Q1 2018 Cincinnati Bell Inc Earnings Call on May 09, 2018 / 1:00PM

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THOMSON REUTERS STREETEVENTS EDITED TRANSCRIPT CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

EVENT DATE/TIME: MAY 09, 2018 / 1:00PM GMT

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

CORPORATE PARTICIPANTS Andrew R. Kaiser Cincinnati Bell Inc. - CFO Joshua T. Duckworth Cincinnati Bell Inc. - VP of Treasury, Corporate Finance & IR Leigh R. Fox Cincinnati Bell Inc. - President, CEO & Director Thomas E. Simpson Cincinnati Bell Inc. - COO

CONFERENCE CALL PARTICIPANTS Batya Levi UBS Investment Bank, Research Division - Executive Director and Research Analyst David William Barden BofA Merrill Lynch, Research Division - MD Sergey Dluzhevskiy GAMCO Investors, Inc. - Associate Portfolio Manager

PRESENTATION Operator Thank you for standing by. Good day, and welcome to the Cincinnati Bell First Quarter 2018 Earnings Release Call.

Today's conference is being recorded.

And at this time, I'd like to turn the conference over to Mr. Josh Duckworth. Please go ahead, sir.

Joshua T. Duckworth - Cincinnati Bell Inc. - VP of Treasury, Corporate Finance & IR Thank you, and good morning. I'd like to welcome everyone to Cincinnati Bell's First Quarter 2018 Earnings Call.

Today's call is being recorded if you would like to listen to it at a future time.

Before we start, let me remind you that our press release and presentation slides for today's call are posted on our Investor Relations website.

As previously announced and stated in the press release issued this morning, Cincinnati Bell changed its segment reporting to more closely aligned with our long-term strategy of building 2 distinct complementary lines of business.

Beginning this quarter, revenue in the Entertainment and Communications segment will be reported in the following 3 categories: to highlight the success of our fiber investment; Fioptics; enterprise fiber and legacy.

To better reflect the strength in our recurring strategic IT services, within the IT Services and Hardware segment, revenue will now be reported in the following practices: communications, cloud, consulting and Infrastructure Solutions, which was previously referred to as telecom and IT hardware sales.

Also as a reminder, the new revenue accounting standard was effective this quarter, and as a result, Infrastructure Solutions sales are now reported net of cost of goods sold with prior periods also being restated for comparability.

Now I would like to draw your attention to the Safe Harbor statement presented on Slide 2. In our remarks this morning, we will be discussing forward-looking information. Due to various risks and uncertainties, actual results or outcomes may differ materially from those indicated or suggested by any such forward-looking statements. More information on potential risks and uncertainties is available in the company's recent filings with the SEC, including Cincinnati Bell's Annual Form 10-K report, Quarterly Form 10-Q reports and Form 8-K reports.

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

This presentation also contains certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also available on our website.

With me on the call today is our President and Chief Executive Officer, Leigh Fox; and our Chief Financial Officer, Andy Kaiser.

Leigh's comments today will recap highlights and the company performance for the first quarter of 2018. Andy will then provide an update on our financial performance by segment.

Following the prepared remarks, Tom Simpson, our Chief Operating Officer, will join Leigh and Andy for a question-and-answer session.

With that, I am pleased to introduce Cincinnati Bell's President and Chief Executive Officer, Leigh Fox.

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Thank you, Josh, and good morning, everyone. Thanks for joining us today.

We delivered solid performance this quarter as we continue to execute on our strategy of expanding our fiber network, while advancing our next-generation service-based IT product within our 2 distinct complementary lines of business.

Consolidated revenue was up 18% year-over-year and adjusted EBITDA increased $6 million, due to the increase in revenue and cost-out initiative.

For the IT Services and Hardware segment, strong demand for UCaaS driven 11% increase in communications revenue, and cloud services were up 8% compared to the prior year.

Also highlighted on the slide, we continue to win where we have fiber, more specifically, fiber-to-the-premise.

Fioptics revenue grew an impressive 13% year-over-year, adding another 6,200 Fioptics Internet subscribers during the quarter.

