ENGLEWOOD, Colo.--(BUSINESS WIRE)--
WideOpenWest, Inc. (“WOW!” or the “Company”) (NYSE: WOW), a leading,
fully integrated provider of residential and commercial high-speed data,
video and telephony services to customers in the United States, today
announced financial and operating results for the second quarter ended
June 30, 2018.
Second Quarter 2018 Highlights
(1)
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Total Subscriber net additions of 1,600 were the best net subscriber
metrics for a second quarter in the last four years
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Second quarter subscriber churn was the best subscriber churn for a
second quarter in at least two years
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Achieved HSD RGU net additions of 3,900, representing the best net
subscriber metrics for the second quarter in the last four years, and
organic HSD RGU net additions, which exclude net additions from
Edge-Outs, were 1,600
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Total Revenue of $291.3 million; Net Income of $25.2 million; and
Diluted Earnings Per Share of $0.31
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Adjusted EBITDA of $102.2 million, up 6.1% sequentially; Adjusted
Diluted Earnings Per Share of $0.39
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Business Services Subscription Revenue, Including Acquisitions and
Dispositions, grew 15.6% over the second quarter of 2017
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Total Edge-Out projects have extended the network to 116,600 homes
passed; 2017 Edge-Out Nodes have achieved 25.3% penetration and 2016
Edge-Out Nodes have achieved 32.5% penetration
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Launched Whole Home WiFi offering across the majority of WOW!’s
footprint in July
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Launched first phase of new wowway.com website in July
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Completed previously announced $25.0 million common stock buyback,
acquiring almost 2.5 million shares
Financial Highlights
For the quarter ended June 30, 2018, WOW! reported Total Revenue of
$291.3 million, down $6.2 million, or 2.1%, compared to the quarter
ended June 30, 2017. The Company reported second quarter 2018 Net Income
of $25.2 million and Adjusted EBITDAof $102.2 million.
“I am heartened by the continued efforts throughout the Company to
execute on our vision,” said Teresa Elder, chief executive officer of
WOW! “WOW! achieved its second consecutive quarter of positive organic
HSD RGU growth in the face of second quarter seasonality and our rate
increase which was implemented at the beginning of the quarter. The
impact of our investments in customer care are showing in continued
churn improvement. The launch of Whole Home WiFi and the re-release of
our wowway.com website are substantial milestones to drive the growth
trajectory of our business.”
“Adjusted EBITDA for the second quarter was in-line with our
expectations,” said Rich Fish, chief financial officer of WOW! “The
second quarter results were the best second quarter performance in
multiple years for total RGU and RGU segment net additions and
demonstrate that WOW! can successfully win, and retain, customer
relationships in our footprint.”
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(1)
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Refer to “Non-GAAP Financial Measures and Operating
Metrics,” “Unaudited Reconciliations of GAAP Measures to Non-GAAP
Measures,” and “Unaudited Transaction Adjusted Condensed
Consolidated Financial and Subscriber Information” in this Press
Release for definitions and information related to Adjusted EBITDA
and Transaction Adjusted financial information, reconciliation of
such non-GAAP measures to the closest comparable GAAP measures and
why our management thinks it is beneficial to present such
non-GAAP measures.
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Revenue
On a reported basis, for the quarter ended June 30, 2018, Total Revenue
was $291.3 million, an increase of 2.0% on a sequential basis compared
to the quarter ended March 31, 2018, driven primarily by HSD RGU net
additions and increases in Video ARPU.
Total subscription revenue for the quarter ended June 30, 2018, was
$269.8 million. Residential Subscription Revenue was $237.2 million, and
Business Services Subscription totaled $32.6 million for the quarter
ended June 30, 2018. Business Services Subscription Revenue, including
the impact of Acquisitions and Dispositions, increased $4.4 million, or
15.6%, compared with the quarter ended June 30, 2017.
Other business services revenue totaled $6.8 million for the quarter
ended June 30, 2018, down $3.8 million compared to the quarter ended
June 30, 2017, primarily due to decreased revenue generated by network
construction activities associated with the Chicago network sale to
Verizon.
Other revenue totaled $14.7 million for the quarter ended June 30, 2018,
down $12.2 million compared to the quarter ended June 30, 2017,
primarily due to the reclassification of franchise fees to residential
video subscription revenue.
