Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Annual Report on Form 10-K and the documents incorporated by reference herein contain forward-looking statements regarding future events and results that are subject to the "safe harbor" provisions. All statements, other than statements of historical facts, are statements that could be deemed forward-looking statements.
Introduction
This Management’s Discussion and Analysis section provides an overview of Cincinnati Bell Inc.'s financial condition as of December 31, 2025 and the results of operations for the years ended December 31, 2025, 2024 and 2023. This discussion should be read in conjunction with the accompanying Consolidated Financial Statements and accompanying notes. Our results of operations as reported in our Consolidated Financial Statements for these periods are prepared in accordance with GAAP.
Our Management's Discussion and Analysis of Financial Condition and Results of Operations included in this document generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this document can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 filed on March 18, 2025.
Business Overview
Cincinnati Bell Inc. and its consolidated subsidiaries ("Cincinnati Bell," "we," "our," "us" or the "Company") provide integrated communications that keep consumer and enterprise customers connected with each other and with the world. We provide Data, Video, and Voice solutions to consumer and enterprise customers over an expanding fiber network and a legacy copper network. The Company serves customers in two distinct regions. These regions are defined by the Company as 1) Midwest, which consists of Cincinnati, Ohio, a radius of approximately 25 miles around Cincinnati, Ohio, including parts of northern Kentucky and southeastern Indiana ("Greater Cincinnati"), and communities near Dayton and Columbus, Ohio that is served through our altafiber brand and 2) Hawaii, which consists of the island of Oahu and the neighboring islands that is served through our Hawaiian Telcom brand. The Company operates its businesses through one reportable business segment.
During 2025, the U.S. announced a variety of trade-related actions, including the imposition of tariffs on imports from several countries. In response, many countries announced their own retaliatory tariffs. Certain tariffs were paused for a period of time but have not been withdrawn. The global trade environment continues to be volatile. The likelihood of the U.S. or its trading partners resuming tariffs, imposing new or reciprocal tariffs, or other forms of trade-related sanctions is highly uncertain. We do not yet know the impact of the recent government actions or the potential changes in global political conditions on our business due to uncertainties as the situation continues to evolve.
Sale of IT Services Business
On February 2, 2024, the Company entered into a definitive purchase agreement (the "Purchase Agreement") with TowerBrook Capital Partners ("TowerBrook") which provided that TowerBrook would acquire the CBTS and OnX businesses (the "Disposal Group") from the Company for a purchase price of $670.0 million (the "Proceeds"). Management evaluated the criteria to report the Disposal Group as held for sale and concluded that all of the criteria were met as of February 2024. Accordingly, the Company has reported the results of operations for the Disposal Group as discontinued operations in the Consolidated Statements of Operations through the date of sale.
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Form 10-K Part II
Cincinnati Bell Inc.
On December 2, 2024 (the "Closing Date"), upon the terms and subject to the conditions set forth in the Purchase Agreement, the divestiture of the Disposal Group was completed. The Proceeds from the Purchase Agreement included cash from TowerBrook in the amount of $688.4 million. The Company recorded a preliminary pre-tax gain on sale of the Disposal Group of $93.7 million upon closing of the sale which was the amount of cash proceeds received (net of cash divested) less costs to sell in excess of the Disposal Group’s carrying value. In the first quarter of 2025, the Proceeds were adjusted for post-closing adjustments as defined in the Purchase Agreement, and the Company recorded a liability of $14.5 million that was paid to TowerBrook in April 2025. In the fourth quarter of 2025, the Company recorded a liability of $1.8 million that is expected to be paid in 2026 for tax-related items that are owed TowerBrook per the terms of the Purchase Agreement. The pre-tax gain of $93.7 million recorded in the prior year was reduced by a pre-tax loss of $16.3 million recorded in 2025, for a net pre-tax on sale of the Disposal Group of $77.4 million. The proceeds received in 2024 were used to pay on the Date (1) $180.0 million of existing debt and accrued interest under the Credit Agreement, (2) $214.3 million of existing debt and accrued interest under the Company's Network and CBTS Receivables Facilities, (3) $23.9 million of consideration payable for transaction-related bonuses, and (4) transaction costs of $7.1 million primarily consisting of legal and transaction-related advisory fees associated with the sale.
Discussion of Results of Operations
The Company provides products and services in which revenue is categorized as Strategic, Legacy, or Other. In the first quarter of 2024, the Company realigned the classification of products and services to these categories within the Network segment to better align revenue across geographies as well as reclass certain nonrecurring revenue to Other. Cincinnati Bell Telephone Company LLC ("CBT"), a subsidiary of the Company, is the incumbent local exchange carrier ("ILEC") for a geography that covers a radius of approximately 25 miles around Cincinnati, Ohio, and includes parts of northern Kentucky and southeastern Indiana. CBT has operated in this territory for over 150 years. In 2022, the Company announced that we will begin doing business as "altafiber" and started our network expansion outside of this territory to provide fiber services to adjacent markets. Voice and data services that are delivered beyond the Company's ILEC territory, particularly in Dayton, Mason, and Columbus, Ohio, are provided through the operations of Cincinnati Bell Extended Territories LLC ("CBET"), a subsidiary of CBT. On July 2, 2018, the Company acquired Hawaiian Telcom. Hawaiian Telcom is the ILEC for the State of Hawaii and the largest full-service provider of communications services and products in the state. Originally incorporated in Hawaii in 1883 as Mutual Telephone Company, Hawaiian Telcom has a strong heritage of over 140 years as Hawaii’s communications carrier. Its services are offered on all of Hawaii’s major islands, with recent expansion of its video service from Oahu to the other major islands. On May 2, 2022, the Company acquired Agile IWG Holdings, LLC ("Agile"), based in Canton, Ohio. Agile leases wireless infrastructure assets to third parties and provides connectivity through hybrid fiber wireless data networks primarily to customers in Ohio and Pennsylvania. On April 17, 2023, the Company acquired Ohio Transparent Telecom Inc. ("OTT"). OTT provides network security, data connectivity, and unified communications solutions to commercial and enterprise customers across multiple sectors throughout Ohio and Michigan.
Strategic revenue includes internet access for speeds that meet or exceed 100 megabits per second and Enterprise Fiber, each categorized below as Data, as well as Video. Enterprise Fiber products include metro-ethernet, dedicated internet access, wavelength, IRU contracts, connectivity services provided by Agile, and wireless backhaul to macro-towers and small cells. Hawaiian Telcom Enterprise Fiber revenue also includes revenue from the SEA-US cable system. As enterprise customers migrate from legacy products and copper-based technology, our metro-ethernet product becomes the preferred method of transport due to its ability to support multiple applications on a single physical connection.
Legacy revenue include internet access for speeds of less than 100 megabits per second, traditional voice lines, consumer and business long distance, switched access, digital trunking, DSL, DS0, DS1, DS3, and other value-added services such as caller identification, voicemail, call waiting and call return. Legacy products also include certain communications services including data and VoIP services, tailored solutions that include converged IP communications of data, voice and mobility applications, MPLS (Multi-Protocol Label Switching) and conferencing services.
Other revenue is comprised of wire care, time and materials projects, advertising, management of distributed antenna systems, certain pass-through fees such as franchise fees and regulatory fees, other fees that are not billed on a monthly recurring basis, and subsidized fiber build project revenue related to extending the Company's fiber network in the Midwest territory subsidized through our UniCity program and in Hawaii subsidized through a customer contract. Other revenue also includes revenue contributed by Hawaiian Telcom for the sale of hardware and maintenance contracts as well as installation projects and cloud services which include storage, SLA-based monitoring and management, cloud computing and cloud consulting.
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Form 10-K Part II
Cincinnati Bell Inc.
$ Change
% Change
$ Change
% Change
(dollars in millions)
Revenue:
Data
Video
Voice
Other
Total Revenue
Operating costs and expenses:
Cost of services and products
Selling, general and administrative
Depreciation and amortization
Restructuring and severance related charges
Impairment of goodwill
Impairment of assets
Transaction costs
Total operating costs and expenses
Network operating income (loss)
Network operating margin
10.0 pts
(1.5) pts
Capital expenditures
Change
% Change
Change
% Change
Metrics information (in thousands):
Midwest
Strategic
Internet*
Video
Enterprise Fiber - Ethernet Bandwidth
Fiber to the Premise ("FTTP") Addresses
Legacy
Internet**
Voice Lines
* Internet speeds of 100mbps or more
** Internet speeds of less than 100mbps
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Form 10-K Part II
Cincinnati Bell Inc.
