Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 28, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38101 | |
Entity Registrant Name | WideOpenWest, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-0552948 | |
Entity Address, Address Line One | 7887 East Belleview Avenue | |
Entity Address, Address Line Two | Suite 1000 | |
Entity Address, City or Town | Englewood | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80111 | |
City Area Code | 720 | |
Local Phone Number | 479-3500 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | WOW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 87,123,394 | |
Entity Central Index Key | 0001701051 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Current assets | |||
Cash and cash equivalents | $ 36.1 | $ 12.4 | |
Accounts receivable-trade, net of allowance for doubtful accounts of $9.1 and $8.6, respectively | 58.5 | 69.5 | |
Accounts receivable-other, net | 3 | 3.7 | |
Prepaid expenses and other | 39.7 | 29.2 | |
Total current assets | 137.3 | 114.8 | |
Right-of-use lease assets-operating | 23.6 | 24.9 | |
Property, plant and equipment, net | 1,098.3 | 1,100.3 | |
Franchise operating rights | 785.5 | 785.5 | |
Goodwill | 408.8 | 408.8 | |
Intangible assets subject to amortization, net | 2 | 2.1 | |
Other non-current assets | 49.6 | 50.6 | |
Total assets | 2,505.1 | 2,487 | |
Current liabilities | |||
Accounts payable-trade | 47.1 | 43.8 | |
Accrued interest | 3.6 | 4 | |
Current portion of long-term lease liability-operating | 6.6 | 6.5 | |
Accrued liabilities and other | 86.6 | 98.6 | |
Current portion of long-term debt and finance lease obligations | 38.4 | 37.5 | |
Current portion of unearned service revenue | 46.3 | 45.5 | |
Total current liabilities | 228.6 | 235.9 | |
Long-term debt and finance lease obligations, net of debt issuance costs -less current portion | 2,243.2 | 2,228.5 | |
Long-term lease liability-operating | 19.9 | 21.3 | |
Deferred income taxes, net | 202.1 | 200.6 | |
Other non-current liabilities | 13.3 | 13.1 | |
Total liabilities | 2,707.1 | 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; 95,853,288 and 95,187,161 issued as of March 31, 2021 and December 31, 2020, respectively; 87,116,738 and 86,847,797 outstanding as of March 31, 2021 and December 31, 2020, respectively | 1 | 1 | |
Additional paid-in capital | 336.9 | 333.8 | |
Accumulated other comprehensive loss | (2.2) | (6.5) | |
Accumulated deficit | (450.4) | (460) | |
Treasury stock at cost, 8,736,550 and 8,339,364 shares as of March 31, 2021 and December 31, 2020, respectively | (87.3) | (80.7) | |
Total stockholders' deficit | (202) | [1] | (212.4) |
Total liabilities and stockholders' deficit | $ 2,505.1 | $ 2,487 | |
[1] | Included in outstanding shares as of March 31, 2021 are 4,423,885 non-vested shares of restricted stock awards granted to employees and directors. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable-trade, allowance for doubtful accounts | $ 9.1 | $ 8.6 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding ( in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 95,853,288 | 95,187,161 |
Common stock, shares outstanding ( in shares) | 87,116,738 | 86,847,797 |
Common shares held in treasury, (in shares) | 8,736,550 | 8,339,364 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 286.3 | $ 284.5 |
Costs and expenses: | ||
Operating (excluding depreciation and amortization) | 138 | 148.5 |
Selling, general and administrative | 45.2 | 46.8 |
Depreciation and amortization | 61.8 | 55.8 |
Total costs and expenses | 245 | 251.1 |
Income from operations | 41.3 | 33.4 |
Other income (expense): | ||
Interest expense | (31.4) | (33.5) |
Gain on sale of assets, net | 0.3 | |
Other income, net | 0.6 | 0.7 |
Income before provision for income tax | 10.5 | 0.9 |
Income tax expense | (0.9) | (0.8) |
Net income | $ 9.6 | $ 0.1 |
Basic and diluted earnings per common share | ||
Basic (in dollars per share) | $ 0.12 | $ 0 |
Diluted (in dollars per share) | $ 0.11 | $ 0 |
Weighted-average common shares outstanding | ||
Basic (in shares) | 82,031,043 | 81,037,633 |
Diluted (in shares) | 85,629,983 | 81,536,813 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net income | $ 9.6 | $ 0.1 |
Unrealized gain (loss) on derivative instrument, net of tax | 4.3 | (3) |
Comprehensive income (loss) | $ 13.9 | $ (2.9) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) $ in Millions | Common Stock | Treasury Stock at Cost | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total | ||
Balances at beginning of period at Dec. 31, 2019 | $ 0.9 | $ (79.7) | $ 322.8 | $ (15.5) | $ (474.4) | $ (245.9) | ||
Balances at beginning of period (in shares) at Dec. 31, 2019 | 84,103,108 | |||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||
Changes in accumulated other comprehensive gain (loss) | (3) | (3) | ||||||
Stock-based compensation | 2.7 | 2.7 | ||||||
Issuance of restricted stock, net (in shares) | 2,858,421 | |||||||
Purchase of shares | (0.7) | (0.7) | ||||||
Purchase of shares (in shares) | (199,520) | |||||||
Net income (loss) | 0.1 | 0.1 | ||||||
Balances at end of period at Mar. 31, 2020 | [1] | $ 0.9 | (80.4) | 325.5 | (18.5) | (474.3) | (246.8) | |
Balances at end of period (in shares) at Mar. 31, 2020 | [1] | 86,762,009 | ||||||
Balances at beginning of period at Dec. 31, 2020 | $ 1 | (80.7) | 333.8 | (6.5) | (460) | $ (212.4) | ||
Balances at beginning of period (in shares) at Dec. 31, 2020 | 86,847,797 | 86,847,797 | ||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||
Changes in accumulated other comprehensive gain (loss) | 4.3 | $ 4.3 | ||||||
Stock-based compensation | 3.1 | 3.1 | ||||||
Issuance of restricted stock, net (in shares) | 666,127 | |||||||
Purchase of shares | (6.6) | (6.6) | ||||||
Purchase of shares (in shares) | (397,186) | |||||||
Net income (loss) | 9.6 | 9.6 | ||||||
Balances at end of period at Mar. 31, 2021 | [2] | $ 1 | $ (87.3) | $ 336.9 | $ (2.2) | $ (450.4) | $ (202) | |
Balances at end of period (in shares) at Mar. 31, 2021 | 87,116,738 | [2] | 87,116,738 | |||||
