Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report that are not historical facts contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Such statements involve certain risks, uncertainties and assumptions. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “anticipate,” “expect,” “believe,” “estimate,” “plan,” “project,” “predict,” “potential,” or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including, but not limited to:

●

the ability to retain and further attract customers due to increased competition, resource abilities of competitors, and shifts in the entertainment desires of customers;

●

our ability to respond to rapid technological change, including our ability to develop and deploy new products and technologies;

●

increases in programming and retransmission costs and/or programming exclusivity in favor of our competitors;

●

the disruption or failure of our network information systems or technologies as a result of hacking, viruses, outages or natural disasters in one or more of our geographic markets;

●

the effects of new regulations or regulatory changes on our business;

●

our substantial level of indebtedness, sensitivity to increases in prevailing interest rates, and our ability to comply with all covenants in our debt agreements;

●

our ability to procure necessary materials, equipment and services from our vendors in a timely manner in connection with our network expansion initiatives;

●

changes in laws and government regulations that may impact the availability and cost of capital;

●

effects of uncertain economic conditions (e.g., unemployment, decreased disposable income, etc.) which may negatively affect our customers’ demand or ability to pay for our current and future products and services;

●

our ability to manage the risks involved in the foregoing; and

other factors described from time to time in our reports filed or furnished with the SEC, and in particular those factors set forth in the section entitled “Risk Factors” in our annual report filed on Form 10-K with the SEC on February 27, 2023 and other reports subsequently filed with the SEC. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this report are made as of the date hereof or the date specified herein, based on information available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.

ii

Table of Contents

PART ~~I—FINANCIAL~~I-FINANCIAL INFORMATION

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

September 30,
2017

December 31,
2016

(in millions, except per share data)

Assets

Current assets:

Cash and cash equivalents

$
36.4

$
30.8

Accounts receivable—trade, net of allowance for doubtful accounts of $6.5 and $9.4, respectively

80.0

87.2

Accounts receivable—other

3.4

0.2

Prepaid expenses and other

15.8

11.3

Total current assets

135.6

129.5

Plant, property and equipment, net (note 3)

1,042.0

995.1

Franchise operating rights

966.5

1,066.6

Goodwill

517.4

568.0

Intangible assets subject to amortization, net

6.0

7.6

Investments

—

0.9

Other noncurrent assets

9.0

3.1

Total assets

$
2,676.5

$
2,770.8

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable—trade

$
29.4

$
21.0

Accrued interest

4.0

47.3

Accrued liabilities (note 5)

84.2

109.8

Current portion of debt and capital lease obligations (note 6)

24.1

22.7

Current portion of unearned service revenue

44.6

50.2

Total current liabilities

186.3

251.0

Long-term debt and capital lease obligations—less current portion, debt issuance costs, and debt discounts (note 6)

2,412.0

2,848.5

Deferred income taxes, net (note 10)

345.2

370.2

Unearned service revenue

15.1

14.5

Other noncurrent liabilities

6.2

4.6

Total liabilities

2,964.8

3,488.8

Commitments and contingencies (note 11)

Stockholders’ deficit:

Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 shares issued and outstanding

—

—

Common stock, $0.01 par value, 700,000,000 shares authorized; issued and outstanding 88,771,710 and 66,498,762 as of September 30, 2017 and December 31, 2016, respectively

0.9

0.7

Additional paid-in capital (deficit)

295.4

(58.8
)
Accumulated deficit

(584.6
)
(659.9
)
Total stockholders’ deficit

(288.3
)
(718.0
)
Total liabilities and stockholders’ deficit

$
2,676.5

$
2,770.8


	June 30,		December 31,
	2023		2022

	(in millions, except share data)
Assets
Current assets
Cash and cash equivalents	$	23.0	$	31.0
Accounts receivable—trade, net of allowance for doubtful accounts of $5.9 and $4.3, respectively		39.7		39.9
Accounts receivable—other, net		13.5		12.2
Prepaid expenses and other		43.3		37.8
Total current assets		119.5		120.9
Right-of-use lease assets—operating		13.4		15.0
Property, plant and equipment, net		759.4		725.8
Franchise operating rights		457.0		585.1
Goodwill		225.1		225.1
Intangible assets subject to amortization, net		1.2		1.3
Other non-current assets		45.8		44.2
Total assets	$	1,621.4	$	1,717.4
Liabilities and stockholders’ equity
Current liabilities
Accounts payable—trade	$	44.9	$	46.1
Accrued interest		1.2		0.1
Current portion of long-term lease liability—operating		4.8		4.9
Accrued liabilities and other		63.1		68.7
Current portion of long-term debt and finance lease obligations		16.7		17.7
Current portion of unearned service revenue		27.1		27.2
Total current liabilities		157.8		164.7
Long-term debt and finance lease obligations, net of debt issuance costs —less current portion		851.4		725.0
Long-term lease liability—operating		10.1		11.6
Deferred income taxes, net		175.8		225.3
Other non-current liabilities		26.1		15.7
Total liabilities		1,221.2		1,142.3
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 shares issued and outstanding		—		—
Common stock, $0.01 par value, 700,000,000 shares authorized; 98,605,784 and 96,830,312 issued as of June 30, 2023 and December 31, 2022, respectively; 83,684,981 and 86,417,733 outstanding as of June 30, 2023 and December 31, 2022, respectively		1.0		1.0
Additional paid-in capital		385.4		374.7
Accumulated income		168.3		308.0
Treasury stock at cost, 14,920,803 and 10,412,579 shares as of June 30, 2023 and December 31, 2022, respectively		(154.5)		(108.6)
Total stockholders’ equity		400.2		575.1
Total liabilities and stockholders’ equity	$	1,621.4	$	1,717.4

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Three months
ended
September 30,

Nine months
ended
September 30,

2017

2016

2017

2016

(in millions, except for per share data)

Revenue

$
297.8

$
311.2

$
895.3

$
921.0

Costs and expenses:

Operating (excluding depreciation and amortization)

153.2

167.1

470.4

499.1

Selling, general and administrative

38.1

32.6

100.9

86.2

Depreciation and amortization

49.0

49.6

150.1

155.0

Management fee to related party

—

0.4

1.0

1.3

240.3

249.7

722.4

741.6

Income from operations

57.5

61.5

172.9

179.4

Other income (expense):

Interest expense

(32.2
)
(52.9
)
(122.0
)
(162.3
)
Loss on early extinguishment of debt (note 6)

(26.1
)
(28.1
)
(32.1
)
(30.6
)
Gain on sale of assets (note 4)

—

—

38.4

—

Unrealized gain on derivative instruments, net

—

—

—

2.3

Other income, net

0.3

1.9

1.7

2.0

Income (loss) before provision for income taxes

(0.5
)
(17.6
)
58.9

(9.2
)
Income tax benefit (expense) (note 10)

(1.6
)
(2.7
)
16.4

7.4

Net income (loss)

$
(2.1
)
$
(20.3
)
$
75.3

$
(1.8
)

Basic and diluted earnings (loss) per common shares

Basic

$
(0.02
)
$
(0.31
)
$
0.99

$
(0.03
)
Diluted

$
(0.02
)
$
(0.31
)
$
0.99

$
(0.03
)
Weighted-average common shares outstanding

Basic

86,973,345

66,525,044

76,014,568

65,605,874

Diluted

86,973,345

66,525,044

76,096,401

65,605,874


	Three months ended				Six months ended
	June 30,				June 30,
	2023		2022		2023		2022

	(in millions, except share data)
Revenue	$	172.6	$	176.1	$	344.8	$	350.7
Costs and expenses:
Operating (excluding depreciation and amortization)		75.6		83.0		153.7		170.3
Selling, general and administrative		43.6		39.3		129.1		77.6
Depreciation and amortization		46.7		43.9		92.2		87.9
Impairment losses on intangibles		128.1		—		128.1		—
		294.0		166.2		503.1		335.8
(Loss) income from operations		(121.4)		9.9		(158.3)		14.9
Other income (expense):
Interest expense		(17.3)		(7.9)		(32.2)		(15.3)
Other income, net		0.8		6.3		2.0		14.2
(Loss) income from operations before provision for income tax		(137.9)		8.3		(188.5)		13.8
Income tax benefit (expense)		36.2		(4.3)		48.8		(4.1)
Net (loss) income	$	(101.7)	$	4.0	$	(139.7)	$	9.7

Basic and diluted (loss) earnings per common share
Basic	$	(1.25)	$	0.05	$	(1.70)	$	0.12
Diluted	$	(1.25)	$	0.05	$	(1.70)	$	0.11
Weighted-average common shares outstanding
Basic		81,502,527		84,148,917		82,262,724		83,722,315
Diluted		81,502,527		86,793,139		82,262,724		86,642,849

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS’ ~~DEFICIT~~EQUITY

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~(unaudited)



		Common		Treasury		Additional				Total
	Common	Stock		Stock at		Paid-in		Accumulated		Stockholders'
	Stock	Par Value		Cost		Capital		Income		Equity

	(in millions, except share data)
Balances at January 1, 2023	86,417,733	$	1.0	$	(108.6)	$	374.7	$	308.0	$	575.1
Stock-based compensation	—		—		—		5.6		—		5.6
Issuance of restricted stock, net	1,783,965		—		—		—		—		—
Purchase of shares	(2,642,178)		—		(28.4)		—		—		(28.4)
Net loss	—		—		—		—		(38.0)		(38.0)
Balances at March 31, 2023(1)	85,559,520	$	1.0	$	(137.0)	$	380.3	$	270.0	$	514.3
Stock-based compensation	—		—		—		5.1		—		5.1
Issuance of restricted stock, net	(8,493)		—		—		—		—		—
Purchase of shares	(1,866,046)		—		(17.5)		—		—		(17.5)
Net loss	—		—		—		—		(101.7)		(101.7)
Balances at June 30, 2023(1)	83,684,981	$	1.0	$	(154.5)	$	385.4	$	168.3	$	400.2

(1)	Included in outstanding shares as of March 31, 2023 and June 30, 2023 are 3,057,037 and 2,847,006, respectively, of non-vested shares of restricted stock awards granted to employees and directors.


		Common		Treasury		Additional				Total
	Common	Stock		Stock at		Paid-in		Accumulated		Stockholders'
	Stock	Par Value		Cost		Capital		Income		Equity

	(in millions, except share data)
Balances at January 1, 2022	87,392,088	$	1.0	$	(89.2)	$	348.5	$	310.5	$	570.8
Stock-based compensation	—		—		—		5.6		—		5.6
Issuance of restricted stock, net	704,864		—		—		—		—		—
Purchase of shares	(298,386)		—		(5.3)		—		—		(5.3)
Net income	—		—		—		—		5.7		5.7
Balances at March 31, 2022(1)	87,798,566	$	1.0	$	(94.5)	$	354.1	$	316.2	$	576.8
Stock-based compensation	—		—		—		6.3		—		6.3
Issuance of restricted stock, net	(31,332)		—		—		—		—		—
Purchase of shares	(35,149)		—		(0.7)		—		—		(0.7)
Net income	—		—		—		—		4.0		4.0
Balances at June 30, 2022(1)	87,732,085	$	1.0	$	(95.2)	$	360.4	$	320.2	$	586.4

(1)	Included in outstanding shares as of March 31, 2022 and June 30, 2022 are 3,721,638 and 3,523,316, respectively, of non-vested shares of restricted stock awards granted to employees and directors.

~~(unaudited)~~

Common
Shares

Common Stock
par value

Management
D Units

Additional Paid-
in
Capital (Deficit)

Accumulated
Deficit

Total
Stockholders’
Deficit

(in millions, expect per share data)

Balances at January 1, 2017

66,498,762

$
0.7

201,696

$
(58.8
)
$
(659.9
)
$
(718.0
)
Repurchase of old management units (note 12)

—

—

—

(8.8
)
—

(8.8
)
Cancellation of management D units

—

—

(201,696
)
—

—

—

Proceeds from issuance of common stock, net of issuance costs (note 7)

20,970,589

0.2

—

334.5

—

334.7

Contribution from former Parent

—

—

—

20.3

—

20.3

Stock-based compensation

1,302,359

—

—

8.3

—

8.3

Other

—

—

—

(0.1
)
—

(0.1
)
Net income

—

—

—

—

75.3

75.3

Balances at September 30, 2017

88,771,710

$
0.9

—

$
295.4

$
(584.6
)
$
(288.3
)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Nine months
ended September 30,

2017

2016

(in millions)

Cash flows from operating activities:

Net income (loss)

$
75.3

$
(1.8
)
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

150.1

155.0

Unrealized gain on derivative instruments

—

(2.3
)
Provision for doubtful accounts

14.3

14.7

Deferred income taxes

(25.0
)
(40.3
)
Gain on sale of assets (note 4)

(38.4
)
—

Amortization of debt issuance costs, premium and discount, net

3.8

6.4

Non-cash compensation expense

8.3

—

Loss on early extinguishment of debt

7.1

5.9

Other non-cash items

0.3

—

Changes in operating assets and liabilities:

Receivables and other operating assets

(23.4
)
(15.4
)
Payables and accruals

(56.0
)
(11.7
)
Net cash flows provided by operating activities

116.4

110.5

Cash flows from investing activities:

Capital expenditures

(224.3
)
(207.2
)
Newnan acquisition

—

(54.3
)
Sale of investment

—

15.7

Proceeds from sale of assets (note 4)

213.0

—

Other investing activities

0.4

1.1

Net cash flows used in investing activities

(10.9
)
(244.7
)

Cash flows from financing activities:

Proceeds from issuance of debt

2,454.3

2,495.1

Payments on debt and capital lease obligations

(2,896.2
)
(2,434.8
)
Contribution from former Parent

20.3

50.0

Proceeds from issuance of common stock, net of issuance costs

334.7

—

Repurchase of old management units

(8.8
)
—

Payment of debt issuance costs

(3.7
)
(1.7
)
Distribution to former Parent

—

(4.8
)
Other

(0.5
)
(0.1
)
Net cash flows provided by (used in) financing activities

(99.9
)
103.7

Increase (decrease) in cash and cash equivalents

5.6

(30.5
)
Cash and cash equivalents, beginning of period

30.8

66.6

Cash and cash equivalents, end of period

$
36.4

$
36.1

Supplemental disclosures of cash flow information:

Cash paid during the periods for interest

$
161.6

$
193.7

Cash paid during the periods for income taxes

$
4.4

$
6.5

Non-cash financing activities:

Changes in capital expenditure accruals

$
(8.6
)
$
2.6


	Six Months Ended
	June 30,
	2023		2022

	(in millions)
Cash flows from operating activities:
Net (loss) income	$	(139.7)	$	9.7
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		92.3		88.9
Deferred income taxes		(49.5)		(3.9)
Provision for doubtful accounts		5.5		0.7
Gain on sale of operating assets, net		(0.1)		(1.0)
Amortization of debt issuance costs and discount		0.8		0.8
Impairment losses on intangibles		128.1		—
Non-cash compensation		10.4		12.1
Other non-cash items		—		0.1
Changes in operating assets and liabilities:
Receivables and other operating assets		(13.7)		(8.4)
Payables and accruals		7.1		(150.7)
Net cash provided by (used in) operating activities	$	41.2	$	(51.7)
Cash flows from investing activities:
Capital expenditures	$	(123.8)	$	(76.8)
Other investing activities		0.2		1.1
Net cash used in investing activities	$	(123.6)	$	(75.7)
Cash flows from financing activities:
Proceeds from issuance of long-term debt, net	$	130.0	$	—
Payments on long-term debt and finance lease obligations		(9.7)		(9.9)
Purchase of shares		(45.9)		(6.0)
Net cash provided by (used in) financing activities	$	74.4	$	(15.9)
Decrease in cash and cash equivalents		(8.0)		(143.3)
Cash and cash equivalents, beginning of period		31.0		193.2
Cash and cash equivalents, end of period	$	23.0	$	49.9
Supplemental disclosures of cash flow information:
Cash paid during the periods for interest	$	30.2	$	14.4
Cash paid during the periods for income taxes	$	9.8	$	141.0
Cash received during the periods for refunds of income taxes	$	4.8	$	—
Non-cash operating activities:
Operating lease additions	$	0.9	$	1.5
Non-cash financing activities:
Finance lease additions	$	4.3	$	6.2
Capital expenditures within accounts payable and accruals	$	29.8	$	22.3

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

Table of Contents

WIDEOPENWEST, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017 AND 2016~~2023

(unaudited)

~~(unaudited)~~

Note 1. General Information

WideOpenWest, Inc. (“WOW” or the “Company”) was organized in Delaware in July 2012 as WideOpenWest Kite, Inc. WideOpenWest Kite, Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017. On April 1, 2016, the Company consummated a restructuring (“Restructuring”) whereby WideOpenWest Finance, LLC (“WOW Finance”) became a wholly owned subsidiary of WOW. Previously, WOW Finance was owned by WOW, WideOpenWest Illinois, Inc., WideOpenWest Ohio, Inc. and Sigecom, Inc. (collectively, the “Members”, or WOW and “Affiliates”). Prior to the Restructuring, the Members were wholly owned subsidiaries of Racecar Acquisition, LLC (“Racecar Acquisition”).

~~As a result~~is one of the ~~Restructuring, the Affiliates merged with and into WOW, WOW became the sole subsidiary~~nation’s leading broadband providers offering an expansive portfolio of ~~Racecar Acquisition and WOW Finance became a wholly owned subsidiary of WOW.~~

On May 25, 2017, the Company completed an initial public offering (“IPO”) of shares of its common stock, which are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “WOW”. Prior to its IPO, WOW was wholly owned by Racecar Acquisition, which is a wholly owned subsidiary of WideOpenWest Holdings, LLC (“Parent”). Subsequent to the IPO, Racecar Acquisition and former Parent do not own any shares in the Company as a result of a distribution of shares to their respective owners. In the following context, the terms we, us, WOW, or the Company may refer, as the context requires, to WOW or, collectively, WOW and its subsidiaries.

~~The Company is a fully integrated provider of~~advanced services, including high-speed data (“HSD”), cable television (“Video”), and digital telephony (“Telephony”) ~~services.~~services to residential and business customers. The Company serves customers in ~~nineteen Midwestern and Southeastern~~15 markets in the United ~~States. The Company manages and operates its Midwestern broadband cable systems in~~States which consist of Detroit and Lansing, Michigan; ~~Chicago, Illinois; Cleveland and Columbus, Ohio; Evansville, Indiana and Baltimore, Maryland. The Southeastern systems are located in~~ Augusta, Columbus, Newnan and West Point, Georgia; Charleston, South Carolina; Dothan, Auburn, Huntsville and Montgomery, Alabama; Knoxville, Tennessee; and Panama City, ~~and~~ Pinellas County and Seminole County, Florida.

The Company’s operations are managed and reported to its Chief Executive Officer (“CEO”), the Company’s chief operating decision maker, on a consolidated basis. The CEO assesses performance and allocates resources based on the consolidated results of operations. Under this organizational and reporting structure, the Company operates as one reportable segment.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

Prior to the Restructuring, the Members were all under common control. The financial statements presented herein include the consolidated accounts of WOW and its subsidiaries and the combined accounts of its Affiliates. All significant intercompany accounts and transactions have been eliminated in consolidation and combination. As a result, the unaudited condensed consolidated financial statements of WOW reflect all transactions of the wholly owned subsidiaries of the former Parent and Racecar Acquisition. The Company operates as one operating segment.

Certain employees of WOW participated in equity plans administered by the Company’s former Parent. Because the management units from the equity plan were issued from the former Parent’s ownership structure, the management units’ value directly correlated to the results of WOW, as the primary asset of the former Parent’s investment in WOW. The management units for the equity plan have been “pushed down” to the Company, as the management units had been utilized as equity-based compensation for WOW management. Immediately prior to the Company’s IPO, these management units were cancelled.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. ~~Accordingly, they do not include all~~Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the ~~information required by GAAP or~~ Securities and Exchange Commission (“SEC”) ~~rules and regulations for complete financial statements.~~; however, in the opinion of management, the disclosures made are adequate to ensure the information presented is not misleading. The ~~December 31, 2016 balance and results of operations for the nine months ended September 30, 2016 are presented on a combined condensed consolidated basis. The~~ year-end ~~combined condensed~~ consolidated balance sheet was derived from audited financial statements.

In the opinion of management, all normally recurring adjustments considered necessary for the fair presentation of the financial statements have been included, and the financial statements present fairly the financial position and results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results expected for the full year or any future period. These

unaudited condensed consolidated financial statements should be read in conjunction with the ~~2016 combined consolidated financial statements and notes thereto, together with the Company’s final prospectus~~2022 Annual Report filed with the SEC on ~~May 25, 2017.~~February 27, 2023.

