WIDEOPENWEST, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2020~~2021

TABLE OF CONTENTS

		Page
PART I. Financial Information
Item 1:	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to the Condensed Consolidated Financial Statements	6
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1820
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	2630
Item 4:	Controls and Procedures	2630
PART II. Other Information		2730
Item 1:	Legal Proceedings	2730
Item 1A:	Risk Factors	2830
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	2831
Item 3:	Defaults Upon Senior Securities	2831
Item 4:	Mine Safety Disclosures	2831
Item 5:	Other Information	2831
Item 6:	Exhibits	2932

This Quarterly Report on Form 10-Q is for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. Any statement contained in a prior periodic report shall be deemed to be modified or superseded for purposes of this Quarterly Report to the extent that a statement contained herein modifies or supersedes such statement. The Securities and Exchange Commission allows us to “incorporate by reference” information that we file with them, which means that we can disclose important information by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. References in this Quarterly Report to “WOW,” “we,” “us,” “our,” or “the Company” are to WideOpenWest, Inc. and its direct and indirect subsidiaries, unless the context specifies or requires otherwise.

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Table of Contents

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

●

~~demand for our broadband communications services may be lower than we expect;~~

●

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

●

increases in programming and retransmission ~~costs;~~

●

~~the effects of regulatory changes in our business;~~

●

~~our substantial level of indebtedness;~~

●

~~certain covenants in our debt documents;~~

●

costs and/or 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;~~

●

~~potential impairments to our goodwill or franchise operating rights;~~

●

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;

●

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

●

our substantial level of indebtedness and our ability to comply with all covenants in our ~~stock price;~~debt agreements;

●

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

●

effects of uncertain economic conditions, particularly in light of the current novel coronavirus (“COVID-19”) pandemic, and related factors (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 Securities and Exchange Commission (“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 ~~March 4, 2020~~February 24, 2021 and other reports subsequently filed with the ~~SEC, including our quarterly report on Form 10-Q filed with the SEC on May 4, 2020.~~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.

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PART I-FINANCIAL INFORMATION

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

September 30,

December 31,


2020

2019

(in millions, except share data)
Assets




Current assets




Cash and cash equivalents

$
32.9

$
21.0
Accounts receivable—trade, net of allowance for doubtful accounts of $8.1 and $7.5, respectively

67.2

65.8
Accounts receivable—other, net

3.1

9.8
Prepaid expenses and other

30.2

22.1
Total current assets

133.4

118.7
Right-of-use lease assets—operating

26.6

26.5
Property, plant and equipment, net

1,079.8

1,073.7
Franchise operating rights

799.5

799.5
Goodwill

408.8

408.8
Intangible assets subject to amortization, net

2.2

2.9
Other non-current assets

49.0

41.5
Total assets

$
2,499.3

$
2,471.6
Liabilities and stockholders’ deficit




Current liabilities




Accounts payable—trade

$
45.9

$
47.1
Accrued interest

3.8

2.7
Current portion of long-term lease liability—operating

6.6

6.1
Accrued liabilities and other

96.9

95.6
Current portion of long-term debt and finance lease obligations

34.9

30.9
Current portion of unearned service revenue

45.9

45.0
Total current liabilities

234.0

227.4
Long-term debt and finance lease obligations—less current portion and debt issuance costs

2,252.1

2,259.5
Long-term lease liability—operating

23.1

23.4
Deferred income taxes, net

198.4

192.5
Other non-current liabilities

14.2

14.7
Total liabilities

2,721.8

2,717.5
Commitments and contingencies




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; 95,192,119 and 92,182,207 issued as of September 30, 2020 and December 31, 2019, respectively; 86,856,478 and 84,103,108 outstanding as of September 30, 2020 and December 31, 2019, respectively

0.9

0.9
Additional paid-in capital

331.1

322.8
Accumulated other comprehensive loss

(10.7)

(15.5)
Accumulated deficit

(463.1)

(474.4)
Treasury stock at cost, 8,335,641 and 8,079,099 shares as of September 30, 2020 and December 31, 2019, respectively

(80.7)

(79.7)
Total stockholders’ deficit

(222.5)

(245.9)
Total liabilities and stockholders’ deficit

$
2,499.3

$
2,471.6


	June 30,		December 31,
	2021		2020

	(in millions, except share data)
Assets
Current assets
Cash and cash equivalents	$	23.3	$	12.4
Accounts receivable—trade, net of allowance for doubtful accounts of $5.2 and $6.7, respectively		38.3		44.4
Accounts receivable—other, net		2.4		2.8
Prepaid expenses and other		35.1		25.0
Current assets held for sale		29.9		30.2
Total current assets		129.0		114.8
Right-of-use lease assets—operating		20.3		22.1
Property, plant and equipment, net		718.6		720.9
Franchise operating rights		620.1		620.1
Goodwill		225.1		225.1
Intangible assets subject to amortization, net		1.8		1.9
Other non-current assets		42.3		42.1
Non-current assets held for sale		730.1		740.0
Total assets	$	2,487.3	$	2,487.0
Liabilities and stockholders’ deficit
Current liabilities
Accounts payable—trade	$	29.8	$	32.4
Accrued interest		3.8		4.0
Current portion of long-term lease liability—operating		6.0		5.8
Accrued liabilities and other		70.7		79.7
Current portion of long-term debt and finance lease obligations		70.9		37.5
Current portion of unearned service revenue		30.0		28.6
Current liabilities held for sale		46.9		47.9
Total current liabilities		258.1		235.9
Long-term debt and finance lease obligations, net of debt issuance costs —less current portion		2,176.8		2,228.5
Long-term lease liability—operating		16.3		19.0
Deferred income taxes, net		205.0		200.6
Other non-current liabilities		12.9		13.1
Non-current liabilities held for sale		2.4		2.3
Total liabilities		2,671.5		2,699.4
Commitments and contingencies
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; 95,888,217 and 95,187,161 issued as of June 30, 2021 and December 31, 2020, respectively; 87,111,194 and 86,847,797 outstanding as of June 30, 2021 and December 31, 2020, respectively		1.0		1.0
Additional paid-in capital		340.9		333.8
Accumulated other comprehensive income (loss)		—		(6.5)
Accumulated deficit		(438.0)		(460.0)
Treasury stock at cost, 8,777,023 and 8,339,364 shares as of June 30, 2021 and December 31, 2020, respectively		(88.1)		(80.7)
Total stockholders’ deficit		(184.2)		(212.4)
Total liabilities and stockholders’ deficit	$	2,487.3	$	2,487.0

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

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WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Three months ended

Nine months ended


September 30,

September 30,

2020

2019

2020

2019

(in millions, except per share data)
Revenue

$
288.7

$
285.4

$
855.2

$
862.3
Costs and expenses:






Operating (excluding depreciation and amortization)

140.8

138.8

436.6

432.4
Selling, general and administrative

45.0

40.6

134.2

133.7
Depreciation and amortization

58.2

50.9

170.8

151.5
Loss on sale of operating assets, net

—

8.4

—

4.8

244.0

238.7

741.6

722.4
Income from operations

44.7

46.7

113.6

139.9
Other income (expense):






Interest expense

(32.2)

(35.8)

(98.1)

(107.4)
(Loss) gain on sale of assets, net

(0.3)

—

0.4

—
Other income, net

0.8

0.6

1.6

3.3
Income before provision for income tax

13.0

11.5

17.5

35.8
Income tax expense

(4.0)

(0.1)

(6.2)

(6.3)
Net income

$
9.0

$
11.4

$
11.3

$
29.5

Basic and diluted earnings per common share

Basic

$
0.11

$
0.14

$
0.14

$
0.37
Diluted

$
0.11

$
0.14

$
0.14

$
0.36
Weighted-average common shares outstanding

Basic

81,771,279

80,885,244

81,475,814

80,639,099
Diluted

83,030,056

81,104,905

82,533,287

81,064,688


	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020

	(in millions, except per share data)
Revenue	$	181.9	$	179.4	$	363.4	$	360.1
Costs and expenses:
Operating (excluding depreciation and amortization)		95.1		102.8		193.5		206.9
Selling, general and administrative		45.5		41.5		88.0		84.8
Depreciation and amortization		42.4		37.2		83.7		73.3
		183.0		181.5		365.2		365.0
Loss from operations		(1.1)		(2.1)		(1.8)		(4.9)
Other income (expense):
Interest expense		(28.8)		(32.4)		(60.2)		(65.9)
(Loss) gain on sale of assets, net		(0.1)		0.4		(0.1)		0.6
Other income, net		—		0.1		0.6		0.7
Loss from continuing operations before provision for income tax		(30.0)		(34.0)		(61.5)		(69.5)
Income tax benefit (expense)		7.5		7.6		16.3		15.4
Loss from continuing operations		(22.5)		(26.4)		(45.2)		(54.1)
Discontinued Operations (Note 1)
Income from discontinued operations, net of tax		34.9		28.6		67.2		56.4
Net income	$	12.4	$	2.2	$	22.0	$	2.3

Basic and diluted (loss) per common share - continuing operations
Basic	$	(0.27)	$	(0.32)	$	(0.55)	$	(0.66)
Diluted	$	(0.27)	$	(0.32)	$	(0.55)	$	(0.66)
Basic and diluted earnings per common share - discontinued operations
Basic	$	0.42	$	0.35	$	0.82	$	0.69
Diluted	$	0.42	$	0.35	$	0.82	$	0.69
Basic and diluted earnings per common share
Basic	$	0.15	$	0.03	$	0.27	$	0.03
Diluted	$	0.15	$	0.03	$	0.27	$	0.03
Weighted-average common shares outstanding
Basic		82,828,227		81,612,359		82,433,311		81,325,795
Diluted		82,828,227		81,612,359		82,433,311		81,325,795

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

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WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Three months ended				Nine months ended				Three months ended				Six months ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(in millions)								(in millions)
Net income	$	9.0	$	11.4	$	11.3	$	29.5	$	12.4	$	2.2	$	22.0	$	2.3
Unrealized gain (loss) on derivative instrument, net of tax		4.5		(0.7)		4.8		(12.3)
Unrealized gain on derivative instrument, net of tax										2.2		3.3		6.5		0.3
Comprehensive income	$	13.5	$	10.7	$	16.1	$	17.2	$	14.6	$	5.5	$	28.5	$	2.6

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

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WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)


								Accumulated													Accumulated
		Common		Treasury		Additional		Other				Total			Common		Treasury		Additional		Other				Total
	Common	Stock		Stock at		Paid-in		Comprehensive		Accumulated		Stockholders'		Common	Stock		Stock at		Paid-in		Comprehensive		Accumulated		Stockholders'
	Stock	Par Value		Cost		Capital		Loss		Deficit		Deficit		Stock	Par Value		Cost		Capital		Loss		Deficit		Deficit

	(in millions, except share data)													(in millions, except share data)
Balances at January 1, 2020	84,103,108	$	0.9	$	(79.7)	$	322.8	$	(15.5)	$	(474.4)	$	(245.9)
Changes in accumulated other comprehensive loss	—		—		—		—		(3.0)		—		(3.0)
Balances at January 1, 2021														86,847,797	$	1.0	$	(80.7)	$	333.8	$	(6.5)	$	(460.0)	$	(212.4)
Changes in accumulated other comprehensive gain														—		—		—		—		4.3		—		4.3
Stock-based compensation	—		—		—		2.7		—		—		2.7	—		—		—		3.1		—		—		3.1
Issuance of restricted stock, net	2,858,421		—		—		—		—		—		—	666,127		—		—		—		—		—		—
Purchase of shares	(199,520)		—		(0.7)		—		—		—		(0.7)	(397,186)		—		(6.6)		—		—		—		(6.6)
Net income	—		—		—		—		—		0.1		0.1	—		—		—		—		—		9.6		9.6
Balances at March 31, 2020(1)	86,762,009	$	0.9	$	(80.4)	$	325.5	$	(18.5)	$	(474.3)	$	(246.8)
Changes in accumulated other comprehensive loss	—		—		—		—		3.3		—		3.3
Balances at March 31, 2021(1)														87,116,738	$	1.0	$	(87.3)	$	336.9	$	(2.2)	$	(450.4)	$	(202.0)
Changes in accumulated other comprehensive gain														—		—		—		—		2.2		—		2.2
Stock-based compensation	—		—		—		3.0		—		—		3.0	—		—		—		4.0		—		—		4.0
Issuance of restricted stock, net	349,673		—		—		—		—		—		—	34,929		—		—		—		—		—		—
Purchase of shares	(46,917)		—		(0.3)		—		—		—		(0.3)	(40,473)		—		(0.8)		—		—		—		(0.8)
Net income	—		—		—		—		—		2.2		2.2	—		—		—		—		—		12.4		12.4
Balances at June 30, 2020(1)	87,064,765	$	0.9	$	(80.7)	$	328.5	$	(15.2)	$	(472.1)	$	(238.6)
Changes in accumulated other comprehensive loss	—		—		—		—		4.5		—		4.5
Stock-based compensation	—		—		—		2.6		—		—		2.6
Issuance of restricted stock, net	(198,182)		—		—		—		—		—		—
Purchase of shares	(10,105)		—		—		—		—		—		—
Net income	—		—		—		—		—		9.0		9.0
Balances at September 30, 2020(1)	86,856,478	$	0.9	$	(80.7)	$	331.1	$	(10.7)	$	(463.1)	$	(222.5)
Balances at June 30, 2021(1)														87,111,194	$	1.0	$	(88.1)	$	340.9	$	—	$	(438.0)	$	(184.2)

(1)	Included in outstanding shares as of March 31, ~~2020,~~2021 and June 30, ~~2020~~2021 are 4,423,885 and ~~September 30, 2020 are 5,292,277, 5,322,864 and 5,072,695,~~4,159,455, respectively, of non-vested shares of restricted stock awards granted to employees and directors.


