Fourth Fiscal Quarter 2017 Financial Highlights
-
$638.0 million of consolidated revenue, including $509.1 million from
the Communications Infrastructure segments and $128.9 million from the
Allstream segment; -
Net income of $23.2 million, including $11.3 million from the
Communications Infrastructure segments and $11.9 million from the
Allstream segment. -
$310.8 million of adjusted EBITDA, including $280.8 million from
Communications Infrastructure and $30.0 million from the Allstream
segment. -
Bookings of $7.5 million, gross installs of $7.3 million, churn of
1.2% and net installs of $1.4 million, all on a monthly recurring
revenue (MRR) and monthly amortized revenue (MAR) basis, excluding the
Allstream segment. - Adjusted unlevered free cash flow of $117.2 million.
BOULDER, Colo. –
Zayo Group Holdings, Inc. (“Zayo” or “the Company”) (NYSE: ZAYO), a
global leader in Communications Infrastructure, announced results for
the three months ended June 30, 2017.
Fourth quarter operating income increased $14.7 million from the
previous quarter primarily due to organic and acquisition related
growth. Net income decreased by $3.8 million during the quarter. Basic
and diluted net income per share during the quarter was $0.09. During
the three months ended June 30, 2017, capital expenditures were $205.3
million.
As of June 30, 2017, the Company had $220.7 million of cash and $442.2
million available under its revolving credit facility.
Recent Developments
KIO Networks US Data Centers
On May 1, 2017, the Company completed the $11.9 million cash acquisition
of Castle Access, Inc.’s (d/b/a “KIO Networks US”) San Diego data
centers. The two data centers, located at 12270 World Trade Drive and
9606 Aero Drive, total more than 100,000 square feet of space and 2
megawatts of critical, IT power, with additional power available. The
acquisition was funded with cash on hand and was considered a stock
purchase for tax purpose.
Unsecured Notes Offering
On April 10, 2017 and July 5, 2017, the Company closed private offerings
of $550.0 million and $300.0 million aggregate principal amount,
respectively, of 5.75% senior unsecured notes due 2027 (the “2027
Unsecured Notes”), which were priced at 104% and 104.25%, respectively,
through an add-on to its existing 2027 Unsecured Notes issue. The net
proceeds from each offering were used to repay certain outstanding
balances on the Company’s term loan facility that mature on January 19,
2024 (the “B-2 tranche”).
July Term Loan Re-Price
On July 20, 2017, the Company entered into a repricing amendment to its
credit agreement to re-price its outstanding B-2 tranche (approximately
$1.1 billion after the aforementioned July 5 repayment) under its term
loan facility at par and to bear interest at a rate of LIBOR plus 2.25%,
with a minimum LIBOR rate of 1.0%, which represents a downward
adjustment of 50 basis points.
|
Fourth Fiscal Quarter Financial Results Three Months Ended June 30, 2017 and March 31, 2017 (in millions) |
||||||||
| Three months ended | ||||||||
| June 30, 2017 | March 31, 2017 | |||||||
| Revenue | $ | 638.0 | $ | 550.2 | ||||
| Annualized revenue growth | 64% | |||||||
| Operating income | 105.4 | 90.7 | ||||||
| Income from operations before income taxes | 34.2 | 27.6 | ||||||
| Provision for income taxes | 11.0 | 0.6 | ||||||
| Net income | $ | 23.2 | $ | 27.0 | ||||
| Adjusted EBITDA | $ | 310.8 | $ | 282.0 | ||||
| Annualized Adjusted EBITDA growth | 41% | |||||||
| Adjusted EBITDA margin | 49% | 51% | ||||||
| Levered free cash flow | $ | 39.6 | $ | 54.1 | ||||
|
Three Months Ended June 30, 2017 and June 30, 2016 (in millions) |
||||||||
| Three months ended | ||||||||
| June 30, 2017 | June 30, 2016 | |||||||
| Revenue | $ | 638.0 | $ | 507.3 | ||||
| Annualized revenue growth | 26% | |||||||
| Operating income | 105.4 | 72.0 | ||||||
| Net income/(loss) from operations before income taxes | 34.2 | (44.0) | ||||||
| Provision/(benefit) for income taxes | 11.0 | (13.1) | ||||||
| Net income/(loss) | $ | 23.2 | $ | (30.9) | ||||
| Adjusted EBITDA | $ | 310.8 | $ | 257.8 | ||||
| Annualized Adjusted EBITDA growth | 21% | |||||||
| Adjusted EBITDA margin | 49% | 51% | ||||||
| Levered free cash flow/(deficit) | $ | 39.6 | $ | (11.2) | ||||
Conference Call
Zayo will host a conference call to discuss fourth fiscal quarter 2017
results at 5:00 p.m. EDT on August 21, 2017. To participate on the live
call, listeners in the U.S. may dial 866-737-5498 and international
listeners may dial 412-858-4607; please request to join the Zayo Group
call. During the call, the Company will review an Earnings Presentation
that summarizes the financial, operational and commercial highlights of
the quarter. This Earnings Presentation, a live webcast of the
conference call, and a Supplemental Earnings Presentation will be made
available through the Investor Relations section of the Company’s
website at www.zayo.com.