[1] | Included in outstanding shares as of March 31, 2020 are 5,292,277 non-vested shares of restricted stock awards granted to employees and directors. | |||||||
[2] | Included in outstanding shares as of March 31, 2021 are 4,423,885 non-vested shares of restricted stock awards granted to employees and directors. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Parenthetical) - shares | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 |
Restricted stock awards | |||
Number of shares granted to employees and directors | 4,423,885 | 4,990,971 | 5,292,277 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 9.6 | $ 0.1 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 61.8 | 55.8 |
Deferred income taxes | 0.2 | (0.1) |
Provision for doubtful accounts | 2.9 | 7.3 |
Gain on sale of assets, net | (0.3) | |
Amortization of debt issuance costs and discount | 1.2 | 1.2 |
Non-cash compensation | 3.1 | 2.7 |
Other non-cash items | (0.1) | |
Changes in operating assets and liabilities: | ||
Receivables and other operating assets | (0.7) | (12.2) |
Payables and accruals | (0.4) | (2.1) |
Net cash provided by operating activities | 77.6 | 52.4 |
Cash flows from investing activities: | ||
Capital expenditures | (59.3) | (58) |
Other investing activities | 0.4 | (1.1) |
Net cash used in investing activities | (58.9) | (59.1) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt | 31 | 41 |
Payments on long-term debt and finance lease obligations | (19.4) | (17.8) |
Purchase of shares | (6.6) | (0.7) |
Net cash provided by financing activities | 5 | 22.5 |
Increase in cash and cash equivalents | 23.7 | 15.8 |
Cash and cash equivalents, beginning of period | 12.4 | 21 |
Cash and cash equivalents, end of period | 36.1 | 36.8 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the periods for interest | 30.7 | 31.4 |
Non-cash operating activities | ||
Operating lease additions | 0.1 | 2.4 |
Non-cash financing activities: | ||
Finance lease additions | 2.8 | 1.2 |
Capital expenditure accounts payable and accruals | $ 17 | $ 13.8 |
General Information
General Information | 3 Months Ended |
Mar. 31, 2021 | |
General Information | |
General Information | Note 1. General Information WideOpenWest, Inc. (“WOW” or the “Company”) is a leading broadband services provider offering high-speed data (“HSD”), cable television (“Video”), and digital telephony (“Telephony”) services to residential and business customers. The Company serves customers in nineteen 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 one reportable segment. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 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 the 2020 Annual Report filed with the SEC on February 24, 2021. All significant intercompany accounts and transactions have been eliminated in consolidation. 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. To the extent there are differences between those estimates and actual results, the unaudited condensed consolidated financial statements may be materially affected. Recently Issued Accounting Standards ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional guidance, expedients and exceptions for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update apply to all entities, subject to meeting the criteria, which participate in contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 was subsequently amended by ASU 2021-01, Reference Rate Reform (Topic 848), Scope, which refines the scope of Topic 848 and permits optional expendients and exceptions when accounting for derivative contracts and certain hedging relationships. The amendments of these updates are available to all entities as of March 12, 2020 through December 31, 2022. The Company has not yet adopted these amendments, but has determined the impact of adopting this guidance will not have a material impact on its financial position, results of operations and cash flows. Recently Adopted Accounting Pronouncements ASU 2019-12, Income Taxes —Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this guidance prospectively as of January 1, 2021. The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | Note 3. Revenue from Contracts with Customers Revenue by Service Offering The following table presents revenue by service offering for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 Three months ended March 31, 2020 Residential Business Total Residential Business Total Subscription Subscription Revenue Subscription Subscription Revenue (in millions) HSD $ 129.8 $ 22.9 $ 152.7 $ 115.3 $ 21.3 $ 136.6 Video 89.6 3.7 93.3 99.5 3.9 103.4 Telephony 11.6 10.2 21.8 14.0 10.6 24.6 Total subscription services revenue $ 231.0 $ 36.8 $ 267.8 $ 228.8 $ 35.8 $ 264.6 Other business services revenue(1) — — 6.2 — — 6.5 Other revenue — — 12.3 — — 13.4 Total revenue $ 231.0 $ 36.8 $ 286.3 $ 228.8 $ 35.8 $ 284.5 (1) Includes wholesale and colocation revenue of $5.4 million for both the three months ended March 31, 2021 and 2020. Costs of Obtaining Contracts with Customers The following table summarizes the activity of costs of obtaining contracts with customers: Three months ended March 31, 2021 2020 (in millions) Balance at beginning of period $ 49.6 $ 40.7 Deferral 4.9 5.7 Amortization (3.6) (2.7) Balance at end of period $ 50.9 $ 43.7 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: March 31, 2021 December 31, 2020 (in millions) Current costs of obtaining contracts with customers $ 16.7 $ 15.3 Non-current costs of obtaining contracts with customers 34.2 34.3 Total costs of obtaining contracts with customers $ 50.9 $ 49.6 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 March 31, 2021 2020 (in millions) Balance at beginning of period $ 4.2 $ 4.2 Deferral 4.6 3.7 Revenue recognized (4.2) (4.0) Balance at end of period $ 4.6 $ 3.9 The following table presents the current and non-current portion of contract liabilities as of the end of the corresponding periods: March 31, 2021 December 31, 2020 (in millions) Current contract liabilities $ 4.0 $ 3.6 Non-current contract liabilities 0.6 0.6 Total contract liabilities $ 4.6 $ 4.2 The current portion 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. 