Change
% Change
Change
% Change
Metrics information (in thousands):
Hawaii
Strategic
Internet*
Video
Enterprise Fiber - Ethernet Bandwidth
FTTP Addresses
Legacy
Internet**
Voice Lines***
* Internet speeds of 100mbps or more
** Internet speeds of less than 100mbps
*** In the first quarter of 2025, the Company updated its definition and reporting method in Hawaii. Voice Lines as of December 31, 2024 and 2023 has also been updated to reflect the change in definition and reporting method.
Year Ended December 31,
(dollars in millions)
Midwest
Hawaii
Total
Midwest
Hawaii
Total
Midwest
Hawaii
Total
Revenue
Strategic
Internet
Enterprise Fiber
Video
Total Strategic
Legacy
Voice
Internet
Data
Total Legacy
Other
Total Network Revenue
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Form 10-K Part II
Cincinnati Bell Inc.
Total Network revenue
Revenue totaling $1,107.2 million for 2025 increased $10.9 million compared to the prior year, primarily due to increased Strategic revenue from growth in the Strategic Internet subscriber base which more than offset the decrease in Video, Legacy Internet and Legacy Voice revenue.
Strategic
Strategic revenue increased $51.8 million for 2025 compared to the prior year primarily due to the increase in the subscriber base for internet. The internet subscriber base continues to increase as we focus attention on growing the Strategic Internet subscriber base, adding 23,300 Strategic Internet subscribers in the Midwest and 22,500 Strategic Internet subscribers in Hawaii during 2025. In the Midwest, we passed 76,400 addresses in 2025, primarily related to multi-dwelling units and single family homes in the areas surrounding Dayton, Ohio and Columbus, Ohio. In Hawaii, our accelerated fiber build pace enabled us to pass 66,500 addresses during the year. The Average Revenue Per User (“ARPU”) for 2025 increased for internet in both the Midwest and Hawaii compared to the prior year primarily due to price increases and more customers subscribing to higher broadband tiers.
Enterprise Fiber revenue increased $5.6 million for 2025 compared to the prior year due to increased revenue in Hawaii of $3.0 million, primarily associated with customers migrating from Legacy product offerings to higher bandwidth fiber solutions as evidenced by the 12% and 22% increases in Ethernet Bandwidth in the Midwest and Hawaii, respectively.
Legacy
Legacy revenue decreased $37.7 million for 2025 compared to the prior year due to the decline in voice lines and internet subscribers. Voice lines declined 13% and 9% in the Midwest and Hawaii, respectively, as voice lines become less relevant. Legacy internet subscribers continue to decrease in the Midwest and Hawaii, as subscribers demand the higher speeds that can be provided by fiber. In addition, declines in DS1, DS3 and digital trunking have contributed to the Legacy revenue decline in 2025 compared to the prior year as customers migrate away from these solutions to fiber-based solutions.
Other
Other revenue decreased $3.2 million for 2025 compared to the prior year primarily due to decreased revenue from subsidized fiber build projects in 2025.
Operating Costs and Expenses
Cost of services and products decreased $56.8 million for 2025 compared to the prior year primarily due to decreases in payroll related costs of $25.3 million due to headcount reductions executed in the prior year, video content costs of $10.6 million, contract services costs of $5.8 million, and $7.2 million of network related expenses related to the decommissioning of certain copper assets as customers continue to migrate from copper-based services to fiber-based services. Additionally, the Company received $3.1 million of insurance proceeds related to a business interruption claim filed in a prior year related to loss of income in Lahaina that was recorded as benefit to expense in 2025.
SG&A expenses decreased $19.3 million for 2025 compared to the prior year primarily due to decreased payroll related costs of $18.7 million. The decrease in payroll related costs is primarily due to headcount reductions made during restructuring initiatives that were executed in the fourth quarter of 2024.
Depreciation and amortization expenses decreased $5.4 million for 2025 compared to the prior year primarily due to certain assets that were given a shorter useful life when recorded at fair value on the Company's merger date, September 7, 2021, and were fully depreciated by 2024 in addition to declining amortization expense on certain intangibles.
Restructuring and severance related charges of $5.9 million were recorded in 2025, a decrease of $53.4 million compared to the prior year primarily due to a restructuring plan executed in the fourth quarter of 2024 consisting of an organizational restructuring to centralize the Company’s management, align resources with strategic product lines and reduce costs associated with certain functions (the “Organizational Restructuring”). The Organizational Restructuring resulted in the elimination of certain positions and termination of employment for certain employees. Restructuring and severance related charges recorded in 2025 related to a continuation of the 2024 Organizational Restructuring and an involuntary severance program reducing employee headcount supporting the Agile Operations.
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Form 10-K Part II
Cincinnati Bell Inc.
In October 2025, the company commenced a strategic review of its Agile business. The evaluation of alternatives included, among other options, continued operation with targeted restructuring initiatives designed to enhance profitability and cash flow, a sale of the business or specific assets, or a potential merger. As a result of the strategic review, management determined that it will continue to operate the business and conducted a headcount reduction contributing to severance charges recorded in the fourth quarter of 2025. Additionally, management completed an updated long-term forecast. Based on these events, the company determined that a triggering event occurred for Agile warranting a review of the recoverability of the asset group and impairment review of the goodwill. Based on these reviews, the company concluded that the undiscounted cash flows exceeded the carrying value of the Agile asset group and thus an impairment did not exist for the related long-lived assets. However, the company determined that on a fair value basis the goodwill was fully impaired and recorded a charge of $36.2 million.
Impairment of asset charges of $2.5 million were recorded in 2025 related to a fiber asset purchase that management concluded would no longer be placed in service.
Impairment of asset charges of $3.1 million were recorded in 2024 related to fixed assets and operating lease assets that will no longer be utilized by the business as a result of the Company's decision to no longer pursue an ancillary product offering.
Capital Expenditures
Capital expenditures are incurred to expand our fiber network, upgrade and increase capacity for our networks, and to maintain our fiber and copper networks. The Company is focused on building FTTP addresses, and during 2025, we passed 76,400 FTTP addresses in the Midwest.
Midwest capital expenditures increased $6.4 million for 2025 compared to the prior year primarily due to network construction expenditures and real estate purchases as the Company continues its expansion efforts to adjacent markets. Additionally, Agile capital expenditures for 2025 decreased by $12.1 million primarily related to tower build projects in the prior year that did not recur.
Hawaii capital expenditures increased $9.0 million for 2025 compared to the prior year primarily due to increased network construction expenditures, partially offset by decreased real estate purchases. In Hawaii, we passed 66,500 FTTP addresses during 2025.
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Form 10-K Part II
Cincinnati Bell Inc.
Corporate
Corporate is comprised primarily of general and administrative costs that have not been allocated to the Network business segment and transaction and integration costs. Corporate costs totaled $27.2 million in 2025, $33.2 million in 2024, and $26.2 million in 2023.
Corporate costs decreased by $6.0 million for 2025 compared to the prior year primarily due to lower payroll costs of $1.0 million related to headcount reductions from the Company's organizational restructuring plan executed in the fourth quarter of 2024 that resulted in $1.2 million of severance charges incurred in the prior year. Additionally, transaction and integration costs decreased $2.9 million compared to the prior year and $3.5 million of expenses related to the Disposal Group incurred in 2024 that did not recur in 2025. These decreased costs were partially offset by higher technology expenses of $1.6 million related to a technology transformation project to modernize systems to achieve better process efficiencies across sourcing, project management, fixed assets and accounting through the use of various solutions (the "Transformation Project"). Depreciation expense increased $1.3 million in 2025 compared to the prior year due to software assets related to the Transformation Project placed in service in the third quarter of 2025.
Interest expense decreased $46.9 million for 2025 compared to the prior year primarily due to less interest expense incurred on the Network Receivables Facility and on the Credit Agreement's revolving credit facility, neither of which were drawn during 2025, partially offset by increased debt of $300 million on the Term B-4 Loan that the Company entered into in the second quarter of 2024.
Other components of pension and postretirement benefit plans benefit decreased for 2025 compared to the prior year due to the annual remeasurement of the pension and postretirement projected benefit obligation that resulted in a decreased benefit from expected return on plan assets. Additionally, settlement gains recorded were the result of the Company's purchase of a group annuity contract to transfer a portion of its pension liability and the related responsibility for benefit payments within existing defined benefit plans as well as the distribution of lump sum payments.