Costs and Expenses
Operating expenses (excluding depreciation and amortization) totaled
$157.3 million for the quarter ended June 30, 2018. Selling, general,
and administrative expenses were $39.7 million for the quarter ended
June 30, 2018.
Net Income and Earnings per Share
Net Income for the quarter ended June 30, 2018, was $25.2 million,
compared to Net Income of $5.0 million for the quarter ended June 30,
2017. Earnings per share for the quarter ended June 30, 2018, was $0.31,
compared to earnings per share of $0.07 for the quarter ended June 30,
2017. The year-over-year improvement in Net Income is primarily
attributable to a reduction in interest expense and lower income tax
expense. Adjusted Diluted Earnings per share for the quarter ended June
30, 2018, was $0.39.
Adjusted EBITDA
Adjusted EBITDA for the quarter ended June 30, 2018, was $102.2 million,
an increase of $5.9 million, or 6.1%, on a sequential basis compared to
Adjusted EBITDA for the quarter ended March 31, 2018. Adjusted EBITDA
margin was 35.1% in the quarter ended June 30, 2018, an increase of over
135 basis points on a sequential basis.
Customers
WOW! reported Total Subscribers of 800,100 as of June 30, 2018. Total
Subscribers increased by 1,600, or 0.2%, compared to March 31, 2018,
which was the best second quarter result in the last four years. HSD
RGUs totaled 747,800 as of June 30, 2018, representing an increase of
3,900, or 0.5%, compared to March 31, 2018. Excluding net additions from
Edge-Outs, HSD RGU net additions were 1,600.
Video RGUs totaled 419,900 as of June 30, 2018, representing a decrease
of 9,100 compared to March 31, 2018, which represents the best second
quarter Video RGU result in the last three years and an improvement in
video losses of 6,700, or 42%, as compared to the second quarter of 2017.
Edge-Outs
As of June 30, 2018, Edge-Out projects reached 116,600 homes passed as
part of the Company’s Edge-Out growth efforts started in 2016.
Edge-Out projects begun in 2016 (“2016 Edge-Out Nodes”) include 41,500
customers on such nodes, which represents 32.5% penetration with an
average of 678 days in active service. The Edge-Out projects begun in
2017 (“2017 Edge-Out Nodes”) include 16,700 customers on such nodes,
which represents 25.3% penetration with an average of 376 days in active
service. The Edge-Out projects begun in 2018 (“2018 Edge-Out Nodes”) now
reach 9,200 homes passed, an increase of 7,100 homes passed compared to
March 31, 2018. The 2018 Edge-Out projects include 700 customers on such
nodes, which represents 7.6% penetration with an average of 30 days in
active service.
Capital Expenditures
Capital Expenditures totaled $77.0 million for the quarter ended June
30, 2018, representing a $4.2 million increase compared to the quarter
ended June 30, 2017, on a reported basis. Transaction Adjusted Capital
Expenditures totaled $70.6 million for the quarter ended June 30, 2018,
an increase of $3.5 million, or 5.2%, compared to the quarter ended June
30, 2017. Transaction Adjusted Strategic Capital Expenditures, defined
as Edge-Out Capital Expenditures and Business Services Capital
Expenditures dedicated to expansion of the Company’s network, were $14.6
million for the quarter ended June 30, 2018, which represented a
decrease of $9.2 million over the Transaction Adjusted Strategic Capital
Expenditures in the quarter ended June 30, 2017. Excluding Transaction
Adjusted Strategic Capital Expenditures, Transaction Adjusted Capital
Expenditures for the quarter ended June 30, 2018, totaled $56.0 million,
which equates to 19.2% of Total Revenue for the quarter ended June 30,
2018.
Liquidity and Leverage
As of June 30, 2018, the total outstanding amount of long term debt and
capital lease obligations was $2.280 billion, and cash and cash
equivalents were $17.1 million. Total Net Leverage as of June 30, 2018,
was 5.4x, on a LTM Transaction Adjusted EBITDA basis, and undrawn
revolver capacity totaled $279.6 million.
Stock Purchases
In May of 2018, WOW! announced a $25.0 million common stock repurchase
program. The Company completed the common stock buyback program, having
repurchased almost 2.5 million shares of the Company’s common stock in
the open market.
Conference Call
WOW! will host a conference call on Thursday, August 9, 2018, at 5:00
p.m. Eastern to discuss the operating and financial results contained in
this press release. The conference call will be broadcast live on the
Company’s investor relations website at ir.wowway.com.