								Accumulated													Accumulated
		Common		Treasury		Additional		Other				Total			Common		Treasury		Additional		Other				Total
	Common	Stock		Stock at		Paid-in		Comprehensive		Accumulated		Stockholders'		Common	Stock		Stock at		Paid-in		Comprehensive		Accumulated		Stockholders'
	Stock	Par Value		Cost		Capital		Loss		Deficit		Deficit		Stock	Par Value		Cost		Capital		Loss		Deficit		Deficit

	(in millions, except share data)													(in millions, except share data)
Balances at January 1, 2019	82,680,380	$	0.9	$	(78.1)	$	312.7	$	(6.5)	$	(510.8)	$	(281.8)
Balances at January 1, 2020														84,103,108	$	0.9	$	(79.7)	$	322.8	$	(15.5)	$	(474.4)	$	(245.9)
Changes in accumulated other comprehensive loss	—		—		—		—		(3.1)		—		(3.1)	—		—		—		—		(3.0)		—		(3.0)
Stock-based compensation	—		—		—		2.1		—		—		2.1	—		—		—		2.7		—		—		2.7
Issuance of restricted stock, net	1,702,482		—		—		—		—		—		—	2,858,421		—		—		—		—		—		—
Purchase of shares	(108,937)		—		(1.1)		—		—		—		(1.1)	(199,520)		—		(0.7)		—		—		—		(0.7)
Net income	—		—		—		—		—		8.4		8.4	—		—		—		—		—		0.1		0.1
Balances at March 31, 2019(2)	84,273,925	$	0.9	$	(79.2)	$	314.8	$	(9.6)	$	(502.4)	$	(275.5)
Balances at March 31, 2020(1)														86,762,009	$	0.9	$	(80.4)	$	325.5	$	(18.5)	$	(474.3)	$	(246.8)
Changes in accumulated other comprehensive loss	—		—		—		—		(8.5)		—		(8.5)	—		—		—		—		3.3		—		3.3
Stock-based compensation	—		—		—		2.8		—		—		2.8	—		—		—		3.0		—		—		3.0
Issuance of restricted stock, net	239,903		—		—		—		—		—		—	349,673		—		—		—		—		—		—
Purchase of shares	(40,155)		—		(0.3)		—		—		—		(0.3)	(46,917)		—		(0.3)		—		—		—		(0.3)
Net income	—		—		—		—		—		9.7		9.7	—		—		—		—		—		2.2		2.2
Balances at June 30, 2019(2)	84,473,673	$	0.9	$	(79.5)	$	317.6	$	(18.1)	$	(492.7)	$	(271.8)
Changes in accumulated other comprehensive loss	—		—		—		—		(0.7)		—		(0.7)
Stock-based compensation	—		—		—		2.9		—		—		2.9
Issuance of restricted stock, net	(170,558)		—		—		—		—		—		—
Purchase of shares	(22,309)		—		(0.1)		—		—		—		(0.1)
Net income	—		—		—		—		—		11.4		11.4
Balances at September 30, 2019(2)	84,280,806	$	0.9	$	(79.6)	$	320.5	$	(18.8)	$	(481.3)	$	(258.3)
Balances at June 30, 2020(1)														87,064,765	$	0.9	$	(80.7)	$	328.5	$	(15.2)	$	(472.1)	$	(238.6)

~~(2)~~(1)

Included in outstanding shares as of March 31, ~~2019,~~2020 and June 30, ~~2019~~2020 are 5,292,277 and ~~September 30, 2019 are 3,703,649, 3,601,021 and 3,354,505,~~5,322,864, respectively, of non-vested shares of restricted stock awards granted to employees and directors.

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

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WIDEOPENWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine Months Ended				Six Months Ended
	September 30,				June 30,
	2020		2019		2021		2020

	(in millions)				(in millions)
Cash flows from operating activities:
Net income	$	11.3	$	29.5	$	22.0	$	2.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		170.8		151.5		124.7		112.6
Deferred income taxes		4.5		8.0		2.3		0.6
Provision for doubtful accounts		14.3		12.5		5.3		12.2
Loss on sale of operating assets, net		—		4.8
Gain on sale of assets, net		(0.4)		—		(0.1)		(0.7)
Amortization of debt issuance costs and discount		3.6		3.6		2.4		2.4
Non-cash compensation		8.3		7.8		7.1		5.7
Other non-cash items						(0.1)		—
Changes in operating assets and liabilities:
Receivables and other operating assets		(23.0)		(27.4)		(9.3)		(11.6)
Payables and accruals		10.7		(11.1)		2.6		3.8
Net cash provided by operating activities	$	200.1	$	179.2	$	156.9	$	127.3
Cash flows from investing activities:
Capital expenditures	$	(166.3)	$	(191.1)	$	(115.5)	$	(115.2)
Proceeds from sale of Chicago fiber assets		—		21.0
Other investing activities		(0.6)		(1.3)		0.9		(0.7)
Net cash used in investing activities	$	(166.9)	$	(171.4)	$	(114.6)	$	(115.9)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	$	91.0	$	65.0	$	31.0	$	91.0
Payments on long-term debt and finance lease obligations		(111.3)		(75.2)		(55.0)		(82.8)
Purchase of shares		(1.0)		(1.5)		(7.4)		(1.0)
Net cash used in financing activities	$	(21.3)	$	(11.7)
Increase (decrease) in cash and cash equivalents		11.9		(3.9)
Net cash (used in) provided by financing activities					$	(31.4)	$	7.2
Increase in cash and cash equivalents						10.9		18.6
Cash and cash equivalents, beginning of period		21.0		13.2		12.4		21.0
Cash and cash equivalents, end of period	$	32.9	$	9.3	$	23.3	$	39.6
Supplemental disclosures of cash flow information:
Cash paid during the periods for interest	$	93.4	$	107.8	$	59.0	$	62.6
Cash (received) paid during the periods for income taxes, net	$	(3.4)	$	1.5
Insurance proceeds received for business interruption	$	—	$	9.6
Cash paid (received) during the periods for income taxes, net					$	1.7	$	(3.9)
Non-cash operating activities:
Operating lease additions	$	5.5	$	9.3	$	0.9	$	4.8
Non-cash financing activities:
Finance lease additions	$	13.3	$	18.0	$	3.3	$	6.6
Capital expenditure accounts payable and accruals	$	13.7	$	11.3	$	12.2	$	9.8

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

5

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WIDEOPENWEST, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2020~~2021

(unaudited)

Note 1. General Information

WideOpenWest, Inc. (“WOW” or the “Company”) is a leading broadband services provider offering high-speed data ~~("HSD"~~(“HSD”), cable television ~~("Video"~~(“Video”), and digital telephony ~~("Telephony"~~(“Telephony”) services to residential and business customers. The Company serves customers in 19 Midwestern and Southeastern markets in the United States. The Company manages and operates its Midwestern broadband networks in 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, 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 1 reportable segment.

Discontinued Operations – Sale of Service Areas

On June 30, 2021, WOW entered into an Asset Purchase Agreement with Atlantic Broadband (OH), LLC, (“Atlantic”), a U.S. cable operator and subsidiary of Cogeco Communications, Inc. and Atlantic Broadband Finance, LLC, a Delaware limitied liability company (the “Atlantic Purchase Agreement”), whereby Atlantic agreed to acquire the Company’s Cleveland and Columbus, Ohio markets for approximately $1.125 billion, subject to adjustments, including customary working capital adjustments, as specified in the Atlantic Purchase Agreement.

Additionally, on June 30, 2021, WOW entered into an Asset Purchase Agreement with Radiate HoldCo, LLC, a telecommunications holding company affiliated with RCN Telecom Services LLC, Grande Communications Networks, LLC and WaveDivision Holdings, LLC (collectively, “Astound Broadband”) (the “Astound Purchase Agreement”), whereby Radiate HoldCo, LLC agreed to acquire the Company’s Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets for approximately $661 million, subject to adjustments, including customary working capital adjustments, as specified in the Astound Purchase Agreement.

Both transactions are expected to close in the second half of 2021. The closing of each transaction is subject to certain regulatory reviews and approvals and the satisfaction of other customary closing conditions.

The divestiture of these markets represents a strategic shift in WOW’s business as the markets represent approximately 37% of total revenue for the three and six months ended June 30, 2021. As such, the results of these markets are classified as discontinued operations in the condensed consolidated statements of operations and excluded from continuing operations for all periods presented. Results of discontinued operations include all revenues and direct expenses of these markets. General corporate overhead is not allocated to discontinued operations. The assets and liabilities associated with these markets, as specified in the June 30, 2021 agreements, are classified as held for sale in our condensed consolidated balance sheets.

In connection with the divestiture of these markets, the Company has entered into transition services agreements under which WOW will continue to provide certain services to Astound Broadband and Atlantic. Under the transition services agreements, the buyers may elect a variety of services, including but not limited to: information technology, network, business support services, etc. The term of the transition services agreements are for 12 months following the closing date, with 2 optional three month extensions. NaN of the costs related to the employees, processes or systems that will be utilized to provide the services under the transition services agreements were allocated to discontinued operations.