~~Earnings or Loss per Share~~

Basic earnings or loss per share attributable to the Company’s common shareholders is computed by dividing net earnings or loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings or loss per share attributable to common shareholders presents the dilutive effect, if any, on a per share basis of potential common shares (such as restricted stock units) as if they had been vested or converted during the periods presented. No such items were included in the computation of diluted loss per share for the three months ended September 30, 2017All significant intercompany accounts and ~~2016 and the nine months ended September 30, 2016 because the Company incurred a net loss in each of these periods and the effect of inclusion would~~transactions have been ~~anti-dilutive. All of the shares outstanding and per share amounts have been retroactively adjusted to reflect the stock-split~~eliminated in the accompanying unaudited condensed consolidated financial statements. For the nine months ended September 30, 2017, the diluted earnings per share calculation resulted in an immaterial change in the weighted average number of common shares outstanding.consolidation.

Three months
ended
September 30,

Nine months
ended
September 30,

Computation of Income per Share

2017

2016

2017

2016

(in millions, except for per share data)

Net income (loss)

$
(2.1
)
$
(20.3
)
$
75.3

$
(1.8
)

Basic weighted-average shares

86,973,345

66,525,044

76,014,568

65,605,874

Effect of dilutive securities:

Restricted stock awards

—

—

81,833

—

Diluted weighted-average shares

86,973,345

66,525,044

76,096,401

65,605,874

Basic net income (loss) per share

$
(0.02
)
$
(0.31
)
$
0.99

$
(0.03
)
Diluted net income (loss) per share

$
(0.02
)
$
(0.31
)
$
0.99

$
(0.03
)

Use of Estimates

The ~~accompanying unaudited condensed consolidated~~preparation of financial statements ~~have been prepared~~ in accordance with ~~GAAP. These accounting principles require~~GAAP requires management to make assumptions and estimates that affect the reported amounts and disclosures of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts and disclosures of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances. To the extent there are differences between those estimates and actual results, the unaudited condensed consolidated financial statements may be materially affected.

~~Recently Issued Accounting Standards~~

~~In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04~~~~, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~~~, which eliminates the requirement to determine the fair value~~

5

Table of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new standard is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual or interim goodwill impairment testing performed after January 1, 2017. The Company is currently evaluating the impact and timing of adopting this guidance.Contents

~~In August 2016, the FASB issued ASU No. 2016-15 to Topic 230 (“ASU 2016-15”),~~ ~~Statement of Cash Flows~~, making changes to the classification of certain cash receipts and cash payments in order to reduce diversity in presentation. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The update addresses eight specific cash flow issues, of which only one is applicable to the Company’s financial statements. The Company does not believe that the adoption of this pronouncement will have a material impact on its financial position, results of operations or cash flows.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~“Leases (Topic 842)”~~ (“ASU 2016-02”). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company will adopt this guidance beginning with its first quarter ending March 31, 2019. The Company is in the process of evaluating the future impact of ASU 2016-02 on its financial position, results of operations and cash flows.

~~In May 2014, the FASB issued ASU 2014-09,~~ “Note 3. Revenue from Contracts with Customers ~~(Topic 606)”~~

R (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of the guidance in Accounting Standards Codification Topic 606 (“ASC 606”) is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity is required to follow five steps which are comprised of (a) identifying the contract(s) with a customer; (b) identifying the performance obligations in the contract; (c) determining the transaction price; (d) allocating the transaction price to the performance obligations in the contract and (e) recognizing revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB approved the deferral of the effective date of ASU 2014-09evenue by ~~one year until January 1, 2018.~~

Service Offering

The ~~Company has substantially completed its review~~following table presents revenue by service offering:

Three months ended

Six months ended

June 30,

June 30,


2023

2022

2023

2022

(in millions)
Residential subscription

HSD

$
88.0

$
84.6

$
174.8

$
166.9
Video

38.7

44.7

77.9

90.4
Telephony

5.5

6.1

11.1

12.4
Total residential subscription

$
132.2

$
135.4

$
263.8

$
269.7
Business subscription

HSD

$
18.7

$
18.0

$
37.1

$
35.8
Video

2.9

3.0

5.8

5.9
Telephony

6.6

6.8

13.1

13.8
Total business subscription

$
28.2

$
27.8

$
56.0

$
55.5
Total subscription services revenue

160.4

163.2

319.8

325.2
Other business services revenue(1)

5.1

5.4

10.3

10.7
Other revenue

7.1

7.5

14.7

14.8
Total revenue

$
172.6

$
176.1

$
344.8

$
350.7
(1) Includes wholesale and colocation lease revenue of $4.9 million for both the three months ended June 30, 2023 and 2022, and $9.6 million for both the six months ended June 30, 2023 and 2022.
Costs of ~~its revenue arrangements. Under~~Obtaining Contracts with Customers
The following table summarizes the activity of costs of obtaining contracts with customers:

Three months ended

Six months ended

June 30,

June 30,

2023

2022

2023

2022

(in millions)
Balance at beginning of period

$
39.9

$
37.7

$
39.5

$
37.3
Deferral

4.9

4.0

9.3

7.8
Amortization

(4.0)

(3.5)

(8.0)

(6.9)
Balance at end of period

$
40.8

$
38.2

$
40.8

$
38.2

The following table presents the current ~~accounting policies, the Company recognizes upfront revenue related to installation activities to the extent~~and non-current portion of ~~direct selling~~ costs ~~which generally results in recognition~~ of revenue when the installation related activities have been provided to the customer. Under the new revenue recognition standard, the Company’s installation related activities will be recognized ratably over the period which the customer is expected to benefit from the initial installation fee. In addition, the Company will be required to capitalize direct costs associated with obtaining contracts with customers ~~primarily sales commissions,~~as of the end of the corresponding periods:

June 30, 2023

December 31, 2022

(in millions)
Current costs of obtaining contracts with customers

$
16.0

$
15.6
Non-current costs of obtaining contracts with customers

24.8

23.9
Total costs of obtaining contracts with customers

$
40.8

$
39.5

The current portion and ~~will amortize~~ the non-current portion of costs ~~over a period consistent~~of obtaining contracts with customers are included in prepaid expenses and other and other non-current assets, respectively, in the ~~transfer~~Company’s unaudited condensed consolidated balance sheets. Amortization of ~~goods~~costs of obtaining contracts with customers is included in selling, general and ~~services to~~administrative expense in the ~~customer, including anticipated renewals.~~ Company’s unaudited condensed consolidated statements of operations.

6

Table of Contents

Contract Liabilities

The ~~Company’s installation~~following table summarizes the activity of current and non-current contract liabilities:

Three months ended

Six months ended

June 30,

June 30,

2023

2022

2023

2022

(in millions)
Balance at beginning of period

$
2.5

$
3.1

$
2.7

$
3.3
Deferral

2.7

3.0

5.2

6.2
Revenue recognized

(2.7)

(3.2)

(5.4)

(6.6)
Balance at end of period

$
2.5

$
2.9

$
2.5

$
2.9

The following table presents the current and non-current portion of contract liabilities as of the end of the corresponding periods:

June 30, 2023

December 31, 2022

(in millions)
Current contract liabilities

$
2.2

$
2.4
Non-current contract liabilities

0.3

0.3
Total contract liabilities

$
2.5

$
2.7

The current portion and the non-current portion of contract liabilities are included in the current portion of unearned service revenue and ~~sales commission expense represents approximately 2% of total revenue and expense,~~other non-current liabilities, respectively, ~~and any changes resulting from the adoption are not expected to have a material impact to~~in the Company’s ~~financial position.~~unaudited condensed consolidated balance sheets.

~~The new standard also requires additional disclosures regarding the nature, timing and uncertainty~~Unsatisfied Performance Obligations

Revenue from month-to-month residential subscription service contracts have historically represented a significant portion of the Company’s revenue ~~arrangements. The~~and the Company ~~intends~~expects that this will continue to ~~adopt~~be the ~~guidance on January 1, 2018 using the cumulative effect transition method.~~case in future periods. All residential subscription service performance obligations will be satisfied within one year.
~~In March 2016, the FASB issued ASU 2016-08,~~ ~~Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net)~~ ~~(“ASU 2016-08”), which amends the principal-versus-agent implementation guidance~~A summary of expected business subscription and ~~illustrations in ASC Topic 606. The FASB issued ASU 2016-08 in response to concerns identified by stakeholders, including those related to determining the appropriate unit of account under the~~other business services revenue standard’s principal-versus-agent guidance and applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard’s control principle. ASU 2016-08 has the same effective date as ASU 2014-09 and requires adopting ASU 2016-08 by using the same transition method used to adopt ASU 2014-09. The Company does not believe adoption of the pronouncement will have a material impact on the Company’s financial position, results of operations or cash flows.
~~Recently Adopted Accounting Pronouncements~~
~~In March 2016, the FASB issued ASU No. 2016-09,~~ ~~Compensation—Stock Compensation (Topic 718):~~ ~~Improvements to Employee Share-Based Payment Accounting~~ ~~(“ASU 2016-09”) which is intended to simplify certain aspects of the accounting for share-based payments to employees. The guidance in ASU 2016-09 requires all income tax effects of awards~~ to be recognized in ~~the statement of operations when the awards vest~~future periods related to performance obligations which have not been satisfied or are ~~settled rather than recording excess tax benefits or deficiencies~~partially unsatisfied as of June 30, 2023 is set forth in ~~additional paid-in capital.~~ the table below:


2023

2024

2025

Thereafter

Total

(in millions)
Subscription services

$
29.1

43.0

$
20.5

$
8.3

$
100.9
Other business services

1.5

2.4

0.9

0.3

5.1
Total expected revenue

$
30.6

$
45.4

$
21.4

$
8.6

$
106.0

Provision for Doubtful Accounts

The ~~guidance in ASU 2016-09 also allows an employer to repurchase more of an employee’s shares than it could under prior guidance~~provision for ~~tax withholding purposes without triggering liability accounting~~doubtful accounts and ~~to make a policy election to account~~the allowance for forfeitures as they occur. For public companies, ASU 2016-09 is effective for interim and annual periods beginning after December 15, 2016, and requires a modified retrospective approach to adoption. The adoption of this pronouncement did not have a material impactdoubtful accounts are based on the ~~Company’s financial position, results~~aging of ~~operations or cash flows.~~
~~In November 2015,~~ the ~~FASB issued ASU No. 2015-17,~~ ~~Balance Sheet Classification of Deferred Taxes~~ ~~(“ASU 2015-17”), which requires that all deferred tax liabilities~~individual receivables, historical trends and ~~assets be classified as noncurrent amounts on the balance sheet. ASU 2015-17 became effective for interim~~current and ~~annual periods beginning after December 15, 2016.~~anticipated future economic conditions. The Company ~~early adopted this standard during~~manages credit risk by disconnecting services to customers who are delinquent, generally after 100 days of delinquency. The individual receivables are written-off after all reasonable efforts to collect the ~~first quarter~~funds have been made. Actual write-offs may differ from the amounts reserved.

7

Table of ~~2016 and has applied prospective treatment.~~ Contents

The ~~adoption of this pronouncement did not have a material impact on~~following table presents the ~~Company’s financial position, results of operations or cash flows.~~change in the allowance for doubtful accounts for trade accounts receivable:

Three months ended

Six months ended

June 30,

June 30,

2023

2022

2023

2022

(in millions)
Balance at beginning of period

$
4.8

$
2.8

$
4.3

$
4.3
Provision charged to expense(1)

2.9

0.3

5.5

0.7
Accounts written off, net of recoveries

(1.8)

(0.7)

(3.9)

(2.6)
Balance at end of period

$
5.9

$
2.4

$
5.9

$
2.4
(1) During the three and six months ended June 30, 2022, the Company released $0.8 million and $1.6 million of reserves established in 2020 related to COVID-19.

Note 3.4. Plant, Property and Equipment, Net
Plant, property and equipment ~~consisted~~consists of the following:

June 30,

December 31,


2023

2022

September 30,
2017

December 31,
2016

(in millions)

(in millions)
Distribution facilities

$
1,447.5

$
1,336.4

$
1,407.5

$
1,341.1
Customer premise equipment

376.1

376.9

268.7

272.3
Head-end equipment

316.3

299.9

274.1

256.7
Computer equipment and software

168.5

156.4
Telephony infrastructure

127.7

123.8

49.4

52.4
Computer equipment and software

101.3

95.4

Buildings and leasehold improvements

32.6

33.4
Vehicles

34.9

32.1

24.8

22.9
Buildings and leasehold improvements

43.9

44.9

Office and technical equipment

32.5

36.2

19.4

19.1
Land

6.2

6.7

4.4

4.4
Construction in progress (including material inventory and other)

125.4

110.5

58.5

43.5
Total plant, property and equipment

2,611.8

2,462.8

Total property, plant and equipment

2,307.9

2,202.2
Less accumulated depreciation

(1,569.8
)
(1,467.7
)

(1,548.5)

(1,476.4)
Plant, Property and Equipment, Net

$
1,042.0

$
995.1

$
759.4

$
725.8

Depreciation expense for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 was ~~$48.4~~$46.7 million and ~~$48.1 million, respectively. Depreciation expense for the nine months ended September 30, 2017 and 2016 was $148.6 million and $142.2~~$44.4 million, respectively. Included in depreciation and amortization expense ~~were gains (losses) on write-offs or sales~~in the condensed consolidated statement of ~~head-end and customer premise equipment totaling nil and $0.1 million~~operations for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, respectively; and $0.3~~2022 were net gains on sales of operating assets of $0.1 million and ~~$0.4~~$0.6 million, respectively.
Depreciation expense for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022 was $92.1 million and $88.8 million, respectively. Included in depreciation and amortization expense in the condensed consolidated statement of operations for the six months ended June 30, 2023 and 2022 were net gains on sales of operating assets of $0.1 million and $1.0 million, respectively.
~~Assets Held for Sale~~Note 5. Franchising Operating Rights and Goodwill
Changes in the carrying amounts of the Company’s franchise operating rights and goodwill during the three and six months ended June 30, 2023 are set forth below:
~~On August 1, 2017,~~

January 1,

June 30,


2023

Impairment

2023

(in millions)
Franchise operating rights

$
585.1

$
(128.1)

$
457.0
Goodwill

225.1

—

225.1

$
810.2

$
(128.1)

$
682.1

8

Table of Contents

Due to the ~~Company entered into a definitive agreement to sell a portion of its fiber network~~decline in the Company’s ~~Chicago market~~stock price, which represented a triggering event during the three months ended June 30, 2023, the Company performed an interim impairment analysis of its franchise operating rights and goodwill.

Franchise Operating Rights
Franchise operating rights are evaluated for impairment by comparing the carrying value of the intangible asset to ~~a subsidiary of Verizon for $225.0 million in cash. The Company anticipates the sale to be completed in the fourth quarter of 2017. In addition,~~its estimated fair value, utilizing both quantitative and qualitative methods, at the ~~closing~~lowest level of identifiable cash flows, which generally represent the ~~definitive agreement, the Company and Verizon will enter into a new agreement pursuant to~~markets in which the Company ~~will complete~~operates. Qualitative analysis is performed for franchise assets in the ~~build-out~~event the previous analysis indicates that there is a significant margin between the estimated fair value of franchise operating rights and the carrying value of those rights, and that it is more likely than not that the estimated fair value equals or exceeds its carrying value.
For the interim impairment analysis, all franchise operating rights were evaluated using quantitative analysis. The Company calculates the estimated fair value of franchise operating rights using the multi-period excess earnings method, an income approach, which calculates the estimated fair value of an intangible asset by discounting its future cash flows. The estimated fair value is determined based on discrete discounted future cash flows attributable to each franchise operating right intangible asset using assumptions consistent with internal forecasts. Assumptions key in estimating fair value under this method include, but are not limited to, revenue and subscriber growth rates (less anticipated customer churn), operating expenditures, capital expenditures (including any build out), market share achieved or market multiples, contributory asset charge rates, tax rates and a discount rate. The discount rate used in the model represents a weighted average cost of capital and the perceived risk associated with an intangible asset such as the Company’s franchise operating rights. If the fair value of the ~~network in exchange~~franchise operating right asset was less than its carrying value, the Company recognizes an impairment charge for ~~approximately $50.0 million, which represented~~ the ~~estimated remaining build-out costs to complete~~difference between the ~~network at~~fair value and the ~~time~~carrying value of the ~~definitive agreement was entered into. The $50.0 million will be payable as such network elements are completed. The Company anticipates such network would be completed in the second half of 2018.~~
asset.
As a result of the ~~definitive agreement,~~interim impairment analysis, the ~~Company concluded that as~~estimated fair value of ~~September 30, 2017,~~certain franchise operating right assets was determined to be below the carrying value, which resulted in the recognition of non-cash impairment losses in the following markets:

Impairment

(in millions)
Huntsville, AL

$
60.0
Augusta, GA

24.4
Panama City, FL

13.5
Montgomery, AL

13.0
Newnan, GA

9.5
Valley, AL

4.0
Columbus, GA

3.7
Total

$
128.1

The primary driver of the impairment charge was a decline in the estimated fair market value of indefinite-lived intangible assets ~~and liabilities associated~~in certain markets. The decline is primarily due to declining cash flows, which results in an increase in the discount rate, combined with the fiber network met the criteria to be classified as held for sale. As of September 30, 2017, the Chicago fiber network has $149.2 million in total assets and $15.5 million in total liabilities held for sale that are includeddecline in the Company’s ~~unaudited condensed consolidated balance sheets which includes approximately $7.0 million~~common stock price. The impairment charges do not have an impact on the Company’s intent and/or ability to renew or extend existing franchise operating rights.
Goodwill
For the interim impairment analysis, the Company ~~has spent on construction subsequent to~~quantitatively evaluated goodwill at the ~~signing~~consolidated reporting unit level. The Company determined the estimated fair value utilizing a market approach that incorporated the approximate market capitalization as of the ~~definitive agreement on August 1, 2017.~~
~~Note 4. Sale of Lawrence, Kansas System~~
~~On January 12, 2017,~~interim testing date, increased by the Company and Midcontinent Communications (“MidCo”) consummated an asset purchase agreement under which MidCo acquired the Company’s Lawrence, Kansas system for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchasequoted market price adjustments set forth in the agreement. As a result of the asset purchase agreement, the Company recorded a gain on sale of assets of $38.4 million, subject to the adjustment as described above. The results of the Company’s ~~Lawrence, Kansas system are included in~~debt and adjusted for a control premium.
Based on the interim analysis, the estimated fair value of goodwill exceeded the carrying value, as such, no impairment charge related to goodwill was recognized during the three and ~~nine~~six months ended ~~September~~June 30, ~~2016 unaudited condensed consolidated financial statements but not included in the three~~2023.

9

Table of Contents

Note 6. Accrued Liabilities and nine months ended September 30, 2017 unaudited condensed consolidated financial statements. The Company and MidCo also entered into a transition services agreement under which the Company provided certain services to MidCo on a transitional basis. The transition services agreement, originally
expiring on July 1, 2017, was extended to September 28, 2017. Charges for the transition services generally allowed the Company to fully recover all allowed costs and allocated expenses incurred in connection with providing these services, generally without profit.
~~Note 5. Accrued Liabilities~~Other
Accrued liabilities ~~consist~~and other consists of the following:

June 30,

December 31,


2023

2022

September 30,
2017

December 31,
2016

(in millions)

(in millions)
Payroll and employee benefits

$
14.7

$
22.2
Programming costs

$
32.3

$
39.9

12.8

15.9
Franchise, copyright and revenue sharing fees

11.4

13.2

Patent litigation settlement

9.8

1.3
Restructuring related to employee severance

6.6

4.1
Franchise and revenue sharing fees

4.9

5.6
Other accrued liabilities

4.8

8.6
Property, income, sales and use taxes

13.2

8.1

4.0

5.8
Payroll and employee benefits

7.2

16.4

Construction

5.6

17.4

Utility pole rentals

3.1

3.7

Other accrued liabilities

11.4

11.1

Accrued Liabilities

$
84.2

$
109.8

Customer cash collections (Transition Services Agreements)

3.6

3.6
Utility pole costs

1.9

1.6

$
63.1

$
68.7

Note 6.7. Long-Term Debt and ~~Capital~~Finance Leases
The following table summarizes the Company’s long-term debt and ~~capital~~finance leases:

September 30, 2017

December 31,
2016

Available

Weighted

borrowing
capacity

average
interest rate (1)

Outstanding
balance

Outstanding
balance

(in millions)

Long-term debt:

Term B Loans (2)

$
—

4.55
%
$
2,266.5

$
2,048.3

Revolving Credit Facility (3)

112.1

4.29
%
180.0

10.0

Senior Notes

—

N/A

—

830.9

Total long-term debt

$
112.1

4.57
%
2,446.5

2,889.2

Capital lease obligations

3.2

4.9

Total long-term debt and capital lease obligations

2,449.7

2,894.1

Less debt issuance costs (4)

(13.6
)
(22.9
)
Sub-total

2,436.1

2,871.2

Less current portion

(24.1
)
(22.7
)
Long-term portion

$
2,412.0

$
2,848.5

December 31,

June 30, 2023

2022


Available




borrowing

Effective

Outstanding

Outstanding

capacity

interest rate(1)


balance

balance

(in millions)
Long-term debt:








Term B Loans, net(2)

$
—

8.24
%

$
714.5

$
717.7
Revolving Credit Facility(3)

106.4

7.90
%

139.0

9.0
Total long-term debt

$
106.4

853.5

726.7
Finance lease obligations





18.8

20.6
Total long-term debt and finance lease obligations





872.3

747.3
Debt issuance costs, net(4)





(4.2)

(4.6)
Sub-total





868.1

742.7
Less current portion





(16.7)

(17.7)
Long-term portion



$
851.4

$
725.0
~~(1)~~
(1) Represents the ~~weighted average~~ effective interest rate in effect for all borrowings outstanding as of June 30, 2023 pursuant to each debt instrument including the applicable margin.
(2) At June 30, 2023 and December 31, 2022 includes $4.6 million and $5.0 million of net discounts, respectively.
(3) Available borrowing capacity at June 30, 2023 represents $250.0 million of total availability less borrowings of $139.0 million on the Revolving Credit Facility and outstanding letters of credit of $4.6 million. Letters of credit are used in the ordinary course of business and are released when the respective contractual obligations have been fulfilled by the Company.
(4) At June 30, 2023 and December 31, 2022 debt issuance costs include $3.2 million and $3.5 million related to Term B Loans and $1.0 million and $1.1 million related to the Revolving Credit Facility, respectively.