Those parties interested in participating via telephone can use the
conference call information as follows:
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Call Date:
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Thursday, August 9, 2018
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Call Time:
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5:00 p.m. Eastern
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Dial In:
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(877) 541-5069
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International:
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(443) 842-7607
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Conf. ID:
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6636968
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A recording of the conference call will be available approximately two
hours after the completion of the call until September 9, 2018. The
dial-in number for this replay is (855) 859-2056.
The following unaudited condensed consolidated statements of operations
summarizes information in the Company’s Form 10-Q for the periods
indicated, as filed on August 9, 2018, with the United States Securities
and Exchange Commission (“SEC”). For ease of use, references in this
release to “WOW!” means WideOpenWest, Inc. and its subsidiaries:
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WideOpenWest, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
($ in millions, except for per share data)
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Three months ended
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Six months ended
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June 30,
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June 30,
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2018
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2017
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2018
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2017
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Revenue
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Residential subscription
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$
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237.2
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$
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231.3
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$
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469.3
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$
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463.7
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Business services subscription
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32.6
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28.7
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64.0
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56.8
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Total subscription
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269.8
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260.0
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533.3
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520.5
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Other business services
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6.8
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10.6
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14.0
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21.7
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Other
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14.7
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26.9
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29.5
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55.3
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Total Revenue
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$
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291.3
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$
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297.5
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$
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576.8
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$
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597.5
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Costs and expenses
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Operating (excluding depreciation and amortization)
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$
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157.3
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$
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157.4
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$
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315.2
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$
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317.2
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Selling, general and administrative
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39.7
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32.5
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79.4
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62.8
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Depreciation and amortization
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46.4
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50.8
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92.7
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101.1
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Impairment loss on intangibles and goodwill
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-
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-
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256.4
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Management fee to related party
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-
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0.5
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-
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1.0
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$
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243.4
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$
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241.2
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$
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743.7
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$
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482.1
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Income (loss) from operations
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$
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47.9
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$
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56.3
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$
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(166.9
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$
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115.4
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Other income (expense)
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Interest expense
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(32.7
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(44.1
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(61.8
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(89.8
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Gain (loss) on sale of system dispositions
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-
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(0.3
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-
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38.4
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Loss on early extinguishment of debt
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-
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(1.0
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-
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(6.0
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Other income, net
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1.2
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-
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1.2
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1.4
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Income tax benefit (expense), net
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8.8
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(5.9
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50.0
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18.0
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Net income (loss)
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$
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25.2
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$
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5.0
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$
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(177.5
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$
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77.4
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Basic and diluted earnings (loss) per common shares
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Basic
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$
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0.31
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$
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0.07
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$
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(2.13
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$
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1.10
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Diluted
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$
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0.31
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$
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0.07
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$
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(2.13
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$
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1.10
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Weighted-average common shares outstanding
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Basic
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81,868,508
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74,309,106
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83,159,949
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70,413,415
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Diluted
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82,652,715
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74,333,425
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83,159,949
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70,437,734
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About WOW!
WOW! is one of the nation's leading providers of high-speed internet,
cable TV and phone serving communities in the U.S. Our vision is
connecting people to their world through the WOW! experience: reliable,
easy, and pleasantly surprising, every time. For more information,
please visit www.wowway.com.
Forward-Looking Statements
This press release contains 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. All
statements, other than statements of historical facts, included in this
release are forward-looking statements. Forward-looking statements
discuss our current expectations and projections relating to our
financial condition, results of operations, plans, objectives, future
performance and business. Forward-looking statements are not guarantees
of future performance and we caution you not to place undue reliance on
such statements. Forward-looking statements are generally identifiable
by the use of the words “may,” “will,” “should,” “expect,” “anticipate,”
“estimate,” “believe,” “intend,” “project,” “continue,” or the negative
of these words, or other similar words or terms. The forward-looking
statements included in this release are made as of the date hereof. We
assume no obligation to publicly update any forward-looking statement,
even if new information becomes available in the future or if experience
or future changes make it clear that any projected results expressed or
implied in such statements will not be realized. If we do update one or
more forward-looking statements, no inference should be made that we
will make additional updates with respect to those or other
forward-looking statements. Actual results may differ materially from
those expected because of various risks and uncertainties, many of which
are beyond our control, including the wide range of competition we face
in our business; competitors that are larger and possess more resources;
dependence upon a business services strategy; conditions in the economy,
including potentially uncertain economic conditions; our ability to
secure new businesses as customers; demand for our bundled broadband
communications services may be lower than we expect; our ability to
respond to rapid technological change; increases in programming and
retransmission costs; a decline in advertising revenues; the effects of
regulatory changes in our business; our substantial level of
indebtedness; certain covenants in our debt documents; programming
exclusivity in favor of our competitors; inability to obtain necessary
hardware, software and operational support; strain on business and
resources from future acquisitions, or the inability to identify
suitable acquisitions; and other factors that are described from time to
time in our filings with the SEC. All forward-looking statements are
expressly qualified in their entirety by these cautionary statements.
