Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 06, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GTT Communications, Inc. | |
Entity Central Index Key | 1,315,255 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | gtt | |
Entity Common Stock, Shares Outstanding (in shares) | 54,701,256 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 47.7 | $ 101.2 |
Accounts receivable, net of allowances of $4.2 and $5.1, respectively | 254.1 | 102.8 |
Prepaid expenses and other current assets | 68.8 | 24.1 |
Total current assets | 370.6 | 228.1 |
Property and equipment, net | 1,904.6 | 499.3 |
Intangible assets, net | 564.6 | 417.1 |
Goodwill | 1,666.8 | 644.5 |
Other long-term assets | 86.6 | 9.2 |
Total assets | 4,593.2 | 1,798.2 |
Current liabilities: | ||
Accounts payable | 125.7 | 22.5 |
Accrued expenses and other current liabilities | 168.7 | 89 |
Acquisition holdbacks | 8.9 | 14 |
Current portion of capital lease obligations | 6.8 | 1.5 |
Current portion of long-term debt | 40.9 | 7 |
Deferred revenue | 191.5 | 53.7 |
Total current liabilities | 542.5 | 187.7 |
Capital lease obligations, long-term portion | 36.2 | 0.3 |
Long-term debt | 3,115.5 | 1,236.5 |
Deferred revenue, long-term portion | 268.6 | 108 |
Deferred tax liabilities | 122.7 | 26.3 |
Other long-term liabilities | 31.7 | 8 |
Total liabilities | 4,117.2 | 1,566.8 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, par value $.0001 per share, 80,000,000 shares authorized, 54,671,841 and 44,531,905 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 0 | 0 |
Additional paid-in capital | 799 | 360.2 |
Accumulated deficit | (315.3) | (124.9) |
Accumulated other comprehensive loss | (7.7) | (3.9) |
Total stockholders’ equity | 476 | 231.4 |
Total liabilities and stockholders’ equity | $ 4,593.2 | $ 1,798.2 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 4.2 | $ 5.1 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, shares, issued (in shares) | 54,671,841 | 44,531,905 |
Common stock, shares, outstanding (in shares) | 54,671,841 | 44,531,905 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue: | ||||
Telecommunications services | $ 448.6 | $ 202.6 | $ 1,036 | $ 578.6 |
Operating expenses: | ||||
Cost of telecommunications services | 247.4 | 103.8 | 568.2 | 296.1 |
Selling, general and administrative expenses | 112.7 | 52 | 270.7 | 151.6 |
Severance, restructuring and other exit costs | 15.5 | 11.1 | 22.7 | 21.8 |
Depreciation and amortization | 58.5 | 32.8 | 146.5 | 94.7 |
Total operating expenses | 434.1 | 199.7 | 1,008.1 | 564.2 |
Operating income | 14.5 | 2.9 | 27.9 | 14.4 |
Other expense: | ||||
Interest expense, net | (47.6) | (18.3) | (98.7) | (50.7) |
Loss on debt extinguishment | 0 | (3) | (13.8) | (8.6) |
Other expense, net | 8.1 | 0.2 | (106.9) | 0.2 |
Total other expense | (39.5) | (21.1) | (219.4) | (59.1) |
Loss before income taxes | (25) | (18.2) | (191.5) | (44.7) |
Benefit from income taxes | (1.6) | (8.7) | (1.1) | (22.7) |
Net loss | $ (23.4) | $ (9.5) | $ (190.4) | $ (22) |
Loss per share: | ||||
Basic (in dollars per share) | $ (0.43) | $ (0.23) | $ (3.87) | $ (0.53) |
Diluted (in dollars per share) | $ (0.43) | $ (0.23) | $ (3.87) | $ (0.53) |
Weighted average shares: | ||||
Basic (in shares) | 54,671,787 | 41,762,693 | 49,210,929 | 41,160,317 |
Diluted (in shares) | 54,671,787 | 41,762,693 | 49,210,929 | 41,160,317 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (23.4) | $ (9.5) | $ (190.4) | $ (22) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustment | (6.9) | 0.5 | (3.8) | 1 |
Comprehensive loss | $ (30.3) | $ (9) | $ (194.2) | $ (21) |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance (in shares) at Dec. 31, 2017 | 44,531,905 | ||||
Balance at Dec. 31, 2017 | $ 231.4 | $ 0 | $ 360.2 | $ (124.9) | $ (3.9) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation for options issued | 0.9 | 0.9 | |||
Share-based compensation for restricted stock issued (in shares) | 631,603 | ||||
Share-based compensation for restricted stock issued | 23 | 23 | |||
Tax withholding related to the vesting of restricted stock (in shares) | (342,807) | ||||
Tax withholding related to the vesting of restricted stock | (16.1) | (16.1) | |||
Stock issued in connection with employee stock purchase plan (in shares) | 22,866 | ||||
Stock issued in connection with employee stock purchase plan | 0.7 | 0.7 | |||
Stock issued in connection with acquisition (in shares) | 79,930 | ||||
Stock issued in connection with acquisition | 4.2 | $ 0 | 4.2 | ||
Equity offerings, net of issuance costs (in shares) | 9,589,094 | ||||
Equity offerings, net of issuance costs | 424.5 | 424.5 | |||
Stock options exercised (in shares) | 159,250 | ||||
Stock options exercised | 1.6 | 1.6 | |||
Net loss | (190.4) | (190.4) | |||
Foreign currency translation | (3.8) | (3.8) | |||
Balance (in shares) at Sep. 30, 2018 | 54,671,841 | ||||
Balance at Sep. 30, 2018 | $ 476 | $ 0 | $ 799 | $ (315.3) | $ (7.7) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (190.4) | $ (22) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 146.5 | 94.7 |
Share-based compensation | 23.9 | 16 |
Debt discount amortization | 1.9 | 0.5 |
Loss on debt extinguishment | 13.8 | 8.6 |
Amortization of debt issuance costs | 3.4 | 2.6 |
Change in fair value of derivative financial liability | 106.9 | 0 |
Excess tax benefit from stock-based compensation | (6.6) | (5.4) |
Deferred income taxes | 8 | (18.3) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable, net | 0.4 | (7.4) |
Prepaid expenses and other current assets | 12.9 | 4.3 |
Other long-term assets | (12.5) | 3.3 |
Accounts payable | 15.5 | (15.7) |
Accrued expenses and other current liabilities | (54.4) | 24.1 |
Deferred revenue | (11.2) | (28.1) |
Other long-term liabilities | (8.1) | (10.1) |
Net cash provided by operating activities | 50 | 47.1 |
Cash flows from investing activities: | ||
Acquisition of businesses, net of cash acquired | (2,206.7) | (652.8) |
Purchase of customer contracts | 0 | (14.9) |
Settlement of deal-contingent foreign currency hedge | (105.8) | 0 |
Purchases of property and equipment | (61.4) | (26.9) |
Net cash used in investing activities | (2,373.9) | (694.6) |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit | 7.5 | 0 |
Repayment of revolving line of credit | 0 | (20) |
Proceeds from term loans | 2,633.7 | 696.5 |
Repayment of term loan | (699.6) | (431) |
Proceeds from senior note | 0 | 159 |
Repayment of other secured borrowings | (5.9) | 0 |
Payment of holdbacks | (11.2) | (22.7) |
Debt issuance costs paid to third parties and lenders | (62.8) | (29.9) |
Proceeds from equity issuance, net of issuance costs | 424.5 | 0 |
Repayment of capital leases | (2.1) | (1) |
Proceeds from issuance of common stock under employee stock purchase plan | 0.7 | 0.5 |
Tax withholding related to the vesting of restricted stock | (16.1) | (3.2) |
Exercise of stock options | 1.6 | 1 |
Net cash provided by financing activities | 2,270.3 | 349.2 |
Effect of exchange rate changes on cash | 0.1 | (0.9) |
Net decrease in cash, cash equivalents, and restricted cash | (53.5) | (299.2) |
Cash, cash equivalents, and restricted cash at beginning of period | 101.2 | 334 |
Cash, cash equivalents, and restricted cash at end of period | 47.7 | 34.8 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 102.4 | 39 |
Cash paid for income taxes, net of refunds | $ 1.9 | $ 0.6 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Organization and Business GTT Communications, Inc. ("GTT" or the "Company") is a provider of cloud networking services to large national and multinational enterprise and carrier clients. The Company's comprehensive portfolio of cloud networking services includes: SD-WAN; wide area networking; managed services; internet; infrastructure services; voice; and video transport. GTT's global network connects people across organizations and around the world. The Company's global network includes over 550 points of presence (PoPs), spans six continents, and provides services to clients in more than 100 countries. GTT differentiates itself from its competition by delivering services to its clients with simplicity, speed, and agility. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the Company’s audited financial statements and footnotes thereto for the fiscal year ended December 31, 2017 , included in the Company’s Annual Report on Form 10-K filed on March 1, 2018. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been omitted pursuant to such rules and regulations. The condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position and its results of operations. The operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full fiscal year 2018 or for any other interim period. The December 31, 2017 consolidated balance sheet is condensed from the audited financial statements as of that date. Reclassification Within Condensed Consolidated Statement of Cash Flows Certain prior period amounts in the condensed consolidated statement of cash flows have been reclassified to conform with the current period presentation to reflect the total change in deferred revenue into a single line item as well as changes in operating assets and liabilities to more closely align with the related balance sheet caption. Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates are used when establishing allowances for doubtful accounts and accruals for billing disputes, determining useful lives for depreciation and amortization, estimating accruals for exit activities, assessing the need for impairment charges (including those related to intangible assets and goodwill), determining the fair values of assets acquired and liabilities assumed in business combinations, accounting for income taxes and related valuation allowances against deferred tax assets, and estimating the grant date fair values used to compute the share-based compensation expense. Management evaluates these estimates and judgments on an ongoing basis and makes estimates based on historical experience, current conditions, and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions. Segment Reporting The Company reports operating results and financial data in one operating and reporting segment. The Company's Chief Executive Officer is the chief operating decision maker and manages the Company as a single profit center in order to promote collaboration, provide comprehensive service offerings across its entire customer base, and provide incentives to employees based on the success of the organization as a whole. Although certain information regarding selected products or services and acquired companies are discussed for purposes of promoting an understanding of the Company's complex business, the chief operating decision maker manages the Company and allocates resources at the consolidated level. Additionally, integration efforts related to Interoute are currently underway, but have not currently changed the manner in which the chief operating decision maker has managed the consolidated business. These integration efforts are designed to establish scale and align Interoute's network assets and product offerings within the existing business. Revenue Recognition The Company's revenue is derived primarily from telecommunications services. Revenues are recognized when control of these services is transferred to the customer, in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company delivers seven primary services to its customers — SD-WAN; wide area networking; managed services; internet; voice; infrastructure services; and video transport. The Company's services are provided under contracts that typically include an installation or provisioning charge along with payments of recurring charges on a monthly basis for use of the services over a committed term. Its contracts with customers specify the terms and conditions for providing such services, including installation date, recurring and non-recurring fees, payment terms, and length of term. These contracts call for the Company to provide the service in question (e.g., data transmission between point A and point Z), to manage the activation process, and to provide ongoing support (in the form of service maintenance and trouble-shooting) during the service term. The contracts do not typically provide the customer any rights to use specifically identifiable assets. Furthermore, the contracts generally provide the Company with discretion to engineer (or re-engineer) a particular network solution to satisfy each customer’s data transmission requirement, and typically prohibit physical access by the customer to the network infrastructure used by the Company and its suppliers to deliver the services. Fees charged for ongoing services are generally fixed in price and billed on a recurring monthly basis (one month in advance) for a specified term. Fees may also be based on specific usage of the related services, or usage above a fixed threshold, which are billed monthly in arrears. The usage based fees represent variable consideration as defined by Accounting Standards Codification ("ASC") 606, however, the nature of the fees are such that the Company is not able to estimate these amounts with a high degree of certainty and therefore the usage based fees are excluded from the transaction price and are instead recognized as revenue based on actual usage charges billed using the rates and/or thresholds specified in each contract. At the end of the term, most contracts provide for a continuation of services on the same terms, either for a specified renewal period (e.g., one year) or on a month-to-month basis. Revenue is generally recognized over time for these contracts as the customers simultaneously receive and consume the benefit of the service as the Company performs. Fees may also be billed for early terminations based on contractually stated amounts. The early termination fees represent variable consideration as defined by ASC 606. The Company estimates the amount of variable consideration it expects to be entitled to receive for such arrangements using the expected value method. Primary geographical market. The Company’s operations are located primarily in the United States and Europe. The nature and timing of revenue from contracts with customers across geographic markets is similar. The following table presents the Company's revenues disaggregated by primary geographic market based on legal entities (in millions, unaudited): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Primary geographic market US $ 192.7 $ 577.6 UK 92.0 165.9 Ireland 20.6 75.9 Other 117.4 181.4 Total revenue from contracts with customers 422.7 1,000.8 Lease revenue 25.9 35.2 Total telecommunications services revenue $ 448.6 $ 1,036.0 Contracts with multiple performance obligations. The majority of the Company’s contracts with customers have a single performance obligation - telecommunication services. The related installation services are generally considered not material within the context of the contract and in accordance with the guidance of ASC 606 the Company does not recognize these immaterial promised services as a separate performance obligation. Certain contracts with customers may include multiple performance obligations, specifically when the Company sells its connectivity services in addition to customer premise equipment ("CPE"). For such arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. The standalone selling price for each performance obligation is based on observable prices charged to customers in similar transactions or using expected cost plus margin. The Company applies the practical expedient in paragraph ASC 606-10-32-18 and does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Prepaid Capacity Sales and Indefeasible Right to Us e. The Company sells capacity on a long-term basis, where a certain portion of the contracted revenue is prepaid upon acceptance of the service by the customer. This prepaid amount is initially recorded as deferred revenue and amortized ratably over the term of the contract. Certain of these prepaid capacity sales are in the form of Indefeasible Rights to Use ("IRUs"), where the customer has the right to use the capacity of the fiber optic cable for a specified term. The Company records revenues from these prepaid leases of fiber optic cable IRUs over the term that the customer is given exclusive access to the assets. Universal Service Fund (USF), Gross Receipts Taxes and Other Surcharges. The Company is liable in certain cases for collecting regulatory fees and/or certain sales taxes from its customers and remitting the fees and taxes to the applicable governing authorities. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Conversely, USF contributions are assessed to the Company by and paid to the Universal Service Administration Company ("USAC") and are based on the Company’s interstate and inter-nation end-user revenues. The Company may assess its customers a separate fee to recoup its USF expense. These fees are included in telecommunications services revenue and costs of telecommunications services. USF fees and other surcharges billed to customers and recorded on a gross basis (as service telecommunications services revenue and cost of telecommunications services) were $5.3 million and $3.7 million for the three months ended September 30, 2018 and 2017 , respectively, and $17.5 million and $11.2 million for the nine months ended September 30, 2018 and 2017 , respectively. Contract balances. Accounts receivable represent amounts billed to customers where the Company has an enforceable right to payment for performance completed to date. Contract liabilities are generally limited to deferred revenue. Deferred revenue is a contract liability, representing advance consideration received from customers primarily related to the pre-paid capacity sales noted above, where transfer of control occurs over time, and therefore revenue is recognized over the related contractual service period. In accordance with ASC 606, the Company is required to disclose its accounts receivable balances, contract assets, and contract liabilities related to revenue from contracts with customers, which excludes lease revenue, at September 30, 2018 . The Company’s accounts receivable balance at September 30, 2018 includes $225.2 million in amounts billed for contracts with customers. There were no contract assets as of January 1, 2018 or September 30, 2018 . Refer to Note 6 - Deferred Revenue for significant changes in the contract liabilities balances during the period as well as the estimated revenue expected to be recognized for each of the years subsequent to September 30, 2018 related to performance obligations that are unsatisfied (or partially unsatisfied) at September 30, 2018 . The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Contract Costs The Company capitalizes sales commissions earned by its sales force when they are considered to be incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit which is determined by taking into consideration our customer contacts, technology and other factors. Amortization of sales commissions expense is included in selling, general and administrative expenses. There were no significant amounts of assets recorded related to contract costs as of September 30, 2018 . Cost of Telecommunications Services Cost of telecommunications services includes direct costs incurred in accessing other telecommunications providers’ networks in order to maintain the Company's global Tier 1 IP network and provide telecommunication services to the Company's customers, including access, co-location, usage-based charges, and certain excise taxes and surcharges recorded on a gross basis. Share-Based Compensation The Company issues three types of equity grants under its share-based compensation plan: time-based restricted stock, time-based stock options, and performance-based restricted stock. The time-based restricted stock and stock options generally vest over a four -year period, contingent upon meeting the requisite service period requirement. Performance awards typically vest over a shorter period, e.g. one to two years, starting when the performance criteria established in the grant have been met. The share price of the Company's common stock as reported on the New York Stock Exchange ("NYSE") on the date of grant is used as the fair value for all restricted stock. The Company uses the Black-Scholes option-pricing model to determine the estimated fair value for stock options. Critical inputs into the Black-Scholes option-pricing model include the following: option exercise price; fair value of the stock; expected life of the option; annualized volatility of the stock; annual rate of quarterly dividends on the stock; and risk-free interest rate. Implied volatility is calculated as of each grant date based on our historical stock price volatility along with an assessment of a peer group. Other than the expected life of the option, volatility is the most sensitive input to our option grants. The risk-free interest rate used in the Black-Scholes option-pricing model is determined by referencing the U.S. Treasury yield curve rates with the remaining term equal to the expected life assumed at the date of grant. Forfeitures are estimated based on our historical analysis of attrition levels. Forfeiture estimates are updated quarterly for actual forfeitures. The share-based compensation expense for time-based restricted stock and stock options is recognized on a straight-line basis over the vesting period. The Company begins recognizing share-based compensation expense for performance awards when the Company considers the achievement of the performance criteria to be probable through the expected vesting period. Income Taxes Income taxes are accounted for under the asset and liability method pursuant to GAAP. Under this method, deferred tax assets and liabilities are recognized for the expected future impacts attributable to the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the change. Further, deferred tax assets are recognized for the expected realization of available net operating loss and tax credit carryforwards. A valuation allowance is recorded on gross deferred tax assets when it is "more likely than not" that such asset will not be realized. When evaluating the realizability of deferred tax assets, all evidence, both positive and negative, is evaluated. Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future earnings. The Company reviews its deferred tax assets on a quarterly basis to determine if a valuation allowance is required based upon these factors. Changes in the Company's assessment of the need for a valuation allowance could give rise to a change in such allowance, potentially resulting in additional expense or benefit in the period of change. The Company's income tax provision includes U.S. federal, state, local, and foreign income taxes and is based on pre-tax income or loss. In determining the annual effective income tax rate, the Company analyzes various factors, including its annual earnings and taxing jurisdictions in which the earnings were generated, transfer pricing methods, the impact of state and local income taxes, and its ability to use tax credits and net operating loss carryforwards. Under GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is "more likely than not" to be sustained upon examination. The Company analyzes its tax filing positions in all of the U.S. federal, state, local, and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is established in the consolidated financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax positions in the provision for income taxes. Comprehensive Loss In addition to net loss, comprehensive loss includes certain charges or credits to equity occurring other than as a result of transactions with stockholders. For the Company, this consists of foreign currency translation adjustments. Loss Per Share Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per share reflects, in periods with earnings and in which they have a dilutive effect, the effect of common shares issuable upon exercise of stock options. The table below details the calculations of loss per share (in millions, except for share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator for basic and diluted EPS – net loss available to common stockholders $ (23.4 ) $ (9.5 ) $ (190.4 ) $ (22.0 ) Denominator for basic EPS – weighted average shares 54,671,787 41,762,693 49,210,929 41,160,317 Effect of dilutive securities — — — — Denominator for diluted EPS – weighted average shares 54,671,787 41,762,693 49,210,929 41,160,317 Loss per share: Basic $ (0.43 ) $ (0.23 ) $ (3.87 ) $ (0.53 ) Diluted $ (0.43 ) $ (0.23 ) $ (3.87 ) $ (0.53 ) All outstanding stock options were anti-dilutive as of September 30, 2018 and 2017 due to the net loss incurred during the periods. There were approximately 526,000 and 767,000 outstanding stock options as of September 30, 2018 and 2017 , respectively. Cash and Cash Equivalents Cash and cash equivalents may include deposits with financial institutions as well as short-term money market instruments, certificates of deposit and debt instruments with maturities of three months or less when purchased. The Company invests its cash and cash equivalents and short-term investments in accordance with the terms and conditions of its 2018 Credit Agreement, which seeks to ensure both liquidity and safety of principal. The Company’s policy limits investments to instruments issued by the U.S. government and commercial institutions with strong investment grade credit ratings, and places restrictions on the length of maturity. As of September 30, 2018 , the Company held no investments in auction rate securities, collateralized debt obligations, structured investment vehicles, or non-government guaranteed mortgage-backed securities. Restricted Cash and Cash Equivalents Cash and cash equivalents that are contractually restricted from operating use are classified as restricted cash and cash equivalents. In December 2016, the Company completed a private offering of $300.0 million aggregate principal amount of 7.875% senior unsecured notes due in 2024. The proceeds of the private offering plus 60 days of prepaid interest, were deposited into escrow, where the funds remained until the closing of the acquisition of Hibernia Networks ("Hibernia") that occurred in January 2017. The proceeds were released from escrow at closing to fund the Hibernia acquisition. Accounts Receivable, Net Accounts receivable balances are stated at amounts due from the customer net of an allowance for doubtful accounts. Credit extended is based on an evaluation of the customer’s financial condition and is granted to qualified customers on an unsecured basis. The Company, pursuant to its standard service contracts, is typically entitled to impose a monthly finance charge of a certain percentage per month with respect to amounts that are past due. The Company’s standard terms require payment within 30 days of the date of the invoice. The Company treats invoices as past due when they remain unpaid, in whole or in part, beyond the payment date set forth in the applicable service contract. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade receivables are past due, the customer’s payment history and current ability to pay its obligation to the Company, and the condition of the general economy. Specific reserves are also established on a case-by-case basis by management. Credit losses have historically been within management's estimates. Actual bad debts, when determined, reduce the allowance, the adequacy of which management then reassesses. The Company writes off accounts after a determination by management that the amounts are no longer likely to be collected, following the exercise of reasonable collection efforts, and upon management's determination that the costs of pursuing collection outweigh the likelihood of recovery. The allowance for doubtful accounts was $4.2 million and $5.1 million as of September 30, 2018 and December 31, 2017 , respectively. Deferred Costs Installation costs related to provisioning of recurring communications services that the Company incurs from independent third party suppliers, directly attributable and necessary to fulfill a particular service contract, and which would not have been incurred but for the occurrence of that service contract, are recorded as deferred costs and expensed ratably over the contractual term of service in the same manner as the deferred revenue arising from that contract. Based on historical experience, the Company believes the initial contractual term is the best estimate for the period of earnings. If any installation costs exceed the amount of corresponding deferred revenue, the excess cost is recognized in the current period. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation on these assets is computed on a straight-line basis over the estimated useful lives of the assets. Assets are recorded at acquired cost. Costs associated with the initial customer installations and upgrade of services and acquiring and deploying customer premise equipment, including materials, internal labor costs, and related indirect labor costs are also capitalized. Indirect and overhead costs include payroll taxes, insurance, and other benefits. Capitalized labor costs include the direct costs of engineers and service delivery technicians involved in the installation and upgrades of services, and the costs of support personnel directly involved in capitalizable activities, such as project managers and supervisors. Internal labor costs are based on standards developed by position for the percentage of time spent on capitalizable projects while overhead costs are capitalized based on standards developed from historical information. Costs for repairs and maintenance, disconnecting service, or reconnecting service are expensed as incurred. The Company capitalized labor costs, including indirect and overhead costs, of $3.0 million and $1.4 million for the three months ended September 30, 2018 and 2017 , respectively, and $9.2 million and $4.1 million for the nine months ended September 30, 2018 and 2017 , respectively. Assets and liabilities under capital leases are recorded at the lesser of the present value of the aggregate future minimum lease payments or the fair value of the assets under lease. Leasehold improvements and assets under capital leases are amortized over the shorter of the term of the lease, excluding optional extensions, or the useful life. Expenditures for maintenance and repairs are expensed as incurred. Depreciable lives used by the Company for its classes of assets are as follows: Freehold Buildings 30 years Furniture and Fixtures 7 years Fiber Optic Cable 20 years Fiber Optic Network Equipment 3 - 15 years Leasehold Improvements up to 10 years Computer Hardware and Software 3-5 years The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the carrying amount of an asset were to exceed its estimated future undiscounted cash flows, the asset would be considered to be impaired. Impairment losses would then be measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of, if any, are reported at the lower of the carrying amount or fair value less costs to sell. Software Capitalization Software development costs include costs to develop software programs to be used solely to meet the Company's internal needs. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a function it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. The Company capitalized software costs of $1.4 million and $0.4 million for the three months ended September 30, 2018 and 2017 , respectively, and $3.6 million and $1.2 million for the nine months ended September 30, 2018 and 2017 , respectively. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is reviewed for impairment at least annually, in October, or more frequently if a triggering event occurs between impairment testing dates. There were no triggering events or goodwill impairments identified for the nine months ended September 30, 2018 and 2017 . Intangible assets arising from business combinations, such as acquired customer contracts and relationships, (collectively "customer relationships"), trade names, and/or intellectual property, are initially recorded at fair value. The Company amortizes these intangible assets over the determined useful life which generally ranges from three to ten years. The Company reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. There were no triggering events or intangible asset impairments recognized for the nine months ended September 30, 2018 and 2017 . Business Combinations The Company includes the results of operations of the businesses that it acquires commencing on the respective dates of acquisition. The Company allocates the fair value of the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. Asset Purchases Periodically the Company acquires customer contracts that it accounts for as an asset purchase and records a corresponding intangible asset that is amortized over its estimated useful life. No goodwill is recorded in an asset purchase. During the nine months ended September 30, 2018 , the Company did no t acquire any such customer contracts. During the nine months ended September 30, 2017 , the Company acquired customer contracts for an aggregate purchase price of $37.3 million . Accrued Supplier Expenses The Company accrues estimated charges owed to its suppliers for services. The Company bases this accrual on the supplier contract, the individual service order executed with the supplier for that service, and the length of time the service has been active. Disputed Supplier Expenses In the normal course of business, the Company identifies errors by suppliers with respect to the billing of services. The Company performs bill verification procedures to ensure that errors in the Company's suppliers' billed invoices are identified and resolved. If the Company concludes that a vendor has billed inaccurately, the Company will record a liability only for the amount that it believes is owed. As of September 30, 2018 and December 31, 2017 , the Company had open disputes not accrued for of $9.2 million and $5.3 million , respectively. Acquisition Holdbacks Acquisition holdbacks represent fixed deferred consideration to be paid out at some point in the future, typically on the one-year anniversary of an acquisition or asset purchase. The portion of the deferred consideration due within one year is recorded as a current liability until paid, and any consideration due beyond one year is recorded in other long-term liabilities. Debt Issuance Costs Debt issuance costs represent costs that qualify for deferral associated with the issuance of new debt or the modification of existing debt facilities. The unamortized balance of debt issuance costs is presented as a reduction to the carrying value of long-term debt. Debt issuance costs are amortized and recognized on the condensed consolidated statements of operations as interest expense. The unamortized debt issuance costs were $32.1 million and $33.8 million as of September 30, 2018 and December 31, 2017 , respectively. Original Issuance Discounts and Premiums Original issuance discounts and premiums is the difference between the face value of debt and the amount of principal received when the debt was originated. When the debt reaches maturity, the face value of the debt is payable. The Company recognizes original issuance discounts and premiums by accretion of the discount or premium as interest expense, net over the term of the debt. The unamortized portion of the original issuance discounts and premiums was a $49.4 million net discount and a $9.3 million net premium as of September 30, 2018 and December 31, 2017 , respectively. Translation of Foreign Currencies For non-U.S. subsidiaries, the functional currency is evaluated at the time of the Company's acquisition of such subsidiaries and on a periodic basis for financial reporting purposes. These c |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS Since its formation, the Company has consummated a number of transactions accounted for as business combinations as part of its growth strategy. The acquisitions of these businesses, which are in addition to periodic purchases of customer contracts, have allowed the Company to increase the scale at which it operates, which in turn affords the Company the ability to increase its operating leverage, extend its network, and broaden its customer base. The accompanying condensed consolidated financial statements include the operations of the acquired entities from their respective acquisition dates. All of the acquisitions have been accounted for as a business combination. Accordingly, consideration paid by the Company to complete the acquisitions is initially allocated to the acquired assets and liabilities based upon their estimated acquisition date fair values. The recorded amounts for assets acquired and liabilities assumed are provisional and subject to change during the measurement period, which is up to 12 months from the acquisition date. 2018 Acquisitions Accelerated Connections, Inc. In March 2018, the Company acquired Accelerated Connections, Inc. ("ACI"). The Company paid $35.0 million cash consideration, of which $0.8 million was net cash acquired, and 79,930 unregistered shares of the Company's common stock valued at $4.2 million at closing. $3.9 million of the initial cash consideration is held in escrow for one year, subject to reduction for any indemnification claims made by the Company prior to such date. Substantially all of the consideration was allocated to goodwill and identifiable intangible assets. The results of ACI have been included from March 1, 2018. Pro forma results of operations for this acquisition have not been presented as it is not material to the condensed consolidated results of operations. The acquisition was considered a stock purchase for tax purposes. Interoute In May 2018, the Company acquired Interoute Communications Holdings S.A. ("Interoute"), a Luxembourg public limited liability company. The Company paid $2,239.3 million in cash consideration at closing, of which $66.1 million was net cash acquired, and assumed $27.7 million in debt. The results of Interoute have been included from June 1, 2018. The acquisition was considered a stock purchase for tax purposes. The Company partially funded the purchase price through the issuance of 9,589,094 shares of common stock to a group of institutional investors for proceeds of $425.0 million concurrently with the closing of the Interoute acquisition. The Company also entered into a credit agreement to fund the remainder of the purchase price. Refer to Note 7 - Debt for further information. In February 2018, the Company also entered into a deal-contingent foreign currency hedge arrangement with a total notional amount of €1.260 billion at a spot rate of $1.23459 to €1.00. Fees associated with this arrangement were payable upon closing of the acquisition based on a pre-defined schedule in the hedge agreement. The Company recognized a loss of $105.8 million upon settlement of the deal-contingent foreign currency hedge arrangement, of which $17.2 million had been recognized during the three months ended March 31, 2018. For material acquisitions completed during 2017 , 2016 , and 2015 , refer to Note 3 - Business Acquisitions to the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . During the nine months ended September 30, 2018 , certain measurement period adjustments were recorded to adjust provisional amounts for acquisitions completed during 2017 and 2018 . Purchase Price Allocation The table below reflects the Company's preliminary estimates of the acquisition date fair values of the purchase consideration, assets acquired, and liabilities assumed for the Interoute acquisition (amounts in millions): Interoute Purchase Price Cash paid at closing $ 2,239.3 Purchase consideration $ 2,239.3 Purchase Price Allocation Assets acquired: Cash $ 66.1 Accounts receivable 155.2 Prepaid expenses and other current assets 51.3 Property and equipment 1,435.9 Other assets 19.7 Intangible assets - customer lists 171.5 Intangible assets - tradename 2.1 Intangible assets - other 15.4 Deferred tax assets 36.9 Goodwill 980.1 Total assets acquired 2,934.2 Liabilities assumed: Accounts payable (75.5 ) Accrued expenses and other current liabilities (112.9 ) Capital leases (1) (42.3 ) Debt (27.7 ) Deferred revenue (311.3 ) Deferred tax liabilities (87.1 ) Other long-term liabilities (38.1 ) Total liabilities assumed (694.9 ) Net assets acquired $ 2,239.3 (1) Includes $38.8 million of assumed long-term building leases. The table below reflects the weighted average amortization period for intangible assets acquired in the Interoute acquisition (amounts in years): Interoute Intangible assets - customer lists 14.7 Intangible assets - tradename 1.0 Intangible assets - other 7.0 Weighted average 13.9 Amortization expense related to intangible assets created as a result of the Interoute acquisition of $4.3 million and $5.8 million has been recorded for the three and nine months ended September 30, 2018 , respectively. Estimated amortization expense related to intangible assets created as a result of the Interoute acquisition for each of the years subsequent to September 30, 2018 is as follows (amounts in millions): 2018 $ 4.4 2019 16.3 2020 15.5 2021 15.5 2022 15.5 2023 and beyond 116.0 Total $ 183.2 Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill is not expected to be deductible for tax purposes. Goodwill will not be amortized but instead will be tested for impairment at least annually and more frequently if certain indicators of impairment are present. Acquisition Method Accounting Estimates The Company initially recognizes the assets and liabilities acquired from the aforementioned acquisitions based on its preliminary estimates of their acquisition date fair values. As additional information becomes known concerning the acquired assets and assumed liabilities, management may make adjustments to the opening balance sheet of the acquired company up to the end of the measurement period, which is no longer than a one year period following the acquisition date. The determination of the fair values of the acquired assets and liabilities assumed (and the related determination of estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment. Transaction Costs Transaction costs describe the broad category of costs the Company incurs in connection with signed and/or closed acquisitions. There are two types of costs that the Company accounts for: • Severance, restructuring and other exit costs • Transaction and integration costs Severance, restructuring and other exit costs include severance and other one-time benefits for terminated employees, termination charges for leases and supplier contracts, and other costs incurred associated with an exit activity. These costs are reported separately in the condensed consolidated statements of operations during the three and nine months ended September 30, 2018 and 2017 . Refer to Note 10 - Severance, Restructuring, and Other Exit Costs of these condensed consolidated financial statements for further information. Transaction and integration costs include expenses associated with legal, accounting, regulatory, and other transition services rendered in connection with acquisition, travel expense, and other non-recurring direct expenses associated with acquisitions. Transaction and integration costs are expensed as incurred in support of the integration. The Company incurred transaction and integration costs of $10.7 million and $3.3 million during the three months ended September 30, 2018 and 2017 , respectively, and $25.1 million and $13.8 million during the nine months ended September 30, 2018 and 2017 , respectively. Transaction and integration costs have been included in selling, general and administrative expenses in the condensed consolidated statements of operations and in cash flows from operating activities in the condensed consolidated statements of cash flows. Pro forma Financial Information (Unaudited) The pro forma results presented below include the effects of the Company’s material acquisitions during 2018 and 2017 as if the acquisitions occurred on January 1, 2017 . The pro forma net loss for the three and nine months ended September 30, 2018 and 2017 includes adjustments to revenue and cost of telecommunications services to eliminate inter-company activity, adjustments to deferred revenue and deferred cost from the acquired companies, and IFRS to US GAAP adjustments for Interoute. The pro forma adjustments are based on historically reported transactions by the acquired companies. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisitions. The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of January 1, 2017 . Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (Amounts in millions, except per share and share data) Revenue $ 448.6 $ 444.7 $ 1,381.2 $ 1,301.4 Net loss $ (23.4 ) $ (9.3 ) $ (75.0 ) $ (137.3 ) Loss per share: Basic $ (0.43 ) $ (0.18 ) $ (1.52 ) $ (2.71 ) Diluted $ (0.43 ) $ (0.18 ) $ (1.52 ) $ (2.71 ) Denominator for basic EPS – weighted average shares 54,671,787 51,351,787 49,210,929 50,749,411 Denominator for diluted EPS – weighted average shares 54,671,787 51,351,787 49,210,929 50,749,411 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The goodwill balance was $1,666.8 million and $644.5 million as of September 30, 2018 and December 31, 2017 , respectively. Additionally, the Company's intangible asset balance was $564.6 million and $417.1 million as of September 30, 2018 and December 31, 2017 , respectively. The additions to both goodwill and intangible assets during the nine months ended September 30, 2018 relate primarily to the acquisition of ACI and Interoute (refer to Note 2 - Business Acquisitions). The change in the carrying amount of goodwill for the nine months ended September 30, 2018 was as follows (amounts in millions): Goodwill - December 31, 2017 $ 644.5 Initial goodwill associated with 2018 business combinations 1,107.3 Adjustments to 2018 business combinations (100.0 ) Adjustments to prior year business combinations 23.5 Foreign currency translation adjustments (8.5 ) Goodwill - September 30, 2018 $ 1,666.8 The following table summarizes the Company’s intangible assets as of September 30, 2018 and December 31, 2017 (amounts in millions): September 30, 2018 December 31, 2017 Amortization Gross Asset Cost Accumulated Amortization Net Book Value Gross Asset Cost Accumulated Amortization Net Book Value Customer lists 3-20 years $ 746.8 $ 212.7 $ 534.1 $ 552.8 $ 155.1 $ 397.7 Non-compete agreements 3-5 years 4.7 4.6 0.1 4.6 4.5 0.1 Other intangible assets 3-7 years 1.7 1.7 — 1.7 1.7 — Intellectual property 10 years 38.9 10.3 28.6 23.7 5.2 18.5 Tradename 1-3 years 6.1 4.3 1.8 3.9 3.1 0.8 $ 798.2 $ 233.6 $ 564.6 $ 586.7 $ 169.6 $ 417.1 Amortization expense was $22.9 million and $17.0 million for the three months ended September 30, 2018 and 2017 , respectively, and $64.0 million and $49.6 million for the nine months ended September 30, 2018 and 2017 , respectively. Estimated amortization expense related to intangible assets subject to amortization at September 30, 2018 in each of the years subsequent to September 30, 2018 is as follows (amounts in millions): 2018 remaining $ 22.0 2019 84.2 2020 80.4 2021 78.7 2022 65.7 2023 and beyond 233.6 Total $ 564.6 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS The following table summarizes the Company’s prepaid expenses and other current assets as of September 30, 2018 and December 31, 2017 (amounts in millions): September 30, 2018 December 31, 2017 Prepaid carrier costs $ 24.7 $ 2.1 Prepaid selling, general and administrative 14.0 10.0 Interest rate swaps 5.8 — Short term deposits 2.6 0.4 Taxes receivable 2.8 1.5 Capitalized commissions 3.2 — Other 15.7 10.1 $ 68.8 $ 24.1 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following table summarizes the Company’s accrued expenses and other current liabilities as of September 30, 2018 and December 31, 2017 (amounts in millions): September 30, 2018 December 31, 2017 Compensation and benefits $ 35.1 $ 13.3 Carrier costs 61.9 13.8 Restructuring 23.7 9.7 Interest 13.2 22.9 Fiber pair repurchase — 10.0 Accrued taxes 6.8 9.6 Interest rate swaps 6.5 — Selling, general and administrative 3.4 2.1 Other 18.1 7.6 $ 168.7 $ 89.0 |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