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The following table presents the aggregate amounts of the classes of assets and liabilities to be sold under the Astound Purchase Agreement and Atlantic Purchase Agreement:


	June 30,		December 31,
	2021		2020

	(in millions)
Assets
Current assets
Accounts receivable—trade, net of allowance for doubtful accounts of $1.8 in both periods	$	23.5	$	25.1
Accounts receivable—other, net		0.7		0.9
Prepaid expenses and other		5.7		4.2
Total current assets		29.9		30.2
Right-of-use lease assets—operating		3.1		2.8
Property, plant and equipment, net		368.7		379.4
Franchise operating rights		165.4		165.4
Goodwill		183.7		183.7
Intangible assets subject to amortization, net		0.2		0.2
Other non-current assets		9.0		8.5
Total assets	$	760.0	$	770.2
Liabilities and stockholders’ deficit
Current liabilities
Accounts payable—trade	$	11.2	$	11.4
Current portion of long-term lease liability—operating		0.8		0.7
Accrued liabilities and other		17.8		18.9
Current portion of unearned service revenue		17.1		16.9
Total current liabilities		46.9		47.9
Long-term lease liability—operating		2.4		2.3
Total liabilities	$	49.3	$	50.2

The following table presents information regarding certain components of income from discontinued operations, net of taxes:


	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020

	(in millions)
Revenue	$	105.4	$	102.6	$	210.2	$	206.4
Costs and expenses:
Operating (excluding depreciation and amortization)		37.6		43.0		77.2		87.4
Selling, general and administrative		2.8		2.4		5.5		5.9
Depreciation and amortization		20.5		19.6		41.0		39.3
		60.9		65.0		123.7		132.6
Income from operations		44.5		37.6		86.5		73.8
Other income (expense):
Interest income (expense)		0.4		—		0.4		—
Gain on sale of assets, net		0.2		—		0.2		0.1
Other income, net		0.1		—		0.1		0.1
Income from discontinued operations before provision for income tax		45.2		37.6		87.2		74.0
Income tax expense		(10.3)		(9.0)		(20.0)		(17.6)
Income from discontinued operations	$	34.9	$	28.6	$	67.2	$	56.4

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The following table presents revenue by service offering from discontinued operations:


	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020

	(in millions)
Residential subscription
HSD	$	51.8	$	44.8	$	102.1	$	89.5
Video		35.5		39.8		71.5		79.6
Telephony		3.9		4.2		7.9		8.6
Total Residential subscription	$	91.2	$	88.8	$	181.5	$	177.7
Business subscription
HSD	$	5.9	$	5.6	$	11.7	$	11.1
Video		0.9		0.8		1.8		1.8
Telephony		2.8		3.0		5.6		6.0
Total business subscription	$	9.6	$	9.4	$	19.1	$	18.9
Total subscription services revenue		100.8		98.2		200.6		196.6
Other business services revenue		0.4		0.4		1.0		1.0
Other revenue		4.2		4.0		8.6		8.8
Total revenue	$	105.4	$	102.6	$	210.2	$	206.4

The following table presents specified items of cash flow and significant non-cash items of discontinued operations:


	June 30,		June 30,
	2021		2020

	(in millions)
Specified items of cash flow:
Capital expenditures	$	29.8	$	28.6

Non-cash operating activities:
Operating lease additions	$	0.7	$	0.6
Non-cash investing activities:
Capital expenditure accounts payable and accruals	$	4.8	$	5.6

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

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. 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 Securities and Exchange Commission (“SEC”); however, in the opinion of management, the disclosures made are adequate to ensure the information presented is not misleading. The year-end 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 ~~Item 8 of~~ the ~~Company’s 2019~~2020 Annual Report ~~on Form 10-K~~ filed with the SEC on ~~March 4, 2020.~~February 24, 2021.

All significant intercompany accounts and transactions have been eliminated in consolidation.

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Use of Estimates

The preparation of financial statements in accordance with 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, including but not limited to the potential impacts arising from COVID-19. As the extent and duration of the impacts from COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change and the Company is not able to fully predict the overall impact of COVID-19, the CARES Act (as defined herein), or any other current or future legislative programs relating to COVID-19 on the business. To the extent there are differences between those estimates and actual results, the unaudited condensed consolidated financial statements may be materially affected.

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Note 3. Revenue from Contracts with Customers

~~Revenue~~Revenue by Service Offering

The following table presents revenue by service offering for the three and six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019, respectively:~~2020:

Three months ended September 30, 2020

Three months ended September 30, 2019


Residential

Business

Total

Residential

Business

Total


Subscription

Subscription

Revenue

Subscription

Subscription

Revenue

(in millions)
HSD

$
120.8

$
21.8

$
142.6

$
109.8

$
20.4

$
130.2
Video

100.1

3.8

103.9

102.8

3.6

106.4
Telephony

12.7

10.3

23.0

15.1

10.7

25.8
Total subscription services revenue

$
233.6

$
35.9

$
269.5

$
227.7

$
34.7

$
262.4
Other business services revenue(1)

—

—

6.3

—

—

6.8
Other revenue

—

—

12.9

—

—

16.2
Total revenue

$
233.6

$
35.9

$
288.7

$
227.7

$
34.7

$
285.4


	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020

	(in millions)
Residential subscription
HSD	$	81.5	$	71.1	$	161.0	$	141.7
Video		52.5		59.2		106.1		118.9
Telephony		7.3		9.3		14.9		18.9
Total Residential subscription	$	141.3	$	139.6	$	282.0	$	279.5
Business subscription
HSD	$	17.2	$	15.8	$	34.3	$	31.6
Video		2.8		2.7		5.6		5.6
Telephony		7.3		7.6		14.7		15.2
Total business subscription	$	27.3	$	26.1	$	54.6	$	52.4
Total subscription services revenue		168.6		165.7		336.6		331.9
Other business services revenue(1)		5.7		6.0		11.3		11.9
Other revenue		7.6		7.7		15.5		16.3
Total revenue	$	181.9	$	179.4	$	363.4	$	360.1

(1)

Includes wholesale and colocation lease revenue of ~~$5.4~~$5.0 million and ~~$5.6~~$4.9 million for the three months ended ~~September~~June 30, 2021 and 2020, respectively and ~~2019, respectively.~~

~~The following table presents revenue by service offering for the nine months ended September 30, 2020 and 2019, respectively:~~

Nine months ended September 30, 2020

Nine months ended September 30, 2019

Residential

Business

Total

Residential

Business

Total


Subscription

Subscription

Revenue


Subscription


Subscription


Revenue

(in millions)
HSD

$
352.0

$
64.5

$
416.5

$
328.4

$
59.7

$
388.1
Video

298.6

11.2

309.8

316.1

10.9

327.0
Telephony

40.2

31.5

71.7

46.8

32.1

78.9
Total subscription services revenue

$
690.8

$
107.2

$
798.0

$
691.3

$
102.7

$
794.0
Other business services revenue(1)

—

—

19.2

—

—

21.0
Other revenue

—

—

38.0

—

—

47.3
Total revenue

$
690.8

$
107.2

$
855.2

$
691.3

$
102.7

$
862.3

~~(1)~~

~~Includes wholesale and colocation lease revenue of $16.1~~$9.8 million and ~~$16.5~~$9.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Costs of Obtaining Contracts with Customers

The following table summarizes the activity of costs of obtaining contracts with customers:


	Three months ended				Nine months ended				Three months ended				Six months ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(in millions)								(in millions)
Balance at beginning of period	$	45.2	$	32.8	$	40.7	$	26.3	$	42.0	$	35.5	$	40.8	$	33.1
Deferral		4.3		6.5		14.5		16.3		3.9		3.6		7.9		8.2
Amortization		(3.1)		(2.1)		(8.8)		(5.4)		(3.1)		(2.3)		(5.9)		(4.5)
Balance at end of period	$	46.4	$	37.2	$	46.4	$	37.2	$	42.8	$	36.8	$	42.8	$	36.8

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The following table presents the current and non-current portion of costs of obtaining contracts with customers as of the end of the corresponding periods:


	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020

	(in millions)				(in millions)
Current costs of obtaining contracts with customers	$	12.9	$	10.0	$	14.4	$	12.6
Non-current costs of obtaining contracts with customers		33.5		30.7		28.4		28.2
Total costs of obtaining contracts with customers	$	46.4	$	40.7	$	42.8	$	40.8

The current portion and the non-current portion of costs of obtaining contracts with customers are included in prepaid expenses and other and other non-current assets, respectively, in the Company’s unaudited condensed consolidated balance sheets. Amortization of costs of obtaining contracts with customers is included in selling, general and administrative expense in the Company’s unaudited condensed consolidated statements of operations.

Contract Liabilities

The following table summarizes the activity of current and non-current contract liabilities:


	Three months ended				Nine months ended				Three months ended				Six months ended
	September 30,					September 30,			June 30,					June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(in millions)								(in millions)
Balance at beginning of period	$	3.6	$	4.1	$	4.2	$	3.9	$	3.2	$	2.7	$	2.9	$	2.8
Deferral		3.7		4.1		10.4		12.0		2.9		2.0		5.8		4.3
Revenue recognized		(3.3)		(4.0)		(10.6)		(11.7)		(2.8)		(2.0)		(5.4)		(4.4)
Balance at end of period	$	4.0	$	4.2	$	4.0	$	4.2	$	3.3	$	2.7	$	3.3	$	2.7

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


	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020

	(in millions)				(in millions)
Current contract liabilities	$	3.4	$	3.6	$	2.7	$	2.4
Non-current contract liabilities		0.6		0.6		0.6		0.5
Total contract liabilities	$	4.0	$	4.2	$	3.3	$	2.9

The current and the non-current portion of contract liabilities are included in the current portion of unearned service revenue and other non-current liabilities, respectively, in the Company’s unaudited condensed consolidated balance sheets.

Unsatisfied Performance Obligations

Revenue from month-to-month residential subscription service contracts have historically represented a significant portion of the Company’s revenue and the Company expects that this will continue to be the case in future periods. All residential subscription service performance obligations will be satisfied within one year.

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Table of Contents

A summary of expected business subscription and other business services revenue to be recognized in future periods related to performance obligations which have not been satisfied or are partially unsatisfied as of ~~September~~June 30, ~~2020~~2021 is set forth in the table below:

2020

2021

2022

Thereafter

Total

(in millions)
Subscription services

$
22.2

$
62.9

$
31.5

$
15.3

$
131.9
Other business services

1.0

3.3

1.5

0.5

6.3
Total expected revenue

$
23.2

$
66.2

$
33.0

$
15.8

$
138.2


	2021		2022		2023		Thereafter		Total

	(in millions)
Subscription services	$	25.3	$	31.4	$	13.6	$	6.1	$	76.4
Other business services		1.8		2.4		1.0		0.2		5.4
Total expected revenue	$	27.1	$	33.8	$	14.6	$	6.3	$	81.8

Provision for Doubtful Accounts

The provision for doubtful accounts and the allowance for doubtful accounts are based on the aging of the individual receivables, historical trends and current and anticipated future economic conditions. The Company manages credit risk by disconnecting services to customers who are delinquent, generally after sixty days of delinquency. From March 12, 2020 through June 30, 2020, the Company suspended certain collection activities as a result of participation in the Federal Communications Commission (“FCC”) Keep Americans Connected Pledge. The ~~FCC Pledge expired on June 30, 2020, however the Company continued to arrange payment plans for those customers impacted by COVID-19 through September 30, 2020. Individual~~individual receivables are written-off after all reasonable efforts to collect the funds have been made. Actual write-offs may differ from the amounts reserved.

The following table presents the change in the allowance for doubtful accounts for trade accounts receivable:


	Three months ended				Nine months ended				Three months ended				Six months ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(in millions)								(in millions)
Balance at beginning of period	$	7.8	$	8.2	$	7.5	$	7.5	$	7.3	$	7.8	$	6.9	$	6.4
Provision charged to expense		3.4		5.2		12.5		12.5		1.6		2.9		3.6		6.8
Accounts written off, net of recoveries		(3.1)		(4.7)		(11.9)		(11.3)		(3.7)		(4.5)		(5.3)		(7.0)
Balance at end of period	$	8.1	$	8.7	$	8.1	$	8.7	$	5.2	$	6.2	$	5.2	$	6.2

The Company established an allowance for doubtful accounts for non-trade accounts receivable of ~~$1.8~~$1.4 million as of ~~September~~June 30, 2020 that is presented within accounts receivable—other in the Company’s unaudited condensed consolidated balance sheet. The Company did 0t have such an allowance as of June 30, 2021.

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Note 4. Property, Plant and Equipment, Net

Property, plant and equipment consists of the following:


	September 30,		December 31,		June 30,		December 31,
	2020		2019		2021		2020

	(in millions)				(in millions)
Distribution facilities	$	1,921.0	$	1,780.7	$	1,193.7	$	1,148.8
Customer premise equipment		479.8		460.1		272.6		266.2
Head-end equipment		354.4		341.2		222.2		209.5
Telephony infrastructure		98.8		97.9		52.3		52.5
Computer equipment and software		158.2		146.4		113.7		102.5
Vehicles		37.2		37.0		21.1		22.7
Buildings and leasehold improvements		49.6		49.5		31.4		31.0
Office and technical equipment		34.7		33.5		18.7		18.7
Land		6.2		6.2		4.4		4.4
Construction in progress (including material inventory and other)		38.1		61.2		32.4		32.8
Total property, plant and equipment		3,178.0		3,013.7		1,962.5		1,889.1
Less accumulated depreciation		(2,098.2)		(1,940.0)		(1,243.9)		(1,168.2)
	$	1,079.8	$	1,073.7	$	718.6	$	720.9

Depreciation expense for the three months ended ~~September~~June 30, 2021 and 2020 ~~and 2019~~ was ~~$58.0~~$42.3 million and ~~$50.4~~$36.9 million, respectively. Depreciation expense for the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020 ~~and 2019~~ was ~~$169.9~~$83.5 million and ~~$150.1~~$72.7 million, respectively.