Non-GAAP Financial Measures and Operating
Metrics
We have included certain non-GAAP financial measures in this release,
including Revenue Including Acquisitions and Dispositions, Residential
Subscription Revenue Including Acquisitions and Dispositions, Business
Services Subscription Revenue Including Acquisitions and Dispositions,
Adjusted EBITDA, Transaction Adjusted EBITDA, Transaction Adjusted
Capital Expenditures, and Adjusted Diluted EPS. The presentation of
these financial measures is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with generally accepted accounting
principles in the United States of America (“GAAP”).
We believe that these non-GAAP measures enhance an investor’s
understanding of our financial performance. We believe that these
non-GAAP measures are useful financial metrics to assess our operating
performance from period to period by excluding certain items that we
believe are not representative of our core business. We believe that
these non-GAAP measures provide investors with useful information for
assessing the comparability between periods of our ability to generate
cash from operations sufficient to pay taxes, to service debt and to
undertake capital expenditures. We use these non-GAAP measures for
business planning purposes and in measuring our performance relative to
that of our competitors. We believe these non-GAAP measures are measures
commonly used by investors to evaluate our performance and that of our
competitors.
Revenue Including Acquisitions and Dispositions, Residential
Subscription Revenue Including Acquisitions and Dispositions, Business
Services Subscription Revenue Including Acquisitions and Dispositions,
and Transaction Adjusted Capital Expenditures give effect to certain
acquisitions and divestitures made by WOW! and are included herein
because they are key metrics used by management and our Board of
Directors to assess our financial performance. We believe that these
non-GAAP measures are appropriate measures of operating performance
because they are meaningful to investors by showing how certain
acquisitions and divestitures might have affected our historical
financial statements. The presentation of these measures is not made in
accordance with GAAP and our use of these terms herein varies from the
use of similar terms by other companies in our industry due to different
methods of calculation and therefore are not necessarily comparable.
These non-GAAP measures should not be considered as an alternative to
revenue, capital expenditures or any other performance measures derived
in accordance with GAAP as measures of operating performance.
Adjusted EBITDA is included herein because it is a key metric used by
management and our Board of Directors to assess our financial
performance. We believe that Adjusted EBITDA is an appropriate measure
of operating performance because it eliminates the impact of expenses
that do not relate to business performance, and that the presentation of
this measure enhances an investor's understanding of our financial
performance. Transaction Adjusted EBITDA makes certain additional
adjustments to the historical financial information that WOW! believes
is meaningful to investors by showing how certain acquisitions and
divestitures might have affected WOW!’s historical financial statements.
Adjusted EBITDA is defined by WOW! 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 equity based compensation
expense) and certain other income and expenses. Transaction Adjusted
EBITDA represents Adjusted EBITDA after giving effect to the impact of
acquisitions and dispositions that were completed during the relevant
periods as if they occurred at the beginning of the period presented.
The presentation of Adjusted EBITDA and Transaction Adjusted EBITDA is
not made in accordance with GAAP and our use of the terms Adjusted
EBITDA and Transaction Adjusted EBITDA may vary from others in our
industry. Adjusted EBITDA and Transaction Adjusted EBITDA should not be
considered as an alternative to net income (loss), operating income or
any other performance measures derived in accordance with GAAP as
measures of operating performance, operating cash flows or liquidity.
Adjusted EBITDA and Transaction Adjusted EBITDA have important
limitations as analytical tools. For example, Adjusted EBITDA and
Transaction Adjusted EBITDA:
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exclude certain tax payments that may represent a reduction in cash
available to us;
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do not reflect any cash capital expenditure requirements for the
assets being depreciated and amortized that may have to be replaced in
the future;
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do not reflect changes in, or cash requirements for, our working
capital needs; and
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do not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments on
our debt.