10

Table of ~~September 30, 2017 pursuant to each debt instrument including the applicable margin.~~Contents

~~(2)~~ ~~At September 30, 2017 includes $13.5 million of net discounts.~~

~~(3)~~ Available borrowing capacity at September 30, 2017 represents $300.0 million of total availability less outstanding letters of credit of $7.9 million and borrowing on revolving credit facility of $180.0 million. Letters of credit are used in the ordinary course of business and are released when the respective contractual obligations have been fulfilled by the Company.

~~(4)~~ ~~At September 30, 2017, debt issuance costs include $9.8 million related to Term B Loans and $3.8 million related to Revolving Credit Facility.~~

Refinancing of the Term B Loans and Revolving Credit Facility

On ~~July 17, 2017,~~December 20, 2021, the Company entered into ~~an eighth amendment (“Eighth Amendment”~~a new secured credit agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, collateral agent and issuing bank (the “Credit Agreement”) ~~to its~~. The Credit Agreement ~~with JPMorgan Chase Bank, N.A., as the administrative agent and revolver agent. Under the Eighth Amendment,~~consists of (i) ~~the Company borrowed~~a new Term Loan B ~~loans~~ in an aggregate principal amount of ~~$230.5~~$730.0 million ~~for a total outstanding Term B loan principal amount~~

~~of $2.28 billion~~ and (ii) ~~the~~a $250.0 million revolving credit commitments were increased by an aggregate principal amount of $100.0 million, for a total outstanding revolving credit commitment of $300.0 million available to the Company under the revolving credit facility.commitment. The ~~new~~ Term Loan B ~~loans will mature on August 19, 2023~~matures in December 2028 and ~~bear~~bears interest ~~at the Company’s option,~~ at a rate equal to ~~ABR~~the Secured Overnight Financing Rate (“SOFR”) plus ~~2.25% or LIBOR plus 3.25%. Loans under~~3.00%, subject to a 50 basis point floor, and the revolving credit ~~facility will mature on May 31, 2022 and bear~~commitment bears interest ~~at the Company’s option,~~ at a rate equal to ~~ABR~~SOFR plus ~~2.00% or LIBOR plus 3.00%.~~2.75%, subject to a 50 basis point commitment fee rate for unused commitments, and matures in December 2026. The ~~guarantees, collateral~~Senior Secured Term B loans and ~~covenants in~~Revolving Credit Facility are secured on a first-priority basis by a lien on substantially all of the ~~Eighth Amendment remain unchanged from those contained in the credit agreement prior~~Company’s assets, subject to ~~the Eighth Amendment. The Company recorded a $6.3 million loss on early extinguishment of debt in the three months ended September 30, 2017 related to the write off of unamortized debt issuance costs~~certain exceptions and ~~third party costs.~~ permitted liens.

As of ~~September~~June 30, ~~2017,~~2023, the Company was in compliance with all debt covenants.
~~On May 31, 2017, the Company entered into~~ a seventh amendment (“Seventh Amendment”) to its Credit Agreement. The Seventh Amendment (i) refinanced the then-existing $200.0 million of borrowings available to the Company under the revolving credit facility and (ii) extended the maturity date of the revolving credit facility to May 31, 2022, unless an earlier date was triggered under certain circumstances. The interest rate margins applicable to the revolving credit facility bore interest at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. Additionally, the Company entered into an Incremental Commitment Letter to its revolving credit facility that increased the available borrowings to $300.0 million that became available upon compliance by the Company with certain conditions (see redemption of 10.25% senior notes whereby such conditionality was subsequently achieved as a result of the eighth amendment). The guarantees, collateral and covenants in the Seventh Amendment remained unchanged from those contained in the credit agreement prior to the Seventh Amendment. The Company recorded a $1.0 million loss on early extinguishment of debt in the three months ended June 30, 2017, primarily related to the write-off of deferred financing costs and third party costs.
On August 19, 2016, the Company entered into a sixth amendment (“Sixth Amendment”) to its Credit Agreement. The Sixth Amendment provided for the addition of a $2.065 billion seven year Term B Loan which bore interest at LIBOR plus 3.50% or ABR plus 2.50% and included a 1.00% LIBOR floor. The Term B Loan had a maturity date of August 19, 2023, unless the earlier maturity dates set forth below was triggered under the following circumstances: the Term B Loan matured on April 15, 2019 if (i) any of the Company’s existing outstanding Senior Notes were outstanding on April 15, 2019, or (ii) any future indebtedness with a final maturity date prior to the date that is 91 days after August 19, 2023 was incurred to refinance the Company’s existing Senior Notes. The Term B Loan matured on July 15, 2019 if (i) any of the Company’s existing Senior Subordinated Notes were outstanding on July 15, 2019, or (ii) any indebtedness with a final maturity prior to the date that is 91 days after August 19, 2023 was incurred to refinance the Company’s existing Senior Subordinated Notes. As described below, the Senior Subordinated Notes were fully redeemed on December 18, 2016 and the Senior Notes were fully redeemed on July 17, 2017.
Proceeds from the issuance of the Term B Loans pursuant to the Sixth Amendment were used to repay in full the existing $1.825 billion Term B Loan, which had a maturity date of April 15, 2019 and which bore interest at the same rates described above. The Company used the remaining $240.0 million in proceeds to fund the Company’s acquisition of HC Cable Opco, LLC (“NuLink”) and to redeem a portion of the Company’s 13.38% Senior Subordinated Notes. The Company recorded a loss on early extinguishment of debt of $32.1 million during the three months ended September 30, 2016. The loss primarily relates to the write off of the unamortized debt issuance costs and third part costs associated with the pre-existing Term B Loans.
On May 11, 2016, the Company entered into a fifth amendment (“Fifth Amendment”) to its Credit Agreement. The Fifth Amendment provided for the addition of an incremental $432.5 million Term B Loan with a maturity date of April 2019 and which bore interest, at the Company’s option, at LIBOR plus 3.50% or ABR plus 2.50% and included a 1.00% LIBOR floor. Proceeds from the issuance of the Term B Loans were used to repay all remaining $382.5 million outstanding principal under the Company’s Term B-1 Loans which had a maturity date of July 2017 and which bore interest at LIBOR plus 3.00% or ABR plus 2.00% and included a 0.75% LIBOR floor.
~~Partial Redemption of 10.25% Senior Notes~~
On March 20, 2017, the Company utilized cash on hand to redeem $95.1 million in aggregate principal amount outstanding of the 10.25% Senior Notes. In addition to the partial redemption, the Company paid accrued interest on the 10.25% Senior Notes of $1.7 million and a call premium of $4.9 million. The Company recorded a loss on early extinguishment of debt of $5.0 million, primarily representing the cash call premium paid.
~~Redemption of 10.25% Senior Notes~~
On July 17, 2017, the Company used the proceeds of the new Term B loans under the Eighth Amendment, and borrowed $180.0 million under its revolving credit facility and cash on hand to fully redeem all of the Company’s remaining outstanding 10.25% Senior Notes due 2019 (the “Senior Notes”) and to pay certain fees and expenses. In connection with the redemption of the 10.25% Senior Notes, the Company satisfied and discharged the indenture governing the Senior Notes. The Company paid $729.9
million in principal amount, incurred prepayment fees of $18.7 million and paid accrued interest of $37.6 million. The Company recorded a loss on early extinguishment of debt of $19.8 million related to the write-off of deferred financing costs, premium, and prepayment fees.
~~Retirement of 13.38% Senior Subordinated Notes~~
~~During the year ended December 31, 2016, the Company made two redemption payments to early retire its 13.38% Senior Subordinated Notes. The final redemption payment was made on December 18, 2016.~~
~~Note 7. Equity~~
~~Initial Public Offering~~
~~On May 25, 2017, the Company completed an IPO of shares of its common stock, which are listed on the NYSE under the ticker symbol “WOW”.~~
The Company sold 20,970,589 shares of its common stock at a price of $17 per share (including the exercise of the overallotment) for $356.5 million in gross proceeds. The Company incurred costs directly associated with the IPO of $21.8 million. Proceeds from the IPO (net of issuance costs) of $334.7 million are reflected in the Company’s unaudited condensed consolidated statement of stockholders’ deficit during the nine months ended September 30, 2017. Outstanding shares and per-share amounts disclosed as of September 30, 2017 and for all other comparative periods presented have been retroactively adjusted to reflect the effects of the May 25, 2017, 66,498.762 to 1 stock-split.
Note 8. Stock-Based Compensation
~~2017 Omnibus Incentive Plan~~
~~In connection with the~~The Company’s ~~IPO, the Company’s Board of Directors adopted and approved~~stock incentive plan, the 2017 Omnibus Incentive ~~Plan (“2017 Plan”) and cancelled its former management D units equity incentive plan (“2016 Profit Interest Plan”).~~ ~~The 2017~~ Plan, provides for grants of stock options, restricted stock and performance awards. The Company’s directors, officers and other employees and persons who engage in services for the Company are eligible for grants under the ~~2017 Plan.~~plan. The ~~purpose~~stock incentive plan has authorized 15,924,128 shares of the ~~2017 Plan is to provide the individuals with incentives to maximize stockholder value and otherwise contribute to the~~ Company’s ~~success and to enable the Company to attract, retain and reward the best available persons for positions of responsibility. The 2017 Plan has authorized 6,355,054 shares of its~~ common stock to be available for issuance, ~~under the 2017 Plan,~~ subject to adjustment in the event of a reorganization, stock split, merger or similar change in the Company’s corporate structure or the outstanding shares of common stock. The Company’s Compensation Committee will administer the 2017 Plan. The Board of Directors also has the authority to administer the 2017 Plan and to take all actions that the Company’s Compensation Committee is otherwise authorized to take under the 2017 Plan. The terms and conditions of each award made under the 2017 Plan, including vesting requirements, will be set forth consistent with the 2017 Plan in a written agreement with the grantee.

~~Employee Grants~~
~~Senior management that had participated in the 2016 Profit Interest Plan were granted (based on a conversion factor of management units to new common shares) new restricted~~Restricted stock ~~to replace the shares that were cancelled in the 2016 Profit Interest Plan. Under the 2017 Plan, 394,052 shares of restricted stock were granted that will~~awards generally vest ratably ~~at 33% per~~over a four year beginning on June 30, 2018 assuming the award recipient continues to be employed by the Company. Senior management also received 450,356 shares of restricted stock in connection with long-term incentive compensation under the 2017 Plan. These restricted stock grants will vest ratably at 33% per year beginning on June 30, 2018 assuming the award recipient continues to be employed by the Company.
Employees that had participated in the 2016 Director Appreciation Rights Plan were granted new restricted stock (based on a conversion factor of the then calculated value of such pool). These employees were granted 78,050 shares of restricted stock under the 2017 Plan that will vest ratably at 33% per year beginning on June 30, 2018 assuming the award recipient continues to be employed by the Company.
Each year, the Company’s Compensation Committee, in consultation with the Company’s Chief Executive Officer (“CEO”), establishes an annual incentive bonus plan. In 2017, the 2017 Management Bonus Plan (“2017 MBP”) was established, which provides incentive cash bonuses for the majority of the Company’s employees based upon the achievement of certain business and individual or department objectives, including most prominently adjusted consolidated earnings before interest, tax, depreciation and amortization. Bonus payouts were established based on a percentage of the participant’s base salaryperiod based on the ~~title/position. In connection with the Company’s IPO, the Compensation Committee, in consultation with the Company’s CEO, granted restricted shares out~~date of ~~the 2017 Plan. The Compensation Committee granted restricted shares equal to 100% to 150% achievement of the 2017~~
~~MBP. Such grant in aggregate totaled 866,708 shares and will vest 100% on June 30, 2018 assuming the participant continues to be employed by the Company.~~
~~Furthermore, the members of the Company’s Board of Directors received 54,361 shares, in aggregate, of restricted stock that will vest 100% beginning on June 30, 2018.~~
~~The following table summarizes the restricted stock awards granted during the nine months ended September 30, 2017.~~
~~Number of~~
~~Restricted Stock~~
~~Shares~~
~~Outstanding January 1, 2017~~
—
~~Granted~~
~~1,843,527~~
~~Cancelled~~
—
~~Forfeited~~
~~(45,162~~
)
~~Outstanding September 30, 2017~~
~~1,798,365~~
The above table includes 472,102 of restricted shares that were granted from plans prior to the 2017 Plan, thus these restricted shares do not count towards the 6,355,054 shares authorized by the plan. These shares represented the unvested shares from the old 2016 Profit Interest Plan that will vest ratably at 33% per year beginning on June 30, 2018.
grant. For restricted stock awards that contain only service conditions for vesting, the Company calculates the award fair value based on the closing stock price on the accounting grant date.

~~For~~The Company recorded $5.0 million and $6.4 million of total non-cash compensation expense for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022, respectively, and recorded $10.4 million and $12.1 million for the ~~Company recorded $5.2 million~~six months ended June 30, 2023 and 2022, respectively. Certain awards were modified during the year ended December 31, 2021 and were classified as liabilities. During the six months ended June 30, 2023, the remainder of these liability-based awards were settled with shares of restricted stock for approximately $0.3 million. The non-cash compensation expense associated with these awards was nil and $0.4 million for the six months ended June 30, 2023 and 2022, respectively ofand is included in total non-cash compensation expense.
The following table presents restricted stock activity during the six months ended June 30, 2023:

Number of

Unvested

Restricted Stock

Shares
Outstanding, beginning of period

3,223,995
Granted

2,033,514
Vested

(2,152,461)
Forfeited

(258,042)
Outstanding, end of period(1)

2,847,006
(1) The total outstanding non-vested shares of restricted stock awards granted to employees and directors are included in total outstanding shares as of June 30, 2023.

11

Table of Contents

Grants of Performance Shares

On March 3, 2023, the Company granted 264,028 performance shares which will vest based on the Company’s achievement level relative to the following performance measures at December 31, 2025: 50% based upon the Company’s Total Shareholder Return (“TSR”) relative to the TSRs of the Company’s peer group and 50% based on the Company’s three-year cumulative EBITDA metric. EBITDA is defined as net income (loss) before net interest expense, ~~which is reflected in selling, general and administrative expense and operating expenses (excluding~~income taxes, depreciation and ~~amortization)~~amortization (including impairments), ~~depending~~impairment losses on intangibles and goodwill, the write-off of any asset, loss on early extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including stock compensation expense) and certain other income and expenses. Upon achievement of the minimum threshold performance metric, the grantee may earn 50% to 200% of their respective target shares based on the ~~recipients’ duties,~~performance goal.

The performance shares based on relative TSR performance have a market condition and are valued using a Monte Carlo simulation model on the grant date, which resulted in a grant date fair value of $16.19 per share. The estimated fair value is amortized to expense over the requisite service period, which ends on December 31, 2025. The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the performance shares with a market condition: risk-free interest rate of 4.62%, volatility factors in the expected market price of the Company's common shares of 51.61% and an expected life of three years.

The performance shares based on three-year cumulative EBITDA have a performance condition. The probability of achieving the performance condition is assessed at each reporting period. If it is deemed probable that the performance condition will be met, compensation cost will be recognized based on the closing price per share of the Company's common stock on the date of the grant multiplied by the number of awards expected to be earned. If it is deemed that it is not probable that the performance condition will be met, the Company will discontinue the recognition of compensation cost and any compensation cost previously recorded will be reversed. At June 30, 2023, achievement of the performance conditions associated with the 2023, 2022 and 2021 performance shares was deemed probable.

Note 9. Equity
On October 4, 2022, the Company’s Board of Directors authorized the Company to repurchase up to $50.0 million of its outstanding common stock. As of June 30, 2023, we have completed our Share Repurchase Program with approximately 4.9 million shares purchased for $50.4 million (including commissions).

The following table summarizes the Company’s purchases of WOW common stock during the three and six months ended June 30, 2023 and 2022, respectively. These shares are reflected as treasury stock in the Company’s ~~unaudited condensed~~ consolidated ~~statements~~balance sheets.

Three months ended

Six months ended

June 30,

June 30,

2023

2022

2023

2022

(shares)
Share buybacks

1,810,770

—

3,751,803

—
Income tax withholding(1)

55,276

35,149

756,421

333,535

1,866,046

35,149

4,508,224

333,535
(1) Generally, the company withholds shares to cover the income tax withholdings of the employee upon vesting. These shares are not part of the board approved Share Repurchase Program.

12

Table of ~~operations. During~~Contents

Note 10. Earnings per Common Share
Basic earnings or loss per share attributable to the ~~nine~~Company’s common stockholders is computed by dividing net income or loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings or loss per share attributable to common stockholders presents the dilutive effect, if any, on a per share basis of potential common shares (such as restricted stock units) as if they had been vested or converted during the periods presented. No such items were included in the computation of diluted loss or earnings per share for the three and six months ended ~~September~~June 30, ~~2017 and 2016,~~2023 because the Company ~~recorded $8.3 million~~incurred a net loss and ~~$0.5 million, respectively,~~the effect of ~~non-cash compensation expense which~~inclusion would have been anti-dilutive.

Three months ended

Six months ended

June 30,

June 30,


2023

2022

2023

2022


(in millions, except share data)

Net (loss) income

$
(101.7)

$
4.0

$
(139.7)

$
9.7

Basic weighted-average shares

81,502,527

84,148,917

82,262,724

83,722,315

Effect of dilutive securities:

Restricted stock awards

—

2,644,222

—

2,920,534

Diluted weighted-average shares

81,502,527

86,793,139

82,262,724

86,642,849

Basic and diluted (loss) earnings per common share

Basic

$
(1.25)

$
0.05

$
(1.70)

$
0.12

Diluted

$
(1.25)

$
0.05

$
(1.70)

$
0.11

The dilutive effect of the potential common shares from the performance shares is ~~reflected~~included in ~~selling, general~~diluted earnings per share upon the satisfaction of certain performance and ~~administrative expense~~market conditions. These conditions are evaluated at each reporting period and ~~operating (excluding depreciation and amortization), depending on participants’ duties,~~if the conditions have been satisfied during the reporting period, the number of contingently issuable shares are included in the ~~Company’s unaudited condensed consolidated statements~~computation of ~~operations.~~
diluted earnings per share. As of June 30, 2022, the Company determined the performance conditions were not yet achieved; however, the market conditions indicated a certain level of achievement within the payout range. Therefore, the contingently issuable performance shares associated with the market condition are included in the computation of diluted earnings per share, if they have a dilutive effect on earnings per share.
Note 9.11. Fair Value Measurements
The fair values of cash and cash equivalents, receivables and trade payables ~~short-term borrowings and the current portions of long-term debt~~ approximate their carrying values due to the short-term nature of these instruments. For assets and liabilities of a long-term nature, the Company determines fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. The Company applies the following hierarchy in determining fair value:
● Level 1, defined as observable inputs being quoted prices in active markets for identical assets;
● Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
● Level 3, defined as values determined using models that utilize significant unobservable inputs for which little or no market data exists, discounted cash flow methodologies or similar techniques, or other determinations requiring significant management judgment or estimation.

13

· ~~Level 1, defined as observable inputs being quoted prices in active markets for identical assets;~~Table of Contents

· Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

· Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions based on the best information available.