Note 5. Accrued Liabilities and Other

Accrued liabilities and other consists of the following:


	September 30,		December 31,		June 30,		December 31,
	2020		2019		2021		2020

	(in millions)				(in millions)
Payroll and employee benefits					$	28.7	$	28.0
Programming costs	$	32.0	$	33.4		20.0		19.7
Interest rate swaps		15.0		14.7
Payroll and employee benefits		21.8		20.8
Other accrued liabilities						9.1		8.2
Franchise and revenue sharing fees		10.2		10.9		6.2		7.1
Other accrued liabilities		9.1		10.0
Property, income, sales and use taxes		4.9		2.4		5.7		5.6
Utility pole costs		3.9		3.4		1.0		1.7
Interest rate swaps						—		9.4
	$	96.9	$	95.6	$	70.7	$	79.7

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Note 6. Long-Term Debt and Finance Leases

The following table summarizes the Company’s long-term debt and finance leases:


							December 31,								December 31,
	September 30, 2020						2019		June 30, 2021						2020
	Available								Available
	borrowing		Effective		Outstanding		Outstanding		borrowing		Effective		Outstanding		Outstanding
	capacity		interest rate(1)		balance		balance		capacity		interest rate(1)		balance		balance

	(in millions)								(in millions)
Long-term debt:
Term B Loans, net(2)	$	—	5.28	%	$	2,204.9	$	2,220.3	$	—	4.25	%	$	2,189.6	$	2,199.9
Revolving Credit Facility(3)		235.6	3.15	%		59.0		55.0		261.7	3.08	%		33.0		38.0
Total long-term debt	$	235.6				2,263.9		2,275.3	$	261.7				2,222.6		2,237.9
Other Financing														0.6		0.8
Finance lease obligations						29.2		23.1						28.9		32.9
Total long-term debt and finance lease obligations						2,293.1		2,298.4
Total long-term debt, finance lease obligations and other														2,252.1		2,271.6
Debt issuance costs, net(4)						(6.1)		(8.0)						(4.4)		(5.6)
Sub-total						2,287.0		2,290.4						2,247.7		2,266.0
Less current portion						(34.9)		(30.9)						(70.9)		(37.5)
Long-term portion					$	2,252.1	$	2,259.5					$	2,176.8	$	2,228.5

(1)	Represents the effective interest rate in effect for all borrowings outstanding as of ~~September~~June 30, ~~2020~~2021 pursuant to each debt instrument including the applicable margin.

(2)	At ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 includes ~~$6.7~~$4.9 million and ~~$8.4~~$6.1 million of net discounts, respectively.

(3)

Available borrowing capacity at ~~September~~June 30, ~~2020~~2021 represents $300.0 million of total availability less borrowing of ~~$59.0~~$33.0 million on the Revolving Credit Facility and outstanding letters of credit of ~~$5.4~~$5.3 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~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, debt issuance costs include ~~$4.8~~$3.6 million and ~~$6.0~~$4.4 million related to Term B Loans and ~~$1.3~~$0.8 million and ~~$2.0~~$1.2 million related to the Revolving Credit Facility, respectively.

The Company’s Term B ~~loans~~Loans will mature on August 19, 2023 and bear interest, at the Company’s option, at a rate equal to ABR plus 2.25% or LIBOR plus 3.25%. Borrowings under the revolving credit facility will mature on May 31, 2022 and bear interest, at the Company's option, at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. As of ~~September~~June 30, ~~2020,~~2021, the Company was in compliance with all debt covenants.

Note 7. Stock-Based Compensation

WOW’s 2017 Omnibus Incentive 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 Omnibus Incentive Plan. The 2017 Omnibus Incentive Plan has authorized 12,074,128 shares of common stock to be available for issuance, subject to adjustment in the event of a reorganization, stock split, merger or similar change in the Company’s corporate structure of the outstanding shares of common stock.

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The following table presents restricted stock activity during the ~~nine~~six months ended ~~September~~June 30, ~~2020:~~2021:


		Number of
		Unvested
		Restricted Stock
		Shares
Outstanding, beginning of period		~~3,140,168~~4,990,971
Granted		~~3,523,787~~841,937
Vested		~~(1,077,385)~~(1,532,572)
Forfeited		~~(513,875)~~(140,881)
Outstanding, end of period(1)		~~5,072,695~~4,159,455

(1)	The total outstanding unvested shares of restricted stock awards granted to employees and directors are included in total outstanding shares as of ~~September~~June 30, ~~2020.~~2021.

For restricted stock awards that contain only service conditions for vesting, the Company calculates the award fair value based on the Company’s closing stock price on the accounting grant date. The Company’s restricted stock awards generally vest ratably over a four year period based on the date of grant.

Nonvested Performance Shares

~~The~~On March 3, 2021, the Company granted ~~404,863~~209,621 performance shares ~~during the three months ended September 30, 2020~~ which will vest based on the Company’s achievement level relative to the following performance measures at December 31, ~~2022:~~2023: 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, income taxes, depreciation and amortization (including impairments), impairment losses on intangibles and goodwill, ~~management fees to related party,~~ the ~~write-up or~~ 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 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 ~~$8.91~~$27.76 per share. The estimated fair value is amortized to expense over the ~~three-year vesting~~requisite service period, which ends on December 31, ~~2022.~~2023. 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 ~~0.12%~~0.26%, volatility factors in the expected market price of the Company's common shares of ~~63.27%~~59.77% 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 September 30, 2020, achievement of the performance condition for the performance shares granted during the three months ended September 30, 2020 was deemed probable.~~

The Company recorded ~~$2.6~~$4.0 million and ~~$2.9~~$3.0 million for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and recorded ~~$8.3~~$7.1 million and ~~$7.8~~$5.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, of non-cash stock-based compensation expense which is reflected in selling, general and administrative expense in the Company’s unaudited condensed consolidated statements of operations.

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Note 8. Earnings (Loss) per Common Share

Basic earnings or loss per share attributable to the Company’s common stockholders is computed by dividing net earnings 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.

Three months ended

Nine months ended

September 30,

September 30,


2020

2019

2020

2019

(in millions, except share data)
Net income

$
9.0

$
11.4

$
11.3

$
29.5

Basic weighted-average shares

81,771,279

80,885,244

81,475,814

80,639,099
Effect of dilutive securities:

Restricted stock awards

1,258,777

219,661

1,057,473

425,589
Diluted weighted-average shares

83,030,056

81,104,905

82,533,287

81,064,688

Basic earnings per share

$
0.11

$
0.14

$
0.14

$
0.37
Diluted earnings per share

$
0.11

$
0.14

$
0.14

$
0.36

The dilutive effect of the potential common shares from the performance shares is included in diluted earnings per share upon the satisfaction of certain performance and market conditions. These conditions are evaluated at each reporting period and if the conditions have been satisfied during the reporting period, the number of contingently issuable shares are included in the computation of diluted earnings per share. As of September 30, 2020, the Company determined the performance and market conditions were not met, therefore, none of the contingently issuable performance sharesNo such items were included in the computation of diluted loss or earnings per ~~share.~~share for the periods presented because the Company incurred a net loss from continuing operations and the effect of inclusion would have been anti-dilutive.

							��
	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021			2020

	(in millions, except share data)
Loss from continuing operations	$	(22.5)	$	(26.4)	$	(45.2)		$	(54.1)

Income from discontinued operations	$	34.9	$	28.6	$	67.2		$	56.4

Net income	$	12.4	$	2.2	$	22.0		$	2.3

Basic weighted-average shares		82,828,227		81,612,359		82,433,311			81,325,795
Effect of dilutive securities:
Restricted stock awards		—		—		—			—
Diluted weighted-average shares		82,828,227		81,612,359		82,433,311			81,325,795

Basic and diluted (loss) per common share - continuing operations
Basic	$	(0.27)	$	(0.32)	$	(0.55)		$	(0.66)
Diluted	$	(0.27)	$	(0.32)	$	(0.55)		$	(0.66)

Basic and diluted earnings per common share - discontinued operations
Basic	$	0.42	$	0.35	$	0.82		$	0.69
Diluted	$	0.42	$	0.35	$	0.82		$	0.69

Basic and diluted earnings per common share
Basic	$	0.15	$	0.03	$	0.27		$	0.03
Diluted	$	0.15	$	0.03	$	0.27		$	0.03

Note 9. Fair Value Measurements

The fair values of cash and cash equivalents, receivables and trade payables 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:

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Table of Contents

●

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.

The Company’s derivative instrument isexpired in May 2021; however, prior to expiration the derivative instrument was accounted for at fair value on a recurring basis and classified within Level 2 of the valuation hierarchy and was valued at ~~$15.0~~$9.4 million ~~and $20.8 million as of September 30, 2020 and~~at December 31, ~~2019, respectively.~~2020. The fair value of the derivative instrument iswas measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curves as of ~~September 30, 2020.~~the date of measurement. The present value calculation ~~uses~~utilized discount rates that ~~have been~~were adjusted to reflect the credit quality of the Company and its counterparties.

14

~~Table of Contents~~

The estimated fair value of the Company’s long-term debt is based on dealer quotes considering current market rates for the Company’s credit facility and is classified as Level 2. The inputs used to determine the fair value of the Company’s aggregate debt balance has trended from quoted market prices in active markets to quoted prices in non-active markets. The fair value of the Company’s long-term debt was valued at ~~$2,181.2~~$2,197.2 million and ~~$2,220.3~~$2,203.1 million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Long-term debt fair value does not include debt issuance costs and discounts.

There were 0 transfers into or out of Level 1, 2 or 3 during the periods ended ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

The Company’s non-financial assets such as ~~franchises,~~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 within Level 3 of the valuation hierarchy.

Note 10. Derivative Instruments and Hedging Activities

The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in interest rates. The Company selectively uses derivative financial instruments (“derivatives”), including interest rate swaps, to manage interest rate risk. The Company does not hold or issue derivative instruments for speculative purposes. Fluctuations in interest rates can be volatile, and the Company’s risk management activities do not totally eliminate these risks. Consequently, these fluctuations could have a significant effect on the Company’s financial results.

The Company’s exposure to interest rate risk results primarily from its variable rate borrowings. On May 9, 2018, the Company entered into variable to fixed interest rate swap agreements for a notional amount of $1,361.2 million to hedge a portion of the outstanding principal balance of its variable rate term loan debt.

As of September 30, 2020, the Company is the fixed rate payor on 2 interest rate swap contracts that effectively fix the LIBOR-based index used to determine the interest rates charged on the Company’s total long-term debt of $2,270.6 million, not including debt issuance costs and discounts. These contracts fix approximately 60% of the Company’s term loan variable rate exposure at 2.7% and have an expiration date of May 2021. These swap agreements qualify as hedging instruments and have been designated as cash flow hedges of forecasted LIBOR-based interest payments. As all of the critical terms of each of the derivative instruments matched the underlying terms of the hedged debt and related forecasted interest payments, these hedges were considered highly effective. Based on LIBOR-based swap yield curves as of September 30, 2020, the Company expects to reclassify losses of $15.0 million out of accumulated other comprehensive loss (“AOCL”) into earnings within the next 12 months.

The ~~following table summarizes the notional amounts and fair values of the~~ Company’s outstanding derivatives ~~by risk category~~had a notional amount of $1,323.5 million and ~~instrument type~~the fair value was presented within accured liabilities and other of $9.4 million within the unaudited condensed consolidated balance sheet as of ~~September 30, 2020 and~~ December 31, ~~2019.~~

2020. The Company did 0t have such amounts as of June 30, 2021

Fair Value

Fair Value

Accrued

Other

Notional

Liabilities

Non-current

Amount

and Other

Liabilities
Derivatives Designated as Hedging Instruments

(in millions)
Interest rate swap contracts as of September 30, 2020

$
1,327.0

$
15.0

$
—
Interest rate swap contracts as of December 31, 2019

$
1,337.2

$
14.7

$
6.1

as the interest rate swap contracts expired in May of 2021.