Adjusted Diluted Earnings per Share (EPS) is included herein because it
is a key metric used by management and our Board of Directors to assess
our financial performance. Adjusted Diluted EPS is a non-GAAP financial
measure that eliminates the effect of management fees to related party,
loss on early extinguishment of debt, gain (loss) on sale of assets,
impairment losses on intangibles and goodwill, non-recurring
professional fees, M&A integration and restructuring expense, non-cash
stock compensation, and other (income) and expenses. We then add or
subtract an estimated incremental income tax effect applicable to those
items. We believe that this measurement is useful to investors as an
additional way to analyze the underlying trends in our business
consistently across the periods presented.
The presentation of Adjusted Diluted EPS is not made in accordance with
GAAP and our use of the term Adjusted Diluted EPS herein varies from the
use of similar terms by other companies in our industry due to different
methods of calculation and is not necessarily comparable. Adjusted
Diluted EPS should not be considered as an alternative to Diluted EPS or
any other performance measures derived in accordance with GAAP as
measures of operating performance.
See “Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures”
and the accompanying tables below for a reconciliation of Adjusted
EBITDA to our net income (loss), which is the most directly comparable
GAAP financial measure and a reconciliation of Adjusted EPS to Diluted
Earnings Per Share, which is the most directly comparable GAAP financial
measure.
In addition, we use the following subscriber information in this release:
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Homes Passed – 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.
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Subscribers – Because we deliver multiple
services to our customers, 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”).
While we take appropriate steps to ensure subscriber information is
presented on a consistent and accurate basis at any given balance sheet
date, we periodically review our policies in light of the variability we
may encounter across our different markets due to the nature and pricing
of products and services and billing systems. Accordingly, we may from
time to time make appropriate adjustments to our subscriber information
based on such reviews.
Unaudited Reconciliations of GAAP Measures to
Non-GAAP Measures
The following table provides unaudited reconciliations of GAAP measures
to non-GAAP measures used herein for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WideOpenWest, Inc.
Reconciliation of GAAP Measures to Non-GAAP Measures (Unaudited)
($ in millions, except for per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
25.2
|
|
|
|
$
|
5.0
|
|
|
|
$
|
(177.5
|
)
|
|
|
$
|
77.4
|
|
Depreciation and amortization
|
|
|
|
46.4
|
|
|
|
|
50.8
|
|
|
|
|
92.7
|
|
|
|
|
101.1
|
|
Impairment loss on intangibles and goodwill
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
256.4
|
|
|
|
|
-
|
|
Management fee to related party
|
|
|
|
-
|
|
|
|
|
0.5
|
|
|
|
|
-
|
|
|
|
|
1.0
|
|
Interest expense
|
|
|
|
32.7
|
|
|
|
|
44.1
|
|
|
|
|
61.8
|
|
|
|
|
89.8
|
|
Loss on early extinguishment of debt
|
|
|
|
-
|
|
|
|
|
1.0
|
|
|
|
|
-
|
|
|
|
|
6.0
|
|
(Gain) loss on sale of system dispositions
|
|
|
|
-
|
|
|
|
|
0.3
|
|
|
|
|
-
|
|
|
|
|
(38.4
|
)
|
Non-recurring professional fees, M&A Integration and restructuring
expense
|
|
|
|
3.3
|
|
|
|
|
2.0
|
|
|
|
|
7.4
|
|
|
|
|
3.9
|
|
Non-cash stock compensation
|
|
|
|
4.6
|
|
|
|
|
2.6
|
|
|
|
|
8.9
|
|
|
|
|
3.1
|
|
Other income, net
|
|
|
|
(1.2
|
)
|
|
|
|
-
|
|
|
|
|
(1.2
|
)
|
|
|
|
(1.4
|
)
|
Income tax (benefit) expense
|
|
|
|
(8.8
|
)
|
|
|
|
5.9
|
|
|
|
|
(50.0
|
)
|
|
|
|
(18.0
|
)
|
Adjusted EBITDA (1) |
|
|
$
|
102.2
|
|
|
|
$
|
112.2
|
|
|
|
$
|
198.5
|
|
|
|
$
|
224.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
|
|
|
|
|
|
|
Six months
|
|
|
|
|
|
|
ended
|
|
|
|
|
|
|
ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
Per Share
|
|
|
|
|
|
|
Per Share
|
|
|
|
Diluted earnings per share
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
$
|
(2.13
|
)
|
|
|
|
Impairment loss on intangibles and goodwill
|
|
|
|
-
|
|
|
|
|
|
|
|
|
3.08
|
|
|
|
|
Non-recurring professional fees, M&A integration and restructuring
expense
|
|
|
|
0.04
|
|
|
|
|
|
|
|
|
0.09
|
|
|
|
|
Non-cash stock compensation
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
0.11
|
|
|
|
|
Income tax applicable to adjustments, net(2) |
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
(0.59
|
)
|
|
|
|
Adjusted Diluted Earnings Per Share
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
See “Unaudited Transaction Adjusted Condensed Consolidated
Financial and Subscriber Information” below for a reconciliation
of Adjusted EBITDA to Transaction Adjusted EBITDA for the
respective quarters giving effect the divestiture of a portion of
our Chicago Fiber Network in December 2017, and our divestiture of
the Lawrence, Kansas, system in January 2017, as if such
transactions had been completed at the beginning of the respective
periods presented.