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 March 31, 2021 is set forth in the table below: 2021 2022 2023 Thereafter Total (in millions) Subscription services $ 54.2 $ 41.5 $ 16.3 $ 6.1 $ 118.1 Other business services 2.8 2.1 0.7 0.1 5.7 Total expected revenue $ 57.0 $ 43.6 $ 17.0 $ 6.2 $ 123.8 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. The 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 for the three months ended March 31, 2021 compared to the three months ended March 31, 2020: Three months ended March 31, 2021 2020 (in millions) Balance at beginning of period $ 8.6 $ 7.5 Provision charged to expense 2.9 5.3 Accounts written off, net of recoveries (2.4) (3.8) Balance at end of period $ 9.1 $ 9.0 The Company established an allowance for doubtful accounts for non-trade accounts receivable of $2.0 million as of March 31, 2020 that is presented within accounts receivable—other in the Company’s unaudited condensed consolidated balance sheets. The Company did not have such an allowance as of March 31, 2021. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment, Net | |
Property, Plant and Equipment, Net | Note 4. Plant, Property and Equipment, Net Plant, property and equipment consists of the following: March 31, December 31, 2021 2020 (in millions) Distribution facilities $ 1,999.3 $ 1,960.0 Customer premise equipment 488.1 481.5 Head-end equipment 369.8 364.3 Telephony infrastructure 99.0 99.3 Computer equipment and software 169.2 163.9 Vehicles 34.6 35.9 Buildings and leasehold improvements 49.8 49.7 Office and technical equipment 34.8 34.8 Land 6.2 6.2 Construction in progress (including material inventory and other) 50.4 50.5 Total property, plant and equipment 3,301.2 3,246.1 Less accumulated depreciation (2,202.9) (2,145.8) $ 1,098.3 $ 1,100.3 Depreciation expense for the three months ended March 31, 2021 and 2020 was $61.7 million and $55.4 million, respectively. |
Accrued Liabilities and Other
Accrued Liabilities and Other | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Liabilities and Other | |
Accrued Liabilities and Other | Note 5. Accrued Liabilities and Other Accrued liabilities and other consists of the following: March 31, December 31, 2021 2020 (in millions) Programming costs $ 32.4 $ 30.0 Payroll and employee benefits 20.1 28.0 Other accrued liabilities 10.3 9.9 Franchise and revenue sharing fees 9.1 11.0 Property, income, sales and use taxes 7.0 5.8 Utility pole costs 3.9 4.5 Interest rate swaps 3.8 9.4 $ 86.6 $ 98.6 |
Long-Term Debt and Finance Leas
Long-Term Debt and Finance Leases | 3 Months Ended |
Mar. 31, 2021 | |
Long-Term Debt and Finance Leases | |
Long-Term Debt and Finance Leases | Note 6. Long-Term Debt and Finance Leases The following table summarizes the Company’s long-term debt and finance leases: December 31, March 31, 2021 2020 Available borrowing Effective Outstanding Outstanding capacity interest rate(1) balance balance (in millions) Long-term debt: Term B Loans, net(2) $ — 5.28 % $ 2,194.7 $ 2,199.9 Revolving Credit Facility(3) 235.6 3.11 % 59.0 38.0 Total long-term debt $ 235.6 2,253.7 2,237.9 Other Financing 0.7 0.8 Finance lease obligations 32.2 32.9 Total long-term debt, finance lease obligations and other 2,286.6 2,271.6 Debt issuance costs, net(4) (5.0) (5.6) Sub-total 2,281.6 2,266.0 Less current portion (38.4) (37.5) Long-term portion $ 2,243.2 $ 2,228.5 (1) Represents the effective interest rate in effect for all borrowings outstanding as of March 31, 2021 pursuant to each debt instrument including the applicable margin. (2) At March 31, 2021 and December 31, 2020 includes $5.5 million and $6.1 million of net discounts, respectively. (3) Available borrowing capacity at March 31, 2021 represents $300.0 million of total availability less borrowing of $59.0 million on the Revolving Credit Facility and outstanding letters of credit of $5.4 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 March 31, 2021 and December 31, 2020, debt issuance costs include $4.0 million and $4.4 million related to Term B Loans and $1.0 million and $1.2 million related to the Revolving Credit Facility, respectively. The Company’s Term B 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 March 31, 2021, the Company was in compliance with all debt covenants. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | 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. The following table presents restricted stock activity during the three months ended March 31, 2021: Number of Unvested Restricted Stock Shares Outstanding, beginning of period 4,990,971 Granted 767,689 Vested (1,233,213) Forfeited (101,562) Outstanding, end of period(1) 4,423,885 (1) The total outstanding non-vested shares of restricted stock awards granted to employees and directors are included in total outstanding shares as of March 31, 2021. For restricted stock awards that contain only service conditions for vesting, the Company calculates the award fair value based on the closing stock price on the accounting grant date. Restricted stock generally vests ratably over a four year period based on the date of grant. Nonvested Performance Shares On March 3, 2021, the Company granted 209,621 performance shares which will vest based on the Company’s achievement level relative to the following performance measures at December 31, 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-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 $27.76 per share. The estimated fair value is amortized to expense over the requisite service period, which ends on December 31, 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 0.26%, volatility factors in the expected market price of the Company's common shares of 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 March 31, 2021, achievement of the performance condition for the performance shares was deemed probable. The Company recorded $3.1 million and $2.7 million for the three months ended March 31, 2021 and 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. |
