EX-99.2 3 tm2131354d1_ex99-2.htm EXHIBIT 99.2

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On November 1, 2021, WideOpenWest, Inc. (the “Company” or “WOW”) completed the previously announced sale of the Company’s Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets, pursuant to an Asset Purchase Agreement by and between the Company, Radiate HoldCo, LLC, a telecommunications holding company affiliated with RCN Telecom Services LLC, Grande Communications Networks, LLC and WaveDivision Holdings, LLC (collectively, “Astound Broadband”) (the “Astound Purchase Agreement” or the “Astound Transaction”), whereby Astound Broadband acquired the Company’s Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets for approximately $661 million, subject to adjustments, including customary working capital adjustments, as specified in the Astound Purchase Agreement.

As previously announced in our Form 8-K filed with the Securities and Exchange Commission (“SEC”) on September 1, 2021, WOW completed the sale of the Company’s Cleveland and Columbus, Ohio markets, pursuant to an Asset Purchase Agreement by and between the Company, WideOpenWest Ohio LLC, a Delaware limited liability company, WideOpenWest Cleveland LLC, a Delaware limited liability company, Atlantic Broadband (OH), LLC, (“Atlantic”), a U.S. cable operator and subsidiary of Cogeco Communications, Inc. and Atlantic Broadband Finance, LLC, a Delaware limited liability company (the “Atlantic Purchase Agreement” or the “Atlantic Transaction”), whereby Atlantic acquired the Company’s Cleveland and Columbus, Ohio markets for approximately $1.125 billion, subject to adjustments, including customary working capital adjustments, as specified in the Atlantic Purchase Agreement.

The unaudited pro forma condensed consolidated financial statements presented below have been derived from WOW’s historical consolidated financial statements. While the historical consolidated financial statements reflect the past financial results of the WOW business, this pro forma information gives effect to the Atlantic and Astound Transactions.

The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information. Regulation S-X Article 11 requires that pro forma financial information include the following pro forma adjustments to the historical financial information of the registrant:

Transaction Accounting Adjustments – Adjustments that reflect only the application of required accounting to the acquisition, disposition, or other transaction.

Autonomous Entity Adjustments – Adjustments that are necessary to reflect the operations and financial position of the registrant as an autonomous entity when the registrant was previously part of another entity. There are no autonomous entity adjustments included in the unaudited pro forma condensed consolidated financial statements.

The transaction accounting adjustments to reflect the Atlantic and Astound Transactions include, but are not limited to:

the separation of the operations, assets and liabilities of the Cleveland and Columbus, Ohio markets and the Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets from WOW and the transfer of those assets and liabilities to Atlantic and Astound, respectively;

the impact of, and transactions contemplated by the Atlantic Transition Services Agreement and the Astound Transition Services Agreement (collectively, the “TSAs”), and

the effect of WOW’s anticipated capital structure after the closing of both transactions, including the repayment of approximately $1.0 billion of debt with the proceeds from the closing of the Atlantic Transaction, which was paid in September 2021, and $480.9 million of debt with the proceeds from the Astound Transaction.

The transaction accounting adjustments are based on available information and assumptions that WOW’s management believes are reasonable. However, such adjustments are estimates and actual experience may differ from expectations. Additionally, Regulation S-X Article 11 permits registrants to reflect in the notes to the pro forma financial information forward-looking information that depicts the synergies and dis-synergies identified by management in determining to consummate or integrate the transaction for which pro forma effect is being given. Such adjustments have not been reflected in the notes to the unaudited pro forma condensed consolidated financial statements because WOW’s management does not believe these adjustments would enhance an understanding of the pro forma effects of the Atlantic and Astound Transactions.

The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2021 and the fiscal years ended December 31, 2020, 2019 and 2018 have been prepared as though the closing of both transactions occurred on January 1, 2018. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2021 have been prepared as though the closing of both transactions occurred on June 30, 2021.

The unaudited pro forma condensed consolidated financial statements are for illustrative purposes only, do not reflect what WOW’s financial position and results of operations would have been had the closing of both transactions occurred on the dates indicated, are not necessarily indicative of WOW’s future financial position and future results of operations and do not reflect all actions that may be taken by WOW after the closing of both transactions.