Other income, net totaled $27.1 million for 2025 primarily due to a gain recognized in the fourth quarter of 2025 from the sale of an equity method investment of $10.0 million and interest income of $9.3 million. In addition, the Company recorded a patronage distribution of $6.7 million from one of the syndicated lenders of the Term B-1 Loans and Term B-3 Loans in the Company's Credit Agreement.
Loss from continuing operations before income taxes totaled $85.7 million resulting in a decrease in the loss of $151.8 million compared to the prior year due to operating income generated, in addition to lower interest expense, partially offset by an unfavorable change to Other income, net compared to 2024 due to decreased gains in 2025 associated with the Company's interest rate swap agreements and interest rate cap agreements.
The income tax provision for 2025 was an expense of $8.1 million, which differed significantly from the period's loss at the statutory rate due primarily to a valuation allowance recorded against federal net operating loss carryforwards. The income tax provision for 2024 was a benefit of $13.9 million. The income tax expense recorded in 2025 differed significantly from the benefit recorded in the prior year due primarily to additional valuation allowance recorded against federal net operating loss carryforwards in 2025.
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Form 10-K Part II
Cincinnati Bell Inc.
Financial Condition, Liquidity, and Capital Resources
Capital Investment, Resources and Liquidity
As of December 31, 2025, the Company had an accumulated deficit of $589.6 million and $1,706.5 million of outstanding indebtedness.
The Company's primary source of cash is generated by operations. The Company generated $201.0 million and $236.8 million of cash flows from operations for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2025, the Company had $468.8 million of short-term liquidity, comprised of $40.5 million of cash and cash equivalents, $400.0 million of undrawn capacity on our Revolving Credit Facility, and $28.3 million available under the Network Receivables Facility.
In August 2023, Parent committed to make capital contributions of $600.0 million to the Company, of which $400.0 million was received in the third quarter of 2023 and $200.0 million was received in the fourth quarter of 2024. The capital contributions received were used to repay borrowings on the Company's Revolving Credit Facility, fund capital expenditures, and fund working capital.
The Company’s primary uses of cash are for working capital requirements, capital expenditures and debt service and, to a lesser extent, to fund pension and retiree medical obligations.
Capital expenditures increased $6.5 million for 2025 compared to the prior year primarily due to network construction expenditures as the Company continues its expansion efforts to adjacent markets. Additionally, corporate capital expenditures increased related to an ongoing technology transformation project to replace certain of the Company's legacy financial systems. These increases were partially offset by decreased capital expenditures related to the Disposal Group in 2024 that did not recur in 2025.
Interest payments were $126.7 million in 2025, a decrease of $48.9 million compared to 2024. Interest payments decreased for 2025 compared to the prior year due to no borrowings on the Revolving Credit Facility and Network Receivables Facility. Our contractual debt maturities in 2026, including finance lease obligations, are $29.5 million and contractual interest payments are expected to be approximately $100 million.
As of December 31, 2025, the Company had no borrowings and $26.7 million of letters of credit outstanding under the Network Receivables Facility on a borrowing capacity of $55.0 million.
In March 2025, the Company executed an amendment to the Network Receivables Facility that increased the maximum borrowing limit for loans and letters of credit to $60.0 million, extended the termination date to March 2028 and extended the renewal date to March 2027.
Capacity on the Network Receivables Facility is calculated based on the quantity and quality of outstanding accounts receivables. Therefore if the Company experiences declines in revenue or extends discounts to customers, the capacity could be negatively impacted and reduce our short term liquidity. While we expect to continue to renew the Network Receivables Facility, we would be required to use cash, our Revolving Credit Facility, or other sources to repay any outstanding balances on the facility if it were not renewed.
In 2021, the Company entered into a Credit Agreement (the "Credit Agreement") that initially provided for (i) a five-year $275 million senior secured revolving credit facility, including both a letter of credit subfacility of up to $40 million and a swingline loan subfacility of up to $10 million (the “Revolving Credit Facility”) and (ii) a seven-year $150 million senior secured term loan facility (the “Term B-1 Loans”). The Revolving Credit Facility matured in September 2026 and the Term B-1 Loans mature in September 2028. Subsequent to entering into the Credit Agreement, additional Amendments have been executed resulting in three tranches of debt outstanding at December 31, 2025 that each mature in September 2028. The three tranches are the Term B-1 Loans, Term B-3 Loans and Term B-5 loans (collectively referred to as the “Term B Loans”). The aggregate principal amount of the Term B Loans is recorded in current and long-term debt on the Consolidated Balance Sheets.
As of December 31, 2025 the maximum borrowing capacity on Revolving Credit Facility is $400 million. No borrowings were drawn on the Revolving Credit Facility at December 31, 2025 and 2024. As the result of a 2024 amendment, the maturity date for the commitments under the Company’s Revolving Credit Facility was extended to August 2028.
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Form 10-K Part II
Cincinnati Bell Inc.
In September 2025, the Company entered into an amendment (the "Amendment No. 6") to the Credit Agreement to provide for (i) a reduction in the interest rate margin applicable to the Term B-1 Loans and the Term B-3 Loans under the Credit Agreement and (ii) the incurrence of a new tranche of senior secured term loans (the "Term B-5 Loans"). The proceeds of the Term B-5 Loans were used to refinance in full the outstanding aggregate principal amount of the Term B-4 Loans and to pay fees and expenses in connection with the refinancing of the Term B-4 Loans. The other material terms, conditions and covenants of the Credit Agreement were unchanged by Amendment No. 6.
One of the syndicated lenders of the Term B-1 Loans and Term B-3 Loans in the Credit Agreement is a cooperative bank owned by its customers. Annually, this bank distributes patronage in the form of cash and stock in the cooperative based on the Company’s average outstanding loan balance. The Company recognizes the patronage, generally as declared, in “Other income, net.” The stock component is recognized at its stated cost basis. The Company received $6.7 million and $6.1 million in patronage dividends for the years ended December 31, 2025 and 2024, respectively.
The Credit Agreement has a financial covenant that requires the Company to maintain a Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) of 5.75 to 1.00 when the utilization under the Revolving Credit Facility exceeds 35%. In addition, the Credit Agreement contains customary affirmative and negative covenants, including but not limited to, restrictions on the Company's ability to incur additional indebtedness, create liens, pay dividends, make certain investments, prepay other indebtedness, sell, transfer, lease, or dispose of assets and enter into, or undertake, certain liquidations, mergers, consolidations or acquisitions.
The Credit Agreement contains customary events of default (which are in some cases subject to certain exceptions, thresholds and grace periods), including, but not limited to, nonpayment of principal or interest, failure to perform or observe covenants, breaches of representations and warranties, cross-defaults with certain other indebtedness, certain bankruptcy-related events or proceedings, final monetary judgments or orders, ERISA defaults, invalidity of loan documents or guarantees, and certain change of control events. If the Company was to violate any of its covenants and was unable to obtain a waiver, it would be considered a default. If the Company was in default under the Credit Agreement, no additional borrowings under the Revolving Credit Facility would be available until the default was waived or cured. See Item 1A. Risk Factors in this Form 10-K where a more in-depth explanation of consequences appears.
The Term B Loans are subject to the same affirmative and negative covenants and events of default as the Revolving Credit Facility, except that a breach of the financial covenants will not result in an event of default under the Term B-5 Loans unless and until the agent or a majority in interest of the lenders under the Revolving Credit Facility have terminated their commitments under the Revolving Credit Facility and accelerated the loans then outstanding under the Revolving Credit Facility in response to such breach in accordance with the terms and conditions of the Credit Agreement.
As of December 31, 2025, the Company was in compliance with the Credit Agreement covenants and ratios.
While the Company is no longer subject to the filing requirements under the Securities Exchange Act of 1934, as amended, certain covenants included in the indenture for the Cincinnati Bell Telephone Notes due 2028 require the Company to make ongoing voluntary filings with the SEC.
Management believes that cash on hand, operating cash flows, its Revolving Credit Facility, its Network Receivables Facility, and the expectation that the Company will continue to have access to capital markets to refinance debt and other obligations as they mature and come due, should allow the Company to meet its cash requirements for the foreseeable future.
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Form 10-K Part II
Cincinnati Bell Inc.
