FULL YEAR HIGHLIGHTS
- Consolidated revenue totaled $1,560 million, up 2%
year-over-year, generating operating income of $66 million
- Adjusted EBITDA1 was $421 million, up 4% compared to a year
ago
- Entertainment and Communications revenue totaled $970 million
with Adjusted EBITDA increasing to $368 million
Fiber-to-the-premise (“FTTP”) High Speed Internet subscribers were
up 20,700 in Cincinnati and 4,400 in Hawaii, compared to a year
ago
- IT Services and Hardware revenue totaled $617 million,
generating Adjusted EBITDA of $68 million, up 9% and 27%,
respectively, compared to the prior year
- Cash provided by operating activities totaled $206 million with
free cash flow2 of $31 million
- Merger agreement with a controlled subsidiary of Macquarie
Infrastructure Partners ("MIP") remains on target to close in the
first half of 2021
FOURTH QUARTER 2020 HIGHLIGHTS
- Revenue of $410 million and operating income of $34 million —
Adjusted EBITDA totaled $110 million
- Entertainment and Communications revenue of $245 million,
generating Adjusted EBITDA of $93 million FTTP High Speed
Internet net activations totaled approximately 5,000 in Cincinnati
and 1,200 in Hawaii during the quarter
- IT Services and Hardware revenue of $172 million, generating
Adjusted EBITDA of $24 million
Cincinnati Bell Inc. (NYSE:CBB), today announced financial
results for the full year and fourth quarter of 2020.
Leigh Fox, President and Chief Executive Officer of Cincinnati
Bell, commented, “2020 was a unique and volatile year, and I am
incredibly proud of the Cincinnati Bell team and their focus to
overcome the challenges resulting from COVID-19. Our continued
investments in dense metro fiber and strategic IT solutions
produced incredible results and were critical to achieving both
year-over-year revenue and Adjusted EBITDA growth.”
Mr. Fox continued, “Through this pandemic, our teams remained
committed to our customers and to the communities we serve. We
participated in the Keep Americans Connected Pledge, maintained
robust charitable contributions through numerous programs, and
offered creative services and solutions to help bridge the digital
divide. All of this was done while exceeding our financial goals,
and reaching an agreement to be acquired by MIP at an attractive
valuation for our shareholders.”
CONSOLIDATED RESULTS
- Revenue totaled $410 million for fourth quarter of 2020 and
$1,560 million for the full year
- Operating income was $34 million in the fourth quarter of 2020
and $66 million for the full year
- Adjusted EBITDA totaled $110 million for the fourth quarter of
2020 and $421 million for the full year
Entertainment and Communications Segment
- Entertainment and Communications revenue totaled $245 million
for the fourth quarter of 2020 and $970 million for the full year
- Cincinnati revenue totaled $171 million in the fourth quarter
and $670 million for the full year
- Fioptics revenue totaled $92 million for the fourth quarter and
$360 million for the full year, up 4% and 2%, respectively,
year-over-year
- FTTP internet subscribers totaled 239,900 at the end of the
fourth quarter, adding 20,700 customers during the year
- FTTP is available to approximately 500,000 addresses, more than
60% of Greater Cincinnati
- Hawaii revenue totaled $75 million in the fourth quarter and
$300 million for the full year
- Consumer / SMB Fiber revenue totaled $22 million for the fourth
quarter and $86 million for the full year
- FTTP internet subscribers totaled 59,800 at the end of the
fourth quarter, adding 4,400 customers during the year
- FTTP is available to 184,300 addresses, or 38% of the state of
Hawaii
- Adjusted EBITDA was $93 million for the fourth quarter of 2020
and $368 million for the full year
IT Services and Hardware Segment
- IT Services and Hardware revenue totaled $172 million for the
fourth quarter of 2020 and $617 million for the full year
- Communications revenue was $55 million in the fourth quarter
and $215 million for the full year, up $3 million and $16 million
year-over-year, respectively
- Consulting revenue totaled $58 million for the fourth quarter
and $196 million for the full year, up $20 million and $43 million
year-over-year, respectively
- Cloud revenue was $23 million in the fourth quarter and $86
million for the full year, up $1 million and down $6 million from
the prior year, respectively
- Infrastructure Solutions revenue totaled $37 million in the
fourth quarter and $119 million for the full year, down $2 million
and $5 million year-over-year, respectively
- Adjusted EBITDA was $24 million for the fourth quarter and $68
million for the full year, up $5 million and $15 million from the
prior year, respectively
Macquarie Infrastructure Partners Transaction Details
On March 13, 2020, Cincinnati Bell Inc. ("Cincinnati Bell" or
the "Company"), together with MIP, announced an agreement through
which an MIP-controlled subsidiary will acquire all outstanding
shares of Cincinnati Bell for $15.50 per share in a cash
transaction valued at approximately $2.9 billion, including debt
(the "Transaction").
