.S. Social Security Administration to have been disabled at the time of such termination of employment.
|
2.
|
“Adjusted Unlevered Operating Cash Flow” means the Employer’s Cash Flows from Operating Activities (as defined by U.S. GAAP) adjusted to exclude expenses related to (1) cash paid for interest on (a) all long-term debt, (b) capital lease obligations, and (c) other financing arrangements for the Performance Period (computed on the basis of the Employer’s interest expense for purposes of the Employer’s applicable income statements as determined in accordance with U.S. GAAP, less non-cash items); and (2) Transaction and Integration Costs.
|
3.
|
“Adjusted Unlevered Operating Cash Flow Result” means the quotient produced by dividing (a) the Adjusted Unlevered Operating Cash Flow for the Performance Period by (b) the approved Adjusted
|
4.
|
“Adjusted Unlevered Operating Cash Flow Result Percentage” means the Adjusted Unlevered Operating Cash Flow Result Percentage that is determined from the following table (which percentage is based on the Adjusted Unlevered Operating Cash Flow Result):
|
5.
|
“Performance Period” means each period for which the value of Units may be calculated under this Award. The Performance Periods are:
|
a.
|
“2018 Performance Period,” which begins on January 1, 2018 and ends on December 31, 2018;
|
b.
|
“2018-2019 Performance Period,” which begins on January 1, 2018 and ends on December 31, 2019; and
|
c.
|
“2018-2020 Performance Period,” which begins on January 1, 2018 and ends on December 31, 2020.
|
6.
|
“Relative Total Shareholder Return” means the rank (by percentile) of the Company’s total shareholder return for the Performance Period when compared to the total shareholder return for the Performance Period of all companies in the Telecom Peer Group. For all purposes of this Award and section 17 of the Plan, a Relative Total Shareholder Return of at least 50th but not greater than the 60
th
percentile shall be deemed the “target” Relative Total Shareholder Return.
|
7.
|
“Relative Total Shareholder Return Percentage” means the Relative Total Shareholder Return Percentage that is determined from the following table (which percentage is based on the Relative Total Shareholder Return):
|
If Relative Total Shareholder Return Is:
|
Then Relative Total Shareholder Return Percentage Is:
|
Less than 20
th
Percentile
|
0.0%
|
At least
20
th
Percentile but less than 30
th
Percentile
|
25.0%
|
At least 30
th
Percentile but less than 40
th
Percentile
|
50.0%
|
At least
40
th
Percentile but less than 50
th
Percentile
|
75.0%
|
At least 50
th
Percentile but less than 60
th
Percentile (“target” Relative Total Shareholder Return)
|
100.0%
|
At least 60
th
Percentile but less than 70
th
Percentile
|
112.5%
|
At least 70
th
Percentile but less than 80
th
Percentile
|
125.0%
|
At least 80
th
Percentile but less than 90
th
Percentile
|
137.5%
|
90
th
Percentile or greater
|
150.0%
|
8.
|
“Retirement” means, with respect to the Employee, the Employee’s termination of employment with the Employer (a) at least one year after the effective date of this Award, (b) after the Employee has both attained at least age 55 and completed at least 10 years of employment with the Employer, and (c) other than by reason of the Employee’s fraud, misappropriation or embezzlement, gross insubordination, failure to perform in good faith the Employee’s assigned duties, or any other reason for which a termination of employment would be deemed for “cause” under any employment agreement between the Employee and the Employer that is in effect at the time of the Employee’s termination of employment with the Employer.
|
9.
|
“Share-based Performance Unit Percentage” means, for the 2018 Performance Period, the 2018-2019 Performance Period, or the 2018-2020 Performance Period, the sum of (a) the Adjusted Unlevered Operating Cash Flow Result Percentage, determined for such Performance Period from the table for Adjusted Unlevered Operating Cash Flow Result Percentage above, multiplied by 70%, and (b) the Relative Total Shareholder Return Percentage, determined for such Performance Period from the table for Relative Total Shareholder Return Percentage above, multiplied by 30%.
|
10.
|
“Target Number of Units” means
NUMBER OF AWARDS GRANTED
Units
|
11.
|
“Telecom Peer Group” means the Telecommunications Peer Group approved by the Committee as in effect on the last day of the respective Performance Period.
|
12.
|
“Transaction and Integration Costs” means the total amount of costs and expenses reflected on the Employer’s Consolidated Statement of Operations that the Committee determines factually relates to the sale, purchase, or integration of any business unit or subsidiary.
|
1.
|
“payment date” means March 15, 2021 (or, if earlier, any date that occurs between January 1, 2021 and March 15, 2021 and that is chosen by the Company for payment of the amount, if any, to be distributed under this part of the Award); and
|
2.
|
“payment eligible” means, with respect to the Employee, either (i) that the Employee is still employed by the Employer on the payment date, (ii) that the Employee’s employment with the Employer ended after the date as of which this Award became effective and before the payment date because of the
|
1.
|
first multiplying (a) 50% of the Target Number of Units by (b) the Share-based Performance Unit Percentage for the 2018 Performance Period;
|
2.
|
second multiplying (a) 25% of the Target Number of Units by (b) the Share-based Performance Unit Percentage for the 2018-2019 Performance Period;
|
3.
|
third multiplying (a) 25% of the Target Number of Units by (b) the Share-based Performance Unit Percentage for the 2018-2020 Performance Period; and
|
4.
|
fourth (and last), by adding the results of steps 1, 2, and 3 above.
|
1.
|
withholding an amount sufficient to meet such requirements from any amounts payable to or with respect to the Employee by the Employer other than by reason of this Award;
|
2.
|
retaining Shares having a fair market value sufficient to meet such requirements from the Shares that the Company would otherwise distribute pursuant to this Award; or
|
3.
|
combining the methods described in clauses 1 and 2 above.
|
1.
|
the Employee will accept and receive such Shares for the purpose of investment and not with a view to their resale or distribution;
|
2.
|
the Employee, upon receipt of such Shares, will furnish to the Company an investment letter in form and substance satisfactory to the Company;
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3.
|
the Employee, prior to selling or offering for sale any such Shares, will furnish the Company with an opinion of counsel satisfactory to the Company to the effect that such sale may lawfully be made and will furnish the Company with such certifications as to factual matters as the Company may reasonably request; and
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4.
|
the transfer agent holding the Employee’s Shares in book-entry form will be notified of the restrictions on sale or transfer.
|
1.
|
there automatically shall be substituted for each Unit that is still subject to this Award a Unit that on the date on which any distribution is to be made under this Award has a value equal to 100% of the fair market value (determined in accordance with the Plan’s terms for determining fair market value) of the number and kind of shares of stock or other securities into which each Share is changed or for which each Share is exchanged; and
|
2.
|
the Company shall make such other adjustments to the Units subject to provisions of the Plan and this Award as may be appropriate and equitable.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cincinnati Bell Inc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure control and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 9, 2018
|
/s/ Leigh R. Fox
|
|
|
Leigh R. Fox
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cincinnati Bell Inc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure control and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 9, 2018
|
/s/ Andrew R. Kaiser
|
|
|
Andrew R. Kaiser
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Leigh R. Fox
|
|
Leigh R. Fox
|
|
Chief Executive Officer
|
|
May 9, 2018
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Andrew R. Kaiser
|
|
Andrew R. Kaiser
|
|
Chief Financial Officer
|
|
May 9, 2018
|
|