investor relations 28 january 2016 zayo reporting update call · dec113 mar114 jun114 sep114 dec114...
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Zayo Reporting Update CallINVESTOR RELATIONS 28 January 2016
ZAYO GROUP
SAFE HARBORInformation contained in this presentation that is not historical by nature constitutes “forward-looking statements” whichcan be identified by the use of forward-looking terminology such as “believes,” “expects,” “plans,” “intends,” “estimates,”“projects,” “could,” “may,” “will,” “should,” or “anticipates” or the negatives thereof, other variations thereon orcomparable terminology, or by discussions of strategy. No assurance can be given that future results expressed or impliedby the forward-looking statements will be achieved and actual results may differ materially from those contemplated bythe forward-looking statements. Such statements are based on management’s current expectations and beliefs and aresubject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed orimplied by the forward-looking statements. These risks and uncertainties include, but are not limited to, those relating toZayo Group Holdings, Inc.’s (“the Company” or “ZGH”) financial and operating prospects, current economic trends, futureopportunities, ability to retain existing customers and attract new ones, outlook of customers, and strength ofcompetition and pricing. In addition, there is risk and uncertainty in the Company’s acquisition strategy including our abilityto integrate acquired companies and assets. Specifically there is a risk associated with our recent acquisitions, and thebenefits thereof, including financial and operating results and synergy benefits that may be realized from theseacquisitions and the timeframe for realizing these benefits. Other factors and risks that may affect our business andfuture financial results are detailed in the “Risk Factors” section of our Annual Report or Form 10-K filed with theSecurities and Exchange Commission (“SEC”) on September 18, 2015. We caution you not to place undue reliance on theseforward-looking statements, which speak only as of their respective dates. We undertake no obligation to publicly updateor revise forward-looking statements to reflect events or circumstances after releasing this supplemental information orto reflect the occurrence of unanticipated events, except as required by law.
2
REPORTING UPDATE
Agenda• Reminder on New Segments Announcement
• On the November 10, 2015 Earnings Conference Call, the Company announced four new reporting segments: Zayo Dark Fiber Solutions, Zayo Network Connectivity, Zayo Colocation and Cloud, and Other
• 8-K Filed With Re-cast Segment Financials & Metrics• On January 26, 2016, the Company filed an 8-K with the Securities and Exchange Commission that included
re-cast historical financial and operating metrics under the new reporting segment structure
• Allstream Update and Reporting Details• Zayo announced the close of the Allstream acquisition on January 15, 2016. Zayo will be reporting Allstream
as a new single and separate reporting segment through the Jun-16 quarter (Fiscal Year 2016)
4
Review: Reporting Segment Changes
4
Reorganized strategic & reporting segments announced on November 10, 2015
strategic product groups – no
change zColoMobile
Infrastructure Group
priorreporting segments