About Zayo
Zayo Group Holdings, Inc. (NYSE: ZAYO) provides communications
infrastructure services, including fiber and bandwidth connectivity,
colocation and cloud infrastructure to the world’s leading businesses.
Customers include wireless and wireline carriers, media and content
companies and finance, healthcare and other large enterprises. Zayo’s
124,000-mile network in North America and Europe includes extensive
metro connectivity to thousands of buildings and data centers. In
addition to high-capacity dark fiber, wavelength, Ethernet and other
connectivity solutions, Zayo offers colocation and cloud infrastructure
in its carrier-neutral data centers. Zayo provides clients with
flexible, customized solutions and self-service through Tranzact, an
innovative online platform for managing and purchasing bandwidth and
services. For more information, visit zayo.com.
Forward-Looking Statements
Information contained in this earnings release that is not historical by
nature constitutes “forward-looking statements” which can be identified
by the use of forward-looking terminology such as “believes,” “expects,”
“plans,” “intends,” “estimates,” “projects,” “could,” “may,” “will,”
“should,” or “anticipates” or the negatives thereof, other variations
thereon or comparable terminology, or by discussions of strategy. No
assurance can be given that future results expressed or implied by the
forward-looking statements will be achieved and actual results may
differ materially from those contemplated by the forward-looking
statements. Such statements are based on management’s current
expectations and beliefs and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from
those expressed or implied by the forward-looking statements. These
risks and uncertainties include, but are not limited to, those relating
to the Company’s financial and operating prospects, current economic
trends, future opportunities, ability to retain existing customers and
attract new ones, outlook of customers, and strength of competition and
pricing. In addition, there is risk and uncertainty in the Company’s
acquisition strategy including our ability to integrate acquired
companies and assets. Specifically, there is a risk associated with our
recent acquisitions, and the benefits thereof, including financial and
operating results and synergy benefits that may be realized from these
acquisitions and the timeframe for realizing these benefits. Other
factors and risks that may affect our business and future financial
results are detailed in the “Risk Factors” section of our Annual Report
on Form 10-K to be filed with the Securities and Exchange Commission
(our “Annual Report”). We caution you not to place undue reliance on
these forward-looking statements, which speak only as of their
respective dates. We undertake no obligation to publicly update or
revise forward-looking statements to reflect events or circumstances
after releasing this supplemental information or to reflect the
occurrence of unanticipated events, except as required by law.
This earnings release should be read together with the Company’s
consolidated financial statements and notes thereto for the year ended
June 30, 2017 included in the Company’s Annual Report.
Non-GAAP Financial Measures
The Company provides financial measures that are not defined under
generally accepted accounting principles in the United States, or GAAP,
including Adjusted EBITDA, Adjusted EBITDA Margin, adjusted unlevered
free cash flow and levered free cash flow.
Adjusted EBITDA, as defined below and in Note 15 – Segment Reporting
of our consolidated financial statements and notes thereto included in
our Annual Report on Form 10-K, is the primary measure used by our chief
operating decision maker to evaluate segment operating performance.
