Document And Entity Information
Document And Entity Information | 12 Months Ended |
Jun. 30, 2017USD ($)shares | |
Document And Entity Information [Abstract] | |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2017 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | ZAYO GROUP LLC |
Entity Central Index Key | 1,502,756 |
Current Fiscal Year End Date | --06-30 |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Public Float | $ | $ 0 |
Entity Common Stock, Shares Outstanding | shares | 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
Current assets | ||
Cash and cash equivalents | $ 220 | $ 170.1 |
Trade receivables, net of allowance of $9.5 and $7.5 as of June 30, 2017 and June 30, 2016, respectively | 191.6 | 148.4 |
Prepaid expenses | 68.3 | 68.8 |
Other assets | 34.1 | 9.3 |
Total current assets | 514 | 396.6 |
Property and equipment, net | 5,016 | 4,079.5 |
Intangible assets, net | 1,188.6 | 934.9 |
Goodwill | 1,840.2 | 1,214.5 |
Deferred income taxes, net | 27.3 | |
Other assets | 141.7 | 94.5 |
Total assets | 8,727.8 | 6,720 |
Current liabilities | ||
Current portion of long-term debt | 5 | |
Accounts payable | 72.4 | 97 |
Accrued liabilities | 329.2 | 226.9 |
Accrued interest | 63.5 | 28.6 |
Capital lease obligations, current | 8 | 5.8 |
Deferred revenue, current | 146 | 129.4 |
Total current liabilities | 624.1 | 487.7 |
Long-term debt, non-current | 5,532.7 | 4,085.3 |
Capital lease obligation, non-current | 93.6 | 44.9 |
Deferred revenue, non-current | 989.7 | 793.3 |
Deferred income taxes, net | 40.2 | 48 |
Other long-term liabilities | 52.4 | 57 |
Total liabilities | 7,332.7 | 5,516.2 |
Commitments and contingencies (Note 13) | ||
Member's Equity | ||
Member's interest | 1,879 | 1,772.6 |
Accumulated other comprehensive income | 5.4 | 4.5 |
Accumulated deficit | (489.3) | (573.3) |
Total member's equity | 1,395.1 | 1,203.8 |
Total liabilities and member's equity | $ 8,727.8 | $ 6,720 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
Statement Of Financial Position [Abstract] | ||
Trade receivables allowance | $ 9.5 | $ 7.5 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | |||||||||||
Revenue | $ 638 | $ 550.2 | $ 506.7 | $ 504.9 | $ 507.3 | $ 478 | $ 369.6 | $ 366.8 | $ 2,199.8 | $ 1,721.7 | $ 1,347.1 |
Operating costs and expenses | |||||||||||
Operating costs (excluding depreciation and amortization and including stock-based compensation—Note 11) | 234.2 | 195 | 179.9 | 173.8 | 182.7 | 170.8 | 112.2 | 113 | 782.9 | 578.7 | 413.5 |
Selling, general and administrative expenses (including stock-based compensation—Note 11) | 117.1 | 108.8 | 104.7 | 105.6 | 104.3 | 112.5 | 85 | 84.6 | 436.2 | 386.4 | 358.1 |
Depreciation and amortization | 181.3 | 155.7 | 131.4 | 138.5 | 148.3 | 137.2 | 113.7 | 117.1 | 606.9 | 516.3 | 406.2 |
Total operating costs and expenses | 532.6 | 459.5 | 416 | 417.9 | 435.3 | 420.5 | 310.9 | 314.7 | 1,826 | 1,481.4 | 1,177.8 |
Operating income (loss) | 105.4 | 90.7 | 90.7 | 87 | 72 | 57.5 | 58.7 | 52.1 | 373.8 | 240.3 | 169.3 |
Other expenses | |||||||||||
Interest expense | (71.5) | (63) | (53.7) | (53.3) | (57.4) | (57.7) | (51.2) | (53.8) | (241.5) | (220.1) | (214) |
Loss on extinguishment of debt | (13.7) | (4.5) | (33.8) | (18.2) | (33.8) | (94.3) | |||||
Foreign currency (loss)/gain on intercompany loans | 14.4 | 3.9 | (17.4) | (11.2) | (24.9) | (11.1) | (7.1) | (10.7) | (10.3) | (53.8) | (24.4) |
Other (income)/expense, net | (0.4) | 0.5 | 0.4 | (0.2) | 0.1 | (0.2) | (0.1) | (0.1) | 0.3 | (0.3) | (0.4) |
Total other expenses, net | (71.2) | (63.1) | (70.7) | (64.7) | (116) | (69) | (58.4) | (64.6) | (269.7) | (308) | (333.1) |
Income/(loss) from operations before income taxes | 34.2 | 27.6 | 20 | 22.3 | (44) | (11.5) | 0.3 | (12.5) | 104.1 | (67.7) | (163.8) |
Provision/(benefit) for income taxes | 11 | 0.6 | 0.2 | 6.6 | (13.1) | 7.8 | 11.1 | 2.7 | 18.4 | 8.5 | (8.7) |
Net income/(loss) | $ 23.2 | $ 27 | $ 19.8 | $ 15.7 | $ (30.9) | $ (19.3) | $ (10.8) | $ (15.2) | $ 85.7 | $ (76.2) | $ (155.1) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Comprehensive Income Net Of Tax [Abstract] | |||
Net income/(loss) | $ 85.7 | $ (76.2) | $ (155.1) |
Foreign currency translation adjustments | 2.1 | 12.4 | (22.3) |
Defined benefit pension plan adjustments | (1.2) | ||
Comprehensive income/(loss) | $ 86.6 | $ (63.8) | $ (177.4) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF MEMBER’S EQUITY - USD ($) $ in Millions | Members Interest [Member] | Accumulated Other Comprehensive (Loss)/Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Jun. 30, 2014 | $ 728.9 | $ 14.4 | $ (342) | $ 401.3 |
Capital contributed (cash) | 385 | 385 | ||
Reclassification of common unit liability to member's interest | 490.2 | 490.2 | ||
Stock-based compensation | 95 | 95 | ||
Foreign currency translation adjustments | (22.3) | (22.3) | ||
Net income/(loss) | (155.1) | (155.1) | ||
Balance at Jun. 30, 2015 | 1,699.1 | (7.9) | (497.1) | 1,194.1 |
Reclassification of common unit liability to member's interest | 490.2 | |||
Stock-based compensation | 152.9 | 152.9 | ||
Cumulative effect adjustment resulting from adoption of ASU 2016-09 (Note 1) | Accounting Standards Update 2016-09 [Member] | (1.7) | |||
Foreign currency translation adjustments | 12.4 | 12.4 | ||
Capital distribution to parent | (81.1) | (81.1) | ||
Other | 1.7 | 1.7 | ||
Net income/(loss) | (76.2) | (76.2) | ||
Balance at Jun. 30, 2016 | 1,772.6 | 4.5 | (573.3) | 1,203.8 |
Stock-based compensation | 104.7 | 104.7 | ||
Cumulative effect adjustment resulting from adoption of ASU 2016-09 (Note 1) | 1.7 | (1.7) | ||
Foreign currency translation adjustments | 2.1 | 2.1 | ||
Defined benefit pension plan adjustments | (1.2) | (1.2) | ||
Net income/(loss) | 85.7 | 85.7 | ||
Balance at Jun. 30, 2017 | $ 1,879 | $ 5.4 | $ (489.3) | $ 1,395.1 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities | |||
Net income/(loss) | $ 85.7 | $ (76.2) | $ (155.1) |
Adjustments to reconcile net income/(loss) to net cash provided by operating activities | |||
Depreciation and amortization | 606.9 | 516.3 | 406.2 |
Loss on extinguishment of debt | 18.2 | 33.8 | 94.3 |
Non-cash interest expense | 9.6 | 11.9 | 19.7 |
Stock-based compensation | 114.1 | 155.9 | 200.7 |
Amortization of deferred revenue | (117.6) | (111.5) | (72.1) |
Additions to deferred revenue | 200.5 | 184 | 149.1 |
Foreign currency loss on intercompany loans | 10.3 | 53.8 | 24.4 |
Excess tax benefit from stock-based compensation | (7.9) | ||
Deferred income taxes | 12.6 | (2.8) | (13.2) |
Provision for bad debts | 3.7 | 3.9 | 1.9 |
Non-cash loss on investments | 1.2 | 1.2 | 0.9 |
Changes in operating assets and liabilities, net of acquisitions | |||
Trade receivables | (7.2) | 1.9 | (11.2) |
Accounts payable and accrued liabilities | 5.2 | (36) | (22.9) |
Other assets and liabilities | (33.4) | (14.3) | (15.7) |
Net cash provided by operating activities | 909.8 | 714 | 607 |
Cash flows from investing activities | |||
Purchases of property and equipment | (835.5) | (704.1) | (530.4) |
Cash paid for acquisitions, net of cash acquired | (1,434.8) | (437.5) | (855.7) |
Net cash used in investing activities | (2,270.3) | (1,141.6) | (1,386.1) |
Cash flows from financing activities | |||
Proceeds from debt | 3,865.8 | 929.3 | 1,787.3 |
Proceeds from equity contributions | 385 | ||
Principal payments on long-term debt | (2,408.8) | (535) | (1,288.5) |
Payment of early redemption fees on debt extinguished | (20.3) | (62.6) | |
Principal payments on capital lease obligations | (6.6) | (4.9) | (3.5) |
Payment of debt issue costs | (35.4) | (4.2) | (24.2) |
Common stock repurchases | (81.1) | ||
Contributions to parent | (81.1) | ||
Excess tax benefit from stock-based compensation | 7.9 | ||
Cash paid for Santa Clara acquisition financing arrangement | (3.7) | ||
Net cash provided by financing activities | 1,411.3 | 291.7 | 793.5 |
Net cash flows | 50.8 | (135.9) | 14.4 |
Effect of changes in foreign exchange rates on cash | (0.9) | (2) | (3.8) |
Net increase/(decrease) in cash and cash equivalents | 49.9 | (137.9) | 10.6 |
Cash and cash equivalents, beginning of period | 170.1 | 308 | 297.4 |
Cash and cash equivalents, end of period | 220 | 170.1 | 308 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Cash paid for interest, net of capitalized interest | 195.6 | 228.5 | 191.2 |
Cash paid for income taxes | 13.1 | 14 | 14.5 |
Non-cash purchases of equipment through capital leasing | 12 | 7.6 | 6.8 |
Increase in accounts payable and accrued expenses for purchases of property and equipment | $ 16.9 | $ 25.7 | $ 8.4 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Jun. 30, 2017 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | (1) ORGANIZATION AND DESCRIPTION OF BUSINESS Business Zayo Group, LLC, a Delaware limited liability company, was formed on May 4, 2007, and is the operating parent company of a number of subsidiaries engaged in bandwidth infrastructure provision and services. Zayo Group, LLC and its subsidiaries are collectively referred to as “Zayo Group” or the “Company.” Headquartered in Boulder, Colorado, the Company operates bandwidth infrastructure assets, including fiber networks and data centers, in the United States, Canada and Europe to offer: Fiber Solutions, including dark fiber, dedicated lit networks and mobile infrastructure services. Transport services, including wavelength, wholesale IP and SONET services. Enterprise Networks, including Ethernet, private lines, dedicated Internet and cloud services. Colocation, including provision of colocation space and power and interconnection services. Voice, unified communications and services dedicated to small and medium sized businesses. Other services, including Zayo Professional Services (“ZPS”). On October 22, 2014, Holdings completed an initial public offering (“IPO”) of shares of its common stock, which were listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “ZAYO”. Prior to Holding’s IPO, ZGH was wholly owned by Communications Infrastructure Investments, LLC ("CII"). |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | (2) BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES a. Basis of Presentation The accompanying consolidated financial statements include all the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the instructions to Form 10-K and Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of financial position, results of operations and cash flows of the Company have been included herein. Unless otherwise noted, dollar amounts and disclosures throughout the Notes to the consolidated financial statements are presented in millions of dollars. The Company’s fiscal year ends June 30 each year, and we refer to the fiscal year ended June 30, 2017 as “Fiscal 2017,” fiscal year ended June 30, 2016 as “Fiscal 2016,” and the fiscal year ended June 30, 2015 as “Fiscal 2015.” b. Foreign Currency Translation For operations outside the U.S. that have functional currencies other than the U.S. dollar, assets and liabilities are translated to U.S. dollars at period-end exchange rates, and revenue, expenses and cash flows are translated using monthly average exchange rates during the year. Gains or losses resulting from currency translation are recorded as a component of accumulated other comprehensive (loss)/income in member’s equity and in the consolidated statements of comprehensive loss. The Company considers its investments in its foreign subsidiaries to be permanently reinvested. c. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense 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 and accruals for exit activities associated with real estate leases, 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, determining the defined benefit costs and defined benefit obligations related to post-employment benefits, and estimating the common unit and restricted stock unit grant fair values used to compute the stock-based compensation liability and 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. e . Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. Cash equivalents are stated at cost, which approximates fair value. Restricted cash consists of cash balances held by various financial institutions as collateral for letters of credit and surety bonds. These balances are reclassified to cash and cash equivalents when the underlying obligation is satisfied, or in accordance with the governing agreement. Restricted cash balances expected to become unrestricted during the next twelve months are recorded as current assets. The Company had a non-current restricted cash balance of $4.5 million as of both June 30, 2017 and 2016. f. Trade Receivables Trade receivables are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its trade receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and the customer’s financial condition, and the age of receivables and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. g. Property and Equipment The Company’s property and equipment includes assets in service and under construction or development. Property and equipment is recorded at historical cost or acquisition date fair value. Costs associated directly with network construction, service installations, and development of business support systems, including employee-related costs, are capitalized. Depreciation is calculated on a straight-line basis over the asset’s estimated useful life from the date placed into service or acquired. Management periodically evaluates the estimates of the useful life of property and equipment by reviewing historical usage, with consideration given to technological changes, trends in the industry, and other economic factors that could impact the network architecture and asset utilization. Equipment acquired under capital leases is recorded at the lower of the fair value of the asset or the net present value of the minimum lease payments at the inception of the lease. Depreciation of equipment held under capital leases is included in depreciation and amortization expense, and is calculated on a straight-line basis over the estimated useful lives of the assets, or the related lease term, whichever is shorter. Management reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of its property and equipment may not be recoverable. An impairment loss is recognized when the assets’ carrying value exceeds both the assets’ estimated undiscounted future cash flows and the assets’ estimated fair value. Measurement of the impairment loss is then based on the estimated fair value of the assets. Considerable judgment is required to project such future cash flows and, if required, to estimate the fair value of the property and equipment and the resulting amount of the impairment. No impairment charges were recorded for property and equipment during the years ended June 30, 2017, 2016 or 2015, respectively. The Company capitalizes interest for assets that require a period of time to get them ready for their intended use. The amount of interest capitalized is based on the Company’s weighted average effective interest rate for outstanding debt obligations during the respective accounting period. h. Goodwill and Acquired Intangibles Intangible assets arising from business combinations, such as acquired customer contracts and relationships, (collectively “customer relationships”), are initially recorded at fair value. The Company amortizes customer relationships primarily over an estimated life of 10 to 20 years using an amortization method that approximates the timing in which the Company expects to receive the benefit from the acquired customer relationship 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 April, or more frequently if a triggering event occurs between impairment testing dates. The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment includes comparing the overall financial performance of the reporting units against the planned results used in the last quantitative goodwill impairment test. Additionally, each reporting unit’s fair value is assessed in light of certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity- and reporting unit-specific events. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgments and estimates. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a single step test is performed to identify and measure impairment and if a reporting unit’s fair value is greater than its carrying value, the Company recognizes an impairment charge for the amount by which the reporting unit’s carrying amount exceeds its fair value, up to but not exceeding the reporting unit’s goodwill. See discussion below in “Recently Issued Accounting Pronouncements” regarding the Company’s early adoption of a new accounting standard during the quarter ended March 31, 2017 which simplifies the requirements for goodwill impairment testing. The Company performed a qualitative assessment for the years ended June 30, 2017, 2016 and 2015, as well as upon the change in reportable segments during Fiscal 2017 (see Note 15- Segment Reporting ), and determined it was more likely than not that the fair values of our reporting units are greater than their carrying amounts. The Company reviews its indefinite-lived intangible assets for impairment at least annually in April, which involves comparing the estimated fair value of indefinite-lived intangible assets to their respective carrying values. To the extent the carrying value of indefinite-lived intangible assets exceeds the fair value, the Company will recognize an impairment loss for the difference. The Company performed a qualitative assessment to determine whether it was more likely than not that the Company’s indefinite-lived intangible assets were impaired and concluded there was no indication of impairment for the years ended June 30, 2017, 2016 and 2015. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. No impairment charges were recorded for goodwill or intangible assets during the years ended June 30, 2017, 2016 or 2015, respectively. i. Derivative Financial Instruments Derivative instruments are recorded in the balance sheet as either assets or liabilities, measured at fair value. The Company has historically entered into interest rate swaps to convert a portion of its floating-rate debt to fixed-rate debt and has not applied hedge accounting; therefore, the changes in the fair value of the interest rate swaps are recognized in earnings as adjustments to interest expense. The principal objectives of the derivative instruments are to minimize the cash flow interest rate risks associated with financing activities. The Company does not use financial instruments for trading purposes. The Company utilized interest rate swap contracts in connection with debt instruments entered into during the July 2012 financing transactions. As of June 30, 2017, the Company’s interest rate swap contract has expired and was not replaced. j. Revenue Recognition The Company recognizes revenues derived from leasing fiber optic telecommunications infrastructure and the provision of telecommunications and colocation services when the service has been provided and there is persuasive evidence of an arrangement, the fee is fixed or determinable, customer acceptance has been obtained with relevant contract terms, and collection of the receivable is reasonably assured. Taxes collected from customers and remitted to a governmental authority are reported on a net basis and are excluded from revenue. Most revenue is billed in advance on a fixed-rate basis and the remainder is billed in arrears on a transactional basis determined by customer usage. The Company often bills customers for upfront charges, which are non-refundable. These charges relate to activation fees, installation charges or prepayments for future services and are influenced by various business factors including how the Company and customer agree to structure the payment terms. These upfront charges are deferred and recognized over the underlying contractual term. The Company also defers costs associated with customer activation and installation to the extent of upfront amounts received from customers, which are recognized as expense over the same period for which the associated revenue is recognized. The Company typically records revenues from leases of dark fiber, including indefeasible rights-of-use (“IRU”) agreements, over the term that the customer is given exclusive access to the assets. Dark fiber IRU agreements generally require the customer to make a down payment upon the execution of the agreement with monthly IRU fees paid over the contract term; however, in some cases, the Company receives up to the entire lease payment at the inception of the lease and recognizes the revenue ratably over the lease term. Revenue related to professional services to provide network management and technical support is recognized as services are provided. In determining the appropriate amount of revenue and related reserves to reflect in its consolidated financial statements, management evaluates payment history, credit ratings, customer financial performance, and historical or potential billing disputes and related estimates are based on these factors and assumptions. k. Operating Costs and Expenses The Company’s operating costs and expenses consist primarily of network expense (“Netex”), compensation and benefits, network operations expense (“Netops”), stock-based compensation, other expenses, and depreciation and amortization. Netex consists of third-party network service costs resulting from the leasing of certain network facilities, primarily leases of circuits and dark fiber, from carriers to augment the Company’s owned infrastructure, for which it is generally billed a fixed monthly fee. Netex also includes colocation facility costs for rent and license fees paid to the landlords of the buildings in which the Company’s colocation business operates, along with the utility costs to power those facilities. Compensation and benefits expenses include salaries, wages, incentive compensation and benefits. Employee-related costs that are directly associated with network construction, service installations and development of business support systems are capitalized and amortized to operating costs and expenses over the customer life. Compensation and benefits expenses related to the departments attributed to generating revenue are included in “Operating costs” while compensation and benefits expenses related to the sales, product, and corporate departments are included in “Selling, general and administrative expenses” in the consolidated statements of operations. Netops expense include all of the non-personnel related expenses of operating and maintaining the network infrastructure, including contracted maintenance fees, right-of-way costs, rent for cellular towers and other places where fiber is located, pole attachment fees, and relocation expenses. Netops expense is included in “Operating costs” in the consolidated statements of operations. Stock-based compensation expense consists of the fair value of equity based awards granted to employees and independent directors recognized over their applicable vesting period. Stock-based compensation expense is included, based on the responsibilities of the awarded recipient, in either “Operating costs” or “Selling, general and administrative expenses” in the consolidated statements of operations. For additional information regarding our stock-based compensation expense, see (l.) – Stock-Based Compensation below and Note 11 – Stock-Based Compensation . Other expenses include expenses such as property tax, franchise fees, and colocation facility maintenance, which relate to operating our network and are therefore included in “Operating costs” as well as travel, office expense and other administrative costs that are included in “Selling, general and administrative expenses”. Other expenses are included in either “Operating costs” or “Selling, general and administrative expenses” in the consolidated statement of operations depending on their relationship to generating revenue or association with sales and administration. Transaction costs include expenses associated with professional services (i.e. legal, accounting, regulatory, etc.) rendered in connection with acquisitions or disposals (including spin-offs), travel expense, severance expense incurred on the date of acquisition or disposal, and other direct expenses incurred that are associated with signed and/or closed acquisitions or disposals and unsuccessful acquisitions. Transaction costs are included in “Selling, general and administrative expenses” in the consolidated statements of operations. Related to Netex, the Company recognizes the cost of these facilities or services when it is incurred in accordance with contractual requirements. The Company routinely disputes incorrect billings. The most prevalent types of disputes include disputes for circuits that are not disconnected on a timely basis and usage bills with incorrect records. Depending on the type and complexity of the issues involved, it may take several quarters to resolve disputes. In determining the amount of such operating expenses and related accrued liabilities to reflect in its consolidated financial statements, management considers the adequacy of documentation of disconnect notices, compliance with prevailing contractual requirements for submitting such disconnect notices and disputes to the provider of the facilities, and compliance with its interconnection agreements with these carriers. Significant judgment is required in estimating the ultimate outcome of the dispute resolution process, as well as any other costs that may be incurred to conclude the negotiations or settle any litigation. l. Stock-Based Compensation In October 2014, the Company adopted a new incentive plan. The plan includes incentive cash compensation (ICC) and equity (in the form of restricted stock units). Grants under the incentive plan are made quarterly for all participants. The Company recognizes all quarterly stock-based awards to employees and independent directors, based on their grant-date fair values , with no consideration for future forfeitures. The Company recognizes the fair value of outstanding awards as a charge to operations over the vesting period. The Company accounts for forfeitures as they occur. The Company uses the straight-line method to recognize share-based compensation expense for outstanding share awards that do not contain a performance condition. Prior to ZGH’s initial public offering (“IPO”), the Company was given authorization by Communications Infrastructure Investments, LLC (“CII”) to award 625,000,000 of CII’s common units as profits interests to employees, directors, and affiliates of the Company. The common units were historically considered to be stock-based compensation with terms that required the awards to be classified as liabilities due to cash settlement features. The vested portion of the awards was reported as a liability and the fair value was re-measured at each reporting date until the date of settlement, with a corresponding charge (or credit) to stock-based compensation expense. In connection with ZGH’s IPO and the related amendment to the CII operating agreement, there was a deemed modification to the stock compensation arrangements with the Company’s employees and directors. As a result, previously issued common units which were historically accounted for as liability awards, became classified as equity awards. Determining the fair value of certain share-based awards at the grant date and subsequent reporting dates requires judgment. If actual results differ significantly from these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted. For additional information regarding our stock-based compensation, see Note 11 – Stock-Based Compensation . m. Legal Costs Costs incurred to hire and retain external legal counsel to advise us on regulatory, litigation and other matters is expensed as the related services are received. n. Income Taxes The Company recognizes income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. Estimating the future tax benefit associated with deferred tax assets requires significant judgment. Deferred tax assets arise from a variety of sources, the most significant being: tax losses that can be carried forward to be utilized against taxable income in future years, deferred revenue, and expenses recognized in the Company’s financial statements but disallowed in the Company’s tax return until the associated cash flow occurs. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is expected to be recognized. The valuation allowance is established if, based on available evidence, it is more-likely-than-not that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the period and/or of the character necessary to utilize the benefit of the deferred tax asset. When evaluating whether it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized, all available evidence, both positive and negative, that may affect the realizability of deferred tax assets is identified and considered in determining the appropriate amount of the valuation allowance. The Company continues to monitor its financial performance and other evidence each quarter to determine the appropriateness of the Company’s valuation allowance. At each balance sheet date, existing assessments are reviewed and, if necessary, revised to reflect changed circumstances. The analysis of the Company’s ability to utilize its net operating loss carryforward (“NOL”) balance is based on the Company’s forecasted taxable income. The forecasted assumptions approximate the Company’s best estimates, including market growth rates, future pricing, market acceptance of the Company’s products and services, future expected capital investments and discount rates. If the Company is unable to meet its taxable income forecasts in future periods the Company may change its conclusion about the appropriateness of the valuation allowance which could create a substantial income tax expense in the Company’s consolidated statement of operations in the period such change occurs. Deferred tax liabilities related to investments in foreign subsidiaries and foreign corporate joint ventures that are essentially permanent in duration are not recognized until it becomes apparent that such amounts will reverse in the foreseeable future. In accordance with Accounting Standards Update (“ASU”) 2015-17, Balance Sheet Classification of Deferred Taxes, all deferred tax assets and liabilities are presented as noncurrent. The Company records interest related to unrecognized tax benefits and penalties in the provision for income taxes. o. Fair Value of Financial Instruments Relevant accounting literature defines and establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and defines fair value 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. Valuation techniques that may be used include the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost), which are each based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Fair Value Hierarchy A fair value hierarchy is established that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that are used to measure fair value are: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company views fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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 assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. p. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash investments and accounts receivable. The Company’s cash and cash equivalents are primarily held in commercial bank accounts in the United States, Canada and Great Britain. The Company limits its cash investments to high-quality financial institutions in order to minimize its credit risk. During the years ended June 30, 2017, 2016 and 2015, the Company had no single customer that exceeded 10% of total revenue. The Company’s trade receivables, which are unsecured, are geographically dispersed. As of June 30, 2017, the Company had no single customer with a trade receivable balance that exceeded 10% of total receivables. As of June 30, 2016, the Company had one customer with a trade receivable balance of 11% of total receivables. q. Employee Benefits As a result of the Allstream acquisition (see Note 3 – Acquisitions ) the Company acquired certain defined benefit pension plans, a defined contribution plan and other non-pension post-employment benefit plans. The cost of providing benefits under the defined benefit pension plans and other non-pension post-employment benefits is determined annually using the projected unit credit method. These actuarial valuations require the use of assumptions, including the discount rate, expected rate of return on plan assets, price inflation, expected future salary increases, turnover, retirement, and mortality rate calculations to measure defined benefit obligations. The discount rate used to calculate the present values of the defined benefit obligation is determined by reference to market interest rates of high quality corporate bonds at the end of the reporting period. The net defined liability/(benefit) recognized in our consolidated balance sheet comprises the present value of the projected benefit obligations less the fair value of plan assets. Annually, all actuarial gains and losses arising from changes in the present value of the defined benefit obligations are recognized as a component of other comprehensive income/(loss), and are included in accumulated other comprehensive income/(loss). The changes in the fair value of plan assets are determined in an accounting valuation prepared by an independent actuary and recognized in the statement of operations during the period in which they occur. Any minimum funding requirements are considered in the calculation of the economic benefit. For plans recognized by a net defined benefit liability, minimum funding requirements can also result in an increase in the liability. The Company recognizes any decrease in an asset or increase in a liability as a result of the above in the statement of operations during the period in which they occur. The Company recognizes payments to the defined contribution plans as an expense in the period the employee service is incurred. r. Recently Issued Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, Simplifying the Accounting for Goodwill Impairment , which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the amendments in ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The updated guidance required a prospective adoption. Early adoption was permitted for goodwill impairment test performed on testing dates after January 1, 2017. The Company early adopted the standard during the quarter ended March 31, 2017. No impairments of goodwill were identified. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The new standard provides guidance for evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions for which the acquisition date occurs before the issuance date or effective date, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company early adopted the standard as of January 1, 2017 and has applied the provisions of this standard for acquisitions consummated subsequent to that date. The adoption of this standard did not have a material impact on the determination of whether the transactions closed during the current year would be accounted for as an acquisition of assets or a business. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classifications of Certain Cash Receipts and Cash Payments." The new standard provides guidance for eight changes with respect to how cash receipts and cash payments are classified in the statement of cash flows, with the objective of reducing diversity in practice. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 31, 2017, with early adoption permitted. The Company does not plan to e |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Jun. 30, 2017 | |