Earnings (Loss) per Common Shar
Earnings (Loss) per Common Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings (Loss) per Common Share | |
Earnings (Loss) per Common Share | Note 8. Earnings per Common Share Basic earnings or loss per share attributable to the Company’s common stockholders is computed by dividing net income or loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings or loss per share attributable to common stockholders presents the dilutive effect, if any, on a per share basis of potential common shares (such as restricted stock units) as if they had been vested or converted during the periods presented. Three months ended March 31, 2021 2020 (in millions, except share data) Net income $ 9.6 $ 0.1 Basic weighted-average shares 82,031,043 81,037,633 Effect of dilutive securities: Restricted stock awards 3,598,940 499,180 Diluted weighted-average shares 85,629,983 81,536,813 Basic earnings per share $ 0.12 $ 0.00 Diluted earnings per share $ 0.11 $ 0.00 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 March 31, 2021, the Company determined the performance conditions were not yet achieved; however, the market conditions indicated a certain level of achievement within the payout range. Therefore, the contingently issuable performance shares associated with the market condition were included in the computation of diluted earnings per share. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | 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: ● 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 is accounted for at fair value on a recurring basis and classified within Level 2 of the valuation hierarchy and was valued at $3.8 million and $9.4 million as of March 31, 2021 and December 31, 2020, respectively. The fair value of the derivative instrument is measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curves as of March 31, 2021. The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties. 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 $2,200.2 million and $2,203.1 million as of March 31, 2021 and December 31, 2020, respectively. Long-term debt fair value does not include debt issuance costs and discounts. There were no transfers into or out of Level 1, 2 or 3 during the periods ended March 31, 2021 and December 31, 2020. The Company’s nonfinancial assets such as franchise operating rights, property, plant, and equipment, and other intangible assets are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. When such impairments are recorded, fair values are generally classified within Level 3 of the valuation hierarchy. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | Note 10. Derivative Instruments and Hedging Activities The Company is exposed to certain 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 the outstanding principal balance of its variable rate term loan debt. As of March 31, 2021, the Company is the fixed rate payor on two 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 $2,259.2 million, not including unamortized debt issuance costs and discount. 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 March 31, 2021, the Company expects to reclassify losses of $3.8 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 and instrument type within the unaudited condensed consolidated balance sheet as of March 31, 2021 and December 31, 2020: Fair Value Accrued Notional Liabilities Amount and Other Derivatives Designated as Hedging Instruments (in millions) Interest rate swap contracts as of March 31, 2021 $ 1,320.1 $ 3.8 Interest rate swap contracts as of December 31, 2020 $ 1,323.5 $ 9.4 Gains and losses on derivatives designated as cash flow hedges included in the unaudited condensed consolidated statements of comprehensive income (loss) for the three months ended March 31, 2021 and 2020 are shown in the table below: Three months ended March 31, 2021 2020 Interest rate swap contracts(1) (in millions) Gain (loss) recorded in AOCL on derivatives, before tax $ 5.6 $ (3.9) Tax impact (1.3) 0.9 Gain (loss) recorded in AOCL on derivatives, net 4.3 (3.0) (1) Gains (losses) on derivatives reclassified from AOCL into income will be included in “Interest expense” in the unaudited condensed consolidated statements of operations, the same income statement line item as the earnings effect of the hedged item. Losses recognized in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 total $5.7 million and $3.8 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Taxes | |
Income Taxes | 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 tax rates is reflected in the financial statements in the period that includes the date of enactment. The Company reported income tax expense of $0.9 million and $0.8 million for the three months ended March 31, 2021 and 2020, respectively. The slight increase in expense is primarily related to an increase in income before tax while the lower effective income tax rate was primarily driven by the windfall deduction related to equity compensation, an increase in the research and development credit, and a decrease in state valuation allowance. The near breakeven income before tax for the three months ended March 31, 2020 resulted in tax adjustments having a larger impact on the effective tax rate as compared to the three months ended March 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 12. Commitments and Contingencies IPO Shareholder Class Action Kirkland. et al. v. WideOpenWest, Inc., et al. Kirkland Kirkland Sprint Patent Infringement Claim 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 are 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | 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 the 2020 Annual Report filed with the SEC on February 24, 2021. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | 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. To the extent there are differences between those estimates and actual results, the unaudited condensed consolidated financial statements may be materially affected. |