Adjusted EBITDA is defined as earnings/(loss) from continuing operations
before interest, income taxes, depreciation, and amortization (“EBITDA”)
adjusted to exclude acquisition or disposal-related transaction costs,
losses on extinguishment of debt, stock-based compensation, unrealized
foreign currency gains/ (losses) on intercompany loans, and non-cash
income/(loss) on equity and cost method investments. Adjusted EBITDA
Margin is defined as Adjusted EBITDA divided by revenue. Adjusted
unlevered free cash flow is defined as Adjusted EBITDA minus purchases
of property and equipment, net of stimulus grants, plus additions to
deferred revenue, less non-cash monthly amortized revenue. Levered free
cash flow is defined as operating cash flow minus purchases of property
and equipment, net of stimulus grants. Adjusted unlevered free cash flow
and levered free cash flow are not measurements of our financial
performance under GAAP and should not be considered in isolation or as
alternatives to net income, net cash flows provided by operating
activities, total net cash flows or any other performance measures
derived in accordance with GAAP or as alternatives to net cash flows
from operating activities or total net cash flows as measures of our
liquidity.
Adjusted EBITDA is a performance rather than cash flow measure. In
addition to Adjusted EBITDA, management uses adjusted unlevered free
cash flow, which measures the ability of Adjusted EBITDA to cover
capital expenditures. We use levered free cash flow as a measure to
evaluate cash generated through normal operating activities. These
metrics are among the primary measures used by management for planning
and forecasting future periods. We believe the presentation of Adjusted
EBITDA is relevant and useful for investors because it allows investors
to view results in a manner similar to the method used by management and
make it easier to compare our results with the results of other
companies that have different financing and capital structures. We
believe that the presentation of levered free cash flow is relevant and
useful to investors because it provides a measure of cash available to
pay the principal on our debt and pursue acquisitions of businesses or
other strategic investments or uses of capital.
We also monitor Adjusted EBITDA because our subsidiaries have debt
covenants that restrict their borrowing capacity that are based on a
leverage ratio, which utilizes a modified EBITDA, as defined in our
credit agreement and the indentures governing our notes. The modified
EBITDA is consistent with our definition of Adjusted EBITDA; however, it
includes the pro forma Adjusted EBITDA of and expected cost synergies
from the companies acquired by us during the quarter for which the debt
compliance certification is due. Adjusted EBITDA results, along with the
quantitative and qualitative information, are also utilized by
management and our Compensation Committee, as an input for determining
incentive payments to employees.
Adjusted EBITDA has limitations as an analytical tool and should not be
considered in isolation from, or as a substitute for, analysis of our
results of operations and operating cash flows as reported under GAAP.
For example, Adjusted EBITDA:
-
does not reflect capital expenditures, or future requirements for
capital and major maintenance expenditures or contractual commitments; -
does not reflect changes in, or cash requirements for, our working
capital needs; -
does not reflect the interest expense, or the cash requirements
necessary to service the interest payments, on our debt; and - does not reflect cash required to pay income taxes.
Adjusted unlevered free cash flow has limitations as an analytical tool
and should not be considered in isolation from, or as a substitute for,
analysis of our results as reported under GAAP. For example, adjusted
unlevered free cash flow:
-
does not reflect changes in, or cash requirements for, our working
capital needs; -
does not reflect the interest expense, or the cash requirements
necessary to service the interest payments, on our debt; and - does not reflect cash required to pay income taxes.
Levered free cash flow has limitations as an analytical tool and should
not be considered in isolation from, or as a substitute for, analysis of
our results as reported under GAAP. For example, levered free cash flow:
- does not reflect principal payments on debt;
- does not reflect principal payments on capital lease obligations;
- does not reflect dividend payments, if any; and
- does not reflect the cost of acquisitions.
Our computation of Adjusted EBITDA, and levered free cash flow may not
be comparable to other similarly titled measures computed by other
companies because all companies do not calculate these measures in the
same fashion.