ACQUISITIONS | |
ACQUISITIONS | (3) ACQUISITIONS Since inception, the Company has consummated 41 transactions accounted for as business combinations. The acquisitions were executed as part of the Company’s business strategy of expanding through acquisitions. The acquisitions of these businesses 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 reach, and broaden its customer base. The accompanying consolidated financial statements include the operations of the acquired entities from their respective acquisition dates. Acquisitions Completed During Fiscal 2017 KIO Networks US Data Centers On May 1, 2017, the Company completed the $11.9 million cash acquisition of Castle Access, Inc.’s (d/b/a “KIO Networks US”) San Diego data centers. The two data centers, located at 12270 World Trade Drive and 9606 Aero Drive, total more than 100,000 square feet of space and 2 megawatts of critical, IT power, with additional power available. As of June 30, 2017, $1.2 million of the purchase consideration is held in escrow pending the expiration of the indemnification adjustment period. The acquisition was funded with cash on hand and was considered a stock purchase for tax purposes. Electric Lightwave Parent, Inc. On March 1, 2017, the Company acquired Electric Lightwave Parent, Inc. (“Electric Lightwave”), an infrastructure and telecom services provider serving 35 markets in the western U.S., for net purchase consideration of $1,426.6 million, net of cash acquired, subject to certain post-closing adjustments. As of June 30, 2017, $7.0 million of the purchase consideration is held in escrow pending the expiration of the indemnification adjustment period. The acquisition was funded through debt (see Note 7 – Long-Term Debt) and cash on hand. As of June 30, 2017, $2.2 million of the net purchase consideration remains payable by the Company. The acquisition was considered a stock purchase for tax purposes. The acquisition added 8,100 route miles of long haul fiber and 4,000 miles of dense metro fiber across Denver, Minneapolis, Phoenix, Portland, Seattle, Sacramento, San Francisco, San Jose, Salt Lake City, Spokane and Boise, with on-net connectivity to more than 3,100 enterprise buildings and 100 data centers. Santa Clara Data Center Acquisition On October 3, 2016, the Company acquired a data center in Santa Clara, California (the “Santa Clara Data Center”), for net purchase consideration of $11.3 million. The net purchase consideration represents the net present value of ten quarterly payments of approximately $1.3 million beginning in the December 2016 quarter. As of June 30, 2017, the remaining cash consideration to be paid was $8.9 million. The acquisition was considered an asset purchase for tax purposes. Payments made to the previous owners of the Santa Clara Data Center during the year ended June 30, 2017 of $3.7 million, representing the principal portion of the financing arrangement, are included in the consolidated statement of cash flows within financing activities . The Santa Clara Data Center, located at 5101 Lafayette Street, includes 26,900 total square feet and three MW of critical power. The facility also includes high-efficiency power and cooling infrastructure, seismic reinforcement and proximity to Zayo’s long haul dark fiber routes between San Francisco and Los Angeles. Acquisitions Completed During Fiscal 2016 Clearview On April 1, 2016, the Company acquired 100% of the equity interest in Clearview International, LLC (“Clearview”), a Texas based colocation and cloud infrastructure services provider for cash consideration of $18.3 million, subject to certain post-closing adjustments. The acquisition was funded with cash on hand and was considered an asset purchase for tax purposes. The acquisition consisted of two Texas data centers. The data centers, located at 6606 LBJ Freeway in Dallas, Texas and 700 Austin Avenue in Waco, Texas, added approximately 30,000 square feet of colocation space, as well as a set of hybrid cloud infrastructure services that complement the Company’s global cloud capabilities. Allstream On January 15, 2016, the Company acquired 100% of the equity interest in Allstream, Inc. and Allstream Fiber U.S. Inc. (together “Allstream”) from Manitoba Telecom Services Inc. (“MTS”) for cash consideration of CAD $422.9 million (or $297.6 million), net of cash acquired, subject to certain post-closing adjustments. The consideration paid is net of $29.6 million of working capital and other liabilities assumed by the Company in the acquisition. The acquisition was funded with Incremental Term Loan proceeds (as defined in Note 7 – Long-Term Debt ). The acquisition was considered a stock purchase for tax purposes. The acquisition added more than 18,000 route miles to the Company’s fiber network, including 12,500 miles of long-haul fiber connecting all major Canadian markets and 5,500 route miles of metro fiber network connecting approximately 3,300 on-net buildings concentrated in Canada’s top five metropolitan markets. As part of the Allstream acquisition, MTS agreed to retain Allstream’s former defined benefit pension obligations, and related pension plan assets, of retirees and other former employees of Allstream and also agreed to reimburse Allstream for certain solvency funding payments related to the pension obligations of active Allstream employees as of January 15, 2016. MTS will transfer assets from Allstream’s former defined benefit pension plans related to pre-closing service obligations for active employees to new Allstream defined benefit pension plans created by the Company, subject to regulatory approval. In addition, if the pre-closing benefit obligation for the January 15, 2016 active employees exceeds the fair value of assets transferred to the new Allstream pension plans, MTS agreed to fund the funding deficiency at the later of the asset transfer date or the date at which it is determined that no further solvency deficit exists. Any required funding of the pension benefit obligation subsequent to January 15, 2016, will be the responsibility of the Company. The amount of the funding deficiency was not material to the financial statements as of June 30, 2017. Also as part of the Allstream acquisition, the Company assumed the liabilities related to Allstream’s other non-pension unfunded post-retirement benefits plans. The liability assumed on January 15, 2016 was approximately $8.3 million. The balance of this liability as of June 30, 2017 was approximately $9.9 million. This liability is currently included in “Other long-term liabilities” on the consolidated balance sheet. Viatel On December 31, 2015, the Company completed the acquisition of a 100% interest in Viatel Infrastructure Europe Ltd., Viatel (UK) Limited, Viatel France SAS, Viatel Deutschland GmbH and Viatel Nederland BV (collectively, “Viatel”) for cash consideration of €92.9 million (or $101.2 million ), net of cash acquired. The acquisition was funded with cash on hand. The acquisition was considered a stock purchase for tax purposes. During the year ended June 30, 2017, the Company received a refund of the purchase price from escrow of $1.5 million. The refund is reflected as a cash inflow from investing activities on the consolidated statement of cash flows for the year ended June 30, 2017 within “Cash paid for acquisitions, net of cash acquired” caption. Dallas Data Center Acquisition (“Dallas Data Center”) On December 31, 2015, the Company acquired a 36,000 square foot data center located in Dallas, Texas for cash consideration of $16.6 million. The acquisition was funded with cash on hand and was considered an asset purchase for tax purposes. Acquisitions Completed During Fiscal 2015 Neo Telecoms (“Neo”) On July 1, 2014, the Company acquired a 96% equity interest in Neo, a Paris-based bandwidth infrastructure company. The purchase agreement also includes a call option to acquire the remaining equity interest on or after December 31, 2015. The purchase consideration of €54.1 million (or $73.9 million), net of cash acquired, was in consideration of acquiring 96% equity ownership in Neo and a call option to purchase the remaining 4% equity interest in Neo. The fair value of the 4% non-controlling interest in Neo as of the acquisition date was $2.9 million and recorded in Other long-term liabilities. The consideration consisted of cash and was paid with cash on hand from the proceeds of the Company’s Term Loan Facility (as defined in Note 7 – Long-Term Debt ). €8.7 million (or $11.9 million) of the purchase consideration is currently held in escrow pending the expiration of the indemnification adjustment period. The acquisition was considered a stock purchase for tax purposes. In April 2016, the Company exercised its call option to acquire the remaining 4% equity interest in Neo. The remaining equity interest was purchased for €2.0 million (or $2.3 million). Colo Facilities Atlanta (“AtlantaNAP”) On July 1, 2014, the Company acquired 100% of the equity interest in AtlantaNAP, a data center and managed services provider in Atlanta, for cash consideration of $51.9 million. The acquisition was considered an asset purchase for tax purposes. IdeaTek Systems, Inc. (“IdeaTek”) Effective January 1, 2015, the Company acquired all of the equity interest in IdeaTek. The purchase price, subject to certain post-closing adjustments, was $52.7 million and was paid with cash on hand. The acquisition was considered a stock purchase for tax purposes. The IdeaTek acquisition added 1,800 route miles to the Company’s network in Kansas, and includes a dense metro footprint in Wichita, Kansas. The network spans across Kansas and connects to approximately 600 cellular towers and over 100 additional buildings. Latisys Holdings, LLC (“Latisys”) On February 23, 2015, the Company acquired the operating units of Latisys, a colocation and infrastructure as a service (“Iaas”) provider for a price of $677.8 million, net of cash acquired. The Latisys acquisition was funded with the proceeds of the January 2015 Notes Offering (as defined in Note 7 – Long-Term Debt ). The acquisition was considered a stock purchase for tax purposes. The Latisys acquisition added colocation and IaaS services through eight data centers across five markets in Northern Virginia, Chicago, Denver, Orange County and London. The acquired data centers currently total over 185,000 square feet of billable space and 33 MW of critical power. 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. As of June 30, 2017, for the KIO Networks US Data Centers and Electric Lightwave acquisitions, the Company has not completed its fair value analysis and calculations in sufficient detail necessary to arrive at the final estimates of the fair value of certain working capital and non-working capital acquired assets and assumed liabilities, including the allocations to goodwill and intangible assets, property and equipment, deferred revenue and resulting deferred taxes. All information presented with respect to certain working capital and non-working capital acquired assets and liabilities assumed as it relates to these acquisitions is preliminary and subject to revision pending the final fair value analysis. The table below reflects the Company's estimates of the acquisition date fair values of the assets and liabilities assumed from its Fiscal 2017 acquisitions: KIO Networks US Data Centers Electric Lightwave Santa Clara Data Acquisition date May 1, 2017 March 1, 2017 October 3, 2016 (in millions) Cash $ 0.1 $ 12.6 $ — Other current assets 0.1 55.4 — Property and equipment 2.4 520.6 31.9 Deferred tax assets, net — 46.7 — Intangibles 6.4 312.2 6.0 Goodwill 6.0 629.3 — Other assets 0.5 1.7 — Total assets acquired 15.5 1,578.5 37.9 Current liabilities 1.7 58.1 — Deferred tax liabilities, net 1.3 — — Capital lease obligations — — 26.6 Deferred revenue 0.5 80.0 — Other liabilities — 1.2 — Total liabilities assumed 3.5 139.3 26.6 Net assets acquired 12.0 1,439.2 11.3 Less cash acquired (0.1) (12.6) — Total consideration paid/payable $ 11.9 $ 1,426.6 $ 11.3 The table below reflects the Company's estimates of the acquisition date fair values of the assets and liabilities assumed from its Fiscal 2016 acquisitions: Clearview Allstream Viatel Dallas Data Acquisition date April 1, 2016 January 15, 2016 December 31, 2015 December 31, 2015 (in millions) Cash $ — $ 2.9 $ 3.5 $ — Other current assets 0.6 95.6 7.3 — Property and equipment 17.1 266.3 174.0 12.2 Deferred tax assets, net 0.2 3.8 — — Intangibles 9.8 64.5 — 4.4 Goodwill 2.1 — 9.5 — Other assets 0.3 4.5 2.0 — Total assets acquired 30.1 437.6 196.3 16.6 Current liabilities 1.1 63.2 18.8 — Deferred revenue 0.4 46.9 58.5 — Deferred tax liability, net — — 8.6 — Other liabilities 10.3 27.0 5.7 — Total liabilities assumed 11.8 137.1 91.6 — Net assets acquired 18.3 300.5 104.7 16.6 Less cash acquired — (2.9) (3.5) — Net consideration paid $ 18.3 $ 297.6 $ 101.2 $ 16.6 The table below reflects the Company's estimates of the acquisition date fair values of the assets and liabilities assumed from its Fiscal 2015 acquisitions: AtlantaNAP Neo IdeaTek Latisys Acquisition date July 1, 2014 July 1, 2014 January 1, 2015 February 23, 2015 (in millions) Cash $ — $ 4.2 $ — $ 9.4 Other current assets 0.2 9.5 0.8 17.4 Property and equipment 7.0 31.3 32.3 222.9 Deferred tax assets, net — — 3.1 0.4 Intangibles 21.0 26.4 7.6 250.2 Goodwill 25.2 32.5 39.0 274.1 Other assets — 2.3 — 5.0 Total assets acquired 53.4 106.2 82.8 779.4 Current liabilities 1.5 13.5 4.4 9.9 Deferred revenue — 3.7 25.7 3.2 Deferred tax liability, net — 7.6 — 79.1 Other liabilities — 3.3 — — Total liabilities assumed 1.5 28.1 30.1 92.2 Net assets acquired 51.9 78.1 52.7 687.2 Less cash acquired — (4.2) — (9.4) Net consideration paid $ 51.9 $ 73.9 $ 52.7 $ 677.8 The goodwill arising from the Company's acquisitions results from synergies, anticipated incremental sales to the acquired company customer base and economies-of-scale expected from the acquisitions. The Company has allocated the goodwill to the reporting units (in existence on the respective acquisition dates) that were expected to benefit from the acquired goodwill. The allocation was determined based on the excess of the estimated fair value of the reporting unit over the estimated fair value of the individual assets acquired and liabilities assumed that were assigned to the reporting units. Effective January 1, 2017, the Company implemented organizational changes which had an impact on the composition of the Company’s strategic product groups ("SPG" or "SPGs") (see Note 15 – Segment Reporting). In connection with the organizational change, goodwill was re-allocated to the Company’s SPGs on a relative fair value basis. The Company completed an assessment immediately prior to and after the organization change at the SPG level and determined that it is more likely than not that the fair value of the Company’s reporting units is greater than their carrying amounts. Note 5 – Goodwill displays the allocation of the Company's acquired goodwill to each of its reporting units. In the Company’s acquisitions, the Company acquired certain customer relationships. These relationships represent a valuable intangible asset, as the Company anticipates continued business from the acquired customer bases. The Company’s estimate of the fair value of the acquired customer relationships is based on a multi-period excess earnings valuation technique that utilizes Level 3 inputs. Transaction Costs Transaction costs include expenses associated with professional services (i.e., legal, accounting, regulatory, etc.) rendered in connection with signed and/or closed acquisitions or disposals, travel expense, severance expense incurred on the date of acquisition or disposal, and other direct expenses incurred that are associated with signed and/or closed acquisitions or disposals and unsuccessful acquisitions. The Company incurred transaction costs of $20.5 million, $21.5 million, and $5.9 million during the years ended June 30, 2017, 2016 and 2015, respectively. Transaction costs have been included in selling, general and administrative expenses in the consolidated statements of operations and in cash flows from operating activities in the consolidated statements of cash flows during these periods. Pro-forma Financial Information (Unaudited) The pro forma results presented below include the effects of the Company’s Fiscal 2017 and 2016 acquisitions as if the acquisitions occurred on July 1, 2015. The pro forma net loss for the periods ended June 30, 2017 and 2016 includes the additional depreciation and amortization resulting from the adjustments to the value of property and equipment and intangible assets resulting from purchase accounting and adjustment to amortized revenue during Fiscal 2017 and 2016 as a result of the acquisition date valuation of assumed deferred revenue. The pro forma results also include interest expense associated with debt used to fund the acquisitions. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisitions. The unaudited pro forma financial information is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of July 1, 2015. Year Ended June 30, 2017 2016 (in millions) Revenue $ 2,566.7 $ 2,574.4 Net income/(loss) $ 35.9 $ (147.3) The Company is unable to determine the amount of revenue associated with each acquisition recognized in the post-acquisition period as a result of integration activities with the exception of Electric Lightwave, which we recognized $169.6 million in revenue during Fiscal 2017. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2017 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | (4) PROPERTY AND EQUIPMENT Property and equipment, including assets held under capital leases, was comprised of the following: Estimated useful lives As of June 30, (in years) 2017 2016 (in millions) Land N/A $ 28.9 $ 16.7 Buildings - leasehold and site improvements 15 to 39 277.1 187.3 Furniture, fixtures and office equipment 3 to 7 27.3 6.8 Computer hardware 3 to 5 33.1 24.5 Software 3 56.5 37.2 Machinery and equipment 5 to 7 483.4 326.6 Fiber optic equipment 8 826.6 732.5 Circuit switch equipment 10 337.6 20.3 Packet switch equipment 5 130.2 97.9 Fiber optic network 15 to 20 4,110.3 3,393.0 Construction in progress N/A 651.5 656.8 Total 6,962.5 5,499.6 Less accumulated depreciation (1,946.5) (1,420.1) Property and equipment, net $ 5,016.0 $ 4,079.5 Total depreciation expense, including depreciation of assets held under capital leases, for the years ended June 30, 2017, 2016 and 2015 was $526.9 million, $440.5 million and $351.4 million, respectively. During the years ended June 30, 2017, 2016 and 2015, the Company capitalized interest in the amounts of $18.8 million, $13.8 million and $12.5 million, respectively. The Company capitalized $79.9 million, $64.5 million, and $58.3 million of direct labor costs to property and equipment accounts during the years ended June 30, 2017, 2016 and 2015, respectively. |
GOODWILL
GOODWILL | 12 Months Ended |
Jun. 30, 2017 | |
GOODWILL | |
GOODWILL | (5) GOODWILL The Company’s goodwill balance was $1,840.2 million and $1,214.5 million as of June 30, 2017 and 2016, respectively. The Company’s reporting units are comprised of SPGs . Effective January 1, 2017, the Company implemented organizational changes which had an impact on the composition of the Company’s SPGs. The change in structure had the impact of consolidating and/or regrouping existing SPGs, disaggregating the legacy Zayo Canada SPG among the existing SPGs and a creating a new Allstream and IP Transit SPG (See Note 15 – Segment Reporting). In connection with the organizational change, goodwill was re-allocated to the Company’s SPGs on a relative fair value basis. The Company completed an assessment immediately prior to and after the organization change at the SPG level and determined that it is more likely than not that the fair value of the Company’s reporting units is greater than their carrying amounts. As of June 30, 2017, the Company’s SPGs were comprised of the following: Fiber Solutions, Zayo Wavelength Services (“Waves”), Zayo IP Transit Services (“IP Transit”), Zayo SONET Services (“SONET”), Zayo Ethernet Services (“Ethernet”), Enterprise Private and Connectivity (“EPIC”), Zayo Cloud Services (“Cloud”), Zayo Colocation (“zColo"), Allstream and Other (primarily ZPS). The following reflects the changes in the carrying amount of goodwill during Fiscal 2017: Product Group As of June 30, 2016 Reallocation among reporting units Adjustments to Fiscal 2016 Fiscal 2017 Foreign Currency As of June 30, 2017 (in millions) Dark Fiber $ 295.1 $ (295.1) $ — $ — $ — $ — Fiber Solutions — 544.8 1.7 92.9 (5.5) 633.9 Waves 258.3 (104.0) (2.7) 96.5 (0.7) 247.4 Sonet 51.3 0.7 — — — 52.0 Ethernet 104.3 (59.8) (0.5) 315.3 0.2 359.5 IP 87.5 (87.5) — — — — MIG 73.6 (73.6) — — — — EPIC — 89.5 — — — 89.5 zColo 268.8 (15.0) (3.7) 4.7 1.5 256.3 Cloud 60.0 — (0.1) 9.4 0.2 69.5 Allstream — — — 116.5 — 116.5 Other 15.6 — — — — 15.6 Total $ 1,214.5 $ — $ (5.3) $ 635.3 $ (4.3) $ 1,840.2 The following reflects the changes in the carrying amount of goodwill during Fiscal 2016: Product Group As of July 1, 2015 Fiscal 2016 Acquisitions Adjustments to Fiscal 2015 Foreign Currency As of July 1, 2016 (in millions) Dark Fiber $ 299.1 $ 10.2 $ — $ (14.2) $ 295.1 Waves 265.6 — — (7.3) 258.3 Sonet 50.3 1.0 — - 51.3 Ethernet 104.2 — — 0.1 104.3 IP 86.3 1.4 — (0.2) 87.5 MIG 73.4 — 0.2 - 73.6 zColo 273.2 1.3 (5.7) - 268.8 Cloud 57.0 3.0 — - 60.0 Other 15.3 — — 0.3 15.6 Total $ 1,224.4 $ 16.9 $ (5.5) $ (21.3) $ 1,214.5 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Jun. 30, 2017 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | (6) INTANGIBLE ASSETS Identifiable intangible assets as of June 30, 2017 and 2016 were as follows: Gross Carrying Amount Accumulated Net (in millions) June 30, 2017 Finite-Lived Intangible Assets Customer relationships $ 1,477.7 $ (308.6) $ 1,169.1 Underlying rights 1.6 (0.4) 1.2 Total 1,479.3 (309.0) 1,170.3 Indefinite-Lived Intangible Assets Certifications 3.5 — 3.5 Underlying Rights 14.8 — 14.8 Total $ 1,497.6 $ (309.0) $ 1,188.6 June 30, 2016 Finite-Lived Intangible Assets Customer relationships $ 1,143.6 $ (228.8) $ 914.8 Trade names 0.2 (0.2) — Underlying rights 1.6 (0.3) 1.3 Total 1,145.4 (229.3) 916.1 Indefinite-Lived Intangible Assets Certifications 3.5 — 3.5 Underlying Rights 15.3 — 15.3 Total $ 1,164.2 $ (229.3) $ 934.9 The weighted average remaining amortization period for the Company’s customer relationships asset is 15.4 years. The Company has determined that certain underlying rights (including easements) and the certifications have indefinite lives. The amortization period for underlying rights (including easements) is 20 years. The amortization of intangible assets for the years ended June 30, 2017, 2016 and 2015 was $80.0 million, $75.8 million, and $54.8 million, respectively. During the years ended June 30, 2017 and 2016, the Company wrote off $0.3 million and $1.8 million in fully amortized intangible assets, respectively. Estimated future amortization of finite-lived intangible assets is as follows: June 30, (in millions) 2018 $ 89.5 2019 88.2 2020 83.2 2021 81.1 2022 79.3 Thereafter 749.0 Total $ 1,170.3 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Jun. 30, 2017 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | (7) LONG-TERM DEBT As of June 30, 2017 and 2016, long-term debt was as follows: 2017 2016 (in millions) Term Loan Facility due 2021 $ 498.8 $ 1,837.4 Term Loan Facility due 2024 1,429.9 — 6.00% Senior Unsecured Notes due 2023 1,430.0 1,430.0 6.375% Senior Unsecured Notes due 2025 900.0 900.0 5.75% Senior Unsecured Notes due 2027 1,350.0 — Total debt obligations 5,608.7 4,167.4 Unamortized discount on Term Loan Facility (16.0) (19.0) Unamortized premium on 6.00% Senior Unsecured Notes due 2023 5.5 6.3 Unamortized discount on 6.375% Senior Unsecured Notes due 2025 (14.3) (15.6) Unamortized premium on 5.75% Senior Unsecured Notes due 2027 21.6 — Unamortized debt issuance costs (67.8) (53.8) Carrying value of debt 5,537.7 4,085.3 Less current portion (5.0) — Long-term debt, less current portion $ $ Term Loan Facility and Revolving Credit Facility On May 6, 2015, the Company and Zayo Capital, Inc. (“Zayo Capital”) entered into an Amendment and Restatement Agreement whereby the Credit Agreement (the “Credit Agreement”) governing the senior secured term loan facility (the “Term Loan Facility”) and $450.0 million senior secured revolving credit facility (the “Revolver”) was amended and restated in its entirety. The amended and restated Credit Agreement extended the maturity date of a portion of the outstanding term loans under the Term Loan Facility from July 2, 2019 to May 6, 2021. The interest rate margins applicable to the portion of the Term Loan Facility due in 2021 were decreased by 25 basis points to LIBOR plus 2.75% with a minimum LIBOR of 1.0%. In addition, the amended and restated Credit Agreement removed the fixed charge coverage ratio covenant and replaced such covenant with a springing senior secured leverage ratio maintenance requirement applicable only to the Revolver, increased certain lien and debt baskets, and removed certain covenants related to collateral. The terms of the Term Loan Facility required the Company to make quarterly principal payments of $5.1 million plus an annual payment of up to 50% of excess cash flow, as determined in accordance with the Credit Agreement (no such payment was required during Fiscal 2017 or Fiscal 2016). Under the amended and restated Credit Agreement, the Revolver matures at the earliest of (i) April 17, 2020, and (ii) six months prior to the earliest maturity date of the Term Loan Facility, subject to amendment thereof. The Credit Agreement also allows for letter of credit commitments of up to $50.0 million. The Revolver is subject to a fee per annum of 0.25% to 0.375% (based on the Company’s current leverage ratio) of the weighted-average unused capacity, and the undrawn amount of outstanding letters of credit backed by the Revolver are subject to a 0.25% fee per annum. Outstanding letters of credit backed by the Revolver accrue interest at a rate ranging from LIBOR plus 2.0% to LIBOR plus 3.0% per annum based upon the Company’s leverage ratio. On January 15, 2016, the Company and Zayo Capital entered into an Incremental Amendment (the “Amendment”) to the Credit Agreement. Under the terms of the Amendment, the portion of the Term Loan Facility due 2021 was increased by $400.0 million (the “Incremental Term Loan”). The additional amounts borrowed bear interest at LIBOR plus 3.5% with a minimum LIBOR rate of 1.0%. The $400.0 million add-on was priced at 99.0 %. The issue discount of $4.8 million on the Amendment is accreted to interest expense over the term of the Term Loan Facility under the effective interest method. No other terms of the Credit Agreement were amended. The Incremental Term Loan proceeds were used to fund the Allstream acquisition (see Note 3 – Acquisitions ) and for general corporate purposes. On July 22, 2016, the Company and Zayo Capital entered into a Repricing Amendment (the “Repricing Amendment”) to the Credit Agreement. Per the terms of the Repricing Amendment, the Incremental Term Loan was repriced at par and will bear interest at a rate of LIBOR plus 2.75%, with a minimum LIBOR rate of 1.0%, which represented a downward adjustment of 75 basis points. No other terms of the Credit Agreement were amended. On January 19, 2017, the Company and Zayo Capital entered into an Incremental Amendment No. 2 (the “Incremental Amendment”) to the Company’s Credit Agreement. Per the terms of the Incremental Amendment, the existing $1.85 billion of term loans under the Credit Agreement were repriced at 99.75% with one $500.0 million tranche that bears interest at a rate of LIBOR plus 2.0%, with a minimum LIBOR rate of 0.0% and a maturity date of four years from incurrence, which represents a downward adjustment of 75 basis points along with the lowering of the previous LIBOR floor, and a second $1.35 billion tranche (the “B-2 Term Loan” and along with the $500.0 million tranche, the “Refinancing Term Loans”) that bears interest at a rate of LIBOR plus 2.5%, with a minimum LIBOR rate of 1.0% and a maturity of seven years from incurrence, which represents a downward adjustment of 25 basis points. In addition, per the terms of the Incremental Amendment, the Company and Zayo Capital added a new $650.0 million term loan tranche under the Credit Agreement (the “Electric Lightwave Incremental Term Loan”) that bears interest at LIBOR plus 2.5%, with a minimum LIBOR rate of 1.0%, with a maturity of seven years from the closing date of the Incremental Amendment. In connection with the Incremental Amendment the full $2,500.0 million Term Loan Facility including the Refinancing Term Loans and the Electric Lightwave Incremental Term Loan, was re-issued at a price of 99.75%. Per the terms of the Incremental Amendment, the Revolver matures on April 17, 2020. No other material terms of the Credit Agreement were amended. On April 10, 2017, $570.1 million of the B-2 Term Loan and the Electric Lightwave Incremental Term Loan was repaid from proceeds of issuance of senior unsecured notes as further discussed below. As of June 30, 2017, $1,928.7 million of aggregate principal amount was outstanding under the Term Loan Facility. In connection with the Incremental Amendment in January 2017 and early repayment of a portion of the term loan, the Company recognized an expense of $18.2 million during Fiscal 2017 associated with debt extinguishment costs. The Company completed an assessment at an individual creditor level in order to determine if the Incremental Amendment resulted in an extinguishment or modification of the Term Loan Facility and the subsequent amendments thereto (the “Previous Term Loan Indebtedness”). Based on this analysis, a portion of the Previous Term Loan Indebtedness was deemed to have been extinguished as a result of the Incremental Amendment. The $18.2 million loss on extinguishment of debt primarily represents non-cash expenses associated with the write-off of unamortized debt issuance costs and the issuance discounts on the portion of the Credit Agreement, as further amended, which was deemed to have been extinguished as well as the portion extinguished through early prepayment. The loss on extinguishment of debt also includes certain fees paid to third parties involved in the Incremental Amendment. The weighted average interest rates (including margins) on the Term Loan Facility were approximately 3.4% and 3.9% at June 30, 2017 and 2016, respectively. Interest rates on the Revolver as of June 30, 2017 and 2016 were approximately 3.8% and 3.4%, respectively. As of June 30, 2017, no amounts were outstanding under the Revolver. Standby letters of credit were outstanding in the amount of $7.8 million as of June 30, 2017, leaving $442.2 million available under the Revolver. Senior Unsecured Notes On January 23, 2015, the Company and Zayo Capital (together “the Issuers”) completed a private offering (the “January 2015 Notes Offering”) of $700.0 million aggregate principal amount of 6.00% senior unsecured notes due in 2023 (the “2023 Unsecured Notes”). On March 9, 2015, the Issuers completed a private offering of an additional $730.0 million aggregate principal amount of 2023 Unsecured Notes at a premium of 1% (the “March 2015 Notes Offering”, and together with the January 2015 Notes Offering, the “2023 Notes Offerings”) resulting in aggregate gross proceeds for the 2023 Unsecured Notes of $1,437.3 million. The issue premium of $7.3 million on the March 2015 Notes Offering is accreted against interest expense over the term of the notes under the effective interest method. The 2023 Unsecured Notes bear interest at the rate of 6.00% per year, which is payable on April 1 and October 1 of each year, beginning on October 1, 2015. The 2023 Unsecured Notes will mature on April 1, 2023. The net proceeds from the January 2015 Notes Offering were used to fund the Latisys acquisition. The net proceeds from the March 2015 Notes Offering were used to redeem the Company’s remaining $675.0 million 2020 Secured Notes (the “Second Notes Redemption”) at a price of 105.75%. As part of the Second Notes Redemption, the Company recorded an early redemption call premium of $38.8 million. The call premium was recorded as a loss on extinguishment of debt on the consolidated statements of operations for the year ended June 30, 2015. On April 14, 2016, the Issuers completed a private offering of $550.0 million aggregate principal amount of additional 2025 Unsecured Notes (the “Incremental 2025 Notes”). The Incremental 2025 Notes were an additional issuance of the existing 6.375% senior unsecured notes due in 2025 (the “2025 Notes” and together with the Incremental 2025 Notes, the “2025 Unsecured Notes”) and were priced at 97.76%. The issue discount of $15.9 million of the Incremental 2025 Notes is accreted to interest expense over the term of the Incremental 2025 Notes using the effective interest method. The net proceeds from the offering plus cash on hand were used to (i) redeem the then outstanding $325.6 million 10.125% senior unsecured notes due 2020 (the “2020 Unsecured Notes”), including the required $20.3 million make-whole premium and accrued interest, and (ii) repay $196.0 million of borrowings under the then outstanding secured Term Loan Facility. The Company recorded a $2.1 million loss on extinguishment of debt associated with the write-off of unamortized debt discount on the Term Loan Facility accounted for as an extinguishment during the fourth quarter of Fiscal 2016. Following the offering of the Incremental 2025 Notes, $900.0 million aggregate principal amount of the 2025 Unsecured Notes is outstanding. On January 27, 2017, the Company and Zayo Capital completed a private offering of $800.0 million