Moving onto Slide 6, I'd like to take a moment to highlight the progress we have made towards our strategic transformation. In our Entertainment and Communications segment, we have built one of the densest and most competitively advantaged fiber networks in the country, spanning more than 11,000 fiber route miles and reaching more than 70% of the residential and commercial addresses in Greater Cincinnati.

As you can see on the slide, our fiber-to-the-premise penetration and churn metrics are far superior to the other Internet products we offer. The reason is simple. A neighborhood where we have deployed fiber directly to the home, our Internet speeds and product performance are unmatched by the competition.

As previously discussed, the pending merger with Hawaiian Telcom is an extension of our fiber strategy and represents an opportunity to replicate our success in Cincinnati and in other attractive market that has already been on progress on a fiber-to-the-premise strategy in Oahu.

We recently received approval from the Hawaiian Public Utilities Commission and continue to make progress with the SEC, as we expect the merger to close in the early second half 2018.

Moving to our IT Services and Hardware segment. I am pleased to report the integration of OnX is progressing as planned, and we are now reporting revenue by our 4 product practices to highlight the strength and growth in our recurring contractual IT services.

Before moving to the quarterly segment results, I'd like to spend a moment describing each practice. Historically, our initial point of entry with the customer has been our Infrastructure Solutions practice. This group offers a complete portfolio of equipment and software tailored to our customers' organizational goal, creating a platform for buyer engagement and a bridge towards recurring revenue streams through the migration towards other services beyond the simple hardware sale.

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

The consulting practice provides hands-on IT expertise by sourcing more than 850 IT professionals to address business's technologies, including IT staffing. These talented individuals become the on-site representation of our company and have the opportunity to become the trusted advisors to our clients.

Moving further up the value chain, our cloud services include the design, application transformation, implementation and ongoing management of the customers' infrastructure, which includes on-premise, public cloud and private cloud solutions.

Our team's build and design solutions, using either the customers' existing infrastructure or new cloud-based options have changed the way that our customers do business.

Similar to our cloud offering, the communications practice is transforming the way businesses connect with their employees, vendors and customers.

Our 140-year history as a provider of voice solutions combined with our understanding of network configuration has proved to be an invaluable resource as businesses upgrade from legacy voice and data application to customize the UCaaS, SD-WAN and NaaS solutions.

The reporting changes we made this quarter highlight the opportunity for increased valuation multiples for our 2 distinct complementary lines of business, by demonstrating the density of our fiber network and the breadth and scale of our IT services offering.

Let me now turn it over to Andy, who will provide additional detail for our quarterly financial performance.

Andrew R. Kaiser - Cincinnati Bell Inc. - CFO Thanks, Leigh. Starting with our Entertainment and Communications quarterly segment performance on Slide 7. Fioptics and enterprise fiber now represent 60% of E&C revenue as we continue the expansion of our fiber network.

Adjusted EBITDA was up $1 million over the prior year, due primarily to cost-optimization initiatives associated with our legacy network.

As Leigh mentioned earlier, one of the significant changes in our reporting was to consolidate all VoIP and UCaaS revenue into our communications practice within the IT Services and Hardware segment, which has had a flattening effect on E&C revenue.

Slide 8 further demonstrates the strength of our fiber network as these assets produce higher bandwidth and faster Internet speeds than our competition. As of the end of the quarter, Fioptics was available to nearly 581,000 addresses or more than 70% of Greater Cincinnati.

During the quarter, we added 2,200 Internet subscribers as the growth in Fioptics more than offset DSL subscriber losses, despite increased direct target marketing and advertising activities from our primary competitor.

Fioptics Internet penetration rates reached 40% compared to 38% a year ago, and ARPU was up 3% to $50.

As expected, video churn increased slightly due to price increases implemented during the quarter, resulting in video subscribers being flat compared to the previous quarter.

A summary of our IT Services and Hardware segment results is presented on Slide 9. This quarter, we generated $128 million in revenue and adjusted EBITDA of $12 million, including contributions from the OnX acquisition.

Each of our practices generated year-over-year revenue growth, and we are especially encouraged by the growth opportunities coming from our communications suite of products and services.

Slide 10 illustrates the recent success of our communications practice. This quarter, we were awarded a UCaaS contract, hosting 32,000 profiles across 96 separate locations.