Because we have acquired numerous entities since our inception and
incurred transaction costs in connection with each acquisition, borrowed
money in order to finance our operations and acquisitions, and used
capital and intangible assets in our business, and because the payment
of income taxes is necessary if we generate taxable income after the
utilization of our net operating loss carry forwards, any measure that
excludes these items has material limitations. As a result of these
limitations, these measures should not be considered as a measure of
discretionary cash available to us to invest in the growth of our
business or as a measure of our liquidity. See “Reconciliation of
Non-GAAP Financial Measures” for a quantitative reconciliation of
Adjusted EBITDA to net income/(loss) and for a quantitative
reconciliation of levered free cash flow to net cash provided by
operating activities.
Annualized revenue and annualized Adjusted EBITDA are derived by
multiplying the total revenue and Adjusted EBITDA, respectively, for the
most recent quarterly period by four. Our computations of annualized
revenue and annualized Adjusted EBITDA may not be representative of our
actual annual results.
Measures referred to as being calculated on a constant currency basis
are intended to present the relevant information assuming a constant
exchange rate between the two periods being compared. Such metrics are
calculated by applying the currency exchange rates used in the
preparation of the prior period financial results to the subsequent
period results.
Tables reconciling non-GAAP measures are included in the Reconciliation
of Non-GAAP Financial Measures section of this presentation. A glossary
of terms used throughout is available under the investor section of the
Company’s website at http://investors.zayo.com/glossary.
|
Consolidated Financial Information Consolidated Statements of Operations (in millions, except per share data) |
|||||||||||||||
| Year Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2015 | |||||||||||||
| Revenue | $ | 2,199.8 | $ | 1,721.7 | $ | 1,347.1 | |||||||||
| Operating costs and expenses | |||||||||||||||
| Operating costs (excluding depreciation and amortization) | 782.9 | 578.7 | 413.5 | ||||||||||||
| Selling, general and administrative expenses | 436.2 | 386.4 | 358.4 | ||||||||||||
| Depreciation and amortization | 606.9 | 516.3 | 406.2 | ||||||||||||
| Total operating costs and expenses | 1,826.0 | 1,481.4 | 1,178.1 | ||||||||||||
| Operating income | 373.8 | 240.3 | 169.0 | ||||||||||||
| Other expenses | |||||||||||||||
| Interest expense | (241.5 | ) | (220.1 | ) | (214.0 | ) | |||||||||
| Loss on extinguishment of debt | (18.2 | ) | (33.8 | ) | (94.3 | ) | |||||||||
| Foreign currency loss on intercompany loans | (10.3 | ) | (53.8 | ) | (24.4 | ) | |||||||||
| Other income/(expense), net | 0.3 | (0.3 | ) | (0.4 | ) | ||||||||||
| Total other expenses, net | (269.7 | ) | (308.0 | ) | (333.1 | ) | |||||||||
| Income/(loss) from operations before income taxes | 104.1 | (67.7 | ) | (164.1 | ) | ||||||||||
| Provision/(benefit) for income taxes | 18.4 | 8.5 | (8.8 | ) | |||||||||||
| Net income/(loss) | $ | 85.7 | $ | (76.2 | ) | $ | (155.3 | ) | |||||||
| Weighted-average shares used to compute net income/(loss) per share: | |||||||||||||||
| Basic | 243.9 | 243.3 | 235.4 | ||||||||||||
| Diluted | 246.8 | 243.3 | 235.4 | ||||||||||||