Cash Flows
Cash provided by operating activities in 2025 totaled $201.0 million, a decrease of $35.8 million compared to the prior year. The decrease is primarily due to cash flows associated with the Disposal Group that are included in the prior year period but excluded in the current period as a result of the completion of the sale transaction in December 2024. Additionally, restructuring payments of $45.5 million in 2025 associated with initiatives executed in the fourth quarter of 2024 and first half of 2025, an increase of $12.2 million compared to payments of $33.3 million in the prior year contributed to lower operating cash flows. These decreases to operating cash flows were partially offset by lower interest payments of $48.9 million due to no borrowings on the Revolving Credit Facility and Network Receivables Facility in 2025.
Cash used in investing activities in 2025 totaled $556.5 million, compared to $124.3 million provided by investing activities in the prior year. This decrease is primarily due to proceeds received from the sale of the Disposal Group in the fourth quarter of 2024 of $672.2 million. In 2025, $14.5 million of proceeds previously received from the sale of CBTS in 2024 were remitted back to TowerBrook in the second quarter of 2025 related to post-closing adjustments. Additionally, the decrease was partially offset by $10.0 million of proceeds received from the sale of a previously impaired equity method investment in the fourth quarter of 2025.
Cash used in financing activities totaled $67.0 million in 2025 primarily due to the extinguishment of the Company's existing Paniolo financing arrangement of $21.4 million, repayment of $18.9 million to resolve a temporary bank overdraft resulting from a miscommunication on payroll dates and related funding requirements, repayment of $6.3 million of outstanding principal amounts of the Company's CBT Notes in the third quarter of 2025, and required payments on the Company's Term Loans due 2028 of $14.0 million.
Cash provided by financing activities totaled $92.1 million in 2024 primarily due to the issuance of $300.0 million of Incremental Term B-2 Loans and a capital contribution from Parent of $200.0 million. These financing inflows were partially offset by net payments on the Revolving Credit Facility and receivables facilities of $152.5 million and $245.5 million, respectively, and required payments totaling $13.4 million on the Term B-1, B-2 and B-3 Loans.
Future Operating Trends
We continue to mitigate the revenue decline experienced with our Legacy products with increases in Strategic revenue of our fiber-based products. In addition, the merger with Hawaiian Telcom has allowed us to build scale and fiber density to help capitalize on the growing demands for internet speeds that only a fiber network can provide. We expect the desire by customers for increased internet speeds will only continue as evidenced by the fact that approximately 97% of the Midwest's internet customers subscribe to speeds of 100 megabits or more, compared to approximately 95% and 90% subscribed to such speeds in 2024 and 2023, respectively. As of December 31, 2025, approximately 89% of internet customers in Hawaii subscribed to speeds of 100 megabits or more, compared to approximately 81% and 75% subscribed to such speeds in 2024 and 2023, respectively. Efforts to expand our fiber network continued in 2025 with delivering additional addresses in areas surrounding Dayton, Ohio and surrounding Columbus, Ohio and we will continue to build in these areas in 2026. In the Cincinnati ILEC territory, the Company will focus their build strategy on success-based business addresses and multi-dwelling units. The Company will also work to identify new opportunities for further expansion in 2026 in addition to the planned construction build in Southwest Ohio with subsidy support of $50 million from a grant awarded in the third quarter of 2024 to build fiber to 38,000 addresses in that region.
During 2026, we expect continued competition for internet, voice and video services as the cable competitor in the Midwest market and fixed wireless providers in the region continue to offer aggressive pricing promotions to switch service providers. Due to this competition, as well as customers migrating to obtaining video programming over broadband Internet connections, we expect to continue to see a decline in video subscribers and DSL internet subscribers. In the Hawaii market, we also expect continued competition for internet, voice and video services as the cable competitor continues to offer significant price concessions and to aggressively market in the state.
In 2026, we plan to invest approximately $550 million to expand our fiber network, including construction, installation and other value-added services.
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Form 10-K Part II
Cincinnati Bell Inc.
Contractual Obligations
The following table summarizes our material contractual obligations and borrowings as of December 31, 2025:
Payments due by Period
(dollars in millions)
Total
Within the next 12 months
Beyond the next 12 months
Long-term debt, excluding finance leases and other financing arrangements (1)
Principal amount
Interest payments (2)
Finance leases (3)
Principal amount
Interest payments (2)
Operating lease obligations
Purchase obligations (4)
Pension and postretirement benefits obligations (5)
Unrecognized tax benefits (6)
Other liabilities (7)
Total
Excludes net unamortized discounts and fair value adjustments recorded on the Merger Date.
Assumes no early payment of debt in future periods. The interest rate applied on variable rate borrowings is the rate in effect as of December 31, 2025.
Includes finance lease obligations primarily related to vehicles, network equipment used in the deployment of our fiber network, and wireless towers assumed from our discontinued wireless operations.
Includes amounts under open purchase orders for purchases of network, IT and telephony equipment, video content, and other goods; contractual obligations for services such as software maintenance and outsourced services; and other purchase commitments.
Includes payments for Cincinnati Bell Hawaiian Telcom Pension Plan and postretirement health plans as well as other employee retirement agreements. Amounts due within the next 12 months include approximately $7 million expected to be contributed for postretirement benefits. Although the Company expects to continue operating the plans past the next 12 months, its contractual obligation related to postretirement obligations only extends through 2026. Amounts for 2026 through 2035 include approximately $4 million of estimated cash contributions to the qualified pension plans with approximately $3 million of cash contributions due within the next 12 months. Expected qualified pension plan contributions are based on current plan design, legislation and current actuarial assumptions. Any changes in plan design, legislation or actuarial assumptions may also affect the expected contribution amount.
Includes the portion of liabilities related to unrecognized tax benefits. If the timing of payments cannot be reasonably estimated for unrecognized tax benefits, these liabilities are included in the "Beyond the next 12 months" column of the table above.
Includes contractual obligations primarily related to asset removal obligations and liabilities related to the pole license agreement obligation.
The amount of these obligations can be expected to change over time as new contracts are initiated and existing contracts are completed, terminated, or modified.
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Form 10-K Part II
Cincinnati Bell Inc.
Contingencies
We are subject to various lawsuits, actions, proceedings, claims and other matters asserted under laws and regulations in the normal course of business. We believe that the amounts provided in our consolidated financial statements, as prescribed by generally accepted accounting principles, are adequate in light of those contingencies that are probable and able to be estimated. However, there can be no assurances that the actual amounts required to satisfy alleged liabilities from various legal proceedings, claims, tax examinations, and other matters, including the matters discussed below and to comply with applicable laws and regulations, will not exceed the amounts reflected in our consolidated financial statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of December 31, 2025, cannot be reasonably determined. For additional details refer to Note 8 of the consolidated financial statements.
Based on information currently available, consultation with counsel, available insurance coverage and established reserves, management believes that the eventual outcome of all outstanding claims will not, individually or in the aggregate, have a material effect on the Company's financial position, results of operations or cash flows.
Off-Balance Sheet Arrangements
Indemnifications
During the normal course of business, the Company makes certain indemnities, commitments, and guarantees under which it may be required to make payments in relation to certain transactions. These include: (a) intellectual property indemnities to customers in connection with the use, sale, and/or license of products and services, (b) indemnities to customers in connection with losses incurred while performing services on their premises, (c) indemnities to vendors and service providers pertaining to claims based on negligence or willful misconduct, (d) indemnities involving the representations and warranties in certain contracts, and (e) outstanding letters of credit which totaled $26.7 million as of December 31, 2025. In addition, the Company has made contractual commitments to several employees providing for payments upon the occurrence of certain prescribed events. The majority of these indemnities, commitments, and guarantees do not provide for any limitation on the maximum potential for future payments.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. Application of these principles requires management to make estimates or judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates or judgments. Certain accounting policies inherently have a greater reliance on the use of estimates, and, as such, have a greater possibility of producing results that could be materially different than originally reported.
Our most significant accounting policies are presented in Note 1 to the consolidated financial statements. Management views critical accounting policies to be those policies that are highly dependent on subjective or complex judgments, estimates or assumptions, and where changes in those estimates and assumptions could have a significant impact on the consolidated financial statements. We have discussed our most critical accounting policies, judgments and estimates with our Audit Committee.