Physical Infrastructure
Metro & Intercity
Dark Fiber
Cloud & Connectivity
WavesEthernet IPCloud SONET
new reporting segments
starting FY16Q2Dark Fiber Solutions
Dave Jones
Colocation & Cloud InfrastructureGreg Friedman
Network ConnectivityMax Clauson
co-COO Chris Morley manages the 3 reporting segments
co-COO Matt Erickson manages Global Sales and Customer Success 1
1 Includes sales, solutions engineering, strategic markets and alliances, IT, tranzact, customer service and security
5
$1,555 $1,618 $1,914 $1,907 $1,960 $1,816 $1,672
$1,914
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
$89.6 $91.6 $97.5 $107.4 $109.0 $111.3 $113.4 $115.4
$0.1 $0.3 $0.4 $0.2 $0.3 $0.2 $0.3 $0.3
$10.5 $10.9 $11.6 $13.3 $13.4 $14.3 $14.9 $15.7
$2.5 $2.7 $5.0
$6.4 $7.0 $7.6 $6.7 $3.6
$102.7 $105.5 $114.4
$127.4 $129.7 $133.5 $135.3 $135.0
$0
$25
$50
$75
$100
$125
$150
$175
$200
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
MRR Usage MAR Other Revenue
millions
Revenue Stratification1
$39 $35 $36 $134 $9 $157 $141 $10 $0
$25
$50
$75
$100
$125
$150
$175
$200
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Estimated Capital and Upfront Expenditures associated with Net New Sales (Bookings) less Upfront
Chargesmillions
Zayo Dark Fiber Solutions Segment RevenueStratification & Operational Data
thousands
($900)($597) ($725)
($945)($818)
($993) ($836)($761)
-‐0.9% -‐0.6% -‐0.7% -‐0.8% -‐0.7% -‐0.8% -‐0.7% -‐0.6%($4,500)
($4,000)
($3,500)
($3,000)
($2,500)
($2,000)
($1,500)
($1,000)
($500)
$0
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Churn ProcessedGross Installations
MRR
and
MAR
MRR
and
MAR
thousands
$655 $1,021
$1,189 $962 $1,141
$824 $837 $1,153
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Net Installationsthousands
MRR
and
MAR
Churn % =
$2,255 $1,592 $2,115 $1,956 $1,239 $2,272 $2,136 $1,668
$310
$325
$327 $531
$212
$546 $484
$330
$2,565
$1,917
$2,442 $2,488
$1,450
$2,818 $2,619
$1,998
$434M$240M$326M$439M$101M$429M$392M$256M
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Net Sales - MRRNet Sales - MAR
Contract Value =
Net New Sales (Bookings)
thousands
MRR
and
MAR
1 Zayo Dark Fiber Solutions annualized QoQ recurring revenue growth was 9% in F1Q16
6
$41 $48 $50 $58 $70 $73 $79 $94
40% 45% 44% 46% 54% 55% 58% 69%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsPurchases of Property and Equipment
$71 $73 $77 $85 $90 $93 $97 $97
69% 69% 68% 67% 69% 69% 72% 72%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsAdjusted EBITDA
$20
($14)
$4 $20 $35 $32 $56 $54
19% -‐14% 4% 16% 27% 24% 41% 40%
($25)
$0
$25
$50
$75
$100
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsNet Capital1
$41 $76 $61 $52 $41 $46 $26 $26
40% 72% 54% 40% 31% 35% 19% 20%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsAdj Unlevered FCF3
$30 $25 $27 $27 $20 $20 $18 $3
29% 24% 24% 21% 15% 15% 13% 2%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsUnlevered Free Cash Flow (FCF)2
Zayo Dark Fiber Solutions SegmentCash Flow Stratification
1 Net Capital is equal to “Cash Outflows for Purchases of Property and Equipment” less “Additions to Deferred Revenue”2 Unlevered Free Cash Flow is equal to Adjusted EBITDA less “Cash Outflows for Purchases of Property and Equipment”3 Adjusted Unlevered Free Cash Flow is equal to Adjusted EBITDA less “Net Capital” less “Monthly Amortized Revenue”
7
$468 $470 $443 $517 $489