| Net income/(loss) per share: | |||||||||||||||
| Basic and diluted | $ | 0.35 | $ | (0.31 | ) | $ | (0.66 | ) | |||||||
|
Consolidated Balance Sheets (in millions, except share amounts) |
||||||||||
| Year Ended June 30, | ||||||||||
| 2017 | 2016 | |||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | 220.7 | $ | 170.7 | ||||||
|
Trade receivables, net of allowance of $9.5 and $7.5 as of June 30, |
191.6 | 148.4 | ||||||||
| Prepaid expenses | 68.3 | 68.8 | ||||||||
| Other assets | 34.0 | 9.2 | ||||||||
| Total current assets | 514.6 | 397.1 | ||||||||
| Property and equipment, net | 5,016.0 | 4,079.5 | ||||||||
| Intangible assets, net | 1,188.6 | 934.9 | ||||||||
| Goodwill | 1,840.2 | 1,214.5 | ||||||||
| Deferred income taxes, net | 38.3 | 7.0 | ||||||||
| Other assets | 141.7 | 94.5 | ||||||||
| Total assets | $ | 8,739.4 | $ | 6,727.5 | ||||||
| Liabilities and stockholders’ equity | ||||||||||
| Current liabilities | ||||||||||
| Current portion of long-term debt | $ | 5.0 | $ | – | ||||||
| Accounts payable | 72.4 | 97.0 | ||||||||
| Accrued liabilities | 325.4 | 225.7 | ||||||||
| Accrued interest | 63.5 | 28.6 | ||||||||
| Capital lease obligations, current | 8.0 | 5.8 | ||||||||
| Deferred revenue, current | 146.0 | 129.4 | ||||||||
| Total current liabilities | 620.3 | 486.5 | ||||||||
| Long-term debt, non-current | 5,532.7 | 4,085.3 | ||||||||
| Capital lease obligation, non-current | 93.6 | 44.9 | ||||||||
| Deferred revenue, non-current | 989.7 | 793.3 | ||||||||
| Deferred income taxes, net | 40.2 | 41.3 | ||||||||
| Other long-term liabilities | 52.4 | 57.0 | ||||||||
| Total liabilities | 7,328.9 | 5,508.3 | ||||||||
| Stockholders’ equity | ||||||||||
|
Preferred stock, $0.001 par value – 50,000,000 shares authorized; |
– | – | ||||||||
|
Common stock, $0.001 par value – 850,000,000 shares authorized; |
0.2 | 0.2 | ||||||||
| Additional paid-in capital | 1,884.0 | 1,777.6 | ||||||||
| Accumulated other comprehensive income | 5.4 | 4.5 | ||||||||
| Accumulated deficit | (479.1 | ) | (563.1 | ) | ||||||
| Total stockholders’ equity | 1,410.5 | 1,219.2 | ||||||||
| Total liabilities and stockholders’ equity | $ | 8,739.4 | $ | 6,727.5 | ||||||
|
Consolidated Statement of Cash Flows (in millions) |
|||||||||
| Year Ended June 30, | |||||||||
| 2017 | 2016 | 2015 | |||||||
| Cash flows from operating activities | |||||||||
| Net income/(loss) | $ | 85.7 | $ | (76.2) | $ | (155.3) | |||
| Adjustments to reconcile net income/(loss) to net cash provided by operating activities |
|||||||||
| Depreciation and amortization | 606.9 | 516.3 | 406.2 | ||||||
| Loss on extinguishment of debt | 18.2 | 33.8 | 94.3 | ||||||
| Non-cash interest expense | 9.6 | 11.9 | 19.7 | ||||||
| Stock-based compensation | 114.1 | 155.9 | 200.7 | ||||||
| Amortization of deferred revenue | (117.6) | (111.5) | (72.1) | ||||||
| Additions to deferred revenue | 200.5 | 184.0 | 149.1 | ||||||
| Foreign currency loss on intercompany loans | 10.3 | 53.8 | 24.4 | ||||||
| Excess tax benefit from stock-based compensation | – | (7.9) | – | ||||||
| Deferred income taxes | 12.6 | (2.8) | (13.3) | ||||||
| Provision for bad debts | 3.7 | 3.9 | 1.9 | ||||||
| Non-cash loss on investments | 1.2 | 1.2 | 0.9 | ||||||
| Changes in operating assets and liabilities, net of acquisitions | |||||||||
| Trade receivables | (7.2) | 1.9 | (11.2) | ||||||