The discussion below addresses major judgments used in:
business combinations
reviewing the carrying values of goodwill and definite-lived intangible assets;
accounting for income taxes; and
accounting for pension and postretirement obligations.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
Business Combinations — In accounting for business combinations, we apply the accounting requirements of FASB ASC 805, “Business Combinations,” which requires the recording of net assets of acquired businesses at fair value. The Company utilizes management estimates and an independent third-party valuation firm to assist in determining the fair values of acquired assets and assumed liabilities. In developing estimates of the fair value of net assets, the Company analyzes a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets, and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets and network assets. The Company reports in its consolidated financial statements provisional amounts for the items for which accounting is incomplete. Goodwill is adjusted for any changes to provisional amounts made within the measurement period.
Reviewing the Carrying Values of Goodwill and Definite-lived Intangible Assets — We amortize intangible assets over their useful lives unless we determine such lives to be indefinite. We evaluate goodwill annually or whenever events or changes in circumstances indicate the carrying value may not be recoverable. For impairment testing, goodwill has been assigned to reporting units which consist of the Company’s Midwest operations, Hawaii operations and Agile operations.
The Company adheres to the guidance under ASC 350-20 in testing goodwill for impairment. Under this guidance, the Company has the option of performing a qualitative assessment for impairment prior to performing the quantitative tests. We perform our annual impairment tests in the fourth quarter on October 1st when our long term plan is updated based on the following steps:
Step 0 or qualitative assessment - Evaluate qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The factors we consider include, but are not limited to, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance or events specific to that reporting unit. If or when we determine it is more likely than not that the fair value of a reporting unit is less than the carrying amount, including goodwill, we would perform a Step 1 quantitative test.
Step 1 or quantitative test - Compare the fair value for each reporting unit to its carrying value, including goodwill. Fair value is determined based on a combination of valuation methods, including both income-based and market-based methods. The income-based approach utilizes a discounted cash flow model using projected cash flows derived from the long term plan, adjusted to reflect market participants' assumptions. Expected future cash flows are discounted at the weighted average cost of capital applying a market participant approach. The market-based approach utilizes earnings multiples from comparable publicly-traded companies. A goodwill impairment charge is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. If a reporting unit’s fair value exceeds the carrying value, no further work is performed and no impairment charge is necessary.
The Company performed a quantitative analysis of goodwill in 2025 for all reporting units. For the Midwest and Hawaii reporting units, fair value exceeded the carrying amounts and, therefore, goodwill was not impaired. For our Agile business, based on the fourth quarter 2025 strategic review discussed above, the company determined that a triggering event occurred warranting a review of the recoverability of the asset group (including goodwill and definite-lived intangible assets). Based on this review, the company concluded that the undiscounted cash flows exceeded the carrying value of the Agile asset group based on the remaining useful life of the primary asset and thus an impairment of the long-lived assets did not exist. However, based on the goodwill impairment assessment, which coincided with the annual goodwill assessment, the company determined that the goodwill was fully impaired and recorded a charge of $36.2 million.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
Changes in certain assumptions could have a significant impact on the impairment tests for goodwill. The most critical assumptions are projected future growth rates, EBITDA margin, terminal growth rate, discount rate selection, peer group determination and market multiples. These assumptions are subject to change as the Company's long-term plans and strategies are updated each year. As of the annual testing date, each reporting unit's fair value exceeded the carrying value of the reporting unit, and as such, there is no goodwill impairment. However, the quantitative analysis of goodwill for the Hawaii reporting unit indicated that the cushion between its estimated fair value and carrying value was less than 10% as of the October 1, 2025 assessment date. Goodwill associated with the Hawaii reporting unit at December 31, 2025 is $144.0 million. The estimated fair value determination requires judgment and is sensitive to changes in the underlying assumptions discussed above. Accordingly, if current cash flow assumptions are not realized or other macroeconomic factors adversely impact other assumptions, it is possible that an impairment charge may be recorded in the future.
Accounting for Income Taxes — The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as various state and local jurisdictions. The Company’s previous tax filings are subject to normal reviews by regulatory agencies until the related statute of limitations expires. With few exceptions, the Company is no longer subject to U.S. federal, state or local examinations for years prior to 2021.
The Company has net operating loss carryforwards at the federal, state and local levels. Federal net operating loss carryforwards are available to offset taxable income in current and future periods. The next material tranche of Federal net operating loss carryforwards will expire, if not utilized, in 2031. The ultimate realization of the deferred income tax assets depends upon our ability to generate future taxable income during the periods in which basis differences and other deductions become deductible and prior to the expiration of the net operating loss carryforwards. The Company assessed all available positive and negative evidence to determine whether it expects that sufficient future taxable income will be generated to allow it to realize its existing deferred tax assets. Based on this analysis, there are not sufficient sources of future taxable income (e.g. reversing deferred tax liabilities) for management to conclude that it is more likely than not that the Company will utilize all available federal net operating losses, so an additional partial valuation allowance was recorded in 2025. In addition, realization of certain state and local net operating losses, as well as other deferred tax assets, is not certain, so valuation allowances have been recorded certain of those deferred assets as well. Changes in our current estimates due to such factors as market conditions and legislative developments could have a material effect on our ability to utilize deferred tax assets. Section 382 of the Internal Revenue Code and similar state provisions place potential on the Company’s ability to fully utilize existing deferred tax assets related to federal and state net operating .
Valuation allowances of $112.6 million and $82.9 million have been recognized as of December 31, 2025 and 2024, respectively. These valuation allowances are against U.S. federal, state and local net operating losses, as well as state carryforwards for interest expense deductions that are limited under state provisions related to IRS Section 163(j) of the Internal Revenue Code.
As of December 31, 2025 and 2024, the liabilities for unrecognized tax benefits were $68.8 million and $67.8 million, respectively. The liability is representative of tax positions taken where tax authorities' interpretation of the appropriate tax treatment may differ from the position the Company has taken. As of December 31, 2025, the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $68.1 million. Accrued interest related to unrecognized tax benefits is recognized in interest expense.
Accounting for Pension and Postretirement Obligations — In accounting for pension and postretirement expenses, we apply ASC 715, "Compensation — Retirement Benefits." A liability has been recognized on the Consolidated Balance Sheets for the unfunded status of the pension and postretirement plans. Actuarial (gains) losses and prior service costs (benefits) that arise during the period are recognized as a component of "Accumulated other comprehensive income" on the Consolidated Balance Sheets.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
The Company sponsors noncontributory defined benefit pension plans for eligible management employees, non-management employees, and certain former senior executives. We also provide healthcare and group life insurance benefits for eligible retirees. The measurement date for our pension and postretirement obligations is as of December 31. When changes to the plans occur during interim periods, management reviews the changes and determines if a remeasurement is necessary. In the third quarters of 2025 and 2024, amendments were approved to transfer portions of the Company's pension liability and related responsibility for benefit payments of certain participants and beneficiaries within the existing defined benefit plans to group annuity contracts. Effective December 31, 2025, an amendment was approved to merge the Hawaiian Telcom Hourly Employees Pension Plan and the Cincinnati Bell Pension Plan into the Cincinnati Bell Management Pension Plan. Following the merger, the Cincinnati Bell Management Pension Plan was renamed the Cincinnati Bell Hawaiian Telcom Pension Plan. With the exception of the previously discussed amendments, no other amendments to the plans were made during 2025 or 2024.
The measurement of our pension and postretirement projected benefit obligations involves significant assumptions and estimates. Each time we remeasure our projected benefit obligations, we reassess the significant assumptions and estimates. The actuarial assumptions attempt to anticipate future events and are used in calculating the expenses and liabilities related to these plans. The most significant of these numerous assumptions, which are reviewed annually, include the discount rate, rate of return and healthcare cost trend rates.
Discount rate
A discount rate is used to measure the present value of projected benefit obligations. The discount rate for each plan is individually calculated based upon the timing of expected future benefit payments. Our discount rates are derived based upon a yield curve developed to reflect yields available on high-quality corporate bonds as of the measurement date. As of December 31, 2025, the average discount rate used to value the Cincinnati pension plans was 5.20% while the average discount rate used to value to Cincinnati postretirement plans was 5.30%. As of December 31, 2024, the average discount rate used to value the Cincinnati pension plans and postretirement plans was 5.60%. As of December 31 2025, the average discount rate used to value the Hawaii postretirement plans was 5.50%. As of December 31, 2024, the average discount rate used to value the Hawaii pension plan for union employees was 5.40% while the average discount rate used to value the Hawaii postretirement plans was 5.70%. Lower rates of interest available on high-quality corporate bonds drove the decrease in the discount rates in 2025.