Recently Issued Accounting Standards and Recently Adopted Accounting Pronouncements | Recently Issued Accounting Standards ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional guidance, expedients and exceptions for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update apply to all entities, subject to meeting the criteria, which participate in contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 was subsequently amended by ASU 2021-01, Reference Rate Reform (Topic 848), Scope, which refines the scope of Topic 848 and permits optional expendients and exceptions when accounting for derivative contracts and certain hedging relationships. The amendments of these updates are available to all entities as of March 12, 2020 through December 31, 2022. The Company has not yet adopted these amendments, but has determined the impact of adopting this guidance will not have a material impact on its financial position, results of operations and cash flows. Recently Adopted Accounting Pronouncements ASU 2019-12, Income Taxes —Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this guidance prospectively as of January 1, 2021. The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contracts with Customers | |
Schedule of revenue by service offering | The following table presents revenue by service offering for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 Three months ended March 31, 2020 Residential Business Total Residential Business Total Subscription Subscription Revenue Subscription Subscription Revenue (in millions) HSD $ 129.8 $ 22.9 $ 152.7 $ 115.3 $ 21.3 $ 136.6 Video 89.6 3.7 93.3 99.5 3.9 103.4 Telephony 11.6 10.2 21.8 14.0 10.6 24.6 Total subscription services revenue $ 231.0 $ 36.8 $ 267.8 $ 228.8 $ 35.8 $ 264.6 Other business services revenue(1) — — 6.2 — — 6.5 Other revenue — — 12.3 — — 13.4 Total revenue $ 231.0 $ 36.8 $ 286.3 $ 228.8 $ 35.8 $ 284.5 (1) Includes wholesale and colocation revenue of $5.4 million for both the three months ended March 31, 2021 and 2020. |
Schedule of activity and costs of current and non-current costs of obtaining contracts | Three months ended March 31, 2021 2020 (in millions) Balance at beginning of period $ 49.6 $ 40.7 Deferral 4.9 5.7 Amortization (3.6) (2.7) Balance at end of period $ 50.9 $ 43.7 March 31, 2021 December 31, 2020 (in millions) Current costs of obtaining contracts with customers $ 16.7 $ 15.3 Non-current costs of obtaining contracts with customers 34.2 34.3 Total costs of obtaining contracts with customers $ 50.9 $ 49.6 |
Schedule of activity of contract liabilities and current and non-current portion of contract liabilities | Three months ended March 31, 2021 2020 (in millions) Balance at beginning of period $ 4.2 $ 4.2 Deferral 4.6 3.7 Revenue recognized (4.2) (4.0) Balance at end of period $ 4.6 $ 3.9 March 31, 2021 December 31, 2020 (in millions) Current contract liabilities $ 4.0 $ 3.6 Non-current contract liabilities 0.6 0.6 Total contract liabilities $ 4.6 $ 4.2 |
Summary of expected revenue to be recognized in future periods related to performance obligations which have not been satisfied or are partially unsatisfied | 2021 2022 2023 Thereafter Total (in millions) Subscription services $ 54.2 $ 41.5 $ 16.3 $ 6.1 $ 118.1 Other business services 2.8 2.1 0.7 0.1 5.7 Total expected revenue $ 57.0 $ 43.6 $ 17.0 $ 6.2 $ 123.8 |
Schedule of change in the allowance for doubtful accounts for trade accounts receivable | Three months ended March 31, 2021 2020 (in millions) Balance at beginning of period $ 8.6 $ 7.5 Provision charged to expense 2.9 5.3 Accounts written off, net of recoveries (2.4) (3.8) Balance at end of period $ 9.1 $ 9.0 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment, Net | |
Schedule of property, plant and equipment | March 31, December 31, 2021 2020 (in millions) Distribution facilities $ 1,999.3 $ 1,960.0 Customer premise equipment 488.1 481.5 Head-end equipment 369.8 364.3 Telephony infrastructure 99.0 99.3 Computer equipment and software 169.2 163.9 Vehicles 34.6 35.9 Buildings and leasehold improvements 49.8 49.7 Office and technical equipment 34.8 34.8 Land 6.2 6.2 Construction in progress (including material inventory and other) 50.4 50.5 Total property, plant and equipment 3,301.2 3,246.1 Less accumulated depreciation (2,202.9) (2,145.8) $ 1,098.3 $ 1,100.3 |
Accrued Liabilities and Other (
Accrued Liabilities and Other (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Liabilities and Other | |
Schedule of accrued liabilities and other | March 31, December 31, 2021 2020 (in millions) Programming costs $ 32.4 $ 30.0 Payroll and employee benefits 20.1 28.0 Other accrued liabilities 10.3 9.9 Franchise and revenue sharing fees 9.1 11.0 Property, income, sales and use taxes 7.0 5.8 Utility pole costs 3.9 4.5 Interest rate swaps 3.8 9.4 $ 86.6 $ 98.6 |
Long-Term Debt and Finance Le_2
Long-Term Debt and Finance Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Long-Term Debt and Finance Leases | |
Summary of long-term debt and finance leases | December 31, March 31, 2021 2020 Available borrowing Effective Outstanding Outstanding capacity interest rate(1) balance balance (in millions) Long-term debt: Term B Loans, net(2) $ — 5.28 % $ 2,194.7 $ 2,199.9 Revolving Credit Facility(3) 235.6 3.11 % 59.0 38.0 Total long-term debt $ 235.6 2,253.7 2,237.9 Other Financing 0.7 0.8 Finance lease obligations 32.2 32.9 Total long-term debt, finance lease obligations and other 2,286.6 2,271.6 Debt issuance costs, net(4) (5.0) (5.6) Sub-total 2,281.6 2,266.0 Less current portion (38.4) (37.5) Long-term portion $ 2,243.2 $ 2,228.5 (1) Represents the effective interest rate in effect for all borrowings outstanding as of March 31, 2021 pursuant to each debt instrument including the applicable margin. (2) At March 31, 2021 and December 31, 2020 includes $5.5 million and $6.1 million of net discounts, respectively. (3) Available borrowing capacity at March 31, 2021 represents $300.0 million of total availability less borrowing of $59.0 million on the Revolving Credit Facility and outstanding letters of credit of $5.4 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 March 31, 2021 and December 31, 2020, debt issuance costs include $4.0 million and $4.4 million related to Term B Loans and $1.0 million and $1.2 million related to the Revolving Credit Facility, respectively. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stock-Based Compensation | |