$1,069 $1,189
$680
$0
$250
$500
$750
$1,000
$1,250
$1,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
$16.8 $18.4 $20.3 $25.5 $25.8 $34.9 $54.5 $55.4$0.3 $0.4 $0.4
$0.6 $0.8
$1.3
$2.2 $2.2
$0.3 $0.3 $0.3 $0.4 $0.4
$0.6
$0.8 $0.8
$0.8 $0.5 $0.5 $0.3 $0.0
$1.9
$0.1
($0.1)
$18.2 $19.6 $21.5 $26.9 $27.0
$38.5
$57.6 $58.3
($20)
$0
$20
$40
$60
$80
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
MRR Usage MAR Other Revenue
millions
Revenue Stratification
$16 $5 $7 $2 $18 $31 $13 $14 $0
$20
$40
$60
$80
$100
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Estimated Capital and Upfront Expenditures associated with Net New Sales (Bookings) less Upfront
Chargesmillions
Zayo Colocation and Cloud Segment RevenueStratification & Operational Data
thousands
($184)($216) ($237)
($301)($262)
($475)
($700)($613)
-‐1.1% -‐1.2% -‐1.2% -‐1.2% -‐1.0% -‐1.3% -‐1.3% -‐1.1%($1,500)
($1,250)
($1,000)
($750)
($500)
($250)
$0
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Churn ProcessedGross Installations
MRR
and
MAR
MRR
and
MAR
thousands
$284 $254 $205 $216 $227
$594 $489
$67 $0
$250
$500
$750
$1,000
$1,250
$1,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Net Installationsthousands
MRR
and
MAR
Churn % =
$377 $397 $415 $452 $536 $852 $831 $847
$29 $22 $48 $37
$35
$80 $51 $72
$406 $420 $462 $489 $570
$932 $882 $918
$16M $13M $17M $15M $19M $31M $23M $30M
$0
$250
$500
$750
$1,000
$1,250
$1,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Net Sales - MRRNet Sales - MAR
Contract Value =
Net New Sales (Bookings)
thousands
MRR
and
MAR
8
$6 $9 $10 $11 $7 $10 $27 $19
32% 48% 47% 40% 27% 26% 47% 33%
$0
$20
$40
$60
$80
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsPurchases of Property and Equipment
$9 $10 $11 $13 $13 $20 $28 $28
51% 49% 50% 50% 50% 51% 48% 49%
$0
$20
$40
$60
$80
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsAdjusted EBITDA
$6 $9 $10 $12 $6 $12 $26 $18
31% 46% 44% 44% 24% 30% 46% 30%
$0
$20
$40
$60
$80
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsNet Capital1
$3 $0 $1 $1 $7 $7 $1 $10
18% 1% 4% 4% 24% 19% 1% 17%
$0
$20
$40
$60
$80
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsAdj Unlevered FCF3
$3 $0 $1 $2 $6 $9 $1 $9
19% 1% 3% 9% 23% 24% 1% 16%
$0
$20
$40
$60
$80
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsUnlevered Free Cash Flow (FCF)2
Zayo Colocation and Cloud SegmentCash Flow Stratification
1 Net Capital is equal to “Cash Outflows for Purchases of Property and Equipment” less “Additions to Deferred Revenue”2 Unlevered Free Cash Flow is equal to Adjusted EBITDA less “Cash Outflows for Purchases of Property and Equipment”3 Adjusted Unlevered Free Cash Flow is equal to Adjusted EBITDA less “Net Capital” less “Monthly Amortized Revenue”
9
$2,695 $2,961 $2,899 $2,942 $3,017 $2,988
$3,307 $3,381
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
$144.2 $144.8 $146.1 $153.1 $154.0 $154.2 $156.3 $159.2
$1.2 $1.7 $1.4 $1.8 $2.4 $2.2 $1.9 $1.8 $2.3 $2.6 $2.9 $3.4 $3.4 $3.4 $3.5 $3.8 $3.5 $2.6 $3.3 $1.9 $1.9 $3.2 $1.4 $2.2 $151.3 $151.7 $153.8
$160.2 $161.7 $163.0 $163.0
$167.0
$0
$25
$50
$75
$100
$125
$150
$175
$200
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
MRR Usage MAR Other Revenue
millions
Revenue Stratification
$2,610 $2,705 $2,968 $2,735 $3,017 $3,125 $3,148 $3,259
$76 $94 $162
$57 $177 $95 $107 $164
$2,686 $2,799 $3,130