The Transaction follows the determination by Cincinnati Bell's
Board of Directors, after consultation with its legal and financial
advisors, that the MIP proposal constituted a "Superior Company
Proposal" as defined in Cincinnati Bell's previously announced
Brookfield merger agreement. Consistent with that determination,
and following the expiration of the negotiation period during which
Brookfield declined to propose an amendment to the Brookfield
merger agreement, Cincinnati Bell terminated the Brookfield merger
agreement. In connection with the termination, Cincinnati Bell paid
Brookfield an approximately $25 million break-up fee.
On May 7, 2020, Cincinnati Bell’s shareholders adopted the MIP
merger agreement at a virtual special meeting of shareholders.
MIP is a fund managed by Macquarie Infrastructure and Real
Assets ("MIRA"). In addition to MIP, certain Special Opportunities
funds or co-investment vehicles managed by the Private Equity Group
of Ares Management Corporation (NYSE: ARES) ("Ares Management"),
and entities controlled by the Retail Employees Superannuation
Trust (“REST”), an Australian superannuation fund managed by Retail
Employees Superannuation Pty Limited, have agreed to provide equity
financing for the Transaction.
MIRA is a global alternative asset manager with extensive
experience in investing in the communications infrastructure
industry. For more than two decades, MIRA has partnered with
investors, governments, and communities to manage, develop, and
enhance assets relied on by more than 100 million people each day.
As of September 30, 2020, MIRA had $146.1 billion in assets under
management (based on proportionate enterprise value), of which $116
billion were invested in infrastructure assets.
Ares Management is a leading global alternative investment
manager operating integrated groups across Credit, Private Equity,
Real Estate and Strategic Initiatives. Ares Management’s investment
groups collaborate to deliver innovative investment solutions and
consistent, attractive investment returns for fund investors
throughout market cycles. As of September 30, 2020, Ares
Management's global platform had approximately $179 billion of
assets under management with more than 1,400 employees operating
across North America, Europe and Asia Pacific.
REST is a widely held Australian public offer pension fund
managing over AUD 58 billion (USD $45 billion) on behalf of
approximately 1.7 million members.
The Transaction is expected to close in the first half of 2021.
It is subject to customary closing conditions, including receipt of
certain regulatory approvals.
INVESTOR RELATIONS CONTACT: Kei Lawson, 513-565-0510 E-mail:
Takeitha.Lawson@cinbell.com or MEDIA CONTACT: Josh Pichler,
513-565-0310 E-mail: Josh.Pichler@cinbell.com
Safe Harbor Note
This release may contain “forward-looking” statements, as
defined in federal securities laws including the Private Securities
Litigation Reform Act of 1995, which are based on our current
expectations, estimates, forecasts and projections. Statements that
are not historical facts, including statements concerning plans,
objectives, goals, strategies, future events, future revenues or
performance, financing needs, plans or intentions relating to
acquisitions and restructuring, business trends, statements
regarding the Transaction and the expected timetable for completing
the Transaction, are forward-looking statements. Words such as
“expects,” “anticipates,” “predicts,” “projects,” “intends,”
“plans,” “believes,” “seeks,” “estimates,” “continues,”
“endeavors,” “strives,” “will,” “may,” “proposes,” “potential,”
“could,” “should,” “outlook,” or variations of such words and
similar expressions are intended to identify such forward-looking
statements. In addition, any statements that refer to projections
of future financial performance, anticipated growth and trends in
businesses, and other characterizations of future events or
circumstances are forward-looking statements. There are a number of
risks, uncertainties and other important factors that could cause
our actual results to differ materially from the forward-looking
statements contained in this report. The following important
factors, among other things, could cause or contribute to actual
results being materially and adversely different from those
described or implied by such forward-looking statements, including,
but not limited to:
- those discussed in this release;
- the global outbreak of COVID-19 and related government, private
sector and individual consumer responsive actions have adversely
affected the Company’s business operations, employee availability,
financial performance, liquidity and cash flow and are expected to
continue to do so for an unknown period of time;
- the Company operates in highly competitive industries, and
customers may not continue to purchase products or services, which
would result in reduced revenue and loss of market share;
- the Company may be unable to grow its revenues and cash flows
despite the initiatives it has implemented;
- failure to anticipate the need to introduce new products and
services or to compete with new technologies may compromise the
Company’s success in the telecommunications industry;
- the Company’s access lines, which generate a significant
portion of our cash flows and profits, are decreasing in number. If
the Company continues to experience access line losses similar to
the past several years, our revenues, earnings and cash flows from
operations may be adversely impacted;
- negotiations with the providers of content for our video
programming may not be successful, potentially resulting in our
inability to carry certain programming channels, which could result
in the loss of subscribers. In addition, due to the influence of
some content providers, we may be forced to pay higher rates for
some content, resulting in increased costs;
- the Company's failure to meet performance standards under its
agreements could result in customers terminating their
relationships with the Company or customers being entitled to
receive financial compensation, leading to reduced revenues and/or
increased costs;
- the Company generates a substantial portion of revenue by
serving a limited geographic area;
- one large customer accounts for a significant portion of the
Company’s accounts receivable. The loss or significant reduction in
business from this customer would cause operating results to