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Table of Contents

Gains (losses) on derivatives designated as cash flow hedges included in the unaudited condensed consolidated statements of comprehensive income (loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 are shown in the table below.


	Three months ended				Nine months ended				Three months ended				Six months ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

Interest rate swap contracts(1)	(in millions)								(in millions)
Gain (loss) recorded in AOCL on derivatives, before tax	$	5.7	$	(0.3)	$	6.1	$	(16.7)
Gain recorded in AOCL on derivatives, before tax									$	2.9	$	4.3	$	8.5	$	0.4
Tax impact		(1.2)		(0.4)		(1.3)		4.4		(0.7)		(1.0)		(2.0)		(0.1)
Gain (loss) recorded in AOCL on derivatives, net		4.5		(0.7)		4.8		(12.3)
Gain recorded in AOCL on derivatives, net										2.2		3.3		6.5		0.3

(1)

Gains (losses) on derivatives reclassified from AOCL into income are included in “Interest expense” in the unaudited condensed consolidated statements of operations, the same line item as the earnings effect of the hedged item. Losses recognized for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 total ~~$5.8~~$3.8 million and ~~$15.4~~$9.5 million, respectively.

For the periods presented, all cash flows associated with derivatives are classified as operating cash flows in the unaudited condensed consolidated statements of cash flows.

Note 11. Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and 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 reported income tax expense of ~~$4.0~~$2.8 million and ~~$0.1~~$1.4 million for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively and ~~$6.2~~$3.7 million and ~~$6.3~~$2.2 million for the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, ~~and 2019,~~ respectively.The ~~Company’s effective federal and state income tax rate during the three and nine months ended September 30, 2020~~increase in expense is primarily related to ~~a reduction~~an increase in income ~~for the nine months ended when~~before tax as compared to ~~2019,~~the corresponding periods in 2020, while the lower effective income tax rate was primarily driven by the windfall deduction related to equity compensation, a decrease in ~~expected tax benefits on stock-based compensation, as well as an additional~~state valuation allowance ~~related to certain net state deferred tax assets.~~and an increase in the research and development credit.

As a result of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act enacted on March 27, 2020, companies were able to request refunds of the remaining amount of refundable Alternative Minimum Tax carryforwards. Previously, the remaining amount would have been refunded between 2020 and 2021. The Company received a full refund of approximately $4.4 million during the second quarter of 2020.

The CARES Act also contains modifications on the limitation of business interest for tax years 2020 and 2019. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. This modification will ultimately decrease the interest limitation deferred tax asset and increase the net operating loss deferred tax asset resulting in no material impact to the financial statements. Additionally, the Company has begun to defer the employer’s portion of social security payroll taxes to 2021 and 2022 as allowed under the CARES Act.

16

~~Table of Contents~~

Note 12. Commitments and Contingencies

IPO Shareholder Class Action. Beginning in June 2018, 4 different plaintiffs’ firms filed 5 separate class-action lawsuits against WOW, certain individual defendants, and the private equity sponsors and underwriters of the May 2017 initial public offering. The actions allege violations of Sections 11, 12, and 15 of the 1933 Securities Act. The 3 actions filed in New York have been consolidated as Kirkland. et al. v. WideOpenWest, Inc., et al., 653248/2018. The other 2 actions, which were filed in Colorado state court, have been stayed by agreement until final resolution of the Kirkland action. The Plaintiffs in Kirkland allege that Defendants made or caused misstatements to be made in the Registration Statement and Prospectus (“Offering Materials”) issued in connection with the IPO. On January 17, 2019, Defendants filed an omnibus motion to dismiss all claims for failure to state causes of action which the court denied in part and granted in part on May 18, 2020, with the Company thereafter appealing those claims not dismissed. ~~The court is considering a litigation schedule that anticipates~~Prior to an anticipated trial in 2022 or ~~2023. Mediation is scheduled for~~2023, the parties undertook mediation on November 6, ~~2020. The~~2020 which, in turn, resulted in a soon-to-be-filed Stipulation of Settlement with the court. Upon approval of the Court to the Stipulation of Settlement (which is expected in the third quarter of 2021), the Company ~~believes~~will be dismissed entirely without any admission of wrongdoing in exchange for a payment of substantially less than that sought by plaintiffs, with the ~~plaintiffs’ claims~~funding of such payment to be ~~without merit and is vigorously defending against them.~~ provided substantially from the Company’s primary D&O carrier.

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Table of Contents

Sprint Patent Infringement Claim. On March 7, 2018, Sprint Communications Company L.P (“Sprint”) filed complaints in the U.S. District Court for the District of Delaware alleging that the Company (and other industry participants) infringe patents purportedly relating to Sprint’s Voice over Internet Protocol (“VoIP”) services. The lawsuit is part of a pattern of litigation that was initiated as far back as 2007 by Sprint against numerous broadband and telecommunications providers. The Company has multiple legal and contractual defenses and is vigorously defending against the claims. Additionally, the Company is pursuing indemnification claims against equipment providers whose equipment is implicated by the claims. Formal discovery was completed in mid-February 2020, with the trial originally scheduled for October 2020, being moved to a yet to be determined date in the middle to second half of ~~2021.~~2022, with the parties undertaking settlement discussions. The Company is unable at this time to determine whether the outcome of the litigation would have a material impact on the Company’s financial position, results of operations or cash flows.

The Company is 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, 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 isare material. 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. However, litigation is subject to uncertainty, and the outcome of any particular matter is not predictable. The Company will vigorously defend its interests in pending litigation, and 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 consolidated financial position, results of operations, or cash flows.

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Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a leading broadband services provider offering high-speed data (“HSD”), cable television (“Video”), and digital telephony (“Telephony”) services to residential customers and offer a full range of products and services to business customers. Our services are delivered across 19 markets via our advanced hybrid fiber-coax (“HFC”) network. Our footprint covers certain suburban areas within the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee. At ~~September~~June 30, ~~2020,~~2021, our broadband networks passed ~~3.2~~3.3 million homes and businesses and served approximately ~~846,300~~857,400 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 uniform networks in the industry with approximately 97% of our network at 750 MHz or greater capacity.

Our advanced network offers HSD speeds up to 1 GIG (1000 Mbps) in approximately 95% of our footprint. 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 service customers. We continue to operate under a ~~broadband-centric growth~~broadband first strategy. Based on our per subscriber economics, we believe that HSD represents the greatest opportunity to enhance profitability across our residential and business markets.

~~In early 2020,~~During the second quarter of 2021, we ~~initiated a shift in our offerings towards IP driven services in certain markets through over-the-top~~continued to experience strong demand for high-speed data (“~~OTT”~~HSD”) ~~trials, in which we offered customers HSD only service with an alternative video streaming option (e.g., Amazon Firestick)~~. Additionally, we launched our WOW tv+ service which provides IP based video service to our customers. Our new Internet based video platform offers many advantages compared to the legacy video services we have historically provided, including an integrated customer experience for consuming video content through multiple mediums. The platform also provides for integration with android-based Internet of Things (“IoT”) devices within each customer home as well as provides operational benefits for WOW as we deploy more efficient set-top boxes and recapture bandwidth within our network. As of September 30, 2020, WOW tv+ is available in ten of our markets covering approximately 80% of total homes passed.

We have also entered into agreements with YouTube TV and Sling TV, alongside previous agreements with Philo and Fubo, to promote their services alongside our HSD service. These initiatives are moving us towards our objective of clearing our network for better bandwidth utilization, providing more desired solutions for our customers, and optimization of our customer service efforts.

The initiatives above align with the accelerated shift in the industry toward consumption of content over the internet and increased dependency on fast reliable HSD service to effectively work and learn from home. For the nine months ended September 30, 2020, the average percentage of HSD only new connections ~~was~~represented approximately ~~77%~~87% and 86% of total new connections for the three and six months ended June 30, 2021, respectively, compared to ~~an average percentage of approximately 57%~~77% and 72% for the ~~nine months ended September 30, 2019.~~corresponding periods in 2020, respectively. Additionally, ~~new customers are connecting at~~the demand for higher internet speeds has increased approximately 10% from the second quarter of 2020, with ~~approximately 80%~~nearly 90% of new ~~customers purchasing~~ HSD only ~~service at~~connections purchasing 200MB or higher speeds during the second quarter of 2021.

In order to support these trends, we are managing network bandwidth to meet the needs of our customers and ~~third quarters of 2020 compared to approximately 50% in prior quarters. WOW has met, and expects to continue~~expect to meet capacity demands as network traffic ~~increases.~~continues to increase. To meet this objective, we will continue to invest in our network to ensure speed and reliability, and obtain a better understanding of how customers utilize our network. Through this understanding, we can make certain capacity improvements and enhance the network to improve the customer experience; as well as introduce more self-help and self-care options to increase flexibility and choice for our customers.

We continue to ~~refine our response to~~monitor the ~~continuing~~impact of the global health crisis related to the outbreak of coronavirus, or COVID-19, ~~by focusing~~ on ~~the management of network bandwidth needs and development of self-service options for~~ our ~~customers. In addition~~business. The primary impact to ~~addressing the needs of our customers, WOW is addressing the needs of others within the communities that~~ the Company ~~operates through participation~~was its election to participate in several initiatives focused on keeping customers impacted by COVID-19 connected to services. These initiatives include the ~~ACA~~Federal Communications Commission (“FCC”) Keep Americans Connected Pledge, which expired on June 30, 2020, and the America’s Communications Association (“ACA”) Connects “K-12 Bridge to Broadband” ~~initiative~~program to ~~connect students with online learning. ACA Connects is a trade association for small and medium-sized independent broadband providers. The initiative helps~~help school districts and states provide internet access for students in low-income households.

18

~~Table~~ The Company is currently participating in the FCC’s Emergency Broadband Benefit Program as outlined under the Consolidated Appropriations Act of ~~Contents~~

As2021. Under this program, eligible households may apply for a discount of ~~September 30, 2020,~~up to $50 per month towards broadband service.

We have identified other potential impacts to the business as the potential for increases in delinquent customer payments and/or adverse effects on our ability to procure materials and equipment. Thus far, we have not experienced either of these adverse effects throughout the duration of the global health crisis. However, we are not able to fully predict the overall impact of the global health crisis on our business. While we have not seen a significant increase in delinquent payments, we have increased our allowance for doubtful accounts by an immaterial amount as a precaution resulting from uncertainty related to the potential impact of our residential and business ~~service customers’ ability to pay for services. Additionally, while we have seen only a slight delay~~if these events or other events occur in the ~~overall timing~~future.

20

Table of ~~customer payments, we are not yet able to assess the future economic impact of WOW’s agreement to suspend disconnections~~Contents

Key Transactions Impacting Operating Results and ~~collection efforts related to COVID-19.~~Financial Condition

Thus far, we have not experienced any adverse effects on our ability to procure materials and equipment. However, we are not able to predict if we will incur delays in obtaining required materials from suppliers and vendors throughout the durationSale of ~~the global health crisis.~~Service Areas

~~We reviewed~~On June 30, 2021, we entered into an Asset Purchase Agreement with Atlantic Broadband (OH), LLC, (“Atlantic”), a U.S. cable operator and subsidiary of Cogeco Communications, Inc. and Atlantic Broadband Finance, LLC, a Delaware limitied liability company (the “Atlantic Purchase Agreement”), whereby Atlantic agreed to acquire the ~~provisions outlined~~Company’s Cleveland and Columbus, Ohio markets for approximately $1.125 billion, subject to adjustments, including customary working capital adjustments, as specified in the ~~Coronavirus Aid, Relief,~~Atlantic Purchase Agreement.

Additionally, on June 30, 2021, we entered into an Asset Purchase Agreement with Radiate HoldCo, LLC, a telecommunications holding company affiliated with RCN Telecom Services LLC, Grande Communications Networks, LLC and ~~Economic Security (“CARES”~~WaveDivision Holdings, LLC (collectively, “Astound Broadband”) ~~Act~~(the “Astound Purchase Agreement”), whereby Radiate HoldCo, LLC agreed to acquire the Company’s Chicago, Illinois, Evansville, Indiana and ~~have taken advantage~~Baltimore, Maryland markets for approximately $661 million, subject to adjustments, including customary working capital adjustments, as specified in the Astound Purchase Agreement.