| Accounts payable and accrued liabilities | 5.2 | (36.0) | (22.1) | ||||||
| Other assets and liabilities | (33.4) | (14.3) | (17.8) | ||||||
| Net cash provided by operating activities | 909.8 | 714.0 | 605.4 | ||||||
| Cash flows from investing activities | |||||||||
| Purchases of property and equipment | (835.5) | (704.1) | (530.4) | ||||||
| Cash paid for acquisitions, net of cash acquired | (1,434.8) | (437.5) | (855.7) | ||||||
| Net cash used in investing activities | (2,270.3) | (1,141.6) | (1,386.1) | ||||||
| Cash flows from financing activities | |||||||||
| Proceeds from debt | 3,865.8 | 929.3 | 1,787.3 | ||||||
| Proceeds from equity offerings | – | – | 413.7 | ||||||
| Direct costs associated with initial public offering | – | – | (26.5) | ||||||
| Principal payments on long-term debt | (2,408.8) | (535.0) | (1,288.5) | ||||||
| Payment of early redemption fees on debt extinguished | – | (20.3) | (62.6) | ||||||
| Principal payments on capital lease obligations | (6.6) | (4.9) | (3.5) | ||||||
| Payment of debt issue costs | (35.4) | (4.2) | (24.2) | ||||||
| Common stock repurchases | – | (81.1) | – | ||||||
| Excess tax benefit from stock-based compensation | – | 7.9 | – | ||||||
| Cash paid for Santa Clara acquisition financing arrangement | (3.7) | – | – | ||||||
| Net cash provided by financing activities | 1,411.3 | 291.7 | 795.7 | ||||||
| Net cash flows | 50.8 | (135.9) | 15.0 | ||||||
| Effect of changes in foreign exchange rates on cash | (0.8) | (2.0) | (3.8) | ||||||
| Net increase/(decrease) in cash and cash equivalents | 50.0 | (137.9) | 11.2 | ||||||
| Cash and cash equivalents, beginning of year | 170.7 | 308.6 | 297.4 | ||||||
| Cash and cash equivalents, end of period | $ | 220.7 | $ | 170.7 | $ | 308.6 | |||
| Supplemental disclosure of non-cash investing and financing activities: |
|||||||||
| Cash paid for interest, net of capitalized interest | $ | 195.6 | $ | 228.5 | $ | 191.2 | |||
| Cash paid for income taxes | 13.1 | 14.0 | 14.5 | ||||||
| Non-cash purchases of equipment through capital leasing | 12.0 | 7.6 | 6.8 | ||||||
|
Increase in accounts payable and accrued expenses for purchases of property and equipment |
16.9 | 25.7 | 8.4 | ||||||
|
Reconciliation of Non-GAAP Financial Measures (in millions) |
|||||||||||||||||||||||||
| Adjusted EBITDA and Cash Flow Reconciliation | Three months ended | Year Ended June 30, | |||||||||||||||||||||||
| June 30, 2017 | March 31, 2017 | June 30, 2016 | 2017 | 2016 | |||||||||||||||||||||
| Reconciliation of Adjusted EBITDA: | |||||||||||||||||||||||||
| Net income/(loss) | $ | 23.2 | $ | 27.0 | $ | (30.9 | ) | $ | 85.7 | $ | (76.2 | ) | |||||||||||||
| Interest expense | 71.5 | 63.0 | 57.4 | 241.5 | 220.1 | ||||||||||||||||||||
| Provision/(benefit) for income taxes | 11.0 | 0.6 | (13.1 | ) | 18.4 | 8.5 | |||||||||||||||||||
| Depreciation and amortization | 181.3 | 155.7 | 148.3 | 606.9 | 516.3 | ||||||||||||||||||||
| Transaction costs | 2.9 | 8.4 | 4.0 | 20.5 | 21.5 | ||||||||||||||||||||
| Stock-based compensation | 21.1 | 26.5 | 33.4 | 114.1 | 155.9 | ||||||||||||||||||||
| Loss on extinguishment of debt | 13.7 | 4.5 | 33.8 | 18.2 | 33.8 | ||||||||||||||||||||
| Foreign currency (loss)/gain on intercompany loans | (14.4 | ) | (3.9 | ) | 24.9 | 10.3 | 53.8 | ||||||||||||||||||
| Non-cash loss on investments | 0.5 | 0.2 | – | 1.2 | 1.2 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 310.8 | $ | 282.0 | $ | 257.8 | $ | 1,116.8 | $ | 934.9 | |||||||||||||||