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

We also were awarded an SD-WAN project to provide service to 18 sites that went live last month.

This quarter, we increased our number of hosted UCaaS profiles by 6%.

We also added approximately 200 NaaS locations and 50 SD-WAN locations during the quarter.

Moving onto our financial position and cash flow performance on Slide 11, I'm happy to report that we successfully reduced the interest rate spread on our credit agreement by 50 basis points, saving $3 million per year and partially mitigating the impact of rising LIBOR rates.

We ended the quarter with net debt of $1.3 billion, resulting in a current net leverage of 4.1x, which is consistent with the prior quarter.

Turning to cash flow. Cash from operations increased $5 million compared to a year ago.

Free cash flow totaled $33 million in the first quarter and was positively impacted by the timing of interest payments and lower-than-planned capital expenditures in the quarter, further outlined on Slide 12.

Capital spending for our Fioptics suite of products totaled $17 million in the quarter, with construction cost totaling $6 million.

During the quarter, we passed 8,600 new addresses and remain on track to pass 35,000 homes and businesses during 2018.

We also invested $5 million in enterprise fiber build and an additional $5 million in new IT services projects.

Our capital spending for 2018 supports our strategy of continuing to invest where we see opportunities to gain or maintain market share and expands our fiber footprint as we need fiber to compete effectively across our market.

Although capital spending was lighter than expected during the quarter, we are still planning on capital expenditures between $190 million and $210 million for the full year.

As noted on Slide 13, we remain on track to generate positive free cash flow for the year. We are also reaffirming our 2018 annual revenue and adjusted EBITDA targets, previously communicated on February 15.

Please note that this guidance does not include any contribution from the pending merger with Hawaiian Telcom.

With that, I'll now turn the call back to Leigh for some closing remarks.

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Thanks, Andy. We are very excited about the growth opportunities in our fiber and IT Services businesses.

We now have 2 distinct businesses with separate reporting and organizational structures, which allows us to execute the appropriate growth and investment strategies for each business to deliver superior operating results and drive respective brand forward.

In our Entertainment and Communications segment, our goal is to continue to differentiate Cincinnati Bell from traditional carriers with our fiber-to-the-premise investment.

Our results demonstrate the growing demand for our fiber offerings and illustrates the critical need for dense fiber networks with the increasing adoption of IoT devices in the home and rapidly approaching expectations for wireless 5G networks.

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

These dynamics are not confined to Cincinnati, and the dense fiber network already constructed in Oahu provides the opportunity to replicate our fiber success in Hawaii.

Fiber is the future, and our goal is to continue to build fiber-to-the-premise within our footprint.

At the same time, we will increase the pace of our copper decommissioning and ultimately migrate to managing one superior next-generation network.

In our IT services segment, we remain focused on transitioning from a hardware-centric business to growing our suite of services across our North American platform and diversified customer base. Our new focus allows us to capitalize on the opportunities created by our customers and changes within the IT landscape to transition towards recurring contractual IT Services.

We remain confident in our path forward with growing 2 distinct businesses and creating platform for sustainable free cash flow as we drive towards increasing valuation multiples associated with our growing fiber-rich network and IT Services business.

Our strategic transformation combined with our disciplined capital allocation and sharp focus on execution has positioned Cincinnati Bell to capitalize on industry trends and deliver long-term shareholder value.

Over the past several weeks, I've had the opportunity to speak with many of you directly regarding the strategic transformation we are pursuing for Cincinnati Bell.

I want to thank each of you for your valuable feedback and input.

Also before closing out the official remarks, I wanted to let those individuals being impacted by the volcanic activity on the Big Island who I know that our thoughts and prayers are with them.

I will now turn the call over to the operator and open up for Q&A.

QUESTIONS AND ANSWERS Operator (Operator Instructions) We'll go to David Barden with Bank of America.