Both transactions are expected to close in the second half of 2021. The closing of each transaction is subject to certain regulatory reviews and approvals and the ~~following provisions: (i) deferral~~satisfaction of the employer’s portion of social security payroll taxes to 2021 and 2022, (ii) the interest expense limitation increase from 30% to 50%, and (iii) the acceleration of Alternative Minimum Tax refund credits to 2020. However, while we continue to evaluate the provisions of the CARES Act and other ~~governmental relief efforts, we do not anticipate any other provisions of the CARES Act or other such relief efforts to have a significant impact on our business.~~customary closing conditions.

Critical Accounting Policies and Estimates

For a discussion of our critical accounting policies and the means by which we develop estimates refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our ~~2019~~2020 Annual Report on Form 10-K. There have been no material changes from the critical policies described in our Form 10-K.

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 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 the Company’s acquisitions or divestitures:


	Sep. 30,	Dec. 31,	Mar. 31,	Jun. 30,	Sep. 30,	Jun. 30,	Sep. 30,	Dec. 31,	Mar. 31,	Jun. 30,
	2019	2019	2020	2020	2020	2020	2020	2020 (1)	2021	2021 (2)
Homes passed	3,215,500	3,237,200	3,235,200	3,237,700	3,242,400	3,237,700	3,242,400	3,248,600	3,251,900	3,275,200
Total subscribers	817,600	823,400	838,000	844,500	846,300	844,500	846,300	846,100	854,700	857,400
HSD RGUs	773,900	781,500	797,600	805,600	808,900	805,600	808,900	812,900	822,900	826,300
Video RGUs	380,800	373,800	365,800	351,700	328,000	351,700	328,000	306,100	288,800	272,100
Telephony RGUs	195,700	193,100	190,900	188,100	182,000	188,100	182,000	176,300	172,100	167,800
Total RGUs	1,350,400	1,348,400	1,354,300	1,345,400	1,318,900	1,345,400	1,318,900	1,295,300	1,283,800	1,266,200

(1)

The Company combined certain billing systems during the second quarter of 2021, which standardized the statistical reporting of key metrics. The standardized reporting led to the following decreases for subscriber and RGU counts at December 31, 2020: total subscribers (4,500), HSD RGUs (900), Video RGUs (2,100), Telephony RGUs (700), and Total RGUs (3,700).

(2)

At June 30, 2021, includes the following subscriber metrics for the service areas to be sold: homes passed 1,394,800, total subscribers 326,800, HSD RGUs 318,400, Video RGUs 102,900, Telephony RGUs 62,200, and Total RGUs 483,500.

21

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The following table displays the homes passed and subscribers related to the Company’s edge-out activities:


	Sep. 30,	Dec. 31,	Mar. 31,	Jun. 30,	Sep. 30,	Jun. 30,	Sep. 30,	Dec. 31,	Mar. 31,	Jun. 30,
	2019	2019	2020	2020	2020	2020	2020	2020	2021	2021 (1)
Homes passed	166,600	186,900	187,700	189,700	190,800	189,700	190,800	194,000	194,600	196,100
Total subscribers	39,500	42,500	44,300	45,200	46,300	45,200	46,300	47,900	48,800	49,500
HSD RGUs	39,200	42,300	44,000	44,900	46,100	44,900	46,100	47,600	48,600	49,200
Video RGUs	18,100	18,700	19,200	19,100	18,900	19,100	18,900	20,400	20,000	19,000
Telephony RGUs	7,100	7,500	7,800	7,800	7,900	7,800	7,900	8,400	8,400	8,300
Total RGUs	64,400	68,500	71,000	71,800	72,900	71,800	72,900	76,400	77,000	76,500

(1)

At June 30, 2021, includes the following subscriber metrics for the service areas to be sold: homes passed 118,700, total subscribers 30,900, HSD RGUs 30,700, Video RGUs 12,100, Telephony RGUs 5,500, and Total RGUs 48,300.

19

~~Table of Contents~~

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, 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 other business services to residential and business customers, 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.

●

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 were ~~93%~~94% and ~~92%~~93% of total revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The remaining percentage of non-subscription revenue is derived primarily from other business services, line assurance warranty services and advertising placement.

22

Table of Contents

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, ~~costs of dark fiber sales,~~hardware/software expenses, network operations and maintenance services, customer service and call center expenses, bad debt, billing and collection expenses and franchise 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.

Depreciation and amortizationincludes depreciation of our ~~broadband networks~~network infrastructure, including associated equipment, hardware and ~~equipment,~~software, buildings and leasehold improvements, and ~~amortization of~~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 in the accompanying unaudited condensed consolidated statements of operations.

20

~~Table of Contents~~

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.

Results of Operations

The following table summarizes our results of operations for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three months ended						Three months ended
	June 30, 2021						June 30, 2020
	Continuing		Discontinued		Total		Continuing		Discontinued		Total

	(in millions)
Revenue	$	181.9	$	105.4	$	287.3	$	179.4	$	102.6	$	282.0
Costs and expenses:
Operating (excluding depreciation and amortization)		95.1		37.6		132.7		102.8		43.0		145.8
Selling, general and administrative		45.5		2.8		48.3		41.5		2.4		43.9
Depreciation and amortization		42.4		20.5		62.9		37.2		19.6		56.8
		183.0		60.9		243.9		181.5		65.0		246.5
(Loss) income from operations		(1.1)		44.5		43.4		(2.1)		37.6		35.5
Other income (expense):
Interest (expense) income		(28.8)		0.4		(28.4)		(32.4)		—		(32.4)
(Loss) gain on sale of assets, net		(0.1)		0.2		0.1		0.4		—		0.4
Other income, net		—		0.1		0.1		0.1		—		0.1
(Loss) income before provision for income tax		(30.0)		45.2		15.2		(34.0)		37.6		3.6
Income tax benefit (expense)		7.5		(10.3)		(2.8)		7.6		(9.0)		(1.4)
Net (loss) income	$	(22.5)	$	34.9	$	12.4	$	(26.4)	$	28.6	$	2.2

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Three months ended

Nine months ended

September 30,

September 30,

2020

2019

2020

2019

(in millions)
Revenue

$
288.7

$
285.4

$
855.2

$
862.3
Costs and expenses:








Operating (excluding depreciation and amortization)

140.8

138.8

436.6

432.4
Selling, general and administrative

45.0

40.6

134.2

133.7
Depreciation and amortization

58.2

50.9

170.8

151.5
Loss on sale of operating assets, net

—

8.4

—

4.8

244.0

238.7

741.6

722.4
Income from operations

44.7

46.7

113.6

139.9
Other income (expense):








Interest expense

(32.2)

(35.8)

(98.1)

(107.4)
(Loss) gain on sale of assets, net

(0.3)

—

0.4

—
Other income, net

0.8

0.6

1.6

3.3
Income before provision for income tax

13.0

11.5

17.5

35.8
Income tax expense

(4.0)

(0.1)

(6.2)

(6.3)
Net income

$
9.0

$
11.4

$
11.3

$
29.5

The following table summarizes our results of operations for the six months ended June 30, 2021 and 2020:


	Six months ended						Six months ended
	June 30, 2021						June 30, 2020
	Continuing		Discontinued		Total		Continuing		Discontinued		Total

	(in millions)
Revenue	$	363.4	$	210.2	$	573.6	$	360.1	$	206.4	$	566.5
Costs and expenses:
Operating (excluding depreciation and amortization)		193.5		77.2		270.7		206.9		87.4		294.3
Selling, general and administrative		88.0		5.5		93.5		84.8		5.9		90.7
Depreciation and amortization		83.7		41.0		124.7		73.3		39.3		112.6
		365.2		123.7		488.9		365.0		132.6		497.6
(Loss) income from operations		(1.8)		86.5		84.7		(4.9)		73.8		68.9
Other income (expense):
Interest (expense) income		(60.2)		0.4		(59.8)		(65.9)		—		(65.9)
(Loss) gain on sale of assets, net		(0.1)		0.2		0.1		0.6		0.1		0.7
Other income, net		0.6		0.1		0.7		0.7		0.1		0.8
(Loss) income before provision for income tax		(61.5)		87.2		25.7		(69.5)		74.0		4.5
Income tax benefit (expense)		16.3		(20.0)		(3.7)		15.4		(17.6)		(2.2)
Net (loss) income	$	(45.2)	$	67.2	$	22.0	$	(54.1)	$	56.4	$	2.3

Revenue

~~Revenue~~Total revenue for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020~~2021 increased ~~$3.3~~$5.3 million, or 1%2%, ~~and decreased~~as compared to the corresponding period in 2020 as follows:


	Three months ended						Three months ended
	June 30, 2021						June 30, 2020
	Continuing		Discontinued		Total		Continuing		Discontinued		Total

	(in millions)
Residential subscription	$	141.3	$	91.2	$	232.5	$	139.6	$	88.8	$	228.4
Business services subscription		27.3		9.6		36.9		26.1		9.4		35.5
Total subscription		168.6		100.8		269.4		165.7		98.2		263.9
Other business services		5.7		0.4		6.1		6.0		0.4		6.4
Other		7.6		4.2		11.8		7.7		4.0		11.7
	$	181.9	$	105.4	$	287.3	$	179.4	$	102.6	$	282.0

Total revenue for the six months ended June 30, 2021 increased $7.1 million, or 1%, ~~respectively,~~ as compared to the corresponding ~~periods~~period in ~~2019~~2020 as follows:


	Three months ended				Nine months ended				Six months ended						Six months ended
	September 30,				September 30,				June 30, 2021						June 30, 2020
	2020		2019		2020		2019		Continuing		Discontinued		Total		Continuing		Discontinued		Total

	(in millions)								(in millions)
Residential subscription	$	233.6	$	227.7	$	690.8	$	691.3	$	282.0	$	181.5	$	463.5	$	279.5	$	177.7	$	457.2
Business services subscription		35.9		34.7		107.2		102.7		54.6		19.1		73.7		52.4		18.9		71.3
Total subscription		269.5		262.4		798.0		794.0		336.6		200.6		537.2		331.9		196.6		528.5
Other business services		6.3		6.8		19.2		21.0		11.3		1.0		12.3		11.9		1.0		12.9
Other		12.9		16.2		38.0		47.3		15.5		8.6		24.1		16.3		8.8		25.1
	$	288.7	$	285.4	$	855.2	$	862.3	$	363.4	$	210.2	$	573.6	$	360.1	$	206.4	$	566.5

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Subscription Revenue

Total subscription revenue increased ~~$7.1~~$5.5 million, or 3%2%, and ~~$4.0~~$8.7 million or 1%2%, during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, as compared to the corresponding periods in ~~2019.~~2020. The increases were driven by a ~~$15.2~~$29.6 million and ~~$22.3~~ $51.9million increase in average revenue per unit (“ARPU”), respectively, as HSD ~~acquisition sell-in ARPU has increased~~customers upgrade to higher speed offerings coupled with ~~periodic Video service rate increases, and~~ a ~~$10.0~~$4.5 million and ~~$25.7~~$11.2 million increase in volume, respectively, attributable almost exclusively to the addition of HSD subscribers. These increases were partially offset by a $28.6 million and $54.4 million shift in the service offering mix, respectively, as we continue to experience a reduction in Video and Telephony RGUs. 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. ~~These increases were partially offset by a $18.1 million and $44.0 million shift in service offering mix, respectively, as we continue to experience a reduction in Video and Telephony RGUs.~~

Other Business Services

Other business services revenue decreased ~~$0.5~~$0.3 million, or 7%5%, and ~~$1.8~~$0.6 million, or 9%5%, during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, as compared to the corresponding periods in ~~2019.~~2020. The decreases in each period were primarily due to decreases in data center revenue.

Other

Other revenue ~~decreased $3.3~~increased $0.1 million, or ~~20% and $9.3 million, or 20%~~1%, during the three ~~and nine~~ months ended ~~September~~June 30, ~~2020,~~2021, as compared to the corresponding ~~periods~~period in ~~2019,~~2020, primarily due to a slight increase in advertising revenue. Other revenue decreased $1.0 million, or 4%, during the six months ended June 30, 2021, as compared to the corresponding period in 2020, primarily due to decreases in ~~advertising, late fee and~~ line assurance ~~revenue. The reduction of late~~revenue and service call fee revenue, partially offset by a slight increase in the year to date period is attributable to the Company’s participation in the FCC pledge from March 12, 2020 to June 30, 2020 to stop charging late fees to customers affected by the global health crisis.advertising revenue.