DEFERRED REVENUE | DEFERRED REVENUE Total deferred revenue as of September 30, 2018 and December 31, 2017 was $460.1 million and $161.7 million , respectively, consisting of unamortized prepaid capacity sales, IRUs, deferred non-recurring revenue, and unearned revenue for amounts billed in advance to customers. Deferred revenue is recognized as current and noncurrent deferred revenue on the condensed consolidated balance sheets. Significant changes in deferred revenue balances during the period are as follows (amounts in millions): Nine Months Ended September 30, 2018 Contract Term ASC 606 Revenue as a % of Greater than 1 Year (1) Less than 1 Year Greater than 1 Year Total Balance, December 31, 2017 $ 31.4 $ 130.3 $ 161.7 45.7 % Revenue recognized from beginning balance (28.8 ) (16.8 ) (45.6 ) 82.1 % Increase in deferred revenue (gross) 472.5 13.7 486.2 32.4 % Revenue recognized on increase in deferred revenue (383.3 ) (4.3 ) (387.6 ) 41.9 % Business combinations (gross) 69.0 242.3 311.3 22.1 % Revenue recognized from business combinations (57.6 ) (8.3 ) (65.9 ) 33.7 % Balance, September 30, 2018 $ 103.2 $ 356.9 $ 460.1 27.7 % (1) Refer to Footnote 1 - Organization and Business for a discussion of the required disclosures in accordance with ASC 606. The change in deferred revenue per the table above includes the non-cash impact of foreign currency translation adjustments of $1.7 million for the nine months ended September 30, 2018 . Three Months Ended September 30, 2018 Contract Term ASC 606 Revenue as a % of Greater than 1 Year (1) Less than 1 Year Greater than 1 Year Total Balance, June 30, 2018 $ 112.2 $ 357.5 $ 469.7 28.5 % Revenue recognized from beginning balance (97.4 ) (9.5 ) (106.9 ) 57.9 % Increase in deferred revenue (gross) 226.2 12.1 238.3 32.2 % Revenue recognized on increase in deferred revenue (137.8 ) (3.2 ) (141.0 ) 43.8 % Balance, September 30, 2018 $ 103.2 $ 356.9 $ 460.1 27.7 % (1) Refer to Footnote 1 - Organization and Business for a discussion of the required disclosures in accordance with ASC 606. Remaining amortization at September 30, 2018 and in each of the years subsequent to September 30, 2018 is as follows (amounts in millions): Contract Term ASC 606 Revenue as a % of Greater than 1 Year (1) Less than 1 Year Greater than 1 Year Total 2018 remaining $ 95.4 $ 14.0 $ 109.4 51.4 % 2019 7.8 56.5 64.3 50.8 % 2020 — 39.3 39.3 35.4 % 2021 — 35.0 35.0 33.7 % 2022 — 33.0 33.0 33.6 % 2023 and beyond — 179.1 179.1 14.7 % $ 103.2 $ 356.9 $ 460.1 27.7 % (1) Refer to Footnote 1 - Organization and Business for a discussion of the required disclosures in accordance with ASC 606. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of September 30, 2018 and December 31, 2017 , long-term debt was as follows (amounts in millions): September 30, 2018 December 31, 2017 US Term loan $ 1,765.6 $ 693.0 EMEA Term loan 868.2 — 7.875% Senior unsecured notes 575.0 575.0 Revolving line of credit 7.5 — Other secured loans 21.6 — Total debt obligations 3,237.9 1,268.0 Unamortized debt issuance costs (32.1 ) (33.8 ) Unamortized original issuance premium (discount), net (49.4 ) 9.3 Carrying value of debt 3,156.4 1,243.5 Less current portion (40.9 ) (7.0 ) Long-term debt less current portion $ 3,115.5 $ 1,236.5 2018 Credit Agreement On May 31, 2018, the Company entered into a credit agreement (the "2018 Credit Agreement") that provides for (1) a $1,770.0 million term loan B facility (the "US Term Loan Facility"), (2) a €750.0 million term loan B facility (the "EMEA Term Loan Facility"), and (3) a $200.0 million revolving credit facility (the "Revolving Line of Credit Facility") (which includes a $50.0 million letter of credit facility). In addition, the Company may request incremental term loan commitments and/or incremental revolving loan commitments in an aggregate amount not to exceed the sum of $575.0 million and an unlimited amount that is subject to pro forma compliance with a net secured leverage ratio test. The US Term Loan Facility was issued at an original issuance discount of $8.9 million and the EMEA Term Loan Facility was issued at an original issuance discount of €3.8 million . The maturity date of the US Term Loan Facility and the EMEA Term Loan Facility (collectively the "Term Loan Facilities") is May 31, 2025 and the maturity date of the Revolving Line of Credit Facility is May 31, 2023 . Each maturity date may be extended per the terms of the 2018 Credit Agreement. If within six months after entering into the 2018 Credit Agreement certain prepayments are made or any amendment reduces the “effective yield” applicable to all or a portion of such term loans, such prepayment or repriced portions of the term loans will be subject to a penalty equal to 1.00% of the outstanding term loans being prepaid or repriced. No such prepayments or amendments were made through September 30, 2018 . The principal amounts of the US Term Loan Facility and EMEA Term Loan Facility are payable in equal quarterly installments of $4.425 million and €1.875 million , respectively, commencing on September 30, 2018 and continuing thereafter until the maturity date when the remaining balances of outstanding principal amount is payable in full. The Company may prepay loans under the 2018 Credit Agreement at any time, subject to certain notice requirements, LIBOR breakage costs, and prepayment fees noted above. At the Company’s election, the US Term Loan Facility may be made as either Base Rate Loans or Eurocurrency Loans. The EMEA Term Loan Facility will bear interest at the European Money Markets Institute EURIBO Rate plus the applicable margin. The applicable margin for the US Term Loan Facility is 1.75% for Base Rate Loans and 2.75% for Eurocurrency Loans, subject to a “LIBOR floor” of 0.00% . The applicable margin for the EMEA Term Loan Facility is 3.25% , subject to a “EURIBOR floor” of 0.00% . The applicable margin for revolving loans under the Revolving Line of Credit Facility is 1.75% for Base Rate Loans, 2.75% for Eurocurrency Loans denominated in U.S. Dollars and certain other approved currencies other than Euros, and 3.25% for revolving loans denominated in Euros. The proceeds from the US Term Loan Facility and EMEA Term Loan Facility were used to finance the Interoute acquisition, to repay amounts outstanding under the Company's prior term loan facility, and to pay costs associated with such transactions. The unused and available amount of the Revolving Line of Credit Facility at September 30, 2018 was as follows (amounts in millions): Committed capacity $ 200.0 Borrowings outstanding (7.5 ) Letters of credit issued (13.9 ) Unused and available $ 178.6 The obligations of the Company under the 2018 Credit Agreement are secured by the substantial majority of the tangible and intangible assets of the Company. The 2018 Credit Agreement does not contain a financial covenant for the US Term Loan Facility or the EMEA Term Loan Facility, but it does include a maximum Consolidated Net Secured Leverage Ratio applicable to the Revolving Line of Credit Facility in the event that utilization exceeds 30% of the revolving loan facility commitment. If triggered, the covenant requires the Company to maintain a Consolidated Net Secured Leverage Ratio, on a Pro Forma Basis, below the maximum ratio specified as follows: Fiscal Quarter Ending Maximum Ratio September 30, 2018 6.50:1.00 December 31, 2018 6.50:1.00 March 31, 2019 6.50:1.00 June 30, 2019 6.50:1.00 September 30, 2019 6.25:1.00 December 31, 2019 6.25:1.00 March 31, 2020 6.00:1.00 June 30, 2020 6.00:1.00 September 30, 2020 5.50:1.00 December 31, 2020 5.50:1.00 March 31, 2021 5.50:1.00 June 30, 2021 5.00:1.00 September 30, 2021 5.00:1.00 December 31, 2021 4.50:1.00 March 31, 2022 4.50:1.00 June 30, 2022 and thereafter 4.25:1.00 Interest Rate Swaps During 2018, the Company entered into the following interest rate swap arrangements to partially mitigate the variability of cash flows due to changes in the Eurodollar rate, specifically related to interest payments on our term loans under the 2018 Credit Agreement: Trade date April 6, 2018 May 17, 2018 May 17, 2018 May 17, 2018 Notional amount (in millions) $ 500.0 $ 200.0 $ 300.0 € 317.0 Term (years) 5 7 3 7 Effective date 4/30/2018 6/29/2018 6/29/2018 6/29/2018 Termination date 4/30/2023 5/31/2025 6/30/2021 5/31/2025 Fixed rate 2.6430 % 3.0370 % 2.8235 % 0.8900 % Floating rate 1-month LIBOR 1-month LIBOR 1-month LIBOR 1-month EURIBOR The interest rate swaps do not qualify for hedge accounting. The fair value of the interest rate swaps at September 30, 2018 was as follows (in millions): Fair Value September 30, 2018 Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date Asset Derivatives Liability Derivatives Interest rate swap $ 500.0 4/30/2018 4/30/2023 $ 5.5 $ — Interest rate swap $ 200.0 6/29/2018 5/31/2025 — (1.5 ) Interest rate swap $ 300.0 6/29/2018 6/30/2021 0.3 — Interest rate swap € 317.0 6/29/2018 5/31/2025 — (5.0 ) $ 5.8 $ (6.5 ) The Company records the fair value of interest rate swaps in its consolidated balance sheets within prepaid expenses and other current assets when in an asset position and within accrued expenses and other current liabilities when in a liability position. During the three and nine months ended September 30, 2018 , the Company recognized a gain of $8.6 million and a loss of $0.7 million in other expense, net due to the change in fair value of its interest rate swaps. 7.875% Senior Unsecured Notes During 2016 and 2017, the Company completed three private offerings for $575.0 million aggregate principal amount of its 7.875% senior unsecured notes due in 2024 (collectively the “ 7.875% Senior Unsecured Notes”). Each offering was treated as a single series of debt securities. The 7.875% Senior Unsecured Notes have identical terms other than the issuance date and offering price. The 7.875% Senior Unsecured Notes were issued at a combined premium of $16.5 million . In connection with the offerings, the Company incurred debt issuance costs of $17.3 million , of which $0.5 million was incurred in 2016 and the remainder was incurred in 2017. Other Secured Loans In connection with the Interoute acquisition in May 2018 the Company acquired other loans related to loans secured by certain network assets. The balance of other secured loans at September 30, 2018 was $21.6 million . Effective Interest Rate The effective interest rate on the long-term debt at September 30, 2018 and December 31, 2017 was 5.3% and 4.5% , respe ctively. The effective interest rate at September 30, 2018 considers the impact of the interest rate swaps. Long-term Debt Contractual Maturities The aggregate contractual maturities of long-term debt (excluding unamortized debt issuance costs and unamortized original issuance discounts and premiums) were as follows as of September 30, 2018 (amounts in millions): Total debt 2018 remaining $ 10.4 2019 39.3 2020 30.9 2021 26.8 2022 26.4 2023 and beyond 3,104.1 $ 3,237.9 Debt Issuance Costs and Original Issuance Discounts and Premiums The following table summarizes the debt issuance costs activity for the nine months ended September 30, 2018 (amounts in millions): US Term Loan EMEA Term Loan 7.875% Senior Unsecured Notes Revolving Line of Credit Total Balance, December 31, 2017 $ (14.7 ) $ — $ (16.1 ) $ (3.0 ) $ (33.8 ) Debt issuance costs incurred (4.7 ) (2.9 ) — (0.6 ) (8.2 ) Amortization 1.5 0.1 1.4 0.4 3.4 Loss on debt extinguishment 6.1 — — 0.4 6.5 Balance, September 30, 2018 $ (11.8 ) $ (2.8 ) $ (14.7 ) $ (2.8 ) $ (32.1 ) Debt issuance costs are presented in the condensed consolidated balance sheets as a reduction to "Long-term debt." Interest expense associated with the amortization of debt issuance costs was $1.1 million and $1.0 million for the three months ended September 30, 2018 and 2017 , respectively, and $3.4 million and $2.6 million for the nine months ended September 30, 2018 and 2017 , respectively. The following table summarizes the original issuance (discount) and premium activity for the nine months ended September 30, 2018 (amounts in millions): US Term Loan EMEA Term Loan 7.875% Senior Unsecured Notes Total Balance, December 31, 2017 $ (6.5 ) $ — $ 15.8 $ 9.3 New Original Issuance Discount (8.9 ) (4.4 ) — (13.3 ) Fees paid to lenders (35.2 ) (19.4 ) — (54.6 ) Amortization 2.2 1.1 (1.4 ) 1.9 Loss on debt extinguishment 7.3 — — 7.3 Balance, September 30, 2018 $ (41.1 ) $ (22.7 ) $ 14.4 $ (49.4 ) Original issuance discounts and premiums are presented in the condensed consolidated balance sheets as a reduction to "Long-term debt." Amortization of original issuance discounts and premiums was $1.7 million and netted to zero for the three months ended September 30, 2018 and 2017 , respectively, and $1.9 million and $0.5 million for the nine months ended September 30, 2018 and 2017 , respectively and is included in Interest expense, net. Previous Debt Agreement - 2017 Credit Agreement On January 9, 2017, the Company entered into a credit agreement (the "2017 Credit Agreement") that provided a $700.0 million term loan facility and a $75.0 million revolving line of credit facility (which included a $25.0 million letter of credit facility). Amounts outstanding under the 2017 Credit Agreement were paid in full at the closing of the 2018 Credit Agreement. The previous term loan facility was issued at an original issuance discount of $3.5 million . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-Based Compensation Plan The Company grants share-based equity awards, including stock options and restricted stock, under the GTT Stock Plan. The GTT Stock Plan is limited to an aggregate 14,250,000 shares of which 9,398,923 have been issued and are outstanding as of September 30, 2018 . The GTT Stock Plan permits the granting of time-based stock options, time-based restricted stock, and performance-based restricted stock to employees and consultants of the Company, and non-employee directors of the Company. Time-based options granted under the GTT Stock Plan have an exercise price of at least 100% of the fair market value of the underlying stock on the grant date and expire no later than 10 years from the grant date. The Company uses the Black-Scholes option-pricing model to determine the fair value of its stock option awards at the time of grant. The stock options generally vest over four years with 25% of the options becoming exercisable one year from the date of grant and the remaining vesting annually or quarterly over the following three years. Time-based restricted stock granted under the GTT Stock Plan is valued at the share price of our common stock as reported on the NYSE on the date of grant. Time-based restricted stock generally vests over four years with 25% of the shares becoming unrestricted one year from the date of grant and the remaining vesting annually or quarterly over the following three years . Performance-based restricted stock is granted under the GTT Stock Plan subject to the achievement of certain performance measures. Once achievement of these performance measures is considered probable, the Company starts to expense the fair value of the grant over the vesting period. The performance-based restricted stock is valued at the share price of our common stock as reported on the NYSE on the date of grant. The performance grant vests quarterly over the vesting period once achievement of the performance measure has been met and approved by the Compensation Committee, typically one to two years. The Compensation Committee of the Board of Directors, as administrator of the GTT Stock Plan, has the discretion to authorize a different vesting schedule for any awards. Share-Based Compensation Expense The following tables summarize the share-based compensation expense recognized as a component of selling, general and administrative expense in the condensed consolidated statements of operations (amounts in millions): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options $ 0.2 $ 0.4 $ 0.9 $ 1.1 Restricted stock 8.9 5.7 22.8 14.8 ESPP 0.1 — 0.2 0.1 Total $ 9.2 $ 6.1 $ 23.9 $ 16.0 As of September 30, 2018 , there was $73.5 million of total unrecognized compensation cost related to unvested share-based compensation awards. The following table summarizes the unrecognized compensation cost and the weighted average period over which the cost is expected to be amortized (amounts in millions): September 30, 2018 Unrecognized Compensation Cost Weighted Average Remaining Period to be Recognized (Years) Time-based stock options $ 0.8 1.01 Time-based restricted stock 56.7 2.30 Performance-based restricted stock (1) 16.0 1.48 Total $ 73.5 2.11 (1) Excludes $16.3 million of unrecognized compensation cost related to 2017 Performance Awards where achievement of the performance criteria was not probable as of September 30, 2018 . The following table summarizes the restricted stock granted during the three and nine months ended September 30, 2018 and 2017 , respectively (amounts in millions, except shares data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Time-based restricted stock granted 196,468 238,088 815,019 929,896 Fair value of time-based restricted stock granted $ 8.8 $ 7.6 $ 38.4 $ 27.5 Performance-based restricted stock granted — 20,000 8,000 20,000 Fair value of performance-based restricted stock granted $ — $ 0.5 $ 0.4 $ 0.5 No stock options were issued in any period presented. Performance-based Restricted Stock The Company granted $8.5 million of restricted stock during 2014 and early 2015 contingent upon the achievement of certain performance criteria (the "2014 Performance Awards"). The fair value of the 2014 Performance Awards was calculated using the value of GTT common stock on date of grant. The Company started recognizing share-based compensation expense for these grants when the achievement of the performance criteria became probable, which was in the third quarter of 2015. The 2014 Performance Awards started vesting in the fourth quarter of 2015 when the performance criteria were met and they continued to vest ratably through the third quarter of 2017. As of September 30, 2018 , the 2014 Performance Awards were fully vested. The Company granted $17.4 million of restricted stock during 2015 and 2017 contingent upon the achievement of certain performance criteria (the "2015 Performance Awards"). The fair value of the 2015 Performance Awards was calculated using the value of GTT common stock on the respective grant dates. Upon announcement of the Hibernia acquisition in November 2016, the achievement of two of the four performance criteria became probable and the Company started recognizing share-based compensation expense for these grants. Expense recognition will continue through the first quarter of 2019. Additionally, upon announcement of the Global Capacity acquisition in June 2017, the achievement of the final two performance criteria became probable and the Company started recognizing share-based compensation expense for these grants. Expense recognition will continue through the fourth quarter of 2019. The Company recognized share-based compensation expense related to the 2015 Performance Awards of $1.9 million and $1.5 million for the three months ended September 30, 2018 and 2017 , respectively, and $5.9 million and $4.2 million for the nine months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 , unrecognized compensation cost related to the unvested 2015 Performance Awards was $3.4 million . The Company granted $32.6 million of restricted stock during 2017 and 2018 contingent upon the achievement of certain performance criteria (the "2017 Performance Awards"). The fair value of the 2017 Performance Awards was calculated using the value of GTT common stock on the grant date. Upon the closing of the Interoute acquisition in May 2018, the achievement of two of the four performance criteria became probable and the Company started recognizing share-based compensation expense for these grants. Expense recognition is expected to continue through the second quarter of 2020. The Company recognized share-based compensation expense related to the 2017 Performance Awards of $1.8 million and $3.6 million for the three and nine months ended September 30, 2018 , respectively. No share-based compensation expense was recognized related to the 2017 Performance Awards during the 2017 period. As of September 30, 2018 , unrecognized compensation cost related to the unvested 2017 Performance Awards was $28.9 million , inclusive of unrecognized compensation cost where achievement of the performance criteria was not probable as of September 30, 2018 . Employee Stock Purchase Plan The Company has an Employee Stock Purchase Plan ("ESPP") that permits eligible employees to purchase common stock through payroll deductions at the lesser of the opening stock price or 85% of the closing stock price of the common stock during each of the three-month offering periods. The Company expenses the discount offered as additional share-based compensation expense. The offering periods generally commence on the first day and the last day of each quarter. At September 30, 2018 , 410,378 shares were available for issuance under the ESPP. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s provision for income taxes is determined using an estimate of its annual effective tax rate, adjusted for the effect of discrete items arising in the quarter. Each quarter the Company updates its estimate of the annual effective tax rate. The quarterly tax provision and the quarterly estimate of the Company's annual effective tax rate is subject to significant variation due to several factors, including variability in accurately predicting pre-tax and taxable income (loss) and the mix of jurisdictions to which they relate, effects of acquisitions and integrations, audit-related developments, changes in the Company's stock price, foreign currency gains (losses), and tax law developments. Additionally, the Company's effective tax rate may be more or less volatile based on the amount of pre-tax income or loss and impact of discrete items. The Company recorded a tax benefit of $1.6 million and $8.7 million for the three months ended September 30, 2018 and 2017 , respectively, and $1.1 million and $22.7 million for the nine months ended September 30, 2018 and 2017 , respectively. The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the Company's existing deferred tax assets. A significant piece of objective negative evidence identified during the Company's evaluation was the cumulative loss incurred over the three-year period ended December 31, 2017. Such objective evidence limits the ability to consider other subjective evidence, such as the Company's forecasts of future taxable income and tax planning strategies. On the basis of this evaluation, as of September 30, 2018 and December 31, 2017 , a valuation allowance of $134.6 million and $39.2 million , respectively, has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. During the three months ended September 30, 2018, the Company recorded a measurement period adjustment of $158.8 million related to the recognized portion of deferred tax assets for Interoute. The amount of the deferred tax asset considered realizable, however, could be adjusted if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as forecasted taxable income. The Tax Act was enacted in December 2017. The Tax Act significantly changed U.S. tax law by, among other things, lowering U.S. corporate income tax rates, implementing a territorial tax system, and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. In accordance with SAB No. 118, the Company recorded the provisional income tax effects of the Tax Act as of December 31, 2017 . The Company is still in the process of analyzing the impact of the various provisions of the Tax Act. The ultimate impact may differ from the provisional income tax effect due to, among other things, additional analyses, changes in interpretations and assumptions made, additional regulatory guidance from various federal and state tax jurisdictions that may be issued, and actions the Company may take as a result of the Tax Act. The Company expects to complete its analysis within the one year measurement period in accordance with SAB No. 118. As of September 30, 2018 , the Company has not recorded any adjustments to provisional recordings from 2017. While the Tax Act provides for a modified territorial tax system, beginning in 2018, global intangible low-taxed income ("GILTI") provisions will be applied providing an incremental tax on low taxed foreign income. The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. Under U.S. GAAP, the Company is required to make an accounting policy election to either (1) treat taxes due related to GILTI as a current-period expense when incurred (the "period cost method") or (2) factor such amounts into our measurement of our deferred taxes (the "deferred method"). During the first quarter 2018, the Company made an accounting policy election to treat the impact of GILTI as a period cost, however the impact is offset by a full valuation allowance in the U.S. |
SEVERANCE, RESTRUCTURING AND OT
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS | SEVERANCE, RESTRUCTURING, AND OTHER EXIT COSTS The Company incurred severance, restructuring and other exit costs associated with 2017 and 2018 acquisitions. These costs include employee severance costs, termination costs associated with facility leases and network agreements, and other exit costs related to the transactions. The total exit costs recorded and paid relating to the acquisitions mentioned above are summarized as follows for the three months ended September 30, 2018 (amounts in millions): Balance, June 30, 2018 Charges Payments Foreign Currency Translation Adjustments Balance, September 30, 2018 Employee Termination Benefits $ 9.1 $ 9.8 $ (7.6 ) $ (0.2 ) $ 11.1 Lease terminations 9.3 0.6 (1.1 ) — 8.8 Other contract terminations 0.7 5.1 (2.0 ) — 3.8 $ 19.1 $ 15.5 $ (10.7 ) $ (0.2 ) $ 23.7 During the three months ended September 30, 2017 the Company incurred severance, restructuring and other exit costs of $11.1 million and made payments of $2.8 million relating to acquisitions. The total exit costs recorded and paid relating to the acquisitions mentioned above are summarized as follows for the nine months ended September 30, 2018 (amounts in millions): Balance, December 31, 2017 Charges Acquired Costs Payments Foreign Currency Translation Adjustments Balance, Employee Termination Benefits $ 5.5 $ 15.9 $ 6.0 $ (16.1 ) $ (0.2 ) $ 11.1 Lease terminations 2.4 1.0 7.8 (2.4 ) — 8.8 Other contract terminations 1.8 5.8 — (3.8 ) — 3.8 $ 9.7 $ 22.7 $ 13.8 $ (22.3 ) $ (0.2 ) $ 23.7 During the nine months ended September 30, 2017 the Company incurred severance, restructuring and other exit costs of $21.8 million and made payments of $9.4 million relating to acquisitions. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Estimated annual commitments under contractual obligations are as follows at September 30, 2018 (amounts in millions): Network Supply Office Space Capital Leases Other 2018 remaining $ 99.5 $ 6.1 $ 1.4 $ 18.0 2019 346.0 20.8 4.4 4.9 2020 242.1 17.8 5.2 2.6 2021 130.6 14.8 4.2 1.4 2022 39.6 10.2 3.1 — 2023 and beyond 182.8 29.1 24.7 — $ 1,040.6 $ 98.8 $ 43.0 $ 26.9 Refer to Note 7 - Debt for the aggregate contractual maturities of long-term debt (excluding unamortized debt issuance costs and unamortized original issuance discounts and premiums) at September 30, 2018 . Network Supply Agreements As of September 30, 2018 , the Company had purchase obligations of $1,040.6 million associated with the telecommunications services that the Company has contracted to purchase from its suppliers. The Company’s supplier agreements fall into two key categories, the Company's core network backbone and customer specific locations (also referred to as 'last mile' locations). Supplier agreements associated with the Company's core network backbone are typically contracted on a one -year term and do not relate to any specific underlying customer commitments. The short-term duration allows the Company to take advantage of favorable pricing trends. Supplier agreements associated with the Company's customer specific locations are contracted with vendors as either a lit service or as dark fiber. The combination of both types of services represent the substantial majority of the Company's network spending. Lit services represent bandwidth services where the customer pays for the amount and type of bandwidth. Lit services are typically contracted so the terms and conditions in both the vendor and customer contracts are substantially the same in terms of duration and capacity. The back-to-back nature of the Company’s contracts means that its network supplier obligations for lit services are generally mirrored by its customers' commitments to purchase the services associated with those obligations. Dark fiber represents dedicated bandwidth where the customer will "light" the fiber using their own optical equipment. The Company combines its owned dark fiber network with contracted dark fiber to meet its customers requirements. Contracted dark fibers is procured on terms and conditions that are similar to that of the customer, however depending on the location and route of the services, the contracted term may be substantially longer than the customer contract. Office Space and Leases The Company is currently headquartered in McLean, Virginia and has 35 other offices throughout North America, 40 offices in Europe, five offices in Asia, two offices in the Middle East, and one office in South America. The Company records rent expense using the straight-line method over the term of the respective lease agreement. Office facility rent expense was $4.6 million and $1.1 million for the three months ended September 30, 2018 and 2017 , respectively, and $10.4 million and $3.2 million for the nine months ended September 30, 2018 and 2017 , respectively. Legal Proceedings From time to time, the Company is a party to legal proceedings arising in the normal course of its business. As of September 30, 2018 , the Company does not believe that it is a party to any current or pending legal action that could reasonably be expected to have a material adverse effect on its financial condition or results of operations and cash flows. |
ORGANIZATION AND BUSINESS (Poli
ORGANIZATION AND BUSINESS (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the Company’s audited financial statements and footnotes thereto for the fiscal year ended December 31, 2017 , included in the Company’s Annual Report on Form 10-K filed on March 1, 2018. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been omitted pursuant to such rules and regulations. The condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position and its results of operations. The operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full fiscal year 2018 or for any other interim period. The December 31, 2017 consolidated balance sheet is condensed from the audited financial statements as of that date. |
Reclassification Within Condensed Consolidated Statement of Cash Flows | Reclassification Within Condensed Consolidated Statement of Cash Flows Certain prior period amounts in the condensed consolidated statement of cash flows have been reclassified to conform with the current period presentation to reflect the total change in deferred revenue into a single line item as well as changes in operating assets and liabilities to more closely align with the related balance sheet caption. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates are used when establishing allowances for doubtful accounts and accruals for billing disputes, determining useful lives for depreciation and amortization, estimating accruals for exit activities, assessing the need for impairment charges (including those related to intangible assets and goodwill), determining the fair values of assets acquired and liabilities assumed in business combinations, accounting for income taxes and related valuation allowances against deferred tax assets, and estimating the grant date fair values used to compute the share-based compensation expense. Management evaluates these estimates and judgments on an ongoing basis and makes estimates based on historical experience, current conditions, and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions. |
Segment Reporting | Segment Reporting The Company reports operating results and financial data in one operating and reporting segment. The Company's Chief Executive Officer is the chief operating decision maker and manages the Company as a single profit center in order to promote collaboration, provide comprehensive service offerings across its entire customer base, and provide incentives to employees based on the success of the organization as a whole. Although certain information regarding selected products or services and acquired companies are discussed for purposes of promoting an understanding of the Company's complex business, the chief operating decision maker manages the Company and allocates resources at the consolidated level. Additionally, integration efforts related to Interoute are currently underway, but have not currently changed the manner in which the chief operating decision maker has managed the consolidated business. These integration efforts are designed to establish scale and align Interoute's network assets and product offerings within the existing business. |
Revenue Recognition | Revenue Recognition The Company's revenue is derived primarily from telecommunications services. Revenues are recognized when control of these services is transferred to the customer, in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company delivers seven primary services to its customers — SD-WAN; wide area networking; managed services; internet; voice; infrastructure services; and video transport. The Company's services are provided under contracts that typically include an installation or provisioning charge along with payments of recurring charges on a monthly basis for use of the services over a committed term. Its contracts with customers specify the terms and conditions for providing such services, including installation date, recurring and non-recurring fees, payment terms, and length of term. These contracts call for the Company to provide the service in question (e.g., data transmission between point A and point Z), to manage the activation process, and to provide ongoing support (in the form of service maintenance and trouble-shooting) during the service term. The contracts do not typically provide the customer any rights to use specifically identifiable assets. Furthermore, the contracts generally provide the Company with discretion to engineer (or re-engineer) a particular network solution to satisfy each customer’s data transmission requirement, and typically prohibit physical access by the customer to the network infrastructure used by the Company and its suppliers to deliver the services. Fees charged for ongoing services are generally fixed in price and billed on a recurring monthly basis (one month in advance) for a specified term. Fees may also be based on specific usage of the related services, or usage above a fixed threshold, which are billed monthly in arrears. The usage based fees represent variable consideration as defined by Accounting Standards Codification ("ASC") 606, however, the nature of the fees are such that the Company is not able to estimate these amounts with a high degree of certainty and therefore the usage based fees are excluded from the transaction price and are instead recognized as revenue based on actual usage charges billed using the rates and/or thresholds specified in each contract. At the end of the term, most contracts provide for a continuation of services on the same terms, either for a specified renewal period (e.g., one year) or on a month-to-month basis. Revenue is generally recognized over time for these contracts as the customers simultaneously receive and consume the benefit of the service as the Company performs. Fees may also be billed for early terminations based on contractually stated amounts. The early termination fees represent variable consideration as defined by ASC 606. The Company estimates the amount of variable consideration it expects to be entitled to receive for such arrangements using the expected value method. Primary geographical market. The Company’s operations are located primarily in the United States and Europe. The nature and timing of revenue from contracts with customers across geographic markets is similar. The following table presents the Company's revenues disaggregated by primary geographic market based on legal entities (in millions, unaudited): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Primary geographic market US $ 192.7 $ 577.6 UK 92.0 165.9 Ireland 20.6 75.9 Other 117.4 181.4 Total revenue from contracts with customers 422.7 1,000.8 Lease revenue 25.9 35.2 Total telecommunications services revenue $ 448.6 $ 1,036.0 Contracts with multiple performance obligations. The majority of the Company’s contracts with customers have a single performance obligation - telecommunication services. The related installation services are generally considered not material within the context of the contract and in accordance with the guidance of ASC 606 the Company does not recognize these immaterial promised services as a separate performance obligation. Certain contracts with customers may include multiple performance obligations, specifically when the Company sells its connectivity services in addition to customer premise equipment ("CPE"). For such arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. The standalone selling price for each performance obligation is based on observable prices charged to customers in similar transactions or using expected cost plus margin. The Company applies the practical expedient in paragraph ASC 606-10-32-18 and does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Prepaid Capacity Sales and Indefeasible Right to Us e. The Company sells capacity on a long-term basis, where a certain portion of the contracted revenue is prepaid upon acceptance of the service by the customer. This prepaid amount is initially recorded as deferred revenue and amortized ratably over the term of the contract. Certain of these prepaid capacity sales are in the form of Indefeasible Rights to Use ("IRUs"), where the customer has the right to use the capacity of the fiber optic cable for a specified term. The Company records revenues from these prepaid leases of fiber optic cable IRUs over the term that the customer is given exclusive access to the assets. Universal Service Fund (USF), Gross Receipts Taxes and Other Surcharges. The Company is liable in certain cases for collecting regulatory fees and/or certain sales taxes from its customers and remitting the fees and taxes to the applicable governing authorities. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Conversely, USF contributions are assessed to the Company by and paid to the Universal Service Administration Company ("USAC") and are based on the Company’s interstate and inter-nation end-user revenues. The Company may assess its customers a separate fee to recoup its USF expense. These fees are included in telecommunications services revenue and costs of telecommunications services. USF fees and other surcharges billed to customers and recorded on a gross basis (as service telecommunications services revenue and cost of telecommunications services) were $5.3 million and $3.7 million for the three months ended September 30, 2018 and 2017 , respectively, and $17.5 million and $11.2 million for the nine months ended September 30, 2018 and 2017 , respectively. Contract balances. Accounts receivable represent amounts billed to customers where the Company has an enforceable right to payment for performance completed to date. Contract liabilities are generally limited to deferred revenue. Deferred revenue is a contract liability, representing advance consideration received from customers primarily related to the pre-paid capacity sales noted above, where transfer of control occurs over time, and therefore revenue is recognized over the related contractual service period. In accordance with ASC 606, the Company is required to disclose its accounts receivable balances, contract assets, and contract liabilities related to revenue from contracts with customers, which excludes lease revenue, at September 30, 2018 . The Company’s accounts receivable balance at September 30, 2018 includes $225.2 million in amounts billed for contracts with customers. There were no contract assets as of January 1, 2018 or September 30, 2018 . Refer to Note 6 - Deferred Revenue for significant changes in the contract liabilities balances during the period as well as the estimated revenue expected to be recognized for each of the years subsequent to September 30, 2018 related to performance obligations that are unsatisfied (or partially unsatisfied) at September 30, 2018 . The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Contract Costs The Company capitalizes sales commissions earned by its sales force when they are considered to be incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit which is determined by taking into consideration our customer contacts, technology and other factors. Amortization of sales commissions expense is included in selling, general and administrative expenses. There were no significant amounts of assets recorded related to contract costs as of September 30, 2018 . Cost of Telecommunications Services Cost of telecommunications services includes direct costs incurred in accessing other telecommunications providers’ networks in order to maintain the Company's global Tier 1 IP network and provide telecommunication services to the Company's customers, including access, co-location, usage-based charges, and certain excise taxes and surcharges recorded on a gross basis. |