decline and could negatively impact profitability and cash
flows;
- maintaining the Company's telecommunications networks requires
significant capital expenditures, and the Company's inability or
failure to maintain its telecommunications networks could have a
material impact on the Company’s market share and ability to
generate revenue;
- increases in broadband usage may cause network capacity
limitations resulting in service disruptions or reduced capacity
for customers;
- we may be liable for the material that content providers
distribute over our networks;
- an IT and/or network security breach or cyber-attack may lead
to unauthorized use or disabling of our network, theft of customer
data or other sensitive data, unauthorized use or publication of
our confidential business information and could have a material
adverse effect on our business;
- weather conditions, natural disasters, terrorist acts or acts
of war could cause damage to our infrastructure and result in
significant disruptions to our operations;
- the Company depends on a number of third-party providers and
the loss of or problems with one or more of these providers may
impede the Company’s growth, cause it to lose customers or
materially and adversely impact our business, financial condition,
and results of operations;
- a failure of back-office information technology systems could
adversely affect the Company’s results of operations and financial
condition;
- if the Company fails to extend or renegotiate its collective
bargaining agreements with its labor unions when they expire, or if
the Company’s unionized employees were to engage in a strike or
other work stoppage, the Company’s business and operating results
could be materially harmed;
- the Company’s debt could limit its ability to fund operations,
raise additional capital, and fulfill its obligations, which, in
turn, would have a material adverse effect on the Company’s
businesses and prospects generally;
- the Company’s credit agreement, the indenture governing the
Company's notes due 2024, the indenture governing the Company's
notes due 2025 and other indebtedness impose significant
restrictions on the Company;
- the Company depends on its revolving credit facility and
receivables facility to provide for its short-term financing
requirements in excess of amounts generated by operations, and the
availability of those funds may be reduced or limited;
- the servicing of the Company’s indebtedness is dependent on its
ability to generate cash, which could be impacted by many factors
beyond the Company’s control;
- the Company depends on the receipt of dividends or other
intercompany transfers from its subsidiaries and investments;
- the uncertain economic environment, including uncertainty in
the U.S. and world securities markets, could impact the Company's
business and financial condition;
- adverse changes in the value of assets or obligations
associated with the Company’s employee benefit plans could
negatively impact shareowners’ deficit and liquidity;
- the trading price of the Company's common stock may be
volatile, and the value of an investment in the Company's common
stock may decline;
- there are material uncertainties and risks associated with the
MIP merger agreement and Transaction;
- the Transaction may not be completed in a timely manner or at
all;
- failure to complete the Transaction could negatively impact the
Company’s business, financial results and stock price;
- the Company has incurred, and will incur, substantial direct
and indirect costs as a result of the Transaction;
- the Company’s future cash flows could be adversely affected if
it is unable to fully realize its deferred tax assets;
- changes in tax laws and regulations, and actions by federal,
state and local taxing authorities related to the interpretation
and application of such tax laws and regulations, could have a
negative impact on the Company's financial results and cash
flows;
- the regulation of the Company’s businesses by federal and state
authorities may, among other things, place the Company at a
competitive disadvantage, restrict our ability to price our
products and services competitively, and threaten our operating
licenses;
- third parties may claim that the Company is infringing upon
their intellectual property, and the Company could suffer
significant litigation or licensing expenses or be prevented from
selling products;
- third parties may infringe upon the Company’s intellectual
property, and the Company may expend significant resources
enforcing its rights or suffer competitive injury;
- the Company could be subject to a significant amount of
litigation, which could require the Company to pay significant
damages or settlements;
- the Company could incur significant costs resulting from
complying with, or potential violations of, environmental, health
and human safety laws;
- the other risks and uncertainties detailed in our filings with
the SEC, including our Form 10-K report, Form 10-Q reports and Form
8-K reports; and
- other factors outside the Company's control.
These forward-looking statements are based on information, plans
and estimates as of the date hereof and there may be other factors
that may cause our actual results to differ materially from these
forward-looking statements. We assume no obligation to update the
information contained in this release except as required by
applicable law.
Use of Non-GAAP Financial Measures
This press release contains information about adjusted earnings
before interest, taxes, depreciation and amortization (Adjusted
EBITDA), Adjusted EBITDA margin, net debt, net income (loss)
applicable to common shareholders excluding special items and free
cash flow. These are non-GAAP financial measures used by Cincinnati
Bell management when evaluating results of operations and cash
flow. Management believes these measures also provide users of the
financial statements with additional and useful comparisons of
current results of operations and cash flows with past and future
periods. Non-GAAP financial measures should not be construed as
being more important than comparable GAAP measures. Detailed
reconciliations of these non-GAAP financial measures to comparable
GAAP financial measures have been included in the tables
distributed with this release and are available in the Investor
Relations section of www.cincinnatibell.com.