For example, the unaudited pro forma condensed consolidated statements of operations do not reflect an adjustment for overhead costs WOW expects to decrease as a result of the disposition of these markets and to operate the continuing business following the closing of both transactions. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with WOW’s historical consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 24, 2021, and quarterly reports on Form 10-Q for the periods ending March 31, 2021 and June 30, 2021, filed on May 4, 2021 and August 5, 2021, respectively. The unaudited pro forma condensed consolidated financial statements constitute forward-looking information, are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated and should be read in conjunction with the accompanying notes thereto.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of June 30, 2021

	WOW			Pro Forma Adjustments								WOW
	Historical			Atlantic			Astound			Notes		Pro Forma

				(in millions, except share data)
Assets
Current assets
Cash and cash equivalents	$	23.3		$			$	24.0			A	$	47.3
Accounts receivable—trade, net		38.3											38.3
Accounts receivable—other		2.4											2.4
Prepaid expenses and other		35.1											35.1
Current assets held for sale		29.9			(18.0	)		(11.9	)		A		-
Total current assets		129.0			(18.0	)		12.1					123.1
Right-of-use lease assets—operating		20.3											20.3
Property, plant and equipment, net		718.6											718.6
Franchise operating rights		620.1											620.1
Goodwill		225.1											225.1
Intangible assets subject to amortization, net		1.8											1.8
Other non-current assets		42.3											42.3
Non-current assets held for sale		730.1			(393.7	)		(331.4	)		A		-
Total assets	$	2,437.3		$	(416.7	)	$	(319.3	)			$	1,751.3
Liabilities and stockholders' deficit
Current liabilities
Accounts payable—trade	$	29.8		$			$					$	29.8
Accrued interest		3.8											3.8
Current portion of long-term lease liability—operating		6.0											6.0
Accrued liabilities and other		70.7											70.7
Current portion of long-term debt and finance lease obligations		70.9			(2.8	)		(22.8	)		B		45.3
Current portion of unearned service revenue		30.0											30.0
Current liabilities held for sale		46.9			(27.7	)		(19.2	)		A		-
Total current liabilities		258.1			(30.5	)		(42.0	)				185.6
Long-term debt and finance lease obligations—less current portion		2,176.8			(1,015.0	)		(458.1	)		B		703.7
Long-term lease liability—operating		16.3											16.3
Deferred income taxes, net		205.0			114.4			(40.6	)		F		278.8
Other non-current liabilities		12.9											12.9
Non-current liabilities held for sale		2.4			(0.9	)		(1.5	)		A		-
Total liabilities		2,671.5			(932.0	)		(542.2	)				1,197.3
Commitments and contingencies
Total stockholders' equity (deficit)		(184.2	)		515.3			222.9			C		554.0
Total liabilities and stockholders' equity (deficit)	$	2,437.3		$	(416.7	)	$	(319.3	)			$	1,751.3

Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

Six months ended June 30, 2021

	WOW			Pro Forma Adjustments								WOW
	Historical			Atlantic			Astound			Notes		Pro Forma

				(in millions)
Revenue	$	363.4		$			$					$	363.4
Costs and expenses:
Operating (excluding depreciation and amortization)		193.5			(2.2	)		(1.9	)		D		189.4
Selling_; general and administrative		88.0											88.0
Depreciation and amortization		83.7											83.7
		365.2			(2.2	)		(1.9	)				361.1
(Loss) income from operations		(1.8	)		2.2			(1.9	)				2.3
Other income (expense):
Interest (expense) income		(60.2)			21.6			10.7			B		(27.9	)
Loss on sale of assets, net		(0.1	)										(0.1	)
Other income, net		0.6			9.8			6.5			E		16.9
(Loss) income before provision for income taxes		(61.5	)		33.6			19.1					(8.8	)
Income tax benefit (expense)		16.3			(8.0	)		(4.6	)		F		3.7
(Loss) income from continuting operations	$	(45.2	)	$	25.6		$	14.5				$	(5.1	)

Basic and diluted loss per share
Basic	$	(0.55	)									$	(0.06	)
Diluted	$	(0.55	)									$	(0.06	)

Weighted-average common shares outstanding
Basic		82,433,311											82,433,311
Diluted		82,433,311											82,433,311

Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

Year ended December 31, 2020

				WOW Pro Forma and
	WOW			Discontinued			WOW			Pro Forma Adjustments								WOW Pro
	Historical			Operations (1)			Continuing			Atlantic			Astound			Notes		Forma