Share-Based Compensation | Share-Based Compensation The Company issues three types of equity grants under its share-based compensation plan: time-based restricted stock, time-based stock options, and performance-based restricted stock. The time-based restricted stock and stock options generally vest over a four -year period, contingent upon meeting the requisite service period requirement. Performance awards typically vest over a shorter period, e.g. one to two years, starting when the performance criteria established in the grant have been met. The share price of the Company's common stock as reported on the New York Stock Exchange ("NYSE") on the date of grant is used as the fair value for all restricted stock. The Company uses the Black-Scholes option-pricing model to determine the estimated fair value for stock options. Critical inputs into the Black-Scholes option-pricing model include the following: option exercise price; fair value of the stock; expected life of the option; annualized volatility of the stock; annual rate of quarterly dividends on the stock; and risk-free interest rate. Implied volatility is calculated as of each grant date based on our historical stock price volatility along with an assessment of a peer group. Other than the expected life of the option, volatility is the most sensitive input to our option grants. The risk-free interest rate used in the Black-Scholes option-pricing model is determined by referencing the U.S. Treasury yield curve rates with the remaining term equal to the expected life assumed at the date of grant. Forfeitures are estimated based on our historical analysis of attrition levels. Forfeiture estimates are updated quarterly for actual forfeitures. The share-based compensation expense for time-based restricted stock and stock options is recognized on a straight-line basis over the vesting period. The Company begins recognizing share-based compensation expense for performance awards when the Company considers the achievement of the performance criteria to be probable through the expected vesting period. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method pursuant to GAAP. Under this method, deferred tax assets and liabilities are recognized for the expected future impacts attributable to the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the change. Further, deferred tax assets are recognized for the expected realization of available net operating loss and tax credit carryforwards. A valuation allowance is recorded on gross deferred tax assets when it is "more likely than not" that such asset will not be realized. When evaluating the realizability of deferred tax assets, all evidence, both positive and negative, is evaluated. Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future earnings. The Company reviews its deferred tax assets on a quarterly basis to determine if a valuation allowance is required based upon these factors. Changes in the Company's assessment of the need for a valuation allowance could give rise to a change in such allowance, potentially resulting in additional expense or benefit in the period of change. The Company's income tax provision includes U.S. federal, state, local, and foreign income taxes and is based on pre-tax income or loss. In determining the annual effective income tax rate, the Company analyzes various factors, including its annual earnings and taxing jurisdictions in which the earnings were generated, transfer pricing methods, the impact of state and local income taxes, and its ability to use tax credits and net operating loss carryforwards. Under GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is "more likely than not" to be sustained upon examination. The Company analyzes its tax filing positions in all of the U.S. federal, state, local, and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is established in the consolidated financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax positions in the provision for income taxes. |
Comprehensive Loss | Comprehensive Loss In addition to net loss, comprehensive loss includes certain charges or credits to equity occurring other than as a result of transactions with stockholders. For the Company, this consists of foreign currency translation adjustments. |
Loss Per Share | Loss Per Share Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per share reflects, in periods with earnings and in which they have a dilutive effect, the effect of common shares issuable upon exercise of stock options. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents may include deposits with financial institutions as well as short-term money market instruments, certificates of deposit and debt instruments with maturities of three months or less when purchased. The Company invests its cash and cash equivalents and short-term investments in accordance with the terms and conditions of its 2018 Credit Agreement, which seeks to ensure both liquidity and safety of principal. The Company’s policy limits investments to instruments issued by the U.S. government and commercial institutions with strong investment grade credit ratings, and places restrictions on the length of maturity. As of September 30, 2018 , the Company held no investments in auction rate securities, collateralized debt obligations, structured investment vehicles, or non-government guaranteed mortgage-backed securities. |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents Cash and cash equivalents that are contractually restricted from operating use are classified as restricted cash and cash equivalents. In December 2016, the Company completed a private offering of $300.0 million aggregate principal amount of 7.875% senior unsecured notes due in 2024. The proceeds of the private offering plus 60 days of prepaid interest, were deposited into escrow, where the funds remained until the closing of the acquisition of Hibernia Networks ("Hibernia") that occurred in January 2017. The proceeds were released from escrow at closing to fund the Hibernia acquisition. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable balances are stated at amounts due from the customer net of an allowance for doubtful accounts. Credit extended is based on an evaluation of the customer’s financial condition and is granted to qualified customers on an unsecured basis. The Company, pursuant to its standard service contracts, is typically entitled to impose a monthly finance charge of a certain percentage per month with respect to amounts that are past due. The Company’s standard terms require payment within 30 days of the date of the invoice. The Company treats invoices as past due when they remain unpaid, in whole or in part, beyond the payment date set forth in the applicable service contract. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade receivables are past due, the customer’s payment history and current ability to pay its obligation to the Company, and the condition of the general economy. Specific reserves are also established on a case-by-case basis by management. Credit losses have historically been within management's estimates. Actual bad debts, when determined, reduce the allowance, the adequacy of which management then reassesses. The Company writes off accounts after a determination by management that the amounts are no longer likely to be collected, following the exercise of reasonable collection efforts, and upon management's determination that the costs of pursuing collection outweigh the likelihood of recovery. The allowance for doubtful accounts was $4.2 million and $5.1 million as of September 30, 2018 and December 31, 2017 , respectively. |
Deferred Costs, Debt Issuance Costs and Original Issue Discount | Debt Issuance Costs Debt issuance costs represent costs that qualify for deferral associated with the issuance of new debt or the modification of existing debt facilities. The unamortized balance of debt issuance costs is presented as a reduction to the carrying value of long-term debt. Debt issuance costs are amortized and recognized on the condensed consolidated statements of operations as interest expense. The unamortized debt issuance costs were $32.1 million and $33.8 million as of September 30, 2018 and December 31, 2017 , respectively. Original Issuance Discounts and Premiums Original issuance discounts and premiums is the difference between the face value of debt and the amount of principal received when the debt was originated. When the debt reaches maturity, the face value of the debt is payable. The Company recognizes original issuance discounts and premiums by accretion of the discount or premium as interest expense, net over the term of the debt. The unamortized portion of the original issuance discounts and premiums was a $49.4 million net discount and a $9.3 million net premium as of September 30, 2018 and December 31, 2017 , respectively. Deferred Costs Installation costs related to provisioning of recurring communications services that the Company incurs from independent third party suppliers, directly attributable and necessary to fulfill a particular service contract, and which would not have been incurred but for the occurrence of that service contract, are recorded as deferred costs and expensed ratably over the contractual term of service in the same manner as the deferred revenue arising from that contract. Based on historical experience, the Company believes the initial contractual term is the best estimate for the period of earnings. If any installation costs exceed the amount of corresponding deferred revenue, the excess cost is recognized in the current period. |
Property and Equipment | The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the carrying amount of an asset were to exceed its estimated future undiscounted cash flows, the asset would be considered to be impaired. Impairment losses would then be measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of, if any, are reported at the lower of the carrying amount or fair value less costs to sell. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation on these assets is computed on a straight-line basis over the estimated useful lives of the assets. Assets are recorded at acquired cost. Costs associated with the initial customer installations and upgrade of services and acquiring and deploying customer premise equipment, including materials, internal labor costs, and related indirect labor costs are also capitalized. Indirect and overhead costs include payroll taxes, insurance, and other benefits. Capitalized labor costs include the direct costs of engineers and service delivery technicians involved in the installation and upgrades of services, and the costs of support personnel directly involved in capitalizable activities, such as project managers and supervisors. Internal labor costs are based on standards developed by position for the percentage of time spent on capitalizable projects while overhead costs are capitalized based on standards developed from historical information. Costs for repairs and maintenance, disconnecting service, or reconnecting service are expensed as incurred. The Company capitalized labor costs, including indirect and overhead costs, of $3.0 million and $1.4 million for the three months ended September 30, 2018 and 2017 , respectively, and $9.2 million and $4.1 million for the nine months ended September 30, 2018 and 2017 , respectively. Assets and liabilities under capital leases are recorded at the lesser of the present value of the aggregate future minimum lease payments or the fair value of the assets under lease. Leasehold improvements and assets under capital leases are amortized over the shorter of the term of the lease, excluding optional extensions, or the useful life. Expenditures for maintenance and repairs are expensed as incurred. |
Software Capitalization | Software Capitalization Software development costs include costs to develop software programs to be used solely to meet the Company's internal needs. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they allow the software to perform a function it previously did not perform. Software maintenance, data conversion and training costs are expensed in the period in which they are incurred. The Company capitalized software costs of $1.4 million and $0.4 million for the three months ended September 30, 2018 and 2017 , respectively, and $3.6 million and $1.2 million for the nine months ended September 30, 2018 and 2017 , respectively. |
Goodwill | Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is reviewed for impairment at least annually, in October, or more frequently if a triggering event occurs between impairment testing dates. |
Intangible Assets | Intangible assets arising from business combinations, such as acquired customer contracts and relationships, (collectively "customer relationships"), trade names, and/or intellectual property, are initially recorded at fair value. The Company amortizes these intangible assets over the determined useful life which generally ranges from three to ten years. The Company reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. |
Business Combinations and Asset Purchases | Business Combinations The Company includes the results of operations of the businesses that it acquires commencing on the respective dates of acquisition. The Company allocates the fair value of the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. Asset Purchases Periodically the Company acquires customer contracts that it accounts for as an asset purchase and records a corresponding intangible asset that is amortized over its estimated useful life. No goodwill is recorded in an asset purchase. |
Accrued Supplier Expenses | Accrued Supplier Expenses The Company accrues estimated charges owed to its suppliers for services. The Company bases this accrual on the supplier contract, the individual service order executed with the supplier for that service, and the length of time the service has been active. |
Disputed Supplier Expenses | Disputed Supplier Expenses In the normal course of business, the Company identifies errors by suppliers with respect to the billing of services. The Company performs bill verification procedures to ensure that errors in the Company's suppliers' billed invoices are identified and resolved. If the Company concludes that a vendor has billed inaccurately, the Company will record a liability only for the amount that it believes is owed. |
Acquisition Holdbacks | Acquisition Holdbacks Acquisition holdbacks represent fixed deferred consideration to be paid out at some point in the future, typically on the one-year anniversary of an acquisition or asset purchase. The portion of the deferred consideration due within one year is recorded as a current liability until paid, and any consideration due beyond one year is recorded in other long-term liabilities. |
Translation of Foreign Currencies | Translation of Foreign Currencies For non-U.S. subsidiaries, the functional currency is evaluated at the time of the Company's acquisition of such subsidiaries and on a periodic basis for financial reporting purposes. These condensed consolidated financial statements have been reported in U.S. Dollars by translating asset and liability amounts of foreign subsidiaries at the closing currency exchange rate, equity amounts at historical rates, and the results of operations and cash flow at the average currency exchange rate prevailing during the periods reported. The net effect of such translation gains and losses are reflected in accumulated other comprehensive loss in the stockholders' equity section of the condensed consolidated balance sheets. Transactions denominated in foreign currencies other than a subsidiary's functional currency are recorded at the rates of exchange prevailing at the time of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured at the rate of exchange prevailing at the balance sheet date. Exchange differences arising upon settlement of a transaction are reported in the condensed consolidated statements of operations in other expense, net. |
Derivative Financial Instruments | Derivative Financial Instruments The Company may use derivatives to partially offset its business exposure to foreign currency or interest rate risk on expected future cash flows. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates. The Company does not hold derivatives for trading purposes. As of September 30, 2018 , the Company had derivative financial instruments in the form of interest rate swaps outstanding. The interest rate swaps were not designated as hedges and therefore do not qualify for hedge accounting. Refer to Note 7 - Debt for further information. There were no derivative financial instruments outstanding as of December 31, 2017. Additionally, during the nine months ended September 30, 2018 the Company settled a derivative financial instrument to hedge foreign currency rates. Refer to Note 2 - Business Acquisitions for further information on the terms of the arrangement. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings on the condensed consolidated statement of operations as other expense, net. During the three and nine months ended September 30, 2018 , the Company recognized a gain of $8.3 million and a loss of $107.0 million in other expense, net, respectively, due to the change in fair value of its derivative financial instruments. The Company records the fair value of its derivative financial instruments in the condensed consolidated balance sheet as a component of other current assets when in a net asset position and a component of accrued expenses and other current liabilities when in a net liability position. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The Company classifies certain assets and liabilities based on the following hierarchy of fair value: Level 1: Quoted prices for identical assets or liabilities in active markets that can be assessed at the measurement date. Level 2: Inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, management considers the principal or most advantageous market in which it would transact and considers risks, restrictions, or other assumptions that market participants would use when pricing the asset or liability. Recurring Fair Value Measurements In accordance with GAAP, certain assets and liabilities are required to be recorded at fair value on a recurring basis. For the Company, the only assets or liabilities adjusted to fair value on a recurring basis are its derivative financial instruments. The Company measures all derivatives at fair value and recognizes them as either assets or liabilities in its condensed consolidated balance sheets. The Company's derivative financial instruments are valued primarily using models based on readily observable market parameters for all substantial terms of our derivative contracts, and therefore have been classified as Level 2. None of the Company's derivative financial instruments qualify for hedge accounting, and therefore all changes in the fair values of derivative instruments are recognized in earnings in the current period. The following table presents the Company's financial assets and liabilities that are required to be measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of September 30, 2018 . There were no financial assets or liabilities that were required to be measured and recognized at fair value on a recurring basis as of December 31, 2017 . There were no transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2018 . September 30, 2018 Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (amounts in millions) Total Level 1 Level 2 Level 3 Assets: Interest rate swap agreements $ 5.8 $ — $ 5.8 $ — Liabilities: Interest rate swap agreements $ (6.5 ) $ — $ (6.5 ) $ — Non-recurring Fair Value Measurements In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a non-recurring basis as required by GAAP. Assets measured at fair value on a non-recurring basis include goodwill, tangible assets, and intangible assets. Such assets are reviewed quarterly for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (Level 3). Other Fair Value Measurements As of September 30, 2018 and December 31, 2017 , the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities, and acquisition earn-outs and holdbacks approximated fair value due to the short-term nature of these instruments. |
Concentrations of Credit Risk | C oncentrations of Credit Risk Financial instruments potentially subject to concentration of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. At times during the periods presented, the Company had funds in excess of $250,000 insured by the U.S. Federal Deposit Insurance Corporation, or in excess of similar Deposit Insurance programs outside of the United States, on deposit at various financial institutions. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company's trade accounts receivable are generally unsecured and geographically dispersed. No single customer's trade accounts receivable balance as of September 30, 2018 or December 31, 2017 exceeded 10% of the Company's consolidated accounts receivable, net. No single customer accounted for more than 10% of revenue for the three or nine months ended September 30, 2018 or 2017 . |