aggregate principal amount of 5.75% senior unsecured notes due 2027, which were issued at par. The net proceeds from the offering, along with the Electric Lightwave Incremental Term Loan discussed above, were used to fund the Electric Lightwave acquisition (see Note 3 – Acquisitions), which closed on March 1, 2017. On April 10, 2017, the Company completed a private offering of $550.0 million aggregate principal amount of 5.75% senior unsecured notes due 2027 (the “Incremental 2027 Notes”). The Incremental 2027 Notes were an additional issuance of the existing 5.75% senior unsecured notes due in 2027 (the “2027 Notes” and together with the Incremental 2027 Notes, the “2027 Unsecured Notes”) and were priced at 104.0%. The issue premium of $22.0 million of the Incremental 2027 Notes is being accreted to interest expense over the term of the 2027 Unsecured Notes using the effective interest method. The net proceeds from the Incremental 2027 Notes were used to repay certain outstanding balances on the Company’s Term Loan Facility that mature on January 19, 2024. Following the offering of the Incremental 2027 Notes, $1.35 billion aggregate principal amount of the 2027 Unsecured Notes is outstanding as of June 30, 2017. Debt covenants The indentures (the “Indentures”) governing the 2023 Unsecured Notes , the 2025 Unsecured Notes and the 2027 Unsecured Notes (collectively the “Notes”) contain covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional indebtedness and issue preferred stock; pay dividends or make other distributions with respect to any equity interests, make certain investments or other restricted payments, create liens, sell assets, incur restrictions on the ability of the Company’s restricted subsidiaries to pay dividends or make other payments to the Company, consolidate or merge with or into other companies or transfer all or substantially all of their assets, engage in transactions with affiliates, and enter into sale and leaseback transactions. The terms of the Indentures include customary events of default. The Credit Agreement contains customary events of default, including among others, non-payment of principal, interest, or other amounts when due, inaccuracy of representations and warranties, breach of covenants, cross default to certain other indebtedness, insolvency or inability to pay debts, bankruptcy, or a change of control. The Credit Agreement also contains a covenant, applicable only to the Revolver, that the Company maintain a senior secured leverage ratio below 5.25:1.00 at any time when the aggregate principal amount of loans outstanding under the Revolver is greater than 35% of the commitments under the Revolver. The Credit Agreement also requires the Company and its subsidiaries to comply with customary affirmative and negative covenants, including covenants restricting the ability of the Company and its subsidiaries, subject to specified exceptions, to incur additional indebtedness, make additional guaranties, incur additional liens on assets, or dispose of assets, pay dividends, or make other distributions, voluntarily prepay certain other indebtedness, enter into transactions with affiliated persons, make investments and amend the terms of certain other indebtedness. The Indentures limit any increase in the Company’s secured indebtedness (other than certain forms of secured indebtedness expressly permitted under such indentures) to a pro forma secured debt ratio of 4.50 times the Company’s previous quarter’s annualized modified EBITDA (as defined in the indentures), and limit the Company’s incurrence of additional indebtedness to a total indebtedness ratio of 6.00 times the previous quarter’s annualized modified EBITDA. The Company was in compliance with all financial covenants associated with its debt agreements as of June 30, 2017 and 2016. Redemption rights At any time prior to April 1, 2018 (for the 2023 Unsecured Notes), May 15, 2018 (for the 2025 Unsecured Notes), and January 15, 2022 (for the 2027 Unsecured Notes), the Company may redeem all or part of the applicable Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) accrued interest and a “make-whole” premium, which is a lump sum payment derived from a formula based on the net present value of future coupon payments that will not be paid because of the early redemption. On or after April 1, 2018 (for the 2023 Unsecured Notes), May 1, 2020 ( for the 2025 Unsecured Notes ), or January 15, 2022 ( for the 2027 Unsecured Notes ), the Company may redeem all or part of the applicable Notes, at the redemption prices (expressed as percentages of principal amount and set forth below), plus accrued and unpaid interest and additional interest, if any, thereon, to the applicable redemption date, subject to the rights of the holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date, if redeemed during the 12-month period of the years indicated below: Redemption Price Year (2023 Unsecured Notes) 2018 104.500 % 2019 103.000 % 2020 101.500 % 2021 and thereafter 100.000 % Redemption Price Year (2025 Unsecured Notes) 2020 103.188 % 2021 102.125 % 2022 101.063 % 2023 and thereafter 100.000 % Redemption Price Year (2027 Unsecured Notes) 2022 102.875 % 2023 101.917 % 2024 100.958 % 2025 and thereafter 100.000 % The Company may purchase the Notes in open-market transactions, tender offers, or otherwise. The Company is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. Aggregate future contractual maturities of long-term debt (excluding issue discounts and premiums) were as follows as of June 30, 2017: Year Ended June 30, (in millions) 2018 $ 5.0 2019 5.0 2020 5.0 2021 483.8 2022 — Thereafter 5,109.9 Total $ 5,608.7 Guarantees The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Company’s current and future domestic restricted subsidiaries. The Notes were co-issued with Zayo Capital, which does not have independent assets or operations. The Term Loan Facility and Revolver are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by all of the Company’s current and future domestic restricted subsidiaries. Debt issuance costs In connection with the Credit Agreement (and subsequent amendments thereto), and the various Notes offerings, the Company incurred debt issuance costs of $112.9 million (net of extinguishments). These costs are being amortized to interest expense over the respective terms of the underlying debt instruments using the effective interest method, unless extinguished earlier, at which time the related unamortized costs are to be immediately expensed. Unamortized debt issuance costs of $10.4 million, $11.4 million and $23.2 million associated with the Company’s previous indebtedness were recorded as part of the loss on extinguishment of debt during the years ended June 30, 2017, 2016 and 2015, respectively. The balance of debt issuance costs as of June 30, 2017 and 2016 was $67.8 million and $53.8 million, net of accumulated amortization of $45.1 million and $35.8 million, respectively. The amortization of debt issuance costs is included on the consolidated statements of cash flows within the caption “Non-cash interest expense” along with the amortization or accretion of the premium and discount on the Company’s indebtedness and changes in the fair value of the Company’s interest rate derivatives. Interest expense associated with the amortization of debt issuance costs was $9.3 million, $10.0 million and $13.9 million for the years ended June 30, 2017, 2016 and 2015, respectively. Debt issuance costs are presented in the consolidated balance sheets as a reduction to “Long-term debt, non-current.” Interest rate derivatives On August 13, 2012, the Company entered into forward-starting interest rate swap agreements with an aggregate notional value of $750.0 million, a maturity date of June 30, 2017, and a start date of June 30, 2013. There were no up-front fees for these agreements. The contract states that the Company shall pay a 1.67% fixed rate of interest for the term of the agreement beginning on the start date. The counter-party will pay to the Company the greater of actual LIBOR or 1.25%. The Company entered into the forward-starting swap arrangements to reduce the risk of increased interest costs associated with potential changes in LIBOR rates. As of June 30, 2017, the interest rate swap agreements have expired and were not replaced. Changes in the fair value of interest rate swaps were recorded in interest expense in the consolidated statements of operations for the applicable period. The fair value of the interest rate swaps of nil and $3.0 million are included in “Other long term liabilities” in the Company’s consolidated balance sheet as of June 30, 2017 and 2016, respectively. During the years ended June 30, 2017, 2016 and 2015, $(3.0) million, $(1.1) million and $2.1 million were recorded as a (decrease)/increase in interest expense for change in the fair value of the interest rate swaps. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2017 | |
INCOME TAXES | |
INCOME TAXES | (8) INCOME TAXES The Company, a limited liability company, is taxed at the Holdings level. All income tax balances resulting from the operations of Zayo Group, on a separate return basis, are reflected in these financial statements. The Company’s provision/(benefit) for income taxes from operations are summarized as follows: June 30, 2017 2016 2015 (in millions) Current Income Taxes Federal $ 1.6 $ (1.3) $ 1.7 State 6.3 8.7 4.4 Foreign (2.1) 3.9 (1.6) Total $ 5.8 $ 11.3 $ 4.5 Deferred Income Taxes Federal $ 13.3 $ 7.3 $ (8.6) State 2.4 (2.3) (6.9) Foreign (3.1) (7.8) 2.3 Total 12.6 (2.8) (13.2) Total provision/(benefit) for income taxes $ 18.4 $ 8.5 $ (8.7) The United States and foreign components of income/(loss) from operations before income taxes are as follows: June 30, 2017 2016 2015 (in millions) United States $ 66.6 $ (46.9) $ (159.4) Foreign 37.5 (20.8) (4.4) Total $ 104.1 $ (67.7) $ (163.8) The Company’s effective income tax rate differs from what would be expected if the federal statutory rate were applied to earnings before income taxes primarily because of certain expenses that represent permanent differences between book and tax expenses and deductions, such as stock-based compensation expense. We file income tax returns in various federal, state, and local jurisdictions including, but not limited to, the United States, Canada, United Kingdom and France. In the normal course of business, we are subject to examination by taxing authorities throughout the world. With few exceptions, we are no longer subject to income tax examinations by tax authorities in major tax jurisdictions for years before 2012. A reconciliation of the actual income tax provision and the tax computed by applying the U.S. federal rate to the earnings before income taxes during the years ended June 30, 2017, 2016 and 2015 are as follows: June 30, 2017 2016 2015 (in millions) Expected provision/(benefit) at the statutory rate $ 36.4 $ (23.8) $ (57.3) Increase/(decrease) due to: Stock-based compensation (11.7) 27.9 59.4 State income taxes, net of federal benefit 2.9 (2.1) (7.4) Transaction costs not deductible for tax purposes 1.9 1.5 0.7 Change in statutory tax rate (1.4) (3.6) (2.2) Change in valuation allowance (10.2) 2.8 — Foreign tax rate differential (3.9) 2.7 0.6 Other, net 4.4 3.1 (2.5) Provision/(benefit) for income taxes $ 18.4 $ 8.5 $ (8.7) As of June 30, 2017, the Company recorded a $0.2 million liability for uncertain tax positions and accrued interest related to state taxing jurisdictions. We recognize interest and penalties related to uncertain tax positions in income tax expense. Currently, the company is under audit by several US states for fiscal years 2013 to 2016. Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: June 30, 2017 2016 (in millions) Deferred income tax assets Net operating loss carry forwards $ 704.6 $ 550.6 Tax credit carry forwards 22.2 16.8 Deferred revenue 405.9 318.3 Accrued expenses 40.0 40.2 Other liabilities 17.4 25.5 Reserves against accounts receivable 18.2 14.8 Deferred compensation 20.3 15.5 Total deferred income tax assets 1,228.6 981.7 Valuation allowance (111.1) (135.3) Net deferred tax assets 1,117.5 846.4 Deferred income tax liabilities Property and equipment 712.2 559.2 Intangible assets 412.4 321.5 Debt issuance costs 5.8 13.7 Total deferred income tax liabilities 1,130.4 894.4 Net deferred income tax liabilities $ (12.9) $ (34.3) As of June 30, 2017, the Company had $1,639.3 million of U.S. federal net operating loss ("NOL") carry forwards. The Company utilized approximately $88.6 million of U.S. federal NOL carry forwards during Fiscal 2017. The Company has completed several acquisitions in which it acquired net operating loss tax attributes as part of the purchase. These acquisitions, however, were considered a "change in ownership” within the meaning of Section 382 of the Internal Revenue Code and, as a result, such NOL carry forwards are subject to an annual limitation, reducing the amount available to offset income tax liabilities absent the limitation. Currently available U.S. NOL carry forwards as of June 30, 2017 are approximatey $948.7 million. An additional $163.6 million will become available for use during fiscal year ended June 30, 2018. The Company's NOL carry forwards, if not utilized to reduce taxable income in future periods, will expire in various amounts beginning in 2019 and ending in 2036. As of June 30, 2017, the Company had approximately $389.5 million of foreign jurisdiction net operating loss carry forwards, primarily in Canada, the United Kingdom and France. The majority of these foreign NOLs have a valuation allowance reducing the value of the corresponding deferred tax asset in the financial statements due to recent losses. It is reasonably possible that the Company may reverse the valuation allowance recorded on certain foreign subsidiaries’ deferred tax assets in the near future. As of June 30, 2017, the Company had tax-effected state net operating loss carry forwards of approximately $39.6 million, which are subject to limitations on their utilization and have various expiration dates 2017 through 2036. The Company believes that only $36.8 million of this balance will be utilized. Management believes it is more likely than not that it will utilize its net deferred tax assets to reduce or eliminate tax payments in future periods, with the exception of deferred tax assets related to certain foreign subsidiaries. The Company’s evaluation encompassed (i) a review of its recent history of taxable income for the past three years and (ii) a review of internal financial forecasts demonstrating its expected ability to fully utilize its deferred tax assets prior to expiration. At June 30, 2017, the positive undistributed earnings of the Company's foreign subsidiaries amounted to $61.8 million. Those earnings are considered to be indefinitely reinvested and, accordingly, no income taxes have been provided thereon. The amount of income taxes that would have resulted had such earnings been repatriated is estimated to be $21.3 million. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Jun. 30, 2017 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | (9) ACCRUED LIABILITIES Accrued liabilities included in current liabilities consisted of the following: June 30, 2017 2016 (in millions) Accrued compensation and benefits $ 38.5 $ 27.9 Accrued property and equipment purchases 81.8 46.7 Network expense accruals 132.1 94.8 Other accrued taxes 20.1 9.1 Accrued professional fees 3.9 2.3 Other accruals 52.8 46.1 Total $ 329.2 $ 226.9 |
EQUITY
EQUITY | 12 Months Ended |
Jun. 30, 2017 | |
EQUITY | |
EQUITY | (10) EQUITY Zayo Group was initially formed on May 4, 2007, and is a wholly-owned subsidiary of Holdings. Prior to October 16, 2014, Holdings was a wholly owned subsidiary of CII. CII was organized on November 6, 2006, and subsequently capitalized on May 7, 2007, with capital contributions from various institutional and founder investors. Cash, property, and service proceeds from the capitalization of CII were contributed to the Company, and the contributions are reflected in the Company’s member’s interest. During the year ended June 30, 2015, there was a deemed modification to the Company’s stock compensation arrangements with employees and directors. The modification resulted in a reclassification of the previously recorded stock-based compensation liability to member’s interest. On October 16, 2014, the Company entered into an agreement with CII which relieved CII of its obligation to repay the Company the outstanding intercompany note receivable balance of $22.0 million. The cancelation of the intercompany note receivable with CII is reflected on the consolidated statement of stockholders’ equity during the year ended June 30, 2015 as a decrease to additional paid-in-capital of $22.0 million and an offsetting decrease to the note receivable from shareholder. During the year ended June 30, 2016, the Company repurchased 3,474,120 shares of its outstanding common stock. This amount includes 3,103,350 shares repurchased at an average price of $23.07 per share, or $71.7 million, excluding commissions, under a $500 million, 6-month share repurchase program authorized by the Company’s Board of Directors on November 10, 2015. The 6-month share repurchase program expired in May 2016. The amounts included in the “Common stock repurchases” line in the consolidated statements of cash flows represents both shares authorized by the Board of Directors for repurchase under the publically announced authorization described above, as well as $9.4 million, or 370,770 shares, withheld from employees to cover tax withholding obligations on certain restricted stock units that vested during Fiscal 2016. During the years ended June 30, 2017 and June 30, 2016, the Company recorded increases of $104.7 million and $152.9 million respectively, in additional paid-in capital associated with stock-based compensation expense related to the Company’s equity classified stock-based compensation awards. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2017 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | (11) STOCK-BASED COMPENSATION The following table summarizes the Company’s stock-based compensation expense for liability and equity classified awards included in the consolidated statements of operations: Year Ended June 30, 2017 2016 2015 (in millions) Included in: Operating costs $ 11.3 $ 17.4 $ 23.3 Selling, general and administrative expenses 102.8 138.5 177.4 Total stock-based compensation expense $ 114.1 $ 155.9 $ 200.7 CII common and preferred units $ 10.1 $ 73.0 $ 156.8 Part A restricted stock units 76.5 45.3 12.6 Part B restricted stock units 26.0 36.5 31.3 Part C restricted stock units 1.5 1.1 — Total stock-based compensation expense $ 114.1 $ 155.9 $ 200.7 CII Common and Preferred Units Prior to Holding’s IPO, the Company was given authorization by CII to award 625,000,000 of CII’s common units as profits interests to employees, directors, and affiliates of the Company. The common units were historically considered to be stock-based compensation with terms that required the awards to be classified as liabilities due to cash settlement features. The vested portion of the awards was reported as a liability and the fair value was re-measured at each reporting date until the date of settlement, with a corresponding charge (or credit) to stock-based compensation expense. In connection with the Holding’s IPO and the related amendment to the CII operating agreement, there was a deemed modification to the stock compensation arrangements with the Company’s employees and directors. As a result, previously issued common units which were historically accounted for as liability awards, became classified as equity awards. Prior to reclassifying the common unit liability to equity, the Company re-measured the fair value of the CII common units factoring in the change in fair value since September 30, 2014 and the change in fair value caused by the modification. The fair value of these previously vested common units was estimated to be $490.2 million on the modification date and this amount is reflected in the Company’s consolidated statement of member’s equity as an increase to additional-paid-in-capital during the year ended June 30, 2015. During the three months ended December 31, 2016, the CII common units became fully vested and as such there is no unrecognized compensation cost associated with CII common units as of June 30, 2017. On October 9, 2014, the Company and CII’s board of managers approved a non-liquidating distribution by CII of shares of ZGH’s common stock held by CII to holders of CII vested common units. Employees and independent directors of the Company with vested CII common units received shares of ZGH’s common stock equal in value to the underlying value of their vested CII common units. The total number of shares of ZGH’s common stock that were distributed to CII common unit holders in connection with this non-liquidating distribution was 20,460,047 shares. The valuation of the CII common units as of the IPO date was determined based on a Monte Carlo simulation. The Monte Carlo valuation analysis attempts to approximate the probability of certain outcomes by running multiple trial runs, called simulations, using random variables to generate potential future stock prices. This valuation technique was used to estimate the fair value associated with future distributions of common stock to CII common unit holders. The Monte Carlo simulation first projects the number of shares to be distributed by CII to the common unit holders at each subsequent measurement date based on stock price projections under each simulation. Shares attributable to unvested CII common units are subject to the existing vesting provisions of the CII common unit awards. The estimated future value of shares scheduled to be distributed by CII based on vesting provisions are calculated under each independent simulation. The present value of the number of shares of common stock to be distributed to common unit holders under each simulation is then computed, and the average of each simulation is the fair value of ZGH’s common shares to be distributed by CII to the common unit holders. This value was then adjusted for prior non-liquidating distributions made by the Company to derive a value for CII common units by class and on per unit basis. These values were used to calculate the fair value of outstanding CII common units as of the ZGH IPO date. Various inputs and assumptions were utilized in the valuation method, including forfeiture behavior, vesting provisions, holding restrictions, peer companies’ historical volatility, and an appropriate risk-free rate. The value of the CII common units is derived from the value of CII’s investments in the Company and Onvoy, LLC and its subsidiaries (“OVS”), a company that provided voice and managed services which the Company spun off during the year ended June 30, 2014. As the value derived from each of these investments is separately determinable and there is a plan in place to distribute the value associated with the investment in Company shares separate from the value derived from OVS, the two components are accounted for separately. The OVS component of the CII awards is adjusted to fair value each reporting period. On December 31, 2015, CII entered into an agreement to sell OVS to a third party. The sale was completed in May 2016. Based on the sale price, the estimated fair value of OVS awards has been increased, resulting in an increase to stock based compensation expense and corresponding increase to additional paid-in capital of $12.9 million for the year ended June 30, 2016. Proceeds from the sale to be distributed to the Company’s employees will be paid by CII. During the years ended June 30, 2017, 2016 and 2015, the Company recognized $10.1 million, $73.0 million and $156.8 million, respectively, of stock-based compensation expense related to vesting of CII common and preferred units. During the three months ended December 31, 2016, the CII common units became fully vested and as such there is no unrecognized compensation cost associated with CII common units as of June 30, 2017. Performance Compensation Incentive Program During October 2014, the Company adopted the 2014 Performance Compensation Incentive Program (“PCIP”). The PCIP includes incentive cash compensation and equity (in the form of restricted stock units or “RSUs”). Grants under the PCIP RSU plans are made quarterly for all participants. The PCIP was effective on October 16, 2014 and will remain in effect for a period of 10 years (or through October 16, 2024) unless it is earlier terminated by ZGH’s Board of Directors. The PCIP has the following components: Part A Under Part A of the PCIP, all full-time employees, including the Company’s executives, are eligible to earn quarterly awards of RSUs. Each participant in Part A of the PCIP will have a RSU annual award target value, which will be allocated to each fiscal quarter. The final Part A value awarded to a participant for any fiscal quarter is determined by the Compensation Committee subsequent to the end of the respective performance period taking into account the Company’s measured value creation for the quarter, as well as such other subjective factors that it deems relevant (including group and individual level performance factors). The number of Part A RSUs granted will be calculated based on the final award value determined by the Compensation Committee divided by the average closing price of ZGH’s common stock over the last ten trading days of the respective performance period. Part A RSUs will vest assuming continuous employment fifteen months subsequent to the end of the performance period. Upon vesting, the RSUs convert to an equal number of shares of ZGH’s common stock. Additionally, under Part A of the PCIP, awards may be granted to certain employees upon commencement of their employment with the Company. During the years ended June 2017, 2016 and 2015, the Company recognized $76.5 million, $45.3 million and $12.6 million of compensation expense associated with Part A awards, respectively. The June 2017 and June 2016 quarterly awards were recorded as liabilities totaling $5.5 million and $2.0 million as of June 30, 2017 and 2016, respectively, as the awards represent an obligation denominated in a fixed dollar amount to be settled in a variable number of shares during the subsequent quarter. The quarterly stock-based compensation liability is included in “Other long-term liabilities” in the accompanying consolidated balance sheets. Upon the issuance of the RSUs, the liability is re-measured and then reclassified to additional paid-in capital, with a corresponding charge (or credit) to stock based compensation expense. The value of the remaining unvested RSUs is expensed ratably through the vesting date. At June 30, 2017, the remaining unrecognized compensation cost to be expensed over the remaining vesting period for Part A awards is $36.6 million. The following table summarizes the Company’s Part A RSU activity for the years ended June 2017, 2016 and 2015: Number of Part A Weighted average Weighted average Outstanding at July 1, 2014 — $ — — Granted 955,831 26.25 Vested — Forfeited (22,614) n/a Outstanding at July 1, 2015 933,217 $ 26.25 7.1 Granted 2,190,785 26.04 Vested (852,853) 26.14 Forfeited (101,248) n/a Outstanding at July 1, 2016 2,169,901 $ 26.04 7.9 Granted 2,678,503 31.64 Vested (2,080,685) 26.03 Forfeited (403,333) n/a Outstanding at June 30, 2017 2,364,386 $ 31.63 7.1 Part B Under Part B of the PCIP, participants, including the Company’s executives, are awarded quarterly grants of RSUs. The number of the RSUs earned by the participants is based on ZGH’s stock price performance over a performance period of one year with the starting price being the average closing price over the last ten trading days of the quarter immediately prior to the grant and vest, assuming continuous employment through the end of the measurement period. The existence of a vesting provision that is associated with the performance of ZGH’s stock price is a market condition, which affects the determination of the grant date fair value. Upon vesting, RSUs earned convert to an equal number of shares of ZGH’s common stock. The following table summarizes the Company’s Part B RSU activity for the years ended June 2017, 2016 and 2015: Number of Part B Weighted average Weighted average Outstanding at July 1, 2014 — $ — — Granted 1,251,671 42.90 Vested — Forfeited (1,798) n/a Outstanding at July 1, 2015 1,249,873 $ 42.90 5.5 Granted 1,152,176 26.80 Vested (1,463,893) 38.70 Forfeited (77,220) n/a Outstanding at July 1, 2016 860,936 $ 29.50 6.2 Granted 715,564 45.56 Vested (793,478) 32.58 Forfeited (371,049) n/a Outstanding at June 30, 2017 411,973 $ 42.86 6.1 The table below reflects the total Part B RSUs granted during each period presented, the maximum eligible shares of ZGH’s stock that the respective Part B RSU grant could be converted into shares of ZGH’s common stock and the grant date fair value per Part B RSU during the period indicated. The table below also reflects the units converted to the Company’s common stock at a subsequent vesting date but for those RSUs granted during the period indicated: During the three months ended June 30, March 31, December 31, September 30, Part B RSUs granted 152,808 171,316 191,015 200,425 Maximum eligible shares of the Company's common stock 550,109 880,564 981,817 1,030,185 Grant date fair value per Part B RSU $ 26.52 $ $ $ Units converted to Company's common stock at vesting date n/a n/a n/a 99,508 During the three months ended June 30, March 31, December 31, September 30, Part B RSUs granted 312,516 284,773 282,074 272,813 Maximum eligible shares of the Company's common stock 1,606,332 1,463,733 1,449,860 1,426,812 Grant date fair value per Part B RSU $ 37.03 $ 25.12 $ 25.26 $ 17.83 Units converted to Company's common stock at vesting date 1,078,812 475,446 40,182 — During the years ended June 2017, 2016 and 2015, the Company recognized stock-based compensation expense of $26.0 million, $36.5 million and $31.3 million related to Part B awards, respectively. The grant date fair value of Part B RSU grants is estimated utilizing a Monte Carlo simulation. This simulation estimates the ten-day average closing stock price ending on the vesting date, the stock price performance over the performance period, and the number of common shares to be issued at the vesting date. Various assumptions are utilized in the valuation method, including the target stock price performance ranges and respective share payout percentages, ZGH’s historical stock price performance and volatility, peer companies’ historical volatility and an appropriate risk-free rate. The aggregate future value of the grant under each simulation is calculated using the estimated per share value of the common stock at the end of the vesting period multiplied by the number of common shares projected to be granted at the vesting date. The present value of the aggregate grant is then calculated under each of the simulations, resulting in a distribution of potential present values. The fair value of the grant is then calculated based on the average of the potential present values. The remaining unrecognized compensation cost associated with Part B RSU grants is $8.0 million at June 30, 2017. Part C Under Part C of the PCIP, independent directors are eligible to receive quarterly awards of RSUs. Independent directors electing to receive a portion of their annual director fees in the form of RSUs are granted a set dollar amount of Part C RSUs each quarter. The quantity of Part C RSUs granted is based on the average closing price of the ZGH’s common stock over the last ten trading days of the quarter ended immediately prior to the grant date and vest at the end of each quarter for which the grant was made. During the year ended June 30, 2017 and June 30, 2016, ZGH’s independent directors were granted 47,420 and 41,793 Part C RSUs, respectively. During the year ended June 30, 2017 and June 30, 2016, the Company recognized $1.5 million and $1.1 million of compensation expense associated with the Part C RSUs, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jun. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | (12) FAIR VALUE MEASUREMENTS The Company’s financial instruments consist of cash and cash equivalents, restricted cash, trade receivables, accounts payable, interest rate swaps, long-term debt, certain post-employment plans and stock-based compensation liability. The carrying values of cash and cash equivalents, restricted cash, trade receivables, and accounts payable approximated their fair values at June 30, 2017 and 2016, due to the short maturity of these instruments. The carrying value of the Company’s Notes, excluding debt issuance costs, reflects the original amounts borrowed, inclusive of net unamortized premium, and was $3,692.8 million and $2,320.7 million as of June 30, 2017 and 2016, respectively. Based on market interest rates for debt of similar terms and average maturities, the fair value of the Company's Notes as of June 30, 2017 and 2016 was estimated to be $3,895.7 million and $2,338.1 million, respectively. The Company’s fair value estimates associated with its Note obligations were derived utilizing Level 2 inputs – quoted prices for similar instruments in active markets. The carrying value of the Company’s Term Loan Facility, excluding debt issuance costs, reflects the original amounts borrowed, inclusive of the unamortized discounts, and was $1,912.7 million and $1,818.4 million as of June 30, 2017 and 2016, respectively. The Company’s Term Loan Facility accrues interest at variable rates based upon the one month, three month or nine month LIBOR plus i) a spread of 2.0% on the Company’s $500.0 million tranche (which has a LIBOR floor of 0.0%) and ii) a spread of 2.50% on its B-2 Term Loan tranche (which has a LIBOR floor of 1.00%) . Since management does not believe that the Company’s credit quality has changed significantly since the date when the Term Loan Facility was amended on January 19, 2017, its carrying amount approximates fair value. Excluding any offsetting effect of the Company’s interest rate swaps, a hypothetical increase in the applicable interest rate on the Company’s Term Loan Facility of one percentage point above a 1.0% LIBOR floor would increase the Company’s annual interest expense by approximately $19.3 million. The Company’s interest rate swaps are valued using discounted cash flow techniques that use observable market inputs, such as LIBOR-based yield curves, forward rates, and credit ratings. Changes in the fair value of the interest rate swaps of $(3.0) million, $(1.1) million and $2.1 million were recorded as a (decrease)/increase to interest expense during the years ended June 30, 2017, 2016 and 2015, respectively. As of June 30, 2017, the interest rate swap agreements have expired and were not renewed. As of June 30, 2017 and 2016, there was no balance outstanding under the Company's Revolver. Financial instruments measured at fair value on a recurring basis are summarized below: Level June 30, 2017 June 30, 2016 Liabilities Recorded at Fair Value in the Financial Statements: (in millions) Interest rate swap Level 2 $ — $ 3.0 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (13) COMMITMENTS AND CONTINGENCIES Capital Leases Future contractual payments under the terms of the Company’s capital lease obligations were as follows: Year Ended June 30, (in millions) 2018 $ 9.8 2019 8.6 2020 7.7 2021 8.0 2022 8.5 Thereafter 74.4 Total minimum lease payments 117.0 Less amounts representing interest (15.4) Less current portion (8.0) Capital lease obligations, non-current $ 93.6 Operating Leases The Company leases office space, warehouse space, network assets, switching and transport sites, points of presence and equipment under non-cancelable operating leases. Lease expense was $68.8 million, $53.1 million, and $52.3 million for the years ended June 30, 2017, 2016 and 2015, respectively. Additionally, the Company recognized expense related to right-of way, pole attachment and other fees for access of $65.1 million, $48.9 million, and $42.0 million for the years ended June 30, 2017, 2016 and 2015, respectively. For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company records minimum rental expenses on a straight-line basis over the terms of the leases. When the straight-line expense recorded exceeds the cash outflows during the respective period, the Company records a deferred lease obligation on the consolidated balance sheets and amortizes the deferred rent over the terms of the respective leases. Minimum contractual lease payments due under the Company’s long-term operating leases are as follows: Year Ended June 30, (in millions) 2018 $ 113.4 2019 104.3 2020 88.0 2021 66.0 2022 34.9 Thereafter 138.4 $ 545.0 Purchase Commitments At June 30, 2017, the Company was contractually committed for $379.6 million of capital expenditures for construction materials and purchases of property and equipment, as well as energy and network expenditures. A majority of these purchase commitments are expected to be satisfied in the next twelve months. These purchase commitments are primarily success based; that is, the Company has executed customer contracts that support the future expenditures. Outstanding Letters of Credit As of June 30, 2017, the Company had $7.8 million in outstanding letters of credit, which were primarily entered into in connection with various lease agreements. Additionally, as of June 30, 2017, Zayo Canada, Inc., a subsidiary of the Company, had CAD $3.4 million (or $2.6 million) in letters of credit, under a CAD $5.0 million (or $3.9 million) unsecured credit letter agreement. Contingencies In the normal course of business, the Company is party to various outstanding legal proceedings, asserted and unasserted claims, and carrier disputes. In the opinion of management, the ultimate disposition of these matters, both asserted and unasserted, will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2017 | |