Expected rate of return
The expected long-term rate of return on plan assets, developed using the building block approach, is based on the mix of investments held directly by the plans and the current view of expected future returns, which is influenced by historical averages. The required use of an expected versus actual long-term rate of return on plan assets may result in recognized pension expense or income that is greater or less than the actual returns of those plan assets in any given year. Over time, however, the expected long-term returns are designed to approximate the actual long-term returns. For the year ended December 31, 2025, the estimated long-term rate of return was 5.30% for both the Cincinnati pension plan assets and the union Hawaii pension plan assets. For the year ended December 31, 2024, the estimated long-term rate of return was 6.30% for the Cincinnati pension plan assets and 6.00% for the union Hawaii pension plan assets. The long-term rate of return on the Cincinnati and Hawaii postretirement plan assets was estimated to be zero for the disclosed periods as these plans have minimal assets with a low rate of return. Actual asset returns for the Cincinnati pension trusts were gains of 11.76% in 2025 and 7.24% in 2024. Actual asset returns for the Hawaii pension trust were gains of 8.98% in 2025 and 4.29% in 2024. In our pension calculations, the market-related value of assets is equal to the fair market value. Differences between actual and expected returns are recognized in the market-related value of plan assets over five years.
Healthcare cost trend
Our healthcare cost trend rate is developed based on historical cost data, the near-term outlook and an assessment of likely long-term trends. As of December 31, 2025 and 2024, the healthcare cost trend rate used to measure the Cincinnati postretirement health benefit obligations was 9.0% and 7.5%, respectively. As of December 31, 2025, the healthcare cost trend rate for the Cincinnati plans is assumed to decrease gradually to 4.8% by the year 2037. As of both December 31, 2025 and 2024, the Hawaii postretirement plans have exceeded the per capita cost caps, and therefore, the healthcare cost trend does not apply.
The actuarial assumptions used may differ materially from actual results due to the changing market and economic conditions and other changes. Revisions to and variations from these estimates would impact liabilities, equity, cash flow and other components of pension and postretirement benefit plans expense.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
The following table represents the sensitivity of changes in certain assumptions related to the Cincinnati pension and postretirement plans as of December 31, 2025:
Pension Benefits
Postretirement and Other Benefits
(Decrease)/
(Decrease)/
(Decrease)/
(Decrease)/
% Point
Increase in
Increase in
Increase in
Increase in
(dollars in millions)
Change
Obligation
Expense
Obligation
Expense
Discount rate
Expected return on assets
The following table represents the sensitivity of changes in certain assumptions related to the Hawaii postretirement plans as of December 31, 2025:
Postretirement and Other Benefits
(Decrease)/
(Decrease)/
% Point
Increase in
Increase in
(dollars in millions)
Change
Obligation
Expense
Discount rate
At December 31, 2025 and 2024, unrecognized actuarial net gains were $48.8 million and $45.6 million, respectively. The unrecognized net gains (losses) have been primarily generated by differences between assumed and actual rates of return on invested assets, changes in discount rates, healthcare costs and the amendment to the Hawaii postretirement health and life insurance plans in 2022. Because gains and losses reflect refinements in estimates, as well as real changes in economic values, and because some gains in one period may be offset by losses in another or vice versa, we are not required to recognize these gains and losses in the periods that they occur. Unrecognized actuarial gains or losses that exceed 10% of the projected benefit obligation are amortized on a straight-line basis over the average life expectancy of the participant group for the Cincinnati pension plans and Hawaii pension plans, the average future working lifetime of active employees for the Cincinnati postretirement plans and the average remaining service period of active employees for the Hawaii postretirement plans.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
Regulatory Matters and Competitive Trends
Federal - The Telecommunications Act of 1996 (the "1996 Act") was enacted with the goal of establishing a pro-competitive, deregulatory framework to promote competition and investment in advanced telecommunications facilities and services to all Americans. From 1996 to 2008, federal regulators considered a multitude of proceedings aimed at promoting competition and deregulation. Although the 1996 Act called for a deregulatory framework, the FCC continued to maintain significant regulatory restraints on the traditional ILECs while increasing opportunities for new competitive entrants and new services by applying minimal regulation. Since 2009, federal regulators have devoted considerable attention to initiatives aimed at promoting investment in, and adoption of, advanced telecommunications services, particularly broadband Internet access services. Simultaneously, the FCC has been adopting measures that it believes would promote competition, protect consumers, reform universal service, and enhance public safety and national security. From 2017 through 2020, the FCC increasingly focused on eliminating burdensome and unnecessary regulations that impede broadband investment. The Biden Administration’s FCC focused on a number of items including net neutrality, digital discrimination, data privacy and transparency. Some of their initiatives were implemented, such as requiring broadband labels and all-in pricing, but others have run into legal . Under Chairman Brendan Carr, the Commission launched major initiatives to reduce regulatory oversight and streamline agency processes. In March 2025, the FCC initiated its “Delete, Delete, Delete” proceeding, a broad deregulatory effort seeking to repeal or modify rules deemed or , with particular attention on media‑ownership restrictions and copper‑network retirement requirements. In addition, the Commission reduced or eliminated longstanding broadband‑deployment obligations by Section 706 mandates that previously required the FCC to ensure broadband was being deployed on a “reasonable and timely” basis to all Americans. We continue to monitor the changing regulatory environment for any potential impacts, particularly on the following proceedings.
Universal Service
The federal Universal Service Fund ("USF") is funded via an assessment on the interstate end-user revenue of all telecommunications carriers and interconnected VoIP providers. The assessment is used to support high cost, low income, rural healthcare, and schools and libraries programs. During 2024, the quarterly USF assessment rate remained at historic highs, continuing to lead for calls from industry and consumer groups for the FCC to re-evaluate the USF contribution mechanism. In June 2025, the U.S. Supreme Court resolved the uncertainty created by the Fifth Circuit’s earlier ruling by upholding the constitutionality of the USF contribution mechanism. The Court reversed the Fifth Circuit, holding that neither Congress’s delegation of authority to the FCC nor the FCC’s delegation of administrative responsibilities to the Universal Service Administrative Company (“USAC”) violates the nondelegation doctrine. This decision eliminates the circuit split, confirms that the USF structure may continue as currently implemented, and ensures uninterrupted operation of the program across all universal‑service components. However, the Court’s ruling has intensified Congressional discussions about broader USF reform, particularly as the contribution factor continues to rise and the revenue base continues to shrink. The Company will continue to monitor any legislative or regulatory proposals affecting the USF, as reform efforts remain active and politically salient following the Supreme Court’s decision.
In August 2018, bidding concluded in the FCC’s Connect America Fund Phase II auction (“Auction 903”). Under this reverse auction, up to $2 billion in support over a 10-year period was available to expand fixed broadband service into additional unserved high-cost areas of the country. There were 103 winning bidders and the total amount of support that will be provided to these bidders over the 10-year term is $1.5 billion. Winning bidders must build out their broadband networks within the winning geographic areas (specific census block groups covering 713,176 locations in 45 states) within the first six years of the support term. CBT and Hawaiian Telcom were both winning bidders. As a result, CBT will receive $1.1 million to extend its broadband service to 342 unserved locations and Hawaiian Telcom will receive $18.2 million to build to 3,936 unserved locations. CBT and Hawaiian Telcom auction support distributions began in May 2019 and will continue until May 2029. The build out to all funded auction locations must be completed by December 31, 2025. In February 2026, the FCC issued updated determinations addressing CAF II “location discrepancy” petitions, granting partial adjustments to some carriers’ required deployment totals based on updated Broadband Serviceable Location Fabric data.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
In January 2020, the FCC adopted a Report and Order establishing the Rural Digital Opportunity Fund (“RDOF”), which will be used to distribute $20.4 billion over ten years to expand broadband in areas that remain unserved at the conclusion of the CAF II price cap support program. The funds will be awarded via two reverse auctions. The Phase I auction (“Auction 904”) began on October 29, 2020 and concluded on November 25, 2020 with 180 winning bidders for a 10-year support amount of $9.23 billion to serve over 5 million locations. The remaining $11 billion will be distributed via a second auction to be held at a later date when more accurate broadband availability data becomes available. Cincinnati Bell was a winning bidder for $26.9 million of support over the 10-year period to reach 11,131 locations in Hawaii, Indiana, Kentucky and Ohio. Cincinnati Bell assigned the Hawaii winning bids ($24.3 million for 8,049 locations) to Hawaiian Telcom and the Indiana, Kentucky and Ohio winning bids ($2.6 million for 3,082 locations) to Cincinnati Bell Telephone. The funding is being distributed in monthly installments over a 10-year period concluding in 2029 with buildout milestones beginning in 2024.