					(in millions)
Revenue	$	1,148.4		$	418.2		$	730.2			$			$				$	730.2
Costs and expenses:
Operating (excluding depreciation and amortization)		570.2			165.0			405.2			(4.5	)		(3.7	)		D		397.0
Selling, general and administrative		182.5			12.3			170.2											170.2
Depreciation and amortization		230.6			79.6			151.0											151.0
Impairment losses on intangibles and goodwill		14.0			-			14.0											14.0
		997.3			256.9			740.4			(45	)		(3.7	)				732.2
Income (loss) from operations		151.1			161.3			(10.2	)		4.5			3.7					(2.0	)
Other income (expense):
Interest (expense) income		(130.7	)		(0.7	)		(130.0	)		53.7			26.7			B		(49.6	)
Other income, net		1.8			0.5			1.3			19.6			13.0			E		33.9
(Loss) income before provision for income taxes		22.2			161.1			(138.9	)		77.8			43.4					(17.7	)
Income tax (expense) benefit		(7.8	)		(38.4	)		30.6			(18.6	)		(10.4	)		F		1.6
Net income (loss)	$	14.4		$	122.7		$	(108.3	)	$	59.2		$	33.0				$	(16.1	)
Basic and diluted earnings (loss) per share
Basic	$	0.18					$	(1.33	)									$	(0.20	)
Diluted	$	0.17					$	(1.33	)									$	(0.20	)

Weighted-average common shares outstanding
Basic		81,561,707						81,561,707											81,561,707
Diluted		82,814,310						81,561,707											81,561,707

(1) This column includes the discontinued operations of the markets sold under the Atlantic Purchase Agreement and the Astound Purchase Agreement and the pro forma effects of the aformentioned agreements. The breakout below presents only income from operations and excludes the line items necessary to calculate net income (loss), as management believes interest expense and income tax expense are not reflective of what stand-alone interest or income tax expense would have been for the markets presented and are therefore immaterial to an investor's understanding of the operations. The breakout is as follows:

	Atlantic		Astound		Total
				(in millions)
Revenue	$	241.5	$	176.7	$	418.2
Operating (excluding depreciation and amortization)		93.6		71.4		165.0
Selling, general and administrative		6.6		5.7		12.3
Depreciation and amortization		44.9		34.7		79.6
Impairment losses on intangibles and goodwill		-		-		-
		145.1		111.8		256.9

Income from operations	$	96.4	$	64.9	$	161 .3

Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

Year ended December 31, 2019

	wow			Pro Forma			wow
	Historical			Adjustments (1)			Pro Forma
					(in millions)
Revenue	$	1,145.8		$	418.8		$	727.0
Costs and expenses:

Operating (excluding depreciation and amortization)		575.8			178.4			397.4
Selling_,general and administrative		172.3			13.0			159.3
Depreciation and amortization		206.2			72.8			133.4
Impairment losses on intangibles and goodwill		9.7			-			9.7
Loss on sale of operating assets, net		5.4			-			5.4
		969.4			264.2			705.2
Income from operations		176.4			154.6			21.8
Other income (expense):
Interest (expense) income		(142.1	)		(0.2	)		(141.9	)
Other income, net		3.6			(0.2	)		3.8
Income (loss) before provision for income taxes		37.9			154.2			(116.3	)
Income tax (expense) benefit		(1.5	)		(35.4	)		33.9
Net income (loss)	$	36.4			118.8		$	(82.4	)
Basic and diluted earnings (loss) per share
Basic	$	0.45					$	(1.02	)
Diluted	$	0.45					$	(1.02	)

Weighted-average common shares out standing
Basic		80.713.926						80,713,926
Diluted		81,189,162						80,713,926

(1) This cobunn includes the markets sold under the Atlantic Purchase Agreement and the Astound Purchase Agreement. The breakout below presents only income from operations and excludes the line items necessary to calculate net income (loss), as management believes interest expense and income tax expense are not reflective of what stand-alone interest of income tax expense would have been for the markets presented and are therefore immaterial to an investor's understanding of the operations. The breakout is as follows:

	Atlantic		Astound		Total
				(in millions)
Revenue	$	237.2	$	181.6	$	418.8

Operating (excluding depreciation and amortization)		99.1		79.3		178.4
Selling,general and administrative		6.6		6.4		13.0
Depreciation and amortization		39.5		33.3		72.8
Impairment losses on intangibles and goodwill		-		-		-
Loss on sale of operating assets, net		-		-		-
		145.2		119.0		264.2