1Adjusted EBITDA provides a useful measure of operational
performance. The Company defines Adjusted EBITDA as GAAP operating
income plus depreciation, amortization, stock-based compensation,
restructuring and severance related charges, (gain) loss on sale or
disposal of assets, transaction and integration costs, transaction
related employee retention agreements, asset impairments, and other
special items. Adjusted EBITDA should not be considered as an
alternative to comparable GAAP measures of profitability and may
not be comparable with the measure as defined by other
companies.
Adjusted EBITDA margin provides a useful measure of
operational performance. The Company defines Adjusted EBITDA margin
as Adjusted EBITDA divided by revenue. Adjusted EBITDA margin
should not be considered as an alternative to comparable GAAP
measures of profitability and may not be comparable with the
measure as defined by other companies.
2Free cash flow provides a useful measure of operational
performance, liquidity and financial health. The Company defines
free cash flow as cash provided by (used in) operating activities,
adjusted for restructuring and severance related payments,
transaction and integration payments, less capital expenditures and
preferred stock dividends. Free cash flow should not be considered
as an alternative to net income (loss), operating income (loss),
cash flow from operating activities, or the change in cash on the
balance sheet and may not be comparable with free cash flow as
defined by other companies. Although the Company feels there is no
comparable GAAP measure for free cash flow, the attached financial
information reconciles cash provided by operating activities to
free cash flow.
Net debt provides a useful measure of liquidity and
financial health. The Company defines net debt as the sum of the
face amount of short-term and long-term debt, unamortized premium
and/or discount and unamortized note issuance costs, offset by cash
and cash equivalents.
Net income (loss) applicable to common shareholders excluding
special items in total and per share provides a useful measure
of operating performance. Net income (loss) applicable to common
shareholders excluding special items should not be considered as an
alternative to comparable GAAP measures of profitability and may
not be comparable with net income (loss) excluding special items as
defined by other companies.
About Cincinnati Bell Inc.
With headquarters in Cincinnati, Ohio, Cincinnati Bell Inc.
(NYSE: CBB) delivers integrated communications solutions to
residential and business customers over its fiber-optic and copper
networks including high-speed internet, video, voice and data.
Cincinnati Bell provides service in areas of Ohio, Kentucky,
Indiana and Hawaii. In addition, enterprise customers across the
United States and Canada rely on CBTS and OnX, wholly-owned
subsidiaries, for efficient, scalable office communications systems
and end-to-end IT solutions. For more information, please visit
www.cincinnatibell.com. The information on the Company’s website is
not incorporated by reference in this press release.
Cincinnati Bell Inc. Consolidated
Statements of Operations (Unaudited) (Dollars in millions, except
per share amounts)
Three Months Ended December
31,
Change
Twelve Months Ended December
31,
Change
2020
2019
$
%
2020
2019
$
%
Revenue
$
410.3
$
390.4
$
19.9
5
%
$
1,559.8
$
1,536.7
$
23.1
2
%
Costs and expenses
Cost of services and products
211.0
196.7
14.3
7
%
802.0
784.6
17.4
2
%
Selling, general and administrative
91.2
93.1
(1.9
)
(2
)%
346.5
354.4
(7.9
)
(2
)%
Depreciation and amortization
72.6
75.8
(3.2
)
(4
)%
293.4
304.9
(11.5
)
(4
)%
Restructuring and severance related
charges
0.5
0.5
-
0
%
16.9
6.9
10.0
n/m
Transaction and integration costs
1.2
9.0
(7.8
)
(87
)%