Summary of the restricted stock awards activity | The following table presents restricted stock activity during the three months ended March 31, 2021: Number of Unvested Restricted Stock Shares Outstanding, beginning of period 4,990,971 Granted 767,689 Vested (1,233,213) Forfeited (101,562) Outstanding, end of period(1) 4,423,885 (1) The total outstanding non-vested shares of restricted stock awards granted to employees and directors are included in total outstanding shares as of March 31, 2021. |
Earnings (Loss) per Common Sh_2
Earnings (Loss) per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings (Loss) per Common Share | |
Schedule of computation of income per share | Three months ended March 31, 2021 2020 (in millions, except share data) Net income $ 9.6 $ 0.1 Basic weighted-average shares 82,031,043 81,037,633 Effect of dilutive securities: Restricted stock awards 3,598,940 499,180 Diluted weighted-average shares 85,629,983 81,536,813 Basic earnings per share $ 0.12 $ 0.00 Diluted earnings per share $ 0.11 $ 0.00 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities | |
Schedule of notional amounts, fair values and classification of outstanding derivatives | Fair Value Accrued Notional Liabilities Amount and Other Derivatives Designated as Hedging Instruments (in millions) Interest rate swap contracts as of March 31, 2021 $ 1,320.1 $ 3.8 Interest rate swap contracts as of December 31, 2020 $ 1,323.5 $ 9.4 |
Schedule of gains and losses on derivatives | Three months ended March 31, 2021 2020 Interest rate swap contracts(1) (in millions) Gain (loss) recorded in AOCL on derivatives, before tax $ 5.6 $ (3.9) Tax impact (1.3) 0.9 Gain (loss) recorded in AOCL on derivatives, net 4.3 (3.0) (1) Gains (losses) on derivatives reclassified from AOCL into income will be included in “Interest expense” in the unaudited condensed consolidated statements of operations, the same income statement line item as the earnings effect of the hedged item. Losses recognized in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 total $5.7 million and $3.8 million, respectively. |
Organization and Basis of Prese
Organization and Basis of Presentation - Markets and segments (Details) | 3 Months Ended |
Mar. 31, 2021itemsegment | |
General Information | |
Number of markets | item | 19 |
Number of reportable segments | segment | 1 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Revenue by Service Offering (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue from Contracts with Customers | ||
Total revenue | $ 286.3 | $ 284.5 |
Subscription services | ||
Revenue from Contracts with Customers | ||
Revenue | 267.8 | 264.6 |
HSD | ||
Revenue from Contracts with Customers | ||
Revenue | 152.7 | 136.6 |
Video | ||
Revenue from Contracts with Customers | ||
Revenue | 93.3 | 103.4 |
Telephony | ||
Revenue from Contracts with Customers | ||
Revenue | 21.8 | 24.6 |
Other business services | ||
Revenue from Contracts with Customers | ||
Revenue | 6.2 | 6.5 |
Other business services - Wholesale and colocation lease revenue | ||
Revenue from Contracts with Customers | ||
Revenue | 5.4 | 5.4 |
Other services | ||
Revenue from Contracts with Customers | ||
Other revenue | 12.3 | 13.4 |
Residential Subscription | ||
Revenue from Contracts with Customers | ||
Total revenue | 231 | 228.8 |
Residential Subscription | Subscription services | ||
Revenue from Contracts with Customers | ||
Revenue | 231 | 228.8 |
Residential Subscription | HSD | ||
Revenue from Contracts with Customers | ||
Revenue | 129.8 | 115.3 |
Residential Subscription | Video | ||
Revenue from Contracts with Customers | ||
Revenue | 89.6 | 99.5 |
Residential Subscription | Telephony | ||
Revenue from Contracts with Customers | ||
Revenue | 11.6 | 14 |
Business Subscription | ||
Revenue from Contracts with Customers | ||
Total revenue | 36.8 | 35.8 |
Business Subscription | Subscription services | ||
Revenue from Contracts with Customers | ||
Revenue | 36.8 | 35.8 |
Business Subscription | HSD | ||
Revenue from Contracts with Customers | ||
Revenue | 22.9 | 21.3 |
Business Subscription | Video | ||
Revenue from Contracts with Customers | ||
Revenue | 3.7 | 3.9 |
Business Subscription | Telephony | ||
Revenue from Contracts with Customers | ||
Revenue | $ 10.2 | $ 10.6 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Costs of Obtaining Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | |
Revenue from Contracts with Customers | ||||
Capitalized contract cost, Beginning of period | $ 49.6 | $ 40.7 | ||
Deferral | 4.9 | 5.7 | ||
Amortization | (3.6) | (2.7) | ||
Capitalized contract cost, End of period | 50.9 | 43.7 | ||
Current costs of obtaining contracts with customers | $ 16.7 | $ 15.3 | ||
Non-current costs of obtaining contracts with customers | 34.2 | 34.3 | ||
Total costs of obtaining contracts with customers | $ 49.6 | $ 43.7 | $ 50.9 | $ 49.6 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | |
Revenue from Contracts with Customers | ||||
Contract liability, Beginning of period | $ 4.2 | $ 4.2 | ||
Deferral | 4.6 | 3.7 | ||
Revenue recognized | (4.2) | (4) | ||
Contract liability, End of period | 4.6 | 3.9 | ||
Current contract liabilities | $ 4 | $ 3.6 | ||
Non-current contract liabilities | 0.6 | 0.6 | ||
Total contract liabilities | $ 4.2 | $ 3.9 | $ 4.6 | $ 4.2 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Unsatisfied Performance Obligations Amount (Details) $ in Millions | Mar. 31, 2021USD ($) |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 123.8 |
Subscription services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | 118.1 |
Other business services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | 5.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 57 |