Income from operations	$	92.0	$	62.6	$	154.6

Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

Year ended December 31, 2018

	wow			Pro Forma			WOW
	Historical			Adjustments (1)			Pro Forma

	(in millions)
Revenue	$	1,153.8		$	419.1		$	734.7
Costs and expenses:
Operating (excluding depreciation and amortization)		617.9			185.3			432.6
Selling,general and administrative		155.2			14.4			140. 8
Depreciation and amortization		186.9			67.6			119.3
Impairment losses on intangibles and goodwill		216.3			12.5			203.8
Gain on sale of operating assets, net		(0.9	)		-			(0.9	)
		1,175.4			279.8			895.6
(Loss) income from operations		(21.6	)		139.3			(160.9	)
Other income (expense):
Interest (expense) income		(132.5	)		-			(132.5	)
Other income, net		1.7			-			1.7
(Loss) income before provision for income taxes		(152.4	)		139.3			(291.7	)
Income tax benefit (expense)		65.1			(35.7	)		100.8
Net (loss) income	$	(87.3	)		103.6		$	(190.9	)

Basic and diluted loss per share
Basic	$	(1.07	)				$	(2.33	)
Diluted	$	(1.07	)				$	(2.33	)

Weighted-average common shares outstanding
Basic		81,808,425						81,808,425
Diluted		81,808,425						81,808,425

(1) This column includes the markets sold under the Atlantic Purchase Agreement and the Astound Purchase Agreement. The breakout below presents only income from operations and excludes the line items necessary to calculate net income (loss), as management believes interest expense and income tax expense are not reflective of what stand-alone interest or income tax expense would have been for the markets presented and are therefore immaterial to an investor's understanding of the operations. The breakout is as follows:

	Atlantic		Astound		Total
				(in millions)
Revenue	$	233.4	$	185.7	$	419.1
Operating (excluding depreciation and amortization)		100.7		84.6		185.3
Selling_:general and administrative		7.4		7.0		14.4
Depreciation and amortization		33.7		33.9		67.6
Impairment losses on intangibles and goodwill		-		12.5		12.5
Gain on sale of operating assets, net		-		-		-
		141.8		138.0		279.8

Income from operations	$	91.6	$	47.7	$	139.3

Refer to accompanying notes to the unaudited pro forma condensed consolidated financial statements.

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information

Reflects the disposition of the operations, assets and liabilities and the retention of cash as a result of the individual closings of the Atlantic and Astound Purchase Agreements

WOW currently estimates it will utilize approximately $1.0 billion and $480.9 million of cash proceeds transferred from the sale of the Columbus and Cleveland, Ohio and the Chicago, Illinois, Evansville, Indiana and Baltimore, Maryland markets, respectively, to repay a portion of WOW’s Term B loans and finance lease agreements. Accordingly, an adjustment to interest expense related to the debt is presented for the Atlantic Transaction in the amount of $21.6 million and $53.7 million for the six months ended June 30, 2021 and the year ended December 31, 2020, respectively. An adjustment to interest expense of $10.7 million and $26.7 million, respectively, is presented for the Astound Transaction. The actual amount of proceeds used to repay WOW debt may materially differ.

The pro forma gain on disposal is based on the sold markets’ historical balance sheet information as of June 30, 2021. The actual gain on disposal will be based on the sold markets’ historical balance sheet information as of the closings and may differ significantly. The pro forma gain on disposal has not been reflected in the unaudited pro forma condensed consolidated statements of operations as this amount pertains to discontinued operations and does not reflect the impact on income from continuing operations.

Reflects the estimated expenses to be passed through to the buyers for services provided to customers in markets sold under the Atlantic and Astound Purchase Agreements.

Reflects the individual estimated income to be earned by WOW under the TSAs, pursuant to which WOW will provide certain transition services. The services provided under the TSAs will run for the periods of time set forth in the schedules to the TSAs, up to 12 months following the closing with two 6 month renewal periods. The services to be provided under the TSAs relate primarily to information technology, network, sales and business support services and may vary significantly from current estimates.

Reflects the estimated tax effects of the pro forma adjustments to pre-tax book income at the applicable statutory income tax rates in the respective jurisdictions except in jurisdictions for which there was a valuation allowance in the historical period. In these instances, a zero rate was utilized. Income tax related adjustments represent current estimates on a discontinued operations basis which could materially change as WOW finalizes its discontinued operations accounting to be reported in Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K to be filed following the closing of both transactions.