35.0
12.8
22.2
n/m
Operating income
33.8
15.3
18.5
n/m
66.0
73.1
(7.1
)
(10
)%
Interest expense
33.6
34.6
(1.0
)
(3
)%
134.2
139.6
(5.4
)
(4
)%
Other components of pension and
postretirement benefit plans expense
5.1
2.8
2.3
82
%
14.1
11.2
2.9
26
%
Other income, net
-
(0.1
)
0.1
n/m
(1.2
)
(0.5
)
(0.7
)
n/m
Loss before income taxes
(4.9
)
(22.0
)
17.1
(78
)%
(81.1
)
(77.2
)
(3.9
)
5
%
Income tax expense (benefit)
0.7
(1.4
)
2.1
n/m
(25.5
)
(10.6
)
(14.9
)
n/m
Net loss
(5.6
)
(20.6
)
15.0
(73
)%
(55.6
)
(66.6
)
11.0
(17
)%
Preferred stock dividends
2.6
2.6
-
-
10.4
10.4
-
-
Net loss applicable to common
shareowners
$
(8.2
)
$
(23.2
)
$
15.0
(65
)%
$
(66.0
)
$
(77.0
)
$
11.0
(14
)%
Basic and diluted net loss per common
share
$
(0.16
)
$
(0.46
)
$
(1.30
)
$
(1.53
)
Weighted average common shares
outstanding
(in millions)
- Basic
50.7
50.4
50.6
50.4
- Diluted
50.7
50.4
50.6
50.4
Cincinnati Bell Inc. Entertainment and
Communications Income Statement (Unaudited) (Dollars in
millions)
Three Months Ended December
31,
Change
Twelve Months Ended December
31,
Change
2020
2019
$
%
2020
2019
$
%
Income Statement
Revenue
$
245.1
$
246.4
$
(1.3
)
(1
)%
$
969.6
$
995.7
$
(26.1
)
(3
)%
Operating costs and expenses
Cost of services and products
107.7
111.6
(3.9
)
(3
)%
427.4
450.4
(23.0
)
(5
)%
Selling, general and administrative
44.8
45.2
(0.4
)
(1
)%
175.0
179.1
(4.1
)
(2
)%
Depreciation and amortization
62.7
65.3
(2.6
)
(4
)%
252.7
255.8
(3.1
)
(1
)%
Restructuring and severance related
charges
-
-
-
n/m
14.8
4.9
9.9
n/m
Total operating costs and expenses
215.2
222.1
(6.9
)
(3
)%
869.9
890.2
(20.3
)
(2
)%
Operating income
$
29.9
$
24.3
$
5.6
23
%
$
99.7
$
105.5
$
(5.8
)
(5
)%
Cincinnati Bell Inc. Entertainment and
Communications Revenue (Unaudited) (Dollars in millions)
Three Months Ended
December 31, 2020
Three Months Ended
December 31, 2019
Cincinnati
Hawaii
Total
Cincinnati
Hawaii
Total
Revenue
Consumer / SMB Fiber *
Data
$
43.6
$
9.6
$
53.2
$
39.9
$
8.3
$
48.2
Video
39.2
9.5
48.7
39.2
10.3
49.5
Voice
9.0
2.8
11.8
9.2
2.7
11.9
Other
0.2
0.1
0.3
0.4
0.2
0.6
Total Consumer / SMB Fiber
92.0
22.0
114.0
88.7
21.5
110.2
Enterprise Fiber
Data
21.7
10.2
31.9
21.1
10.1
31.2
Legacy
Data
23.0
12.5
35.5
25.0
14.1
39.1
Voice
27.6
25.8
53.4
29.8
27.8
57.6
Other
6.3
4.0
10.3
3.9
4.4
8.3
Total Legacy
56.9
42.3
99.2
58.7
46.3
105.0
Total Entertainment &
Communications
$
170.6
$
74.5
$
245.1
$
168.5
$
77.9
$
246.4
Twelve Months Ended
December 31, 2020
Twelve Months Ended
December 31, 2019
Cincinnati
Hawaii
Total
Cincinnati
Hawaii
Total
Revenue
Consumer / SMB Fiber *
Data
$
169.6
$
36.1
$
205.7
$
155.4
$
32.1
$
187.5
Video
155.5
38.3
193.8
159.5
43.5
203.0
Voice
34.0
10.9
44.9
36.8
10.9
47.7
Other
1.3
0.7
2.0
1.5
0.7
2.2
Total Consumer / SMB Fiber
360.4
86.0
446.4
353.2
87.2
440.4
Enterprise Fiber
Data
86.0
41.2
127.2
84.9
39.4
124.3
Legacy
Data
94.6
51.9
146.5
103.4
59.8
163.2
Voice
113.3
104.6
217.9
126.1
111.1
237.2
Other
15.6
16.0
31.6
14.1
16.5
30.6
Total Legacy
223.5
172.5
396.0
243.6
187.4
431.0
Total Entertainment &
Communications
$
669.9
$
299.7
$
969.6
$
681.7
$
314.0
$
995.7
* Represents Fioptics in Cincinnati
Cincinnati Bell Inc. Entertainment and
Communications Metric Information (Unaudited) (In
thousands)
December 31,
2020
September 30,
2020
June 30, 2020
March 31, 2020
December 31,
2019
Cincinnati Metrics
Fioptics
Data
Internet FTTP *
239.9
235.0
230.6
224.3
219.2
Internet FTTN *
26.7
27.7
28.9
30.0
31.4
Total Fioptics Internet
266.6
262.7
259.5
254.3
250.6
Video
Video FTTP *
107.6
108.7
109.7
111.2
112.7
Video FTTN *
20.4
20.8
21.4
21.9
22.4
Total Fioptics Video
128.0
129.5
131.1
133.1
135.1
Voice
Fioptics Voice Lines
103.8
104.4
105.3
105.3
106.8
Fioptics Units
Passed
Units Passed FTTP *
499.6
494.8
489.6
486.6
484.8
Units Passed FTTN *
137.4
138.0
138.6