$2,792
$3,194 $3,220 $3,255 $3,423
$80M $100M$150M $90M $106M$103M$100M$119M
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Net Sales - MRRNet Sales - MAR
Contract Value =
Net New Sales (Bookings)
thousands
MRR
and
MAR
Zayo Network Connectivity SegmentRevenue Stratification & Operational Data
thousands
($2,461)($2,669)
($2,452)($2,458)($2,587)($2,595)
($2,263)($2,308)
-‐1.7% -‐1.8% -‐1.6% -‐1.6% -‐1.6% -‐1.6% -‐1.4% -‐1.4%($4,500)
($4,000)
($3,500)
($3,000)
($2,500)
($2,000)
($1,500)
($1,000)
($500)
$0
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Churn ProcessedGross Installations
MRR
and
MAR
MRR
and
MAR
thousands
$233 $292 $447 $484 $430 $393
$1,044 $1,073
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Net Installationsthousands
MRR
and
MAR
Churn % =
$27 $36 $41 $32 $41 $35 $35 $40 $0
$25
$50
$75
$100
$125
$150
$175
$200
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
Estimated Capital and Upfront Expenditures associated with Net New Sales (Bookings) less Upfront
Chargesmillions
10
$42 $34 $35 $46 $53 $47 $49 $47
27% 22% 23% 29% 32% 29% 30% 28%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsPurchases of Property and Equipment
$81 $82 $82 $83 $86 $86 $85 $89
54% 54% 53% 52% 53% 53% 52% 53%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsAdjusted EBITDA
$40 $31 $32 $40 $47 $47 $48 $38
26% 20% 21% 25% 29% 29% 29% 22%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsNet Capital1
$39 $49 $46 $40 $35 $35 $34 $47
26% 32% 30% 25% 22% 22% 21% 28%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsAdj Unlevered FCF3
$40 $49 $47 $37 $33 $39 $36 $42
26% 32% 30% 23% 20% 24% 22% 25%
$0
$25
$50
$75
$100
$125
Dec-‐13 Mar-‐14 Jun-‐14 Sep-‐14 Dec-‐14 Mar-‐15 Jun-‐15 Sep-‐15
% of Revenue
millionsUnlevered Free Cash Flow (FCF)2
Zayo Network Connectivity SegmentCash Flow Stratification
1 Net Capital is equal to “Cash Outflows for Purchases of Property and Equipment” less “Additions to Deferred Revenue”2 Unlevered Free Cash Flow is equal to Adjusted EBITDA less “Cash Outflows for Purchases of Property and Equipment”3 Adjusted Unlevered Free Cash Flow is equal to Adjusted EBITDA less “Net Capital” less “Monthly Amortized Revenue”
ALLSTREAM ACQUISITION
Allstream Acquisition Closed & Reporting Update
11
>9,000 km metro fiber network concentrated in Canada’s top five metropolitan markets (Toronto, Montreal, Vancouver, Ottawa, Calgary)
Connect approximately 3,300 on-net buildings
~20,000 km long-haul fiber network connecting all major Canadian markets and key U.S. network access points
Operates colocation space in Toronto, Montreal & Vancouver
• Acquisition closed on January 15, 2016 • Zayo will report Allstream as a single separate segment in the Mar-16 and Jun-16 fiscal quarters
(through FY 2016) • Starting in the Sep-16 quarter (FY 2017), the Company plans to separately report Zayo Canada
(the Canadian Communications Infrastructure business) and consolidate financial and operating metrics into the Dark Fiber Solutions, Network Connectivity and Colo & Cloud segments
• The remaining Allstream business will continue to be reported under the Allstream segment
Q & A
Thank You
Appendix: Reconciliations
14
15
Zayo Dark Fiber Solutions SegmentFinancial Data
Financial DataFinancial Data($ in millions)
September 30, December 31, March 31, June 30, September 30,
2014 2014 2015 2015 2015