David William Barden - BofA Merrill Lynch, Research Division - MD I guess, just the first one, Leigh. It sounds like the expectation now is for the Hawaii deal maybe to close on the sooner end of the second half target. Now that you've got the PUC approval, could you kind of talk about what -- if any expectations you should have for the upside opportunity for putting the 2 companies together sooner rather than later in the 2018 year, and that of course is obviously volcano-related issues. It's the first I would had to talk about that on the Cincinnati call. And the second question was just on the -- just kind of more thinking into '19 on the fiber trajectory. It sounds like you're more kind of married to the notion that fiber is more of a necessity now for maybe the totality of the Cincinnati region. Once upon a time, it was 60% penetration, now it's 70% and rising. Is there a limit? Or is it just really the senses you've got to be fully committed to a fiber overbuild and this kind of pacing of the Fioptics expansion is really what we should expect in the next year or 2?

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Yes. Thanks, David. On Hawaii, yes, what I'll say about that is, the teams have been working together. They have a fairly detailed plan to be in executing once we closed on everything. We're excited about it. I think their teams are excited about it. We're looking forward to, as you mentioned, hopefully, closing on the sooner end of what we had expected. So everything is going as well as can be expected on our end. I'm excited. As you can imagine, we're just excited to get going. And just get the teams moving forward. And on volcano front, I do want to send, again, our best wishes and thoughts and prayers to folks out there being impacted by that. As per -- our infrastructure out there is not being impacted as of now. And honestly, the teams out there, I got an update just the other day, they are doing fantastic work to help that community get connected and stay connected. And they're putting together some pretty, I think, original technology to help the folks out there. So I'm really proud of what's going on out there. On the fiber question, we've had a lot of conversations about what fiber looks like in future, obviously, for the company. I think, you've seen it through the metrics. I think, you're seeing more and more of those out in the news. The fiber is just the future period. And as I said in the script, it's a superior asset. It's where I think technology needs to go. You look at everything, all the overlying technologies are going to ride over that threshold network. We need a deep fiber network as a nation, personally. But for what we control, we need to continue to build. As per our footprint, I think you've heard us say this in the past that if we have 800,000-plus homes here in Cincinnati, my goal to be, let's build 100% of 800,000 homes. That is unrealistic. But I think what we have is the opportunity to say, look, if we are started with a footprint of 800,000 homes, can we expand even slightly beyond Cincinnati to match 800,000 homes. So ideally, look over the next few years, I want to see a footprint of 800,000 fiber homes. They don't necessarily have to all be in the traditional legacy CBT network as we've defined it. We've got a lot of opportunity expanding slightly up and the team. There Columbus, where we can use our data analytics and almost do a Google ask fiber build to neighborhood that are -- we know have a high customer [icon] value. And so that's what we're looking at. I think for our investors, what's important is, we replaced 1 footprint with the footprint of a similar size with a better network. And then for those houses remaining, and the old in the legacy network, we were currently looking at technology that allows us to maximize speeds, do the best we can for those customers, while also getting as far through network transformation over the years as we can. So I think that's what you can expect to us -- from us. As I said in the script, I think it is important that at some point in the future, we run 1 fiber network. And that's where the value is going to be. And I think that's where the future is.

Andrew R. Kaiser - Cincinnati Bell Inc. - CFO And David, I would add to that. I'm sure you noticed in our earnings release as well as in our Q. We have started to focus on fiber-to-the-prem and Fiber-to-the-Node by way of what we report. So when you talk about covering our footprint with fiber, we think it's very important that we cover the footprint as much as possible with fiber-to-the-prem. So we will continue to report those metrics, so the folks understand and can differentiate between making it to a point terminating prior to the home or making it all the way into the home.

David William Barden - BofA Merrill Lynch, Research Division - MD And if I could just ask one follow-up. Leigh, you kind of highlighted in the deck the notion of creating these 2 business units that might be undervalued. Legacy management teams have tried to create value for Cincinnati Bell by spinning off these kind of units like the CyrusOne unit or the Convergys billing unit or whatever it was. Do these 2 units need to be together to create this value, given their kind of network-based nature? Or is the IT Services Hardware business an independent entity that could be monetized separately?

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Ultimately, they do not need to be together. And the CBTS entity can be separated, if need be. As I mentioned in the past, our job is to do the best we can to articulate the value that the teams are creating. They're doing great work. I think this quarter is the first quarter that the -- I think the world sees what we have seen in that company in its distinct practices, its growth trajecting revenues. There's a ton of opportunity there. But no, they don't have to be together, and there is a possibility of spins.

Operator We will go next to Batya Levi with UBS.