|
(2)
|
|
The income tax impacts are determined using the applicable
rates in the taxing jurisdictions in which expense or income
occurred and includes both current and deferred income tax expense
(benefit) based on the nature of the non-GAAP performance measure.
|
|
|
|
Unaudited Transaction Adjusted Condensed
Consolidated Financial and Subscriber Information
The SEC requires that pro forma financial information be presented in a
registrant’s periodic filings when events occur for which disclosure
would be material to investors, including significant business
combinations or the disposition of a significant portion of the
business. The significance of an acquired or disposed business is
determined based on the “significant subsidiary” tests specified in
Regulation S-X, Article 11, Rule 1-02(w). Although the Company has made
certain acquisitions and divestitures, such transactions do not meet the
“significant subsidiary” tests and, accordingly, the Company’s
historical financial information as filed with the SEC does not contain
pro forma financial information relating to those transactions.
Nevertheless, we make certain adjustments in this release to the
historical financial and subscriber information of the Company as filed
with the SEC (“Transaction Adjusted”) because we believe such
information would be meaningful to investors by showing how such
transactions might have affected the Company’s historical financial
statements. The unaudited Transaction Adjusted financial and subscriber
information in this release has been prepared giving effect to the
divestiture of a portion of our Chicago Fiber Network in December 2017,
and our divestiture of the Lawrence, Kansas, system in 2017, as if such
transactions had been completed at the beginning of the respective
periods presented. The unaudited Transaction Adjusted financial and
subscriber information is for informational purposes only and does not
purport to represent what our results of operations, financial or
subscriber information would have been if such transactions had occurred
at any date, nor does such information purport to project the results of
operations for any future period.
The unaudited Transaction Adjusted condensed consolidated financial and
subscriber information in this release was prepared based on our books
and records for the respective periods presented for the Lawrence,
Kansas system and the portion of the Chicago Fiber Network that was
divested. Such historical unaudited financial and subscriber information
has been adjusted to give a Transaction Adjusted effect to events that
are directly attributable to such transactions, factually supportable
and expected to have a continuing impact on the results. The unaudited
Transaction Adjusted financial information herein does not reflect
non-recurring charges that have been incurred in connection with the
transaction including legal fees, broker fees and accounting fees.
The following table provides an unaudited reconciliation of our
residential subscription revenue to residential subscription revenue
including Acquisitions and Dispositions, business services subscription
revenue to business services subscription revenue including Acquisitions
and Dispositions, Total Revenue to Total Revenue including Acquisitions
and Dispositions, Adjusted EBITDA to Transaction Adjusted EBITDA and
Capital Expenditures to Transaction Adjusted Capital Expenditures for
the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WideOpenWest, Inc.