Beginning in 2024 and accelerating in 2025–2026, the FCC implemented several reforms affecting RDOF participants. In December 2024 and February 2025, the FCC modified its letter‑of‑credit (LOC) rules to reduce compliance burdens—expanding eligibility to all well‑capitalized U.S. banks and allowing RDOF recipients to reduce their LOCs to one year of support once 10% of required locations are deployed.
Infrastructure Investment and Jobs Act
On November 15, 2021, President Biden signed the $1 trillion Infrastructure Investment and Jobs Act (Public Law No. 117-58) (“IIJA”), which contains $65 billion for various broadband initiatives.
Broadband Equity, Access, and Deployment (“BEAD”) Program: The IIJA includes $42.5 billion which will be distributed by the National Telecommunications and Information Administration (“NTIA”) to states for awards to public and private entities to expand broadband deployment to currently unserved or underserved areas. In June 2023, NTIA announced allocation amounts for all 56 states and territories based on the FCC’s June 2023 broadband map. NTIA initially required each state to submit Initial and Final Proposals under the 2022 Notice of Funding Opportunity (NOFO).
Beginning in 2025, however, the BEAD program underwent substantial restructuring. In June 2025, NTIA issued a major Policy Notice rescinding the Biden‑era approvals of Final Proposals from multiple states and requiring every state and territory to revise its broadband deployment plans and conduct at least one additional competitive subgrantee selection round. The updated rules adopt a technology‑neutral approach, eliminating the prior “fiber‑first” preference and allowing any technology—fiber, cable, licensed fixed wireless, or LEO satellite—to qualify so long as it meets statutory performance requirements of at least 100/20 Mbps and ≤100 ms latency. The Policy Notice also removed numerous previously required elements, including labor‑standards scoring, climate‑resilience modeling, and affordability plan mandates, and temporarily rescinded approval for all non‑deployment funding pending new guidance. States must now update their Initial Proposals within 30 days and complete new competitive rounds—the “Benefit of the Bargain” process—within 90 days. These changes shift evaluation criteria toward lowest cost per location, reflecting the program’s new emphasis on efficiency and technology neutrality.
As of February 2026, NTIA reported that 50 of 56 states and territories have had their revised Final Proposals approved, moving the program closer to full implementation and opening the door to allocation of remaining funds. NTIA leadership also announced that program reforms have generated an estimated $21 billion in savings, which will be reinvested consistent with statutory requirements. The Company continues to monitor these developments closely and evaluate participation opportunities as states revise and rebid their BEAD subgrant processes. The Company is closely monitoring the federal and state procedural rules drafting processes and continues to evaluate initiatives that will lay the foundation for potential participation within each state and will pursue opportunities for funding where it deems it to be beneficial.
Middle Mile Grants (“MMG”) Program: The IIJA appropriated $1 billion for the MMG Program to be used to “encourage the expansion and extension of middle mile infrastructure to reduce the cost of connecting unserved and underserved areas to the backbone of the internet” and to “promote broadband connection resiliency through the creation of alternative network connection paths that can be designed to prevent single points of failure on a broadband network.” The NTIA accepted middle-mile applications through November 1, 2022 and on June 15, 2023 announced that $930 million was awarded for projects covering 35 states and Puerto Rico. Hawaiian Telcom applied for $37.4 million to partially fund an economically and environmentally sustainable open access middle mile infrastructure to benefit unserved and underserved communities and improve the resiliency of existing broadband services in the state of Hawaii by building new terrestrial and undersea fiber routes in the state. In June 2023, the NTIA awarded Hawaiian Telcom $37.4 million for the project.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
Broadband Consumer Labels: The IIJA contains a requirement for broadband internet access service providers to display consumer labels for stand-alone broadband Internet service plans that disclose information to consumers regarding the broadband Internet service plans available to them. The labels contain information about offered speed, price, contract requirements, expected download/upload speed, latency, etc. On April 10, 2024, the rules went into effect to have consumer labels available at points of sale for all standalone broadband internet service plans. On October 10, 2024, the requirement to have labels for all available service plans in a machine-readable format online and having the label available in consumer online accounts went into effect. Both altafiber and Hawaiian Telcom have implemented fully compliant broadband consumer labels as of the effective dates. The Commission has introduced a Notice of Proposed Rulemaking to roll-back some of the Broadband label requirements as part of its Delete, Delete, Delete initiative. The requirements being reconsidered include the requirement to read the label over the phone, display labels in the account portal, make them available in a machine readable format, etc.
IP Transition
In late 2013, the FCC opened a proceeding to explore how to transition from the legacy circuit-switched TDM networks to Internet Protocol (“IP”) networks. Examination of the myriad of technical, legal and policy issues surrounding the IP transition moved to the forefront during 2014, and during 2015 and 2016, the FCC adopted several orders imposing additional requirements on service providers seeking to transition their networks from copper to fiber. However, during the second quarter of 2017, the FCC opened several proceedings aimed at removing barriers to wireline and wireless broadband deployment and proposed reversing several of the additional requirements imposed in 2015 and 2016. Following this review, in November 2017, the FCC revised its rules to streamline the ILEC copper retirement process and the approval process for discontinuing legacy TDM service to speed the transition from legacy copper-based TDM services to IP services. It also reformed the pole attachment rules to make it easier for providers to attach equipment necessary for next-generation networks. In 2018, the FCC adopted additional changes aimed at streamlining the pole attachment process and preempting state and local processes considered to be detrimental to broadband deployment, particularly the small cells that will be used for 5G networks. The Company does not anticipate any significant financial impact due to these proceedings, although the streamlined processes will help facilitate a transition as the Company migrates from its legacy copper network to a fiber-based IP network.
Broadband Internet Access/Net Neutrality
During the October 2023 FCC meeting, the Commission proposed a net neutrality framework which would reclassify broadband Internet access as a Title II telecommunications service. Although the proposal suggested forbearing from applying certain telecommunications regulations to broadband internet access, it would have subjected broadband internet to significant regulation relative to its current unregulated status. Most notable were the proposals regarding privacy, security and outage reporting. Although outright ex ante price regulation is not proposed, the proposal clearly suggested that the Commission has the right under sections 201 and 202 of the Communications Act to determine in a subsequent period if broadband rates are just and reasonable. The Order implemented by the FCC was challenged and assigned to the 6th Circuit Court of Appeals. In December 2024, the Court, in a unanimous opinion, rejected the FCC’s authority to reclassify broadband as a Title II telecommunications service.
Robocalls
During 2019, the FCC took several steps to mitigate the impact of illegal robocalls and spoofed calls on consumers and businesses, including the Chairman calling on the largest voice service providers to “voluntarily” adopt the secure telephone identity revisited signature-based handling of asserted information using tokens (“STIR/SHAKEN”) call authentication standards developed by the Alliance for Telecommunications Industry Standards (“ATIS”). In addition, in December 2019, Congress passed and President Trump signed into law the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (“Pallone-Thune TRACED Act”). Under the Pallone-Thune Traced Act, voice service providers must implement the STIR/SHAKEN framework in their IP networks and take reasonable measures to implement an effective call authentication framework in their non-IP networks. Beginning in 2020, the FCC adopted several Orders to implement the provisions of the Pallone-Thune TRACED Act that require voice service providers to take proactive steps to mitigate the origination of illegal robocalls from their networks. The Company continues to take all steps necessary to comply with the new requirements.
State – On April 4, 2023 altafiber successfully filed with the Public Utilities Commission of Ohio (“PUCO”) a request for exemption from Ohio Revised Code (“ORC”) Section 4927.12 requirements, in accordance with Section 4927.123. All of altafiber’s Ohio exchanges have been determined to qualify for alternative regulation of basic local exchange service (“BLES”) by the Public Utilities Commission of Ohio which therefore removes the annual $2 price cap increases for basic local exchange service.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
In Hawaii, the legislature and the Hawaii Public Utilities Commission (“HPUC”) have taken steps over the last decade to reduce rate regulation of some of the services of the Company’s Hawaiian Telcom subsidiaries. In 2009 and 2010, the Hawaii State Legislature required the HPUC to treat all intrastate retail telecommunications services, including intrastate toll (i.e., inter island), central exchange (“Centrex”), most residential and business local exchange services, integrated service digital network (“ISDN”) private lines and special assemblies, and directory assistance, as “fully competitive” under the HPUC’s rules with certain qualifications. As a result, HPUC approval and cost support filings were no longer required to establish or reduce rates or to bundle service offerings; however, all service offerings were required to be priced above the service’s long run incremental cost and HPUC retained the ability to suspend and investigate any offering. In 2012, the Hawaii State Legislature passed legislation that gave Hawaiian Telcom pricing flexibility to increase tariffed intrastate rates for any retail telecommunications service without approval from the HPUC, with the exception of basic exchange service (i.e., single line residential and single line business services).