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

Batya Levi - UBS Investment Bank, Research Division - Executive Director and Research Analyst So a lot of focus on fiber. Maybe can you talk about how you're positioned to capture the 5G opportunity versus competitors in your region? And also on the Entertainment segment, trends have been relatively stable, but with legacy still 40% of the mix and falling, I think, carrier is putting some pressure there. And video subs potentially not growing. And can we continue to see Entertainment top line remain stable or even grow from here -- from these levels?

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Thanks, Batya. I'll answer them in reverse. I'll answer the second question and then I'll put it over to Tom to talk about 5G. I think what you're seeing, trend lines is going to be all about pace and pace of build. Right now, we feel like we have a good steady pace, which helps offset the legacy declines. We see some positives in the legacy area also. There are pieces of it that are slowing down a bit. But as you are well aware, there are pieces that are just in steady decline and will be. So it's going to be about pace. I do see the potential of matching pace and keeping things relatively stable, and then even slightly growing. And that's really going to be our focus. And when we look at builds, it's really going to be how do we build efficiently and effectively from a cost standpoint. And then how does that match the pace of decline. As I mentioned in the comments today that it's ultimately about replacing the legacy footprint that we have today with the next-generation footprint. And that's what we're really going to focus on. Pace is really going to dictate how you see top line move. But we've also got some cost areas that we still can attack too. So I think overall, this quarter was probably indicative of (technical difficulty) as we increase in pace. And then, Andy will add to that.

Andrew R. Kaiser - Cincinnati Bell Inc. - CFO Yes, let me add to that briefly, Batya. So from a video perspective, just to get a little more granular, I would anticipate video will likely be flat, similar to what you saw this quarter. And that being driven by the shift and even really intentional shift from Cincinnati Bell toward Internet and Internet subs. So I would anticipate growth from an Internet perspective continued growth and likely flat from a video perspective.

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Yes. And that's a good point. We have -- from a video strategy standpoint, I think the one benefit that we have versus our competition is that we have less exposure on the video side from a profitability standpoint. Obviously, getting into the game a little late and with some of the content cost pressures that we see as an independent carrier, we're fully moving down the strategy of deemphasizing video. We're going to be releasing over the top products. For us, it is all about the Internet. And we feel like, we are setting ourselves up and this company up to have a, superior network and b, superior pipe in our footprint. And that's probably a good segue into the 5G question for Tom.

Thomas E. Simpson - Cincinnati Bell Inc. - COO Batya, this is Tom. So on the 5G question, when Leigh speaks of fiber density, when you think about the neighborhoods that we build into and the businesses and homes that we pass, we have excess capacity in fiber and in dark and lit services from a fiber standpoint. So when we build fiber-to-the-prem and we provide services to a home or business, that's one side of the network. When we think about a 5G build by having something exceptionally dense, it's very easy for us to add the 5G radio network, which requires high-bandwidth backhaul to the ultimate carrier. So when you think about this, we've just completed a trial with another vendor where we're actually carrying both our normal GPON network and even 10-gig terrestrial fiber backhaul, 4, 5G radios or other business purposes on the same network. By having a very dense fiber network, it's very easy for us to service 5G. And the criticality in that is you need the fiber to pass within some proximity to the buildings where you're actually trying to serve. Remember, even with other vendors and other carriers touting the distances that you can carry 5G is up to 2,000 feet. But that doesn't go around corners and that doesn't pass through leaves. So you have to have some proximity to the buildings that you're serving.

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call

Batya Levi - UBS Investment Bank, Research Division - Executive Director and Research Analyst Got it. And just a follow-up on the opportunity to decommission the copper network. When do you think that process could begin? And I would assume that it's going to be a long process. And once it's all on the new next-gen IP network on that platform, what kind of margin outside it can provide?

Thomas E. Simpson - Cincinnati Bell Inc. - COO Well, that's a good question. And it's -- the conversion is a long process. We see customers that we pass with fiber that are still on a legacy network. And you're talking about attractive forced migration versus price migration attrition. So in the midterm, you would actually see some increases via price migration which would actually move those customers over to the strategic network. It's still a fairly a long road for complete copper network shutdown. But you would see certainly expense opportunities in the operations and maintenance of the network inside plants, licensing, and things like that. There is a -- that is a big opportunity for us in the future.