138.6
138.6
Total Fioptics Units Passed
637.0
632.8
628.2
625.2
623.4
Enterprise Fiber
Data
Ethernet Bandwidth (Gb)
6,566
5,978
5,756
5,487
5,228
Legacy
Data
DSL
61.9
63.3
62.7
63.3
64.0
Voice
Legacy Voice Lines
175.1
180.3
186.4
191.2
196.8
* Fiber-to-the-Premise (FTTP), Fiber-to-the-Node (FTTN)
Cincinnati Bell Inc. Entertainment and
Communications Metric Information (Unaudited) (In
thousands)
December 31,
2020
September 30,
2020
June 30, 2020
March 31, 2020
December 31,
2019
Hawaii Metrics
Consumer / SMB Fiber
Data
Internet FTTP *
59.8
58.6
57.4
56.4
55.4
Internet FTTN *
11.0
11.7
12.1
12.4
12.8
Total Consumer / SMB Fiber Internet
70.8
70.3
69.5
68.8
68.2
Video
Video FTTP *
30.2
30.6
31.0
29.6
30.6
Video FTTN *
10.4
11.4
11.8
11.5
12.1
Total Consumer / SMB Fiber Video
40.6
42.0
42.8
41.1
42.7
Voice
Consumer / SMB Fiber Voice Lines
29.5
29.8
29.9
29.9
30.0
Consumer / SMB Fiber
Units Passed
Units Passed FTTP *
184.3
178.1
176.2
174.9
173.5
Units Passed FTTN *
70.0
72.5
72.5
72.5
72.9
Total Consumer / SMB Fiber Units
Passed
254.3
250.6
248.7
247.4
246.4
Enterprise Fiber
Data
Ethernet Bandwidth (Gb)
4,021
4,063
3,691
3,619
3,651
Legacy
Data
DSL
36.8
38.2
40.3
41.1
42.9
Voice
Legacy Voice Lines
160.1
164.2
165.1
173.0
177.1
* Fiber-to-the-Premise (FTTP), Fiber-to-the-Node (FTTN)
Cincinnati Bell Inc. IT Services and
Hardware Income Statement and Metric Information (Unaudited)
(Dollars in millions)
Three Months Ended
December 31,
Change
Twelve Months Ended
December 31,
Change
2020
2019
$
%
2020
2019
$
%
Income Statement
Revenue
$
172.1
$
150.4
$
21.7
14
%
$
616.6
$
567.4
$
49.2
9
%
Operating costs and expenses
Cost of services and products
109.8
91.3
18.5
20
%
400.0
359.6
40.4
11
%
Selling, general and administrative
38.8
40.5
(1.7
)
(4
)%
149.4
154.3
(4.9
)
(3
)%
Depreciation and amortization
9.9
10.4
(0.5
)
(5
)%
40.6
48.9
(8.3
)
(17
)%
Restructuring and severance related
charges
0.5
0.5
-
0
%
2.0
2.0
-
0
%
Total operating costs and expenses
159.0
142.7
16.3
11
%
592.0
564.8
27.2
5
%
Operating income
$
13.1
$
7.7
$
5.4
70
%
$
24.6
$
2.6
$
22.0
n/m
Revenue
Consulting
$
57.5
$
38.0
$
19.5
51
%
$
196.0
$
152.6
$
43.4
28
%
Cloud
23.2
22.3
0.9
4
%
86.2
92.1
(5.9
)
(6
)%
Communications
54.7
51.7
3.0
6
%
215.0
198.7
16.3
8
%
Infrastructure Solutions
36.7
38.4
(1.7
)
(4
)%
119.4
124.0
(4.6
)
(4
)%
Total IT Services and Hardware Revenue
$
172.1
$
150.4
$
21.7
14
%
$
616.6
$
567.4
$
49.2
9
%
December 31,
2020
September 30,
2020
June 30, 2020
March 31, 2020
December 31,
2019
Consulting
Billable Resources
1,665
1,437
1,305
1,222
1,034
Communications
NaaS Locations
5,691
5,419
5,048
4,593
4,047
SD - WAN Locations
3,191
2,783
2,575
2,337
2,197
Hosted UCaaS Profiles*
281,000
277,610
276,360
277,092
274,654
* Includes Hawaii Hosted UCaaS Profiles
Cincinnati Bell Inc. Net Debt
(Non-GAAP) (Unaudited) (Dollars in millions)
December 31,
2020
December 31,
2019
Receivables Facility
$
182.0
$
131.5
Credit Agreement - Tranche B Term Loan due
2024
586.5
592.5
Credit Agreement - Revolving Credit
Facility
67.0
57.0
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
Other financing lease agreements
2.8
5.2
Finance lease liabilities
66.0
73.8
Net unamortized premium
1.1
1.3
Unamortized note issuance costs
(18.9
)
(22.9
)
Total debt
1,971.7
1,923.6
Less: Cash and cash equivalents
(12.2
)
(11.6
)
Net debt (Non-GAAP)
$
1,959.5
$
1,912.0
Cincinnati Bell Inc. Reconciliation of
Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) (Unaudited)
(Dollars in millions)
Three Months Ended December
31, 2020
Entertainment &
Communications
IT Services &
Hardware
Corporate
Total Company
Net loss (GAAP)
$
(5.6
)
Add:
Income tax expense
0.7
Interest expense
33.6
Other components of pension and
postretirement benefit plans expense
5.1
Operating income (loss) (GAAP)
$
29.9
$
13.1
$