Revenue $127.4 $129.7 $133.5 $135.3 $135.0
Annualized revenue growth 45% 7% 12% 6% -‐1%
Pro-‐forma annualized revenue growth 1 18% 9%
Operating income/(loss) ($35.4) $35.7 $20.2 $25.9 $23.4
Adjusted EBITDA $85.2 $89.6 $92.6 $96.8 $96.6
Annualized Adjusted EBITDA growth 40% 21% 14% 18% -‐1%
Pro-‐forma annualized Adjusted EBITDA growth 1 21% 12%
Adjusted EBITDA margin 67% 69% 69% 72% 72%
Purchases of property and equipment $58.1 $69.7 $73.0 $78.9 $93.5
Unlevered Free Cash Flow $27.0 $19.9 $19.6 $17.9 $3.1
Unlevered Free Cash Flow margin 21% 15% 15% 13% 2%
Adjusted Unlevered Free Cash Flow $51.5 $40.8 $46.2 $26.0 $26.4
Adj Unlevered Free Cash Flow margin 40% 31% 35% 19% 20%
Three Months Ended
1 Pro-‐forma annualized growth for revenue and Adjusted EBITDA are calculated as if the acquisitions occurred on the first day of the quarter preceding the respective quarter in which the acquisitions closed
2 Zayo Dark Fiber Solutions annualized QoQ recurring revenue growth was 9% in F1Q16
2
16
Zayo Colocation and Cloud SegmentFinancial Data
1 Pro-‐forma annualized growth for revenue and Adjusted EBITDA are calculated as if the acquisitions occurred on the first day of the quarter preceding the respective quarter in which the acquisitions closed
Financial DataFinancial Data($ in millions)
September 30, December 31, March 31, June 30, September 30,
2014 2014 2015 2015 2015
Revenue $26.9 $27.0 $38.5 $57.6 $58.3
Annualized revenue growth 100% 2% 171% 198% 5%
Pro-‐forma annualized revenue growth 1 13% 7% 17%
Operating income/(loss) $1.4 $6.5 $2.0 ($0.5) ($5.8)
Adjusted EBITDA $13.3 $13.4 $19.5 $27.8 $28.4
Annualized Adjusted EBITDA growth 94% 3% 184% 169% 8%
Pro-‐forma annualized Adjusted EBITDA growth 1 29% 19% 4%
Adjusted EBITDA margin 50% 50% 51% 48% 49%
Purchases of property and equipment $10.9 $7.3 $10.2 $27.0 $19.0
Unlevered Free Cash Flow $2.4 $6.1 $9.3 $0.8 $9.4
Unlevered Free Cash Flow margin 9% 23% 24% 1% 16%
Adjusted Unlevered Free Cash Flow $1.1 $6.5 $7.3 $0.7 $10.0
Adj Unlevered Free Cash Flow margin 4% 24% 19% 1% 17%
Three Months Ended
17
Zayo Network Connectivity SegmentFinancial Data
Financial DataFinancial Data
1 Pro-‐forma annualized growth for revenue and Adjusted EBITDA are calculated as if the acquisitions occurred on the first day of the quarter preceding the respective quarter in which the acquisitions closed
($ in millions)September 30, December 31, March 31, June 30, September 30,
2014 2014 2015 2015 2015
Revenue $160.2 $161.7 $163.0 $163.0 $167.0
Annualized revenue growth 17% 4% 3% 0% 10%
Pro-‐forma annualized revenue growth 1 3% 2%
Operating income/(loss) ($4.5) $53.8 $33.8 $28.6 $33.3
Adjusted EBITDA $83.1 $85.6 $85.7 $85.0 $88.7
Annualized Adjusted EBITDA growth 8% 11% 1% -‐3% 17%
Pro-‐forma annualized Adjusted EBITDA growth 1 -‐1% -‐1%
Adjusted EBITDA margin 52% 53% 53% 52% 53%
Purchases of property and equipment $46.3 $52.5 $46.9 $49.4 $46.7
Unlevered Free Cash Flow $36.8 $33.1 $38.7 $35.6 $42.0
Unlevered Free Cash Flow margin 23% 20% 24% 22% 25%
Adjusted Unlevered Free Cash Flow $39.6 $35.4 $35.2 $34.0 $47.4
Adj Unlevered Free Cash Flow margin 25% 22% 22% 21% 28%
Three Months Ended
18
Zayo Other Segment Financial Data
1 Pro-‐forma annualized growth for revenue and Adjusted EBITDA are calculated as if the acquisitions occurred on the first day of the quarter preceding the respective quarter in which the acquisitions closed