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director And on timing, it's already begun. We have dedicated leadership here in Cincinnati that's focused on the migration, the decommissioning. Once we close with Hawaii, the teams will combine and we'll have a dedicated group and dedicated leadership focused on just this area.

Thomas E. Simpson - Cincinnati Bell Inc. - COO Absolutely.

Operator We will move next to Sergey Dluzhevskiy with GAMCO Investors.

Sergey Dluzhevskiy - GAMCO Investors, Inc. - Associate Portfolio Manager Couple questions. So Leigh, my first question is for you. So as you look at your 2 businesses and given that you'll be integrating meaningful positions, could you share with us how you'll be looking at M&A over the next few years? And what would be the key criteria for you if you decide to pursue additional deals? And also, what kind of assets, in your opinion, could accelerate your strategy in both segments and you would be interested in potentially?

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Yes. On the M&A front, I think, there's potential out there on the IT Services side. I think on the network side, we are -- we haven't closed Hawaii yet. So I don't think you're going to see much on the network side from us for a while. We've got to focus on integration and execution with those 2 teams, and so we'll be heads down in that area. And as I mentioned many times on the call that we'll be focused on fiber build and creating value that way. So we've got some things to prove there and we -- so we're going to work through that. On the IT side, you're probably -- if you see anything, I think, there is an opportunity for product augmentation for the practices. So one of the things that we see, the IT landscape is -- remains very fragmented. I think what we've done in really separating these practices and cleaning up the reporting structure, we now have pretty tight focus on different areas of growth. I do see the potential of maybe adding a small tuck-in company for, as an example, the cloud practice or the communications practice. So there are those potential opportunities out there. I would say, there's probably nothing large that we're seeing. So if we were to see anything, it would be small and really focused on accelerating the growth in those practices, especially the practices that we believe are the future. I said this in the past, and I want to reiterate it that we're trying to deemphasize product sales and point product sales, I think. We've

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MAY 09, 2018 / 1:00PM, CBB - Q1 2018 Cincinnati Bell Inc Earnings Call the right assets to make the transition from being what is traditionally called a VAR to a service-oriented company. And I think you're seeing that in the reporting now in the business. And so what we will be focused on is really the services side of that. Is that helpful?

Sergey Dluzhevskiy - GAMCO Investors, Inc. - Associate Portfolio Manager Yes. And my second question is on Hawaiian Telcom. So assuming you close this deal relatively soon, what are your key priorities for this asset over the next 12 months, let's say? And what do you plan to do to ensure that this asset doesn't lose up rating in sales momentum?

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Yes, it's great question. I think, we've got, as I mentioned earlier, a multi-pointed plan to address on the operations side. I think working with the teams on the build and assessing where we are at the build and seeing what we can do, if anything, to accelerate the build in the short or the midterm, it will more then likely be in the midterm not in the short term. They've got a plan that they're executing. On the sales momentum side, we've been working pretty tightly with the team on organizational structure. The thing that you would think would make sense to make sure that once the deal is closed that you really hit the ground in a sprint together and not see a gap in momentum. So that's really what we're focused on. In the short term, just seamless transition, and then in the midterm, how do we begin implementing with that team, some of the things we've learned here in Cincinnati, and vice versa, implementing some of the things that they've learned in Hawaii here in Cincinnati so that we can take the best of both worlds.

Operator With no questions remaining, I'd like to turn the call back to Mr. Leigh Fox for any additional or closing comments.

Leigh R. Fox - Cincinnati Bell Inc. - President, CEO & Director Thank you. Just want to finish with some short comments. We entered 2018 with really strong momentum. I want to take the opportunity to personally thank our team for the hard work and commitment to our strategic transformation. As always, we anticipate or appreciate your continued support and interest in Cincinnati Bell. I just want to reiterate the thank you to our teams with all the work done in the Q1. It's been exceptional. Things have not been easy, but they've done a tremendous job. And I just want to say how much I really appreciate it, and look forward to speaking to everyone soon. Thank you for joining us, and have a great day.

Operator Thank you, sir. And again, that does conclude the call for today. Thank you for participating. You may disconnect at this time.

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