| Reconciliation of adjusted unlevered free cash flow: | |||||||||||||||||||||||||
| Net cash provided by continuing operating activities | $ | 244.9 | $ | 262.4 | $ | 176.2 | $ | 909.8 | $ | 714.0 | |||||||||||||||
| Cash paid for income taxes | 3.3 | 3.8 | 2.6 | 13.1 | 14.0 | ||||||||||||||||||||
| Cash paid for interest, net of capitalized interest | 86.4 | 11.9 | 83.5 | 195.6 | 228.5 | ||||||||||||||||||||
| Excess tax benefit from stock-based compensation | – | – | – | – | 7.9 | ||||||||||||||||||||
| Transaction costs | 2.9 | 8.4 | 4.0 | 20.5 | 21.5 | ||||||||||||||||||||
| Provision for bad debts | (1.6 | ) | (0.7 | ) | (0.8 | ) | (3.7 | ) | (3.9 | ) | |||||||||||||||
| Additions to deferred revenue | (43.8 | ) | (72.4 | ) | (38.6 | ) | (200.5 | ) | (184.0 | ) | |||||||||||||||
| Amortization of deferred revenue | 32.1 | 29.9 | 44.9 | 117.6 | 111.5 | ||||||||||||||||||||
| Other changes in operating assets and liabilities | (13.4 | ) | 38.7 | (14.0 | ) | 64.4 | 25.4 | ||||||||||||||||||
| Adjusted EBITDA | 310.8 | 282.0 | 257.8 | 1,116.8 | 934.9 | ||||||||||||||||||||
| Purchases of property and equipment | (205.3 | ) | (208.3 | ) | (187.4 | ) | (835.5 | ) | (704.1 | ) | |||||||||||||||
| Additions to deferred revenue | 43.8 | 72.4 | 38.6 | 200.5 | 184.0 | ||||||||||||||||||||
| Amortization of deferred revenue | (32.1 | ) | (29.9 | ) | (44.9 | ) | (117.6 | ) | (111.5 | ) | |||||||||||||||
| Adjusted unlevered free cash flow | $ | 117.2 | $ | 116.2 | $ | 64.1 | $ | 364.2 | $ | 303.3 | |||||||||||||||
| Reconciliation of levered free cash flow: | |||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 244.9 | $ | 262.4 | $ | 176.2 | $ | 909.8 | $ | 714.0 | |||||||||||||||
| Purchases of property and equipment, net | (205.3 | ) | (208.3 | ) | (187.4 | ) | (835.5 | ) | (704.1 | ) | |||||||||||||||
| Levered free cash flow/(deficit), as defined | $ | 39.6 | $ | 54.1 | $ | (11.2 | ) | $ | 74.3 | $ | 9.9 | ||||||||||||||
| Adjusted EBITDA and Cash Flow Reconciliation | Three months ended June 30, 2017 | ||||||||||||||
|
Zayo |
Allstream |
Consolidated |
|||||||||||||
| Reconciliation of Adjusted EBITDA: | |||||||||||||||
| Net income | $ | 23.2 | $ | 11.9 | $ | 11.3 | |||||||||
| Interest expense | 71.5 | 3.8 | 67.7 | ||||||||||||
| Provision for income taxes | 11.0 | – | 11.0 | ||||||||||||
| Depreciation and amortization | 181.3 | 13.1 | 168.2 | ||||||||||||
| Transaction costs | 2.9 | 0.7 | 2.2 | ||||||||||||
| Stock-based compensation | 21.1 | 0.5 | 20.6 | ||||||||||||
| Loss on extinguishment of debt | 13.7 | – | 13.7 | ||||||||||||
| Foreign currency gain on intercompany loans | (14.4 | ) | – | (14.4 | ) | ||||||||||
| Non-cash loss on investments | 0.5 | – | 0.5 | ||||||||||||
| Adjusted EBITDA | $ | 310.8 | $ | 30.0 | $ | 280.8 | |||||||||
| Reconciliation of levered free cash flow: | |||||||||||||||
| Net cash provided by operating activities | $ | 244.9 | $ | 5.5 | $ | 239.4 | |||||||||
| Purchases of property and equipment, net | (205.3 | ) | (4.5 | ) | (200.8 | ) | |||||||||
| Levered free cash flow, as defined | $ | 39.6 | $ | 1.0 | $ | 38.6 | |||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170821005656/en/
Zayo Group Holdings, Inc.
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or
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