The estimated fair value of the Company’s long-term debt ~~which includes debt subject to the effects of interest rate risk, was~~is based on dealer quotes considering current market rates ~~and was approximately $2,457.2 million compared to carrying value of $2,460.0 million, not including debt issuance costs, discount and premium as of September 30, 2017. As~~for the Company’s credit facility and is classified as Level 2. The ratio of ~~its~~the Company’s aggregate debt balance has trended from quoted market prices in active markets to quoted prices in non-active ~~markets, the Company has concluded that the~~markets. The fair value of the Company’s long-term debt ~~should be~~was valued at $709.2 million and $699.2 million as of June 30, 2023 and December 31, 2022, respectively. Long-term debt fair value does not include debt issuance costs and discounts. There were no transfers into or out of Level 1, 2 or 3 during the periods ended June 30, 2023 and December 31, 2022.
The Company’s nonfinancial assets such as franchise operating rights, property, plant, and equipment, and other intangible assets are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. When such impairments are recorded, fair values are generally classified ~~as a~~within Level 2.
3 of the valuation hierarchy.
Note ~~10.~~12. Income Taxes
The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax ~~liabilities~~assets and ~~assets~~liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact on deferred tax assets and liabilities of changes in ~~the~~ tax rates ~~and laws on deferred taxes, if any,~~ is reflected in the ~~unaudited condensed consolidated~~ financial statements in the period that includes the date of enactment.
The Company assesses the available positive and negative evidence to estimate whether sufficient taxable income will be generated to permit the utilization of existing deferred tax assets. On the basis of this evaluation, as of September 30, 2017, a valuation allowance of $128.0 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The valuation allowance is based on the Company’s existing positive and negative evidence. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased based on the Company’s future operating results.
The Company reported ~~total~~income tax benefit of $36.2 million and income tax expense of ~~$1.6 million and $2.7~~$4.3 million for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively, and ~~reported total~~ income tax benefit of ~~$16.4~~$48.8 million and ~~$7.4~~income tax expense of $4.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively.
Note 13. Commitments and Contingencies
Sprint Patent Infringement Claim. On ~~January 12, 2017,~~March 7, 2018, Sprint Communications Company LP (“Sprint”) filed a complaint in the U.S. District Court for the District of Delaware alleging that the Company infringed a set of patents directed to the provision of Voice over Internet Protocol (“VoIP”) services. This lawsuit was part of a larger, decade long patent enforcement campaign by Sprint aimed at numerous service providers in the broadband and telecommunications industry. In April 2023, prior to the commencement of the Company’s jury trial on April 24, 2023, the Company and ~~MidCo consummated an asset purchase~~Sprint entered into settlement discussions and also conducted a formal mediation. Those discussions culminated in a negotiated resolution of the pending litigation, for which the parties executed a binding term sheet on April 19, 2023, and a Confidential Settlement and License Agreement on April 28, 2023. The terms of the settlement are confidential, but the agreement ~~pursuant~~does obligate the Company to ~~which MidCo acquired~~make payments to Sprint over the course of three years in exchange for a full release of all liability.
The Company intends to pursue funding contributions for that settlement from third parties implicated by Sprint’s claims and the Company’s ~~Lawrence, Kansas system for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in~~defense, including indemnification claims against the ~~agreement.~~Company’s various affected equipment providers. As a result of the ~~sale,~~settlement, the Company ~~has recorded $11.1~~accrued $46.8 million as of ~~income tax expense. In addition, a deferred income tax benefit of $36.3 million was recognized as a result~~March 31, 2023, and the associated expense is included in the change of valuation allowance. The change in valuation allowance was due primarily to the utilization of NOLs from the disposal of indefinite lived assets related to the Lawrence, Kansas system sale transaction.
selling, general and administrative expenses. The Company ~~files income tax returns in~~does not believe that the ~~U.S. federal jurisdiction, and various state jurisdictions. For federal tax purposes,~~settlement will have a material impact on the Company’s 2013 through 2016 tax years remain open for examination by the tax authorities under the normal three year statute of limitations. Generally, for state tax purposes, the Company’s 2013 through 2016 tax years remain open for examination by the tax authorities under a three year statute of limitations. Should the Company utilize any of its U.S. or state loss carryforwards, their carryforward losses, which date back to 1995, would be subject to examination.
As of September 30, 2017, the Company recorded gross unrecognized tax benefits of $31.2 million, all of which, if recognized, would affect the Company’s effective tax rate. Interest and penalties related to income tax liabilities, if incurred, are included in income tax benefit (expense) in the unaudited condensed consolidated statement of operations. The Company has accrued gross interest and penalties of $0.5 million. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues are addressed in the Company’s tax audits in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.
Unrecognized tax benefits consist primarily of tax positions related to issues associated with the Restructuring of WOW Finance and the acquisition of Knology, Inc. Depending on the resolution with certain state taxing authorities that is expected to occur within the next twelve months, there could be an adjustment to the Company’s unrecognized tax benefits and certain state tax matters.
capital expenditures.
The Company is ~~not currently under examination for U.S. federal income tax purposes, but does have various open tax controversy matters with various state taxing authorities.~~
~~Note 11. Commitments and Contingencies~~
~~The Company is~~also party to various legal proceedings (including individual, class and putative class actions) arising in the normal course of its business covering a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, programming, taxes, fees and surcharges, consumer protection, trademark and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers.
In accordance with GAAP, ~~WOW~~the Company accrues an expense for pending litigation when it determines that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Legal defense costs are expensed as incurred. None of the Company’s existing accruals for pending matters are material. ~~WOW regularly~~The Company consistently monitors its pending litigation for the purpose of adjusting its accruals and revising its disclosures accordingly, in accordance with GAAP, when required. ~~Litigation~~However, litigation is ~~however,~~ subject to uncertainty, and the outcome of any particular matter is not predictable. The Company will vigorously ~~defends~~defend its interests in pending litigation, and ~~as of this date, WOW~~the Company believes that the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which it is entitled, will not have a material adverse effect on its ~~unaudited condensed~~ consolidated financial position, results of operations, or cash flows.

~~Note 12. Related Party Transactions~~14

~~Prior to the Company’s IPO, the Company paid a quarterly management fee~~Table of $0.4 million plus travel and miscellaneous expenses, if any, to Avista Capital Partners (“Avista”) and Crestview Advisors, LLC (“Crestview”), majority owners of the Company’s former Parent. In addition, pursuant to a consulting agreement dated as of December 18, 2015 by and among Parent, Avista and Crestview, Crestview is entitled to 50% of any management fee actually received by Avista. Such fee will no longer be paid in future periods. The management fee paid by the Company for the three months ended September 30, 2017 and 2016 amounted to nil and $0.4 million, respectively. The management fee paid by the Company for the nine months ended September 30, 2017 and 2016 amounted to $1.0 million and $1.3 million, respectively.Contents

On December 18, 2015, Crestview and the Company’s former Parent consummated a transaction whereby Crestview became the beneficial owner of approximately 35% of the Company’s former Parent. Under the terms of the agreement, Crestview’s funds purchased units held by Avista and other unit holders, and separately made a $125.0 million primary investment in newly-issued units.

~~On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in the Company’s former Parent.~~

~~As of September 30, 2017, all the proceeds from the funds’ investments of Avista and Crestview in the amount of $143.3 million, net of transaction costs have been contributed to the Company.~~

During the nine months ended September 30, 2017, the Company’s former Parent bought back vested Class A and Class B units from certain former employees of the Company. The former employees had the option to sell their units at a price set by the Company’s former Parent or decline such offer. The cash proceeds used to repurchase such units have been contributed down to the Company and reflected as such. The Company repurchased 415,494 of Class A units and 243,270 of Class B units for $8.8 million.

~~As a result of the Company’s IPO, the Class A and Class B shares were converted to common shares of the Company.~~

~~As of September 30, 2017 and December 31, 2016, the receivable balance from the former Parent and Members amounted to nil and $0.3 million, respectively.~~

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
~~Forward-Looking Statements~~Overview
Certain statements contained in this Quarterly Report that are not historical facts contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Such statements involve certain risks, uncertainties and assumptions. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “anticipate,” “expect,” “believe,” “estimate,” “plan,” “project,” “predict,” “potential,” or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including, but not limited to:
·                  ~~the wide range of competition we face;~~
·                  ~~competitors that are larger and possess more resources;~~
·                  ~~competition for the leisure and entertainment time of audiences;~~
·                  ~~whether our edge-out strategy will succeed;~~
·                  ~~dependence upon a business services strategy, including our ability to secure new businesses as customers;~~
·                  ~~conditions in the economy, including potentially uncertain economic conditions, unemployment levels and turbulent developments in the housing market;~~
·                  ~~demand for our bundled broadband communications services may be lower than we expect;~~
·                  ~~our ability to respond to rapid technological change;~~
·                  ~~increases in programming and retransmission costs;~~
·                  ~~a decline in advertising revenues;~~
·                  ~~the effects of regulatory changes in our business;~~
·                  ~~our substantial level of indebtedness;~~
·                  ~~certain covenants in our debt documents;~~
·                  ~~programming exclusivity in favor of our competitors;~~
·                  ~~inability to obtain necessary hardware, software and operational support;~~
·                  ~~loss of interconnection arrangements;~~
·                  ~~failure to receive support from various funds established under federal and state law;~~
·                  ~~exposure to credit risk of customers, vendors and third parties;~~
·                  ~~strain on business and resources from future acquisitions or joint ventures, or the inability to identify suitable acquisitions;~~
·                  ~~our ability to manage the risks involved in the foregoing; and~~
other factors described from time to time in our reports filed or furnished with the SEC, and in particular those factors set forth in the section entitled “Risk Factors” in our final prospectus filed with the SEC on May 25, 2017 and other reports subsequently filed with the SEC. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this report are made as of the date hereof or the date specified herein, based on information ~~available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.~~
~~Overview~~

We are one of the ~~sixth largest~~nation’s leading broadband providers offering an expansive portfolio of advanced services, including high-speed data (“HSD”), cable ~~operator in the United States ranked by number of customers as of December 31, 2016. We provide HSD, Video, Telephony,~~television (“Video”), and ~~business-class~~digital telephony (“Telephony”) services to residential customers and offer a ~~service area that includes approximately 3.1 million homes~~full range of products and ~~businesses.~~services to business customers. Our services are delivered across ~~nineteen~~15 markets via our efficient, advanced ~~HFC cable~~hybrid fiber-coax (“HFC”) network. Our footprint covers ~~over 300 communities in~~certain suburban areas within the states of Alabama, Florida, Georgia, ~~Illinois, Indiana, Maryland,~~ Michigan, ~~Ohio,~~ South Carolina and Tennessee. At June 30, 2023, our broadband networks passed 1.9 million homes and businesses and served 522,400 customers.

Our core strategy is to provide outstanding service at affordable prices. We execute this strategy by managing our operations to focus on the customer. We believe that the customer experience should be reliable, easy and pleasantly surprising, every time. To achieve this customer experience, we operate one of the most technically advanced and high-performing networks in the industry.

We operate under a broadband first strategy. Our advanced network offers HSD speeds up to 1.2 GIG (1200 Mbps) in approximately 99% of our footprint and HSD speeds of 5 GIG (5000 Mbps) in our Greenfield expansion markets. Led by our robust HSD offering, our products are available either as ~~a bundle or as~~ an individual service or a bundle to residential and business ~~services~~service customers. ~~As of September 30, 2017, 776,400 customers subscribed to our services.~~
Since commencing operations in 2001, our focus has been to offer a competitive alternative cable service and establish a brand with a strong market position. We have scaled our business through (i) organic subscriber growth and increased penetration within our existing markets and footprint, (ii) edge-outs to grow our footprint, (iii) upgrades to introduce enhanced broadband services to networks we have acquired, (iv) entry into business services, with a broad range of HSD, Video and Telephony products, and (v) acquisitions and integration of cable systems.
We operate primarily in economically stable suburbs that are adjacent to large metropolitan areas as well as secondary and tertiary markets, which we believe have favorable competitive and demographic profiles and include businesses operating across a range of industries. We benefit from the ability to augment our footprint by pursuing value-accretive network extensions, or edge-outs, to increase our addressable market and grow our customer base. We have historically made selective capital investments in edge-outs to facilitate growth in residential and business services.
We are focused on efficient capital spending and maximizing adjusted earnings before income taxes, depreciation and amortization (“Adjusted EBITDA”) through an Internet-centric growth strategy while maintaining a profitable video subscriber base. Based on our per subscriber economics, we believe that HSD represents the greatest opportunity to enhance profitability across our residential and business markets.

We ~~believe that our advanced network is designed~~continue to meet our current and future customers’ HSD needs. We offer HSD speeds up to 500 Mbps in over 94% of our footprint and will be expanding our 1 Gbps service in more than 95% of our markets beginning in 2018.
Our most significant competitors are other cable television operators, direct broadcast satellite providers and certain telephone companies that offer services that provide features and functionality similar toexperience strong demand for our HSD ~~Video~~service. For the three and ~~Telephony services. We believe that our strategy~~six months ended June 30, 2023, the average percentage of ~~operating primarily~~HSD only new connections was approximately 87%, consistent with the corresponding periods in ~~suburban areas provides better operating~~2022. Customers also connected at higher speeds with approximately 80% of HSD only new connections purchasing 500MB or higher speeds during the three and ~~financial stability~~six months ended June 30, 2023, representing an approximate 10% increase compared to the ~~more competitive environments~~corresponding periods in large metropolitan markets. We have a history of successfully competing in chosen markets despite the presence of competing incumbent providers through attractive high value bundling of our services and investments in new service offerings.2022.
We believe that a prolonged economic downturn, especially any downturn in the housing market, may negatively impact our ability to attract new subscribers and generate increased revenues. Additional capital and credit market disruptions could cause broader economic downturns, which could also lead to lower demand for our products and lower levels of advertising sales. A slowdown in growth of the housing market could severely affect consumer confidence and may cause increased delinquencies or cancellations by our customers or lead to unfavorable changes in the mix of products purchased.
In addition, we are susceptible to risks associated with the potential financial instability of our vendors and third parties on which we rely to provide products and services or to which we delegate certain functions. The same economic conditions that may affect our customers, as well as volatility and disruption in the capital and credit markets, also could adversely affect vendors and third parties and lead to significant increases in prices, reduction in output or the bankruptcy of our vendors or third parties upon which we rely. In addition, programming costs are a significant part of our operating expenses and are expected to continue to increase primarily as a result of contractual rate increases and additional service offerings.
~~Ownership and Basis of Presentation~~
Our business commenced operations in 2001. WideOpenWest, Inc. (“WOW”) was founded in 2012 as WideOpenWest Kite, Inc., a Delaware corporation. WideOpenWest Kite, Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017.
~~We were wholly owned by Racecar Acquisition, LLC (“Racecar Acquisition”), which is a wholly owned subsidiary of WideOpenWest Holdings, LLC (“Parent”).~~
On April 1, 2016, we consummated a restructuring (“Restructuring”) whereby WideOpenWest Finance, LLC (“WOW Finance”) became a wholly owned subsidiary of WOW. Previously, WOW Finance was owned by WideOpenWest Illinois, Inc., WideOpenWest Ohio, Inc., WideOpenWest Cleveland, Inc., WOW Sigecom, Inc. and WOW (collectively, the “Members”). Prior to the Restructuring, the Members were wholly owned subsidiaries of Racecar Acquisition.
As a result of the Restructuring, each of the Members, other than WOW, merged with and into WOW. WOW became the sole subsidiary of Racecar Acquisition and WOW Finance became a wholly owned subsidiary of WOW.
On May 25, 2017, we completed an initial public offering (“IPO”) of shares of our common stock, which are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “WOW”. Prior to our IPO, WOW was wholly owned by Racecar Acquisition, which is a wholly owned subsidiary of the Parent. Subsequent to the IPO, Racecar Acquisition and Parent were liquidated and our shares distributed to their respective members. In the following context, the terms we, us, WOW, or the Company may refer, as the context requires, to WOW or, collectively, WOW and its subsidiaries.
Certain employees of WOW participated in equity plans administered by the Company’s former Parent. The management units from the equity plan were issued from the former Parent’s ownership structure, the management units’ value directly correlated to the results of WOW, as the primary asset of the former Parent’s investment in WOW. The management units for the equity plan have been “pushed down” to the Company, as the management units had been utilized as equity-based compensation for WOW management. Immediately prior to the Company’s IPO, these management units were cancelled.
~~Refinancing of the Term B Loans and Revolving Credit Facility~~
On July 17, 2017, the Company entered into an eighth amendment (“Eighth Amendment”) to its Credit Agreement, with JPMorgan Chase Bank, N.A., as the administrative agent and revolver agent. Under the Eighth Amendment, (i) we borrowed new Term B loans in an aggregate principal amount of $230.5 million, for a total outstanding Term B loan principal amount of $2.28 billion and (ii) the revolving credit commitments were increased by an aggregate principal amount of $100.0 million, for a total outstanding revolving credit commitment of $300.0 million available to us under the revolving credit facility. The new Term B loans will mature on August 19, 2023 and bear interest, at our option, at a rate equal to ABR plus 2.25% or LIBOR plus 3.25%. Loans under the revolving credit facility will mature on May 31, 2022 and bear interest, at our option, at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. The guarantees, collateral and covenants in the Eighth Amendment remain unchanged from those contained in the credit agreement prior to the Eighth Amendment.
~~On May 31, 2017, the Company entered into~~ a seventh amendment (“Seventh Amendment”) to its Credit Agreement. The Seventh Amendment (i) refinanced the existing $200.0 million of borrowings available to the Company under the revolving credit facility and (ii) extended the maturity date of the revolving credit facility to May 31, 2022, unless an earlier date was triggered under certain circumstances. The interest rate margins applicable to the revolving credit facility bore interest at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. Additionally, the Company entered into an Incremental Commitment Letter to its revolving credit facility that increased the available borrowings to $300.0 million that became available upon compliance by the Company with certain conditions (see redemption of 10.25% senior notes whereby such conditionality was subsequently achieved as a result of the eighth amendment). The guarantees, collateral and covenants in the Seventh Amendment remain unchanged from those contained in the credit agreement prior to the Seventh Amendment.
~~Partial Redemption of 10.25% Senior Notes~~
On March 20, 2017, we utilized cash on hand to redeem $95.1 million in aggregate principal amount outstanding of the 10.25% Senior Notes. In addition to the partial redemption, we paid accrued interest on the 10.25% Senior Notes of $1.7 million and a call premium of $4.9 million. We recorded a loss on early extinguishment of debt of $5.0 million, primarily representing the cash call premium paid.
~~Redemption of 10.25% Senior Notes~~
On July 17, 2017, we used the proceeds of the new Term B loans, and borrowed $180.0 million under our revolving credit facility and cash on hand to fully redeem all of the Company’s remaining outstanding 10.25% Senior Notes due 2019 (the “Senior Notes”) and to pay certain fees and expenses. In connection with the redemption of the 10.25% Senior Notes, we satisfied and discharged the indenture governing the Senior Notes. We paid $729.9 million in principal amount, incurred prepayment fees of $18.7
million and paid accrued interest of $37.6 million. We recorded a loss on early extinguishment of debt of $19.8 million related to the write-off of deferred financing costs, premium, and prepayment fees.
~~Retirement of 13.38% Senior Subordinated Notes~~

During the ~~year ended December 31, 2016,~~first half of 2023, WOW focused on its market expansion strategy by building out its network in locations adjacent and nonadjacent to its existing network and bringing its state-of-the-art all IP fiber technology and award-winning customer service to those markets. During the first quarter of 2023, we ~~made two redemption payments to early retire our 13.38% Senior Subordinated Notes. The final redemption payment was made on December 18, 2016.~~launched services in Altamonte Springs, Florida, and Headland, Alabama. During the second quarter of 2023, we launched services in Wekiwa Springs, Florida. As of June 30, 2023, we had widespread construction underway across the Central Florida communities of Casselberry, Fern Park, Forest City, Lake Mary, Longwood, Ocoee, Sanlando Springs, and Winter Springs.

~~Sale of Lawrence, Kansas System~~Key Transactions Impacting Operating Results and Financial Condition

Share Repurchase Program

On ~~January 12, 2017, we and Midcontinent Communications (“MidCo”) consummated an asset purchase agreement under which MidCo acquired~~October 4, 2022, our ~~Lawrence, Kansas system for net proceeds~~Board of ~~approximately $213.0~~Directors authorized us to repurchase up to $50.0 million ~~in cash, subject to certain normal and customary purchase price adjustments set forth in the Agreement. The results~~ of our ~~Lawrence, Kansas system are included in the three and nine months ended September~~outstanding common stock. As of June 30, ~~2016 unaudited condensed consolidated financial statements but not included in the three and nine months ended September 30, 2017 unaudited condensed consolidated financial statements.~~2023, we have completed our Share Repurchase Program with approximately 4.9 million shares purchased for $50.4 million (including commissions).