Newly Adopted Accounting Principles and Recent Accounting Pronouncements | Newly Adopted Accounting Principles In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ( Topic 606 ) as modified by subsequently issued ASUs 2015-14, 2016-08, 2016-10, 2016-12, and 2016-20 (collectively ASU 2014-09). The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company has adopted this new standard as of January 1, 2018 using the modified retrospective method. The adoption of the new standard did not have a material impact on the Company's condensed consolidated balance sheets, statements of operations, comprehensive (loss) income, stockholders' equity, or cash flows as of the adoption date or for the nine months ended September 30, 2018 , and therefore no tabular reconciliation has been provided as there was no material effect on any financial statement line item. As part of the adoption, the Company has not retrospectively restated the contract revenue for those modifications in accordance with the contract modification guidance in paragraphs ASC 606-10-25-12 and 25-13. Instead, the Company reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. The impact of this practical expedient had no significant impact on the Company's final conclusions. The Company has included the disclosures required by ASU No. 2014-09 above. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments , which is intended to reduce diversity in practice of how certain transactions are classified and presented in the statement of cash flows in accordance with ASC 230. The ASU amends or clarifies guidance on eight specific cash flow issues, some of which include classification on debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and separately identifiable cash flows and application of the predominance principle. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those periods. The guidance requires application using a retrospective transition method. The Company adopted the guidance as of January 1, 2018, and the provisions of the new guidance did not have a material impact on its condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires that restricted cash and restricted cash equivalents during the period should be included in the beginning and ending cash and cash equivalents balance reconciliation on the statement of cash flows. When cash, cash equivalents, restricted cash, or restricted cash equivalents are presented in more than one line item within the statement of financial position, an entity shall calculate a total cash amount in a narrative or tabular format that agrees to the amount shown on the statement of cash flows. Details on the nature and amounts of restricted cash should also be disclosed. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within that reporting period and should be applied using a retrospective transition method to each period presented. The Company adopted the guidance as of January 1, 2018. The impact of the implementation is as follows: Nine Months Ended September 30, 2018 2017 Net cash used in investing activities (prior to the adoption of ASU 2016-18) $ (2,373.9 ) $ (390.3 ) Impact of including restricted cash within cash and cash equivalents — (304.3 ) Net cash used in investing activities (after adoption of ASU 2016-18) $ (2,373.9 ) $ (694.6 ) In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when changes to the terms or conditions of share-based equity awards must be accounted for as modifications. Entities will apply the modification accounting guidance if the value, vesting conditions, or classification of the award are not the same immediately before and after the modification. The guidance is effective prospectively for public business entities for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company adopted the guidance as of January 1, 2018, and the provisions of the new guidance did not have a material impact on its condensed consolidated financial statements. In December 2017, the SEC issued Staff Accounting Bulletin ("SAB") No. 118 (as further clarified by FASB ASU 2018- 05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 ), which provides guidance for companies that may not have completed their accounting for the income tax effects of the Tax Cut and Jobs Act ("Tax Act") in the period of enactment, which is the period that includes December 22, 2017. SAB No. 118 provides for a provisional one year measurement period for entities to finalize their accounting for certain income tax effects related to the Tax Act. The Company expects to finalize its provisional amounts within the one year measurement period. Refer to Note 9 - Income Taxes for additional disclosure. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases , which requires most leases (with the exception of leases with terms of less than one year) to be recognized on the balance sheet as an asset and a lease liability. Leases will be classified as an operating lease or a financing lease. Operating leases are expensed using the straight-line method, whereas financing leases will be treated similarly to a capital lease under the current standard. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The new standard must be presented using the modified retrospective method. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which provides an additional (and optional) transition method to adopt the new leases standard. The modified retrospective method is applied to all prior reporting periods presented with a cumulative-effect adjustment recorded in the earliest comparative period while the optional transition relief method is applied beginning in the period of adoption with a cumulative-effect adjustment recorded to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. The Company is still evaluating the method of adoption. The Company anticipates the new standard will have a material impact to its consolidated balance sheets. However, the Company does not believe adoption will have a material impact on its consolidated statements of operations. While the Company is continuing to assess all potential impacts of the new standard, the Company currently believes the most significant impact relates to its accounting for office space, colocation operating leases, and embedded leases within its dark fiber and duct supplier contracts. The Company expects its accounting for capital leases to remain substantially unchanged under the new standard. In March 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill (Step 2) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value (as determined in Step 1). The guidance is effective prospectively for public business entities for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the new guidance to have a material impact on its consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows for reclassification of stranded tax effects on items resulting from the Tax Act from accumulated other comprehensive income (loss) to retained earnings. The guidance will be effective for the Company for interim and annual reporting periods beginning after December 31, 2018, and early adoption is permitted. The Company is currently evaluating the effect of the new guidance on its consolidated financial statements and related disclosures. In August 2018, the SEC issued several final rules, including but not limited to SEC Final Rule Release No. 33-10532 Disclosure Update and Simplification (“Final Rule”), which amends certain redundant, duplicative, outdated, superseded or overlapping disclosure requirements. This Final Rule is intended to facilitate disclosure information provided to investors and simplify compliance without significantly impacting the mix of information provided to investors. The amendments also expand the disclosure requirements regarding the analysis of stockholders' equity for interim financial statements, in which entities will be required to present a reconciliation for each period for which a statement of comprehensive income is required to be filed. The Final Rule is effective on November 5, 2018, however the SEC staff announced that it would not object if the filer's first presentation of the changes in stockholders' equity is included in its Form 10-Q for the quarter that begins after the effective date of the amendments. As such, the Company plans to use the new presentation of a condensed consolidated statement of stockholders equity within its interim financial statements beginning in its Form 10-Q for the quarter ending March 31, 2019. Other than the new presentation, the Company does not anticipate any material impact to its consolidated financial statements and related disclosures upon adoption. |
ORGANIZATION AND BUSINESS (Tabl
ORGANIZATION AND BUSINESS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company's revenues disaggregated by primary geographic market based on legal entities (in millions, unaudited): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Primary geographic market US $ 192.7 $ 577.6 UK 92.0 165.9 Ireland 20.6 75.9 Other 117.4 181.4 Total revenue from contracts with customers 422.7 1,000.8 Lease revenue 25.9 35.2 Total telecommunications services revenue $ 448.6 $ 1,036.0 |
Schedule of Earnings Per Share, Basic and Diluted | The table below details the calculations of loss per share (in millions, except for share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator for basic and diluted EPS – net loss available to common stockholders $ (23.4 ) $ (9.5 ) $ (190.4 ) $ (22.0 ) Denominator for basic EPS – weighted average shares 54,671,787 41,762,693 49,210,929 41,160,317 Effect of dilutive securities — — — — Denominator for diluted EPS – weighted average shares 54,671,787 41,762,693 49,210,929 41,160,317 Loss per share: Basic $ (0.43 ) $ (0.23 ) $ (3.87 ) $ (0.53 ) Diluted $ (0.43 ) $ (0.23 ) $ (3.87 ) $ (0.53 ) |
Schedule of Depreciable Lives Used for Classes of Assets | Depreciable lives used by the Company for its classes of assets are as follows: Freehold Buildings 30 years Furniture and Fixtures 7 years Fiber Optic Cable 20 years Fiber Optic Network Equipment 3 - 15 years Leasehold Improvements up to 10 years Computer Hardware and Software 3-5 years |
Schedule of Interest Rate Derivatives | The following table presents the Company's financial assets and liabilities that are required to be measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of September 30, 2018 . There were no financial assets or liabilities that were required to be measured and recognized at fair value on a recurring basis as of December 31, 2017 . There were no transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2018 . September 30, 2018 Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (amounts in millions) Total Level 1 Level 2 Level 3 Assets: Interest rate swap agreements $ 5.8 $ — $ 5.8 $ — Liabilities: Interest rate swap agreements $ (6.5 ) $ — $ (6.5 ) $ — |
Schedule of Fair Values of Long-term Debt | The table below presents the fair values for the Company's long-term debt as well as the input level used to determine these fair values as of September 30, 2018 and December 31, 2017 . The carrying amounts exclude any debt issuance costs or original issuance discount: Fair Value Measurement Using Total Carrying Value in Consolidated Balance Sheet Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (1) (Level 1) (amounts in millions) September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Liabilities not recorded at fair value in the Financial Statements: Long-term debt, including the current portion: US Term loan $ 1,765.6 $ 693.0 $ 1,750.1 $ 697.3 EMEA Term loan 868.2 — 865.0 — 7.875% Senior unsecured notes 575.0 575.0 543.4 608.1 Revolving line of credit 7.5 — 7.4 — Other secured loans 21.6 — 21.6 — Total long-term debt, including current portion $ 3,237.9 $ 1,268.0 $ 3,187.5 $ 1,305.4 (1) Fair value based on the bid quoted price, except for other secured loans for which carrying value approximates fair value. |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The impact of the implementation is as follows: Nine Months Ended September 30, 2018 2017 Net cash used in investing activities (prior to the adoption of ASU 2016-18) $ (2,373.9 ) $ (390.3 ) Impact of including restricted cash within cash and cash equivalents — (304.3 ) Net cash used in investing activities (after adoption of ASU 2016-18) $ (2,373.9 ) $ (694.6 ) |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The table below reflects the Company's preliminary estimates of the acquisition date fair values of the purchase consideration, assets acquired, and liabilities assumed for the Interoute acquisition (amounts in millions): Interoute Purchase Price Cash paid at closing $ 2,239.3 Purchase consideration $ 2,239.3 Purchase Price Allocation Assets acquired: Cash $ 66.1 Accounts receivable 155.2 Prepaid expenses and other current assets 51.3 Property and equipment 1,435.9 Other assets 19.7 Intangible assets - customer lists 171.5 Intangible assets - tradename 2.1 Intangible assets - other 15.4 Deferred tax assets 36.9 Goodwill 980.1 Total assets acquired 2,934.2 Liabilities assumed: Accounts payable (75.5 ) Accrued expenses and other current liabilities (112.9 ) Capital leases (1) (42.3 ) Debt (27.7 ) Deferred revenue (311.3 ) Deferred tax liabilities (87.1 ) Other long-term liabilities (38.1 ) Total liabilities assumed (694.9 ) Net assets acquired $ 2,239.3 (1) Includes $38.8 million of assumed long-term building leases. |
Schedule of Weighted-Average Useful Life | The table below reflects the weighted average amortization period for intangible assets acquired in the Interoute acquisition (amounts in years): Interoute Intangible assets - customer lists 14.7 Intangible assets - tradename 1.0 Intangible assets - other 7.0 Weighted average 13.9 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense related to intangible assets created as a result of the Interoute acquisition for each of the years subsequent to September 30, 2018 is as follows (amounts in millions): 2018 $ 4.4 2019 16.3 2020 15.5 2021 15.5 2022 15.5 2023 and beyond 116.0 Total $ 183.2 Estimated amortization expense related to intangible assets subject to amortization at September 30, 2018 in each of the years subsequent to September 30, 2018 is as follows (amounts in millions): 2018 remaining $ 22.0 2019 84.2 2020 80.4 2021 78.7 2022 65.7 2023 and beyond 233.6 Total $ 564.6 |
Schedule of Pro Forma Information | The pro forma results presented below include the effects of the Company’s material acquisitions during 2018 and 2017 as if the acquisitions occurred on January 1, 2017 . The pro forma net loss for the three and nine months ended September 30, 2018 and 2017 includes adjustments to revenue and cost of telecommunications services to eliminate inter-company activity, adjustments to deferred revenue and deferred cost from the acquired companies, and IFRS to US GAAP adjustments for Interoute. The pro forma adjustments are based on historically reported transactions by the acquired companies. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisitions. The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of January 1, 2017 . Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (Amounts in millions, except per share and share data) Revenue $ 448.6 $ 444.7 $ 1,381.2 $ 1,301.4 Net loss $ (23.4 ) $ (9.3 ) $ (75.0 ) $ (137.3 ) Loss per share: Basic $ (0.43 ) $ (0.18 ) $ (1.52 ) $ (2.71 ) Diluted $ (0.43 ) $ (0.18 ) $ (1.52 ) $ (2.71 ) Denominator for basic EPS – weighted average shares 54,671,787 51,351,787 49,210,929 50,749,411 Denominator for diluted EPS – weighted average shares 54,671,787 51,351,787 49,210,929 50,749,411 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amount of goodwill for the nine months ended September 30, 2018 was as follows (amounts in millions): Goodwill - December 31, 2017 $ 644.5 Initial goodwill associated with 2018 business combinations 1,107.3 Adjustments to 2018 business combinations (100.0 ) Adjustments to prior year business combinations 23.5 Foreign currency translation adjustments (8.5 ) Goodwill - September 30, 2018 $ 1,666.8 |
Schedule of Finite-Lived Intangible Assets | The following table summarizes the Company’s intangible assets as of September 30, 2018 and December 31, 2017 (amounts in millions): September 30, 2018 December 31, 2017 Amortization Gross Asset Cost Accumulated Amortization Net Book Value Gross Asset Cost Accumulated Amortization Net Book Value Customer lists 3-20 years $ 746.8 $ 212.7 $ 534.1 $ 552.8 $ 155.1 $ 397.7 Non-compete agreements 3-5 years 4.7 4.6 0.1 4.6 4.5 0.1 Other intangible assets 3-7 years 1.7 1.7 — 1.7 1.7 — Intellectual property 10 years 38.9 10.3 28.6 23.7 5.2 18.5 Tradename 1-3 years 6.1 4.3 1.8 3.9 3.1 0.8 $ 798.2 $ 233.6 $ 564.6 $ 586.7 $ 169.6 $ 417.1 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense related to intangible assets created as a result of the Interoute acquisition for each of the years subsequent to September 30, 2018 is as follows (amounts in millions): 2018 $ 4.4 2019 16.3 2020 15.5 2021 15.5 2022 15.5 2023 and beyond 116.0 Total $ 183.2 Estimated amortization expense related to intangible assets subject to amortization at September 30, 2018 in each of the years subsequent to September 30, 2018 is as follows (amounts in millions): 2018 remaining $ 22.0 2019 84.2 2020 80.4 2021 78.7 2022 65.7 2023 and beyond 233.6 Total $ 564.6 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | The following table summarizes the Company’s prepaid expenses and other current assets as of September 30, 2018 and December 31, 2017 (amounts in millions): September 30, 2018 December 31, 2017 Prepaid carrier costs $ 24.7 $ 2.1 Prepaid selling, general and administrative 14.0 10.0 Interest rate swaps 5.8 — Short term deposits 2.6 0.4 Taxes receivable 2.8 1.5 Capitalized commissions 3.2 — Other 15.7 10.1 $ 68.8 $ 24.1 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following table summarizes the Company’s accrued expenses and other current liabilities as of September 30, 2018 and December 31, 2017 (amounts in millions): September 30, 2018 December 31, 2017 Compensation and benefits $ 35.1 $ 13.3 Carrier costs 61.9 13.8 Restructuring 23.7 9.7 Interest 13.2 22.9 Fiber pair repurchase — 10.0 Accrued taxes 6.8 9.6 Interest rate swaps 6.5 — Selling, general and administrative 3.4 2.1 Other 18.1 7.6 $ 168.7 $ 89.0 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Revenue | Significant changes in deferred revenue balances during the period are as follows (amounts in millions): Nine Months Ended September 30, 2018 Contract Term ASC 606 Revenue as a % of Greater than 1 Year (1) Less than 1 Year Greater than 1 Year Total Balance, December 31, 2017 $ 31.4 $ 130.3 $ 161.7 45.7 % Revenue recognized from beginning balance (28.8 ) (16.8 ) (45.6 ) 82.1 % Increase in deferred revenue (gross) 472.5 13.7 486.2 32.4 % Revenue recognized on increase in deferred revenue (383.3 ) (4.3 ) (387.6 ) 41.9 % Business combinations (gross) 69.0 242.3 311.3 22.1 % Revenue recognized from business combinations (57.6 ) (8.3 ) (65.9 ) 33.7 % Balance, September 30, 2018 $ 103.2 $ 356.9 $ 460.1 27.7 % (1) Refer to Footnote 1 - Organization and Business for a discussion of the required disclosures in accordance with ASC 606. The change in deferred revenue per the table above includes the non-cash impact of foreign currency translation adjustments of $1.7 million for the nine months ended September 30, 2018 . Three Months Ended September 30, 2018 Contract Term ASC 606 Revenue as a % of Greater than 1 Year (1) Less than 1 Year Greater than 1 Year Total Balance, June 30, 2018 $ 112.2 $ 357.5 $ 469.7 28.5 % Revenue recognized from beginning balance (97.4 ) (9.5 ) (106.9 ) 57.9 % Increase in deferred revenue (gross) 226.2 12.1 238.3 32.2 % Revenue recognized on increase in deferred revenue (137.8 ) (3.2 ) (141.0 ) 43.8 % Balance, September 30, 2018 $ 103.2 $ 356.9 $ 460.1 27.7 % (1) Refer to Footnote 1 - Organization and Business for a discussion of the required disclosures in accordance with ASC 606. Remaining amortization at September 30, 2018 and in each of the years subsequent to September 30, 2018 is as follows (amounts in millions): Contract Term ASC 606 Revenue as a % of Greater than 1 Year (1) Less than 1 Year Greater than 1 Year Total 2018 remaining $ 95.4 $ 14.0 $ 109.4 51.4 % 2019 7.8 56.5 64.3 50.8 % 2020 — 39.3 39.3 35.4 % 2021 — 35.0 35.0 33.7 % 2022 — 33.0 33.0 33.6 % 2023 and beyond — 179.1 179.1 14.7 % $ 103.2 $ 356.9 $ 460.1 27.7 % (1) Refer to Footnote 1 - Organization and Business for a discussion of the required disclosures in accordance with ASC 606. |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of September 30, 2018 and December 31, 2017 , long-term debt was as follows (amounts in millions): September 30, 2018 December 31, 2017 US Term loan $ 1,765.6 $ 693.0 EMEA Term loan 868.2 — 7.875% Senior unsecured notes 575.0 575.0 Revolving line of credit 7.5 — Other secured loans 21.6 — Total debt obligations 3,237.9 1,268.0 Unamortized debt issuance costs (32.1 ) (33.8 ) Unamortized original issuance premium (discount), net (49.4 ) 9.3 Carrying value of debt 3,156.4 1,243.5 Less current portion (40.9 ) (7.0 ) Long-term debt less current portion $ 3,115.5 $ 1,236.5 The following table summarizes the original issuance (discount) and premium activity for the nine months ended September 30, 2018 (amounts in millions): US Term Loan EMEA Term Loan 7.875% Senior Unsecured Notes Total Balance, December 31, 2017 $ (6.5 ) $ — $ 15.8 $ 9.3 New Original Issuance Discount (8.9 ) (4.4 ) — (13.3 ) Fees paid to lenders (35.2 ) (19.4 ) — (54.6 ) Amortization 2.2 1.1 (1.4 ) 1.9 Loss on debt extinguishment 7.3 — — 7.3 Balance, September 30, 2018 $ (41.1 ) $ (22.7 ) $ 14.4 $ (49.4 ) The unused and available amount of the Revolving Line of Credit Facility at September 30, 2018 was as follows (amounts in millions): Committed capacity $ 200.0 Borrowings outstanding (7.5 ) Letters of credit issued (13.9 ) Unused and available $ 178.6 The following table summarizes the debt issuance costs activity for the nine months ended September 30, 2018 (amounts in millions): US Term Loan EMEA Term Loan 7.875% Senior Unsecured Notes Revolving Line of Credit Total Balance, December 31, 2017 $ (14.7 ) $ — $ (16.1 ) $ (3.0 ) $ (33.8 ) Debt issuance costs incurred (4.7 ) (2.9 ) — (0.6 ) (8.2 ) Amortization 1.5 0.1 1.4 0.4 3.4 Loss on debt extinguishment 6.1 — — 0.4 6.5 Balance, September 30, 2018 $ (11.8 ) $ (2.8 ) $ (14.7 ) $ (2.8 ) $ (32.1 ) |
Debt Instrument, Maximum Ratio Specified | The 2018 Credit Agreement does not contain a financial covenant for the US Term Loan Facility or the EMEA Term Loan Facility, but it does include a maximum Consolidated Net Secured Leverage Ratio applicable to the Revolving Line of Credit Facility in the event that utilization exceeds 30% of the revolving loan facility commitment. If triggered, the covenant requires the Company to maintain a Consolidated Net Secured Leverage Ratio, on a Pro Forma Basis, below the maximum ratio specified as follows: Fiscal Quarter Ending Maximum Ratio September 30, 2018 6.50:1.00 December 31, 2018 6.50:1.00 March 31, 2019 6.50:1.00 June 30, 2019 6.50:1.00 September 30, 2019 6.25:1.00 December 31, 2019 6.25:1.00 March 31, 2020 6.00:1.00 June 30, 2020 6.00:1.00 September 30, 2020 5.50:1.00 December 31, 2020 5.50:1.00 March 31, 2021 5.50:1.00 June 30, 2021 5.00:1.00 September 30, 2021 5.00:1.00 December 31, 2021 4.50:1.00 March 31, 2022 4.50:1.00 June 30, 2022 and thereafter 4.25:1.00 |