Financial DataFinancial Data($ in millions)
September 30, December 31, March 31, June 30, September 30,
2014 2014 2015 2015 2015
Revenue $6.1 $5.5 $5.7 $6.0 $6.5
Annualized revenue growth -‐109% -‐43% 20% 24% 31%
Pro-‐forma annualized revenue growth 1 -‐125%
Operating income $1.3 $1.1 $0.6 $0.7 $1.2
Adjusted EBITDA $1.4 $1.1 $1.2 $1.3 $1.7
Annualized Adjusted EBITDA growth -‐175% -‐78% -‐22% 35% 148%
Pro-‐forma annualized Adjusted EBITDA growth 1 -‐172%
Adjusted EBITDA margin 22% 20% 20% 21% 27%
Purchases of property and equipment $0.0 $0.0 $0.0 $0.0 $0.0
Unlevered Free Cash Flow $1.4 $1.1 $1.2 $1.3 $1.7
Unlevered Free Cash Flow margin 22% 20% 20% 21% 27%
Adjusted Unlevered Free Cash Flow $1.3 $1.1 $1.3 $1.2 $1.7
Adj Unlevered Free Cash Flow margin 21% 20% 23% 20% 27%
Three Months Ended
19
Segment Financial Data Rollup
Segment Data Rollup($ in millions)
Dark Fiber Colocation & Cloud NetworkSolutions Dark Fiber Zayo Infrastructure Colocation & Cloud Zayo Zayo Zayo Connectivity Network Zayo
Zayo Mobile Zayo Dark Segment Solutions Cloud Segment Infrastructure Wavelength Zayo SONET Ethernet IP Segment Connectivity Professional Other Zayo Group Infrastructure Fiber Elimination Segment zColo Services Elimination Segment Services Services Services Services Elimination Segment Services Other Segment Holdings
Revenue $25.3 $109.7 $0.0 $135.0 $48.7 $9.6 $0.0 $58.3 $70.9 $23.8 $41.4 $30.9 $0.0 $167.0 $4.7 $1.7 $6.5 $366.8Adjusted EBITDA $16.9 $79.7 $96.6 $24.0 $4.4 $28.4 $34.1 $13.0 $24.3 $17.3 $88.7 $1.2 $0.5 $1.7 $215.4Adjusted EBITDA margin 67% 73% 72% 49% 45% 49% 48% 55% 59% 56% 53% 26% 28% 27% 59%
Three Months Ended September 30, 2015
20
Invested Capital Ratio by Reporting Segment
Invested CapitalInvested Capital
($ in millions)
Dark Fiber Solutions
Colocation and Cloud
Network Connnectivity Other
Corporate / Intercompany Elimination
Zayo Group Holdings
Vested Stock-‐Based Compensation of Equity Awards $309.4 $45.1 $279.6 $0.6 $7.3 $641.9 Other Additional Paid-‐In Capital $289.3 $275.4 $169.7 $25.3 $355.7 $1,115.4 Total Additional paid-‐in capital
$598.7 $320.5 $449.3 $25.9 $363.0 $1,757.3 Less net assests of discontinued operations
Capital lease obligations 12.0 20.1 4.4 -‐ -‐ 36.6 Debt 1,848.1 624.6 1,195.0 -‐ (0.0) 3,667.7 Less cash balance (10.3) (1.1) (26.0) (3.1) (305.1) (345.7)
Total Invested Capital $2,448.5 $964.0 $1,622.7 $22.7 $57.9 $5,115.9
Three Months Ended September 30, 2015
21
Segment Data Reconciliation: Net (Loss)/Earnings to Adjusted EBITDA
Segment Data Reconciliation1
1 A reconciliation of previous quarters’ legacy segment information can be found in our historical earnings supplements found on our website at http://www.zayo.com/financial-‐earnings-‐release
($ in millions)
Zayo Dark Fiber Solutions
Zayo Network Connectivity
Zayo Colocation and
Cloud Infrastructure Zayo Other
Corporate / Intercompany Elimination
Zayo Group Holdings
Net earnings/(loss) ($2.2) $15.9 ($15.8) $1.2 ($14.3) ($15.2)
Interest expense 25.5 17.5 10.0 0.0 0.8 53.8
Provision for income taxes 0.0 0.0 0.0 0.0 2.7 2.7
Depreciation and amortization expense 55.6 33.9 27.1 0.5 0.0 117.1
Stock-‐based compensation 17.5 21.5 7.1 0.0 0.0 46.1
Unrealized foreign currency gain/(loss) on intercompany loans 0.0 (0.1) 0.0 0.0 10.8 10.7
Non-‐cash loss on investments 0.2 0.0 0.0 0.0 0.0 0.2