RELATED PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | (14) RELATED-PARTY TRANSACTIONS In May 2016, CII sold OVS and its subsidiaries to an entity that has a material ownership interest in the Company. The Company continues to have ongoing contractual relationships with Inteliquent, Inc., successor by merger to OVS (“Inteliquent”), whereby the Company provides Inteliquent and its subsidiaries with bandwidth capacity and Inteliquent provides the Company and its subsidiaries with voice services. The contractual relationships are based on agreements that were entered into at estimated market rates. The following table represents the revenue and expense transactions the Company recorded with Inteliquent for the periods presented: Year Ended June 30, 2017 2016 2015 (in millions) Revenues $ 7.5 $ 6.6 $ 6.9 Operating costs $ 2.0 $ 2.1 $ 1.0 As of June 30, 2017 and June 30, 2016, the Company had $0. 5 million and $0.2 million, respectively, due from Inteliquent. Dan Caruso, the Company’s Chief Executive Officer and Chairman of the Board is a party to an aircraft charter (or membership) agreement through his affiliate, Bear Equity LLC, for business and personal travel. Under the terms of the charter agreement, all fees for the use of the aircraft are effectively variable in nature. For his business travel on behalf of the Company, Mr. Caruso is reimbursed for his use of the aircraft subject to an annual maximum reimbursement threshold approved by the Company's Nominating and Governance Committee. During the years ended June 30, 2017, 2016 and 2015, respectively, the Company reimbursed Mr. Caruso $0.8 million, $0.5 million and $0.7 million for his business use of the aircraft. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Jun. 30, 2017 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | (15) SEGMENT REPORTING The Company uses the management approach to determine the segment financial information that should be disaggregated and presented separately in the Company's notes to its consolidated financial statements. The management approach is based on the manner by which management has organized the segments within the Company for making operating decisions, allocating resources, and assessing performance. As the Company has increased in scope and scale, it has developed its management and reporting structure to support this growth. The Company’s bandwidth infrastructure, colocation and connectivity services are comprised of various related product groups generally defined around the type of service the customer is buying, referred to as SPGs. Each SPG is responsible for the revenue, costs and associated capital expenditures of its respective services. The SPGs enable sales, make pricing and product decisions, engineer networks and deliver services to customers, and support customers for their specific telecom and Internet infrastructure services. In connection with the Company’s continued increase in scope and scale, effective January 1, 2017, and contemplation of the Company’s acquisition of Electric Lightwave which was completed March 1, 2017, the Company's chief operating decision maker ("CODM"), the Company's Chief Executive Officer, implemented certain organizational changes to the management and operation of the business that directly impact how the CODM makes resource allocation decisions and manages the Company. Under the new structure, the Company’s reportable segments include: Fiber Solutions, Transport, Enterprise Networks, Zayo Colocation, Allstream and Other. The change in structure had the impact of consolidating and/or regrouping existing SPGs and product offerings among the Company’s reportable segments and disaggregating the legacy Zayo Canada segment among the existing SPGs and a new Allstream reportable segment. The change in structure also resulted in adjustments to intercompany pricing which more closely align to third party pricing on the services which are provided between the Company’s SPGs. The Company’s legacy SPGs included Dark Fiber and Mobile Infrastructure Group (“MIG”). Effective January 1, 2017, the Dark Fiber and MIG SPGs were merged together and are now reported as part of the Fiber Solutions reporting segment. Waves and Ethernet services that are provided on dedicated dark fiber strands and colocation facilities that support only dark fiber customers which were historically reported as part of the Waves, Ethernet or zColo SPGs were transferred to the Fiber Solutions reportable segment effective January 1, 2017 (the “Dedicated Services Transfers”). The Company’s legacy Waves, IP and Sonet SPGs, after giving effect to the Dedicated Services Transfers, are now reported under the Company’s Transport reportable segment. The Company’s legacy Ethernet and Cloud SPGs, after giving effect to the Dedicated Services Transfers, are now reported under the Company’s Enterprise Networks segment. The Company’s legacy Zayo Canada reporting segment was disaggregated based upon the products offered by the legacy Zayo Canada segment to the Company’s existing SPGs and two new SPGs were established: Voice and Small and Medium Business (“SMB”). The Company’s segments are further described below: Fiber Solutions. Through the Fiber Solutions segment, the Company provides raw bandwidth infrastructure to customers that require more control of their internal networks. These services include dark fiber, dedicated lit networks and mobile infrastructure (fiber-to-the-tower and small cell). Dark fiber is a physically separate and secure, private platform for dedicated bandwidth. The Company leases dark fiber pairs (usually 2 to 12 total fibers) to its customers, who “light” the fiber using their own optronics. The Company’s mobile infrastructure services provide direct fiber connections to cell towers, small cells, hub sites, and mobile switching centers. Fiber Solutions customers include carriers and other communication service providers, Internet service providers, wireless service providers, major media and content companies, large enterprises, and other companies that have the expertise to run their own fiber optic networks or require interconnected technical space. The contract terms in the Fiber Solutions segment tend to range from three to twenty years. Transport. The Transport segment provides lit bandwidth infrastructure solutions over the Company’s metro, regional, and long-haul fiber networks. The segment uses optronics to light the fiber, and the Company’s customers pay for service based on the amount and type of bandwidth they purchase. The Company’s services within this segment include wavelengths, wholesale IP services and SONET. The Company targets customers who require a minimum of 10G of bandwidth across their networks. Transport customers include carriers, content providers, financial services companies, healthcare, government entities, education institutions and other medium and large enterprises. The contract terms in this segment tend to range from two to five years. Enterprise Networks . The Enterprise Networks segment provides communication solutions to medium and large enterprises. The Company’s services within this segment include Ethernet, enterprise private and connectivity services, managed services and cloud based compute and storage products. Solutions range from point-to-point data connections to multi-site managed networks to international outsourced IT infrastructure environments. Zayo Colocation (zColo). The Colocation segment provides data center infrastructure solutions to a broad range of enterprise, carrier, cloud, and content customers. The Company’s services within this segment include the provision of colocation space, power and interconnection services in North America and Western Europe. Solutions range in size from single cabinet solutions to 1MW+ data center infrastructure environments. The Company’s data centers also support a large component of the Company’s networking equipment for the purpose of aggregating and distributing data, voice, Internet, and video traffic. The contract terms in this segment tend to range from two to five years. Allstream. The Allstream segment provides Voice, SIP Trunking, Unified Communications and scalable data services using a variety of technologies for businesses. Voice provides a full range of local voice services allowing business customers to complete telephone calls in their local exchange, as well as make long distance, toll-free and related calls. Unified Communications is the integration of real-time communication services such as telephony (including Cloud-based IP telephony), instant messaging and video conferencing with non-real-time communication services, such as integrated voicemail and e-mail. Unified Communications provides a set of products that give users the ability to work and communicate across multiple devices, media types and geographies. Allstream also offers a range of data services that help SMB customers implement the right data and networking solutions for their business. Those scalable data services make use of technologies including Ethernet services, IP/MPLS VPN Solutions, and wavelength services. Allstream provides services to approximately 70,000 customers in the SMB market while leveraging its extensive network and product offerings. These include IP, internet, voice, IP Trunking, cloud private branch exchange, collaboration services and unified communications. Other. The Other segment is primarily comprised of ZPS. ZPS provides network and technical resources to customers who wish to leverage our expertise in designing, acquiring and maintaining networks. Services are typically provided for a term of one year for a fixed recurring monthly fee in the case of network and on an hourly basis for technical resources (usage revenue). ZPS also generates revenue via telecommunication equipment sales. Effective January 1, 2017, revenues for all of the Company’s products are included in one of the Company’s six segments. This segment presentation has been recast for all periods presented for comparability. The results of operations for each segment include an allocation of certain indirect costs and corporate related costs, including overhead and third party-financed debt. The allocation is based on a percentage that represents management’s estimate of the relative burden each segment bears of indirect and corporate costs. Management has evaluated the allocation methods utilized to allocate these costs and determined they are systematic, rational and consistently applied. Identifiable assets for each reportable segment are reconciled to total consolidated assets including unallocated corporate assets and intersegment eliminations. Unallocated corporate assets consist primarily of cash and deferred taxes. Segment Adjusted EBITDA Segment Adjusted EBITDA is the primary measure used by the Company’s CODM to evaluate segment operating performance. The Company defines Segment Adjusted EBITDA as earnings/(loss) from operations before interest, income taxes, depreciation and amortization (“EBITDA”) adjusted to exclude acquisition or disposal-related transaction costs, losses on extinguishment of debt, stock-based compensation, unrealized foreign currency gains/(losses) on intercompany loans, and non-cash income/(loss) on equity and cost method investments. The Company uses Segment Adjusted EBITDA to evaluate operating performance, and this financial measure is among the primary measures used by management for planning and forecasting of future periods. The Company believes that the presentation of Segment Adjusted EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by management and facilitates comparison of the Company’s results with the results of other companies that have different financing and capital structures. Segment Adjusted EBITDA results, along with other quantitative and qualitative information, are also utilized by the Company and its Compensation Committee for purposes of determining bonus payouts to employees. Segment Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, analysis of the Company’s results from operations and operating cash flows as reported under GAAP. For example, Segment Adjusted EBITDA: does not reflect capital expenditures, or future requirements for capital and major maintenance expenditures or contractual commitments; does not reflect changes in, or cash requirements for, working capital needs; does not reflect the significant interest expense, or the cash requirements necessary to service the interest payments, on the Company’s debt; and does not reflect cash required to pay income taxes. The Company’s computation of Segment Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because all companies do not calculate segment Adjusted EBITDA in the same fashion. For the year ended June 30, 2017 Fiber Transport Enterprise Networks zColo Allstream Other Corp/ Total (in millions) Revenue from external customers $ 722.1 $ 440.4 $ 487.4 $ 214.0 $ 314.3 $ 21.6 $ — $ 2,199.8 Segment Adjusted EBITDA 566.3 184.2 178.0 111.9 71.3 5.1 — 1,116.8 Total assets 4,504.6 1,230.0 1,385.7 994.4 406.2 33.2 173.7 8,727.8 Capital expenditures 499.1 147.3 89.1 91.5 8.5 — — 835.5 For the year ended June 30, 2016 Fiber Transport Enterprise Networks zColo Allstream Other Corp/ Total (in millions) Revenue from external customers $ 648.8 $ 391.4 $ 359.6 $ 195.4 $ 106.2 $ 20.3 $ — $ 1,721.7 Segment Adjusted EBITDA 499.6 168.0 145.6 100.9 16.3 4.5 — 934.9 Total assets 3,780.9 964.8 849.2 884.3 72.6 33.5 134.7 6,720.0 Capital expenditures 421.4 123.1 88.0 66.3 5.3 — — 704.1 For the year ended June 30, 2015 Fiber Transport Enterprise Networks zColo Allstream Other Corp/ Total (in millions) Revenue from external customers $ 575.6 $ 336.4 $ 285.0 $ 126.9 $ — $ 23.2 $ — $ 1,347.1 Segment Adjusted EBITDA 400.7 139.3 172.8 64.7 — 5.1 — 782.6 Capital expenditures 303.5 110.6 62.8 53.5 — — — 530.4 Reconciliation from Total Segment Adjusted EBITDA to income/(loss) from operations before income taxes For the year ended June 30, 2017 2016 2015 Total Segment Adjusted EBITDA $ 1,116.8 $ 934.9 $ 782.6 Interest expense (241.5) (220.1) (214.0) Depreciation and amortization (606.9) (516.3) (406.2) Transaction costs (20.5) (21.5) (5.9) Stock-based compensation (114.1) (155.9) (200.7) Loss on extinguishment of debt (18.2) (33.8) (94.3) Foreign currency loss on intercompany loans (10.3) (53.8) (24.4) Non-cash loss on investments (1.2) (1.2) (0.9) Income/(loss) from operations before income taxes $ 104.1 $ (67.7) $ (163.8) The following is a summary of geographical information: For the year ended June 30, 2017 2016 2015 Revenue from external customers: United States $ 1,610.0 $ 1,334.1 $ 1,193.5 Europe 176.5 174.1 153.6 Canada 412.0 213.3 — Other 1.3 0.2 — Total Revenue $ 2,199.8 $ 1,721.7 $ 1,347.1 Long-lived assets: United States $ 5,504.7 $ 4,236.1 3,848.0 Europe 521.3 527.8 454.0 Canada 335.8 326.4 — Other 22.8 25.6 0.3 Total Long-lived assets $ 6,384.6 $ 5,115.9 $ 4,302.3 The Company includes all non-current assets, except for goodwill and assets of discontinued operations, in its long-lived assets. |
CONDENSED CONSOLIDATING FINANCI
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | 12 Months Ended |
Jun. 30, 2017 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | (16) Condensed Consolidating Financial Information As discussed Note 7 – Long-Term Debt , as of June 30, 2017, the Company has outstanding $1,430.0 million 2023 Unsecured Notes and $900.0 million 2025 Unsecured Notes and $1,350.0 million 2027 Unsecured Notes. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Company’s current and future domestic restricted subsidiaries. Zayo Capital does not have independent assets or operations. The non-guarantor subsidiaries consist of the foreign subsidiaries that were acquired in conjunction with the Company's acquisitions. The accompanying condensed consolidating financial information has been prepared and is presented to display the components of the Company’s balance sheets, statements of operations and statements of cash flows in a manner that allows an existing or future holder of the Company’s Notes to review and analyze the current financial position and recent operating results of the legal subsidiaries that guarantee the Company’s debt obligations. The operating activities of the separate legal entities included in the Company’s consolidated financial statements are interdependent. The accompanying condensed consolidating financial information presents the results of operations, financial position and cash flows of the separate legal entities as they relate to the Issuer and its guarantors. The Company and its guarantors provide services to each other during the normal course of business. These transactions are eliminated in the consolidated results of operations of the Company. Activity related to income taxes is included at the issuer, or the Company level, and the Company's non-guarantor subsidiaries and is not allocated to the Company's guarantor subsidiaries in the condensed consolidated financial information presented below. Condensed Consolidating Balance Sheets Year Ended June 30, 2017 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Eliminations Total (in millions) Assets Current assets Cash and cash equivalents $ 96.6 $ 2.1 $ 121.3 $ — 220.0 Trade receivables, net of allowance 117.9 4.5 69.2 — 191.6 Prepaid expenses 42.6 0.3 25.4 — 68.3 Other assets 25.1 — 9.0 — 34.1 Total current assets 282.2 6.9 224.9 — 514.0 Property and equipment, net 4,306.3 — 709.7 — 5,016.0 Intangible assets, net 1,033.6 11.0 144.0 — 1,188.6 Goodwill 1,660.8 14.6 164.8 — 1,840.2 Deferred income taxes, net 27.2 — 0.1 — 27.3 Other assets 115.6 — 26.1 — 141.7 Related party receivable 341.5 — — (341.5) — Investment in subsidiary 624.6 — — (624.6) — Total assets $ 8,391.8 $ 32.5 $ 1,269.6 $ (966.1) $ 8,727.8 Liabilities and member's equity Current liabilities Current portion of long-term debt $ 5.0 $ — $ — $ — $ 5.0 Accounts payable 57.0 — 15.4 — 72.4 Accrued liabilities 217.5 1.4 110.3 — 329.2 Accrued interest 63.5 — — — 63.5 Capital lease obligations, current 6.6 — 1.4 — 8.0 Deferred revenue, current 113.1 0.2 32.7 — 146.0 Total current liabilities 462.7 1.6 159.8 — 624.1 Long-term debt, non-current 5,532.7 — — — 5,532.7 Related party debt, long-term — — 341.5 (341.5) — Capital lease obligation, non-current 82.6 — 11.0 — 93.6 Deferred revenue, non-current 884.8 — 104.9 — 989.7 Deferred income taxes, net — — 40.2 — 40.2 Other long-term liabilities 33.9 — 18.5 — 52.4 Total liabilities 6,996.7 1.6 675.9 (341.5) 7,332.7 Member's equity Member's interest 1,893.5 18.5 574.2 (607.2) 1,879.0 Accumulated other comprehensive loss — — 5.4 — 5.4 Accumulated deficit (498.4) 12.4 14.1 (17.4) (489.3) Total member's equity 1,395.1 30.9 593.7 (624.6) 1,395.1 Total liabilities and member's equity $ 8,391.8 $ 32.5 $ 1,269.6 $ (966.1) $ 8,727.8 Condensed Consolidating Balance Sheets Year Ended June 30, 2016 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Eliminations Total (in millions) Assets Current assets Cash and cash equivalents $ 91.3 $ 3.0 $ 75.8 $ — 170.1 Trade receivables, net of allowance 75.5 2.1 70.8 — 148.4 Prepaid expenses 33.7 0.3 34.8 — 68.8 Deferred income taxes, net — — — — — Other assets (2.0) — 11.3 — 9.3 Total current assets 198.5 5.4 192.7 — 396.6 Property and equipment, net 3,375.7 — 703.8 — 4,079.5 Intangible assets, net 775.5 12.9 146.5 — 934.9 Goodwill 1,025.5 14.6 174.4 — 1,214.5 Other assets 65.0 — 29.5 — 94.5 Related party receivable 346.7 — — (346.7) — Investment in subsidiary 550.9 — — (550.9) — Total assets $ 6,337.8 $ 32.9 $ 1,246.9 $ (897.6) $ 6,720.0 Liabilities and member's equity Current liabilities Current portion of long-term debt $ — $ — $ — $ — $ — Accounts payable 70.3 — 26.7 — 97.0 Accrued liabilities 116.0 0.7 110.2 — 226.9 Accrued interest 28.6 — — — 28.6 Capital lease obligations, current 4.2 — 1.6 — 5.8 Deferred revenue, current 89.1 0.2 40.1 — 129.4 Total current liabilities 308.2 0.9 178.6 — 487.7 Long-term debt, non-current 4,085.3 — — — 4,085.3 Related party debt, long-term — — 346.7 (346.7) — Capital lease obligation, non-current 32.0 — 12.9 — 44.9 Deferred revenue, non-current 681.1 — 112.2 — 793.3 Deferred income taxes, net 3.3 — 44.7 — 48.0 Other long-term liabilities 24.1 — 32.9 — 57.0 Total liabilities 5,134.0 0.9 728.0 (346.7) 5,516.2 Member's equity Member's interest 1,786.2 22.3 543.2 (579.1) 1,772.6 Accumulated other comprehensive loss — — 4.5 — 4.5 Accumulated deficit (582.4) 9.7 (28.8) 28.2 (573.3) Total member's equity 1,203.8 32.0 518.9 (550.9) 1,203.8 Total liabilities and member's equity $ 6,337.8 $ 32.9 $ 1,246.9 $ (897.6) $ 6,720.0 Condensed Consolidating Statements of Operations Year Ended June 30, 2017 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Eliminations Total (in millions) Revenue $ 1,588.3 $ 21.6 $ 589.9 $ — $ 2,199.8 Operating costs and expenses Operating costs (excluding depreciation amortization and including stock-based compensation) 489.5 15.8 277.6 — 782.9 Selling, general and administrative expenses (including stock-based compensation) 293.3 1.3 141.6 — 436.2 Depreciation and amortization 505.6 1.8 99.5 — 606.9 Total operating costs and expenses 1,288.4 18.9 518.7 — 1,826.0 Operating income 299.9 2.7 71.2 — 373.8 Other expenses Interest expense (219.4) — (22.1) — (241.5) Loss on extinguishment of debt (18.2) — — — (18.2) Foreign currency loss on intercompany loans 0.8 — (11.1) — (10.3) Other expense 0.7 — (0.4) — 0.3 Equity in net earnings of subsidiaries 45.6 — — (45.6) — Total other expense, net (190.5) — (33.6) (45.6) (269.7) Income/(loss) from operations before income taxes 109.4 2.7 37.6 (45.6) 104.1 Provision/(benefit) for income taxes 23.7 — (5.3) — 18.4 Net income/(loss) $ 85.7 $ 2.7 $ 42.9 $ (45.6) $ 85.7 Condensed Consolidating Statements of Operations Year Ended June 30, 2016 Zayo Group, LLC Guarantor Non-Guarantor Issuer Subsidiaries Subsidiaries Eliminations Total (in millions) Revenue $ 1,316.5 $ 17.6 $ 387.6 $ — $ 1,721.7 Operating costs and expenses Operating costs (excluding depreciation amortization and including stock-based compensation) 383.1 12.7 182.9 — 578.7 Selling, general and administrative expenses (including stock-based compensation) 284.8 1.1 100.5 — 386.4 Depreciation and amortization 427.4 1.8 87.1 — 516.3 Total operating costs and expenses 1,095.3 15.6 370.5 — 1,481.4 Operating income 221.2 2.0 17.1 — 240.3 Other expenses Interest expense (198.6) — (21.5) — (220.1) Loss on extinguishment of debt (33.8) — — — (33.8) Foreign currency loss on intercompany loans (37.9) — (15.9) (53.8) Other expense 0.5 — (0.8) — (0.3) Equity in net earnings of subsidiaries (18.7) — — 18.7 — Total other expense, net (288.5) — (38.2) 18.7 (308.0) (Loss)/income from operations before income taxes (67.3) 2.0 (21.1) 18.7 (67.7) Provision/(benefit) for income taxes 8.9 — (0.4) — 8.5 Net (loss)/income $ (76.2) $ 2.0 $ (20.7) $ 18.7 $ (76.2) Condensed Consolidating Statements of Operations Year Ended June 30, 2015 Zayo Group, LLC Guarantor Non-Guarantor Issuer Subsidiaries Subsidiaries Eliminations Total (in millions) Revenue $ 1,170.5 $ 21.2 $ 155.4 $ — $ 1,347.1 Operating costs and expenses Operating costs (excluding depreciation amortization and including stock-based compensation) 352.3 15.9 45.3 — 413.5 Selling, general and administrative expenses (including stock-based compensation) 305.4 (0.1) 52.8 — 358.1 Depreciation and amortization 362.5 1.9 41.8 — 406.2 Total operating costs and expenses 1,020.2 17.7 139.9 — 1,177.8 Operating income/(loss) 150.3 3.5 15.5 — 169.3 Other expenses Interest expense (197.3) — (16.7) — (214.0) Loss on extinguishment of debt (93.5) — (0.8) — (94.3) Foreign currency loss on intercompany loans (23.2) — (1.2) — (24.4) Other income, net (0.4) — — — (0.4) Equity in net earnings of subsidiaries (9.5) — — 9.5 — Total other expense, net (323.9) — (18.7) 9.5 (333.1) (Loss)/income from operations before income taxes (173.6) 3.5 (3.2) 9.5 (163.8) (Benefit)/provision for income taxes (8.6) — (0.1) — (8.7) Net (loss)/income $ (165.0) $ 3.5 $ (3.1) $ 9.5 $ (155.1) Condensed Consolidating Statements of Cash Flows Year Ended June 30, 2017 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Total (in millions) Net cash provided by operating activities $ 777.1 $ 2.9 $ 129.8 $ 909.8 Cash flows from investing activities: Purchases of property and equipment (762.5) — (73.0) (835.5) Acquisitions, net of cash acquired (1,436.3) — 1.5 (1,434.8) Net cash used in investing activities (2,198.8) — (71.5) (2,270.3) Cash flows from financing activities: Proceeds from debt 3,865.8 — — 3,865.8 Principal payments on long-term debt (2,408.8) — — (2,408.8) Principal repayments on capital lease obligations (5.5) — (1.1) (6.6) Payment of debt issuance costs (35.4) — — (35.4) Receipts from/(payments of) intercompany loans 10.8 — (10.8) — Contributions to parent 3.8 (3.8) — — Cash paid for Santa Clara acquisition (3.7) — — (3.7) Net cash provided by financing activities 1,427.0 (3.8) (11.9) 1,411.3 Effect of changes in foreign exchange rates on cash — — (0.9) (0.9) Net increase/(decrease) in cash and cash equivalents 5.3 (0.9) 45.5 49.9 Cash and cash equivalents, beginning of period 91.3 3.0 75.8 170.1 Cash and cash equivalents, end of period $ 96.6 $ 2.1 $ 121.3 $ 220.0 Condensed Consolidating Statements of Cash Flows Year Ended June 30, 2016 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Total (in millions) Net cash provided by operating activities $ 620.6 $ 3.6 $ 89.8 $ 714.0 Cash flows from investing activities: Purchases of property and equipment (643.5) — (60.6) (704.1) Acquisitions, net of cash acquired (344.2) — (93.3) (437.5) Net cash used in investing activities (987.7) — (153.9) (1,141.6) Cash flows from financing activities: Proceeds from debt 929.3 — — 929.3 Principal payments on long-term debt (535.0) — — (535.0) Payment of early redemption fees on debt extinguished (20.3) — — (20.3) Principal repayments on capital lease obligations (3.9) — (1.0) (4.9) Payment of debt issuance costs (4.2) — — (4.2) Contributions to parent (91.6) (4.3) 14.8 (81.1) (Payments of)/receipts from intercompany loans (99.1) — 99.1 — Excess tax benefit from stock-based compensation 7.9 — — 7.9 Net cash provided by financing activities 183.1 (4.3) 112.9 291.7 Effect of changes in foreign exchange rates on cash — — (2.0) (2.0) Net (decrease)/increase in cash and cash equivalents (184.0) (0.7) 46.8 (137.9) Cash and cash equivalents, beginning of period 275.3 3.7 29.0 308.0 Cash and cash equivalents, end of period $ 91.3 $ 3.0 $ 75.8 $ 170.1 Condensed Consolidating Statements of Cash Flows Year Ended June 30, 2015 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Total (in millions) Net cash provided by operating activities $ 548.0 $ (3.0) $ 62.0 $ 607.0 Cash flows from investing activities: Purchases of property and equipment (484.6) — (45.8) (530.4) Acquisitions, net of cash acquired (781.8) — (73.9) (855.7) Net cash used in investing activities (1,266.4) — (119.7) (1,386.1) Cash flows from financing activities: Proceeds from debt 1,747.2 — 40.1 1,787.3 Proceeds from equity offerings and contributions 367.9 1.9 15.2 385.0 Principal payments on long-term debt (1,288.5) — — (1,288.5) Payment of early redemption fees on debt extinguished (62.6) — — (62.6) Principal payments on capital lease obligations (3.1) — (0.4) (3.5) Payment of debt issuance costs (24.2) — — (24.2) Net cash provided by financing activities 736.7 1.9 54.9 793.5 Effect of changes in foreign exchange rates on cash — — (3.8) (3.8) Net inrease/(decrease) in cash and cash equivalents 18.3 (1.1) (6.6) 10.6 Cash and cash equivalents, beginning of period 257.0 4.8 35.6 297.4 Cash and cash equivalents, end of period $ 275.3 $ 3.7 $ 29.0 $ 308.0 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Jun. 30, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | (17) QUARTERLY FINANCIAL DATA (UNAUDITED) The following table presents the unaudited quarterly results for the year ended June 30, 2017: 2017 Quarter Ended September 30 December 31 March 31 (1) (2) June 30 (2) Total (in millions) Revenue $ 504.9 $ 506.7 $ 550.2 $ 638.0 $ Operating costs and expenses Operating costs (excluding depreciation and amortization and including stock-based compensation) 173.8 179.9 195.0 234.2 Selling, general and administrative expenses (including stock-based compensation) 105.6 104.7 108.8 117.1 Depreciation and amortization 138.5 131.4 155.7 181.3 Total operating costs and expenses 417.9 416.0 459.5 532.6 Operating income 87.0 90.7 90.7 105.4 Other expenses Interest expense (53.3) (53.7) (63.0) (71.5) Loss on extinguishment of debt — — (4.5) (13.7) Foreign currency income/(loss) on intercompany loans (11.2) (17.4) 3.9 14.4 Other (expense)/income, net (0.2) 0.4 0.5 (0.4) Total other expenses, net (64.7) (70.7) (63.1) (71.2) Income from operations before income taxes 22.3 20.0 27.6 34.2 Provision for income taxes 6.6 0.2 0.6 11.0 Net income $ 15.7 $ 19.8 $ 27.0 $ 23.2 $ (1) (2) Long Term Debt. The following table presents the unaudited quarterly results for the year ended June 30, 2016: 2016 Quarter Ended September 30 December 31 March 31 (1) (2) June 30 (3) (4) Total (in millions) Revenue $ 366.8 $ 369.6 $ 478.0 $ 507.3 $ 1,721.7 Operating costs and expenses Operating costs (excluding depreciation and amortization and including stock-based compensation) 113.0 112.2 170.8 182.7 578.7 Selling, general and administrative expenses (including stock-based compensation) 84.6 85.0 112.5 104.3 386.4 Depreciation and amortization 117.1 113.7 137.2 148.3 516.3 Total operating costs and expenses 314.7 310.9 420.5 435.3 1,481.4 Operating (loss)/income 52.1 58.7 57.5 72.0 240.3 Other expenses Interest expense (53.8) (51.2) (57.7) (57.4) (220.1) Loss on extinguishment of debt — — — (33.8) (33.8) Foreign currency (loss)/gain on intercompany loans (10.7) (7.1) (11.1) (24.9) (53.8) Other (expense)/income, net (0.1) (0.1) (0.2) 0.1 (0.3) Total other expenses, net (64.6) (58.4) (69.0) (116.0) (308.0) (Loss)/earnings from operations before income taxes (12.5) 0.3 (11.5) (44.0) (67.7) Provision/(benefit) for income taxes 2.7 11.1 7.8 (13.1) 8.5 Net loss $ (15.2) $ (10.8) $ (19.3) $ (30.9) $ (76.2) (1) (2) (3) (4) The Company completed debt refinancing transactions during April and May, resulting in a loss on debt extinguishment in the fourth quarter. See Note 7 – Long Term Debt. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | (18) SUBSEQUENT EVENTS On July 5, 2017, the Company closed a private offering of $300.0 million aggregate principal amount of 5.75% senior notes due 2027 (the “July Incremental 2027 Notes”) through an add-on to the Company’s 2027 Unsecured Notes priced at 104.25%. The net proceeds from the offering were used to further repay certain outstanding balances on the Company’s Term Loan Facility that mature on January 19, 2024 resulting in $1,618.1 million in aggregate principal amount outstanding under the Term Loan Facility. Following the offering of the July Incremental 2027 Notes, $1,650.0 million aggregate principal amount of the 2027 Unsecured Notes are outstanding. On July 20, 2017, the Company and Zayo Capital entered into a repricing amendment under the Credit Agreement for the outstanding balances under the B-2 Term Loan and Electric Lightwave Incremental Term Loan (the “Repricing Amendment No. 2”). Per the terms of the Repricing Amendment No. 2, the B-2 Term Loan and Electric Lightwave Incremental Term Loan was repriced at par and bears interest at a rate of LIBOR plus 2.25%, with a minimum LIBOR rate of 1.0%. No other terms of the Credit Agreement were amended. |
BASIS OF PRESENTATION AND SIG26