~~Avista and Crestview Partners Investment~~Critical Accounting Estimates

~~On December 18, 2015, Crestview Advisors, LLC (“Crestview”) and our former Parent consummated~~For a ~~transaction whereby Crestview became the beneficial owner of approximately 35%~~discussion of our ~~former Parent. Under terms~~critical accounting estimates and the means by which we develop estimates refer to “Item 7. Management’s Discussion and Analysis of ~~the agreement (“Crestview Purchase Agreement”), Crestview’s funds purchased units held by Avista Capital Partners (“Avista”)~~Financial Condition and ~~other unit holders, and separately made a $125.0 million primary investment in newly-issued units.~~
~~On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units~~Results of Operations” in our ~~former Parent.~~
~~As of September 30, 2017, all the proceeds~~2022 Annual Report on Form 10-K. There have been no material changes from the ~~funds’ investments of Avista and Crestview in the amount of $143.3 million, net of transaction costs have been contributed to the Company.~~
~~Critical Accounting Policies and Estimates~~
~~In the preparation of our unaudited condensed consolidated financial statements, we are required to make~~critical estimates judgments and assumptions we believe are reasonable based upon the information available, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Critical accounting policies are defined as those policies that are reflective of significant judgments, estimates and uncertainties, which would potentially result in materially different results under different assumptions and conditions. We believe the following accounting policies are the most critical in the preparation of our unaudited condensed consolidated financial statements because of the judgment necessary to account for these matters and the significant estimates involved, which are susceptible to change.
~~Valuation of Plant, Property and Equipment and Intangible Assets~~
~~Carrying Value.~~ The aggregate carrying value of our plant, property and equipment and intangible assets (including franchise operating rights and goodwill) comprised approximately 95% of our total assets at September 30, 2017 and December 31, 2016, respectively.
Plant, property and equipment are recorded at cost and include costs associated with the construction of cable transmission and distribution facilities and new service installations at customer locations. Capitalized costs include materials, labor and certain indirect costs attributable to the capitalization activity. Maintenance and repairs are expensed as incurred. Upon sale or retirement of an asset, the cost and related depreciation are removed from the related accounts, and resulting gains or losses are reflected in operating results. We make judgments regarding the installation and construction activities to be capitalized. We capitalize direct labor associated with capitalizable activities and indirect cost using standards developed from operational data, including the proportionate time to perform a new installation relative to the total technical operations activities and an evaluation of the nature of the indirect costs incurred to support capitalizable activities. Judgment is required to determine the extent to which indirect costs that have been incurred are related to capitalizable activities and, as a result, should be capitalized. Indirect costs include (i) employee benefits and payroll taxes associated with capitalized direct labor, (ii) direct variable cost of installation and construction vehicle costs, (iii) the direct variable costs of support personnel directly involved in assisting with installation activities, such as dispatchers and (iv) indirect costs directly attributable to capitalizable activities.
Intangible assets consist primarily of acquired franchise operating rights, franchise-related customer relationships and goodwill. Franchise operating rights represent the value attributable to agreements with local franchising authorities, which allows
access to homes in the public right of way. Our franchise operating rights were acquired through business combinations. We do not amortize cable franchise operating rights as we have determined that they have an indefinite life. Costs incurred in negotiating and renewing cable franchise agreements are expensed as incurred. Franchise-related customer relationships represent the value of the benefit to us of acquiring the existing cable subscriber base and are amortized over the estimated life of the subscriber base, generally four years, on a straight-line basis. Goodwill represents the excess purchase price over the fair value of the identifiable net assets we acquired in business combinations.
~~Asset Impairments.~~ Long-lived assets, including plant, property and equipment and intangible assets subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying value of the asset.
We evaluate the recoverability of our franchise operating rights at least annually on October 1, or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. Franchise operating rights are evaluated for impairment by comparing the carrying value of the intangible asset to its estimated fair value, utilizing both quantitative and qualitative methods. Qualitative analysis is performed for franchise assets in the event the previous analysis indicates that there is a significant margin between carrying value of franchise operating rights and estimated fair value of those rights, and that it is more likely than not that the estimated fair values equal or exceed carrying value. For franchise assets that undergo quantitative analysis, we calculate the fair value of franchise operating rights using the multi-period excess earnings method, an income approach, which calculates the value of an intangible asset by discounting its future cash flows. The fair value is determined based on estimated discrete discounted future cash flows attributable to each franchise operating right intangible asset using assumptions consistent with internal forecasts. Assumptions key in estimating fair value under this method include, but are not limited to, revenue and subscriber growth rates (less anticipated customer churn), operating expenditures, capital expenditures (including any build out), market share achieved, contributory asset charge rates, tax rates and discount rate. The discount rate used in the model represents a weighted average cost of capital and the perceived risk associated with an intangible asset such as our franchise operating rights. The estimates and assumptions madedescribed in our ~~valuations are inherently subject to significant uncertainties, many~~Form 10-K.

15

Table of which are beyond our control, and there is no assurance that these results can be achieved. The primary assumptions for which there is a reasonable possibility of the occurrence of a variation that would significantly affect the measurement value include the assumptions regarding revenue growth, programming expense growth rates, the amount and timing of capital expenditures and the discount rate utilized.Contents

We conduct our cable operations under the authority of state cable television franchises, except in Alabama and parts of Michigan where we continue to operate under local franchises. Our franchises generally have service terms that last from five to 15 years, but we operate in some states that have perpetual terms. All of our term-limited franchise agreements are subject to renewal. The renewal process for our state franchises is specified by state law and tends to be a simple process, requiring the filing of a renewal application with information no more burdensome than that contained in our original application. Although renewal is not assured, there are provisions in the law that protect the Company from arbitrary or unreasonable denial. This is especially true for competitive cable providers like us. In most areas in which we operate, we are a “competitive” operator, meaning that we compete directly in the service area with at least one other franchised cable operator. The Cable Television Consumer Protection and Competition Act of 1992 (the “Cable Act”) says that “a franchising authority may not unreasonably refuse to award an additional competitive franchise.” The Cable Act also provides a formal renewal process that protects cable operators against arbitrary or unreasonable refusals to renew a franchise. In those few areas where we operate under local franchises, we can use this formal renewal process if needed.

In our experience, state and local franchising authorities encourage our entry into the market, as our competitive presence often leads to overall better service, more service options and lower prices. In our and our expert advisors’ experience, it has not been the practice for a franchising authority to deny a cable franchise renewal. We have never had a renewal denied.

We also, at least annually on October 1, evaluate our goodwill for impairment for each reporting unit (which generally are represented by geographical operations of cable systems managed by us), utilizing both quantitative and qualitative methods. Qualitative analysis is performed for goodwill in the event the previous analysis indicates that there is a significant margin between carrying value of goodwill and estimated fair value of the reporting units, and that it is more likely than not that the estimated fair value equals or exceeds carrying value. For our quantitative evaluation of our goodwill, we utilize both an income approach as well as a market approach. The income approach utilizes a discounted cash flow analysis to estimate the fair value of each reporting unit, while the market approach utilizes multiples derived from actual precedent transactions of similar businesses and market valuations of guideline public companies. In the event that the carrying amount exceeds the fair value, we would be required to estimate the fair value of the assets and liabilities of the reporting unit as if the unit was acquired in a business combination, thereby revaluing goodwill. Any excess of the carrying value of goodwill over the revalued goodwill would be expensed as an impairment loss.

~~Fair Value Measurements~~

GAAP provides guidance for a framework for measuring fair value in the form of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Financial assets and liabilities are classified by level in their entirety based upon the lowest level of input that is significant to the fair value measurement. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability due to the fact there is no market activity. We record our interest rate swaps at fair value on the balance sheet and perform recurring fair value measurements with respect to these derivative financial instruments. The fair value measurements of our interest rate swaps were determined using cash flow valuation models. The inputs to the cash flow models consist of, or are derived from, observable data for substantially the full term of the swaps. This observable data includes interest and swap rates, yield curves and credit ratings, which are retrieved from available market data. The valuations are then adjusted for our own nonperformance risk as well as the counterparty as required by the provisions of the authoritative guidance using a discounted cash flow technique that accounts for the duration of the interest rate swaps and our and the counterparty’s risk profile.

We also have non-recurring valuations primarily associated with (i) the application of acquisition accounting and (ii) impairment assessments, both of which require that we make fair value determinations as of the applicable valuation date. In making these determinations, we are required to make estimates and assumptions that affect the recorded amounts, including, but not limited to, expected future cash flows, market comparables and discount rates, remaining useful lives of long-lived assets, replacement or reproduction costs of plant, property and equipment and the amounts to be recovered in future periods from acquired net operating losses and other deferred tax assets. To assist us in making these fair value determinations, we may engage third- party valuation specialists. Our estimates in this area impact, among other items, the amount of depreciation and amortization, and any impairment charges that we may report. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain. A significant portion of our long-lived assets were initially recorded through the application of acquisition accounting and all of our long-lived assets are subject to periodic or event-driven impairment assessments.

~~Legal and Other Contingencies~~

Legal and other contingencies have a high degree of uncertainty. When a loss from a contingency becomes estimable and probable, a reserve is established. The reserve reflects management’s best estimate of the probable cost of ultimate resolution of the matter and is revised as facts and circumstances change. A reserve is released when a matter is ultimately brought to closure or the statute of limitations lapses. The actual costs of resolving a claim may be substantially different from the amount of reserve we recorded. In addition, in the normal course of business, we are subject to various other legal and regulatory claims and proceedings directed at or involving us, which in our opinion will not have a material adverse effect on our financial position or results of operations or liquidity.

~~Programming Agreements~~

We exercise significant judgment in estimating programming expense associated with certain video programming contracts. Our policy is to record video programming costs based on our contractual agreements with our programming vendors, which are generally multi-year agreements that provide for us to make payments to the programming vendors at agreed upon market rates based on the number of customers to which we provide the programming service. If a programming contract expires prior to the parties’ entry into a new agreement and we continue to distribute the service, we estimate the programming costs during the period there is no contract in place. In doing so, we consider the previous contractual rates, inflation and the status of the negotiations in determining our estimates. When the programming contract terms are finalized, an adjustment to programming expense is recorded, if necessary, to reflect the terms of the new contract. We also make estimates in the recognition of programming expense related to other items, such as the accounting for free periods, timing of rate increases and credits from service interruptions, as well as the allocation of consideration exchanged between the parties in multiple-element transactions.

Significant judgment is also involved when we enter into agreements which result in us receiving cash consideration from the programming vendor, usually in the form of advertising sales, channel positioning fees, launch support or marketing support. In these situations, we must determine based upon facts and circumstances if such cash consideration should be recorded as revenue, a reduction in programming expense or a reduction in another expense category (e.g., marketing).

~~Income Taxes~~

We account for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the unaudited condensed consolidated financial statements in the period of enactment.

As a result of the Restructuring, WOW Finance became a single member LLC for U.S. federal income tax purposes. The Restructuring is treated as a change in tax status related to WOW Finance, since a single member LLC is required to record current and deferred income taxes reflecting the results of its operations.
From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. Examples of such transactions include business acquisitions and dispositions, including dispositions designed to be tax-deferred transactions for tax purposes, investments and certain financing transactions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. We prepare and file tax returns based on interpretations of tax laws and regulations. In the normal course of business, our tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax, interest and penalty assessments by these taxing authorities. In determining our income tax provision for financial reporting purposes, we establish a reserve for uncertain income tax positions unless such positions are determined to be more likely than not of being sustained upon examination, based on their technical merits, and, accordingly, for financial reporting purposes, we only recognize tax benefits taken on the tax return that we believe are more likely than not of being sustained. There is considerable judgment involved in determining whether positions taken on the tax return are more likely than not of being sustained.
We adjust our tax reserve estimates periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The condensed consolidated income tax provision of any given year includes adjustments to prior year income tax accruals that are considered appropriate and any related estimated interest. Our policy is to recognize, when applicable, interest and penalties on uncertain income tax positions as part of income tax provision.
Homes Passed and Subscribers
We report homes passed as the number of serviceable addresses, such as single residence homes, apartments and condominium units, and businesses passed by our broadband network and listed in our database. We report total subscribers as the number of subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe. We define each of the individual HSD subscribers, Video subscribers and Telephony subscribers as a ~~RGU.~~revenue generating unit (“RGU”). The following table summarizes homes passed, total subscribers and total RGUs for our services as of each respective date and ~~does not make adjustment~~ for ~~any of~~comparability purposes, presents subscribers associated with the Company’s ~~acquisitions or divestitures:~~operations as of each specified date:

Jun. 30,

Sep. 30,

Dec. 31,

Mar. 31,

Jun. 30,


2022

2022

2022

2023

2023
Homes passed

1,886,000

1,886,000

1,886,000

1,885,700

1,892,600
Total subscribers

536,600

538,100

530,600

527,300

522,400
HSD RGUs

517,200

518,600

511,600

508,700

507,800
Video RGUs

135,500

129,900

123,200

117,100

110,000
Telephony RGUs

95,200

92,900

89,900

87,700

85,300
Total RGUs

747,900

741,400

724,700

713,500

703,100

Increase/
(decrease) (3)

Dec. 31,
2015

Mar. 31,
2016

Jun. 30,
2016

Sep. 30,
2016 (2)

Dec. 31,
2016

Mar. 31,
2017

Jun. 30,
2017

Sep. 30,
2017

Sep. 30,
2017 vs.
Sep. 30,
2016

Homes passed

3,003,100

3,010,700

3,022,800

3,075,000

3,094,300

3,047,800

3,072,500

3,097,500

22,500

Total subscribers(1)

777,800

784,600

785,600

800,800

803,400

780,100

776,500

776,400

(24,400
)
HSD RGUs

712,500

722,200

725,700

742,000

747,400

729,000

727,600

730,000

(12,000
)
Video RGUs

547,500

537,200

524,300

514,900

501,400

474,000

458,200

442,500

(72,400
)
Telephony RGUs

296,800

286,600

277,500

267,400

258,100

243,000

235,400

226,200

(41,200
)
Total RGUs

1,556,800

1,546,000

1,527,500

1,524,300

1,506,900

1,446,000

1,421,200

1,398,700

(125,600
)
~~(1)~~                                 ~~Defined as~~The following table displays the ~~number of subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe.~~
~~(2)~~                                 ~~Includes the following~~ homes passed and ~~subscriber numbers~~subscribers related to ~~our Lawrence, Kansas system~~the Company’s market expansion activities, which ~~was divested on January 12, 2017: homes passed was 67,900; total subscribers was 31,100; HSD RGUs was 28,400; Video RGUs was 15,300; Telephony RGUs was 7,200;~~includes edge-outs and ~~Total RGUs was 50,900.~~Greenfield expansion:


Jun. 30,

Sep. 30,

Dec. 31,

Mar. 31,

Jun. 30,


2022

2022

2022

2023

2023
Homes passed

78,900

79,100

81,100

85,600

92,800
Total subscribers

19,700

19,800

20,300

21,200

23,200
HSD RGUs

19,600

19,700

20,200

21,100

22,900
Video RGUs

6,900

6,900

6,900

6,900

7,000
Telephony RGUs

2,800

2,800

2,900

2,900

3,100
Total RGUs

29,300

29,400

30,000

30,900

33,000

~~(3)~~                                 Increase (decrease) in homes passed and subscriber numbers during the twelve months ended September 30, 2017 related to edge-outs includes the following; homes passed was 70,100; total subscribers was 16,200; HSD RGUs was 16,000; Video RGUs was 8,600; Telephony RGUs was 3,100; and Total RGUs was 27,700.
For the quarter ended September 30, 2017, total subscribers decreased by approximately 24,400 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total subscribers decreased by approximately 9,400 over this period.
For the quarter ended September 30, 2017, total HSD RGUs decreased by approximately 12,000 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total HSD RGUs increased by approximately 400 over this period.
For the quarter ended September 30, 2017, total Video RGUs decreased by approximately 72,400 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total Video RGUs decreased by approximately 65,600 over this period.
For the quarter ended September 30, 2017, total Telephony RGUs decreased by approximately 41,200 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total Telephony RGUs decreased by approximately 37,100 over this period.
For the quarter ended September 30, 2017, total RGUs decreased by approximately 125,600 compared to the quarter ended September 30, 2016. Excluding the impact of the Lawrence, Kansas system disposition and edge-outs, total RGUs decreased by approximately 102,300 over this period.
Subscriber information for acquired entities is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies. While we take appropriate steps to ensure subscriber information is presented on a consistent and accurate basis at any given balance sheet date, we periodically review our policies in light of the variability we may encounter across our different markets due to the nature and pricing of products, ~~and~~ services, and billing systems. Accordingly, we may from time to time make appropriate adjustments to our subscriber information based on such reviews.
Financial Statement Presentation
Revenue
Our operating revenue is primarily derived from monthly recurring charges for HSD, Video, Telephony and ~~Telephony~~other business services to residential and business customers, ~~other business services, advertising and~~in addition to other revenues.
·
● HSD revenue consists primarily of fixed monthly fees for data service and rental of modems.
● Video revenue consists primarily of fixed monthly fees for basic, premium and digital cable television services and rental of video converter equipment, as well as charges from optional services, such as pay-per-view, video-on-demand and other events available to the customer. The Company is required to pay certain cable franchising authorities an amount based on the percentage of gross revenue derived from video services. The Company generally passes these fees on to the customer, which is included in video revenue.
● Telephony revenue consists primarily of fixed monthly fees for local service and enhanced services, such as call waiting, voice mail and measured and flat rate long-distance service.

16

Table of ~~fixed monthly fees for data service and rental of cable modems.~~Contents

· Video revenue consists of fixed monthly fees for basic, premium and digital cable television services and rental of video converter equipment, as well as fees from pay-per-view, video-on-demand and other events that involve a charge for each viewing.

· ~~Telephony revenue consists primarily of fixed monthly fees for local service and enhanced services, such as call waiting, voice mail and measured and flat rate long-distance service.~~

· Other business service revenue consists of session initiated protocol, web hosting, metro Ethernet, wireless backhaul, broadband carrier services, dark fiber sales, advanced collocation and cloud infrastructure services.

· ~~Other revenue consists primarily of franchise and other regulatory fees, advertising revenue installation services and other ancillary customer fees.~~

●

Other business service revenue consists primarily of monthly recurring charges for session initiated protocol, web hosting, metro Ethernet, wireless backhaul, broadband carrier services and cloud infrastructure services provided to business customers.

●

Other revenue consists primarily of revenue from line assurance warranty services provided to residential and business customers and revenue from late fees and advertising placement.

Revenues attributable to monthly subscription fees charged to customers for our HSD, Video and Telephony services provided by our ~~cable systems~~broadband networks were ~~87%~~ 93%of total revenue for both the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022. The remaining percentage of total revenue represents non-subscription revenue ~~is derived~~ primarily from ~~franchise~~other business services, line assurance warranty services and ~~other regulatory fees (which are collected by us but then paid to local authorities),~~ advertising ~~revenues and installation services.~~placement.

Costs and Expenses

Our expenses primarily consist of operating, selling, general and administrative expenses, depreciation and amortization expense, and interest expense.

Operating expenses primarily include programming costs, data costs, transport costs and network access fees related to our HSD, Video and Telephony services, ~~cable service related~~hardware/software expenses, ~~costs of dark fiber sales,~~ network operations and maintenance services, customer service and call center expenses, bad debt, billing and collection expenses and franchise ~~fees~~ and other regulatory fees.

Selling, general and administrative expenses primarily include salaries and benefits of corporate and field management, sales and marketing personnel, human resources and related administrative costs.

~~Operating~~Depreciation and amortization includes depreciation of our network infrastructure, including associated equipment, hardware and software, buildings and leasehold improvements, and finance lease obligations. Amortization is recognized on other intangible assets with definite lives primarily related to acquisitions. Depreciation and amortization expense is presented separately from operating and selling, general and administrative expenses ~~exclude depreciation and amortization expense, which is presented separately~~ in the accompanying unaudited condensed consolidated statements of operations.

~~Depreciation and amortization~~ ~~includes depreciation of our broadband networks and equipment, buildings and leasehold improvements and amortization of other intangible assets with definite lives primarily related to acquisitions.~~
~~Realized and unrealized gain on derivative instruments, net~~ includes adjustments to fair value for the various interest rate swaps and caps we enter into on the required portions of our outstanding variable debt. As we do not use hedge accounting for financial reporting purposes, at the end of each reporting period, the adjustments to fair value of our interest rate swaps and caps are recorded to earnings.
We control our costs of operations by maintaining strict controls on expenditures. More specifically, we are focused on managing our cost structure by improving workforce productivity, increasing the effectiveness of our purchasing activities and maintaining discipline in customer acquisition. We expect programming expenses to continue to increase per Video subscriber due to a variety of factors, including increased demands by owners of some broadcast stations for carriage of other services or payments to those broadcasters for retransmission consent and annual increases imposed by programmers with additional selling power as a result of media consolidation. We have not been able to fully pass these increases on to our customers without the loss of customers, nor do we expect to be able to do so in the future.