Expected period to recognize revenue of remaining performance obligations | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Maximum | |
Unsatisfied Performance Obligations | |
Expected period to recognize revenue of remaining performance obligations | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Subscription services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 54.2 |
Expected period to recognize revenue of remaining performance obligations | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Other business services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 2.8 |
Expected period to recognize revenue of remaining performance obligations | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 43.6 |
Expected period to recognize revenue of remaining performance obligations | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Subscription services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 41.5 |
Expected period to recognize revenue of remaining performance obligations | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Other business services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 2.1 |
Expected period to recognize revenue of remaining performance obligations | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 17 |
Expected period to recognize revenue of remaining performance obligations | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Subscription services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 16.3 |
Expected period to recognize revenue of remaining performance obligations | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Other business services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 0.7 |
Expected period to recognize revenue of remaining performance obligations | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 6.2 |
Expected period to recognize revenue of remaining performance obligations | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Subscription services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 6.1 |
Expected period to recognize revenue of remaining performance obligations | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Other business services | |
Unsatisfied Performance Obligations | |
Expected revenue to be recognized in future periods | $ 0.1 |
Expected period to recognize revenue of remaining performance obligations |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Provision for Doubtful Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Trade accounts receivable | ||
Threshold period past due for trade accounts receivable for disconnecting service to customers | 60 days | |
Change in the allowance for doubtful accounts | ||
Balance at beginning of period | $ 8.6 | |
Provision charged to expense | 2.9 | $ 7.3 |
Balance at end of period | 9.1 | |
Trade accounts receivable | ||
Change in the allowance for doubtful accounts | ||
Balance at beginning of period | 8.6 | 7.5 |
Provision charged to expense | 2.9 | 5.3 |
Accounts written off, net of recoveries | (2.4) | (3.8) |
Balance at end of period | 9.1 | 9 |
Non-trade accounts receivable | ||
Change in the allowance for doubtful accounts | ||
Balance at end of period | $ 0 | $ 2 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net - Components (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | $ 3,301.2 | $ 3,246.1 | |
Less accumulated depreciation | (2,202.9) | (2,145.8) | |
Plant, Property and Equipment, Net | 1,098.3 | 1,100.3 | |
Depreciation expense | 61.7 | $ 55.4 | |
Distribution facilities | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 1,999.3 | 1,960 | |
Customer premise equipment | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 488.1 | 481.5 | |
Head-end equipment | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 369.8 | 364.3 | |
Telephony infrastructure | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 99 | 99.3 | |
Computer equipment and software | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 169.2 | 163.9 | |
Vehicles | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 34.6 | 35.9 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 49.8 | 49.7 | |
Office and technical equipment | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 34.8 | 34.8 | |
Land | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | 6.2 | 6.2 | |
Construction in progress (including material inventory and other) | |||
Property, Plant and Equipment, Net | |||
Total property, plant and equipment | $ 50.4 | $ 50.5 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities and Other | ||
Programming costs | $ 32.4 | $ 30 |
Payroll and employee benefits | 20.1 | 28 |
Other accrued liabilities | 10.3 | 9.9 |
Franchise and revenue sharing fees | 9.1 | 11 |
Property, income, sales and use taxes | 7 | 5.8 |
Utility pole costs | 3.9 | 4.5 |
Interest rate swaps | 3.8 | 9.4 |
Accrued liabilities and other | $ 86.6 | $ 98.6 |
Long-Term Debt and Finance Le_3
Long-Term Debt and Finance Leases - Summary (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Long-Term Debt and Capital Leases | ||
Available borrowing capacity | $ 235.6 | |
Long-term debt | 2,253.7 | $ 2,237.9 |
Other Financing | 0.7 | 0.8 |
Finance lease obligations | 32.2 | 32.9 |
Total long-term debt, finance lease obligations and other | 2,286.6 | 2,271.6 |
Debt issuance costs, net | (5) | (5.6) |
Sub-total | 2,281.6 | 2,266 |
Less current portion | (38.4) | (37.5) |
Long-term portion | $ 2,243.2 | 2,228.5 |
Term B Loans | ||
Long-Term Debt and Capital Leases | ||
Effective interest rate (as a percent) | 5.28% | |
Long-term debt | $ 2,194.7 | 2,199.9 |
Debt issuance costs, net | (4) | (4.4) |
Net discount | 5.5 | 6.1 |
Revolving Credit Facility | ||
Long-Term Debt and Capital Leases | ||
Available borrowing capacity | $ 235.6 | |
Effective interest rate (as a percent) | 3.11% | |
Long-term debt | $ 59 | 38 |
Debt issuance costs, net | (1) | $ (1.2) |
Maximum borrowing capacity | 300 | |
Outstanding letters of credit | $ 5.4 |
Long-Term Debt and Finance Le_4