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | a. Basis of Presentation The accompanying consolidated financial statements include all the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the instructions to Form 10-K and Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of financial position, results of operations and cash flows of the Company have been included herein. Unless otherwise noted, dollar amounts and disclosures throughout the Notes to the consolidated financial statements are presented in millions of dollars. The Company’s fiscal year ends June 30 each year, and we refer to the fiscal year ended June 30, 2017 as “Fiscal 2017,” fiscal year ended June 30, 2016 as “Fiscal 2016,” and the fiscal year ended June 30, 2015 as “Fiscal 2015.” |
Foreign Currency Translation | b. Foreign Currency Translation For operations outside the U.S. that have functional currencies other than the U.S. dollar, assets and liabilities are translated to U.S. dollars at period-end exchange rates, and revenue, expenses and cash flows are translated using monthly average exchange rates during the year. Gains or losses resulting from currency translation are recorded as a component of accumulated other comprehensive (loss)/income in member’s equity and in the consolidated statements of comprehensive loss. The Company considers its investments in its foreign subsidiaries to be permanently reinvested. |
Use of Estimates | c. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense 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 and accruals for exit activities associated with real estate leases, 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, determining the defined benefit costs and defined benefit obligations related to post-employment benefits, and estimating the common unit and restricted stock unit grant fair values used to compute the stock-based compensation liability and 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. |
Cash and Cash Equivalents and Restricted Cash | e . Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. Cash equivalents are stated at cost, which approximates fair value. Restricted cash consists of cash balances held by various financial institutions as collateral for letters of credit and surety bonds. These balances are reclassified to cash and cash equivalents when the underlying obligation is satisfied, or in accordance with the governing agreement. Restricted cash balances expected to become unrestricted during the next twelve months are recorded as current assets. The Company had a non-current restricted cash balance of $4.5 million as of both June 30, 2017 and 2016. |
Trade Receivables | f. Trade Receivables Trade receivables are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its trade receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and the customer’s financial condition, and the age of receivables and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Property and Equipment | g. Property and Equipment The Company’s property and equipment includes assets in service and under construction or development. Property and equipment is recorded at historical cost or acquisition date fair value. Costs associated directly with network construction, service installations, and development of business support systems, including employee-related costs, are capitalized. Depreciation is calculated on a straight-line basis over the asset’s estimated useful life from the date placed into service or acquired. Management periodically evaluates the estimates of the useful life of property and equipment by reviewing historical usage, with consideration given to technological changes, trends in the industry, and other economic factors that could impact the network architecture and asset utilization. Equipment acquired under capital leases is recorded at the lower of the fair value of the asset or the net present value of the minimum lease payments at the inception of the lease. Depreciation of equipment held under capital leases is included in depreciation and amortization expense, and is calculated on a straight-line basis over the estimated useful lives of the assets, or the related lease term, whichever is shorter. Management reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of its property and equipment may not be recoverable. An impairment loss is recognized when the assets’ carrying value exceeds both the assets’ estimated undiscounted future cash flows and the assets’ estimated fair value. Measurement of the impairment loss is then based on the estimated fair value of the assets. Considerable judgment is required to project such future cash flows and, if required, to estimate the fair value of the property and equipment and the resulting amount of the impairment. No impairment charges were recorded for property and equipment during the years ended June 30, 2017, 2016 or 2015, respectively. The Company capitalizes interest for assets that require a period of time to get them ready for their intended use. The amount of interest capitalized is based on the Company’s weighted average effective interest rate for outstanding debt obligations during the respective accounting period. |
Goodwill and Acquired Intangibles | h. Goodwill and Acquired Intangibles Intangible assets arising from business combinations, such as acquired customer contracts and relationships, (collectively “customer relationships”), are initially recorded at fair value. The Company amortizes customer relationships primarily over an estimated life of 10 to 20 years using an amortization method that approximates the timing in which the Company expects to receive the benefit from the acquired customer relationship 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 April, or more frequently if a triggering event occurs between impairment testing dates. The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment includes comparing the overall financial performance of the reporting units against the planned results used in the last quantitative goodwill impairment test. Additionally, each reporting unit’s fair value is assessed in light of certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity- and reporting unit-specific events. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgments and estimates. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a single step test is performed to identify and measure impairment and if a reporting unit’s fair value is greater than its carrying value, the Company recognizes an impairment charge for the amount by which the reporting unit’s carrying amount exceeds its fair value, up to but not exceeding the reporting unit’s goodwill. See discussion below in “Recently Issued Accounting Pronouncements” regarding the Company’s early adoption of a new accounting standard during the quarter ended March 31, 2017 which simplifies the requirements for goodwill impairment testing. The Company performed a qualitative assessment for the years ended June 30, 2017, 2016 and 2015, as well as upon the change in reportable segments during Fiscal 2017 (see Note 15- Segment Reporting ), and determined it was more likely than not that the fair values of our reporting units are greater than their carrying amounts. The Company reviews its indefinite-lived intangible assets for impairment at least annually in April, which involves comparing the estimated fair value of indefinite-lived intangible assets to their respective carrying values. To the extent the carrying value of indefinite-lived intangible assets exceeds the fair value, the Company will recognize an impairment loss for the difference. The Company performed a qualitative assessment to determine whether it was more likely than not that the Company’s indefinite-lived intangible assets were impaired and concluded there was no indication of impairment for the years ended June 30, 2017, 2016 and 2015. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. No impairment charges were recorded for goodwill or intangible assets during the years ended June 30, 2017, 2016 or 2015, respectively. |
Derivative Financial Instruments | i. Derivative Financial Instruments Derivative instruments are recorded in the balance sheet as either assets or liabilities, measured at fair value. The Company has historically entered into interest rate swaps to convert a portion of its floating-rate debt to fixed-rate debt and has not applied hedge accounting; therefore, the changes in the fair value of the interest rate swaps are recognized in earnings as adjustments to interest expense. The principal objectives of the derivative instruments are to minimize the cash flow interest rate risks associated with financing activities. The Company does not use financial instruments for trading purposes. The Company utilized interest rate swap contracts in connection with debt instruments entered into during the July 2012 financing transactions. As of June 30, 2017, the Company’s interest rate swap contract has expired and was not replaced. |
Revenue Recognition | j. Revenue Recognition The Company recognizes revenues derived from leasing fiber optic telecommunications infrastructure and the provision of telecommunications and colocation services when the service has been provided and there is persuasive evidence of an arrangement, the fee is fixed or determinable, customer acceptance has been obtained with relevant contract terms, and collection of the receivable is reasonably assured. Taxes collected from customers and remitted to a governmental authority are reported on a net basis and are excluded from revenue. Most revenue is billed in advance on a fixed-rate basis and the remainder is billed in arrears on a transactional basis determined by customer usage. The Company often bills customers for upfront charges, which are non-refundable. These charges relate to activation fees, installation charges or prepayments for future services and are influenced by various business factors including how the Company and customer agree to structure the payment terms. These upfront charges are deferred and recognized over the underlying contractual term. The Company also defers costs associated with customer activation and installation to the extent of upfront amounts received from customers, which are recognized as expense over the same period for which the associated revenue is recognized. The Company typically records revenues from leases of dark fiber, including indefeasible rights-of-use (“IRU”) agreements, over the term that the customer is given exclusive access to the assets. Dark fiber IRU agreements generally require the customer to make a down payment upon the execution of the agreement with monthly IRU fees paid over the contract term; however, in some cases, the Company receives up to the entire lease payment at the inception of the lease and recognizes the revenue ratably over the lease term. Revenue related to professional services to provide network management and technical support is recognized as services are provided. In determining the appropriate amount of revenue and related reserves to reflect in its consolidated financial statements, management evaluates payment history, credit ratings, customer financial performance, and historical or potential billing disputes and related estimates are based on these factors and assumptions. |
Operating Costs And Expenses | k. Operating Costs and Expenses The Company’s operating costs and expenses consist primarily of network expense (“Netex”), compensation and benefits, network operations expense (“Netops”), stock-based compensation, other expenses, and depreciation and amortization. Netex consists of third-party network service costs resulting from the leasing of certain network facilities, primarily leases of circuits and dark fiber, from carriers to augment the Company’s owned infrastructure, for which it is generally billed a fixed monthly fee. Netex also includes colocation facility costs for rent and license fees paid to the landlords of the buildings in which the Company’s colocation business operates, along with the utility costs to power those facilities. Compensation and benefits expenses include salaries, wages, incentive compensation and benefits. Employee-related costs that are directly associated with network construction, service installations and development of business support systems are capitalized and amortized to operating costs and expenses over the customer life. Compensation and benefits expenses related to the departments attributed to generating revenue are included in “Operating costs” while compensation and benefits expenses related to the sales, product, and corporate departments are included in “Selling, general and administrative expenses” in the consolidated statements of operations. Netops expense include all of the non-personnel related expenses of operating and maintaining the network infrastructure, including contracted maintenance fees, right-of-way costs, rent for cellular towers and other places where fiber is located, pole attachment fees, and relocation expenses. Netops expense is included in “Operating costs” in the consolidated statements of operations. Stock-based compensation expense consists of the fair value of equity based awards granted to employees and independent directors recognized over their applicable vesting period. Stock-based compensation expense is included, based on the responsibilities of the awarded recipient, in either “Operating costs” or “Selling, general and administrative expenses” in the consolidated statements of operations. For additional information regarding our stock-based compensation expense, see (l.) – Stock-Based Compensation below and Note 11 – Stock-Based Compensation . Other expenses include expenses such as property tax, franchise fees, and colocation facility maintenance, which relate to operating our network and are therefore included in “Operating costs” as well as travel, office expense and other administrative costs that are included in “Selling, general and administrative expenses”. Other expenses are included in either “Operating costs” or “Selling, general and administrative expenses” in the consolidated statement of operations depending on their relationship to generating revenue or association with sales and administration. Transaction costs include expenses associated with professional services (i.e. legal, accounting, regulatory, etc.) rendered in connection with acquisitions or disposals (including spin-offs), travel expense, severance expense incurred on the date of acquisition or disposal, and other direct expenses incurred that are associated with signed and/or closed acquisitions or disposals and unsuccessful acquisitions. Transaction costs are included in “Selling, general and administrative expenses” in the consolidated statements of operations. Related to Netex, the Company recognizes the cost of these facilities or services when it is incurred in accordance with contractual requirements. The Company routinely disputes incorrect billings. The most prevalent types of disputes include disputes for circuits that are not disconnected on a timely basis and usage bills with incorrect records. Depending on the type and complexity of the issues involved, it may take several quarters to resolve disputes. In determining the amount of such operating expenses and related accrued liabilities to reflect in its consolidated financial statements, management considers the adequacy of documentation of disconnect notices, compliance with prevailing contractual requirements for submitting such disconnect notices and disputes to the provider of the facilities, and compliance with its interconnection agreements with these carriers. Significant judgment is required in estimating the ultimate outcome of the dispute resolution process, as well as any other costs that may be incurred to conclude the negotiations or settle any litigation. |
Stock-based Compensation | l. Stock-Based Compensation In October 2014, the Company adopted a new incentive plan. The plan includes incentive cash compensation (ICC) and equity (in the form of restricted stock units). Grants under the incentive plan are made quarterly for all participants. The Company recognizes all quarterly stock-based awards to employees and independent directors, based on their grant-date fair values , with no consideration for future forfeitures. The Company recognizes the fair value of outstanding awards as a charge to operations over the vesting period. The Company accounts for forfeitures as they occur. The Company uses the straight-line method to recognize share-based compensation expense for outstanding share awards that do not contain a performance condition. Prior to ZGH’s initial public offering (“IPO”), the Company was given authorization by Communications Infrastructure Investments, LLC (“CII”) to award 625,000,000 of CII’s common units as profits interests to employees, directors, and affiliates of the Company. The common units were historically considered to be stock-based compensation with terms that required the awards to be classified as liabilities due to cash settlement features. The vested portion of the awards was reported as a liability and the fair value was re-measured at each reporting date until the date of settlement, with a corresponding charge (or credit) to stock-based compensation expense. In connection with ZGH’s IPO and the related amendment to the CII operating agreement, there was a deemed modification to the stock compensation arrangements with the Company’s employees and directors. As a result, previously issued common units which were historically accounted for as liability awards, became classified as equity awards. Determining the fair value of certain share-based awards at the grant date and subsequent reporting dates requires judgment. If actual results differ significantly from these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted. For additional information regarding our stock-based compensation, see Note 11 – Stock-Based Compensation . |
Legal Costs | m. Legal Costs Costs incurred to hire and retain external legal counsel to advise us on regulatory, litigation and other matters is expensed as the related services are received. |
Income Taxes | n. Income Taxes The Company recognizes income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. Estimating the future tax benefit associated with deferred tax assets requires significant judgment. Deferred tax assets arise from a variety of sources, the most significant being: tax losses that can be carried forward to be utilized against taxable income in future years, deferred revenue, and expenses recognized in the Company’s financial statements but disallowed in the Company’s tax return until the associated cash flow occurs. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is expected to be recognized. The valuation allowance is established if, based on available evidence, it is more-likely-than-not that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the period and/or of the character necessary to utilize the benefit of the deferred tax asset. When evaluating whether it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized, all available evidence, both positive and negative, that may affect the realizability of deferred tax assets is identified and considered in determining the appropriate amount of the valuation allowance. The Company continues to monitor its financial performance and other evidence each quarter to determine the appropriateness of the Company’s valuation allowance. At each balance sheet date, existing assessments are reviewed and, if necessary, revised to reflect changed circumstances. The analysis of the Company’s ability to utilize its net operating loss carryforward (“NOL”) balance is based on the Company’s forecasted taxable income. The forecasted assumptions approximate the Company’s best estimates, including market growth rates, future pricing, market acceptance of the Company’s products and services, future expected capital investments and discount rates. If the Company is unable to meet its taxable income forecasts in future periods the Company may change its conclusion about the appropriateness of the valuation allowance which could create a substantial income tax expense in the Company’s consolidated statement of operations in the period such change occurs. Deferred tax liabilities related to investments in foreign subsidiaries and foreign corporate joint ventures that are essentially permanent in duration are not recognized until it becomes apparent that such amounts will reverse in the foreseeable future. In accordance with Accounting Standards Update (“ASU”) 2015-17, Balance Sheet Classification of Deferred Taxes, all deferred tax assets and liabilities are presented as noncurrent. The Company records interest related to unrecognized tax benefits and penalties in the provision for income taxes. |
Fair Value of Financial Instruments | o. Fair Value of Financial Instruments Relevant accounting literature defines and establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and defines fair value 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. Valuation techniques that may be used include the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost), which are each based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Fair Value Hierarchy A fair value hierarchy is established that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that are used to measure fair value are: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company views fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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 assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. |
Concentration of Credit Risk | p. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash investments and accounts receivable. The Company’s cash and cash equivalents are primarily held in commercial bank accounts in the United States, Canada and Great Britain. The Company limits its cash investments to high-quality financial institutions in order to minimize its credit risk. During the years ended June 30, 2017, 2016 and 2015, the Company had no single customer that exceeded 10% of total revenue. The Company’s trade receivables, which are unsecured, are geographically dispersed. As of June 30, 2017, the Company had no single customer with a trade receivable balance that exceeded 10% of total receivables. As of June 30, 2016, the Company had one customer with a trade receivable balance of 11% of total receivables. |
Employee Benefits | q. Employee Benefits As a result of the Allstream acquisition (see Note 3 – Acquisitions ) the Company acquired certain defined benefit pension plans, a defined contribution plan and other non-pension post-employment benefit plans. The cost of providing benefits under the defined benefit pension plans and other non-pension post-employment benefits is determined annually using the projected unit credit method. These actuarial valuations require the use of assumptions, including the discount rate, expected rate of return on plan assets, price inflation, expected future salary increases, turnover, retirement, and mortality rate calculations to measure defined benefit obligations. The discount rate used to calculate the present values of the defined benefit obligation is determined by reference to market interest rates of high quality corporate bonds at the end of the reporting period. The net defined liability/(benefit) recognized in our consolidated balance sheet comprises the present value of the projected benefit obligations less the fair value of plan assets. Annually, all actuarial gains and losses arising from changes in the present value of the defined benefit obligations are recognized as a component of other comprehensive income/(loss), and are included in accumulated other comprehensive income/(loss). The changes in the fair value of plan assets are determined in an accounting valuation prepared by an independent actuary and recognized in the statement of operations during the period in which they occur. Any minimum funding requirements are considered in the calculation of the economic benefit. For plans recognized by a net defined benefit liability, minimum funding requirements can also result in an increase in the liability. The Company recognizes any decrease in an asset or increase in a liability as a result of the above in the statement of operations during the period in which they occur. The Company recognizes payments to the defined contribution plans as an expense in the period the employee service is incurred. |
Recently Issued Accounting Pronouncements | r. Recently Issued Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, Simplifying the Accounting for Goodwill Impairment , which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the amendments in ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The updated guidance required a prospective adoption. Early adoption was permitted for goodwill impairment test performed on testing dates after January 1, 2017. The Company early adopted the standard during the quarter ended March 31, 2017. No impairments of goodwill were identified. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The new standard provides guidance for evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions for which the acquisition date occurs before the issuance date or effective date, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company early adopted the standard as of January 1, 2017 and has applied the provisions of this standard for acquisitions consummated subsequent to that date. The adoption of this standard did not have a material impact on the determination of whether the transactions closed during the current year would be accounted for as an acquisition of assets or a business. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classifications of Certain Cash Receipts and Cash Payments." The new standard provides guidance for eight changes with respect to how cash receipts and cash payments are classified in the statement of cash flows, with the objective of reducing diversity in practice. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 31, 2017, with early adoption permitted. The Company does not plan to early adopt, nor does it expect the adoption of this new standard to have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . The new guidance supersedes existing guidance on accounting for leases in Topic 840 and is intended to increase the transparency and comparability of accounting for lease transactions. ASU 2016-02 requires most leases to be recognized on the balance sheet. Lessees will need to recognize a right-of-use asset and a lease liability for virtually all leases. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting remains similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard (ASU 2014-09). The ASU will require both quantitative and qualitative disclosures regarding key information about leasing arrangements. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company established a project team and commenced an initial impact assessment process. To date, the Company has reviewed a sample of lessee and lessor arrangements and made preliminary assessments of the impact this standard will have on the consolidated financial statements. Although it is still assessing the impact of this standard, the Company expects the new guidance to significantly increase the reported assets and liabilities on the consolidated balance sheets. There are currently no plans to early adopt this ASU. On March 30, 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting , which is intended to improve the accounting for share-based payment transactions as part of the FASB’s simplification initiative. The ASU changes five aspects of the accounting for share-based payment award transactions that will affect public companies, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. The Company early-adopted ASU 2016-09 effective July 1, 2016. Excess tax benefits for share-based payments are now recognized against income tax expense rather than additional paid-in capital and are included in operating cash flows rather than financing cash flows. The recognition of excess tax benefits have been applied prospectively and prior periods have not been adjusted. The Company had $15.6 million of excess tax benefits for the year ended June 30, 2017. In addition, the Company elected to change its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective basis with a cumulative effect adjustment to accumulated deficit of $1.7 million as of July 1, 2016. Amendments related to minimum statutory tax withholding requirements and the classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes have been adopted prospectively and did not have a material impact on the consolidated financial statements . In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. In July 2015, the FASB deferred the effective date to annual reporting periods and interim reporting periods within annual reporting periods beginning after December 15, 2017. Early adoption is permitted as of the original effective date or annual reporting periods and interim reporting periods within annual reporting periods beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. In Fiscal 2017, the Company established a project team and commenced an initial impact assessment process based on a review of a sample of contracts with its customers. Lease revenue is not included in the scope of ASU 2014-09 and as a result the revenue to which the Company must apply the new guidance is generally limited to service revenue, certain maintenance revenue not covered by lease arrangements and other fees charged to customers. Although the Company is still assessing the impact of this standard on its consolidated financial statements, it has preliminarily determined that due to changes in the timing of recognition of certain installation services, discounts and promotional credits given to customers, there may be additional contract assets and liabilities recorded in the consolidated balance sheets upon adoption. Additionally, the requirement to defer incremental costs incurred to acquire a contract including sales commissions, and recognize such costs over the contract period or expected customer life may result in additional deferred charges recognized in the consolidated balance sheets and could have the impact of deferring operating expenses. The assessment of the impact of this standard on the Company’s consolidated financial statements also includes developing new accounting policies, internal controls and procedures and possible changes to our systems to facilitate the adoption of this accounting policy. The Company plans to adopt this new standard as of July 1, 2018 and based on its initial assessment expects to apply the modified retrospective method, which may result in a cumulative effect adjustment as of the date of adoption. The Company' initial assessment of changes to the reporting of its revenue and expenses and anticipated adoption method may change depending on the results of the Company’s ongoing and final assessment of this ASU. Until the Company is further along in its assessment, it does not anticipate being able to provide reasonably accurate estimates of the impact of ASU 2014-09. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
ACQUISITIONS | |
Schedule of Acquisitions | The table below reflects the Company's estimates of the acquisition date fair values of the assets and liabilities assumed from its Fiscal 2017 acquisitions: KIO Networks US Data Centers Electric Lightwave Santa Clara Data Acquisition date May 1, 2017 March 1, 2017 October 3, 2016 (in millions) Cash $ 0.1 $ 12.6 $ — Other current assets 0.1 55.4 — Property and equipment 2.4 520.6 31.9 Deferred tax assets, net — 46.7 — Intangibles 6.4 312.2 6.0 Goodwill 6.0 629.3 — Other assets 0.5 1.7 — Total assets acquired 15.5 1,578.5 37.9 Current liabilities 1.7 58.1 — Deferred tax liabilities, net 1.3 — — Capital lease obligations — — 26.6 Deferred revenue 0.5 80.0 — Other liabilities — 1.2 — Total liabilities assumed 3.5 139.3 26.6 Net assets acquired 12.0 1,439.2 11.3 Less cash acquired (0.1) (12.6) — Total consideration paid/payable $ 11.9 $ 1,426.6 $ 11.3 The table below reflects the Company's estimates of the acquisition date fair values of the assets and liabilities assumed from its Fiscal 2016 acquisitions: Clearview Allstream Viatel Dallas Data Acquisition date April 1, 2016 January 15, 2016 December 31, 2015 December 31, 2015 (in millions) Cash $ — $ 2.9 $ 3.5 $ — Other current assets 0.6 95.6 7.3 — Property and equipment 17.1 266.3 174.0 12.2 Deferred tax assets, net 0.2 3.8 — — Intangibles 9.8 64.5 — 4.4 Goodwill 2.1 — 9.5 — Other assets 0.3 4.5 2.0 — Total assets acquired 30.1 437.6 196.3 16.6 Current liabilities 1.1 63.2 18.8 — Deferred revenue 0.4 46.9 58.5 — Deferred tax liability, net — — 8.6 — Other liabilities 10.3 27.0 5.7 — Total liabilities assumed 11.8 137.1 91.6 — Net assets acquired 18.3 300.5 104.7 16.6 Less cash acquired — (2.9) (3.5) — Net consideration paid $ 18.3 $ 297.6 $ 101.2 $ 16.6 The table below reflects the Company's estimates of the acquisition date fair values of the assets and liabilities assumed from its Fiscal 2015 acquisitions: AtlantaNAP Neo IdeaTek Latisys Acquisition date July 1, 2014 July 1, 2014 January 1, 2015 February 23, 2015 (in millions) Cash $ — $ 4.2 $ — $ 9.4 Other current assets 0.2 9.5 0.8 17.4 Property and equipment 7.0 31.3 32.3 222.9 Deferred tax assets, net — — 3.1 0.4 Intangibles 21.0 26.4 7.6 250.2 Goodwill 25.2 32.5 39.0 274.1 Other assets — 2.3 — 5.0 Total assets acquired 53.4 106.2 82.8 779.4 Current liabilities 1.5 13.5 4.4 9.9 Deferred revenue — 3.7 25.7 3.2 Deferred tax liability, net — 7.6 — 79.1 Other liabilities — 3.3 — — Total liabilities assumed 1.5 28.1 30.1 92.2 Net assets acquired 51.9 78.1 52.7 687.2 Less cash acquired — (4.2) — (9.4) Net consideration paid $ 51.9 $ 73.9 $ 52.7 $ 677.8 |
Schedule Of Pro-Forma Financial Information | Year Ended June 30, 2017 2016 (in millions) Revenue $ 2,566.7 $ 2,574.4 Net income/(loss) $ 35.9 $ (147.3) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and Equipment | Estimated useful lives As of June 30, (in years) 2017 2016 (in millions) Land N/A $ 28.9 $ 16.7 Buildings - leasehold and site improvements 15 to 39 277.1 187.3 Furniture, fixtures and office equipment 3 to 7 27.3 6.8 Computer hardware 3 to 5 33.1 24.5 Software 3 56.5 37.2 Machinery and equipment 5 to 7 483.4 326.6 Fiber optic equipment 8 826.6 732.5 Circuit switch equipment 10 337.6 20.3 Packet switch equipment 5 130.2 97.9 Fiber optic network 15 to 20 4,110.3 3,393.0 Construction in progress N/A 651.5 656.8 Total 6,962.5 5,499.6 Less accumulated depreciation (1,946.5) (1,420.1) Property and equipment, net $ 5,016.0 $ 4,079.5 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