In May 2019, the Hawaii State Legislature granted nearly full pricing flexibility to telecommunications carriers, including Hawaiian Telcom, for intrastate telecommunications services. Rate changes for retail telecommunications services no longer need to be filed with and approved by the HPUC except for any price increase greater than $6.50 on an annual basis for basic exchange services in counties with a population of less than 500,000. In addition, the traditional cost-of-service regulatory framework that required cost support for retail telecommunications service offerings and pricing above a service’s long run incremental cost are no longer applicable; however, the HPUC retains the ability to investigate any offering. The legislation also eliminated the requirements for providers of fully competitive retail telecommunications services to obtain HPUC approval for financing and the sale or encumbrance of regulated property and assets, except when such sale or encumbrance occurs as part of a merger or consolidation with any other public utility. Additional relief was also granted on reporting affiliated transactions and accidents.
Based on these regulatory reforms, the Company can now compete more effectively in Hawaii by making decisions based on marketplace dynamics and other economic information.
Cable Franchises – Ohio, Kentucky and Indiana - The states of Ohio and Indiana permit statewide video service authorization. The Company is now authorized by Ohio and Indiana to provide service in its self-described territory with only 10-day notification to the local government entity and other providers. The authorization can be amended to include additional territories upon notification to the state. A franchise agreement with each local franchising authority is required in Kentucky. The Company has agreements with fifty-three franchising authorities in Kentucky.
Hawaii - In Hawaii, cable franchises must be approved by the Hawaii Department of Commerce and Consumer Affairs (“DCCA”). Since 2011, the Company’s Hawaiian Telcom Services Company, Inc. (“HTSC”) subsidiary has held a cable franchise authorizing it to provide video services throughout the island of Oahu. In late 2023, HTSC applied for cable franchises for the island of Kauai and the counties of Hawaii and Maui, which were granted by DCCA in July 2024.
Recently Issued Accounting Standards
Refer to Note 2 of the consolidated financial statements for further information on recently issued accounting standards.
Table of Contents
Form 10-K Part II
Cincinnati Bell Inc.
Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement
This Form 10-K contains "forward-looking" statements which are based on our current expectations, estimates, forecasts and projections. Statements that are not historical facts, including statements concerning plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans or intentions relating to acquisitions and restructuring, and business trends are forward-looking statements. Words such as “expects,” “anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “will,” “may,” “proposes,” “potential,” “could,” “should,” “outlook,” or variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of future financial performance, anticipated growth and trends in businesses, and other characterizations of future events or circumstances are forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this report. For a further discussion of these and other risks and uncertainties, refer to Part I, Item 1A. Risk Factors. The following important factors, among other things, could cause or contribute to actual results being materially and adversely different from those described or implied by such forward-looking statements, including, but not limited to:
the Company operates in highly competitive industries, and customers may not continue to purchase products or services, which would result in reduced revenue and loss of market share;
the Company may be unable to grow its revenues and cash flows despite the initiatives it has implemented;
if the Company’s goodwill, indefinite-lived intangible assets or long-lived assets become impaired, the Company may be required to record significant charges to earnings;
failure to anticipate the need to introduce new products and services or to compete with new technologies may compromise the Company’s success in our industries;
the Company’s access lines, which generate a significant portion of its cash flows and profits, are decreasing in number. If the Company continues to experience access line losses similar to the past several years, its revenues, earnings and cash flows from operations may be adversely impacted;
negotiations with the providers of content for our video programming may not be successful, potentially resulting in our inability to carry certain programming channels, which could result in the loss of subscribers. In addition, due to the influence of some content providers, we may be forced to pay higher rates for some content resulting in increased costs;
maintaining the Company's telecommunications networks requires significant capital expenditures, and the Company's inability or failure to maintain its telecommunications networks could have a material impact on the Company’s market share and ability to generate revenue;
the Company's failure to meet performance standards under its agreements could result in customers terminating their relationships with the Company or customers being entitled to receive financial compensation, leading to reduced revenues and/or increased costs;
the Company generates a substantial portion of revenue by serving a limited geographic area;
increases in broadband usage may cause network capacity limitations resulting in service disruptions or reduced capacity for customers;
An IT and/or network security breach or cyber-attack could lead to unauthorized use or disabling of our network, theft of customer data or other sensitive data, unauthorized use or publication of our confidential business information and could have a material adverse effect on our business;
weather conditions, natural disasters, terrorist acts or acts of war could cause damage to our infrastructure and result in significant disruptions to our operations;
damaging wildfires occurring on the Hawaiian islands of Maui and Hawaii have caused damage to our infrastructure and adversely affected, and could continue to adversely affect, our operations;
volatile geopolitical turmoil, including popular uprisings, regional conflicts, terrorism and war could result in market instability, which could negatively impact our business results;
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Form 10-K Part II
Cincinnati Bell Inc.
the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, could adversely affect our business, results of operations and financial condition;
the Company depends on a number of third-party providers and the loss of or problems with one or more of these providers may impede the Company’s growth, cause it to lose customers or materially and adversely impact its business, financial condition, and results of operations;
a failure of back-office information technology systems could adversely affect the Company’s results of operations and financial condition;
we may be liable for the material that content providers distribute over our networks;
our ability to attract and retain qualified personnel could disrupt our business and affect the Company's ability to meet key financial and business objects;
if the Company fails to extend or renegotiate its collective bargaining agreements with its labor unions when they expire, or if the Company’s unionized employees were to engage in a strike or other work stoppage, the Company’s business and operating results could be materially harmed;
the Company’s debt could limit its ability to fund operations, raise additional capital, and fulfill its obligations, which, in turn, would have a material adverse effect on the Company’s businesses and prospects generally;
the Company’s Credit Agreement and other indebtedness impose significant restrictions on the Company;
the Company depends on its revolving credit facility and receivables facilities to provide for its short-term financing requirements in excess of amounts generated by operations, and the availability of those funds may be reduced or limited;
the servicing of the Company’s indebtedness is dependent on its ability to generate cash, which could be impacted by many factors beyond the Company’s control;
the Company may need additional financing in the future to meet our capital needs or to make opportunistic acquisitions, and such financing may not be available on terms favorable to the Company, if at all;
growing inflation, supply chain disruption and other increased operating costs could materially and adversely affect our results of operations;
the uncertain economic environment, including uncertainty in the U.S. and world securities markets, could impact the Company's business and financial condition;
adverse changes in the value of assets or obligations associated with the Company’s employee benefit plans could negatively impact shareowners’ equity and liquidity;
the Company’s future cash flows could be adversely affected if it is unable to fully realize its deferred tax assets;
the Company has been named in litigation associated with the wildfires occurring on the Hawaiian island of Maui, which has resulted in the Company paying significant amounts in legal expenses and could require the payment of damages or settlements;
changes in tax laws and regulations, and actions by federal, state and local taxing authorities related to the interpretation and application of such tax laws and regulations, could have a negative impact on the Company's financial results and cash flows;
the regulation of the Company’s businesses by federal and state authorities may, among other things, place the Company at a competitive disadvantage, restrict our ability to price our products and services competitively, participate in new regulatory programs and threaten our operating licenses;
third parties may claim that the Company is infringing upon their intellectual property, and the Company could suffer significant litigation or licensing expenses or be prevented from selling products;
third parties may infringe upon the Company’s intellectual property, and the Company may expend significant resources enforcing its rights or suffer competitive injury;
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Form 10-K Part II
Cincinnati Bell Inc.
the Company could be subject to a significant amount of litigation, which could require the Company to pay significant damages or settlements;
the Company could incur significant costs resulting from complying with, or potential violations of, environmental, health and human safety laws;
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company does not undertake any obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
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Form 10-K Part II
Cincinnati Bell Inc.