17

Table of Contents

Results of ~~operations~~Operations

The following table summarizes our results of operations for the ~~three months ended September 30, 2017 and 2016:~~periods presented:

Three months ended

Six months ended

June 30,

June 30,


2023

2022

2023

2022

(in millions)
Revenue

$
172.6

$
176.1

$
344.8

$
350.7
Costs and expenses:





Operating (excluding depreciation and amortization)

75.6

83.0

153.7

170.3
Selling, general and administrative

43.6

39.3

129.1

77.6
Depreciation and amortization

46.7

43.9

92.2

87.9
Impairment losses on intangibles

128.1

—

128.1

—

294.0

166.2

503.1

335.8
(Loss) income from operations

(121.4)

9.9

(158.3)

14.9
Other income (expense):






Interest expense

(17.3)

(7.9)

(32.2)

(15.3)
Other income, net

0.8

6.3

2.0

14.2
(Loss) income before provision for income tax

(137.9)

8.3

(188.5)

13.8
Income tax benefit (expense)

36.2

(4.3)

48.8

(4.1)
Net (loss) income

$
(101.7)

$
4.0

$
(139.7)

$
9.7

Three months
ended September 30,

Change

2017

2016

$

%

(in millions)

Revenue

$
297.8

$
311.2

$
(13.4
)
(4
)%
Costs and expenses:

Operating (excluding depreciation and amortization)

153.2

167.1

(13.9
)
(8
)%
Selling, general and administrative

38.1

32.6

5.5

17
%
Depreciation and amortization

49.0

49.6

(0.6
)
(1
)%
Management fee to related party

—

0.4

(0.4
)
*

240.3

249.7

(9.4
)
(4
)%
Income from operations

57.5

61.5

(4.0
)
(7
)%
Other income (expense):

Interest expense

(32.2
)
(52.9
)
20.7

39
%
Loss on early extinguishment of debt

(26.1
)
(28.1
)
2.0

7
%
Other income, net

0.3

1.9

(1.6
)
(84
)%
Loss before provision for income taxes

(0.5
)
(17.6
)
17.1

97
%
Income tax expense

(1.6
)
(2.7
)
1.1

41
%
Net loss

$
(2.1
)
$
(20.3
)
$
18.2

90
%
Revenue
~~The results of our Lawrence, Kansas system are included in the three months ended September 30, 2016 but are not included in the three months ended September 30, 2017.~~
*                 ~~Not meaningful~~
~~The following table summarizes our results of operations for the nine months ended September 30, 2017 and 2016:~~

Nine months
ended September 30,

Change

2017

2016

$

%

(in millions)

Revenue

$
895.3

$
921.0

$
(25.7
)
(3
)%
Costs and expenses:

Operating (excluding depreciation and amortization)

470.4

499.1

(28.7
)
(6
)%
Selling, general and administrative

100.9

86.2

14.7

17
%
Depreciation and amortization

150.1

155.0

(4.9
)
(3
)%
Management fee to related party

1.0

1.3

(0.3
)
(23
)%

722.4

741.6

(19.2
)
(3
)%
Income from operations

172.9

179.4

(6.5
)
(4
)%
Other income (expense):

Interest expense

(122.0
)
(162.3
)
40.3

25
%
Loss on early extinguishment of debt

(32.1
)
(30.6
)
(1.5
)
5
%
Gain on sale of assets

38.4

—

38.4

*

Unrealized gain on derivative instruments, net

—

2.3

(2.3
)
*

Other income, net

1.7

2.0

(0.3
)
15
%
Income (Loss) before provision for income taxes

58.9

(9.2
)
68.1

*

Income tax benefit

16.4

7.4

9.0

*

Net income (loss)

$
75.3

$
(1.8
)
$
77.1

*

~~The results of our Lawrence, Kansas system are included in the nine months ended September 30, 2016 but are not included in the nine months ended September 30, 2017.~~
*                 ~~Not meaningful~~
~~Three months ended September 30, 2017 compared to the three months ended September 30, 2016~~
~~Revenue~~
~~Revenue~~Total revenue for the three and six months ended ~~September~~June 30, ~~2017~~2023 and 2022 decreased ~~$13.4~~$3.5 million, or 4%2%, and $5.9 million, or 2%, as compared to ~~revenue for~~ the ~~three months ended September 30, 2016~~corresponding periods in 2022 as follows:

Three months ended

Six months ended

June 30,

June 30,


2023

2022

2023

2022

(in millions)
Residential subscription

$
132.2

$
135.4

$
263.8

$
269.7
Business services subscription

28.2

27.8

56.0

55.5
Total subscription

160.4

163.2

319.8

325.2
Other business services

5.1

5.4

10.3

10.7
Other

7.1

7.5

14.7

14.8
Total revenue

$
172.6

$
176.1

$
344.8

$
350.7

Three months ended
September 30,

Change

2017

2016

$

%

(in millions)

Residential subscription

$
231.9

$
243.4

$
(11.5
)
(5
)%
Business services subscription

29.6

27.5

2.1

8
%
Total subscription

261.5

270.9

(9.4
)
(3
)%
Other business services

9.6

10.0

(0.4
)
(4
)%
Other

26.7

30.3

(3.6
)
(12
)%

$
297.8

$
311.2

$
(13.4
)
(4
)%
Subscription Revenue

Total subscription revenue decreased ~~$9.4~~$2.8 million, or 3%2%, and $5.4 million, or 2%, during the three and six months ended ~~September~~June 30, ~~2017~~2023, respectively, as compared to the ~~three months ended September 30, 2016. Contributing~~corresponding periods in 2022. The decreases were primarily driven by a $9.0 million and $19.1 million shift in service offering mix, respectively, as we continue to ~~the~~experience a reduction in Video and Telephony RGUs, and a $4.8 million and $6.1 million decrease in volume across all services. These decreases were ~~approximately $18.8~~partially offset by a $11.0 million ~~of year over year reductions in average total revenue generating units (“RGUs”)~~ and ~~$10.0 million related to the disposition of our Lawrence, Kansas system on January 12, 2017. Offsetting these decreases was a $15.2~~$19.8 million increase in ~~total subscription revenue as a result of increases in the~~ average revenue per unit (“ARPU”), respectively, as HSD customers continue to purchase higher speed tiers; coupled with rate increases issued in the first quarter of ~~our customer base, which~~2023. ARPU is calculated as subscription revenue for each of the HSD, Video and Telephony services divided by the average total RGUs for each service category for the respective period, which increase was driven by customer rate increases to offset the rising cost of programming per subscriber. Additionally, we had an increase of $4.2 million of subscription revenue generated from our NuLink acquisition on September 9, 2016.period.

~~The decrease in other~~Other Business Services
Other business services revenue ofdecreased $0.3 million, or 6%, and $0.4 million, or 4%, isduring the three and six months ended June 30, 2023, as compared to the corresponding periods in 2022. The decreases in each period are primarily due to decreases in data center revenue.

18

Table of Contents

Other Revenue

Other revenue decreased $0.4 million, or 5%, and $0.1 million, or 1%, during the three and six months ended June 30, 2023, as compared to the corresponding period in 2022. The decreases are primarily due to decreases in advertising and line assurance revenue, ~~generated by network construction activities,~~ partially offset by increases in ~~recurring revenue related to our fiber network.~~paper statement revenue.

The decrease in other revenue of $3.6 million, or 12%, is primarily due to a decrease in advertising revenues and a decrease in franchise fees which correlates with the reduction in subscribers over the same period for the three months ended September 30, 2017 compared to the three months ended September 30, 2016.

~~The following table details subscription revenue by service offering for the three months ended September 30, 2017 and September 30, 2016:~~

Three months ended September 30,

Subscription
Revenue

2017

2016

Change

Subscription
Revenue

Average
RGUs(1)

Subscription
Revenue

Average
RGUs(1)

$

%

(in millions)

(in thousands)

(in millions)

(in thousands)

HSD subscription

$
103.9

728.8

$
93.2

733.9

$
10.7

11
%
Video subscription

124.9

450.4

139.6

519.6

(14.7
)
(11
)%
Telephony subscription

32.7

230.8

38.1

272.4

(5.4
)
(14
)%

$
261.5

$
270.9

$
(9.4
)
(3
)%
~~(1)~~ Average subscribers, presented in thousands, is calculated based on reported subscribers and is not adjusted for changes related to the disposition of our Lawrence, Kansas system and acquisition of NuLink.
HSD subscription revenue increased $10.7 million, or 11%, during the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The increase in HSD subscription revenue is primarily attributable to a $2.2 million increase in average HSD RGUs, an $11.0 million year over year increase in HSD ARPU and a $1.9 million increase in HSD subscription revenue related to our NuLink acquisition. Partially offsetting the overall increase was a $4.4 million decrease related to the disposition of our Lawrence, Kansas system.
Video subscription revenue decreased $14.7 million, or 11%, during the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decrease is primarily attributable to a year over year decrease of $16.1 million in average Video RGUs and $4.4 million related to the disposition of our Lawrence, Kansas system. Partially offsetting the overall decrease was a $3.9 million increase year over year in Video ARPU and a $1.9 million increase in video subscription revenue related to our NuLink acquisition.
Telephony subscription revenue decreased $5.4 million, or 14%, during the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decrease is attributable to a $5.1 million decrease related to a year over year decline in average Telephony RGUs and $1.2 million decrease related to the disposition of our Lawrence, Kansas system. Partially offsetting the overall decreases was a $0.3 million increase in year over year Telephony ARPU and a $0.6 million increase in Telephony subscription revenue related to our NuLink acquisition.
Operating expenses (excluding depreciation and amortization)
Operating expenses (excluding depreciation and amortization) decreased ~~$13.9~~$7.4 million, or 8%9%, and $16.6 million, or 10%, during the three and six months ended June 30, 2023, as compared to the corresponding periods in 2022. The decreases are primarily driven by decreases in direct operating expenses, specifically programming expenses of $5.7 million and $11.0 million, respectively which aligns with the reduction in Video RGUs between periods and lower operating expenses related to the transition services agreements, in which WOW was providing post-transaction continuity of service to the two different buyers of our sold service areas during the transition periods (“Transition Services Agreements”), that are offset in Other Income, partially offset by an increase in bad debt expense. The transition service agreements with both buyers expired during the second quarter of 2023.

Incremental contribution
Incremental contribution is defined as subscription services revenue less costs directly incurred from third parties in connection with the provision of such services to our customers (service direct expense). Incremental contribution increased $2.2 million, or 2%, during the three months ended ~~September~~June 30, ~~2017~~2023 compared to the three months ended ~~September~~June 30, ~~2016.~~2022 and $4.9 million, or 2%, during the six months ended June 30, 2023 compared to the six months ended June 30, 2022.
Selling, general and administrative expenses
Selling, general and administrative expenses increased $4.3 million, or 11%, and $51.5 million, or 66%, during the three and six months ended June 30, 2023, respectively, compared to the corresponding periods in 2022. For the three months ended, the increase is primarily attributable to increases in restructuring costs related to employee severance charges. For the six months ended, the increase is primarily attributable to the patent litigation settlement combined with increases in restructuring costs.

Depreciation and amortization expenses
Depreciation and amortization expenses increased $2.8 million, or 6%, and $4.3 million, or 5%, during the three and six months ended June 30, 2023, respectively, compared to the corresponding periods in 2022. The ~~decrease~~increases are primarily due to increases of equipment placed into service as we continue to expand our network.
Impairment losses on intangibles
The Company recognized a non-cash impairment charge related to its franchise operating rights of $128.1 million for the three and six months ended June 30, 2023. The decline is primarily due to ~~reductions~~declining cash flows, which results in ~~Video programming costs that correlate~~an increase in the discount rate, combined with the decline in the Company’s common stock price. See Note 5 – Franchising Operating Rights and Goodwill for discussion of non-cash impairment charge.
Interest expense
Interest expense increased $9.4 million, or 119%, and $16.9 million, or 110%, during the three and six months ended June 30, 2023, respectively, compared to the corresponding periods in 2022.The increases are primarily due to higher interest rates and additional borrowings on the revolving credit facility during the three and six months ended June 30, 2023.

19

Table of Contents

Other income

Other income decreased $5.5 million and $12.2 million during the three and six months ended June 30, 2023, respectively, compared to the corresponding periods in 2022. The decreases are primarily due to the decline in ~~Video RGUs, decreased costs~~services provided under the Transition Services Agreements.

Income Tax Expense

We reported income tax benefitof $36.2 million and income tax expense of $4.3 million for the three months ended June 30, 2023 and 2022, respectively, and income tax benefit of $48.8 million and income tax expense of $4.1 million for the six months ended June 30, 2023 and 2022, respectively. The change in income tax benefit is primarily related to ~~our fiber network construction activities and overall reduced costs~~a decrease in income from ~~our disposition~~operations.

Use of ~~our Lawrence, Kansas system. Partially offsetting the overall decrease were increased employee benefit costs.~~

Incremental ~~contribution~~

~~A presentation of incremental contribution, a non-GAAP measure, is included below.~~

Contribution

Incremental contribution is included herein because we believe that it is a key metric used by our management to assess the financial performance of the business by showing how the relative relationship of the various components of subscription services contributes to our overall consolidated historical results. Our management further believes that it provides useful information to investors in evaluating our financial condition and results of operations because the additional detail illustrates how an incremental dollar of revenue ~~by particular service type,~~ generates cash, before any unallocated costs are considered, which we believe is a key component of our overall strategy and important for understanding what drives our cash flow position relative to our historical results. We believe that when evaluating our business, investors apply varying degrees of importance to the different types of subscription revenue we generate and providing supplemental detail on these services, as well as third party costs associated with each service, is useful to investors because it allows investors to better evaluate these aspects of our performance. Incremental contribution is defined by ~~WOW~~us as the components of subscription revenue, less costs directly incurred from third parties in connection with the provision of such services to our customers.

Incremental contribution is not made in accordance with GAAP and our use of the term incremental contribution varies from others in our industry. Incremental contribution should be considered in addition to, not as a substitute for, consolidated net income (loss) and operating income (loss) or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows, or as measures of liquidity. Incremental contribution has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP as it does not identify or allocate any other operating costs and expenses that are components of our income from operations to specific subscription revenues as we do not measure or record such costs and expenses in a manner that would allow attribution to a specific component of subscription revenue. Accordingly,

incremental contribution should not be considered as an alternative to operating income or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows, or as ~~measures~~a measure of liquidity.
The following tables provide ~~the most comparable GAAP measurements (i.e. income from operations) for the three months ended September 30, 2017 and September 30, 2016:~~

Three months ended
September 30,

2017

2016

(in millions)

Income from operations

$
57.5

$
61.5

~~Incremental contribution for the provision of such services for the three months ended September 30, 2017 and 2016 are as follows:~~

Three months
ended
September 30,

Change

2017

2016

$

%

(in millions)

HSD subscription revenue

$
103.9

$
93.2

$
10.7

11
%
HSD expenses(1)

3.5

3.6

(0.1
)
(3
)%
HSD incremental contribution

$
100.4

$
89.6

$
10.8

Three months
ended
September 30,

Change

2017

2016

$

%

(in millions)

Video subscription revenue

$
124.9

$
139.6

$
(14.7
)
(11
)%
Video expenses(2)

80.1

88.8

(8.7
)
(10
)%
Video incremental contribution

$
44.8

$
50.8

$
(6.0
)

Three months
ended
September 30,

Change

2017

2016

$

%

(in millions)

Telephony subscription revenue

$
32.7

$
38.1

$
(5.4
)
(14
)%
Telephony expenses(3)

1.7

4.0

(2.3
)
(58
)%
Telephony incremental contribution

$
31.0

$
34.1

$
(3.1
)

~~(1)~~                                 ~~HSD expenses represent costs incurred from third-party vendors related to maintaining our network and internet connectivity fees.~~
~~(2)~~                                 ~~Video expenses represent fees paid to content providers for programming.~~
~~(3)~~                                 ~~Telephony expenses represent costs incurred from third-party providers for leased circuits, interconnectivity and switching costs.~~
~~The following table provides~~ a reconciliation of incremental contribution to income from operations, which is the most directly comparable GAAP measure, for the ~~three months ended September 30, 2017 and September 30, 2016:~~

Three months
ended
September 30,

2017

2016

(in millions)

Income from operations

$
57.5

$
61.5

Revenue (excluding subscription revenue)

(36.3
)
(40.3
)
Other non-allocated operating expense (excluding depreciation and amortization)(1)

67.9

70.7

Selling, general and administrative(1)

38.1

32.6

Depreciation and amortization(1)

49.0

49.6

Management fee to related party(1)

—

0.4

$
176.2

$
174.5

HSD incremental contribution

$
100.4

$
89.6

Video incremental contribution

44.8

50.8

Telephony incremental contribution

31.0

34.1

Total incremental contribution

$
176.2

$
174.5

~~(1)~~                                 Operating expenses (other than third-party direct expenses excluding depreciation and amortization); selling, general and administrative; depreciation and amortization; and management fees to related party are not allocated by product or location for either internal or external reporting.periods presented:

Three months ended

Six months ended

June 30,

June 30,

2023

2022

2023

2022

(in millions)
(Loss) income from operations

$
(121.4)

$
9.9

$
(158.3)

$
14.9
Revenue (excluding subscription revenue)

(12.2)

(12.9)

(25.0)

(25.5)
Other non-allocated operating expense (excluding depreciation and amortization)

39.5

41.9

79.4

85.7
Selling, general and administrative

43.6

39.3

129.1

77.6
Depreciation and amortization

46.7

43.9

92.2

87.9
Impairment losses on intangibles

128.1

—

128.1

—
Incremental contribution

$
124.3

$
122.1

$
245.5

$
240.6
~~Selling, general and administrative (SG&A) expenses~~

20

Selling, general and administrative expenses increased $5.5 million, or 17%, in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The increase is mainly due to higher employee related non-cash compensation cost and third party professional fees. Partially offsetting these increases was an overall reduction in expenses related to our Lawrence, Kansas system disposition.

~~Depreciation and amortization expenses~~

Depreciation and amortization expenses decreased $0.6 million, or 1%, in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decrease is primarily due to the dispositionTable of ~~our Lawrence, Kansas system.~~Contents

~~Management fee to related party expenses~~

Prior to our IPO, we paid a quarterly management fee of approximately $0.4 million per quarter plus any travel and miscellaneous expenses to Avista. In addition, pursuant to a consulting agreement dated as of December 18, 2015 by and among Parent, Avista and Crestview, Crestview is entitled to 50% of any management fee actually received by Avista. Subsequent to our IPO, we do not pay such management fee to Avista or Crestview.

~~Interest expense~~

Interest expense decreased $20.7 million, or 39%, in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The decrease is primarily due lower overall debt and a lower blended rate mainly related to the early extinguishment of the 13.38% Senior Subordinated Notes during the latter part of 2016 and the redemption of the 10.25% Senior Notes on July 17, 2017.

~~Income tax expense~~

We reported total income tax expense of $1.6 million and $2.7 million for the three months ended September 30, 2017 and 2016, respectively. The income tax expense reported during the three months ended September 30, 2017 is primarily due to a change in the state valuation allowance. On January 12, 2017, the Company and MidCo consummated the Asset Purchase Agreement under which MidCo acquired the Company’s Lawrence, Kansas system, for gross proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. As a result of the Lawrence sale, the Company has recorded $11.1 million of associated income tax expense. In addition, a deferred income tax benefit of $36.3 million was recognized as a result of the change in valuation allowance. The change in valuation allowance was due primarily to the utilization of NOLs from the disposal of indefinite lived assets related to the Lawrence, Kansas system sale transaction.