GOODWILL | |
Schedule Of Goodwill | The following reflects the changes in the carrying amount of goodwill during Fiscal 2017: Product Group As of June 30, 2016 Reallocation among reporting units Adjustments to Fiscal 2016 Fiscal 2017 Foreign Currency As of June 30, 2017 (in millions) Dark Fiber $ 295.1 $ (295.1) $ — $ — $ — $ — Fiber Solutions — 544.8 1.7 92.9 (5.5) 633.9 Waves 258.3 (104.0) (2.7) 96.5 (0.7) 247.4 Sonet 51.3 0.7 — — — 52.0 Ethernet 104.3 (59.8) (0.5) 315.3 0.2 359.5 IP 87.5 (87.5) — — — — MIG 73.6 (73.6) — — — — EPIC — 89.5 — — — 89.5 zColo 268.8 (15.0) (3.7) 4.7 1.5 256.3 Cloud 60.0 — (0.1) 9.4 0.2 69.5 Allstream — — — 116.5 — 116.5 Other 15.6 — — — — 15.6 Total $ 1,214.5 $ — $ (5.3) $ 635.3 $ (4.3) $ 1,840.2 The following reflects the changes in the carrying amount of goodwill during Fiscal 2016: Product Group As of July 1, 2015 Fiscal 2016 Acquisitions Adjustments to Fiscal 2015 Foreign Currency As of July 1, 2016 (in millions) Dark Fiber $ 299.1 $ 10.2 $ — $ (14.2) $ 295.1 Waves 265.6 — — (7.3) 258.3 Sonet 50.3 1.0 — - 51.3 Ethernet 104.2 — — 0.1 104.3 IP 86.3 1.4 — (0.2) 87.5 MIG 73.4 — 0.2 - 73.6 zColo 273.2 1.3 (5.7) - 268.8 Cloud 57.0 3.0 — - 60.0 Other 15.3 — — 0.3 15.6 Total $ 1,224.4 $ 16.9 $ (5.5) $ (21.3) $ 1,214.5 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
INTANGIBLE ASSETS | |
Schedule of Intangible Assets, Excluding Goodwill | Gross Carrying Amount Accumulated Net (in millions) June 30, 2017 Finite-Lived Intangible Assets Customer relationships $ 1,477.7 $ (308.6) $ 1,169.1 Underlying rights 1.6 (0.4) 1.2 Total 1,479.3 (309.0) 1,170.3 Indefinite-Lived Intangible Assets Certifications 3.5 — 3.5 Underlying Rights 14.8 — 14.8 Total $ 1,497.6 $ (309.0) $ 1,188.6 June 30, 2016 Finite-Lived Intangible Assets Customer relationships $ 1,143.6 $ (228.8) $ 914.8 Trade names 0.2 (0.2) — Underlying rights 1.6 (0.3) 1.3 Total 1,145.4 (229.3) 916.1 Indefinite-Lived Intangible Assets Certifications 3.5 — 3.5 Underlying Rights 15.3 — 15.3 Total $ 1,164.2 $ (229.3) $ 934.9 |
Schedule of Estimated Future Amortization of Finite-Lived Intangible Assets | June 30, (in millions) 2018 $ 89.5 2019 88.2 2020 83.2 2021 81.1 2022 79.3 Thereafter 749.0 Total $ 1,170.3 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
LONG-TERM DEBT | |
Schedule of Debt | 2017 2016 (in millions) Term Loan Facility due 2021 $ 498.8 $ 1,837.4 Term Loan Facility due 2024 1,429.9 — 6.00% Senior Unsecured Notes due 2023 1,430.0 1,430.0 6.375% Senior Unsecured Notes due 2025 900.0 900.0 5.75% Senior Unsecured Notes due 2027 1,350.0 — Total debt obligations 5,608.7 4,167.4 Unamortized discount on Term Loan Facility (16.0) (19.0) Unamortized premium on 6.00% Senior Unsecured Notes due 2023 5.5 6.3 Unamortized discount on 6.375% Senior Unsecured Notes due 2025 (14.3) (15.6) Unamortized premium on 5.75% Senior Unsecured Notes due 2027 21.6 — Unamortized debt issuance costs (67.8) (53.8) Carrying value of debt 5,537.7 4,085.3 Less current portion (5.0) — Long-term debt, less current portion $ $ |
Schedule Of Debt Instrument Redemption Price | Redemption Price Year (2023 Unsecured Notes) 2018 104.500 % 2019 103.000 % 2020 101.500 % 2021 and thereafter 100.000 % Redemption Price Year (2025 Unsecured Notes) 2020 103.188 % 2021 102.125 % 2022 101.063 % 2023 and thereafter 100.000 % Redemption Price Year (2027 Unsecured Notes) 2022 102.875 % 2023 101.917 % 2024 100.958 % 2025 and thereafter 100.000 % |
Schedule of Future Contractual Maturities of Long-term Debt | Year Ended June 30, (in millions) 2018 $ 5.0 2019 5.0 2020 5.0 2021 483.8 2022 — Thereafter 5,109.9 Total $ 5,608.7 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
INCOME TAXES | |
Schedule of Provision/(Benefit) for Income Taxes | June 30, 2017 2016 2015 (in millions) Current Income Taxes Federal $ 1.6 $ (1.3) $ 1.7 State 6.3 8.7 4.4 Foreign (2.1) 3.9 (1.6) Total $ 5.8 $ 11.3 $ 4.5 Deferred Income Taxes Federal $ 13.3 $ 7.3 $ (8.6) State 2.4 (2.3) (6.9) Foreign (3.1) (7.8) 2.3 Total 12.6 (2.8) (13.2) Total provision/(benefit) for income taxes $ 18.4 $ 8.5 $ (8.7) |
Schedule of Income Before Income Tax | June 30, 2017 2016 2015 (in millions) United States $ 66.6 $ (46.9) $ (159.4) Foreign 37.5 (20.8) (4.4) Total $ 104.1 $ (67.7) $ (163.8) |
Schedule Of Reconciliation Of Income Tax Provision | June 30, 2017 2016 2015 (in millions) Expected provision/(benefit) at the statutory rate $ 36.4 $ (23.8) $ (57.3) Increase/(decrease) due to: Stock-based compensation (11.7) 27.9 59.4 State income taxes, net of federal benefit 2.9 (2.1) (7.4) Transaction costs not deductible for tax purposes 1.9 1.5 0.7 Change in statutory tax rate (1.4) (3.6) (2.2) Change in valuation allowance (10.2) 2.8 — Foreign tax rate differential (3.9) 2.7 0.6 Other, net 4.4 3.1 (2.5) Provision/(benefit) for income taxes $ 18.4 $ 8.5 $ (8.7) |
Schedule of Deferred Tax Assets and Liabilities | June 30, 2017 2016 (in millions) Deferred income tax assets Net operating loss carry forwards $ 704.6 $ 550.6 Tax credit carry forwards 22.2 16.8 Deferred revenue 405.9 318.3 Accrued expenses 40.0 40.2 Other liabilities 17.4 25.5 Reserves against accounts receivable 18.2 14.8 Deferred compensation 20.3 15.5 Total deferred income tax assets 1,228.6 981.7 Valuation allowance (111.1) (135.3) Net deferred tax assets 1,117.5 846.4 Deferred income tax liabilities Property and equipment 712.2 559.2 Intangible assets 412.4 321.5 Debt issuance costs 5.8 13.7 Total deferred income tax liabilities 1,130.4 894.4 Net deferred income tax liabilities $ (12.9) $ (34.3) |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
ACCRUED LIABILITIES | |
Schedule of Accrued Liabilities | June 30, 2017 2016 (in millions) Accrued compensation and benefits $ 38.5 $ 27.9 Accrued property and equipment purchases 81.8 46.7 Network expense accruals 132.1 94.8 Other accrued taxes 20.1 9.1 Accrued professional fees 3.9 2.3 Other accruals 52.8 46.1 Total $ 329.2 $ 226.9 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Schedule of Employee Service Share-based Compensation Allocation of Recognized Period Costs | Year Ended June 30, 2017 2016 2015 (in millions) Included in: Operating costs $ 11.3 $ 17.4 $ 23.3 Selling, general and administrative expenses 102.8 138.5 177.4 Total stock-based compensation expense $ 114.1 $ 155.9 $ 200.7 CII common and preferred units $ 10.1 $ 73.0 $ 156.8 Part A restricted stock units 76.5 45.3 12.6 Part B restricted stock units 26.0 36.5 31.3 Part C restricted stock units 1.5 1.1 — Total stock-based compensation expense $ 114.1 $ 155.9 $ 200.7 |
Summary Of Part B RSU Issuance | The table below reflects the total Part B RSUs granted during each period presented, the maximum eligible shares of ZGH’s stock that the respective Part B RSU grant could be converted into shares of ZGH’s common stock and the grant date fair value per Part B RSU during the period indicated. The table below also reflects the units converted to the Company’s common stock at a subsequent vesting date but for those RSUs granted during the period indicated: During the three months ended June 30, March 31, December 31, September 30, Part B RSUs granted 152,808 171,316 191,015 200,425 Maximum eligible shares of the Company's common stock 550,109 880,564 981,817 1,030,185 Grant date fair value per Part B RSU $ 26.52 $ $ $ Units converted to Company's common stock at vesting date n/a n/a n/a 99,508 During the three months ended June 30, March 31, December 31, September 30, Part B RSUs granted 312,516 284,773 282,074 272,813 Maximum eligible shares of the Company's common stock 1,606,332 1,463,733 1,449,860 1,426,812 Grant date fair value per Part B RSU $ 37.03 $ 25.12 $ 25.26 $ 17.83 Units converted to Company's common stock at vesting date 1,078,812 475,446 40,182 — |
Part A Restricted Stock Units [Member] | |
Summary Of Restricted Stock Units Activity | The following table summarizes the Company’s Part A RSU activity for the years ended June 2017, 2016 and 2015: Number of Part A Weighted average Weighted average Outstanding at July 1, 2014 — $ — — Granted 955,831 26.25 Vested — Forfeited (22,614) n/a Outstanding at July 1, 2015 933,217 $ 26.25 7.1 Granted 2,190,785 26.04 Vested (852,853) 26.14 Forfeited (101,248) n/a Outstanding at July 1, 2016 2,169,901 $ 26.04 7.9 Granted 2,678,503 31.64 Vested (2,080,685) 26.03 Forfeited (403,333) n/a Outstanding at June 30, 2017 2,364,386 $ 31.63 7.1 |
Part B Restricted Stock Units [Member] | |
Summary Of Restricted Stock Units Activity | The following table summarizes the Company’s Part B RSU activity for the years ended June 2017, 2016 and 2015: Number of Part B Weighted average Weighted average Outstanding at July 1, 2014 — $ — — Granted 1,251,671 42.90 Vested — Forfeited (1,798) n/a Outstanding at July 1, 2015 1,249,873 $ 42.90 5.5 Granted 1,152,176 26.80 Vested (1,463,893) 38.70 Forfeited (77,220) n/a Outstanding at July 1, 2016 860,936 $ 29.50 6.2 Granted 715,564 45.56 Vested (793,478) 32.58 Forfeited (371,049) n/a Outstanding at June 30, 2017 411,973 $ 42.86 6.1 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis | Level June 30, 2017 June 30, 2016 Liabilities Recorded at Fair Value in the Financial Statements: (in millions) Interest rate swap Level 2 $ — $ 3.0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of Future Contractual Capital Lease Payments | Year Ended June 30, (in millions) 2018 $ 9.8 2019 8.6 2020 7.7 2021 8.0 2022 8.5 Thereafter 74.4 Total minimum lease payments 117.0 Less amounts representing interest (15.4) Less current portion (8.0) Capital lease obligations, non-current $ 93.6 |
Schedule of Future Contractual Long-Term Operating Lease Payments | Year Ended June 30, (in millions) 2018 $ 113.4 2019 104.3 2020 88.0 2021 66.0 2022 34.9 Thereafter 138.4 $ 545.0 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Inteliquent, Inc [Member] | |
Revenue and Expense Transactions Recognized | Year Ended June 30, 2017 2016 2015 (in millions) Revenues $ 7.5 $ 6.6 $ 6.9 Operating costs $ 2.0 $ 2.1 $ 1.0 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
SEGMENT REPORTING | |
Summary of Financial Information by Segments | For the year ended June 30, 2017 Fiber Transport Enterprise Networks zColo Allstream Other Corp/ Total (in millions) Revenue from external customers $ 722.1 $ 440.4 $ 487.4 $ 214.0 $ 314.3 $ 21.6 $ — $ 2,199.8 Segment Adjusted EBITDA 566.3 184.2 178.0 111.9 71.3 5.1 — 1,116.8 Total assets 4,504.6 1,230.0 1,385.7 994.4 406.2 33.2 173.7 8,727.8 Capital expenditures 499.1 147.3 89.1 91.5 8.5 — — 835.5 For the year ended June 30, 2016 Fiber Transport Enterprise Networks zColo Allstream Other Corp/ Total (in millions) Revenue from external customers $ 648.8 $ 391.4 $ 359.6 $ 195.4 $ 106.2 $ 20.3 $ — $ 1,721.7 Segment Adjusted EBITDA 499.6 168.0 145.6 100.9 16.3 4.5 — 934.9 Total assets 3,780.9 964.8 849.2 884.3 72.6 33.5 134.7 6,720.0 Capital expenditures 421.4 123.1 88.0 66.3 5.3 — — 704.1 For the year ended June 30, 2015 Fiber Transport Enterprise Networks zColo Allstream Other Corp/ Total (in millions) Revenue from external customers $ 575.6 $ 336.4 $ 285.0 $ 126.9 $ — $ 23.2 $ — $ 1,347.1 Segment Adjusted EBITDA 400.7 139.3 172.8 64.7 — 5.1 — 782.6 Capital expenditures 303.5 110.6 62.8 53.5 — — — 530.4 |
Reconciliation from Segment Adjusted EBITDA to Net Loss from Continuing Operations | For the year ended June 30, 2017 2016 2015 Total Segment Adjusted EBITDA $ 1,116.8 $ 934.9 $ 782.6 Interest expense (241.5) (220.1) (214.0) Depreciation and amortization (606.9) (516.3) (406.2) Transaction costs (20.5) (21.5) (5.9) Stock-based compensation (114.1) (155.9) (200.7) Loss on extinguishment of debt (18.2) (33.8) (94.3) Foreign currency loss on intercompany loans (10.3) (53.8) (24.4) Non-cash loss on investments (1.2) (1.2) (0.9) Income/(loss) from operations before income taxes $ 104.1 $ (67.7) $ (163.8) |
Schedule of Geographical Information | For the year ended June 30, 2017 2016 2015 Revenue from external customers: United States $ 1,610.0 $ 1,334.1 $ 1,193.5 Europe 176.5 174.1 153.6 Canada 412.0 213.3 — Other 1.3 0.2 — Total Revenue $ 2,199.8 $ 1,721.7 $ 1,347.1 Long-lived assets: United States $ 5,504.7 $ 4,236.1 3,848.0 Europe 521.3 527.8 454.0 Canada 335.8 326.4 — Other 22.8 25.6 0.3 Total Long-lived assets $ 6,384.6 $ 5,115.9 $ 4,302.3 |
CONDENSED CONSOLIDATING FINAN39
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |
Schedule Of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheets Year Ended June 30, 2017 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Eliminations Total (in millions) Assets Current assets Cash and cash equivalents $ 96.6 $ 2.1 $ 121.3 $ — 220.0 Trade receivables, net of allowance 117.9 4.5 69.2 — 191.6 Prepaid expenses 42.6 0.3 25.4 — 68.3 Other assets 25.1 — 9.0 — 34.1 Total current assets 282.2 6.9 224.9 — 514.0 Property and equipment, net 4,306.3 — 709.7 — 5,016.0 Intangible assets, net 1,033.6 11.0 144.0 — 1,188.6 Goodwill 1,660.8 14.6 164.8 — 1,840.2 Deferred income taxes, net 27.2 — 0.1 — 27.3 Other assets 115.6 — 26.1 — 141.7 Related party receivable 341.5 — — (341.5) — Investment in subsidiary 624.6 — — (624.6) — Total assets $ 8,391.8 $ 32.5 $ 1,269.6 $ (966.1) $ 8,727.8 Liabilities and member's equity Current liabilities Current portion of long-term debt $ 5.0 $ — $ — $ — $ 5.0 Accounts payable 57.0 — 15.4 — 72.4 Accrued liabilities 217.5 1.4 110.3 — 329.2 Accrued interest 63.5 — — — 63.5 Capital lease obligations, current 6.6 — 1.4 — 8.0 Deferred revenue, current 113.1 0.2 32.7 — 146.0 Total current liabilities 462.7 1.6 159.8 — 624.1 Long-term debt, non-current 5,532.7 — — — 5,532.7 Related party debt, long-term — — 341.5 (341.5) — Capital lease obligation, non-current 82.6 — 11.0 — 93.6 Deferred revenue, non-current 884.8 — 104.9 — 989.7 Deferred income taxes, net — — 40.2 — 40.2 Other long-term liabilities 33.9 — 18.5 — 52.4 Total liabilities 6,996.7 1.6 675.9 (341.5) 7,332.7 Member's equity Member's interest 1,893.5 18.5 574.2 (607.2) 1,879.0 Accumulated other comprehensive loss — — 5.4 — 5.4 Accumulated deficit (498.4) 12.4 14.1 (17.4) (489.3) Total member's equity 1,395.1 30.9 593.7 (624.6) 1,395.1 Total liabilities and member's equity $ 8,391.8 $ 32.5 $ 1,269.6 $ (966.1) $ 8,727.8 Condensed Consolidating Balance Sheets Year Ended June 30, 2016 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Eliminations Total (in millions) Assets Current assets Cash and cash equivalents $ 91.3 $ 3.0 $ 75.8 $ — 170.1 Trade receivables, net of allowance 75.5 2.1 70.8 — 148.4 Prepaid expenses 33.7 0.3 34.8 — 68.8 Deferred income taxes, net — — — — — Other assets (2.0) — 11.3 — 9.3 Total current assets 198.5 5.4 192.7 — 396.6 Property and equipment, net 3,375.7 — 703.8 — 4,079.5 Intangible assets, net 775.5 12.9 146.5 — 934.9 Goodwill 1,025.5 14.6 174.4 — 1,214.5 Other assets 65.0 — 29.5 — 94.5 Related party receivable 346.7 — — (346.7) — Investment in subsidiary 550.9 — — (550.9) — Total assets $ 6,337.8 $ 32.9 $ 1,246.9 $ (897.6) $ 6,720.0 Liabilities and member's equity Current liabilities Current portion of long-term debt $ — $ — $ — $ — $ — Accounts payable 70.3 — 26.7 — 97.0 Accrued liabilities 116.0 0.7 110.2 — 226.9 Accrued interest 28.6 — — — 28.6 Capital lease obligations, current 4.2 — 1.6 — 5.8 Deferred revenue, current 89.1 0.2 40.1 — 129.4 Total current liabilities 308.2 0.9 178.6 — 487.7 Long-term debt, non-current 4,085.3 — — — 4,085.3 Related party debt, long-term — — 346.7 (346.7) — Capital lease obligation, non-current 32.0 — 12.9 — 44.9 Deferred revenue, non-current 681.1 — 112.2 — 793.3 Deferred income taxes, net 3.3 — 44.7 — 48.0 Other long-term liabilities 24.1 — 32.9 — 57.0 Total liabilities 5,134.0 0.9 728.0 (346.7) 5,516.2 Member's equity Member's interest 1,786.2 22.3 543.2 (579.1) 1,772.6 Accumulated other comprehensive loss — — 4.5 — 4.5 Accumulated deficit (582.4) 9.7 (28.8) 28.2 (573.3) Total member's equity 1,203.8 32.0 518.9 (550.9) 1,203.8 Total liabilities and member's equity $ 6,337.8 $ 32.9 $ 1,246.9 $ (897.6) $ 6,720.0 |
Schedule Of Condensed Consolidating Statements Of Operations | Condensed Consolidating Statements of Operations Year Ended June 30, 2017 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Eliminations Total (in millions) Revenue $ 1,588.3 $ 21.6 $ 589.9 $ — $ 2,199.8 Operating costs and expenses Operating costs (excluding depreciation amortization and including stock-based compensation) 489.5 15.8 277.6 — 782.9 Selling, general and administrative expenses (including stock-based compensation) 293.3 1.3 141.6 — 436.2 Depreciation and amortization 505.6 1.8 99.5 — 606.9 Total operating costs and expenses 1,288.4 18.9 518.7 — 1,826.0 Operating income 299.9 2.7 71.2 — 373.8 Other expenses Interest expense (219.4) — (22.1) — (241.5) Loss on extinguishment of debt (18.2) — — — (18.2) Foreign currency loss on intercompany loans 0.8 — (11.1) — (10.3) Other expense 0.7 — (0.4) — 0.3 Equity in net earnings of subsidiaries 45.6 — — (45.6) — Total other expense, net (190.5) — (33.6) (45.6) (269.7) Income/(loss) from operations before income taxes 109.4 2.7 37.6 (45.6) 104.1 Provision/(benefit) for income taxes 23.7 — (5.3) — 18.4 Net income/(loss) $ 85.7 $ 2.7 $ 42.9 $ (45.6) $ 85.7 Condensed Consolidating Statements of Operations Year Ended June 30, 2016 Zayo Group, LLC Guarantor Non-Guarantor Issuer Subsidiaries Subsidiaries Eliminations Total (in millions) Revenue $ 1,316.5 $ 17.6 $ 387.6 $ — $ 1,721.7 Operating costs and expenses Operating costs (excluding depreciation amortization and including stock-based compensation) 383.1 12.7 182.9 — 578.7 Selling, general and administrative expenses (including stock-based compensation) 284.8 1.1 100.5 — 386.4 Depreciation and amortization 427.4 1.8 87.1 — 516.3 Total operating costs and expenses 1,095.3 15.6 370.5 — 1,481.4 Operating income 221.2 2.0 17.1 — 240.3 Other expenses Interest expense (198.6) — (21.5) — (220.1) Loss on extinguishment of debt (33.8) — — — (33.8) Foreign currency loss on intercompany loans (37.9) — (15.9) (53.8) Other expense 0.5 — (0.8) — (0.3) Equity in net earnings of subsidiaries (18.7) — — 18.7 — Total other expense, net (288.5) — (38.2) 18.7 (308.0) (Loss)/income from operations before income taxes (67.3) 2.0 (21.1) 18.7 (67.7) Provision/(benefit) for income taxes 8.9 — (0.4) — 8.5 Net (loss)/income $ (76.2) $ 2.0 $ (20.7) $ 18.7 $ (76.2) Condensed Consolidating Statements of Operations Year Ended June 30, 2015 Zayo Group, LLC Guarantor Non-Guarantor Issuer Subsidiaries Subsidiaries Eliminations Total (in millions) Revenue $ 1,170.5 $ 21.2 $ 155.4 $ — $ 1,347.1 Operating costs and expenses Operating costs (excluding depreciation amortization and including stock-based compensation) 352.3 15.9 45.3 — 413.5 Selling, general and administrative expenses (including stock-based compensation) 305.4 (0.1) 52.8 — 358.1 Depreciation and amortization 362.5 1.9 41.8 — 406.2 Total operating costs and expenses 1,020.2 17.7 139.9 — 1,177.8 Operating income/(loss) 150.3 3.5 15.5 — 169.3 Other expenses Interest expense (197.3) — (16.7) — (214.0) Loss on extinguishment of debt (93.5) — (0.8) — (94.3) Foreign currency loss on intercompany loans (23.2) — (1.2) — (24.4) Other income, net (0.4) — — — (0.4) Equity in net earnings of subsidiaries (9.5) — — 9.5 — Total other expense, net (323.9) — (18.7) 9.5 (333.1) (Loss)/income from operations before income taxes (173.6) 3.5 (3.2) 9.5 (163.8) (Benefit)/provision for income taxes (8.6) — (0.1) — (8.7) Net (loss)/income $ (165.0) $ 3.5 $ (3.1) $ 9.5 $ (155.1) |
Schedule Of Condensed Consolidating Statements Of Cash Flows | Condensed Consolidating Statements of Cash Flows Year Ended June 30, 2017 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Total (in millions) Net cash provided by operating activities $ 777.1 $ 2.9 $ 129.8 $ 909.8 Cash flows from investing activities: Purchases of property and equipment (762.5) — (73.0) (835.5) Acquisitions, net of cash acquired (1,436.3) — 1.5 (1,434.8) Net cash used in investing activities (2,198.8) — (71.5) (2,270.3) Cash flows from financing activities: Proceeds from debt 3,865.8 — — 3,865.8 Principal payments on long-term debt (2,408.8) — — (2,408.8) Principal repayments on capital lease obligations (5.5) — (1.1) (6.6) Payment of debt issuance costs (35.4) — — (35.4) Receipts from/(payments of) intercompany loans 10.8 — (10.8) — Contributions to parent 3.8 (3.8) — — Cash paid for Santa Clara acquisition (3.7) — — (3.7) Net cash provided by financing activities 1,427.0 (3.8) (11.9) 1,411.3 Effect of changes in foreign exchange rates on cash — — (0.9) (0.9) Net increase/(decrease) in cash and cash equivalents 5.3 (0.9) 45.5 49.9 Cash and cash equivalents, beginning of period 91.3 3.0 75.8 170.1 Cash and cash equivalents, end of period $ 96.6 $ 2.1 $ 121.3 $ 220.0 Condensed Consolidating Statements of Cash Flows Year Ended June 30, 2016 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Total (in millions) Net cash provided by operating activities $ 620.6 $ 3.6 $ 89.8 $ 714.0 Cash flows from investing activities: Purchases of property and equipment (643.5) — (60.6) (704.1) Acquisitions, net of cash acquired (344.2) — (93.3) (437.5) Net cash used in investing activities (987.7) — (153.9) (1,141.6) Cash flows from financing activities: Proceeds from debt 929.3 — — 929.3 Principal payments on long-term debt (535.0) — — (535.0) Payment of early redemption fees on debt extinguished (20.3) — — (20.3) Principal repayments on capital lease obligations (3.9) — (1.0) (4.9) Payment of debt issuance costs (4.2) — — (4.2) Contributions to parent (91.6) (4.3) 14.8 (81.1) (Payments of)/receipts from intercompany loans (99.1) — 99.1 — Excess tax benefit from stock-based compensation 7.9 — — 7.9 Net cash provided by financing activities 183.1 (4.3) 112.9 291.7 Effect of changes in foreign exchange rates on cash — — (2.0) (2.0) Net (decrease)/increase in cash and cash equivalents (184.0) (0.7) 46.8 (137.9) Cash and cash equivalents, beginning of period 275.3 3.7 29.0 308.0 Cash and cash equivalents, end of period $ 91.3 $ 3.0 $ 75.8 $ 170.1 Condensed Consolidating Statements of Cash Flows Year Ended June 30, 2015 Zayo Group, LLC Guarantor Non-Guarantor (Issuer) Subsidiaries Subsidiaries Total (in millions) Net cash provided by operating activities $ 548.0 $ (3.0) $ 62.0 $ 607.0 Cash flows from investing activities: Purchases of property and equipment (484.6) — (45.8) (530.4) Acquisitions, net of cash acquired (781.8) — (73.9) (855.7) Net cash used in investing activities (1,266.4) — (119.7) (1,386.1) Cash flows from financing activities: Proceeds from debt 1,747.2 — 40.1 1,787.3 Proceeds from equity offerings and contributions 367.9 1.9 15.2 385.0 Principal payments on long-term debt (1,288.5) — — (1,288.5) Payment of early redemption fees on debt extinguished (62.6) — — (62.6) Principal payments on capital lease obligations (3.1) — (0.4) (3.5) Payment of debt issuance costs (24.2) — — (24.2) Net cash provided by financing activities 736.7 1.9 54.9 793.5 Effect of changes in foreign exchange rates on cash — — (3.8) (3.8) Net inrease/(decrease) in cash and cash equivalents 18.3 (1.1) (6.6) 10.6 Cash and cash equivalents, beginning of period 257.0 4.8 35.6 297.4 Cash and cash equivalents, end of period $ 275.3 $ 3.7 $ 29.0 $ 308.0 |
QUARTERLY FINANCIAL DATA (UNA40
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of Quarterly Results | The following table presents the unaudited quarterly results for the year ended June 30, 2017: 2017 Quarter Ended September 30 December 31 March 31 (1) (2) June 30 (2) Total (in millions) Revenue $ 504.9 $ 506.7 $ 550.2 $ 638.0 $ Operating costs and expenses Operating costs (excluding depreciation and amortization and including stock-based compensation) 173.8 179.9 195.0 234.2 Selling, general and administrative expenses (including stock-based compensation) 105.6 104.7 108.8 117.1 Depreciation and amortization 138.5 131.4 155.7 181.3 Total operating costs and expenses 417.9 416.0 459.5 532.6 Operating income 87.0 90.7 90.7 105.4 Other expenses Interest expense (53.3) (53.7) (63.0) (71.5) Loss on extinguishment of debt — — (4.5) (13.7) Foreign currency income/(loss) on intercompany loans (11.2) (17.4) 3.9 14.4 Other (expense)/income, net (0.2) 0.4 0.5 (0.4) Total other expenses, net (64.7) (70.7) (63.1) (71.2) Income from operations before income taxes 22.3 20.0 27.6 34.2 Provision for income taxes 6.6 0.2 0.6 11.0 Net income $ 15.7 $ 19.8 $ 27.0 $ 23.2 $ (1) (2) Long Term Debt. The following table presents the unaudited quarterly results for the year ended June 30, 2016: 2016 Quarter Ended September 30 December 31 March 31 (1) (2) June 30 (3) (4) Total (in millions) Revenue $ 366.8 $ 369.6 $ 478.0 $ 507.3 $ 1,721.7 Operating costs and expenses Operating costs (excluding depreciation and amortization and including stock-based compensation) 113.0 112.2 170.8 182.7 578.7 Selling, general and administrative expenses (including stock-based compensation) 84.6 85.0 112.5 104.3 386.4 Depreciation and amortization 117.1 113.7 137.2 148.3 516.3 Total operating costs and expenses 314.7 310.9 420.5 435.3 1,481.4 Operating (loss)/income 52.1 58.7 57.5 72.0 240.3 Other expenses Interest expense (53.8) (51.2) (57.7) (57.4) (220.1) Loss on extinguishment of debt — — — (33.8) (33.8) Foreign currency (loss)/gain on intercompany loans (10.7) (7.1) (11.1) (24.9) (53.8) Other (expense)/income, net (0.1) (0.1) (0.2) 0.1 (0.3) Total other expenses, net (64.6) (58.4) (69.0) (116.0) (308.0) (Loss)/earnings from operations before income taxes (12.5) 0.3 (11.5) (44.0) (67.7) Provision/(benefit) for income taxes 2.7 11.1 7.8 (13.1) 8.5 Net loss $ (15.2) $ (10.8) $ (19.3) $ (30.9) $ (76.2) (1) (2) (3) (4) The Company completed debt refinancing transactions during April and May, resulting in a loss on debt extinguishment in the fourth quarter. See Note 7 – Long Term Debt. |
BASIS OF PRESENTATION AND SIG41
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Non-current restricted cash | $ 4.5 | $ 4.5 | |
Impairment of property, plant and equipment | 0 | 0 | $ 0 |
Impairment of goodwill and intangibles | 0 | 0 | $ 0 |
Unamortized debt issuance cost | 67.8 | 53.8 | |
Excess tax benefit from stock-based compensation | (7.9) | ||
Accounting Standards Update 2016-09 [Member] | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Excess tax benefit from stock-based compensation | $ 15.6 | ||
Cumulative effect adjustment resulting from adoption of ASU | $ 1.7 | ||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Major concentration risk percentage | 10.00% | 10.00% | 10.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Major concentration risk percentage | 10.00% | 11.00% | |
Customer relationships [Member] | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Customer relationship estimated life | 15 years 4 months 24 days | ||
Minimum [Member] | Customer relationships [Member] | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Customer relationship estimated life | 10 years | ||
Maximum [Member] | Customer relationships [Member] | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Customer relationship estimated life | 20 years | ||
CII Common Units [Member] | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Shares authorized | 625,000,000 | ||
CII Common Units [Member] | Common Units [Member] | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Shares authorized | 625,000,000 |
ACQUISITIONS (Narrative) (Detai
ACQUISITIONS (Narrative) (Details) € in Millions, CAD in Millions, $ in Millions | May 01, 2017USD ($)ft²CenterMW | Mar. 01, 2017USD ($)buildingCenteritemmi | Oct. 03, 2016USD ($)ft²paymentMW | Apr. 01, 2016USD ($)ft²item | Jan. 15, 2016CADbuildingitemmi | Jan. 15, 2016USD ($)buildingitemmi | Dec. 31, 2015EUR (€)ft² | Dec. 31, 2015USD ($)ft² | Feb. 23, 2015USD ($)ft²locationitemMW | Jan. 01, 2015USD ($)buildingitemmi | Jul. 01, 2014EUR (€) | Jul. 01, 2014USD ($) | Apr. 30, 2016EUR (€) | Apr. 30, 2016USD ($) | Jun. 30, 2017USD ($)item | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) |
Business Acquisition [Line Items] | |||||||||||||||||
Number of business combinations completed since inception | item | 41 | ||||||||||||||||
Cash paid for acquisitions | $ 1,434.8 | $ 437.5 | $ 855.7 | ||||||||||||||
Acquisition related costs | 20.5 | $ 21.5 | $ 5.9 | ||||||||||||||
KIO Networks US Data Centers [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | May 1, 2017 | ||||||||||||||||
Business acquisition purchase price | $ 11.9 | ||||||||||||||||
Purchase price held in escrow | $ 1.2 | ||||||||||||||||
Number of data centers | Center | 2 | ||||||||||||||||
Acquired facility size (in square feet) | ft² | 100,000 | ||||||||||||||||
Acquired megawatts of critical power | MW | 2 | ||||||||||||||||
Electric Lightwave [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Mar. 1, 2017 | ||||||||||||||||
Number of metropolitan markets | item | 35 | ||||||||||||||||
Business acquisition purchase price | $ 1,426.6 | ||||||||||||||||
Purchase price held in escrow | 7 | ||||||||||||||||
Remaining cash consideration to be paid | $ 2.2 | ||||||||||||||||
Number of on-net buildings connected | building | 3,100 | ||||||||||||||||
Number of data centers | Center | 100 | ||||||||||||||||
Santa Clara Data Center [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Oct. 3, 2016 | ||||||||||||||||
Business acquisition purchase price | $ 11.3 | ||||||||||||||||
Remaining cash consideration to be paid | $ 8.9 | ||||||||||||||||
Number of quarterly payments | payment | 10 | ||||||||||||||||
Amount of quarterly payments | $ 1.3 | ||||||||||||||||
Cash paid for acquisitions | $ 3.7 | ||||||||||||||||
Acquired facility size (in square feet) | ft² | 26,900 | ||||||||||||||||
Acquired megawatts of critical power | MW | 3 | ||||||||||||||||
Clearview [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Apr. 1, 2016 | ||||||||||||||||
Business acquisition purchase price | $ 18.3 | ||||||||||||||||
Number of data centers | item | 2 | ||||||||||||||||
Cash paid for acquisitions | $ 18.3 | ||||||||||||||||
Acquired facility size (in square feet) | ft² | 30,000 | ||||||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||||||||||||
Allstream, Inc. [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Jan. 15, 2016 | Jan. 15, 2016 | |||||||||||||||
Number of metropolitan markets | item | 5 | 5 | |||||||||||||||
Business acquisition purchase price | $ 297.6 | ||||||||||||||||
Acquired route miles added to fiber network | mi | 12,500 | 12,500 | |||||||||||||||
Number of on-net buildings connected | building | 3,300 | 3,300 | |||||||||||||||
Cash paid for acquisitions | CAD 422.9 | $ 297.6 | |||||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||||||||||||
Working capital and other liabilities assumed in the acquisition | $ 29.6 | ||||||||||||||||
Other post retirement benefits plan liability assumed | $ 8.3 | 9.9 | |||||||||||||||
Allstream, Inc. [Member] | Minimum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired route miles added to fiber network | mi | 18,000 | 18,000 | |||||||||||||||
Viatel [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Dec. 31, 2015 | Dec. 31, 2015 | |||||||||||||||
Business acquisition purchase price | $ 101.2 | ||||||||||||||||
Cash paid for acquisitions | € 92.9 | $ 101.2 | |||||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | 100.00% | |||||||||||||||
Refund of escrow reflected as a cash inflow from investing activities | $ 1.5 | ||||||||||||||||
Dallas Data Center [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Dec. 31, 2015 | Dec. 31, 2015 | |||||||||||||||
Business acquisition purchase price | $ 16.6 | ||||||||||||||||
Cash paid for acquisitions | $ 16.6 | ||||||||||||||||
Acquired area in square feet | ft² | 36,000 | 36,000 | |||||||||||||||
Neo Telecoms [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Jul. 1, 2014 | Jul. 1, 2014 | |||||||||||||||
Business acquisition purchase price | $ 73.9 | ||||||||||||||||
Purchase price held in escrow | € 8.7 | 11.9 | |||||||||||||||
Cash paid for acquisitions | € 54.1 | $ 73.9 | € 2 | $ 2.3 | |||||||||||||
Business acquisition, percentage of voting interests acquired | 96.00% | 4.00% | 4.00% | ||||||||||||||
Business acquisition percentage of non controlling interest | 4.00% | ||||||||||||||||
Neo Telecoms [Member] | Other long term liabilities | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Business acquisition, fair value of noncontrolling interest | $ 2.9 | ||||||||||||||||
Neo Telecoms [Member] | Call Option [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Business acquisition, percentage of voting interests acquired | 4.00% | ||||||||||||||||
Business acquisition percentage of non controlling interest | 4.00% | ||||||||||||||||
Atlanta Nap [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Jul. 1, 2014 | Jul. 1, 2014 | |||||||||||||||
Business acquisition purchase price | $ 51.9 | ||||||||||||||||
Cash paid for acquisitions | $ 51.9 | ||||||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||||||||||||
Ideatek Systems Inc [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Jan. 1, 2015 | ||||||||||||||||
Business acquisition purchase price | $ 52.7 | ||||||||||||||||
Acquired route miles added to fiber network | mi | 1,800 | ||||||||||||||||
Number of on-net buildings connected | building | 100 | ||||||||||||||||
Number Of Additional Cellular Towers connected | item | 600 | ||||||||||||||||
Cash paid for acquisitions | $ 52.7 | ||||||||||||||||
Latisys Holdings, LLC | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition date | Feb. 23, 2015 | ||||||||||||||||
Number of metropolitan markets | location | 5 | ||||||||||||||||
Business acquisition purchase price | $ 677.8 | ||||||||||||||||
Number of data centers | item | 8 | ||||||||||||||||
Cash paid for acquisitions | $ 677.8 | ||||||||||||||||
Acquired area in square feet | ft² | 185,000 | ||||||||||||||||
Critical Power Acquired | MW | 33 | ||||||||||||||||
Long-Haul Fiber [Member] | Electric Lightwave [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired route miles added to fiber network | mi | 8,100 | ||||||||||||||||
Metro Fiber [Member] | Electric Lightwave [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired route miles added to fiber network | mi | 4,000 | ||||||||||||||||
Metro Fiber [Member] | Allstream, Inc. [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired route miles added to fiber network | mi | 5,500 | 5,500 |
ACQUISITIONS (Schedule of Acqui
ACQUISITIONS (Schedule of Acquisition) (Details) - USD ($) $ in Millions | May 01, 2017 | Mar. 01, 2017 | Oct. 03, 2016 | Apr. 01, 2016 | Jan. 15, 2016 | Dec. 31, 2015 | Feb. 23, 2015 | Jan. 01, 2015 | Jul. 01, 2014 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 1,840.2 | $ 1,214.5 | $ 1,224.4 | |||||||||
KIO Networks US Data Centers [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | $ 0.1 | |||||||||||
Other current assets | 0.1 | |||||||||||
Property and equipment | 2.4 | |||||||||||
Intangibles | 6.4 | |||||||||||
Goodwill | 6 | |||||||||||
Other assets | 0.5 | |||||||||||