Operating expenses (excluding depreciation and amortization)

Operating expenses (excluding depreciation and amortization) ~~increased $2.0~~decreased $13.1 million, or 1%9%, and ~~$4.2~~$23.6 million, or 1%8%, during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, as compared to the corresponding periods in 2019. During the third quarter of 2019, the Company finalized the insurance claim related to the damages incurred from Hurricane Michael, receiving approximately $6.5 million of business interruption insurance proceeds during the quarter. During the three2020. The decreases were primarily driven by decreases in direct operating and ~~nine months ended September 30, 2020, the Company incurred lower direct expenses, specifically programming~~bad debt expense, partially offset by ~~increased hardware~~decreases in capital eligible expenses and ~~software and~~increases in third-party service provider expense. The decrease in bad debt expense is related to the additional bad debt expense of $2.1 million and $5.3 million recorded during the three and six months ended June 30, 2020, respectively related to trade accounts receivable and non-trade accounts receivable as a result of uncertainties around the economic positions of our customers impacted by the global health crisis. We did not incur such expense for the three and six months ended June 30, 2021.

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 ~~$12.4~~$18.5 million, or 7%11%, during the three months ended ~~September~~June 30, ~~2020~~2021 compared to the three months ended ~~September~~June 30, ~~2019~~2020 and ~~$18.7~~$30.2 million, or 4%9% during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

The increase is primarily due to an increase in HSD subscription revenue combined with the decrease in programming expense. Programming expense decreased from ~~$88.8~~$87.9 million for the three months ended ~~September~~June 30, ~~2019~~2020 to ~~$83.9~~$75.2 million for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~$275.9~~$177.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 to ~~$261.6~~$156.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~

~~Selling, general and administrative expenses~~

~~Selling, general and administrative expenses increased $4.4 million, or 11%, and $0.5 million during the three and nine months ended September 30, 2020, respectively, compared~~2021. The decrease in programming expense is attributable to the ~~corresponding~~decline in Video RGUs over the periods in 2019. The increases are primarily attributable to increases in costs associated with digital transformation initiatives and marketing expense, partially offset by decreased restructuring and travel and entertainment expenses.

presented.

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~~Depreciation~~Selling, general and ~~amortization~~administrative expenses

~~Depreciation~~Selling, general and ~~amortization~~administrative expenses increased ~~$7.3~~$4.4 million, or ~~14%~~10%, and ~~$19.3~~$2.8 million, or ~~13%,~~3% during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to the corresponding periods in ~~2019.~~2020. The increases are primarily attributable to ~~assets placed~~increases in marketing, stock compensation, professional service and legal expenses, partially offset by decreases in operating taxes.

Depreciation and amortization expenses

Depreciation and amortization expenses increased $6.1 million, or 11%, and $12.1 million, or 11%, during the ~~fourth quarter of 2019 combined with an increase~~three and six months ended June 30, 2021, respectively, compared to the corresponding periods in 2020. The increases are primarily attributable to increases of equipment and vehicle lease activity.

~~Loss on sale of operating assets~~

On December 14, 2017, we sold a portion of our Chicago fiber network to a subsidiary of Verizon for $225.0 million in cash. In addition, we and a subsidiary of Verizon entered into a Construction Services Agreement pursuant to which we agreed to complete the build-out of the network in exchange for $50.0 million (which approximated our remaining estimate to complete the network build-out), recognized over time as the remaining network elements were completed and accepted. The Company completed the network build-out as of September 30, 2019. We recognized a $2.5 million loss for the nine months ended September 30, 2019 as a result of the completion and acceptance of such elements during 2019.

Interest expense

Interest expense decreased ~~$3.6~~$4.0 million, or ~~10%~~12%, and ~~$9.3~~$6.1 million, or 9%, during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to the corresponding periods in ~~2019.~~2020. The decreases are primarily due to the expiration of the interest rate swap agreement in May 2021 and lower interest rates during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to the corresponding periods in ~~2019.~~2020.

Income tax expense

We reported income tax expense of ~~$4.0~~$2.8 million and ~~$0.1~~$1.4 million for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and income tax expense of ~~$6.2~~$3.7 million and ~~$6.3~~$2.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The ~~Company’s~~increase in expense is primarily related to an increase in income before tax as compared to the corresponding periods in 2020, while the lower effective ~~federal and state~~ income tax rate was primarily driven by the windfall deduction related to equity compensation, a decrease in state valuation allowance and an increase in the research and development credit.

Discontinued Operations

Revenue from discontinued operations increased $2.8 million, or 3%, and $3.8 million, or 2%, during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020 is~~2021, respectively, compared to the corresponding periods in 2020. The increases are primarily due to increases in HSD revenue, partially offset by decreases in Video and Telephony revenue.

Operating expense for discontinued operations (excluding depreciation and amortization) decreased $5.4 million, or 13%, and $10.2 million, or 12%, during the three and six months ended June 30, 2021, respectively, compared to the corresponding periods in 2020. The decreases are primarily due to the decrease in programming expense of $5.4 million and $9.2 million over the same periods, respectively.

Discontinued operations expense does not include general corporate overhead or continuing costs related to providing service per the transition service agreements. Certain costs of providing the transition service agreements will continue during the term of the agreements as services are provided; however, upon termination of the agreements, these costs are expected to be reduced. In addition, general corporate overhead costs are expected to be reduced over a reduction in income for the nine months ended when compared to 2019, a decrease in expected tax benefits on stock-based compensation, and an additional valuation allowance related to certain state deferred tax assets.three year period.

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Table of Contents

Use of Incremental Contribution and Adjusted EBITDA

We use certain measures that are not defined by GAAP to evaluate various aspects of our business such as adjusted EBITDA and incremental contribution. These measures 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. Our use of the terms adjusted EBITDA and incremental contribution may vary from others in our industry. These metrics have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. These metrics do not identify or allocate any other operating costs and expenses that are components of our income (loss) 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.

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~~Table of Contents~~

Adjusted EBITDA

The following table provides a reconciliation of adjusted EBITDA to net income or loss, which is the most directly comparable GAAP measure, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three months ended				Nine months ended				Three months ended				Six months ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(in millions)								(in millions)
Net income	$	9.0	$	11.4	$	11.3	$	29.5	$	12.4	$	2.2	$	22.0	$	2.3
Depreciation and amortization		58.2		50.9		170.8		151.5		62.9		56.8		124.7		112.6
Loss on sale of operating assets, net		—		8.4		—		4.8
Interest expense		32.2		35.8		98.1		107.4		28.4		32.4		59.8		65.9
Loss (gain) on sale of assets, net		0.3		—		(0.4)		—
Gain on sale of assets, net										(0.1)		(0.4)		(0.1)		(0.7)
Non-recurring professional fees, M&A integration and restructuring expense		8.0		5.3		21.2		22.2		7.5		6.0		13.7		13.2
Non-cash stock compensation		2.6		2.9		8.3		7.8		4.0		3.0		7.1		5.7
Other income, net		(0.8)		(0.6)		(1.6)		(3.3)		(0.1)		(0.1)		(0.7)		(0.8)
Income tax expense		4.0		0.1		6.2		6.3		2.8		1.4		3.7		2.2
Adjusted EBITDA	$	113.5	$	114.2	$	313.9	$	326.2	$	117.8	$	101.3	$	230.2	$	200.4

Incremental 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 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. Incremental contribution is defined by 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.

27

Table of Contents

The following table provides a reconciliation of incremental contribution to income from operations, which is the most directly comparable GAAP measure, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three months ended				Nine months ended				Three months ended				Six months ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(in millions)								(in millions)
Income from operations	$	44.7	$	46.7	$	113.6	$	139.9	$	43.4	$	35.5	$	84.7	$	68.9
Revenue (excluding subscription revenue)		(19.2)		(23.0)		(57.2)		(68.3)		(17.9)		(18.1)		(36.4)		(38.0)
Other non-allocated operating expense (excluding depreciation and amortization)		50.5		43.2		155.1		136.2		50.9		51.0		101.0		103.1
Selling, general and administrative		45.0		40.6		134.2		133.7		48.3		43.9		93.5		90.7
Depreciation and amortization		58.2		50.9		170.8		151.5		62.9		56.8		124.7		112.6
Loss on sale of operating assets, net		—		8.4		—		4.8
Incremental contribution	$	179.2	$	166.8	$	516.5	$	497.8	$	187.6	$	169.1	$	367.5	$	337.3

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, ~~2020, we had $133.4 million in current assets, including $32.9 million in cash and cash equivalents, and $234.0 million in current liabilities. Our~~2021, the principal amount of our outstanding consolidated debt ~~and finance lease obligations~~ aggregated to ~~$2,287.0~~$2,247.7 million, of which ~~$34.9~~ $70.9million is classified as current in our unaudited condensed consolidated balance sheet as of such date.

24

~~Table~~ As of ~~Contents~~

June 30, 2021, we had borrowing capacity of $261.7 million under our Revolving Credit Facility representing $300.0 million of total availability less borrowings of $33.0 million and letters of credit of $5.3 million. 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. As of September 30, 2020, we had~~Credit Agreement.

We believe that existing cash balances, available borrowing capacity ~~of $235.6 million~~ under ~~our~~the Revolving Credit Facility, and ~~were in compliance with all our debt covenants. Thus far, we have not experienced significant effects on our liquidity as a result of the global health crisis. 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 free cash flow and cash on hand as funding sources, as well as potentially engage in future refinancing transactions to further extend the ~~foreseeable future in light~~maturities of our debt obligations. The timing and terms of any refinancing transactions will be subject to market conditions among other considerations. Additionally, dependent on a successful closing of the ~~current~~asset sales and market conditions and other factors, we plan to utilize the proceeds from the sale of specific service areas as announced on June 30, 2021, to retire a portion of our debt. We expect to utilize the remaining proceeds from the sale to fund specific capital expenditures and execute against our broadband first strategy.

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 ~~uncertainties.~~conditions and to financial, business and other factors, including the impact of COVID-19, some of which are beyond our control.

Historical Operating, Investing, and Financing Activities

Operating Activities

Net cash provided by operating activities increased from ~~$179.2~~$127.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 to ~~$200.1~~$156.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The increase is primarily due to ~~timing differences~~an increase in operating income as a result of ~~our receivables~~higher revenue and ~~payables.~~lower operating expenses as compared to the corresponding period in 2020.

Investing Activities

Net cash used in investing activities decreased from ~~$171.4~~$115.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 to ~~$166.9~~$114.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The ~~change~~decrease is ~~primarily~~ attributable to ~~a decrease~~an increase in ~~capital expenditures~~cash provided by other investing activities, partially offset by ~~proceeds from the sale~~a slight increase in capital expenditures.

28

Table of ~~the Chicago fiber assets received during the first nine months of 2019.~~Contents

We have ongoing capital expenditure requirements related to the maintenance, expansion and technological upgrades of our network. Capital expenditures are funded primarily through a combination of cash on hand and cash flow from operations. Our capital expenditures were ~~$166.3~~$115.5 million and ~~$191.1~~$115.2 million for the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, respectively. The $0.3 million increase from the six months ended June 30, 2020 ~~and 2019, respectively. The $24.8 million decrease from~~to the ~~nine~~six months ended ~~September~~June 30, ~~2019 to the nine months ended September 30, 2020~~2021 is primarily ~~due~~related to ~~a decrease in edge-out expenditures~~network enhancements focused on increasing bandwidth capacity, standardization and reliability to meet the needs of our customers. These increases are partially offset by ~~an increase in HSD~~decreased expenditures related to customer premise equipment (“CPE”) ~~purchases to ensure the Company received the necessary equipment to meet customer demand in light of the coronavirus outbreak~~ and mitigate against potential supply chain issues. Additionally, the Company is no longer incurring costs in relation to the Construction Services Agreement as it was completed during the third quarter of 2019. Capital expenditures associated with the Construction Services Agreement were recognized within the business services capital expenditure category in 2019.edge-outs.