Adjusted EBITDA $96.6 $88.7 $28.4 $1.7 $0.0 $215.4
Three Months Ended September 30, 2015
22
Segment Data Reconciliation: Net (Loss)/Earnings to Adjusted EBITDA
Segment Data Reconciliation
($ in millions)
Zayo Dark Fiber Solutions
Zayo Network Connectivity
Zayo Colocation and
Cloud Infrastructure Zayo Other
Corporate / Intercompany Elimination
Zayo Group Holdings
Net earnings/(loss) ($5.2) $7.2 ($9.9) $1.1 $11.9 $5.1
Interest expense 26.1 17.8 9.1 0.0 0.0 53.0
Benefit/(provision) for income taxes 0.0 0.0 0.0 (0.4) 5.0 4.6
Depreciation and amortization expense 55.3 34.8 22.6 0.5 0.0 113.2
Stock-‐based compensation 15.5 21.5 5.8 0.1 0.0 42.9
Loss on extinguishment of debt 4.7 3.6 0.2 0.0 0.0 8.5
Unrealized foreign currency gain/(loss) on intercompany loans 0.0 0.1 0.0 0.0 (16.9) (16.8)
Non-‐cash loss on investments 0.4 0.0 0.0 0.0 0.0 0.4
Adjusted EBITDA $96.8 $85.0 $27.8 $1.3 $0.0 $210.9
Three Months Ended June 30, 2015
23
Segment Data Reconciliation: Net (Loss)/Earnings to Adjusted EBITDA
Segment Data Reconciliation
($ in millions)
Zayo Dark Fiber Solutions
Zayo Network Connectivity
Zayo Colocation and Cloud
Infrastructure Zayo Other
Corporate / Intercompany Elimination
Zayo Group Holdings
Net earnings/(loss) ($42.7) ($9.5) ($7.3) $0.6 $5.2 ($53.7)
Interest expense 31.7 20.5 8.5 0.0 0.0 60.7
Benefit for income taxes 0.0 0.0 0.0 0.0 (18.4) (18.4)
Depreciation and amortization expense 53.4 33.3 12.9 0.5 0.0 100.1
Transaction costs 0.2 0.2 1.1 0.0 0.0 1.5
Stock-‐based compensation 18.8 18.4 3.4 0.1 0.0 40.7
Loss on extinguishment of debt 31.2 22.8 0.9 0.0 0.0 54.9
Unrealized foreign currency gain/(loss) on intercompany loans 0.0 0.0 0.0 0.0 13.2 13.2
Adjusted EBITDA $92.6 $85.7 $19.5 $1.2 $0.0 $199.0
Three Months Ended March 31, 2015
24
Segment Data Reconciliation: Net (Loss)/Earnings to Adjusted EBITDA
Segment Data Reconciliation
($ in millions)
Zayo Dark Fiber Solutions
Zayo Network Connectivity
Zayo Colocation and Cloud
Infrastructure Zayo Other
Corporate / Intercompany Elimination
Zayo Group Holdings
Net earnings/(loss) ($13.2) $21.1 $3.5 $1.2 ($8.8) $3.8
Interest expense 30.9 20.0 2.5 0.0 0.0 53.4
Benefit for income taxes 0.0 0.0 0.0 0.0 (4.4) (4.4)
Depreciation and amortization expense 55.5 34.4 6.6 0.4 0.0 96.9
Transaction costs 0.8 0.2 0.3 0.0 0.0 1.3
Stock-‐based compensation (2.4) (3.1) 0.0 (0.5) 0.0 (6.0)
Loss on extinguishment of debt 17.5 12.9 0.5 0.0 0.0 30.9
Foreign currency gain on intercompany loans 0.0 0.1 0.0 0.0 13.2 13.3
Non-‐cash loss on investments 0.5 0.0 0.0 0.0 0.0 0.5
Adjusted EBITDA $89.6 $85.6 $13.4 $1.1 $0.0 $189.7
Three Months Ended December 31, 2014
25
Segment Data Reconciliation: Net (Loss)/Earnings to Adjusted EBITDA
Segment Data Reconciliation
($ in millions)
Zayo Dark Fiber Solutions
Zayo Network Connectivity
Zayo Colocation and
Cloud Infrastructure Zayo Other
Corporate / Intercompany Elimination
Zayo Group Holdings
Net loss ($62.5) ($22.0) ($1.0) $0.9 ($25.9) ($110.5)
Interest expense 27.0 17.5 2.4 0.0 0.0 46.9
Provision for income taxes 0.0 0.0 0.0 0.4 9.0 9.4
Depreciation and amortization expense 56.4 33.8 5.3 0.5 0.0 96.0
Transaction costs 0.8 0.3 0.1 0.0 2.2 3.4
Stock-‐based compensation 63.5 53.5 6.5 (0.4) 0.0 123.1
Foreign currency gain on intercompany loans 0.0 0.0 0.0 0.0 14.7 14.7
Adjusted EBITDA $85.2 $83.1 $13.3 $1.4 $0.0 $183.0
Three Months Ended September 30, 2014