Long-Term Debt and Finance Leases - Term B Loans and Revolving Credit Facility (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Term B Loans | Alternate base rate | |
Long-Term Debt and Capital Leases | |
Basis spread on variable rate (as a percent) | 2.25% |
Term B Loans | LIBOR rate | |
Long-Term Debt and Capital Leases | |
Basis spread on variable rate (as a percent) | 3.25% |
Revolving Credit Facility | Alternate base rate | |
Long-Term Debt and Capital Leases | |
Basis spread on variable rate (as a percent) | 2.00% |
Revolving Credit Facility | LIBOR rate | |
Long-Term Debt and Capital Leases | |
Basis spread on variable rate (as a percent) | 3.00% |
Stock-Based Compensation - 2017
Stock-Based Compensation - 2017 Plan (Details) | 3 Months Ended |
Mar. 31, 2021shares | |
Restricted stock awards | |
Stock Based Compensation | |
Vesting period | 4 years |
2017 Plan | |
Stock Based Compensation | |
Number of authorized shares | 12,074,128 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted stock awards | 3 Months Ended |
Mar. 31, 2021shares | |
Restricted Stock Awards | |
Outstanding, beginning of period (in shares) | 4,990,971 |
Granted (in shares) | 767,689 |
Vested (in shares) | (1,233,213) |
Forfeited (in shares) | (101,562) |
Outstanding, end of period (in shares) | 4,423,885 |
Additional information | |
Vesting period | 4 years |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Shares (Details) - Performance shares - $ / shares | Mar. 03, 2021 | Sep. 30, 2020 |
Stock Based Compensation | ||
Granted (in shares) | 209,621 | |
Share-based Payment Arrangement, Tranche One, Total Shareholder Return | ||
Stock Based Compensation | ||
Vesting (as a percent) | 50.00% | |
Grant date fair value (in dollars per share) | $ 27.76 | |
Fair value assumptions | ||
Risk-free interest rate (as a percent) | 0.26% | |
Expected volatility (as a percent) | 59.77% | |
Expected life | 3 years | |
Share-based Payment Arrangement, Tranche Two, EBITDA metric | ||
Stock Based Compensation | ||
Vesting (as a percent) | 50.00% | |
Vesting period | 3 years | 3 years |
Minimum | ||
Stock Based Compensation | ||
Percentage of target shares that may be earned upon achievement of threshold performance metric | 50.00% | |
Maximum | ||
Stock Based Compensation | ||
Percentage of target shares that may be earned upon achievement of threshold performance metric | 200.00% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Selling, general and administrative expense and operating expenses (excluding depreciation and amortization) | ||
Stock-Based Compensation | ||
Non-cash compensation expense | $ 3.1 | $ 2.7 |
Earnings (Loss) per Common Sh_3
Earnings (Loss) per Common Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings (Loss) per Common Share | ||
Net income | $ 9.6 | $ 0.1 |
Basic weighted-average shares | 82,031,043 | 81,037,633 |
Effect of dilutive securities: | ||
Restricted stock awards | 3,598,940 | 499,180 |
Diluted weighted-average shares | 85,629,983 | 81,536,813 |
Basic earnings per share (in dollars per share) | $ 0.12 | $ 0 |
Diluted earnings per share (in dollars per share) | $ 0.11 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Financial Liabilities | ||
Transfer of assets from level 1 to level 2 | $ 0 | $ 0 |
Transfer of assets from level 2 to level 1 | 0 | 0 |
Transfer of liabilities from level 1 to level 2 | 0 | 0 |
Transfer of liabilities from level 2 to level 1 | 0 | 0 |
Transfer of assets into level 3 | 0 | 0 |
Transfer of assets out of level 3 | 0 | 0 |
Transfer of liabilities into level 3 | 0 | 0 |
Transfer of liabilities out of level 3 | 0 | 0 |
Significant other observable inputs (Level 2) | Recurring | ||
Financial Liabilities | ||
Derivative instrument | 3.8 | 9.4 |
Liabilities | $ 2,200.2 | $ 2,203.1 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Summary (Details) - Cash flow hedging - Interest rate swaps $ in Millions | 3 Months Ended | ||
Mar. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | May 09, 2018USD ($) | |
Interest Rate Hedge | |||
Notional amount | $ 1,320.1 | $ 1,323.5 | $ 1,361.2 |
Number of interest rate swaps | item | 2 | ||
Term loan variable rate exposure (as a percent) | 60.00% | ||
Fixed rate (as a percent) | 2.70% | ||
Carrying amount | |||
Interest Rate Hedge | |||
Long-term debt | $ 2,259.2 | ||
Reclassification of losses out of accumulated other comprehensive loss into earnings within next 12 months | $ 3.8 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Notional amounts, fair values and classification (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | May 09, 2018 |
Derivatives | |||
Derivative current liabilities, fair value | $ 3.8 | $ 9.4 | |
Interest rate swaps | Cash flow hedging | |||
Derivatives | |||
Notional amount | 1,320.1 | 1,323.5 | $ 1,361.2 |
Interest rate swaps | Cash flow hedging | Accrued Liabilities and Other | |||
Derivatives | |||
Derivative current liabilities, fair value | $ 3.8 | $ 9.4 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Gains and losses on derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Gains and losses on derivatives | ||
Gain (loss) recorded in AOCL on derivatives, net | $ 4.3 | $ (3) |
Cash flow hedging | Interest rate swaps | ||
Gains and losses on derivatives | ||
Gain (loss) recorded in AOCL on derivatives, before tax | 5.6 | (3.9) |
Tax impact | (1.3) | 0.9 |
Gain (loss) recorded in AOCL on derivatives, net | 4.3 | (3) |
Gain (loss) on derivatives | $ (5.7) | $ (3.8) |
Income Taxes - Income tax expen
Income Taxes - Income tax expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Components of income tax benefit (expense) from continuing operations | ||
Income tax expense | $ 0.9 | $ 0.8 |
Commitments and Contingencies -
Commitments and Contingencies - Legal (Details) - IPO Shareholder Class Action | Mar. 31, 2021item |
Commitments and contingencies | |
Number of plaintiff firms | 4 |
Number of lawsuits | 5 |
New York | |
Commitments and contingencies | |
Number of actions filed that have been consolidated | 3 |
Colorado | |
Commitments and contingencies | |
Number of lawsuits | 2 |