Schedule of Derivative Instruments | During 2018, the Company entered into the following interest rate swap arrangements to partially mitigate the variability of cash flows due to changes in the Eurodollar rate, specifically related to interest payments on our term loans under the 2018 Credit Agreement: Trade date April 6, 2018 May 17, 2018 May 17, 2018 May 17, 2018 Notional amount (in millions) $ 500.0 $ 200.0 $ 300.0 € 317.0 Term (years) 5 7 3 7 Effective date 4/30/2018 6/29/2018 6/29/2018 6/29/2018 Termination date 4/30/2023 5/31/2025 6/30/2021 5/31/2025 Fixed rate 2.6430 % 3.0370 % 2.8235 % 0.8900 % Floating rate 1-month LIBOR 1-month LIBOR 1-month LIBOR 1-month EURIBOR |
Schedule of Interest Rate Derivatives | The fair value of the interest rate swaps at September 30, 2018 was as follows (in millions): Fair Value September 30, 2018 Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date Asset Derivatives Liability Derivatives Interest rate swap $ 500.0 4/30/2018 4/30/2023 $ 5.5 $ — Interest rate swap $ 200.0 6/29/2018 5/31/2025 — (1.5 ) Interest rate swap $ 300.0 6/29/2018 6/30/2021 0.3 — Interest rate swap € 317.0 6/29/2018 5/31/2025 — (5.0 ) $ 5.8 $ (6.5 ) |
Schedule of Maturities of Long-term Debt | The aggregate contractual maturities of long-term debt (excluding unamortized debt issuance costs and unamortized original issuance discounts and premiums) were as follows as of September 30, 2018 (amounts in millions): Total debt 2018 remaining $ 10.4 2019 39.3 2020 30.9 2021 26.8 2022 26.4 2023 and beyond 3,104.1 $ 3,237.9 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following tables summarize the share-based compensation expense recognized as a component of selling, general and administrative expense in the condensed consolidated statements of operations (amounts in millions): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options $ 0.2 $ 0.4 $ 0.9 $ 1.1 Restricted stock 8.9 5.7 22.8 14.8 ESPP 0.1 — 0.2 0.1 Total $ 9.2 $ 6.1 $ 23.9 $ 16.0 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards | The following table summarizes the unrecognized compensation cost and the weighted average period over which the cost is expected to be amortized (amounts in millions): September 30, 2018 Unrecognized Compensation Cost Weighted Average Remaining Period to be Recognized (Years) Time-based stock options $ 0.8 1.01 Time-based restricted stock 56.7 2.30 Performance-based restricted stock (1) 16.0 1.48 Total $ 73.5 2.11 (1) Excludes $16.3 million of unrecognized compensation cost related to 2017 Performance Awards where achievement of the performance criteria was not probable as of September 30, 2018 . |
Schedule of Share-based Compensation, Activity | The following table summarizes the restricted stock granted during the three and nine months ended September 30, 2018 and 2017 , respectively (amounts in millions, except shares data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Time-based restricted stock granted 196,468 238,088 815,019 929,896 Fair value of time-based restricted stock granted $ 8.8 $ 7.6 $ 38.4 $ 27.5 Performance-based restricted stock granted — 20,000 8,000 20,000 Fair value of performance-based restricted stock granted $ — $ 0.5 $ 0.4 $ 0.5 |
SEVERANCE, RESTRUCTURING AND _2
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The total exit costs recorded and paid relating to the acquisitions mentioned above are summarized as follows for the three months ended September 30, 2018 (amounts in millions): Balance, June 30, 2018 Charges Payments Foreign Currency Translation Adjustments Balance, September 30, 2018 Employee Termination Benefits $ 9.1 $ 9.8 $ (7.6 ) $ (0.2 ) $ 11.1 Lease terminations 9.3 0.6 (1.1 ) — 8.8 Other contract terminations 0.7 5.1 (2.0 ) — 3.8 $ 19.1 $ 15.5 $ (10.7 ) $ (0.2 ) $ 23.7 The total exit costs recorded and paid relating to the acquisitions mentioned above are summarized as follows for the nine months ended September 30, 2018 (amounts in millions): Balance, December 31, 2017 Charges Acquired Costs Payments Foreign Currency Translation Adjustments Balance, Employee Termination Benefits $ 5.5 $ 15.9 $ 6.0 $ (16.1 ) $ (0.2 ) $ 11.1 Lease terminations 2.4 1.0 7.8 (2.4 ) — 8.8 Other contract terminations 1.8 5.8 — (3.8 ) — 3.8 $ 9.7 $ 22.7 $ 13.8 $ (22.3 ) $ (0.2 ) $ 23.7 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Estimated Annual Commitments Under Contractual Obligations | Estimated annual commitments under contractual obligations are as follows at September 30, 2018 (amounts in millions): Network Supply Office Space Capital Leases Other 2018 remaining $ 99.5 $ 6.1 $ 1.4 $ 18.0 2019 346.0 20.8 4.4 4.9 2020 242.1 17.8 5.2 2.6 2021 130.6 14.8 4.2 1.4 2022 39.6 10.2 3.1 — 2023 and beyond 182.8 29.1 24.7 — $ 1,040.6 $ 98.8 $ 43.0 $ 26.9 |
ORGANIZATION AND BUSINESS - Nar
ORGANIZATION AND BUSINESS - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jan. 31, 2017 | Sep. 30, 2018USD ($)service | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)serviceequity_grantsegmentshares | Sep. 30, 2017USD ($)shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||||
Number of operating segments (in segments) | segment | 1 | ||||||
Number of reporting segments (in segments) | segment | 1 | ||||||
Number of primary services | service | 7 | 7 | |||||
Excise taxes collected | $ 5,300,000 | $ 3,700,000 | $ 17,500,000 | $ 11,200,000 | |||
Contract with customer | 191,500,000 | $ 191,500,000 | $ 53,700,000 | ||||
Number of types of equity grants | equity_grant | 3 | ||||||
Antidilutive securities (in shares) | shares | 526,000 | 767,000 | |||||
Allowance for doubtful accounts | 4,200,000 | $ 4,200,000 | 5,100,000 | ||||
Capitalized labor costs | 3,000,000 | 1,400,000 | 9,200,000 | $ 4,100,000 | |||
Capitalized software costs | 1,400,000 | $ 400,000 | 3,600,000 | 1,200,000 | |||
Goodwill impairment | 0 | 0 | |||||
Intangible asset impairment | 0 | 0 | |||||
Goodwill | 1,666,800,000 | 1,666,800,000 | 644,500,000 | ||||
Disputed supplier expense | 9,200,000 | 9,200,000 | 5,300,000 | ||||
Unamortized debt issuance costs | 32,100,000 | 32,100,000 | 33,800,000 | ||||
Unamortized debt premium | (49,400,000) | (49,400,000) | |||||
Unamortized discount | 9,300,000 | ||||||
Gain (loss) recognized in other expense, net | 8,300,000 | $ (107,000,000) | |||||
Minimum | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Finite-lived intangible asset, useful life | 3 years | ||||||
Maximum | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Finite-lived intangible asset, useful life | 10 years | ||||||
Time-Restricted Stock and Stock Options | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Award vesting period | 4 years | ||||||
7.875% Senior unsecured notes | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Aggregate principal amount | $ 575,000,000 | ||||||
Unamortized debt issuance costs | $ 14,700,000 | $ 14,700,000 | 16,100,000 | ||||
Senior Notes | 7.875% Senior unsecured notes | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Aggregate principal amount | $ 575,000,000 | $ 300,000,000 | |||||
Stated percentage rate | 7.875% | 7.875% | 7.875% | 7.875% | |||
Period interest is in escrow | 60 days | ||||||
Unamortized discount | $ 16,500,000 | $ 16,500,000 | |||||
Customer Contract Portfolios | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 0 | $ 0 | |||||
Customer Contracts Portfolios Acquired In Prior Year | Customer Contracts | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Aggregate purchase price | 0 | $ 37,300,000 | |||||
Accounts Receivable | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Contract with customer | $ 225,200,000 | $ 225,200,000 |
ORGANIZATION AND BUSINESS - Sch
ORGANIZATION AND BUSINESS - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | $ 422.7 | $ 1,000.8 | ||
Lease revenue | 25.9 | 35.2 | ||
Total telecommunications services revenue | 448.6 | $ 202.6 | 1,036 | $ 578.6 |
US | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 192.7 | 577.6 | ||
UK | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 92 | 165.9 | ||
Ireland | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 20.6 | 75.9 | ||
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | $ 117.4 | $ 181.4 |
ORGANIZATION AND BUSINESS - S_2
ORGANIZATION AND BUSINESS - Schedule of Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Numerator for basic and diluted EPS – net loss available to common stockholders | $ (23.4) | $ (9.5) | $ (190.4) | $ (22) |
Denominator for basic EPS – weighted average shares (in shares) | 54,671,787 | 41,762,693 | 49,210,929 | 41,160,317 |
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Denominator for diluted EPS – weighted average shares (in shares) | 54,671,787 | 41,762,693 | 49,210,929 | 41,160,317 |
Loss per share: | ||||
Earnings (loss) per share: basic (in dollars per share) | $ (0.43) | $ (0.23) | $ (3.87) | $ (0.53) |
Earnings (loss) per share: diluted (in dollars per share) | $ (0.43) | $ (0.23) | $ (3.87) | $ (0.53) |
ORGANIZATION AND BUSINESS - S_3
ORGANIZATION AND BUSINESS - Schedule of Depreciable Lives of Assets (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Freehold Buildings | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 30 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 7 years |
Fiber Optic Cable | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 20 years |
Fiber Optic Network Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Fiber Optic Network Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Leasehold Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Computer Hardware and Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Computer Hardware and Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
ORGANIZATION AND BUSINESS - S_4
ORGANIZATION AND BUSINESS - Schedule of Interest Rate Derivatives (Details) $ in Millions | Sep. 30, 2018USD ($) |
Assets: | |
Interest rate swap agreements | $ 5.8 |
Liabilities: | |
Interest rate swap agreements | (6.5) |
Quoted Prices in Active Markets Level 1 | |
Assets: | |
Interest rate swap agreements | 0 |
Significant Other Observable Inputs Level 2 | |
Assets: | |
Interest rate swap agreements | 5.8 |
Significant Unobservable Inputs Level 3 | |
Assets: | |
Interest rate swap agreements | 0 |
Interest rate swap agreements | |
Liabilities: | |
Interest rate swap agreements | (6.5) |
Interest rate swap agreements | Quoted Prices in Active Markets Level 1 | |
Liabilities: | |
Interest rate swap agreements | 0 |
Interest rate swap agreements | Significant Other Observable Inputs Level 2 | |
Liabilities: | |
Interest rate swap agreements | (6.5) |
Interest rate swap agreements | Significant Unobservable Inputs Level 3 | |
Liabilities: | |
Interest rate swap agreements | $ 0 |
ORGANIZATION AND BUSINESS - S_5
ORGANIZATION AND BUSINESS - Schedule of Carrying Amount of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | $ 3,237.9 | $ 1,268 |
Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 3,187.5 | 1,305.4 |
7.875% Senior unsecured notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 575 | 575 |
7.875% Senior unsecured notes | Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 543.4 | 608.1 |
Other secured loans | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 21.6 | 0 |
Other secured loans | Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 21.6 | 0 |
Revolving line of credit | 7.875% Senior unsecured notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 7.5 | 0 |
Revolving line of credit | 7.875% Senior unsecured notes | Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 7.4 | 0 |
US Term Loan | Term loan | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 1,765.6 | 693 |
US Term Loan | Term loan | Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 1,750.1 | 697.3 |
EMEA Term loan | Term loan | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | 868.2 | 0 |
EMEA Term loan | Term loan | Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total long-term debt, including current portion | $ 865 | $ 0 |
ORGANIZATION AND BUSINESS - New
ORGANIZATION AND BUSINESS - New Accounting Pronouncements (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash used in investing activities | $ (2,373.9) | $ (694.6) |
Previously Reported | Accounting Standards Update 2016-18 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash used in investing activities | (2,373.9) | (390.3) |
Restatement Adjustment | Accounting Standards Update 2016-18 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Impact of including restricted cash within cash and cash equivalents | $ 0 | $ (304.3) |
BUSINESS ACQUISITIONS - Narrati
BUSINESS ACQUISITIONS - Narrative (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
May 31, 2018USD ($)shares | Mar. 31, 2018USD ($)shares | Feb. 28, 2018USD ($)$ / € | Feb. 28, 2018EUR (€)$ / € | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Business Acquisition [Line Items] | |||||||||
Foreign currency hedge notional amount | € | € 1,260 | ||||||||
Spot rate | $ / € | 1.23459 | 1.23459 | |||||||
Loss recognized upon settlement of deal-contingent foreign currency hedge | $ 105.8 | $ 17.2 | |||||||
Amortization of intangible assets | $ 22.9 | $ 17 | $ 64 | $ 49.6 | |||||
Integration related costs | 10.7 | $ 3.3 | 25.1 | $ 13.8 | |||||
Accelerated Connections, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase price | $ 35 | ||||||||
Cash acquired | $ 0.8 | ||||||||
Consideration transferred (in shares) | shares | 79,930 | ||||||||
Total common stock consideration | $ 4.2 | ||||||||
Portion of initial cash consideration | $ 3.9 | ||||||||
Interoute Communications Holdings S.A. | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase price | $ 2,239.3 | ||||||||
Cash acquired | $ 66.1 | ||||||||
Consideration transferred (in shares) | shares | 9,589,094 | ||||||||
Total common stock consideration | $ 425 | ||||||||
Assumed debt | $ 27.7 | ||||||||
Accelerated Connections Inc and Interoute Communications Holdings S.A. | |||||||||
Business Acquisition [Line Items] | |||||||||
Amortization of intangible assets | $ 4.3 | $ 5.8 |
BUSINESS ACQUISITIONS - Purchas
BUSINESS ACQUISITIONS - Purchase Price (Details) - USD ($) $ in Millions | 1 Months Ended | ||
May 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Assets acquired: | |||
Goodwill | $ 1,666.8 | $ 644.5 | |
Interoute Communications Holdings S.A. | |||
Purchase Price | |||
Purchase price | $ 2,239.3 | ||
Assets acquired: | |||
Cash | 66.1 | ||
Accounts receivable | 155.2 | ||
Prepaid expenses and other current assets | 51.3 | ||
Property and equipment | 1,435.9 | ||
Other assets | 19.7 | ||
Deferred tax assets | 36.9 | ||
Goodwill | 980.1 | ||
Total assets acquired | 2,934.2 | ||
Liabilities assumed: | |||
Accounts payable | (75.5) | ||
Accrued expenses and other current liabilities | (112.9) | ||
Capital leases | (42.3) | ||
Debt | (27.7) | ||
Deferred revenue | (311.3) | ||
Deferred tax liabilities | (87.1) | ||
Other long-term liabilities | (38.1) | ||
Total liabilities assumed | (694.9) | ||
Net assets acquired | 2,239.3 | ||
Interoute Communications Holdings S.A. | Building | |||
Liabilities assumed: | |||
Capital leases | $ (38.8) | ||
Interoute Communications Holdings S.A. | Intangible assets - customer lists | |||
Assets acquired: | |||
Intangible assets | 171.5 | ||
Interoute Communications Holdings S.A. | Intangible assets - tradename | |||
Assets acquired: | |||
Intangible assets | 2.1 | ||
Interoute Communications Holdings S.A. | Other intangible assets | |||
Assets acquired: | |||
Intangible assets | $ 15.4 |
BUSINESS ACQUISITIONS - Weighte
BUSINESS ACQUISITIONS - Weighted Average Life (Details) - Interoute Communications Holdings S.A. | 1 Months Ended |
May 31, 2018 | |
Business Acquisition [Line Items] | |
Weighted average | 13 years 10 months 24 days |
Intangible assets - customer lists | |
Business Acquisition [Line Items] | |
Weighted average | 14 years 8 months 12 days |
Intangible assets - tradename | |
Business Acquisition [Line Items] | |
Weighted average | 1 year |
Intangible assets - other | |
Business Acquisition [Line Items] | |
Weighted average | 7 years |
BUSINESS ACQUISITIONS - Schedul
BUSINESS ACQUISITIONS - Schedule of Amortization Expense (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||
2,018 | $ 22 | |
2,019 | 84.2 | |
2,020 | 80.4 | |
2,021 | 78.7 | |
2,022 | 65.7 | |
2023 and beyond | 233.6 | |
Total | 564.6 | $ 417.1 |
Interoute Communications Holdings S.A. | ||
Business Acquisition [Line Items] | ||
2,018 | 4.4 | |
2,019 | 16.3 | |
2,020 | 15.5 | |
2,021 | 15.5 | |
2,022 | 15.5 | |
2023 and beyond | 116 | |
Total | $ 183.2 |
BUSINESS ACQUISITIONS - Sched_2
BUSINESS ACQUISITIONS - Schedule of Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Combinations [Abstract] | ||||
Revenue | $ 448.6 | $ 444.7 | $ 1,381.2 | $ 1,301.4 |
Net loss | $ (23.4) | $ (9.3) | $ (75) | $ (137.3) |
Loss per share: | ||||
Basic (in dollars per share) | $ (0.43) | $ (0.18) | $ (1.52) | $ (2.71) |
Diluted (in dollars per share) | $ (0.43) | $ (0.18) | $ (1.52) | $ (2.71) |
Denominator for basic EPS – weighted average shares (in shares) | 54,671,787 | 51,351,787 | 49,210,929 | 50,749,411 |
Denominator for diluted EPS – weighted average shares (in shares) | 54,671,787 | 51,351,787 | 49,210,929 | 50,749,411 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 1,666.8 | $ 1,666.8 | $ 644.5 | ||
Intangible asset balance | 564.6 | 564.6 | $ 417.1 | ||
Amortization of intangible assets | $ 22.9 | $ 17 | $ 64 | $ 49.6 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Carrying Amount of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Goodwill beginning of period | $ 644.5 |
Goodwill end of period | 1,666.8 |
Accelerated Connections, Inc. | |
Goodwill [Roll Forward] | |
Goodwill beginning of period | 644.5 |
Initial goodwill associated with 2018 business combinations | 1,107.3 |
Adjustments to 2018 business combinations | (100) |
Adjustments to prior year business combinations | 23.5 |
Foreign currency translation adjustments | (8.5) |
Goodwill end of period | $ 1,666.8 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill And Intangible Assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Schedule of Intangible Assets [Line Items] | ||
Gross Asset Cost | $ 798.2 | $ 586.7 |
Accumulated Amortization | 233.6 | 169.6 |
Total | $ 564.6 | 417.1 |
Minimum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 3 years | |
Maximum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 10 years | |
Customer lists | ||
Schedule of Intangible Assets [Line Items] | ||
Gross Asset Cost | $ 746.8 | 552.8 |
Accumulated Amortization | 212.7 | 155.1 |
Total | $ 534.1 | 397.7 |
Customer lists | Minimum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 3 years | |
Customer lists | Maximum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 20 years | |
Non-compete agreements | ||
Schedule of Intangible Assets [Line Items] | ||
Gross Asset Cost | $ 4.7 | 4.6 |
Accumulated Amortization | 4.6 | 4.5 |
Total | $ 0.1 | 0.1 |
Non-compete agreements | Minimum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 3 years | |
Non-compete agreements | Maximum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Other intangible assets | ||
Schedule of Intangible Assets [Line Items] | ||
Gross Asset Cost | $ 1.7 | 1.7 |
Accumulated Amortization | 1.7 | 1.7 |
Total | $ 0 | 0 |
Other intangible assets | Minimum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 3 years | |
Other intangible assets | Maximum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 7 years | |
Intellectual property | ||
Schedule of Intangible Assets [Line Items] | ||
Gross Asset Cost | $ 38.9 | 23.7 |
Accumulated Amortization | 10.3 | 5.2 |
Total | $ 28.6 | 18.5 |
Intellectual property | Minimum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 10 years | |
Tradename | ||
Schedule of Intangible Assets [Line Items] | ||
Gross Asset Cost | $ 6.1 | 3.9 |
Accumulated Amortization | 4.3 | 3.1 |
Total | $ 1.8 | $ 0.8 |
Tradename | Minimum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 1 year | |
Tradename | Maximum | ||
Schedule of Intangible Assets [Line Items] | ||
Amortization Period | 3 years |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Amortization Expense (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2018 remaining | $ 22 | |
2,019 | 84.2 | |
2,020 | 80.4 | |
2,021 | 78.7 | |
2,022 | 65.7 | |
2023 and beyond | 233.6 | |
Total | $ 564.6 | $ 417.1 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid carrier costs | $ 24.7 | $ 2.1 |
Prepaid selling, general and administrative | 14 | 10 |
Interest rate swaps | 5.8 | 0 |
Short term deposits | 2.6 | 0.4 |
Taxes receivable | 2.8 | 1.5 |
Capitalized commissions | 3.2 | 0 |
Other | 15.7 | 10.1 |
Prepaid expenses and other current assets | $ 68.8 | $ 24.1 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Compensation and benefits | $ 35.1 | $ 13.3 |
Carrier costs | 61.9 | 13.8 |
Restructuring | 23.7 | 9.7 |
Interest | 13.2 | 22.9 |
Fiber pair repurchase | 0 | 10 |
Accrued taxes | 6.8 | 9.6 |
Interest rate swaps | 6.5 | 0 |
Selling, general and administrative | 3.4 | 2.1 |
Other | 18.1 | 7.6 |
Accrued expenses and other current liabilities | $ 168.7 | $ 89 |
DEFERRED REVENUE - Narrative (D
DEFERRED REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Deferred Revenue Arrangement [Line Items] | ||||
Non-cash impact on foreign currency translation adjustments | $ 1.7 | |||
Increase in deferred revenue (gross) | (11.2) | $ (28.1) | ||
Prepaid Capacity Sales, IRUs, Deferred Non-Recurring Revenue, and Unearned Revenue | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Total deferred revenue | $ 460.1 | 460.1 | $ 161.7 | |
Increase in deferred revenue (gross) | $ 238.3 | $ 486.2 |
DEFERRED REVENUE - Schedule of
DEFERRED REVENUE - Schedule of Changes in Deferred Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Beginning balance | $ 53.7 | ||
Increase in deferred revenue (gross) | (11.2) | $ (28.1) | |
Ending balance | $ 191.5 | 191.5 | |
Prepaid Capacity Sales, IRUs, Deferred Non-Recurring Revenue, and Unearned Revenue | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Beginning balance | $ 469.7 | $ 161.7 | |
Beginning balance, percentage | 28.50% | 45.70% | |
Revenue recognized from beginning balance | $ (106.9) | $ (45.6) | |
Revenue recognized that was included in beginning balance, percentage | 57.90% | 82.10% | |
Increase in deferred revenue (gross) | $ 238.3 | $ 486.2 | |
Increase in deferred revenue (gross), percentage | 32.20% | 32.40% | |
Revenue recognized on increase in deferred revenue | $ (141) | $ (387.6) | |
Revenue recognized on increase in deferred revenue, percentage | 43.80% | 41.90% | |
Business combinations (gross) | $ 311.3 | ||
Business combinations (gross), percentage | 22.10% | ||
Revenue recognized from business combinations | $ (65.9) | ||
Revenue recognized from business combinations, percentage | 33.70% | ||
Ending balance | $ 460.1 | $ 460.1 | |
Ending balance, percentage | 27.70% | 27.70% | |