Transaction Adjusted Condensed Consolidated Financial Information
(Unaudited)
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential Subscription Revenue
|
|
|
$
|
237.2
|
|
|
|
$
|
231.3
|
|
|
|
|
$
|
469.3
|
|
|
|
$
|
463.7
|
|
Acquisitions and Dispositions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential Subscription Revenue related to the Lawrence system
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(1.1
|
)
|
Residential Subscription Revenue Including Acquisitions and
Dispositions
|
|
|
$
|
237.2
|
|
|
|
$
|
231.3
|
|
|
|
|
$
|
469.3
|
|
|
|
$
|
462.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Services Subscription Revenue
|
|
|
$
|
32.6
|
|
|
|
$
|
28.7
|
|
|
|
|
$
|
64.0
|
|
|
|
$
|
56.8
|
|
Acquisitions and Dispositions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Services Subscription Revenue related to the Lawrence system
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(0.3
|
)
|
Business Services Subscription Revenue related to the Chicago fiber
network
|
|
|
|
-
|
|
|
|
|
(0.5
|
)
|
|
|
|
|
-
|
|
|
|
|
(0.9
|
)
|
Business Services Subscription Including Acquisitions and
Dispositions
|
|
|
$
|
32.6
|
|
|
|
$
|
28.2
|
|
|
|
|
$
|
64.0
|
|
|
|
$
|
55.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
|
$
|
291.3
|
|
|
|
$
|
297.5
|
|
|
|
|
$
|
576.8
|
|
|
|
$
|
597.5
|
|
Acquisitions and Dispositions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue related to the Lawrence system
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(1.5
|
)
|
Total Revenue related to the Chicago fiber network
|
|
|
|
-
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
-
|
|
|
|
|
(7.1
|
)
|
Total Revenue Including Acquisitions and Dispositions
|
|
|
$
|
291.3
|
|
|
|
$
|
294.3
|
|
|
|
|
$
|
576.8
|
|
|
|
$
|
588.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
102.2
|
|
|
|
$
|
112.2
|
|
|
|
|
$
|
198.5
|
|
|
|
$
|
224.5
|
|
Transaction Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA related to the Lawrence system
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(1.0
|
)
|
Adjusted EBITDA related to the Chicago fiber network
|
|
|
|
-
|
|
|
|
|
(1.7
|
)
|
|
|
|
|
-
|
|
|
|
|
(4.2
|
)
|
Transaction Adjusted EBITDA
|
|
|
$
|
102.2
|
|
|
|
$
|
110.5
|
|
|
|
|
$
|
198.5
|
|
|
|
$
|
219.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
|
$
|
77.0
|
|
|
|
$
|
72.8
|
|
|
|
|
$
|
133.5
|
|
|
|
$
|
152.0
|
|
Transaction Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures related to the Lawrence system
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(0.1
|
)
|
Capital Expenditures related to the Chicago fiber network
|
|
|
|
(6.4
|
)
|
|
|
|
(5.7
|
)
|
|
|
|
|
(12.3
|
)
|
|
|
|
(31.6
|
)
|
Transaction Adjusted Capital Expenditures
|
|
|
$
|
70.6
|
|
|
|
$
|
67.1
|
|
|
|
|
$
|
121.2
|
|
|
|
$
|
120.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides an unaudited summary of our subscriber
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2018
|
|
|
2017(1) |
|
|
|
|
|
|
|
|
|
|
Homes Passed
|
|
|
3,149,200
|
|
|
3,129,300
|
|
|
3,108,500
|
|
|
|
|
|
|
|
|
|
|
Total Subscribers
|
|
|
800,100
|
|
|
798,500
|
|
|
791,500
|
|
|
|
|
|
|
|
|
|
|
HSD RGUs
|
|
|
747,800
|
|
|
743,900
|
|
|
735,200
|
|
|
|
|
|
|
|
|
|
|
Video RGUs
|
|
|
419,900
|
|
|
429,000
|
|
|
436,700
|
|
|
|
|
|
|
|
|
|
|
Telephony RGUs
|
|
|
214,000
|
|
|
218,300
|
|
|
222,600
|
|
|
|
|
|
|
|
|
|
|
Total RGUs
|
|
|
1,381,700
|
|
|
1,391,200
|
|
|
1,394,500
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Statistical reporting was standardized to a single reporting
methodology beginning in the first quarter of 2018. Previously,
the data was maintained and accumulated separately through
independent processes and procedures. The standardized reporting
had the following increase/(decrease) on December 31, 2017 homes
passed and subscriber numbers, which are reflected in the table
above: homes passed (700); total subscribers 14,200; HSD RGUs
2,500; Video RGUs 4,100; Telephony RGUs 2,700; and Total RGUs
9,300.
|
|
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20180809005539/en/
WideOpenWest, Inc.
Lucas Binder, 303-927-4951
VP Corporate
Development & Investor Relations
lucas.binder@wowinc.com
Source: WideOpenWest, Inc.