Cincinnati Bell 2014 Annual Report Download - page 129

Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
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
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Revenue $ 322.5
$ 319.9
$ 327.5
$ 308.3
$ 1,278.2
Operating income 56.9
35.6
16.0
7.3
115.8
Net income (loss) 7.0
114.2
(27.3)
(18.3)
75.6
Basic earnings (loss) per common share $ 0.02
$ 0.54
$ (0.14)
$ (0.10)
$ 0.31
Diluted earnings (loss) per common share $ 0.02
$ 0.53
$ (0.14)
$ (0.10)
$ 0.31
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
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
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
Revenue $ 325.7
$ 312.0
$ 310.8
$ 308.4
$ 1,256.9
Operating income 19.2
46.8
57.7
40.1
163.8
Net (loss) income (36.7)
0.8
9.3
(28.1)
(54.7)
Basic and diluted (loss) earnings per common share $ (0.19)
$ (0.01)
$ 0.03
$ (0.15)
$ (0.32)
The effects of assumed common share conversions are determined independently for each respective quarter and year and may not be dilutive during every
period due to variations in operating results. Therefore, the sum of quarterly per share results will not necessarily equal the per share results for the full year.
In the second quarter of 2014, operating income includes a $6.4 million restructuring charge related to employee severance as well as contracts that will no
longer be utilized once the wireless business ceases to exist. Net income in the second quarter of 2014 includes a $192.8 million gain on sale of our
CyrusOne equity method investment.
Third quarter of 2014 operating income includes a $9.0 million restructuring charge attributable to contract termination fees on our wireless segment offset
by the reversal of a Wireline lease abandonment reserve associated with leased space that was reoccupied. Operating income also includes a $7.5 million
impairment charge for the write-off of certain construction-in-progress projects that will no longer be completed due to the wind down of the wireless
business in addition to $3.0 million of transaction costs related to the wireless spectrum sale. Also in the third quarter, the Company redeemed $325.0 million
of the outstanding 8 3/4% Senior Subordinated Notes due 2018 at a redemption price of 104.375%. As a result of the redemption, the Company recorded a
loss on the extinguishment of debt totaling $19.4 million.
Operating income in the fourth quarter of 2014 includes an impairment charge of $4.6 million related to the abandonment of an internal use software project
that was written off in the fourth quarter.
On January 24, 2013, we completed the IPO of CyrusOne, which owns and operates our former data center colocation business. Effective January 24, 2013,
we no longer consolidate the accounts of CyrusOne in our consolidated financial statements, but account for our ownership in CyrusOne as an equity method
investment.
In the fourth quarter of 2013, the Company redeemed all of the $500.0 million of 8 1/4% Senior Notes due 2017 at a redemption price of 104.125% using
proceeds from the Tranche B Term Loan facility that was issued on September 10, 2013. As a result, the Company recorded a debt extinguishment loss of
$29.6 million.
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On January 22, 2015, the Company signed an agreement valued at approximately $10 million for a third party to decommission our wireless towers that are
not being assumed by the acquirer. As of December 31, 2014 we had $3.3 million of asset retirement obligations included in capital lease obligations and
$7.5 million included in other non-current liabilities.
Negotiations with the CWA have been ongoing since the tentative agreement reached on August 4, 2014 was not ratified by local members of the union.
Both sides reached a tentative agreement on January 23, 2015 that is pending ratification by local union members.
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