(9.2
)
$
33.8
Add:
Depreciation and amortization
62.7
9.9
-
72.6
Restructuring and severance related
charges
-
0.5
-
0.5
Transaction and integration costs
-
-
1.2
1.2
Transaction related employee retention
agreements
-
-
0.9
0.9
Stock-based compensation
-
-
1.4
1.4
Adjusted EBITDA (Non-GAAP)
$
92.6
$
23.5
$
(5.7
)
$
110.4
Adjusted EBITDA Margin
(Non-GAAP)
38
%
14
%
-
27
%
Three Months Ended December
31, 2019
Entertainment &
Communications
IT Services &
Hardware
Corporate
Total Company
Net loss (GAAP)
$
(20.6
)
Add:
Income tax benefit
(1.4
)
Interest expense
34.6
Other income, net
(0.1
)
Other components of pension and
postretirement benefit plans expense
2.8
Operating income (loss) (GAAP)
$
24.3
$
7.7
$
(16.7
)
$
15.3
Add:
Depreciation and amortization
65.3
10.4
0.1
75.8
Restructuring and severance related
charges
-
0.5
-
0.5
Transaction and integration costs
-
-
9.0
9.0
Stock-based compensation
-
-
2.0
2.0
Adjusted EBITDA (Non-GAAP)
$
89.6
$
18.6
$
(5.6
)
$
102.6
Adjusted EBITDA Margin
(Non-GAAP)
36
%
12
%
-
26
%
Year-over-year dollar change in
Adjusted EBITDA
3.0
4.9
(0.1
)
7.8
Year-over-year percentage change in
Adjusted EBITDA
3
%
26
%
2
%
8
%
Cincinnati Bell Inc. Reconciliation of
Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) (Unaudited)
(Dollars in millions)
Twelve Months Ended December
31, 2020
Entertainment &
Communications
IT Services &
Hardware
Corporate
Total Company
Net loss (GAAP)
$
(55.6
)
Add:
Income tax benefit
(25.5
)
Interest expense
134.2
Other income, net
(1.2
)
Other components of pension and
postretirement benefit plans expense
14.1
Operating income (loss) (GAAP)
$
99.7
$
24.6
$
(58.3
)
$
66.0
Add:
Depreciation and amortization
252.7
40.6
0.1
293.4
Restructuring and severance related
charges
14.8
2.0
0.1
16.9
Transaction and integration costs
-
-
35.0
35.0
Employee contract termination costs
0.3
0.8
-
1.1
Transaction related employee retention
agreements
-
-
3.2
3.2
Stock-based compensation
-
-
5.6
5.6
Adjusted EBITDA (Non-GAAP)
$
367.5
$
68.0
$
(14.3
)
$
421.2
Adjusted EBITDA Margin
(Non-GAAP)
38
%
11
%
-
27
%
Twelve Months Ended December
31, 2019
Entertainment &
Communications
IT Services &
Hardware
Corporate
Total Company
Net loss (GAAP)
$
(66.6
)
Add:
Income tax benefit
(10.6
)
Interest expense
139.6
Other income, net
(0.5
)
Other components of pension and
postretirement benefit plans expense
11.2
Operating income (loss) (GAAP)
$
105.5
$
2.6
$
(35.0
)
$
73.1
Add:
Depreciation and amortization
255.8
48.9
0.2
304.9
Restructuring and severance related
charges
4.9
2.0
-
6.9
Transaction and integration costs
-
-
12.8
12.8
Stock-based compensation
-
-
7.4
7.4
Adjusted EBITDA (Non-GAAP)
$
366.2
$
53.5
$
(14.6
)
$
405.1
Adjusted EBITDA Margin
(Non-GAAP)
37
%
9
%
-
26
%
Year-over-year dollar change in
Adjusted EBITDA
1.3
14.5
0.3
16.1
Year-over-year percentage change in
Adjusted EBITDA
0
%
27
%
2
%
4
%
Cincinnati Bell Inc. Consolidated
Statements of Cash Flows (Unaudited) (Dollars in millions)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2020
2019
2020
2019
Cash provided by operating activities
$
67.2
$
70.2
$
206.1
$
259.1
Capital expenditures
(64.4
)
(56.5
)
(223.6
)
(223.8
)
Wireless spectrum license purchase
(4.7
)
-
(6.4
)
-
Other, net
3.5
0.2
3.6
0.5
Cash used in investing activities
(65.6
)
(56.3
)
(226.4
)
(223.3
)
Net increase (decrease) in corporate
credit and receivables facilities with initial maturities less than
90 days
12.2
2.0
60.2
(6.1
)
Repayment of debt
(3.1
)
(8.1
)
(22.4
)
(21.5
)
Debt issuance costs
(0.2
)
-
(0.7
)
(0.8
)
Dividends paid on preferred stock
(2.6
)
(2.6
)
(10.4
)
(10.4
)
Other, net
-
-
(1.1
)
(0.8
)
Cash provided by (used in) financing
activities
6.3
(8.7
)
25.6
(39.6
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
0.5
(0.1
)
0.3
-
Net increase (decrease) in cash, cash