Total assets acquired | 15.5 | |||||||||||
Current liabilities | 1.7 | |||||||||||
Deferred revenue | 0.5 | |||||||||||
Deferred tax liability, net | 1.3 | |||||||||||
Total liabilities assumed | 3.5 | |||||||||||
Net assets acquired | 12 | |||||||||||
Less cash acquired | (0.1) | |||||||||||
Total consideration paid/payable | $ 11.9 | |||||||||||
Electric Lightwave [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | $ 12.6 | |||||||||||
Other current assets | 55.4 | |||||||||||
Property and equipment | 520.6 | |||||||||||
Deferred tax assets, net | 46.7 | |||||||||||
Intangibles | 312.2 | |||||||||||
Goodwill | 629.3 | |||||||||||
Other assets | 1.7 | |||||||||||
Total assets acquired | 1,578.5 | |||||||||||
Current liabilities | 58.1 | |||||||||||
Deferred revenue | 80 | |||||||||||
Other liabilities | 1.2 | |||||||||||
Total liabilities assumed | 139.3 | |||||||||||
Net assets acquired | 1,439.2 | |||||||||||
Less cash acquired | (12.6) | |||||||||||
Total consideration paid/payable | $ 1,426.6 | |||||||||||
Santa Clara Data Center [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Property and equipment | $ 31.9 | |||||||||||
Intangibles | 6 | |||||||||||
Total assets acquired | 37.9 | |||||||||||
Capital lease obligations | 26.6 | |||||||||||
Total liabilities assumed | 26.6 | |||||||||||
Net assets acquired | 11.3 | |||||||||||
Total consideration paid/payable | $ 11.3 | |||||||||||
Clearview [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other current assets | $ 0.6 | |||||||||||
Property and equipment | 17.1 | |||||||||||
Deferred tax assets, net | 0.2 | |||||||||||
Intangibles | 9.8 | |||||||||||
Goodwill | 2.1 | |||||||||||
Other assets | 0.3 | |||||||||||
Total assets acquired | 30.1 | |||||||||||
Current liabilities | 1.1 | |||||||||||
Deferred revenue | 0.4 | |||||||||||
Other liabilities | 10.3 | |||||||||||
Total liabilities assumed | 11.8 | |||||||||||
Net assets acquired | 18.3 | |||||||||||
Total consideration paid/payable | $ 18.3 | |||||||||||
Allstream, Inc. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | $ 2.9 | |||||||||||
Other current assets | 95.6 | |||||||||||
Property and equipment | 266.3 | |||||||||||
Deferred tax assets, net | 3.8 | |||||||||||
Intangibles | 64.5 | |||||||||||
Other assets | 4.5 | |||||||||||
Total assets acquired | 437.6 | |||||||||||
Current liabilities | 63.2 | |||||||||||
Deferred revenue | 46.9 | |||||||||||
Other liabilities | 27 | |||||||||||
Total liabilities assumed | 137.1 | |||||||||||
Net assets acquired | 300.5 | |||||||||||
Less cash acquired | (2.9) | |||||||||||
Total consideration paid/payable | $ 297.6 | |||||||||||
Viatel [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | $ 3.5 | |||||||||||
Other current assets | 7.3 | |||||||||||
Property and equipment | 174 | |||||||||||
Goodwill | 9.5 | |||||||||||
Other assets | 2 | |||||||||||
Total assets acquired | 196.3 | |||||||||||
Current liabilities | 18.8 | |||||||||||
Deferred revenue | 58.5 | |||||||||||
Deferred tax liability, net | 8.6 | |||||||||||
Other liabilities | 5.7 | |||||||||||
Total liabilities assumed | 91.6 | |||||||||||
Net assets acquired | 104.7 | |||||||||||
Less cash acquired | (3.5) | |||||||||||
Total consideration paid/payable | 101.2 | |||||||||||
Dallas Data Center [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Property and equipment | 12.2 | |||||||||||
Intangibles | 4.4 | |||||||||||
Total assets acquired | 16.6 | |||||||||||
Net assets acquired | 16.6 | |||||||||||
Total consideration paid/payable | $ 16.6 | |||||||||||
Neo Telecoms [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | $ 4.2 | |||||||||||
Other current assets | 9.5 | |||||||||||
Property and equipment | 31.3 | |||||||||||
Intangibles | 26.4 | |||||||||||
Goodwill | 32.5 | |||||||||||
Other assets | 2.3 | |||||||||||
Total assets acquired | 106.2 | |||||||||||
Current liabilities | 13.5 | |||||||||||
Deferred revenue | 3.7 | |||||||||||
Deferred tax liability, net | 7.6 | |||||||||||
Other liabilities | 3.3 | |||||||||||
Total liabilities assumed | 28.1 | |||||||||||
Net assets acquired | 78.1 | |||||||||||
Less cash acquired | (4.2) | |||||||||||
Total consideration paid/payable | 73.9 | |||||||||||
Atlanta Nap [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other current assets | 0.2 | |||||||||||
Property and equipment | 7 | |||||||||||
Intangibles | 21 | |||||||||||
Goodwill | 25.2 | |||||||||||
Total assets acquired | 53.4 | |||||||||||
Current liabilities | 1.5 | |||||||||||
Total liabilities assumed | 1.5 | |||||||||||
Net assets acquired | 51.9 | |||||||||||
Total consideration paid/payable | $ 51.9 | |||||||||||
Ideatek Systems Inc [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other current assets | $ 0.8 | |||||||||||
Property and equipment | 32.3 | |||||||||||
Deferred tax assets, net | 3.1 | |||||||||||
Intangibles | 7.6 | |||||||||||
Goodwill | 39 | |||||||||||
Total assets acquired | 82.8 | |||||||||||
Current liabilities | 4.4 | |||||||||||
Deferred revenue | 25.7 | |||||||||||
Total liabilities assumed | 30.1 | |||||||||||
Net assets acquired | 52.7 | |||||||||||
Total consideration paid/payable | $ 52.7 | |||||||||||
Latisys Holdings, LLC | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | $ 9.4 | |||||||||||
Other current assets | 17.4 | |||||||||||
Property and equipment | 222.9 | |||||||||||
Deferred tax assets, net | 0.4 | |||||||||||
Intangibles | 250.2 | |||||||||||
Goodwill | 274.1 | |||||||||||
Other assets | 5 | |||||||||||
Total assets acquired | 779.4 | |||||||||||
Current liabilities | 9.9 | |||||||||||
Deferred revenue | 3.2 | |||||||||||
Deferred tax liability, net | 79.1 | |||||||||||
Total liabilities assumed | 92.2 | |||||||||||
Net assets acquired | 687.2 | |||||||||||
Less cash acquired | (9.4) | |||||||||||
Total consideration paid/payable | $ 677.8 |
ACQUISITIONS (Schedule of Pro F
ACQUISITIONS (Schedule of Pro Forma Information) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Business Acquisition [Line Items] | ||
Revenue | $ 2,566.7 | $ 2,574.4 |
Net income/(loss) | 35.9 | $ (147.3) |
Electric Lightwave [Member] | ||
Business Acquisition [Line Items] | ||
Revenue | $ 169.6 |
PROPERTY AND EQUIPMENT (Schedul
PROPERTY AND EQUIPMENT (Schedule of Property and Equipment) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 6,962.5 | $ 5,499.6 |
Less accumulated depreciation | (1,946.5) | (1,420.1) |
Property, Plant and Equipment, Net, Total | 5,016 | 4,079.5 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 28.9 | 16.7 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 277.1 | 187.3 |
Building Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 15 years | |
Building Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 39 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 27.3 | 6.8 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 7 years | |
Computer Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 33.1 | 24.5 |
Computer Hardware [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 3 years | |
Computer Hardware [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 5 years | |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 56.5 | 37.2 |
Software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 3 years | |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 483.4 | 326.6 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 5 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 7 years | |
Fiber Optic Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 826.6 | 732.5 |
Fiber Optic Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 8 years | |
Circuit Switch Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 337.6 | 20.3 |
Circuit Switch Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 10 years | |
Packet Switch Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 130.2 | 97.9 |
Packet Switch Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 5 years | |
Fiber Optic Network [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,110.3 | 3,393 |
Fiber Optic Network [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 15 years | |
Fiber Optic Network [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life in years | 20 years | |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 651.5 | $ 656.8 |
PROPERTY AND EQUIPMENT (Narrati
PROPERTY AND EQUIPMENT (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
PROPERTY AND EQUIPMENT | |||
Depreciation expense | $ 526.9 | $ 440.5 | $ 351.4 |
Capitalized interest | 18.8 | 13.8 | 12.5 |
Capitalized labor costs included in fixed assets | $ 79.9 | $ 64.5 | $ 58.3 |
GOODWILL (Schedule Of Goodwill)
GOODWILL (Schedule Of Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill [Line Items] | ||
Goodwill, beginning Balance | $ 1,214.5 | $ 1,224.4 |
Current Period Acquisitions | 635.3 | 16.9 |
Adjustments to Prior Period Acquisitions | (5.3) | (5.5) |
Foreign Currency Translation and Other | (4.3) | (21.3) |
Goodwill, ending balance | 1,840.2 | 1,214.5 |
Dark Fiber [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 295.1 | 299.1 |
Reallocation among reporting units | (295.1) | |
Current Period Acquisitions | 10.2 | |
Foreign Currency Translation and Other | (14.2) | |
Goodwill, ending balance | 295.1 | |
Fiber Solutions [Member] | ||
Goodwill [Line Items] | ||
Reallocation among reporting units | 544.8 | |
Current Period Acquisitions | 92.9 | |
Adjustments to Prior Period Acquisitions | 1.7 | |
Foreign Currency Translation and Other | (5.5) | |
Goodwill, ending balance | 633.9 | |
Waves [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 258.3 | 265.6 |
Reallocation among reporting units | (104) | |
Current Period Acquisitions | 96.5 | |
Adjustments to Prior Period Acquisitions | (2.7) | |
Foreign Currency Translation and Other | (0.7) | (7.3) |
Goodwill, ending balance | 247.4 | 258.3 |
Sonet [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 51.3 | 50.3 |
Reallocation among reporting units | 0.7 | |
Current Period Acquisitions | 1 | |
Goodwill, ending balance | 52 | 51.3 |
Ethernet [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 104.3 | 104.2 |
Reallocation among reporting units | (59.8) | |
Current Period Acquisitions | 315.3 | |
Adjustments to Prior Period Acquisitions | (0.5) | |
Foreign Currency Translation and Other | 0.2 | 0.1 |
Goodwill, ending balance | 359.5 | 104.3 |
IP [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 87.5 | 86.3 |
Reallocation among reporting units | (87.5) | |
Current Period Acquisitions | 1.4 | |
Foreign Currency Translation and Other | (0.2) | |
Goodwill, ending balance | 87.5 | |
MIG [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 73.6 | 73.4 |
Reallocation among reporting units | (73.6) | |
Adjustments to Prior Period Acquisitions | 0.2 | |
Goodwill, ending balance | 73.6 | |
EPIC [Member] | ||
Goodwill [Line Items] | ||
Reallocation among reporting units | 89.5 | |
Goodwill, ending balance | 89.5 | |
zColo [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 268.8 | 273.2 |
Reallocation among reporting units | (15) | |
Current Period Acquisitions | 4.7 | 1.3 |
Adjustments to Prior Period Acquisitions | (3.7) | (5.7) |
Foreign Currency Translation and Other | 1.5 | |
Goodwill, ending balance | 256.3 | 268.8 |
Cloud [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 60 | 57 |
Current Period Acquisitions | 9.4 | 3 |
Adjustments to Prior Period Acquisitions | (0.1) | |
Foreign Currency Translation and Other | 0.2 | |
Goodwill, ending balance | 69.5 | 60 |
Allstream, Inc. [Member] | ||
Goodwill [Line Items] | ||
Current Period Acquisitions | 116.5 | |
Goodwill, ending balance | 116.5 | |
Other [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning Balance | 15.6 | 15.3 |
Foreign Currency Translation and Other | 0.3 | |
Goodwill, ending balance | $ 15.6 | $ 15.6 |
INTANGIBLE ASSETS (Schedule of
INTANGIBLE ASSETS (Schedule of Identifiable Acquisition Related Intangible Assets) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
Schedule Of Intangible Assets Net Excluding Goodwill [Line Items] | ||
Gross Carrying Amount, Finite-Lived Intangible Assets | $ 1,479.3 | $ 1,145.4 |
Total Intangible Assets, Gross | 1,497.6 | 1,164.2 |
Accumulated Amortization | (309) | (229.3) |
Total Net | 1,170.3 | 916.1 |
Intangible Assets, Net | 1,188.6 | 934.9 |
Certifications [Member] | ||
Schedule Of Intangible Assets Net Excluding Goodwill [Line Items] | ||
Gross Carrying Amount, Indefinite-lived Intangibles | 3.5 | 3.5 |
Intangible Assets, Net | 3.5 | 3.5 |
Underlying Rights [Member] | ||
Schedule Of Intangible Assets Net Excluding Goodwill [Line Items] | ||
Gross Carrying Amount, Indefinite-lived Intangibles | 14.8 | 15.3 |
Intangible Assets, Net | 14.8 | 15.3 |
Customer relationships [Member] | ||
Schedule Of Intangible Assets Net Excluding Goodwill [Line Items] | ||
Gross Carrying Amount, Finite-Lived Intangible Assets | 1,477.7 | 1,143.6 |
Accumulated Amortization | (308.6) | (228.8) |
Total Net | 1,169.1 | 914.8 |
Trade names [Member] | ||
Schedule Of Intangible Assets Net Excluding Goodwill [Line Items] | ||
Gross Carrying Amount, Finite-Lived Intangible Assets | 0.2 | |
Accumulated Amortization | (0.2) | |
Underlying rights [Member] | ||
Schedule Of Intangible Assets Net Excluding Goodwill [Line Items] | ||
Gross Carrying Amount, Finite-Lived Intangible Assets | 1.6 | 1.6 |
Accumulated Amortization | (0.4) | (0.3) |
Total Net | $ 1.2 | $ 1.3 |
INTANGIBLE ASSETS (Narrative) (
INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Acquired Finite Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 80 | $ 75.8 | $ 54.8 |
Amortized intangible assets write off | $ 0.3 | $ 1.8 | |
Customer relationships [Member] | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Customer relationship estimated life | 15 years 4 months 24 days | ||
Underlying rights [Member] | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Customer relationship estimated life | 20 years |
INTANGIBLE ASSETS (Schedule o50
INTANGIBLE ASSETS (Schedule of Estimated Future Amortization Of Intangible Assets) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
INTANGIBLE ASSETS | ||
2,018 | $ 89.5 | |
2,019 | 88.2 | |
2,020 | 83.2 | |
2,021 | 81.1 | |
2,022 | 79.3 | |
Thereafter | 749 | |
Total Net | $ 1,170.3 | $ 916.1 |
LONG-TERM DEBT (Summary of Long
LONG-TERM DEBT (Summary of Long-Term Debt) (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Jun. 30, 2017 | Jun. 30, 2016 | Apr. 10, 2017 | Jan. 27, 2017 | Apr. 14, 2016 | Jan. 15, 2016 | |
Debt Instrument [Line Items] | ||||||
Debt obligations | $ 5,608.7 | $ 4,167.4 | ||||
Unamortized discount | $ (4.8) | |||||
Unamortized debt issuance costs | (67.8) | (53.8) | ||||
Carrying value of debt | 5,537.7 | 4,085.3 | ||||
Less current portion | (5) | |||||
Long-term debt, less current portion | 5,532.7 | 4,085.3 | ||||
6.00% Senior Notes due 2023 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Unamortized premium | 7.3 | |||||
6.375% Senior Notes due 2025 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligations | $ 196 | |||||
Unamortized discount | $ (15.9) | |||||
5.75% Senior Unsecured Notes due 2027 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 5.75% | 5.75% | ||||
Term Loan Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Carrying value of debt | $ 1,912.7 | $ 1,818.4 | ||||
Maturity date | 2,021 | 2,021 | ||||
Term Loan Facility [Member] | 6.00% Senior Notes due 2023 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Unamortized discount | $ (16) | $ (19) | ||||
Term Loan Facility due 2021 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligations | 498.8 | 1,837.4 | ||||
Term Loan Facility due 2024 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligations | 1,429.9 | |||||
Unsecured Debt [Member] | 6.00% Senior Notes due 2023 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligations | 1,430 | 1,430 | ||||
Unamortized premium | $ 5.5 | $ 6.3 | ||||
Interest rate | 6.00% | 6.00% | ||||
Maturity date | 2,023 | 2,023 | ||||
Unsecured Debt [Member] | 6.375% Senior Notes due 2025 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligations | $ 900 | $ 900 | ||||
Unamortized discount | $ (14.3) | $ (15.6) | ||||
Interest rate | 6.375% | 6.375% | ||||
Maturity date | 2,025 | 2,025 | ||||
Unsecured Debt [Member] | 5.75% Senior Unsecured Notes due 2027 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligations | $ 1,350 | |||||
Unamortized premium | $ 21.6 | |||||
Interest rate | 5.75% | 5.75% | ||||
Maturity date | 2,027 | 2,027 |
LONG-TERM DEBT (Narrative) (Det
LONG-TERM DEBT (Narrative) (Details) - USD ($) $ in Millions | Apr. 14, 2017 | Apr. 10, 2017 | Jan. 19, 2017 | Jul. 22, 2016 | Apr. 14, 2016 | Jan. 15, 2016 | May 06, 2015 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Jan. 27, 2017 | Mar. 09, 2015 | Jan. 23, 2015 |
Debt Instrument [Line Items] | ||||||||||||||||
Amended term loan facility | $ 400 | |||||||||||||||
Discount on debt | $ 4.8 | |||||||||||||||
Debt extinguishment costs | $ 18.2 | $ 18.2 | ||||||||||||||
Term loan priced percent | 99.00% | |||||||||||||||
Redemption of debt | 2,408.8 | $ 535 | $ 1,288.5 | |||||||||||||
Loss on extinguishment of debt | (13.7) | $ (4.5) | $ (33.8) | (18.2) | (33.8) | (94.3) | ||||||||||
Payment of early redemption fees on debt extinguished | 20.3 | 62.6 | ||||||||||||||
Outstanding letters of credit | $ 7.8 | 7.8 | ||||||||||||||
Cumulative proceeds from issuance of private placement | $ 3,865.8 | $ 929.3 | $ 1,787.3 | |||||||||||||
10.125% Senior Notes due 2020 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 10.125% | |||||||||||||||
Redemption of debt | $ 325.6 | |||||||||||||||
6.00% Senior Notes due 2023 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 730 | $ 700 | ||||||||||||||
Secured debt ratio | 4.50 | 4.50 | ||||||||||||||
Total indebtedness ratio | 6 | 6 | ||||||||||||||
Debt Instrument Issuance At Premium Price Percentage | 1.00% | |||||||||||||||
Cumulative proceeds from issuance of private placement | $ 1,437.3 | |||||||||||||||
6.375% Senior Notes due 2025 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 550 | |||||||||||||||
Discount on debt | $ 15.9 | |||||||||||||||
Term loan priced percent | 97.76% | |||||||||||||||
Loss on extinguishment of debt | $ 2.1 | |||||||||||||||
Redemption premium and accrued interest included in redemption amount | $ 20.3 | |||||||||||||||
5.75% Senior Unsecured Notes due 2027 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 550 | $ 800 | ||||||||||||||
Interest rate | 5.75% | 5.75% | ||||||||||||||
Repriced percentage | 104.00% | |||||||||||||||
Redemption premium | $ 22 | |||||||||||||||
Revolver line of credit | 1,350 | |||||||||||||||
LIBOR [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 1.00% | |||||||||||||||
Facility interest rate | 3.50% | |||||||||||||||
Revolver [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of excess cash flows committed to debt payments | 35.00% | |||||||||||||||
Secured debt ratio | 5.25 | 5.25 | ||||||||||||||
Weighted average interest rates (including margins) | 3.80% | 3.40% | 3.80% | 3.40% | ||||||||||||
Senior Secured Term Loan Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Weighted average interest rates (including margins) | 3.40% | 3.90% | 3.40% | 3.90% | ||||||||||||
Unsecured credit letter agreement | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Unused commitment, percentage | 0.25% | |||||||||||||||
Secured Debt [Member] | 8.125% Senior Secured Notes due 2020 | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Redemption of debt | $ 675 | |||||||||||||||
Redemption premium | $ 38.8 | |||||||||||||||
Secured Debt [Member] | Second Note Redemption [Member] | 8.125% Senior Secured Notes due 2020 | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, redemption price, percentage | 105.75% | |||||||||||||||
Secured Debt [Member] | Revolver [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding letters of credit increased | $ 50 | $ 50 | ||||||||||||||
Line of credit facility maturity date | Apr. 17, 2020 | |||||||||||||||
Revolver line of credit | 0 | $ 0 | ||||||||||||||
Available borrowing capacity | $ 442.2 | $ 442.2 | ||||||||||||||
Secured Debt [Member] | Revolver [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Unused commitment, percentage | 0.25% | |||||||||||||||
Secured Debt [Member] | Revolver [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Unused commitment, percentage | 0.375% | |||||||||||||||
Secured Debt [Member] | Revolver [Member] | LIBOR [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 2.00% | |||||||||||||||
Secured Debt [Member] | Revolver [Member] | LIBOR [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 3.00% | |||||||||||||||
Unsecured Debt [Member] | 10.125% Senior Notes due 2020 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 2024.00% | 2024.00% | 2024.00% | 2024.00% | ||||||||||||
Unsecured Debt [Member] | 6.00% Senior Notes due 2023 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 6.00% | 6.00% | 6.00% | 6.00% | ||||||||||||
Maturity date | 2,023 | 2,023 | ||||||||||||||
Unsecured Debt [Member] | 6.375% Senior Notes due 2025 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 6.375% | 6.375% | 6.375% | 6.375% | ||||||||||||
Maturity date | 2,025 | 2,025 | ||||||||||||||
Discount on debt | $ 14.3 | $ 15.6 | $ 14.3 | $ 15.6 | ||||||||||||
Unsecured Debt [Member] | 5.75% Senior Unsecured Notes due 2027 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 5.75% | 5.75% | 5.75% | 5.75% | ||||||||||||
Maturity date | 2,027 | 2,027 | ||||||||||||||
Term Loan Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 1,850 | |||||||||||||||
Maturity date | 2,021 | 2,021 | ||||||||||||||
Interest rate decrease (basis point) | 0.75% | |||||||||||||||
Repriced percentage | 99.75% | |||||||||||||||
Revolver line of credit | $ 1,928.7 | $ 1,928.7 | ||||||||||||||
Term Loan Facility [Member] | 6.00% Senior Notes due 2023 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Discount on debt | $ 16 | $ 19 | $ 16 | $ 19 | ||||||||||||
Term Loan Facility [Member] | Amendment and Restatement Agreement [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Line of credit facility maximum borrowing capacity | $ 450 | |||||||||||||||
Payment towards principal | $ 5.1 | |||||||||||||||
Percentage of excess cash flows committed to debt payments | 50.00% | |||||||||||||||
Term Loan Facility [Member] | Tranche One [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 500 | |||||||||||||||
Term Loan Facility [Member] | Tranche Two [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 1,350 | |||||||||||||||
Term Loan Facility [Member] | LIBOR [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 2.75% | 2.00% | ||||||||||||||
Term Loan Facility [Member] | LIBOR [Member] | Amendment and Restatement Agreement [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate decrease (basis point) | (25.00%) | |||||||||||||||
Facility interest rate | 2.75% | |||||||||||||||
Term Loan Facility [Member] | LIBOR [Member] | Tranche One [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate decrease (basis point) | 0.75% | |||||||||||||||
Facility interest rate | 2.00% | |||||||||||||||
Term Loan Facility [Member] | LIBOR [Member] | Tranche Two [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate decrease (basis point) | 0.25% | |||||||||||||||
Facility interest rate | 2.50% | |||||||||||||||
Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 1.00% | |||||||||||||||
Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | Amendment and Restatement Agreement [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 1.00% | |||||||||||||||
Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | Tranche One [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 0.00% | |||||||||||||||
Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | Tranche Two [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 1.00% | |||||||||||||||
Electric Lightwave [Member] | Term Loan Facility [Member] | New 2025 Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Redemption of debt | $ 570.1 | |||||||||||||||
Electric Lightwave [Member] | Term Loan Facility [Member] | $650 Million Term Loan [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 650 | |||||||||||||||
Electric Lightwave [Member] | Term Loan Facility [Member] | Term Loan 2500 Million [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 2,500 | |||||||||||||||
Repriced percentage | 99.75% | |||||||||||||||
Electric Lightwave [Member] | Term Loan Facility [Member] | LIBOR [Member] | $650 Million Term Loan [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 2.50% | |||||||||||||||
Electric Lightwave [Member] | Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | $650 Million Term Loan [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Facility interest rate | 1.00% |
LONG-TERM DEBT (Debt Issuance C
LONG-TERM DEBT (Debt Issuance Costs - Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Debt issuance cost | $ 112.9 | $ 112.9 | ||||
Loss on extinguishment of debt | (13.7) | $ (4.5) | $ (33.8) | (18.2) | $ (33.8) | $ (94.3) |
Accumulated amortization of debt issuance costs | $ 45.1 | $ 35.8 | 45.1 | 35.8 | ||
Interest expense associated with the amortization of debt issuance costs | 9.3 | 10 | 13.9 | |||
Unamortized Debt Issuance Costs [Member] | ||||||
Loss on extinguishment of debt | $ 10.4 | $ 11.4 | $ 23.2 |
LONG-TERM DEBT (Interest Rate D
LONG-TERM DEBT (Interest Rate Derivatives - Narrative) (Details) - Interest Rate Swap [Member] - USD ($) $ in Millions | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Aug. 13, 2012 | |
Notional amount of derivative | $ 750 | |||
Derivative, fixed interest rate | 1.67% | |||
Derivative, floor rate | 1.25% | |||
Change in fair value of interest rate swaps | $ (3) | $ (1.1) | $ 2.1 | |
Other long term liabilities | ||||
Fair value of interest rate swaps | $ 0 | $ 3 |
LONG-TERM DEBT (Redemption Righ
LONG-TERM DEBT (Redemption Rights) (Details) | 12 Months Ended |
Jun. 30, 2017 | |
Debt Instrument [Line Items] | |
Redemption price | 100.00% |
5.75% Senior Unsecured Notes due 2027 [Member] | Debt Instrument Redemption Period Sixth | |
Debt Instrument [Line Items] | |
Redemption price | 102.875% |
5.75% Senior Unsecured Notes due 2027 [Member] | Debt Instrument Redemption Period Seven | |
Debt Instrument [Line Items] | |
Redemption price | 101.917% |
5.75% Senior Unsecured Notes due 2027 [Member] | Debt Instrument Redemption Period Eight | |
Debt Instrument [Line Items] | |
Redemption price | 100.958% |
5.75% Senior Unsecured Notes due 2027 [Member] | Debt Instrument Redemption Period Nineth And Thereafter | |
Debt Instrument [Line Items] | |
Redemption price | 100.00% |
Unsecured Debt [Member] | 6.00% Senior Notes due 2023 [Member] | Second Note Redemption [Member] | |
Debt Instrument [Line Items] | |
Redemption price | 104.50% |
Unsecured Debt [Member] | 6.00% Senior Notes due 2023 [Member] | Debt Instrument Redemption Period Three | |
Debt Instrument [Line Items] | |
Redemption price | 103.00% |
Unsecured Debt [Member] | 6.00% Senior Notes due 2023 [Member] | Debt Instrument, Redemption, Period Four [Member] | |
Debt Instrument [Line Items] | |
Redemption price | 101.50% |
Unsecured Debt [Member] | 6.00% Senior Notes due 2023 [Member] | Debt Instrument Redemption Period Fourth And Thereafter | |
Debt Instrument [Line Items] | |
Redemption price | 100.00% |
Unsecured Debt [Member] | 6.375% Senior Notes due 2025 [Member] | Debt Instrument, Redemption, Period Four [Member] | |
Debt Instrument [Line Items] | |
Redemption price | 103.188% |
Unsecured Debt [Member] | 6.375% Senior Notes due 2025 [Member] | Debt Instrument Redemption Period Fifth | |
Debt Instrument [Line Items] | |
Redemption price | 102.125% |
Unsecured Debt [Member] | 6.375% Senior Notes due 2025 [Member] | Debt Instrument Redemption Period Sixth | |
Debt Instrument [Line Items] | |
Redemption price | 101.063% |
Unsecured Debt [Member] | 6.375% Senior Notes due 2025 [Member] | Debt Instrument Redemption Period Seventh And There After | |
Debt Instrument [Line Items] | |
Redemption price | 100.00% |
LONG-TERM DEBT (Schedule of Fut
LONG-TERM DEBT (Schedule of Future Contractual Maturities of Long-term Debt) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
LONG-TERM DEBT | ||
2,018 | $ 5 | |
2,019 | 5 | |
2,020 | 5 | |
2,021 | 483.8 | |
Thereafter | 5,109.9 | |
Total | $ 5,608.7 | $ 4,167.4 |
INCOME TAXES (Provision_(Benefi
INCOME TAXES (Provision/(Benefit) for Income Taxes from Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Current Income Taxes | |||||||||||
Federal | $ 1.6 | $ (1.3) | $ 1.7 | ||||||||
State | 6.3 | 8.7 | 4.4 | ||||||||
Foreign | (2.1) | 3.9 | (1.6) | ||||||||
Total | 5.8 | 11.3 | 4.5 | ||||||||
Deferred Income Taxes | |||||||||||
Federal | 13.3 | 7.3 | (8.6) | ||||||||
State | 2.4 | (2.3) | (6.9) | ||||||||
Foreign | (3.1) | (7.8) | 2.3 | ||||||||
Total | 12.6 | (2.8) | (13.2) | ||||||||
Provision/(benefit) for income taxes | $ 11 | $ 0.6 | $ 0.2 | $ 6.6 | $ (13.1) | $ 7.8 | $ 11.1 | $ 2.7 | 18.4 | 8.5 | (8.7) |
Zayo Group, LLC [Member] | |||||||||||
Deferred Income Taxes | |||||||||||
Provision/(benefit) for income taxes | $ 23.7 | $ 8.9 | $ (8.6) |
INCOME TAXES (Components of Los
INCOME TAXES (Components of Loss from Continuing Operations Before Income Tax) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
United States | $ 66.6 | $ (46.9) | $ (159.4) | ||||||||
Foreign | 37.5 | (20.8) | (4.4) | ||||||||
Income/(loss) from operations before income taxes | $ 34.2 | $ 27.6 | $ 20 | $ 22.3 | $ (44) | $ (11.5) | $ 0.3 | $ (12.5) | 104.1 | (67.7) | (163.8) |
Zayo Group, LLC [Member] | |||||||||||
Income/(loss) from operations before income taxes | $ 109.4 | $ (67.3) | $ (173.6) |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Income Tax Provision) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Expected provision/(benefit) at the statutory rate | $ 36.4 | $ (23.8) | $ (57.3) | ||||||||
Stock-based compensation | (11.7) | 27.9 | 59.4 | ||||||||
State income taxes benefit, net of federal benefit | 2.9 | (2.1) | (7.4) | ||||||||
Transaction costs not deductible for tax purposes | 1.9 | 1.5 | 0.7 | ||||||||
Change in statutory tax rate | (1.4) | (3.6) | (2.2) | ||||||||
Change in valuation allowance | (10.2) | 2.8 | |||||||||
Foreign tax rate differential | (3.9) | 2.7 | 0.6 | ||||||||
Other, net | 4.4 | 3.1 | (2.5) | ||||||||
Provision/(benefit) for income taxes | $ 11 | $ 0.6 | $ 0.2 | $ 6.6 | $ (13.1) | $ 7.8 | $ 11.1 | $ 2.7 | 18.4 | 8.5 | (8.7) |
Liability for uncertain tax positions and accrued interest related to state taxing jurisdictions | $ 0.2 | 0.2 | |||||||||
Zayo Group, LLC [Member] | |||||||||||
Provision/(benefit) for income taxes | $ 23.7 | $ 8.9 | $ (8.6) |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
Deferred income tax assets | ||
Net operating loss carry forwards | $ 704.6 | $ 550.6 |
Tax credit carry forwards | 22.2 | 16.8 |
Deferred revenue | 405.9 | 318.3 |
Accrued expenses | 40 | 40.2 |
Other liabilities | 17.4 | 25.5 |
Reserves against accounts receivable | 18.2 | 14.8 |
Deferred compensation | 20.3 | 15.5 |
Total deferred income tax assets | 1,228.6 | 981.7 |
Valuation allowance | (111.1) | (135.3) |
Net deferred tax assets | 1,117.5 | 846.4 |
Deferred income tax liabilities | ||
Property and equipment | 712.2 | 559.2 |
Intangible assets | 412.4 | 321.5 |
Debt issuance costs | 5.8 | 13.7 |
Total deferred income tax liabilities | 1,130.4 | 894.4 |
Net deferred income tax liabilities | $ (12.9) | $ (34.3) |
INCOME TAXES (Operating Loss Ca
INCOME TAXES (Operating Loss Carryforward - Narrative) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Jun. 30, 2017 |
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 948.7 | |
Undistributed Earnings of Foreign Subsidiaries | 61.8 | |
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | 21.3 | |
Scenario, Forecast [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 163.6 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | 1,639.3 | |
Current Annual Net Operating Loss Usage | 88.6 | |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | 389.5 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | 39.6 | |
Current Annual Net Operating Loss Usage | $ 36.8 |
ACCRUED LIABILITIES (Schedule o
ACCRUED LIABILITIES (Schedule of Accrued Liabilities) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation and benefits | $ 38.5 | $ 27.9 |
Accrued property and equipment purchases | 81.8 | 46.7 |
Network expense accruals | 132.1 | 94.8 |
Other accrued taxes | 20.1 | 9.1 |
Accrued professional fees | 3.9 | 2.3 |
Other accruals | 52.8 | 46.1 |
Total | $ 329.2 | $ 226.9 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 10, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Oct. 16, 2014 |
Stockholders Equity Note [Abstract] | |||||
Increase in member's interest associated with stock-based compensation expense | $ 104.7 | $ 152.9 | |||
Note receivable | $ 22 | ||||
Decrease in additional paid-in-capital | $ 22 | ||||
Number of shares repurchased | 3,474,120 | ||||
Number of shares repurchased at an average price of $23.07 per share | 3,103,350 | ||||
Average price per share | $ 23.07 | ||||
Value for repurchase of shares excluding commissions | $ 71.7 | ||||
Number of shares authorized to repurchase | 500,000,000 | ||||
Share repurchase program authorized period | 6 months | ||||
Amount withheld from employees to cover tax withholding obligations on certain restricted stock units that vested during Fiscal 2016 | $ 9.4 | ||||
Shares withheld from employees to cover tax withholding obligations on certain restricted stock units that vested during Fiscal 2016 | 370,770 |
STOCK-BASED COMPENSATION (Summa
STOCK-BASED COMPENSATION (Summary of Stock-based Compensation Expense Liability and Equity Classified Awards Included in Consolidated Statements of Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 114.1 | $ 155.9 | $ 200.7 |
Operating Costs [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 11.3 | 17.4 | 23.3 |
Selling, General and Administrative Expenses [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 102.8 | 138.5 | 177.4 |
Part A Restricted Stock Units [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 76.5 | 45.3 | 12.6 |
Part B Restricted Stock Units [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 26 | 36.5 | 31.3 |
Part C Restricted Stock Units [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 1.5 | 1.1 | |
Vested Portion Part A Restricted Stock Units [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 76.5 | 45.3 | 12.6 |
CII Common Units [Member] | Common and Preferred Units [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 10.1 | $ 73 | $ 156.8 |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) $ in Millions | Oct. 16, 2014 | Oct. 09, 2014 | Jun. 30, 2017 | Jun. 30, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock distributed in connection with non-liquidating distribution | 20,460,047 | |||
PCIP [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Incentive plan termination period | 10 years | 10 days | ||