~~Nine months ended September 30, 2017 compared to the nine months ended September 30, 2016~~

~~Revenue~~

~~Revenue for the nine months ended September 30, 2017 decreased $25.7 million, or 3%, as compared to revenue for the nine months ended September 30, 2016 as follows:~~

Nine months ended
September 30,

Change

2017

2016

$

%

(in millions)

Residential subscription

$
695.6

$
722.9

$
(27.3
)
(4
)%
Business services subscription

86.4

80.2

6.2

8
%
Total subscription

782.0

803.1

(21.1
)
(3
)%
Other business services

31.3

31.8

(0.5
)
(2
)%
Other

82.0

86.1

(4.1
)
(5
)%

$
895.3

$
921.0

$
(25.7
)
(3
)%
Total subscription revenue decreased $21.1 million, or 3%, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Contributing to the decrease were approximately $53.1 million of year over year reductions in average RGUs and $28.9 million related to the disposition of our Lawrence, Kansas system on January 12, 2017. Offsetting these decreases was a $45.8 million increase in total subscription revenue as a result of increases in ARPU which was driven by customer rate increases to offset the rising cost of programming per subscriber. Additionally, we had an increase of $15.1 million of subscription revenue generated from our NuLink acquisition on September 9, 2016.
~~The following table details subscription revenue by service offering for the nine months ended September 30, 2017 and September 30, 2016:~~

Nine months ended September 30,

Subscription
Revenue

2017

2016

Change

Subscription
Revenue

Average
RGUs(1)

Subscription
Revenue

Average
RGUs(1)

$

%

(in millions)

(in thousands)

(in millions)

(in thousands)

HSD subscription

$
300.7

738.7

$
276.3

727.2

$
24.4

9
%
Video subscription

379.6

472.0

408.3

531.2

(28.7
)
(7
)%
Telephony subscription

101.7

242.1

118.5

282.1

(16.8
)
(14
)%

$
782.0

$
803.1

$
(21.1
)
(3
)%
~~(1)~~                                 Average subscribers, presented in thousands, is calculated based on reported subscribers and is not adjusted for changes related to the disposition of our Lawrence, Kansas system and acquisition of NuLink.
HSD subscription revenue increased $24.4 million, or 9%, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The increase in HSD subscription revenue is primarily attributable to a $7.7 million increase in average HSD RGUs, a $22.1 million year over year increase in HSD ARPU and a $7.2 million increase in HSD subscription revenue related to our NuLink acquisition. Partially offsetting the overall increase was a $12.6 million decrease related to the disposition of our Lawrence, Kansas system.
Video subscription revenue decreased $28.7 million, or 7%, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is primarily attributable to a year over year decrease of $45.0 million related to a decline in average Video RGUs and a decrease of $12.7 million related to the disposition of our Lawrence, Kansas system. Partially offsetting the overall decrease was a $23.0 million increase year over year in Video ARPU and a $6.0 million increase in video subscription revenue related to our NuLink acquisition.
Telephony subscription revenue decreased $16.8 million, or 14%, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is attributable to a $15.9 million decrease related to a year over year decline in average Telephony RGUs and a $3.5 million decrease related to the disposition of our Lawrence, Kansas system. Partially offsetting these decreases was a $0.8 million increase in year over year Telephony ARPU and a $1.8 million increase in Telephony subscription revenue related to our NuLink acquisition.
~~Operating expenses (excluding depreciation and amortization)~~
Operating expenses (excluding depreciation and amortization) decreased $28.7 million, or 6%, in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is primarily due to reductions in Video programming costs and direct Telephony costs that correlate to the decreases in Video and Telephony RGUs, decreased costs related to our fiber network construction activities and overall reduced costs from our disposition of our Lawrence, Kansas system. Partially offsetting the decreases were increased repair and maintenance costs.
~~Incremental contribution~~
A presentation of incremental contribution, a non-GAAP measure, is included below. See the prior presentation of incremental contribution for the three months ended September 30, 2017 for an explanation of why we present this metric and the limitations thereof.
~~The following tables provide the most comparable GAAP measurements (i.e. income from operations) for the nine months ended September 30, 2017 and September 30, 2016:~~

Nine months ended
September 30,

2017

2016

(in millions)

Income from operations

$
172.9

$
179.4

~~Incremental contribution for the provision of such services for the nine months ended September 30, 2017 and 2016 are as follows:~~

Nine months
ended
September 30,

Change

2017

2016

$

%

(in millions)

HSD subscription revenue

$
300.7

$
276.3

$
24.4

9
%
HSD expenses(1)

10.3

11.0

(0.7
)
(6
)%
HSD incremental contribution

$
290.4

$
265.3

$
25.1

9
%

Nine months
ended
September 30,

Change

2017

2016

$

%

(in millions)

Video subscription revenue

$
379.6

$
408.3

$
(28.7
)
(7
)%
Video expenses(2)

255.0

270.0

(15.0
)
(6
)%
Video incremental contribution

$
124.6

$
138.3

$
(13.7
)
(10
)%

Nine months
ended
September 30,

Change

2017

2016

$

%

(in millions)

Telephony subscription revenue

$
101.7

$
118.5

$
(16.8
)
(14
)%
Telephony expenses(3)

8.5

12.5

(4.0
)
(32
)%
Telephony incremental contribution

$
93.2

$
106.0

$
(12.8
)
(12
)%
~~(1)~~                                 ~~HSD expenses represent costs incurred from third-party vendors related to maintaining our network and Internet connectivity fees.~~
~~(2)~~                                 ~~Video expenses represent fees paid to content providers for programming.~~
~~(3)~~                                 ~~Telephony expenses represent costs incurred from third-party providers for leased circuits, interconnectivity and switching costs.~~
The following table provides a reconciliation of incremental contribution to income from operations, which is the most directly comparable GAAP measure, for the nine months ended September 30, 2017 and September 30, 2016:

Nine months
ended
September 30,

2017

2016

(in millions)

Income from operations

$
172.9

$
179.4

Revenue (excluding subscription revenue)

(113.3
)
(117.9
)
Other non-allocated operating expense (excluding depreciation and amortization)(1)

196.6

205.6

Selling, general and administrative(1)

100.9

86.2

Depreciation and amortization(1)

150.1

155.0

Management fee to related party(1)

1.0

1.3

$
508.2

$
509.6

HSD incremental contribution

$
290.4

$
265.3

Video incremental contribution

124.6

138.3

Telephony incremental contribution

93.2

106.0

Total incremental contribution

$
508.2

$
509.6

~~(1)~~                                 Operating expenses (other than third-party direct expenses excluding depreciation and amortization); selling, general and administrative; depreciation and amortization; and management fees to related party are not allocated by product or location for either internal or external reporting.
~~Selling, general and administrative (SG&A) expenses~~
Selling, general and administrative expenses increased $14.7 million, or 17%, in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The increase is mainly due to higher employee related non-cash compensation cost, an increase in telecom taxes, third party professional fees, and overall costs related to our NuLink acquisition. Partially offsetting these increases were overall reduction in expenses related to our Lawrence, Kansas system disposition.
~~Depreciation and amortization expenses~~
Depreciation and amortization expenses decreased $4.9 million, or 3%, in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is primarily due to certain intangible assets related to our acquisitions becoming fully amortized and the disposition of our Lawrence, Kansas system.
~~Management fee to related party expenses~~
Prior to our IPO, we paid a quarterly management fee of approximately $0.4 million per quarter plus any travel and miscellaneous expenses to Avista. In addition, pursuant to a consulting agreement dated as of December 18, 2015 by and among Parent, Avista and Crestview, Crestview is entitled to 50% of any management fee actually received by Avista. Subsequent to our IPO, we will no longer pay a management fee to Avista or Crestview.
~~Interest expense~~
Interest expense decreased $40.3 million, or 25%, in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease is primarily due to lower overall debt and a lower blended rate mainly related to the early extinguishment of the 13.38% Senior Subordinated Notes during the latter part of 2016 and the redemption of the 10.25% Senior Notes on July 17, 2017.
~~Gain on sale of assets~~
On January 12, 2017, we sold our Lawrence, Kansas system to MidCo for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the Agreement. We recorded a gain on sale of assets of $38.4 million, subject to the adjustment as described above. We also entered into a transition services agreement under which we provided certain services to MidCo on a transitional basis. The transition services agreement, originally expiring on July 1, 2017, was extended to September 28, 2017. Charges for the transition services generally allowed us to fully recover all allowed costs and allocated expenses incurred in connection with providing these services, generally without profit.
~~Income tax benefit~~
We reported total income tax benefit of $16.4 million and $7.4 million for the nine months ended September 30, 2017 and 2016, respectively. On January 12, 2017, the Company and MidCo consummated the Asset Purchase Agreement under which MidCo
acquired the Company’s Lawrence, Kansas system, for gross proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. As a result of the Lawrence sale, the Company has recorded $11.1 million of associated income tax expense. In addition, a deferred income tax benefit of $36.3 million was recognized as a result of the change in valuation allowance. The change in valuation allowance was due primarily to the utilization of NOLs from the disposal of indefinite lived assets related to the Lawrence sale transaction.
Liquidity and Capital Resources
Our primary funding requirements are for our ongoing operations, capital expenditures, outstanding debt obligations, including lease agreements, and strategic investments. At ~~September~~June 30, ~~2017, we had $135.6 million in current assets, including $36.4 million in cash and cash equivalents, and $186.3 million in current liabilities. Our~~2023, the principal amount of our outstanding consolidated debt ~~and capital lease obligations~~ aggregated ~~$2,436.1~~to $868.1 million, of which ~~$24.1~~$16.7 million is classified as current in our unaudited condensed consolidated balance sheet as of such date.
~~On July 17, 2017,~~ As of June 30, 2023, we ~~entered into the Eighth Amendment to the credit agreement and increased our Term B loan aggregate principal amount by $230.5 million. In addition, we increased the~~had borrowing capacity of ~~the revolving credit commitments by an aggregate principal amount of $100.0 million.~~
~~On May 25, 2017, we consummated our IPO and received $334.7 million, net of costs associated with this offering.~~
On March 20, 2017, we redeemed approximately $95.1 million in aggregate principal amount of Senior Notes using cash on hand. Following such redemption, $729.9 million in aggregate principal amount of 10.25% Senior Notes remained outstanding. On July 17, 2017, we fully redeemed the 10.25% Senior Notes utilizing the proceeds of the new Term B loans, borrowings of $180.0$106.4 million under our ~~revolving credit facility and cash on hand.~~
On January 12, 2017, we consummated the divestiture of substantially all of the operating assets of our Lawrence, Kansas system to MidCo. In connection with the closing of this transaction, we received $213.0 million in net cash consideration representing gross proceeds.
On December 18, 2015, under a purchase agreement entered into by the Company’s former Parent, Avista and Crestview (the “Crestview Purchase Agreement”), Crestview’s funds purchased units held by Avista and other unit holders, and made a $125.0 million primary investment in newly-issued units of the Company’s former parent. On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in our former Parent. As of September 30, 2017, the $143.3 million of proceeds from the funds’ investment of Avista and Crestview, net of transaction costs have been contributed to us.
At the closing of the definitive agreement, we and Verizon expect to enter into a new agreement pursuant to which we would complete the build-out of the network in exchange for approximately $50.0 million. The $50.0 million would be payable as such network elements are completed. We have spent approximately $7.0 million on the construction as of September 30, 2017.
Revolving Credit Facility.
We are required to prepay principal amounts ~~under our Senior Secured Credit Facilities credit agreement~~ if we generate excess cash flow, as defined in the ~~credit agreement.~~Credit Agreement. As of ~~September~~June 30, ~~2017,~~2023, we had $23.0 million of cash and cash equivalents. We believe that our existing cash balances, available borrowing capacity ~~of $112.1 million~~ under our Revolving Credit Facility, and ~~were in compliance with all our debt covenants. Accordingly, we believe that we have~~operating cash flows will provide sufficient resources to fund our obligations and anticipated liquidity requirements over the next 12 months.
We expect to utilize cash flow from operations and cash on hand as funding sources, as well as potentially engage in future refinancing transactions to further extend the ~~foreseeable future.~~maturities of our debt obligations. The timing and terms of any refinancing transactions will be subject to market conditions among other considerations.

As potential acquisitions or dispositions arise, we actively review such transactions against our objectives including, among other considerations, improving our operational efficiency, geographic clustering of assets, product development or technology capabilities of our business and achieving appropriate strategic objectives, and we may participate in such transactions to the extent we believe these possibilities present attractive opportunities. However, there can be no assurance that we will actually complete any acquisitions or dispositions, or that any such transactions will be material to our operations or results.

Our ability to fund operations, make capital expenditures, repay debt obligations and make future acquisitions and strategic investments depends on future operating performance and cash flows, which are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control.

Historical Operating, Investing, and Financing Activities

Operating Activities
Net cash used in operating activities was $51.7 million for the six months ended June 30, 2022 compared to net cash provided by operating activities ~~increased from $110.5~~of $41.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016 to $116.4 million for the nine months ended September 30, 2017.~~2023. The ~~increase~~change is primarily due to ~~working capital fluctuations due to timing~~the income tax payment associated with the sale of ~~payables partially offset by a decrease in operating earnings.~~
the Chicago, Illinois, Evansville, Indiana, and Baltimore, Maryland markets, which the Company paid during the second quarter of 2022.
Investing Activities
Net cash used in investing activities ~~decreased from $244.7~~was $75.7 million for six months ended June 30, 2022 compared $123.6 million for the ~~nine~~six months ended ~~September~~June 30, 2016 to $10.9 million for the nine months ended September 30, 2017. The decrease is attributable to net cash proceeds from the sale of our Lawrence, Kansas system in the amount of $213.0 million. Partially offsetting this decrease was an increase in capital expenditures of $17.1 million for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.
2023. We have ongoing capital expenditure requirements related to the maintenance, expansion and technological upgrades of our ~~cable~~ network. Capital expenditures are funded primarily through a combination of cash on hand and cash flow from operations. Our capital expenditures were ~~$224.3~~$123.8 million and ~~$207.2~~$76.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively. The ~~$17.1~~$47.0 million increase from the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2022 to the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 is ~~primarily due~~related to ~~the increase~~increases in ~~investment for edge-out network expansion.~~line extensions as we focus on market expansion in locations adjacent and non-adjacent to our existing network.

21

Table of Contents

The following table sets forth additional information regarding our capital expenditures for the periods presented:

For the nine
months ended
September 30,

2017

2016

Capital Expenditures

(in millions)

Customer premise equipment(1)

$
77.9

$
78.1

Scalable infrastructure(2)

27.2

24.1

Line extensions(3)

83.8

69.3

Upgrade / rebuild(4)

0.3

0.7

Support capital(5)

35.1

35.0

Total

$
224.3

$
207.2

Capital expenditures included in total related to:

Edge-outs(6)

$
38.7

$
22.6

Business services(7)

$
55.9

$
59.6

Six months ended

June 30,


2023

2022

(in millions)
Capital Expenditures

Scalable infrastructure(1)

$
29.6

$
18.1
Customer premise equipment(2)

32.0

33.6
Line extensions(3)

38.7

10.2
Support capital and other(4)

23.5

14.9
Total

$
123.8

$
76.8
Capital expenditures included in total related to:

Greenfields(5)

$
43.2

$
5.0
Edge-outs(6)

$
7.9

$
1.9
Business services(7)

$
7.6

$
5.8
~~(1)~~
(1) Scalable infrastructure includes costs, not directly related to customer acquisition activity, to support new customer growth and provide service enhancements (e.g., headend equipment).
(2) Customer premise equipment, or CPE, includes equipment and installation costs incurred to deliver services to residential and business services customers. CPE includes the costs of acquiring and installing our set-top boxes and modems, as well as the cost of customer connections to our network.
(3) Line extensions include costs associated with new home development including edge-outs and greenfields (e.g., fiber / coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
(4) Support capital and other includes costs to modify or replace existing HFC network, including enhancements, and all other costs to support day-to-day operations, including land, buildings, vehicles, office equipment, tools and test equipment.
(5) Greenfields represent costs associated with building our fiber technology network in locations non-adjacent to our existing network.
(6) Edge-outs represent costs to extend our network into new adjacent service areas, including the associated CPE.
(7) Business services represent costs associated with the build-out of our network to support business services customers, including the associated CPE.

Financing Activities
Net cash used in financing activities was $15.9 million for the six months ended June 30, 2022 compared to deliver services to residential and business services customers. CPE includes the costs of acquiring and installing our set-top boxes and modems, as well as the cost of customer connections to our network.
~~(2)~~                                 ~~Scalable infrastructure includes costs, not directly related to customer acquisition activity, to support new customer growth and provide service enhancements (e.g., headend equipment).~~
~~(3)~~                                 Line extensions include costs associated with new home development within our footprint and edge-outs (e.g., fiber / coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
~~(4)~~                                 ~~Upgrade / rebuild includes costs to modify or replace existing HFC network, including enhancements.~~
~~(5)~~                                 ~~Support capital includes all other non-network-related costs to support day-to-day operations, including land, buildings, vehicles, office equipment, tools and test equipment.~~
~~(6)~~                                 ~~Edge-outs represent costs to extend our network into new adjacent service areas, including the associated CPE.~~
~~(7)~~                                 ~~Business services represent costs associated with the build-out of our network to support business services customers, including the associated CPE.~~
~~Financing Activities~~
~~Net~~net cash provided by financing activities ~~decreased from $103.7~~of $74.4 million ~~cash provided by financing activities~~ for ~~the nine~~six months ended ~~September~~June 30, ~~2016 to $99.9 million cash used in financing activities for the nine months ended September 30, 2017.~~2023. The ~~decrease~~change is primarily due to ~~cash payments on outstanding debt~~an increase in net borrowings of ~~$2,896.2~~$130.2 million ~~for~~during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 compared to ~~$2,434.8 million for~~ the ~~nine~~six months ended ~~September~~June 30, ~~2016. The decrease is partially offset by proceeds received from our IPO~~2022.

22

Table of ~~$334.7 million.~~Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our exposure to market risk is limited and primarily related to fluctuating interest rates associated with our variable rate indebtedness under our Senior Secured Credit Facility. As of ~~September~~June 30, ~~2017,~~2023, borrowings under our Term B Loans and Revolving
Credit Facility bear interest at SOFR plus 3.00% and SOFR plus 2.75%, respectively. As of June 30, 2023, our option at a rate equal to either an adjusted LIBOR rate (which is subject to a minimum rate of 1.00% for Term B Loans) or an ABR (which is subject to a minimum rate of 1.00% for Term B Loans), plus the applicable margin. The applicable margins for the Term B Loans is 3.25% for adjusted LIBOR loans and 2.25% for ABR loans. The applicable margin for borrowings under the RevolvingSenior Secured Credit Facility is ~~3.00% for adjusted LIBOR loans and 2.00% for ABR loans.~~still variable rate debt. A hypothetical 100 basis point (1%) change in ~~LIBOR~~SOFR interest rates (based on the interest rates in effect under our Senior Secured Credit Facility as of ~~September~~June 30, ~~2017)~~2023) would result in an annual interest expense change of up to approximately ~~$22.8~~$8.6 million on our Senior Secured Credit Facility.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of ourWe maintain disclosure controls and procedures ~~with respect~~that are designed to the information generated for use in this quarterly report. The evaluation was based in part upon reports and certifications provided by a number of executives. Based upon, and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective to provide reasonable assurancesensure that information required to be disclosed in ~~the reports we file or submit under the Securities~~our Exchange Act ~~of 1934~~reports is recorded, processed, summarized and reported within the time periods specified in the ~~SEC’s~~U.S. Securities and Exchange Commission rules and ~~forms.~~
forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), as appropriate, to allow for timely decisions regarding required disclosure.
In designing and evaluating ~~the~~ disclosure controls and procedures, ~~our~~ management ~~recognized~~recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance, not absolute assurance of achieving the desired objectives. Also, the design of a control ~~objectives,~~system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Our management, ~~necessarily was required to apply its judgment in evaluating~~with the ~~cost-benefit relationship~~participation of ~~possible~~the Certifying Officers, evaluated the effectiveness of our disclosure controls and ~~procedures.~~procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2023. Based ~~upon~~on these evaluations, the ~~above evaluation, we believe~~Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls ~~provide such reasonable assurances.~~and procedures required by paragraph (b) of Rule 13a-15 or 15d-15 were effective as of June 30, 2023.

Changes in Internal Control over Financial Reporting
There ~~was~~were no ~~change~~changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the ~~third~~second quarter of ~~2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.~~2023.

23

Table of Contents

PART II
Item 1. Legal Proceedings
~~The Company is party~~Refer to ~~various legal proceedings (including individual, class~~Note 13 – Commitments and ~~putative class actions) arising in the normal course of its business covering~~Contingencies for a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, programming, taxes, fees and surcharges, consumer protection, trademark and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers.
In accordance with GAAP, WOW accrues an expense for pending litigation when it determines an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Legal defense costs are expensed as incurred. Nonediscussion of the Company’s existing accruals for pending matters is material. WOW regularly monitors its pending litigation for the purpose of adjusting its accruals and revising its disclosures accordingly, in accordance with GAAP, when required. Litigation is, however, subject to uncertainty, and the outcome of any particular matter is not predictable. The Company vigorously defends its interest in pending litigation, and as of this date, WOW believes the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which it is entitled, will not have a material adverse effect on the condensed consolidated financial position, results of operations, or our cash flows.legal proceedings.

Item 1A. Risk Factors
Our Annual Report on Form 10-K for the year ended December 31, 2022 includes “Risk Factors” under Item 1A of Part 1. There have been no material changes ~~in our~~to the risk factors ~~from those disclosed in our final prospectus relating to our IPO filed with the SEC on May 25, 2017.~~set forth therein.

Item 2. Unregistered Sales of Equity ~~Proceeds~~Securities and Use of Proceeds
~~Use~~Purchases of ~~Proceeds from Initial Public Offering~~Equity Securities by the Issuer
The ~~Registration Statement on Form S-1 (File No. 333-216894) for~~following table presents WOW’s purchases of equity securities completed during the ~~initial public offering~~second quarter of ~~our common stock was declared effective by the Securities and Exchange Commission on May 24, 2017.~~2023:
There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the Securities and Exchange Commission on May 25, 2017 pursuant to Rule 424(b)(4).