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

Nine months ended

September 30,

2020

2019
Capital Expenditures

Customer premise equipment(1)

$
97.9

$
87.0
Scalable infrastructure(2)

21.9

13.4
Line extensions(3)

11.9

48.7
Support capital and other(4)

34.6

42.0
Total

$
166.3

$
191.1
Capital expenditures included in total related to:

Edge-outs(5)

$
6.5

$
27.6
Business services(6)

$
12.2

$
27.2

25

~~Table of Contents~~


	Six months ended
	June 30,
	2021		2020

Capital Expenditures	(in millions)
Customer premise equipment(1)	$	56.3	$	70.4
Scalable infrastructure(2)		24.9		12.8
Line extensions(3)		9.8		9.2
Support capital and other(4)		24.5		22.8
Total	$	115.5	$	115.2
Capital expenditures included in total related to:
Edge-outs(5)	$	3.0	$	4.7
Business services(6)	$	9.6	$	9.4

(1)	Customer premise equipment (“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.

(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)	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)	Edge-outs represent costs to extend our network into new adjacent service areas, including the associated CPE.

(6)	Business services represent costs associated with the build-out of our network to support business services customers, including the associated CPE.

Financing Activities

~~Net~~The change from net cash provided by financing activities of $7.2 million for the six months ended June 30, 2020 to net cash used in financing ~~activities increased from $11.7~~activites of $31.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019 to $21.3 million for the nine months ended September 30, 2020~~2021, is primarily due to an increase in net repayments of ~~$10.1~~$32.2 million and an increase of $6.4 million in share purchases during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~ 2020.

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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, ~~2020,~~2021, borrowings under our Term B Loans and Revolving Credit Facility bear interest at 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 are 3.25% for adjusted LIBOR loans and 2.25% for ABR loans. The applicable margin for borrowings under the Revolving Credit Facility is 3.00% for adjusted LIBOR loans and 2.00% for ABR loans. We manage the impact of interest rate changes on earnings and operating cash flows by entering into derivative instruments to protect against increases in the interest rates on our variable rate debt. We use interest rate swaps, where we receive variable rate amounts in exchange for fixed rate payments. As of ~~September~~June 30, ~~2020, after considering our interest rate swaps, approximately 40%~~2021, 100% of our Senior Secured Credit Facility is ~~still~~ variable rate debt. A hypothetical 100 basis point (1%) change in LIBOR interest rates (based on the interest rates in effect under our Senior Secured Credit Facility as of ~~September~~June 30, ~~2020)~~2021) would result in an annual interest expense change of up to approximately~~$9.4~~ $22.3 million on our Senior Secured Credit Facility.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission rules and 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 disclosure controls and procedures, management 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 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

26

~~Table of Contents~~

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, with the participation of the Certifying Officers, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of ~~September~~June 30, ~~2020.~~2021. Based on these evaluations, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures required by paragraph (b) of Rule 13a-15 or 15d-15 were effective as of ~~September~~June 30, ~~2020.~~2021.

Changes in Internal Control over Financial Reporting

There were no 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 ~~2020.~~2021.

PART II

Item 1. Legal Proceedings

~~IPO Shareholder Class Action. Beginning in June 2018, four different plaintiffs’ firms filed five separate class-action lawsuits against WOW, certain individual defendants,~~Refer to Note 12 – Commitments and the private equity sponsors and underwriters of the May 2017 initial public offering. The actions allege violations of Sections 11, 12, and 15 of the 1933 Securities Act. The three actions filed in New York have been consolidated as ~~Kirkland. et al. v. WideOpenWest, Inc., et al.~~~~, 653248/2018 in the federal court in the Southern District of New York. The other two actions, which were filed in Colorado state court, have been stayed by agreement until final resolution of the~~ ~~Kirkland~~ ~~action. The Plaintiffs in~~ ~~Kirkland~~ allege that Defendants made or caused misstatements to be made in the Registration Statement and Prospectus issued in connection with the IPO. On January 17, 2019, Defendants filed an omnibus motion to dismiss all claimsContingencies for ~~failure to state causes of action which the court denied in part and granted in part on May 18, 2020, with the Company thereafter appealing those claims not dismissed. The court is considering~~ a litigation schedule that anticipates trial in 2022 or 2023. Mediation is scheduled for November 6, 2020. The Company believes plaintiffs claims to be without merit and is vigorously defending against them.

~~Sprint Patent Infringement Claim~~. On March 7, 2018, Sprint Communications Company L.P (“Sprint”) filed complaints in the U.S. District Court for the District of Delaware alleging that the Company (and other industry participants) infringe patents purportedly relating to Sprint’s Voice over Internet Protocol (“VoIP”) services. The lawsuit is part of a pattern of litigation that was initiated as far back as 2007 by Sprint against numerous broadband and telecommunications providers. The Company has multiple legal and contractual defenses and is vigorously defending against the claims. Additionally, the Company is pursuing indemnification claims against equipment providers whose equipment is implicated by the claims. Formal discovery was completed in mid-February 2020, with the trial originally scheduled for October 2020, being moved to a yet to be determined date in the second half of 2021. The Company is unable at this time to determine whether the outcome of the litigation would have a material impact on the Company’s financial position, results of operations or cash flows.

The Company is 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 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.

27

~~Table of Contents~~

In accordance with GAAP, 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. Nonediscussion of the Company’s existing accruals for pending matters is material. 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. However, litigation is subject to uncertainty, and the outcome of any particular matter is not predictable. The Company will vigorously defend its interest for pending litigation, and as of this date, 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.legal proceedings.

Item 1A. Risk Factors

Our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 includes “Risk Factors” under Item 1A of Part 1. The Company identified an additional risk factor related to public health threats or outbreaks of communicable diseases which is included in our quarterly Form 10-Q for the period ended March 31, 2020.

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Table of Contents

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer

The following table presents WOW’s purchases of equity securities completed during the ~~third~~second quarter of ~~2020~~2021 (dollars in millions, except per share amounts):


					Approximate Dollar Value of						Approximate Dollar Value of
				Total Number of Shares	Shares that May Yet be					Total Number of Shares	Shares that May Yet be
	Number of Shares	Average Price		Purchased as Part of Publicly	Purchased Under the Plans		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		Purchased (1)	Paid per Share		Announced Plans or Programs	or Programs
July 1 - 31, 2020	4,897	$	5.46	—	$	—
August 1 - 31, 2020	3,786	$	5.75	—	$	—
September 1 - 30, 2020	1,422	$	5.19	—	$	—
April 1 - 30, 2021							11,116	$	14.02	—	$	—
May 1 - 31, 2021							4,038	$	14.39	—	$	—
June 1 - 30, 2021							25,319	$	20.68	—	$	—

(1)	Shares represent shares withheld from employees for the payment of taxes upon the vesting of restricted stock awards.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On August 4, 2020, the Compensation Committee of our Board of Directors approved a form of Performance Unit Award Agreement (“Performance Award Agreement”) based on the Company’s cumulative EBITDA (as defined therein) and its total shareholder return, units of which would be issued from time to time under the Company’s 2017 Omnibus Incentive Plan. Under the terms of the Performance Award Agreement, the Company may issue restricted stock units (“performance units”), which performance units will be earned or forfeited based on the Company’s performance relative to (i) certain three-year cumulative EBITDA targets of the Company for 2020, 2021 and 2022 (such performance units, the “EBITDA Units”), and (ii) the total shareholder return (“TSR”) performance of the Company in comparison to the provided peer group therein between January 1, 2020 and December 31, 2022 (such performance units, the “TSR Units”). With respect to each of the EBITDA Units and TSR Units, upon achievement of the minimum threshold performance metric, grantees may earn 50% to 200% of their respective target equity awards based on the performance goal. The performance unitsNone.

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will be earned and vested or forfeited, as applicable, upon the Compensation Committee’s determination of final three-year performance metrics in early 2023 and, to the extent earned, the grantee will be entitled to one share of common stock for each performance unit earned no later than March 15, 2023.

Generally, in the event of a termination without cause following a change in control, performance units will be earned and vested based on actual performance. In the event of termination without cause not in connection with a change in control, the performance units will be pro-rated based on the number of completed months of employment during the performance period divided by the 36-month performance period and the amount of EBITDA Units and TSR Units shall be based on actual performance during the applicable performance periods as set forth in the Performance Award Agreement. In the event of termination with cause, all performance units will be forfeited, except with respect to resignation or retirement, where only unearned and unvested performance units will be forfeited. The participant is subject to standard covenants, including confidentiality, non-solicitation, non-competition and non-disparagement. The Form of Performance Award Agreement is attached as Exhibit 10.1 to this Form 10-Q and is incorporated herein by reference.

On August 4, 2020, the Compensation Committee of our Board of Directors approved the issuance of performance units to each of the following named executive officers in the following target amounts: Teresa Elder, Chief Executive Officer, 74,526 EBITDA Units and 137,755 TSR Units; Craig Martin, General Counsel and Secretary, 15,686 EBITDA Units and 28,994 TSR Units; and Don Schena, Chief Customer Experience Officer, 15,505 EBITDA Units and 28,659 TSR Units.

Item 6. Exhibits


Exhibit Number		Exhibit Description
10.1		Atlantic Purchase Agreement, dated June 30, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-38101) filed on July 1, 2021)
~~10.1*+~~10.2		Astound Purchase Agreement, dated June 30, 2021 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form ~~of Performance Unit Agreement between WOW and the Participant of WOW~~8-K (File No. 001-38101) filed on July 1, 2021)
31.131.1		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
31.231.2		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
32.132.1		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 ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, filed with the Securities and Exchange Commission on ~~November~~August 5, ~~2020,~~2021, formatted in iXBRL (inline eXtensible Business Reporting Language) includes: (i) the unaudited Condensed Consolidated Balance Sheets; (ii) the unaudited Condensed Consolidated Statements of Operations, (iii) the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) the unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit; (v) the unaudited Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to the unaudited Condensed Consolidated Financial Statements.
104		Cover Page, formatted in iXBRL and contained in Exhibit 101.

*	Filed herewith.

+	Certain portions of this exhibit that are not material and would be competitively harmful if publicly disclosed have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. Copies of the unredacted exhibit will be furnished to the SEC upon request.

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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~~August 5, ~~2020~~2021	By:	/s/ TERESA ELDER
		Teresa Elder
		Chief Executive Officer

	By:	/s/ JOHN REGO
		John Rego
		Chief Financial Officer

3033

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

For the quarterly period ended ~~September~~June 30, ~~2020~~2021

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

For the transition period from to

Delaware (State or Other Jurisdiction of Incorporation or Organization)	46-0552948 (IRS Employer Identification No.)

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


Large accelerated filer ☐	Accelerated filer ☒

Non-accelerated filer ☐	Smaller reporting company ☐
Emerging Growth Company ☐


	Three months ended September 30, 2020						Three months ended September 30, 2019
	Residential		Business		Total		Residential		Business		Total
	Subscription		Subscription		Revenue		Subscription		Subscription		Revenue

	(in millions)
HSD	$	120.8	$	21.8	$	142.6	$	109.8	$	20.4	$	130.2
Video		100.1		3.8		103.9		102.8		3.6		106.4
Telephony		12.7		10.3		23.0		15.1		10.7		25.8
Total subscription services revenue	$	233.6	$	35.9	$	269.5	$	227.7	$	34.7	$	262.4
Other business services revenue(1)		—		—		6.3		—		—		6.8
Other revenue		—		—		12.9		—		—		16.2
Total revenue	$	233.6	$	35.9	$	288.7	$	227.7	$	34.7	$	285.4


	Nine months ended September 30, 2020							Nine months ended September 30, 2019
	Residential		Business		Total			Residential		Business		Total
	Subscription		Subscription		Revenue			Subscription		Subscription		Revenue

	(in millions)
HSD	$	352.0	$	64.5	$	416.5	$	328.4	$	59.7	$	388.1
Video		298.6		11.2		309.8		316.1		10.9		327.0
Telephony		40.2		31.5		71.7		46.8		32.1		78.9
Total subscription services revenue	$	690.8	$	107.2	$	798.0	$	691.3	$	102.7	$	794.0
Other business services revenue(1)		—		—		19.2		—		—		21.0
Other revenue		—		—		38.0		—		—		47.3
Total revenue	$	690.8	$	107.2	$	855.2	$	691.3	$	102.7	$	862.3