Part A Restricted Stock Units [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Award recorded as liability | $ 5.5 | $ 2 | ||
Unrecognized compensation cost | 36.6 | |||
Part B Restricted Stock Units [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 8 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Performance period | 1 year | |||
Average closing price | 10 days | |||
CII Common Units [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 0 | |||
Increase To Additional Paid In Capital Due To Sale Price Of Spin Off | $ 12.9 |
STOCK-BASED COMPENSATION (Sum66
STOCK-BASED COMPENSATION (Summary of Restricted Stock Units Activity) (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Part A Restricted Stock Units [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of RSUs, Outstanding beginning balance | 2,169,901 | 933,217 | 2,169,901 | 933,217 | |||||||
Number of RSUs, Granted | 2,678,503 | 2,190,785 | 955,831 | ||||||||
Number of RSUs, Vested | (2,080,685) | (852,853) | |||||||||
Number of RSUs, Forfeited | (403,333) | (101,248) | (22,614) | ||||||||
Number of RSUs, Outstanding ending balance | 2,364,386 | 2,169,901 | 2,364,386 | 2,169,901 | 933,217 | ||||||
Weighted average grant-date fair value per share, Outstanding beginning balance | $ 26.04 | $ 26.25 | $ 26.04 | $ 26.25 | |||||||
Weighted average grant-date fair value per share, Granted | 31.64 | 26.04 | 26.25 | ||||||||
Weighted average grant-date fair value per share, vested | 26.03 | 26.14 | |||||||||
Weighted average grant-date fair value per share, Outstanding ending balance | $ 31.63 | $ 26.04 | $ 31.63 | $ 26.04 | $ 26.25 | ||||||
Weighted average remaining contractual term in months | 7 months 3 days | 7 months 27 days | 7 months 3 days | ||||||||
Part B Restricted Stock Units [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of RSUs, Outstanding beginning balance | 860,936 | 1,249,873 | 860,936 | 1,249,873 | |||||||
Number of RSUs, Granted | 152,808 | 171,316 | 191,015 | 200,425 | 312,516 | 284,773 | 282,074 | 272,813 | 715,564 | 1,152,176 | 1,251,671 |
Number of RSUs, Vested | (793,478) | (1,463,893) | |||||||||
Number of RSUs, Forfeited | (371,049) | (77,220) | (1,798) | ||||||||
Number of RSUs, Outstanding ending balance | 411,973 | 860,936 | 411,973 | 860,936 | 1,249,873 | ||||||
Weighted average grant-date fair value per share, Outstanding beginning balance | $ 29.50 | $ 42.90 | $ 29.50 | $ 42.90 | |||||||
Weighted average grant-date fair value per share, Granted | $ 26.52 | $ 27.39 | $ 75.56 | $ 47 | $ 37.03 | $ 25.12 | $ 25.26 | $ 17.83 | 45.56 | 26.80 | $ 42.90 |
Weighted average grant-date fair value per share, vested | 32.58 | 38.70 | |||||||||
Weighted average grant-date fair value per share, Outstanding ending balance | $ 42.86 | $ 29.50 | $ 42.86 | $ 29.50 | $ 42.90 | ||||||
Weighted average remaining contractual term in months | 6 months 3 days | 6 months 6 days | 5 months 15 days |
STOCK-BASED COMPENSATION (Sum67
STOCK-BASED COMPENSATION (Summary Of Part B RSUs Granted, Maximum Eligible Shares Of Stock And Grant Date Fair Value Per Part B RSU) (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Part B Restricted Stock Units [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of RSUs, Granted | 152,808 | 171,316 | 191,015 | 200,425 | 312,516 | 284,773 | 282,074 | 272,813 | 715,564 | 1,152,176 | 1,251,671 |
Maximum eligible shares of the Company's common stock | 550,109 | 880,564 | 981,817 | 1,030,185 | 1,606,332 | 1,463,733 | 1,449,860 | 1,426,812 | 550,109 | 1,606,332 | |
Grant date fair value per Part B RSU | $ 26.52 | $ 27.39 | $ 75.56 | $ 47 | $ 37.03 | $ 25.12 | $ 25.26 | $ 17.83 | $ 45.56 | $ 26.80 | $ 42.90 |
Units converted to Company's common stock at vesting date | 99,508 | 1,078,812 | 475,446 | 40,182 | |||||||
Part C Restricted Stock Units [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of RSUs, Granted | 47,420 | 41,793 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Millions | Jan. 19, 2017 | Jul. 22, 2016 | Jan. 15, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Carrying value of the notes | $ 5,537.7 | $ 4,085.3 | ||||
Hypothetical annual interest expense | 19.3 | |||||
Interest Rate Swap [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Change in fair value of interest rate swaps | (3) | (1.1) | $ 2.1 | |||
LIBOR [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Facility interest rate | 3.50% | |||||
Term Loan Facility [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Carrying value of the notes | $ 1,912.7 | 1,818.4 | ||||
Debt instrument, face amount | $ 1,850 | |||||
Term Loan Facility [Member] | LIBOR [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Facility interest rate | 2.75% | 2.00% | ||||
Floor rate | 1.00% | |||||
Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Facility interest rate | 1.00% | |||||
Notes [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Carrying value of the notes | $ 3,692.8 | 2,320.7 | ||||
Fair value of the notes | 3,895.7 | 2,338.1 | ||||
Tranche One [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Carrying value of the notes | $ 500 | |||||
Tranche One [Member] | LIBOR [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Floor rate | 0.00% | |||||
Tranche One [Member] | Term Loan Facility [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Debt instrument, face amount | $ 500 | |||||
Tranche One [Member] | Term Loan Facility [Member] | LIBOR [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Facility interest rate | 2.00% | |||||
Tranche One [Member] | Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Facility interest rate | 0.00% | |||||
B-2 Term loan tranche | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Facility interest rate | 2.50% | |||||
B-2 Term loan tranche | LIBOR [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Floor rate | 1.00% | |||||
Tranche Two [Member] | Term Loan Facility [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Debt instrument, face amount | $ 1,350 | |||||
Tranche Two [Member] | Term Loan Facility [Member] | LIBOR [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Facility interest rate | 2.50% | |||||
Tranche Two [Member] | Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Facility interest rate | 1.00% | |||||
Revolver [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Carrying value of the notes | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule Of Financial Instruments Measured At Fair Value On A Recurring Basis) (Details) $ in Millions | Jun. 30, 2016USD ($) |
Level 2 [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value of interest rate swaps | $ 3 |
COMMITMENTS AND CONTINGENCIES70
COMMITMENTS AND CONTINGENCIES (Schedule of Future Contractual Capital Lease Payments) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
2,018 | $ 9.8 | |
2,019 | 8.6 | |
2,020 | 7.7 | |
2,021 | 8 | |
2,022 | 8.5 | |
Thereafter | 74.4 | |
Total minimum lease payments | 117 | |
Less amounts representing interest | (15.4) | |
Less current portion | (8) | $ (5.8) |
Capital lease obligations, non-current | 93.6 | 44.9 |
Zayo Group, LLC [Member] | ||
Less current portion | (6.6) | (4.2) |
Capital lease obligations, non-current | $ 82.6 | $ 32 |
COMMITMENTS AND CONTINGENCIES71
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) CAD in Millions, $ in Millions | 12 Months Ended | ||||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2017CAD | Jun. 30, 2017USD ($) | |
Commitment And Contingencies [Line Items] | |||||
Lease expense | $ 68.8 | $ 53.1 | $ 52.3 | ||
Expense related to right-of way, pole attachment and other fees for access | $ 65.1 | $ 48.9 | $ 42 | ||
Purchase commitments | $ 379.6 | ||||
Unsecured credit letter agreement | |||||
Commitment And Contingencies [Line Items] | |||||
Letters of credit | CAD 5 | 3.9 | |||
Zayo Canada, Inc | |||||
Commitment And Contingencies [Line Items] | |||||
Letters of credit | CAD 3.4 | $ 2.6 |
COMMITMENTS AND CONTINGENCIES72
COMMITMENTS AND CONTINGENCIES (Schedule of Minimum Contractual Long-Term Operating Lease Payments) (Details) $ in Millions | Jun. 30, 2017USD ($) |
COMMITMENTS AND CONTINGENCIES | |
2,018 | $ 113.4 |
2,019 | 104.3 |
2,020 | 88 |
2,021 | 66 |
2,021 | 34.9 |
Thereafter | 138.4 |
Total operating lease obligations | $ 545 |
RELATED PARTY TRANSACTIONS (Sch
RELATED PARTY TRANSACTIONS (Schedule of Revenue and Expense Transactions) (Details) - Inteliquent, Inc [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Related Party Transaction [Line Items] | |||
Revenues | $ 7.5 | $ 6.6 | $ 6.9 |
Operating costs | $ 2 | $ 2.1 | $ 1 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Inteliquent, Inc [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | $ 0.5 | $ 0.2 | |
Dan Caruso [Member] | Aircraft Reimbursement [Member] | |||
Related Party Transaction [Line Items] | |||
Payable to related party settled | $ 0.8 | $ 0.5 | $ 0.7 |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) | 12 Months Ended |
Jun. 30, 2017customersegmentitem | |
Segment Reporting Information [Line Items] | |
Number of strategic product groups | 2 |
Number of segments where revenue is reported | segment | 6 |
Fiber Solutions [Member] | Minimum [Member] | |
Segment Reporting Information [Line Items] | |
Number of dark fiber pairs leased to customers | 2 |
Contract term | 3 years |
Fiber Solutions [Member] | Maximum [Member] | |
Segment Reporting Information [Line Items] | |
Number of dark fiber pairs leased to customers | 12 |
Contract term | 20 years |
Transport [Member] | Minimum [Member] | |
Segment Reporting Information [Line Items] | |
Contract term | 2 years |
Transport [Member] | Maximum [Member] | |
Segment Reporting Information [Line Items] | |
Contract term | 5 years |
zColo [Member] | Minimum [Member] | |
Segment Reporting Information [Line Items] | |
Contract term | 2 years |
zColo [Member] | Maximum [Member] | |
Segment Reporting Information [Line Items] | |
Contract term | 5 years |
Allstream, Inc. [Member] | |
Segment Reporting Information [Line Items] | |
Number of customers serviced | customer | 70,000 |
Other [Member] | |
Segment Reporting Information [Line Items] | |
Contract term | 1 year |
SEGMENT REPORTING (Summary of F
SEGMENT REPORTING (Summary of Financial Information by Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenue from external customers | $ 638 | $ 550.2 | $ 506.7 | $ 504.9 | $ 507.3 | $ 478 | $ 369.6 | $ 366.8 | $ 2,199.8 | $ 1,721.7 | $ 1,347.1 |
Segment Adjusted EBITDA | 1,116.8 | 934.9 | 782.6 | ||||||||
Total assets | 8,727.8 | 6,720 | 8,727.8 | 6,720 | |||||||
Capital expenditures | 835.5 | 704.1 | 530.4 | ||||||||
Corp/Eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 173.7 | 134.7 | 173.7 | 134.7 | |||||||
Fiber Solutions [Member] | Reportable Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue from external customers | 722.1 | 648.8 | 575.6 | ||||||||
Segment Adjusted EBITDA | 566.3 | 499.6 | 400.7 | ||||||||
Total assets | 4,504.6 | 3,780.9 | 4,504.6 | 3,780.9 | |||||||
Capital expenditures | 499.1 | 421.4 | 303.5 | ||||||||
Transport [Member] | Reportable Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue from external customers | 440.4 | 391.4 | 336.4 | ||||||||
Segment Adjusted EBITDA | 184.2 | 168 | 139.3 | ||||||||
Total assets | 1,230 | 964.8 | 1,230 | 964.8 | |||||||
Capital expenditures | 147.3 | 123.1 | 110.6 | ||||||||
Enterprise Networks [Member] | Reportable Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue from external customers | 487.4 | 359.6 | 285 | ||||||||
Segment Adjusted EBITDA | 178 | 145.6 | 172.8 | ||||||||
Total assets | 1,385.7 | 849.2 | 1,385.7 | 849.2 | |||||||
Capital expenditures | 89.1 | 88 | 62.8 | ||||||||
zColo [Member] | Reportable Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue from external customers | 214 | 195.4 | 126.9 | ||||||||
Segment Adjusted EBITDA | 111.9 | 100.9 | 64.7 | ||||||||
Total assets | 994.4 | 884.3 | 994.4 | 884.3 | |||||||
Capital expenditures | 91.5 | 66.3 | 53.5 | ||||||||
Allstream, Inc. [Member] | Reportable Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue from external customers | 314.3 | 106.2 | |||||||||
Segment Adjusted EBITDA | 71.3 | 16.3 | |||||||||
Total assets | 406.2 | 72.6 | 406.2 | 72.6 | |||||||
Capital expenditures | 8.5 | 5.3 | |||||||||
Other [Member] | Reportable Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue from external customers | 21.6 | 20.3 | 23.2 | ||||||||
Segment Adjusted EBITDA | 5.1 | 4.5 | $ 5.1 | ||||||||
Total assets | $ 33.2 | $ 33.5 | $ 33.2 | $ 33.5 |
SEGMENT REPORTING (Reconciliati
SEGMENT REPORTING (Reconciliation from Segment Adjusted EBITDA to Net Loss from Continuing Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
SEGMENT REPORTING | |||||||||||
Total Segment Adjusted EBITDA | $ 1,116.8 | $ 934.9 | $ 782.6 | ||||||||
Interest expense | $ (71.5) | $ (63) | $ (53.7) | $ (53.3) | $ (57.4) | $ (57.7) | $ (51.2) | $ (53.8) | (241.5) | (220.1) | (214) |
Depreciation and amortization | (181.3) | (155.7) | (131.4) | (138.5) | (148.3) | (137.2) | (113.7) | (117.1) | (606.9) | (516.3) | (406.2) |
Transaction costs | (20.5) | (21.5) | (5.9) | ||||||||
Stock-based compensation | (114.1) | (155.9) | (200.7) | ||||||||
Loss on extinguishment of debt | (13.7) | (4.5) | (33.8) | (18.2) | (33.8) | (94.3) | |||||
Foreign currency loss on intercompany loans | 14.4 | 3.9 | (17.4) | (11.2) | (24.9) | (11.1) | (7.1) | (10.7) | (10.3) | (53.8) | (24.4) |
Non-cash loss on investments | (1.2) | (1.2) | (0.9) | ||||||||
Income/(loss) from operations before income taxes | $ 34.2 | $ 27.6 | $ 20 | $ 22.3 | $ (44) | $ (11.5) | $ 0.3 | $ (12.5) | $ 104.1 | $ (67.7) | $ (163.8) |
SEGMENT REPORTING (Schedule of
SEGMENT REPORTING (Schedule of Geographical Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue from external customers | $ 638 | $ 550.2 | $ 506.7 | $ 504.9 | $ 507.3 | $ 478 | $ 369.6 | $ 366.8 | $ 2,199.8 | $ 1,721.7 | $ 1,347.1 |
Long-lived assets | 6,384.6 | 5,115.9 | 6,384.6 | 5,115.9 | 4,302.3 | ||||||
United States [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue from external customers | 1,610 | 1,334.1 | 1,193.5 | ||||||||
Long-lived assets | 5,504.7 | 4,236.1 | 5,504.7 | 4,236.1 | 3,848 | ||||||
Europe [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue from external customers | 176.5 | 174.1 | 153.6 | ||||||||
Long-lived assets | 521.3 | 527.8 | 521.3 | 527.8 | 454 | ||||||
Canada [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue from external customers | 412 | 213.3 | |||||||||
Long-lived assets | 335.8 | 326.4 | 335.8 | 326.4 | |||||||
Other [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue from external customers | 1.3 | 0.2 | |||||||||
Long-lived assets | $ 22.8 | $ 25.6 | $ 22.8 | $ 25.6 | $ 0.3 |
CONDENSED CONSOLIDATING FINAN79
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Narrative) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 | Apr. 14, 2016 |
Condensed Financial Statements Captions [Line Items] | |||
Debt obligations | $ 5,608.7 | $ 4,167.4 | |
6.00% Senior Notes due 2023 [Member] | Unsecured Debt [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Debt obligations | 1,430 | 1,430 | |
6.375% Senior Notes due 2025 [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Debt obligations | $ 196 | ||
6.375% Senior Notes due 2025 [Member] | Unsecured Debt [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Debt obligations | 900 | $ 900 | |
5.75% Senior Unsecured Notes due 2027 [Member] | Unsecured Debt [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Debt obligations | $ 1,350 |
CONDENSED CONSOLIDATING FINAN80
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Schedule Of Condensed Consolidating Balance Sheet) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 |
Current assets | ||||
Cash and cash equivalents | $ 220 | $ 170.1 | $ 308 | $ 297.4 |
Trade receivables, net of allowance | 191.6 | 148.4 | ||
Prepaid expenses | 68.3 | 68.8 | ||
Other assets | 34.1 | 9.3 | ||
Total current assets | 514 | 396.6 | ||
Property and equipment, net | 5,016 | 4,079.5 | ||
Intangible assets, net | 1,188.6 | 934.9 | ||
Goodwill | 1,840.2 | 1,214.5 | 1,224.4 | |
Deferred income taxes, net | 27.3 | |||
Other assets | 141.7 | 94.5 | ||
Total assets | 8,727.8 | 6,720 | ||
Current liabilities | ||||
Current portion of long-term debt | 5 | |||
Accounts payable | 72.4 | 97 | ||
Accrued liabilities | 329.2 | 226.9 | ||
Accrued interest | 63.5 | 28.6 | ||
Capital lease obligations, current | 8 | 5.8 | ||
Deferred revenue, current | 146 | 129.4 | ||
Total current liabilities | 624.1 | 487.7 | ||
Long-term debt, non-current | 5,532.7 | 4,085.3 | ||
Capital lease obligation, non-current | 93.6 | 44.9 | ||
Deferred revenue, non-current | 989.7 | 793.3 | ||
Deferred income taxes, net | 40.2 | 48 | ||
Other long-term liabilities | 52.4 | 57 | ||
Total liabilities | 7,332.7 | 5,516.2 | ||
Member's Equity | ||||
Member's interest | 1,879 | 1,772.6 | ||
Accumulated other comprehensive income | 5.4 | 4.5 | ||
Accumulated deficit | (489.3) | (573.3) | ||
Total member's equity | 1,395.1 | 1,203.8 | 1,194.1 | 401.3 |
Total liabilities and member's equity | 8,727.8 | 6,720 | ||
Eliminations [Member] | ||||
Current assets | ||||
Related party receivable | (341.5) | (346.7) | ||
Investment in subsidiary | (624.6) | (550.9) | ||
Total assets | (966.1) | (897.6) | ||
Current liabilities | ||||
Related party debt, long-term | (341.5) | (346.7) | ||
Total liabilities | (341.5) | (346.7) | ||
Member's Equity | ||||
Member's interest | (607.2) | (579.1) | ||
Accumulated deficit | (17.4) | 28.2 | ||
Total member's equity | (624.6) | (550.9) | ||
Total liabilities and member's equity | (966.1) | (897.6) | ||
Zayo Group, LLC [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 96.6 | 91.3 | 275.3 | 257 |
Trade receivables, net of allowance | 117.9 | 75.5 | ||
Prepaid expenses | 42.6 | 33.7 | ||
Other assets | 25.1 | (2) | ||
Total current assets | 282.2 | 198.5 | ||
Property and equipment, net | 4,306.3 | 3,375.7 | ||
Intangible assets, net | 1,033.6 | 775.5 | ||
Goodwill | 1,660.8 | 1,025.5 | ||
Deferred income taxes, net | 27.2 | |||
Other assets | 115.6 | 65 | ||
Related party receivable | 341.5 | 346.7 | ||
Investment in subsidiary | 624.6 | 550.9 | ||
Total assets | 8,391.8 | 6,337.8 | ||
Current liabilities | ||||
Current portion of long-term debt | 5 | |||
Accounts payable | 57 | 70.3 | ||
Accrued liabilities | 217.5 | 116 | ||
Accrued interest | 63.5 | 28.6 | ||
Capital lease obligations, current | 6.6 | 4.2 | ||
Deferred revenue, current | 113.1 | 89.1 | ||
Total current liabilities | 462.7 | 308.2 | ||
Long-term debt, non-current | 5,532.7 | 4,085.3 | ||
Capital lease obligation, non-current | 82.6 | 32 | ||
Deferred revenue, non-current | 884.8 | 681.1 | ||
Deferred income taxes, net | 3.3 | |||
Other long-term liabilities | 33.9 | 24.1 | ||
Total liabilities | 6,996.7 | 5,134 | ||
Member's Equity | ||||
Member's interest | 1,893.5 | 1,786.2 | ||
Accumulated deficit | (498.4) | (582.4) | ||
Total member's equity | 1,395.1 | 1,203.8 | ||
Total liabilities and member's equity | 8,391.8 | 6,337.8 | ||
Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 2.1 | 3 | 3.7 | 4.8 |
Trade receivables, net of allowance | 4.5 | 2.1 | ||
Prepaid expenses | 0.3 | 0.3 | ||
Total current assets | 6.9 | 5.4 | ||
Intangible assets, net | 11 | 12.9 | ||
Goodwill | 14.6 | 14.6 | ||
Total assets | 32.5 | 32.9 | ||
Current liabilities | ||||
Accrued liabilities | 1.4 | 0.7 | ||
Deferred revenue, current | 0.2 | 0.2 | ||
Total current liabilities | 1.6 | 0.9 | ||
Total liabilities | 1.6 | 0.9 | ||
Member's Equity | ||||
Member's interest | 18.5 | 22.3 | ||
Accumulated deficit | 12.4 | 9.7 | ||
Total member's equity | 30.9 | 32 | ||
Total liabilities and member's equity | 32.5 | 32.9 | ||
Non-Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash and cash equivalents | 121.3 | 75.8 | $ 29 | $ 35.6 |
Trade receivables, net of allowance | 69.2 | 70.8 | ||
Prepaid expenses | 25.4 | 34.8 | ||
Other assets | 9 | 11.3 | ||
Total current assets | 224.9 | 192.7 | ||
Property and equipment, net | 709.7 | 703.8 | ||
Intangible assets, net | 144 | 146.5 | ||
Goodwill | 164.8 | 174.4 | ||
Deferred income taxes, net | 0.1 | |||
Other assets | 26.1 | 29.5 | ||
Total assets | 1,269.6 | 1,246.9 | ||
Current liabilities | ||||
Accounts payable | 15.4 | 26.7 | ||
Accrued liabilities | 110.3 | 110.2 | ||
Capital lease obligations, current | 1.4 | 1.6 | ||
Deferred revenue, current | 32.7 | 40.1 | ||
Total current liabilities | 159.8 | 178.6 | ||
Related party debt, long-term | 341.5 | 346.7 | ||
Capital lease obligation, non-current | 11 | 12.9 | ||
Deferred revenue, non-current | 104.9 | 112.2 | ||
Deferred income taxes, net | 40.2 | 44.7 | ||
Other long-term liabilities | 18.5 | 32.9 | ||
Total liabilities | 675.9 | 728 | ||
Member's Equity | ||||
Member's interest | 574.2 | 543.2 | ||
Accumulated other comprehensive income | 5.4 | 4.5 | ||
Accumulated deficit | 14.1 | (28.8) | ||
Total member's equity | 593.7 | 518.9 | ||
Total liabilities and member's equity | $ 1,269.6 | $ 1,246.9 |
CONDENSED CONSOLIDATING FINAN81
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Schedule Of Condensed Consolidating Statements Of Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue | $ 638 | $ 550.2 | $ 506.7 | $ 504.9 | $ 507.3 | $ 478 | $ 369.6 | $ 366.8 | $ 2,199.8 | $ 1,721.7 | $ 1,347.1 |
Operating costs and expenses | |||||||||||
Operating costs (excluding depreciation amortization and including stock-based compensation) | 234.2 | 195 | 179.9 | 173.8 | 182.7 | 170.8 | 112.2 | 113 | 782.9 | 578.7 | 413.5 |
Selling, general and administrative expenses (including stock-based compensation) | 117.1 | 108.8 | 104.7 | 105.6 | 104.3 | 112.5 | 85 | 84.6 | 436.2 | 386.4 | 358.1 |
Depreciation and amortization | 181.3 | 155.7 | 131.4 | 138.5 | 148.3 | 137.2 | 113.7 | 117.1 | 606.9 | 516.3 | 406.2 |
Total operating costs and expenses | 532.6 | 459.5 | 416 | 417.9 | 435.3 | 420.5 | 310.9 | 314.7 | 1,826 | 1,481.4 | 1,177.8 |
Operating income (loss) | 105.4 | 90.7 | 90.7 | 87 | 72 | 57.5 | 58.7 | 52.1 | 373.8 | 240.3 | 169.3 |
Other expenses | |||||||||||
Interest expense | (71.5) | (63) | (53.7) | (53.3) | (57.4) | (57.7) | (51.2) | (53.8) | (241.5) | (220.1) | (214) |
Loss on extinguishment of debt | (13.7) | (4.5) | (33.8) | (18.2) | (33.8) | (94.3) | |||||
Foreign currency loss on intercompany loans | 14.4 | 3.9 | (17.4) | (11.2) | (24.9) | (11.1) | (7.1) | (10.7) | (10.3) | (53.8) | (24.4) |
Other (income)/expense, net | (0.4) | 0.5 | 0.4 | (0.2) | 0.1 | (0.2) | (0.1) | (0.1) | 0.3 | (0.3) | (0.4) |
Total other expenses, net | (71.2) | (63.1) | (70.7) | (64.7) | (116) | (69) | (58.4) | (64.6) | (269.7) | (308) | (333.1) |
Income/(loss) from operations before income taxes | 34.2 | 27.6 | 20 | 22.3 | (44) | (11.5) | 0.3 | (12.5) | 104.1 | (67.7) | (163.8) |
Provision/(benefit) for income taxes | 11 | 0.6 | 0.2 | 6.6 | (13.1) | 7.8 | 11.1 | 2.7 | 18.4 | 8.5 | (8.7) |
Net income/(loss) | $ 23.2 | $ 27 | $ 19.8 | $ 15.7 | $ (30.9) | $ (19.3) | $ (10.8) | $ (15.2) | 85.7 | (76.2) | (155.1) |
Eliminations [Member] | |||||||||||
Other expenses | |||||||||||
Equity in net earnings of subsidiaries | (45.6) | 18.7 | 9.5 | ||||||||
Total other expenses, net | (45.6) | 18.7 | 9.5 | ||||||||
Income/(loss) from operations before income taxes | (45.6) | 18.7 | 9.5 | ||||||||
Net income/(loss) | (45.6) | 18.7 | 9.5 | ||||||||
Zayo Group, LLC [Member] | |||||||||||
Revenue | 1,588.3 | 1,316.5 | 1,170.5 | ||||||||
Operating costs and expenses | |||||||||||
Operating costs (excluding depreciation amortization and including stock-based compensation) | 489.5 | 383.1 | 352.3 | ||||||||
Selling, general and administrative expenses (including stock-based compensation) | 293.3 | 284.8 | 305.4 | ||||||||
Depreciation and amortization | 505.6 | 427.4 | 362.5 | ||||||||
Total operating costs and expenses | 1,288.4 | 1,095.3 | 1,020.2 | ||||||||
Operating income (loss) | 299.9 | 221.2 | 150.3 | ||||||||
Other expenses | |||||||||||
Interest expense | (219.4) | (198.6) | (197.3) | ||||||||
Loss on extinguishment of debt | (18.2) | (33.8) | (93.5) | ||||||||
Foreign currency loss on intercompany loans | 0.8 | (37.9) | (23.2) | ||||||||
Other (income)/expense, net | 0.7 | 0.5 | (0.4) | ||||||||
Equity in net earnings of subsidiaries | 45.6 | (18.7) | (9.5) | ||||||||
Total other expenses, net | (190.5) | (288.5) | (323.9) | ||||||||
Income/(loss) from operations before income taxes | 109.4 | (67.3) | (173.6) | ||||||||
Provision/(benefit) for income taxes | 23.7 | 8.9 | (8.6) | ||||||||
Net income/(loss) | 85.7 | (76.2) | (165) | ||||||||
Guarantor Subsidiaries [Member] | |||||||||||
Revenue | 21.6 | 17.6 | 21.2 | ||||||||
Operating costs and expenses | |||||||||||
Operating costs (excluding depreciation amortization and including stock-based compensation) | 15.8 | 12.7 | 15.9 | ||||||||
Selling, general and administrative expenses (including stock-based compensation) | 1.3 | 1.1 | (0.1) | ||||||||
Depreciation and amortization | 1.8 | 1.8 | 1.9 | ||||||||
Total operating costs and expenses | 18.9 | 15.6 | 17.7 | ||||||||
Operating income (loss) | 2.7 | 2 | 3.5 | ||||||||
Other expenses | |||||||||||
Income/(loss) from operations before income taxes | 2.7 | 2 | 3.5 | ||||||||
Net income/(loss) | 2.7 | 2 | 3.5 | ||||||||
Non-Guarantor Subsidiaries [Member] | |||||||||||
Revenue | 589.9 | 387.6 | 155.4 | ||||||||
Operating costs and expenses | |||||||||||
Operating costs (excluding depreciation amortization and including stock-based compensation) | 277.6 | 182.9 | 45.3 | ||||||||
Selling, general and administrative expenses (including stock-based compensation) | 141.6 | 100.5 | 52.8 | ||||||||
Depreciation and amortization | 99.5 | 87.1 | 41.8 | ||||||||
Total operating costs and expenses | 518.7 | 370.5 | 139.9 | ||||||||
Operating income (loss) | 71.2 | 17.1 | 15.5 | ||||||||
Other expenses | |||||||||||
Interest expense | (22.1) | (21.5) | (16.7) | ||||||||
Loss on extinguishment of debt | (0.8) | ||||||||||
Foreign currency loss on intercompany loans | (11.1) | (15.9) | (1.2) | ||||||||
Other (income)/expense, net | (0.4) | (0.8) | |||||||||
Total other expenses, net | (33.6) | (38.2) | (18.7) | ||||||||
Income/(loss) from operations before income taxes | 37.6 | (21.1) | (3.2) | ||||||||
Provision/(benefit) for income taxes | (5.3) | (0.4) | (0.1) | ||||||||
Net income/(loss) | $ 42.9 | $ (20.7) | $ (3.1) |
CONDENSED CONSOLIDATING FINAN82
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Schedule Of Condensed Consolidating Statements Of Cash Flows) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net cash provided by operating activities | $ 909.8 | $ 714 | $ 607 |
Cash flows from investing activities | |||
Purchases of property and equipment | (835.5) | (704.1) | (530.4) |
Acquisitions, net of cash acquired | (1,434.8) | (437.5) | (855.7) |
Net cash used in investing activities | (2,270.3) | (1,141.6) | (1,386.1) |
Cash flows from financing activities | |||
Proceeds from debt | 3,865.8 | 929.3 | 1,787.3 |
Proceeds from equity offerings and contributions | 385 | ||
Principal payments on long-term debt | (2,408.8) | (535) | (1,288.5) |
Payment of early redemption fees on debt extinguished | (20.3) | (62.6) | |
Principal payments on capital lease obligations | (6.6) | (4.9) | (3.5) |
Payment of debt issuance costs | (35.4) | (4.2) | (24.2) |
Contributions to parent | (81.1) | ||
Excess tax benefit from stock-based compensation | 7.9 | ||
Cash paid for Santa Clara acquisition financing arrangement | (3.7) | ||
Net cash provided by financing activities | 1,411.3 | 291.7 | 793.5 |
Effect of changes in foreign exchange rates on cash | (0.9) | (2) | (3.8) |
Net increase/(decrease) in cash and cash equivalents | 49.9 | (137.9) | 10.6 |
Cash and cash equivalents, beginning of period | 170.1 | 308 | 297.4 |
Cash and cash equivalents, end of period | 220 | 170.1 | 308 |
Zayo Group, LLC [Member] | |||
Net cash provided by operating activities | 777.1 | 620.6 | 548 |
Cash flows from investing activities | |||
Purchases of property and equipment | (762.5) | (643.5) | (484.6) |
Acquisitions, net of cash acquired | (1,436.3) | (344.2) | (781.8) |
Net cash used in investing activities | (2,198.8) | (987.7) | (1,266.4) |
Cash flows from financing activities | |||
Proceeds from debt | 3,865.8 | 929.3 | 1,747.2 |
Proceeds from equity offerings and contributions | 367.9 | ||
Principal payments on long-term debt | (2,408.8) | (535) | (1,288.5) |
Payment of early redemption fees on debt extinguished | (20.3) | (62.6) | |
Principal payments on capital lease obligations | (5.5) | (3.9) | (3.1) |
Payment of debt issuance costs | (35.4) | (4.2) | (24.2) |
Contributions to parent | 3.8 | (91.6) | |
Receipt/(payment of) from intercompany loans | 10.8 | (99.1) | |
Excess tax benefit from stock-based compensation | 7.9 | ||
Cash paid for Santa Clara acquisition financing arrangement | (3.7) | ||
Net cash provided by financing activities | 1,427 | 183.1 | 736.7 |
Net increase/(decrease) in cash and cash equivalents | 5.3 | (184) | 18.3 |
Cash and cash equivalents, beginning of period | 91.3 | 275.3 | 257 |
Cash and cash equivalents, end of period | 96.6 | 91.3 | 275.3 |
Guarantor Subsidiaries [Member] | |||
Net cash provided by operating activities | 2.9 | 3.6 | (3) |
Cash flows from financing activities | |||
Proceeds from equity offerings and contributions | 1.9 | ||
Contributions to parent | (3.8) | (4.3) | |
Net cash provided by financing activities | (3.8) | (4.3) | 1.9 |
Net increase/(decrease) in cash and cash equivalents | (0.9) | (0.7) | (1.1) |
Cash and cash equivalents, beginning of period | 3 | 3.7 | 4.8 |
Cash and cash equivalents, end of period | 2.1 | 3 | 3.7 |
Non-Guarantor Subsidiaries [Member] | |||
Net cash provided by operating activities | 129.8 | 89.8 | 62 |
Cash flows from investing activities | |||
Purchases of property and equipment | (73) | (60.6) | (45.8) |
Acquisitions, net of cash acquired | 1.5 | (93.3) | (73.9) |
Net cash used in investing activities | (71.5) | (153.9) | (119.7) |
Cash flows from financing activities | |||
Proceeds from debt | 40.1 | ||
Proceeds from equity offerings and contributions | 15.2 | ||
Principal payments on capital lease obligations | (1.1) | (1) | (0.4) |
Contributions to parent | 14.8 | ||
Receipt/(payment of) from intercompany loans | (10.8) | 99.1 | |
Net cash provided by financing activities | (11.9) | 112.9 | 54.9 |
Effect of changes in foreign exchange rates on cash | (0.9) | (2) | (3.8) |
Net increase/(decrease) in cash and cash equivalents | 45.5 | 46.8 | (6.6) |
Cash and cash equivalents, beginning of period | 75.8 | 29 | 35.6 |
Cash and cash equivalents, end of period | $ 121.3 | $ 75.8 | $ 29 |
QUARTERLY FINANCIAL DATA (UNA83
QUARTERLY FINANCIAL DATA (UNAUDITED) (Schedule of Quarterly Results) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue | $ 638 | $ 550.2 | $ 506.7 | $ 504.9 | $ 507.3 | $ 478 | $ 369.6 | $ 366.8 | $ 2,199.8 | $ 1,721.7 | $ 1,347.1 |
Operating costs and expenses | |||||||||||
Operating costs (excluding depreciation amortization and including stock-based compensation) | 234.2 | 195 | 179.9 | 173.8 | 182.7 | 170.8 | 112.2 | 113 | 782.9 | 578.7 | 413.5 |
Selling, general and administrative expenses (including stock-based compensation—Note 11) | 117.1 | 108.8 | 104.7 | 105.6 | 104.3 | 112.5 | 85 | 84.6 | 436.2 | 386.4 | 358.1 |
Depreciation and amortization | 181.3 | 155.7 | 131.4 | 138.5 | 148.3 | 137.2 | 113.7 | 117.1 | 606.9 | 516.3 | 406.2 |
Total operating costs and expenses | 532.6 | 459.5 | 416 | 417.9 | 435.3 | 420.5 | 310.9 | 314.7 | 1,826 | 1,481.4 | 1,177.8 |
Operating income (loss) | 105.4 | 90.7 | 90.7 | 87 | 72 | 57.5 | 58.7 | 52.1 | 373.8 | 240.3 | 169.3 |
Other expenses | |||||||||||
Interest expense | (71.5) | (63) | (53.7) | (53.3) | (57.4) | (57.7) | (51.2) | (53.8) | (241.5) | (220.1) | (214) |
Loss on extinguishment of debt | (13.7) | (4.5) | (33.8) | (18.2) | (33.8) | (94.3) | |||||
Foreign currency (loss)/gain on intercompany loans | 14.4 | 3.9 | (17.4) | (11.2) | (24.9) | (11.1) | (7.1) | (10.7) | (10.3) | (53.8) | (24.4) |
Other (income)/expense, net | (0.4) | 0.5 | 0.4 | (0.2) | 0.1 | (0.2) | (0.1) | (0.1) | 0.3 | (0.3) | (0.4) |
Total other expenses, net | (71.2) | (63.1) | (70.7) | (64.7) | (116) | (69) | (58.4) | (64.6) | (269.7) | (308) | (333.1) |
Income/(loss) from operations before income taxes | 34.2 | 27.6 | 20 | 22.3 | (44) | (11.5) | 0.3 | (12.5) | 104.1 | (67.7) | (163.8) |
Provision/(benefit) for income taxes | 11 | 0.6 | 0.2 | 6.6 | (13.1) | 7.8 | 11.1 | 2.7 | 18.4 | 8.5 | (8.7) |
Net income/(loss) | $ 23.2 | $ 27 | $ 19.8 | $ 15.7 | $ (30.9) | $ (19.3) | $ (10.8) | $ (15.2) | 85.7 | (76.2) | (155.1) |
Zayo Group, LLC [Member] | |||||||||||
Revenue | 1,588.3 | 1,316.5 | 1,170.5 | ||||||||
Operating costs and expenses | |||||||||||
Operating costs (excluding depreciation amortization and including stock-based compensation) | 489.5 | 383.1 | 352.3 | ||||||||
Selling, general and administrative expenses (including stock-based compensation—Note 11) | 293.3 | 284.8 | 305.4 | ||||||||
Depreciation and amortization | 505.6 | 427.4 | 362.5 | ||||||||
Total operating costs and expenses | 1,288.4 | 1,095.3 | 1,020.2 | ||||||||
Operating income (loss) | 299.9 | 221.2 | 150.3 | ||||||||
Other expenses | |||||||||||
Interest expense | (219.4) | (198.6) | (197.3) | ||||||||
Loss on extinguishment of debt | (18.2) | (33.8) | (93.5) | ||||||||
Foreign currency (loss)/gain on intercompany loans | 0.8 | (37.9) | (23.2) | ||||||||
Other (income)/expense, net | 0.7 | 0.5 | (0.4) | ||||||||
Total other expenses, net | (190.5) | (288.5) | (323.9) | ||||||||
Income/(loss) from operations before income taxes | 109.4 | (67.3) | (173.6) | ||||||||
Provision/(benefit) for income taxes | 23.7 | 8.9 | (8.6) | ||||||||
Net income/(loss) | $ 85.7 | $ (76.2) | $ (165) |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) $ in Millions | Jul. 20, 2017 | Jul. 05, 2017 | Jan. 15, 2016 | Apr. 10, 2017 | Jan. 27, 2017 |
LIBOR [Member] | |||||
Subsequent Event [Line Items] | |||||
Interest rate | 1.00% | ||||
Basis spread | 3.50% | ||||
Private Placement [Member] | Subsequent Event [Member] | LIBOR [Member] | |||||
Subsequent Event [Line Items] | |||||
Basis spread | 1.00% | ||||
5.75% Senior Unsecured Notes due 2027 [Member] | |||||
Subsequent Event [Line Items] | |||||
Aggregate principal amount | $ 550 | $ 800 | |||
Interest rate | 5.75% | 5.75% | |||
5.75% Senior Unsecured Notes due 2027 [Member] | Private Placement [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Aggregate principal amount | $ 300 | ||||
Interest rate | 5.75% | ||||
Term Loan Facility [Member] | Private Placement [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Aggregate principal amount | $ 1,618.1 | ||||
Basis spread | 2.25% | ||||
Unsecured Debt [Member] | Private Placement [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Aggregate principal amount | $ 1,650 | ||||
Percentage price of notes | 104.25% |