Cincinnati Bell 2013 Annual Report Download - page 192

15. Business Segment Information
As of December 31, 2012, and for the period January 1, 2013 through January 23, 2013, we operated four
business segments: Wireline, Wireless, IT Services and Hardware, and Data Center Colocation. Effective
January 24, 2013, the date of the CyrusOne IPO, we no longer include CyrusOne, our former Data Center
Colocation segment, in our consolidated financial statements and now account for our ownership in CyrusOne as
an equity method investment. Therefore, at December 31, 2013, we operated three business segments: Wireline,
Wireless and IT Services and Hardware. For further details of the CyrusOne IPO, see Note 1 and Note 3 of Notes
to consolidated financial statements.
The Wireline segment provides products and services such as local voice, high-speed internet, data
transport, long distance, entertainment, voice over internet protocol (VoIP), and other services. Voice local
service revenue includes local service, digital trunking, switched access, information services, and other value-
added services such as caller identification, voicemail, call waiting, and call return. Data services include
Fioptics high-speed internet and DSL internet access primarily for residential consumers. Data services also
provide data transport for businesses, including local area network services, dedicated network access, metro-
ethernet and Dense Wavelength Division Multiplexing (“DWDM”), which principally are used to transport large
amounts of data over private networks. Long distance and VoIP services include long distance voice, audio
conferencing, VoIP and other broadband services including private line and multi-protocol label switching, a
technology that enables a business customer to privately interconnect voice and data services at its locations.
Entertainment services are comprised of television media through our Fioptics product suite. Other services
primarily include inside wire installation for business enterprises and rental revenue. These services are primarily
provided to customers in southwestern Ohio, northern Kentucky, and southeastern Indiana.
Wireline recognized restructuring charges of $9.1 million, $3.5 million, and $7.7 million in 2013, 2012 and
2011, respectively, for costs associated with employee separation, lease abandonments and contract termination
costs. A curtailment gain of $0.6 million was recognized during the second quarter of 2013 due to the
remeasurement of the Company’s projected benefit obligation following an amendment to the management
pension plan that eliminated all future pension service credits as of July 1, 2013. During 2011, a curtailment loss
of $4.2 million was recognized from the reduction of future pension benefits for certain bargained employees.
Gains on the sale assets were $1.1 million, $1.8 million, and $8.4 million, in 2013, 2012 and 2011, respectively.
The gains in 2013 and 2012 were primarily from the sale of copper cabling that was no longer in use. In 2011,
the Company sold substantially all of the assets associated with its home security monitoring business. There
were no asset impairments in 2013. Asset impairments of $0.5 million in 2012 relate primarily to the write-off of
an out-of-territory fiber network. The impairment losses in 2011 of $1.0 million were related to abandoned
leasehold improvements on vacated office space and the write-down to fair value of certain assets that were held
for sale.
The Wireless segment provides digital wireless voice and data communications services and sales of related
handset equipment to customers in the Greater Cincinnati and Dayton, Ohio operating areas. Wireless incurred
restructuring charges of $0.2 million in 2013 and $1.6 million in 2012, with no such charges in 2011. In 2013,
Wireless recorded a $3.5 million loss on disposal of assets for equipment that had no resale market or has either
been disconnected from the wireless network, abandoned or demolished. There was no loss on disposal of assets
recorded in 2012 and 2011. In 2011, the Wireless segment recognized a goodwill impairment loss of $50.3
million. In 2012 and 2011, other asset impairments were $0.4 million and $1.1 million, respectively, and related
to the write-off of canceled or abandoned capital projects. There were no such impairments in 2013.
The IT Services and Hardware segment provides a range of fully managed and outsourced IT and
telecommunications services along with the sale, installation, and maintenance of major branded IT and
telephony equipment. During 2013 and 2011, the IT Services and Hardware segment incurred employee
separation charges of $0.7 million and $1.9 million, respectively, associated with the elimination of certain
functions due to product consolidation and integration within the Wireline segment. In 2012, the IT Services and
Hardware segment reversed restructuring costs of $1.2 million due to changes in estimates of liabilities that had
been accrued for in the prior year.
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Form 10-K Part II Cincinnati Bell Inc.