equivalents and restricted cash
8.4
5.1
5.6
(3.8
)
Cash, cash equivalents and restricted cash
at beginning of period
8.8
6.5
11.6
15.4
Cash, cash equivalents and restricted cash
at end of period
$
17.2
$
11.6
$
17.2
$
11.6
Reconciliation of Cash Provided by
Operating Activities (GAAP) to
Free Cash Flow (Non-GAAP)
Cash provided by operating activities
$
67.2
$
70.2
$
206.1
$
259.1
Adjustments:
Capital expenditures
(64.4
)
(56.5
)
(223.6
)
(223.8
)
Restructuring and severance related
payments
1.0
1.1
15.3
14.3
Preferred stock dividends
(2.6
)
(2.6
)
(10.4
)
(10.4
)
Transaction and integration costs
2.1
0.3
43.1
7.0
Free cash flow (Non-GAAP)
$
3.3
$
12.5
$
30.5
$
46.2
Income tax payments (refunds)
$
0.9
$
(1.3
)
$
0.5
$
0.5
Cincinnati Bell Inc. Capital
Expenditures (Unaudited) (Dollars in millions)
Three Months Ended
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
Entertainment and Communications
57.5
55.9
42.2
44.4
51.0
IT Services and Hardware
6.8
3.9
6.3
6.5
5.5
Corporate
0.1
-
-
-
-
Total capital expenditures
$64.4
$59.8
$48.5
$50.9
$56.5
Cincinnati Bell Inc.
Reconciliation of Net (Loss) Income Applicable to Common
Shareholders (GAAP) to Net (Loss) Income Applicable to Common
Shareholders, Excluding Special Items (Non-GAAP) and Adjusted
Diluted Earnings Per Share (Non-GAAP) (Unaudited)
(Dollars in millions, except per share amounts)
Three Months Ended
December 31, 2020
December 31, 2019
Net loss applicable to common shareholders
(GAAP)
$
(8.2
)
$
(23.2
)
Special items:
Restructuring and severance related
charges
0.5
0.5
Transaction and integration costs
1.2
9.0
Income tax effect of special items *
(0.4
)
2.8
Total special items
1.3
12.3
Net loss applicable to common shareowners,
excluding special items (Non-GAAP)
$
(6.9
)
$
(10.9
)
Weighted average diluted shares
outstanding**
50.7
50.4
Diluted loss per common share (GAAP)
$
(0.16
)
$
(0.46
)
Adjusted diluted loss per common share
(Non-GAAP)
$
(0.14
)
$
(0.22
)
* Special items have been tax effected utilizing the normalized
effective tax rate for the period, with the exception of
transaction and integration costs, which are treated as a discrete
item. ** Weighted average diluted shares outstanding based on net
(loss) income applicable to common shareowners, excluding special
items (Non-GAAP).
Cincinnati Bell Inc. Reconciliation of
Net (Loss) Income Applicable to Common Shareholders (GAAP) to Net
(Loss) Income Applicable to Common Shareholders, Excluding Special
Items (Non-GAAP) and Adjusted Diluted Earnings Per Share (Non-GAAP)
(Unaudited) (Dollars in millions, except per share amounts)
Twelve Months Ended
December 31, 2020
December 31, 2019
Net loss applicable to common shareholders
(GAAP)
$
(66.0
)
$
(77.0
)
Special items:
Restructuring and severance related
charges
16.9
6.9
Transaction and integration costs
35.0
12.8
Income tax effect of special items *
(4.3
)
0.3
Total special items
47.6
20.0
Net loss applicable to common shareowners,
excluding special items (Non-GAAP)
$
(18.4
)
$
(57.0
)
Weighted average diluted shares
outstanding**
50.6
50.4
Diluted loss per common share (GAAP)
$
(1.30
)
$
(1.53
)
Adjusted diluted loss per common share
(Non-GAAP)
$
(0.36
)
$
(1.13
)
* Special items have been tax effected utilizing the normalized
effective tax rate for the period, with the exception of
transaction and integration costs, which are treated as a discrete
item. ** Weighted average diluted shares outstanding based on net
(loss) income applicable to common shareowners, excluding special
items (Non-GAAP).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210218005522/en/
Cincinnati Bell Inc. Investor contact: Kei
Lawson, 513-565-0510 Takeitha.Lawson@cinbell.com
Media contact: Josh Pichler, 513-565-0310
Josh.Pichler@cinbell.com
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