Less than 1 Year | Prepaid Capacity Sales, IRUs, Deferred Non-Recurring Revenue, and Unearned Revenue | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Beginning balance | $ 112.2 | $ 31.4 | |
Revenue recognized from beginning balance | (97.4) | (28.8) | |
Increase in deferred revenue (gross) | 226.2 | 472.5 | |
Revenue recognized on increase in deferred revenue | (137.8) | (383.3) | |
Business combinations (gross) | 69 | ||
Revenue recognized from business combinations | (57.6) | ||
Ending balance | 103.2 | 103.2 | |
Greater than 1 Year | Prepaid Capacity Sales, IRUs, Deferred Non-Recurring Revenue, and Unearned Revenue | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Beginning balance | 357.5 | 130.3 | |
Revenue recognized from beginning balance | (9.5) | (16.8) | |
Increase in deferred revenue (gross) | 12.1 | 13.7 | |
Revenue recognized on increase in deferred revenue | (3.2) | (4.3) | |
Business combinations (gross) | 242.3 | ||
Revenue recognized from business combinations | (8.3) | ||
Ending balance | $ 356.9 | $ 356.9 |
DEFERRED REVENUE - Schedule o_2
DEFERRED REVENUE - Schedule of Performance Obligations (Details) - Prepaid Capacity Sales, IRUs, Deferred Non-Recurring Revenue, and Unearned Revenue $ in Millions | Sep. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 109.4 |
Performance obligation, percentage | 51.40% |
Performance obligation period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 64.3 |
Performance obligation, percentage | 50.80% |
Performance obligation period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 39.3 |
Performance obligation, percentage | 35.40% |
Performance obligation period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 35 |
Performance obligation, percentage | 33.70% |
Performance obligation period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 33 |
Performance obligation, percentage | 33.60% |
Performance obligation period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 179.1 |
Performance obligation, percentage | 14.70% |
Performance obligation period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 460.1 |
Performance obligation, percentage | 27.70% |
Less than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 95.4 |
Less than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 7.8 |
Less than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 0 |
Less than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 0 |
Less than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 0 |
Less than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 0 |
Less than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 103.2 |
Greater than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 14 |
Greater than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 56.5 |
Greater than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 39.3 |
Greater than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 35 |
Greater than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 33 |
Greater than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | 179.1 |
Greater than 1 Year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Deferred Revenue Arrangement [Line Items] | |
Performance obligations | $ 356.9 |
DEBT - Schedule of Long-term De
DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Debt Instrument [Line Items] | |||
Total debt obligations | $ 3,237.9 | $ 1,268 | |
Unamortized debt issuance costs | (32.1) | (33.8) | |
Unamortized original issuance premium (discount), net | (49.4) | 9.3 | |
Carrying value of debt | 3,156.4 | 1,243.5 | |
Less current portion | (40.9) | (7) | |
Long-term debt less current portion | 3,115.5 | 1,236.5 | |
US Term Loan | |||
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | (11.8) | (14.7) | |
Unamortized original issuance premium (discount), net | (41.1) | (6.5) | |
EMEA Term loan | |||
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | (2.8) | 0 | |
Unamortized original issuance premium (discount), net | (22.7) | 0 | |
7.875% Senior unsecured notes | |||
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | (14.7) | (16.1) | |
Unamortized original issuance premium (discount), net | 14.4 | 15.8 | |
Term loan | US Term Loan | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 1,765.6 | 693 | |
Term loan | EMEA Term loan | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 868.2 | 0 | |
Senior Notes | 7.875% Senior unsecured notes | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 575 | 575 | |
Other secured loans | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 21.6 | $ 0 | |
Revolving line of credit | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 7.5 | ||
Revolving line of credit | Line of Credit | Credit Agreement January 2017 | |||
Debt Instrument [Line Items] | |||
Total debt obligations | $ 7.5 | $ 0 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Sep. 30, 2017USD ($) | May 31, 2018USD ($) | May 31, 2018EUR (€) | Dec. 31, 2017USD ($) | Jan. 09, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Increase in borrowing capacity limit (not more than) | $ 575,000,000 | |||||||||
Original issuance discount | $ 49,400,000 | $ 49,400,000 | ||||||||
Prepayment penalty percentage | 1.00% | 1.00% | ||||||||
Prepayment penalty | $ 0 | $ 0 | ||||||||
Other expense | (8,100,000) | $ (200,000) | 106,900,000 | $ (200,000) | ||||||
Debt premium | $ 9,300,000 | |||||||||
Other secured loans | 3,237,900,000 | 3,237,900,000 | 1,268,000,000 | |||||||
Amortization of debt issuance costs | 1,100,000 | 1,000,000 | 3,400,000 | 2,600,000 | ||||||
Debt discount amortization | 1,700,000 | $ 0 | 1,900,000 | $ 500,000 | ||||||
Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Other expense | (8,600,000) | 700,000 | ||||||||
Other secured loans | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Other secured loans | 21,600,000 | 21,600,000 | $ 0 | |||||||
Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | $ 200,000,000 | 200,000,000 | |||||||
Debt instrument, interest rate, effective percentage | 5.30% | 5.30% | 4.50% | |||||||
Other secured loans | $ 7,500,000 | $ 7,500,000 | ||||||||
Letter of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 50,000,000 | |||||||||
US Term Loan B Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 1,770,000,000 | |||||||||
Original issuance discount | $ 8,900,000 | |||||||||
Quarterly installments | $ 4,425,000 | |||||||||
US Term Loan B Facility | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 1.75% | 1.75% | ||||||||
US Term Loan B Facility | Eurocurrency Loans | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 2.75% | 2.75% | ||||||||
US Term Loan B Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 0.00% | 0.00% | ||||||||
EMEA Term Loan B Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | € | € 750,000,000 | |||||||||
Original issuance discount | € | € 3,800,000 | |||||||||
Quarterly installments | € | € 1,875,000 | |||||||||
Debt instrument, basis spread on variable rate | 3.25% | 3.25% | ||||||||
EMEA Term Loan B Facility | Euribor | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 0.00% | 0.00% | ||||||||
EMEA Term Loan B Facility | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 3.25% | 3.25% | ||||||||
EMEA Term Loan B Facility | Revolving Credit Facility | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 1.75% | 1.75% | ||||||||
EMEA Term Loan B Facility | Revolving Credit Facility | Eurodollar | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 2.75% | 2.75% | ||||||||
Credit Agreement 2018 | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Consolidated net secured leverage ratio (more than) | 0.30 | 0.30 | ||||||||
7.875% Senior unsecured notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount | $ 575,000,000 | |||||||||
Debt issuance costs | $ 500,000 | $ 500,000 | ||||||||
Amortization of debt issuance costs | $ 1,400,000 | |||||||||
Debt discount amortization | $ (1,400,000) | |||||||||
7.875% Senior unsecured notes | Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated percentage rate | 7.875% | 7.875% | 7.875% | 7.875% | ||||||
Aggregate principal amount | $ 575,000,000 | $ 300,000,000 | ||||||||
Debt premium | 16,500,000 | 16,500,000 | ||||||||
Debt issuance costs | 17,300,000 | $ 17,300,000 | ||||||||
Other secured loans | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 | |||||||
Credit Agreement January 2017 | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 75,000,000 | |||||||||
Credit Agreement January 2017 | Letter of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 25,000,000 | |||||||||
Credit Agreement January 2017 | US Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 700,000,000 | |||||||||
Original issuance discount | $ 3,500,000 |
DEBT - Schedule of Revolving Cr
DEBT - Schedule of Revolving Credit Facility (Details) - USD ($) | Sep. 30, 2018 | May 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Borrowings outstanding | $ (3,237,900,000) | $ (1,268,000,000) | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Committed capacity | 200,000,000 | $ 200,000,000 | |
Borrowings outstanding | (7,500,000) | ||
Letters of credit issued | (13,900,000) | ||
Unused and available | $ 178,600,000 |
DEBT - Schedule of Interest Rat
DEBT - Schedule of Interest Rate Swaps (Details) | 9 Months Ended | |
Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | |
Derivative [Line Items] | ||
Asset Derivatives | $ 5,800,000 | |
Liability Derivatives | (6,500,000) | |
Interest rate swap, maturing 4/30/2023 | ||
Derivative [Line Items] | ||
Notional amount | $ 500,000,000 | |
Term | 5 years | |
Asset Derivatives | $ 5,500,000 | |
Liability Derivatives | 0 | |
Interest rate swap, maturing 5/31/2025 | ||
Derivative [Line Items] | ||
Notional amount | $ 200,000,000 | |
Term | 7 years | |
Asset Derivatives | $ 0 | |
Liability Derivatives | (1,500,000) | |
Interest rate swap, maturing 6/30/2021 | ||
Derivative [Line Items] | ||
Notional amount | $ 300,000,000 | |
Term | 3 years | |
Asset Derivatives | $ 300,000 | |
Liability Derivatives | $ 0 | |
Interest rate swap, maturing 5/31/2025 | ||
Derivative [Line Items] | ||
Notional amount | € | € 317,000,000 | |
Term | 7 years | |
Asset Derivatives | € | 0 | |
Liability Derivatives | € | € (5,000,000) | |
LIBOR | Interest rate swap, maturing 4/30/2023 | ||
Derivative [Line Items] | ||
Fixed rate | 2.643% | 2.643% |
LIBOR | Interest rate swap, maturing 5/31/2025 | ||
Derivative [Line Items] | ||
Fixed rate | 3.037% | 3.037% |
LIBOR | Interest rate swap, maturing 6/30/2021 | ||
Derivative [Line Items] | ||
Fixed rate | 2.8235% | 2.8235% |
Euribor | Interest rate swap, maturing 5/31/2025 | ||
Derivative [Line Items] | ||
Fixed rate | 0.89% | 0.89% |
DEBT - Schedule of Maturities o
DEBT - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2018 remaining | $ 10.4 | |
2,019 | 39.3 | |
2,020 | 30.9 | |
2,021 | 26.8 | |
2,022 | 26.4 | |
2023 and beyond | 3,104.1 | |
Unamortized original issuance premium (discount), net | $ 3,237.9 | $ 1,268 |
DEBT - Schedule of Debt Issuanc
DEBT - Schedule of Debt Issuance Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Issuance Costs [Roll Forward] | ||||
Beginning balance | $ (33.8) | |||
Debt issuance costs incurred | (8.2) | |||
Amortization | $ 1.1 | $ 1 | 3.4 | $ 2.6 |
Loss on debt extinguishment | 6.5 | |||
Ending balance | (32.1) | (32.1) | ||
US Term Loan | ||||
Debt Issuance Costs [Roll Forward] | ||||
Beginning balance | (14.7) | |||
Debt issuance costs incurred | (4.7) | |||
Amortization | 1.5 | |||
Loss on debt extinguishment | 6.1 | |||
Ending balance | (11.8) | (11.8) | ||
EMEA Term loan | ||||
Debt Issuance Costs [Roll Forward] | ||||
Beginning balance | 0 | |||
Debt issuance costs incurred | (2.9) | |||
Amortization | 0.1 | |||
Loss on debt extinguishment | 0 | |||
Ending balance | (2.8) | (2.8) | ||
7.875% Senior Unsecured Notes | ||||
Debt Issuance Costs [Roll Forward] | ||||
Beginning balance | (16.1) | |||
Debt issuance costs incurred | 0 | |||
Amortization | 1.4 | |||
Loss on debt extinguishment | 0 | |||
Ending balance | (14.7) | (14.7) | ||
Revolving Line of Credit | ||||
Debt Issuance Costs [Roll Forward] | ||||
Beginning balance | (3) | |||
Debt issuance costs incurred | (0.6) | |||
Amortization | 0.4 | |||
Loss on debt extinguishment | 0.4 | |||
Ending balance | $ (2.8) | $ (2.8) |
DEBT - Schedule of Debt Discoun
DEBT - Schedule of Debt Discount And Premium (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Original Issuance Discount And Premium [Roll Forward] | ||||
Beginning balance | $ 9.3 | |||
New Original Issuance Discount | (13.3) | |||
Fees paid to lenders | (54.6) | |||
Amortization | $ 1.7 | $ 0 | 1.9 | $ 0.5 |
Loss on debt extinguishment | 7.3 | |||
Ending balance | (49.4) | (49.4) | ||
US Term Loan | ||||
Original Issuance Discount And Premium [Roll Forward] | ||||
Beginning balance | (6.5) | |||
New Original Issuance Discount | (8.9) | |||
Fees paid to lenders | (35.2) | |||
Amortization | 2.2 | |||
Loss on debt extinguishment | 7.3 | |||
Ending balance | (41.1) | (41.1) | ||
EMEA Term loan | ||||
Original Issuance Discount And Premium [Roll Forward] | ||||
Beginning balance | 0 | |||
New Original Issuance Discount | (4.4) | |||
Fees paid to lenders | (19.4) | |||
Amortization | 1.1 | |||
Loss on debt extinguishment | 0 | |||
Ending balance | (22.7) | (22.7) | ||
7.875% Senior Unsecured Notes | ||||
Original Issuance Discount And Premium [Roll Forward] | ||||
Beginning balance | 15.8 | |||
New Original Issuance Discount | 0 | |||
Fees paid to lenders | 0 | |||
Amortization | (1.4) | |||
Loss on debt extinguishment | 0 | |||
Ending balance | $ 14.4 | $ 14.4 |
DEBT DEBT - Maximum Specified R
DEBT DEBT - Maximum Specified Ratio (Details) - Revolving Credit Facility - Credit Agreement 2018 | 3 Months Ended | |||||||||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||||||||||||||||
Maximum specified ratio | 650.00% | |||||||||||||||
Scenario, Forecast | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum specified ratio | 425.00% | 450.00% | 450.00% | 500.00% | 500.00% | 550.00% | 550.00% | 550.00% | 600.00% | 600.00% | 625.00% | 625.00% | 650.00% | 650.00% | 650.00% |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | 14,250,000 | 14,250,000 | |||||
Awards outstanding and issued (in shares) | 9,398,923 | 9,398,923 | |||||
Unrecognized compensation cost | $ 73,500,000 | $ 73,500,000 | |||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Purchase price of common stock, percent | 85.00% | ||||||
Number of shares available for grant (in shares) | 410,378 | 410,378 | |||||
Performance-based restricted stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value of shares granted | $ 0 | $ 500,000 | $ 400,000 | $ 500,000 | |||
Performance-based restricted stock | 2015 Performance Awards | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value of shares granted | $ 17,400,000 | $ 17,400,000 | |||||
Performance-based restricted stock | 2017 Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | 32,600,000 | $ 32,600,000 | |||||
Stock Option 25 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options, vested and expected to vest, outstanding, weighted average remaining contractual term | 4 years | ||||||
Stock Option 25 | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options, vested and expected to vest, outstanding, weighted average remaining contractual term | 4 years | ||||||
Stock Option 75 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options, vested and expected to vest, outstanding, weighted average remaining contractual term | 3 years | ||||||
Stock Option 75 | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options, vested and expected to vest, outstanding, weighted average remaining contractual term | 3 years | ||||||
Periodic Vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Purchase price of common stock, percent (at least) | 100.00% | ||||||
Periodic Vesting | Employee Director Consultant Stock Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of award (no later than) | 10 years | ||||||
Periodic Vesting | Stock Option 25 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual vesting percentage | 25.00% | ||||||
Periodic Vesting | Stock Option 25 | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual vesting percentage | 25.00% | ||||||
2014 Performance Awards | Performance-based restricted stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value of shares granted | $ 8,500,000 | $ 8,500,000 | |||||
2015 Performance Awards | Performance-based restricted stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | 3,400,000 | $ 3,400,000 | |||||
Allocated share-based compensation expense | 1,900,000 | 1,500,000 | 5,900,000 | 4,200,000 | |||
2017 Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | 16,300,000 | 16,300,000 | |||||
2017 Performance Shares | Performance-based restricted stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | 28,900,000 | 28,900,000 | |||||
Allocated share-based compensation expense | $ 1,800,000 | $ 0 | $ 3,600,000 | $ 0 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Share-based Compensation Expense (Details) - Selling, general and administrative expenses - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 9.2 | $ 6.1 | $ 23.9 | $ 16 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 0.2 | 0.4 | 0.9 | 1.1 |
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 8.9 | 5.7 | 22.8 | 14.8 |
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 0.1 | $ 0 | $ 0.2 | $ 0.1 |
SHARE-BASED COMPENSATION - Sc_2
SHARE-BASED COMPENSATION - Schedule of Unrecognized Compensation Expense (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 73.5 |
Weighted Average Remaining Period to be Recognized (Years) | 2 years 1 month 10 days |
Time-based stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost, Time-based stock options | $ 0.8 |
Weighted Average Remaining Period to be Recognized (Years) | 1 year 4 days |
Time-based restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost, Time-based and Performance-based restricted stock | $ 56.7 |
Weighted Average Remaining Period to be Recognized (Years) | 2 years 3 months 18 days |
Performance-based restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost, Time-based and Performance-based restricted stock | $ 16 |
Weighted Average Remaining Period to be Recognized (Years) | 1 year 5 months 23 days |
2017 Performance Shares | Performance-based restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 32.6 |
SHARE-BASED COMPENSATION - Sc_3
SHARE-BASED COMPENSATION - Schedule of Stock Options (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Time-based restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Time-based stock granted (in shares) | 196,468 | 238,088 | 815,019 | 929,896 |
Fair value of stock granted | $ 8.8 | $ 7.6 | $ 38.4 | $ 27.5 |
Performance-based restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Time-based stock granted (in shares) | 0 | 20,000 | 8,000 | 20,000 |
Fair value of stock granted | $ 0 | $ 0.5 | $ 0.4 | $ 0.5 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Tax expense (benefit) | $ (1.6) | $ (8.7) | $ (1.1) | $ (22.7) | |
Valuation allowance | 134.6 | $ 134.6 | $ 39.2 | ||
Measurement period adjustment | $ 158.8 |
SEVERANCE, RESTRUCTURING AND _3
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS - Schedule of Exit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 19.1 | $ 9.7 | ||
Charges | 15.5 | $ 11.1 | 22.7 | $ 21.8 |
Payments | (10.7) | $ (2.8) | (22.3) | $ (9.4) |
Acquired Costs | 13.8 | |||
Foreign Currency Translation Adjustments | (0.2) | (0.2) | ||
Ending balance | 23.7 | 23.7 | ||
Employee Termination Benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 9.1 | 5.5 | ||
Charges | 9.8 | 15.9 | ||
Payments | (7.6) | (16.1) | ||
Acquired Costs | 6 | |||
Foreign Currency Translation Adjustments | (0.2) | (0.2) | ||
Ending balance | 11.1 | 11.1 | ||
Lease terminations | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 9.3 | 2.4 | ||
Charges | 0.6 | 1 | ||
Payments | (1.1) | (2.4) | ||
Acquired Costs | 7.8 | |||
Foreign Currency Translation Adjustments | 0 | 0 | ||
Ending balance | 8.8 | 8.8 | ||
Other contract terminations | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 0.7 | 1.8 | ||
Charges | 5.1 | 5.8 | ||
Payments | (2) | (3.8) | ||
Acquired Costs | 0 | |||
Foreign Currency Translation Adjustments | 0 | 0 | ||
Ending balance | $ 3.8 | $ 3.8 |
SEVERANCE, RESTRUCTURING AND _4
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | ||||
Charges | $ 15.5 | $ 11.1 | $ 22.7 | $ 21.8 |
Payments for restructuring | $ 10.7 | $ 2.8 | $ 22.3 | $ 9.4 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)office | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)officecategory | Sep. 30, 2017USD ($) | |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
2018 remaining | $ 1.4 | $ 1.4 | ||
2,019 | 4.4 | 4.4 | ||
2,020 | 5.2 | 5.2 | ||
2,021 | 4.2 | 4.2 | ||
2,022 | 3.1 | 3.1 | ||
2023 and beyond | 24.7 | 24.7 | ||
Capital lease obligation | 43 | 43 | ||
Office Space | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
2018 remaining | 6.1 | 6.1 | ||
2,019 | 20.8 | 20.8 | ||
2,020 | 17.8 | 17.8 | ||
2,021 | 14.8 | 14.8 | ||
2,022 | 10.2 | 10.2 | ||
2023 and beyond | 29.1 | 29.1 | ||
Operating lease obligation | 98.8 | 98.8 | ||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
Office facility rent expense | 4.6 | $ 1.1 | 10.4 | $ 3.2 |
Other | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
2018 remaining | 18 | 18 | ||
2,019 | 4.9 | 4.9 | ||
2,020 | 2.6 | 2.6 | ||
2,021 | 1.4 | 1.4 | ||
2,022 | 0 | 0 | ||
2023 and beyond | 0 | 0 | ||
Operating lease obligation | 26.9 | 26.9 | ||
Network Supply | ||||
Contractual Obligation, Fiscal Year Maturity | ||||
2018 remaining | 99.5 | 99.5 | ||
2,019 | 346 | 346 | ||
2,020 | 242.1 | 242.1 | ||
2,021 | 130.6 | 130.6 | ||
2,022 | 39.6 | 39.6 | ||
2023 and beyond | 182.8 | 182.8 | ||
Contractual obligation | $ 1,040.6 | $ 1,040.6 | ||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
Contractual obligation, number of key categories | category | 2 | |||
Contract term | 1 year | |||
North America | ||||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
Number of offices | office | 35 | 35 | ||
Europe | ||||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
Number of offices | office | 40 | 40 | ||
Asia | ||||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
Number of offices | office | 5 | 5 | ||
Middle East | ||||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
Number of offices | office | 2 | 2 | ||
South America | ||||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||||
Number of offices | office | 1 | 1 |