Approximate Dollar Value of

Total Number of Shares

Shares that May Yet be

Number of Shares

Average Price

Purchased as Part of Publicly

Purchased Under the Plans
Period

Purchased (1)

Paid per Share

Announced Plans or Programs

or Programs (in millions)
April 1 - 30, 2023

637,896

$
10.82

630,062

$
9.4
May 1 - 31, 2023

1,022,505

$
8.78

1,008,988

$
0.6
June 1 - 30, 2023

205,645

$
7.81

171,720

$
—
(1) Includes 7,834, 13,517 and 33,925 shares withheld from employees for the payment of taxes upon the vesting of restricted stock awards for the months of April, May and June 2023, respectively. The balance of the shares were repurchased pursuant to a stock repurchase plan approved by our Board of Directors on October 4, 2022, which authorized us to repurchase up to $50.0 million of our outstanding common stock. The repurchase plan was completed in June 2023.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our Section 16 officers and directors for the three months ended June 30, 2023, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, were as follows:

24

Table of Contents

Trading Arrangement

Rule

Non-Rule

Total Shares

Expiration
Name and Title
Action
Date
10b5-1(1)
10b5-1(2)
to be Sold
Date
Donald P. Schena, Chief Customer Experience Officer
Terminated(3)
May 9, 2023
X

95,000
3/29/2024
Donald P. Schena, Chief Customer Experience Officer
Adopted
May 9, 2023
X

100,000
3/31/2025
Henry Hryckiewicz, Chief Technology Officer
Terminated(4)
May 9, 2023
X

46,256
8/15/2023
Henry Hryckiewicz, Chief Technology Officer

Adopted

May 9, 2023

X

44,000

8/30/2024

(1) Intended to satisfy the affirmative defense of Rule 10b5-1(c).
(2) Not intended to satisfy the affirmative defense of Rule 10b5-1(c).
(3) Mr. Schena entered into this 10b5-1 Plan on August 13, 2022.
(4) Mr. Hryckiewicz entered into this 10b5-1 Plan on August 23, 2022.

~~None.~~
Item 6. Exhibits
Exhibit
Number
Exhibit Description
3.1

Amended and Restated Certificate of Incorporation of WideOpenWest, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-216894) filed on May 15, 2017)
3.2

Amended and Restated Bylaws of WideOpenWest, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1/A (File No. 333-216894) filed on May 15, 2017)
31.1*

Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*

Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101

The following financial information from WideOpenWest, Inc.’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2023, filed with the Securities and Exchange Commission on August 8, 2023, formatted in iXBRL (inline eXtensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Changes in Stockholders’ Equity; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to the Condensed Consolidated Financial Statements.
104

Cover Page, formatted in iXBRL and contained in Exhibit 101.
*
Exhibit
Number

Exhibit Description

Form

File Number

Date of First
Filing

Exhibit
Number

Filed
Herewith
10.1

Eighth Amendment to Credit Agreement dated as of July 17, 2017

8-K

001-38101

July 17, 2017

10.1

10.2

WideOpenWest, Inc. 2017 Omnibus Incentive Plan

*
31.1

Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*
31.2

Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*
32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*
101.INS

XBRL Instance Document

*
101.SCH

XBRL Taxonomy Extension Schema Document

*
101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

*
101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

*
101.LAB

XBRL Taxonomy Extension Label Linkbase Document

*
101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

*
*Filed herewith.

25

Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WIDEOPENWEST, INC.

~~November 13, 2017~~August 8, 2023
By:
/s/ ~~STEVEN COCHRAN~~TERESA ELDER

~~Steven Cochran~~Teresa Elder

Chief Executive Officer

By:
/s/ ~~RICHARD E. FISH, JR.~~JOHN REGO

~~Richard E. Fish, Jr.~~John Rego

Chief Financial Officer

36

26

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Large accelerated filer o☒		Accelerated filer o☐

Non-accelerated filer x ~~(Do not check if a~~ ~~smaller reporting company)~~☐		Smaller reporting company o☐
Emerging Growth Company ☐

			Page
PART I. Financial Information
Item 1:	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
~~Item 1:~~	~~Financial Statements (Unaudited)~~
	~~Condensed Consolidated Balance Sheets~~	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated ~~Statement~~Statements of ~~Changes in~~ Stockholders’ ~~Deficit~~Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to the Condensed Consolidated Financial Statements	5
Item 2:2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3:3:	Quantitative and Qualitative Disclosures about Market Risk	3223
Item 4:4:	Controls and Procedures	3323
PART II. Other Information			3424
Item 1:1:	Legal Proceedings	3424
Item ~~1A:~~1A:	Risk Factors	3424
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	3424
Item 3:3:	Defaults Upon Senior Securities	3424
Item 4:4:	Mine Safety Disclosures	3424
Item 5:5:	Other Information	3424
Item 6:6:	Exhibits	3525


7887 East Belleview Avenue, Suite 1000 Englewood, Colorado (Address of Principal Executive Offices)		80111 (Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	WOW	New York Stock Exchange

	September 30, 2017			December 31, 2016
	(in millions, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	36.4		$	30.8
Accounts receivable—trade, net of allowance for doubtful accounts of $6.5 and $9.4, respectively	80.0			87.2
Accounts receivable—other	3.4			0.2
Prepaid expenses and other	15.8			11.3
Total current assets	135.6			129.5
Plant, property and equipment, net (note 3)	1,042.0			995.1
Franchise operating rights	966.5			1,066.6
Goodwill	517.4			568.0
Intangible assets subject to amortization, net	6.0			7.6
Investments	—			0.9
Other noncurrent assets	9.0			3.1
Total assets	$	2,676.5		$	2,770.8
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable—trade	$	29.4		$	21.0
Accrued interest	4.0			47.3
Accrued liabilities (note 5)	84.2			109.8
Current portion of debt and capital lease obligations (note 6)	24.1			22.7
Current portion of unearned service revenue	44.6			50.2
Total current liabilities	186.3			251.0
Long-term debt and capital lease obligations—less current portion, debt issuance costs, and debt discounts (note 6)	2,412.0			2,848.5
Deferred income taxes, net (note 10)	345.2			370.2
Unearned service revenue	15.1			14.5
Other noncurrent liabilities	6.2			4.6
Total liabilities	2,964.8			3,488.8
Commitments and contingencies (note 11)
Stockholders’ deficit:
Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 shares issued and outstanding	—			—
Common stock, $0.01 par value, 700,000,000 shares authorized; issued and outstanding 88,771,710 and 66,498,762 as of September 30, 2017 and December 31, 2016, respectively	0.9			0.7
Additional paid-in capital (deficit)	295.4			(58.8		)
Accumulated deficit	(584.6		)	(659.9		)
Total stockholders’ deficit	(288.3		)	(718.0		)
Total liabilities and stockholders’ deficit	$	2,676.5		$	2,770.8

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
	(in millions, except for per share data)
Revenue	$	297.8		$	311.2		$	895.3		$	921.0
Costs and expenses:
Operating (excluding depreciation and amortization)	153.2			167.1			470.4			499.1
Selling, general and administrative	38.1			32.6			100.9			86.2
Depreciation and amortization	49.0			49.6			150.1			155.0
Management fee to related party	—			0.4			1.0			1.3
	240.3			249.7			722.4			741.6
Income from operations	57.5			61.5			172.9			179.4
Other income (expense):
Interest expense	(32.2		)	(52.9		)	(122.0		)	(162.3		)
Loss on early extinguishment of debt (note 6)	(26.1		)	(28.1		)	(32.1		)	(30.6		)
Gain on sale of assets (note 4)	—			—			38.4			—
Unrealized gain on derivative instruments, net	—			—			—			2.3
Other income, net	0.3			1.9			1.7			2.0
Income (loss) before provision for income taxes	(0.5		)	(17.6		)	58.9			(9.2		)
Income tax benefit (expense) (note 10)	(1.6		)	(2.7		)	16.4			7.4
Net income (loss)	$	(2.1	)	$	(20.3	)	$	75.3		$	(1.8	)

Basic and diluted earnings (loss) per common shares
Basic	$	(0.02	)	$	(0.31	)	$	0.99		$	(0.03	)
Diluted	$	(0.02	)	$	(0.31	)	$	0.99		$	(0.03	)
Weighted-average common shares outstanding
Basic	86,973,345			66,525,044			76,014,568			65,605,874
Diluted	86,973,345			66,525,044			76,096,401			65,605,874

	Common Shares	Common Stock par value		Management D Units		Additional Paid- in Capital (Deficit)			Accumulated Deficit			Total Stockholders’ Deficit
	(in millions, expect per share data)
Balances at January 1, 2017	66,498,762	$	0.7	201,696		$	(58.8	)	$	(659.9	)	$	(718.0	)
Repurchase of old management units (note 12)	—	—		—		(8.8		)	—			(8.8		)
Cancellation of management D units	—	—		(201,696	)	—			—			—
Proceeds from issuance of common stock, net of issuance costs (note 7)	20,970,589	0.2		—		334.5			—			334.7
Contribution from former Parent	—	—		—		20.3			—			20.3
Stock-based compensation	1,302,359	—		—		8.3			—			8.3
Other	—	—		—		(0.1		)	—			(0.1		)
Net income	—	—		—		—			75.3			75.3
Balances at September 30, 2017	88,771,710	$	0.9	—		$	295.4		$	(584.6	)	$	(288.3	)

	Nine months ended September 30,
	2017			2016
	(in millions)
Cash flows from operating activities:
Net income (loss)	$	75.3		$	(1.8	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	150.1			155.0
Unrealized gain on derivative instruments	—			(2.3		)
Provision for doubtful accounts	14.3			14.7
Deferred income taxes	(25.0		)	(40.3		)
Gain on sale of assets (note 4)	(38.4		)	—
Amortization of debt issuance costs, premium and discount, net	3.8			6.4
Non-cash compensation expense	8.3			—
Loss on early extinguishment of debt	7.1			5.9
Other non-cash items	0.3			—
Changes in operating assets and liabilities:
Receivables and other operating assets	(23.4		)	(15.4		)
Payables and accruals	(56.0		)	(11.7		)
Net cash flows provided by operating activities	116.4			110.5

Cash flows from investing activities:
Capital expenditures	(224.3		)	(207.2		)
Newnan acquisition	—			(54.3		)
Sale of investment	—			15.7
Proceeds from sale of assets (note 4)	213.0			—
Other investing activities	0.4			1.1
Net cash flows used in investing activities	(10.9		)	(244.7		)

Cash flows from financing activities:
Proceeds from issuance of debt	2,454.3			2,495.1
Payments on debt and capital lease obligations	(2,896.2		)	(2,434.8		)
Contribution from former Parent	20.3			50.0
Proceeds from issuance of common stock, net of issuance costs	334.7			—
Repurchase of old management units	(8.8		)	—
Payment of debt issuance costs	(3.7		)	(1.7		)
Distribution to former Parent	—			(4.8		)
Other	(0.5		)	(0.1		)
Net cash flows provided by (used in) financing activities	(99.9		)	103.7
Increase (decrease) in cash and cash equivalents	5.6			(30.5		)
Cash and cash equivalents, beginning of period	30.8			66.6
Cash and cash equivalents, end of period	$	36.4		$	36.1
Supplemental disclosures of cash flow information:
Cash paid during the periods for interest	$	161.6		$	193.7
Cash paid during the periods for income taxes	$	4.4		$	6.5
Non-cash financing activities:
Changes in capital expenditure accruals	$	(8.6	)	$	2.6

	Three months ended September 30,						Nine months ended September 30,
Computation of Income per Share	2017			2016			2017		2016
	(in millions, except for per share data)

Net income (loss)	$	(2.1	)	$	(20.3	)	$	75.3	$	(1.8	)

Basic weighted-average shares	86,973,345			66,525,044			76,014,568		65,605,874
Effect of dilutive securities:
Restricted stock awards	—			—			81,833		—
Diluted weighted-average shares	86,973,345			66,525,044			76,096,401		65,605,874

Basic net income (loss) per share	$	(0.02	)	$	(0.31	)	$	0.99	$	(0.03	)
Diluted net income (loss) per share	$	(0.02	)	$	(0.31	)	$	0.99	$	(0.03	)


	June 30, 2023		December 31, 2022

	(in millions)
Current costs of obtaining contracts with customers	$	16.0	$	15.6
Non-current costs of obtaining contracts with customers		24.8		23.9
Total costs of obtaining contracts with customers	$	40.8	$	39.5


	2023		2024		2025		Thereafter		Total

	(in millions)
Subscription services	$	29.1		43.0	$	20.5	$	8.3	$	100.9
Other business services		1.5		2.4		0.9		0.3		5.1
Total expected revenue	$	30.6	$	45.4	$	21.4	$	8.6	$	106.0


	January 1,				June 30,
	2023		Impairment		2023

	(in millions)
Franchise operating rights	$	585.1	$	(128.1)	$	457.0
Goodwill		225.1		—		225.1
	$	810.2	$	(128.1)	$	682.1


	Impairment
	(in millions)
Huntsville, AL	$	60.0
Augusta, GA		24.4
Panama City, FL		13.5
Montgomery, AL		13.0
Newnan, GA		9.5
Valley, AL		4.0
Columbus, GA		3.7
Total	$	128.1

	September 30, 2017							December 31, 2016
	Available		Weighted
	borrowing capacity		average interest rate (1)		Outstanding balance			Outstanding balance
	(in millions)
Long-term debt:
Term B Loans (2)	$	—	4.55	%	$	2,266.5		$	2,048.3
Revolving Credit Facility (3)	112.1		4.29	%	180.0			10.0
Senior Notes	—		N/A		—			830.9
Total long-term debt	$	112.1	4.57	%	2,446.5			2,889.2
Capital lease obligations					3.2			4.9
Total long-term debt and capital lease obligations					2,449.7			2,894.1
Less debt issuance costs (4)					(13.6		)	(22.9		)
Sub-total					2,436.1			2,871.2
Less current portion					(24.1		)	(22.7		)
Long-term portion					$	2,412.0		$	2,848.5

	~~Number of~~ ~~Restricted Stock~~ ~~Shares~~

~~Outstanding January 1, 2017~~	—
~~Granted~~	~~1,843,527~~
~~Cancelled~~	—
~~Forfeited~~	~~(45,162~~	)
~~Outstanding September 30, 2017~~	~~1,798,365~~


		Number of
		Unvested
		Restricted Stock
		Shares
Outstanding, beginning of period		3,223,995
Granted		2,033,514
Vested		(2,152,461)
Forfeited		(258,042)
Outstanding, end of period(1)		2,847,006


	Jun. 30,	Sep. 30,	Dec. 31,	Mar. 31,	Jun. 30,
	2022	2022	2022	2023	2023
Homes passed	1,886,000	1,886,000	1,886,000	1,885,700	1,892,600
Total subscribers	536,600	538,100	530,600	527,300	522,400
HSD RGUs	517,200	518,600	511,600	508,700	507,800
Video RGUs	135,500	129,900	123,200	117,100	110,000
Telephony RGUs	95,200	92,900	89,900	87,700	85,300
Total RGUs	747,900	741,400	724,700	713,500	703,100

									Increase/ (decrease) (3)
	Dec. 31, 2015	Mar. 31, 2016	Jun. 30, 2016	Sep. 30, 2016 (2)	Dec. 31, 2016	Mar. 31, 2017	Jun. 30, 2017	Sep. 30, 2017	Sep. 30, 2017 vs. Sep. 30, 2016
Homes passed	3,003,100	3,010,700	3,022,800	3,075,000	3,094,300	3,047,800	3,072,500	3,097,500	22,500
Total subscribers(1)	777,800	784,600	785,600	800,800	803,400	780,100	776,500	776,400	(24,400	)
HSD RGUs	712,500	722,200	725,700	742,000	747,400	729,000	727,600	730,000	(12,000	)
Video RGUs	547,500	537,200	524,300	514,900	501,400	474,000	458,200	442,500	(72,400	)
Telephony RGUs	296,800	286,600	277,500	267,400	258,100	243,000	235,400	226,200	(41,200	)
Total RGUs	1,556,800	1,546,000	1,527,500	1,524,300	1,506,900	1,446,000	1,421,200	1,398,700	(125,600	)

	Three months ended September 30,						Change
	2017			2016			$			%
	(in millions)
Revenue	$	297.8		$	311.2		$	(13.4	)	(4	)%
Costs and expenses:
Operating (excluding depreciation and amortization)	153.2			167.1			(13.9		)	(8	)%
Selling, general and administrative	38.1			32.6			5.5			17	%
Depreciation and amortization	49.0			49.6			(0.6		)	(1	)%
Management fee to related party	—			0.4			(0.4		)	*
	240.3			249.7			(9.4		)	(4	)%
Income from operations	57.5			61.5			(4.0		)	(7	)%
Other income (expense):
Interest expense	(32.2		)	(52.9		)	20.7			39	%
Loss on early extinguishment of debt	(26.1		)	(28.1		)	2.0			7	%
Other income, net	0.3			1.9			(1.6		)	(84	)%
Loss before provision for income taxes	(0.5		)	(17.6		)	17.1			97	%
Income tax expense	(1.6		)	(2.7		)	1.1			41	%
Net loss	$	(2.1	)	$	(20.3	)	$	18.2		90	%

	Three months ended September 30,				Change
	2017		2016		$			%
	(in millions)
Residential subscription	$	231.9	$	243.4	$	(11.5	)	(5	)%
Business services subscription	29.6		27.5		2.1			8	%
Total subscription	261.5		270.9		(9.4		)	(3	)%
Other business services	9.6		10.0		(0.4		)	(4	)%
Other	26.7		30.3		(3.6		)	(12	)%
	$	297.8	$	311.2	$	(13.4	)	(4	)%

	Three months ended September 30,						Subscription Revenue
	2017			2016			Change
	Subscription Revenue		Average RGUs(1)	Subscription Revenue		Average RGUs(1)	$			%
	(in millions)		(in thousands)	(in millions)		(in thousands)
HSD subscription	$	103.9	728.8	$	93.2	733.9	$	10.7		11	%
Video subscription	124.9		450.4	139.6		519.6	(14.7		)	(11	)%
Telephony subscription	32.7		230.8	38.1		272.4	(5.4		)	(14	)%
	$	261.5		$	270.9		$	(9.4	)	(3	)%

	Nine months ended September 30,				Change
	2017		2016		$			%
	(in millions)
Residential subscription	$	695.6	$	722.9	$	(27.3	)	(4	)%
Business services subscription	86.4		80.2		6.2			8	%
Total subscription	782.0		803.1		(21.1		)	(3	)%
Other business services	31.3		31.8		(0.5		)	(2	)%
Other	82.0		86.1		(4.1		)	(5	)%
	$	895.3	$	921.0	$	(25.7	)	(3	)%

	Nine months ended September 30,						Subscription Revenue
	2017			2016			Change
	Subscription Revenue		Average RGUs(1)	Subscription Revenue		Average RGUs(1)	$			%
	(in millions)		(in thousands)	(in millions)		(in thousands)
HSD subscription	$	300.7	738.7	$	276.3	727.2	$	24.4		9	%
Video subscription	379.6		472.0	408.3		531.2	(28.7		)	(7	)%
Telephony subscription	101.7		242.1	118.5		282.1	(16.8		)	(14	)%
	$	782.0		$	803.1		$	(21.1	)	(3	)%

	For the nine months ended September 30,
	2017		2016
Capital Expenditures	(in millions)
Customer premise equipment(1)	$	77.9	$	78.1
Scalable infrastructure(2)	27.2		24.1
Line extensions(3)	83.8		69.3
Upgrade / rebuild(4)	0.3		0.7
Support capital(5)	35.1		35.0
Total	$	224.3	$	207.2
Capital expenditures included in total related to:
Edge-outs(6)	$	38.7	$	22.6
Business services(7)	$	55.9	$	59.6


					Approximate Dollar Value of
				Total Number of Shares	Shares that May Yet be
	Number of Shares	Average Price		Purchased as Part of Publicly	Purchased Under the Plans
Period	Purchased (1)	Paid per Share		Announced Plans or Programs	or Programs (in millions)
April 1 - 30, 2023	637,896	$	10.82	630,062	$	9.4
May 1 - 31, 2023	1,022,505	$	8.78	1,008,988	$	0.6
June 1 - 30, 2023	205,645	$	7.81	171,720	$	—

Exhibit Number		Exhibit Description
3.1		Amended and Restated Certificate of Incorporation of WideOpenWest, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-216894) filed on May 15, 2017)
3.2		Amended and Restated Bylaws of WideOpenWest, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1/A (File No. 333-216894) filed on May 15, 2017)
31.1*		Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		The following financial information from WideOpenWest, Inc.’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2023, filed with the Securities and Exchange Commission on August 8, 2023, formatted in iXBRL (inline eXtensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Changes in Stockholders’ Equity; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to the Condensed Consolidated Financial Statements.
104		Cover Page, formatted in iXBRL and contained in Exhibit 101.


	WIDEOPENWEST, INC.

~~November 13, 2017~~August 8, 2023	By:	/s/ ~~STEVEN COCHRAN~~TERESA ELDER
		~~Steven Cochran~~Teresa Elder
			Chief Executive Officer

	By:	/s/ ~~RICHARD E. FISH, JR.~~JOHN REGO
		~~Richard E. Fish, Jr.~~John Rego
			Chief Financial Officer