☑
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the quarterly period ended June 30, 2019
|
|
or
|
☐
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the transition period from ____ to ____
|
Delaware
|
|
20-2096338
|
(State or Other Jurisdiction of
|
|
(I.R.S. Employer Identification No.)
|
Incorporation or Organization)
|
|
|
Title of each class
|
|
Trading symbol(s)
|
|
Name of each exchange on which registered
|
Common stock, par value $.0001 per share
|
|
GTT
|
|
The New York Stock Exchange
|
Series A Junior Participating Cumulative Preferred Stock Purchase Rights
|
|
|
|
|
Large Accelerated Filer
|
☑
|
|
Accelerated Filer
|
☐
|
Non-Accelerated Filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
|
Page
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
33.7
|
|
|
$
|
55.3
|
|
Accounts receivable, net of allowances of $12.1 and $11.1, respectively
|
238.9
|
|
|
174.5
|
|
||
Prepaid expenses and other current assets
|
42.6
|
|
|
49.2
|
|
||
Total current assets
|
315.2
|
|
|
279.0
|
|
||
Property and equipment, net
|
1,821.8
|
|
|
1,870.4
|
|
||
Operating lease right of use assets
|
394.9
|
|
|
—
|
|
||
Intangible assets, net
|
507.3
|
|
|
552.4
|
|
||
Goodwill
|
1,773.4
|
|
|
1,738.0
|
|
||
Other long-term assets
|
82.1
|
|
|
97.8
|
|
||
Total assets
|
$
|
4,894.7
|
|
|
$
|
4,537.6
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
128.1
|
|
|
$
|
89.2
|
|
Accrued expenses and other current liabilities
|
221.0
|
|
|
226.8
|
|
||
Operating lease liabilities
|
77.0
|
|
|
—
|
|
||
Finance lease liabilities
|
5.2
|
|
|
6.7
|
|
||
Long-term debt
|
34.8
|
|
|
39.9
|
|
||
Deferred revenue
|
82.9
|
|
|
84.2
|
|
||
Total current liabilities
|
549.0
|
|
|
446.8
|
|
||
Operating lease liabilities, long-term portion
|
304.7
|
|
|
—
|
|
||
Finance lease liabilities, long-term portion
|
36.9
|
|
|
35.1
|
|
||
Long-term debt, long-term portion
|
3,157.3
|
|
|
3,151.6
|
|
||
Deferred revenue, long-term portion
|
274.0
|
|
|
287.0
|
|
||
Deferred tax liabilities
|
179.6
|
|
|
176.2
|
|
||
Other long-term liabilities
|
38.0
|
|
|
26.2
|
|
||
Total liabilities
|
4,539.5
|
|
|
4,122.9
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Common stock, par value $.0001 per share, 80,000,000 shares authorized, 56,258,886 and 55,625,149 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
826.9
|
|
|
809.9
|
|
||
Accumulated deficit
|
(428.9
|
)
|
|
(368.3
|
)
|
||
Accumulated other comprehensive loss
|
(42.8
|
)
|
|
(26.9
|
)
|
||
Total stockholders’ equity
|
355.2
|
|
|
414.7
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,894.7
|
|
|
$
|
4,537.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Telecommunications services
|
$
|
433.8
|
|
|
$
|
326.8
|
|
|
$
|
884.0
|
|
|
$
|
587.4
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of telecommunications services
|
237.5
|
|
|
179.4
|
|
|
479.3
|
|
|
320.9
|
|
||||
Selling, general and administrative expenses
|
97.6
|
|
|
89.7
|
|
|
201.7
|
|
|
157.8
|
|
||||
Severance, restructuring and other exit costs
|
6.4
|
|
|
5.3
|
|
|
9.2
|
|
|
7.2
|
|
||||
Depreciation and amortization
|
61.2
|
|
|
48.2
|
|
|
124.0
|
|
|
88.0
|
|
||||
Total operating expenses
|
402.7
|
|
|
322.6
|
|
|
814.2
|
|
|
573.9
|
|
||||
Operating income
|
31.1
|
|
|
4.2
|
|
|
69.8
|
|
|
13.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other expense:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(49.3
|
)
|
|
(30.2
|
)
|
|
(97.5
|
)
|
|
(51.1
|
)
|
||||
Loss on debt extinguishment
|
—
|
|
|
(13.8
|
)
|
|
—
|
|
|
(13.8
|
)
|
||||
Other expense, net
|
(14.9
|
)
|
|
(97.6
|
)
|
|
(30.9
|
)
|
|
(115.1
|
)
|
||||
Total other expense
|
(64.2
|
)
|
|
(141.6
|
)
|
|
(128.4
|
)
|
|
(180.0
|
)
|
||||
Loss before income taxes
|
(33.1
|
)
|
|
(137.4
|
)
|
|
(58.6
|
)
|
|
(166.5
|
)
|
||||
Provision for (benefit from) income taxes
|
0.2
|
|
|
(1.1
|
)
|
|
2.0
|
|
|
0.5
|
|
||||
Net loss
|
$
|
(33.3
|
)
|
|
$
|
(136.3
|
)
|
|
$
|
(60.6
|
)
|
|
$
|
(167.0
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.59
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(1.08
|
)
|
|
$
|
(3.60
|
)
|
Diluted
|
$
|
(0.59
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(1.08
|
)
|
|
$
|
(3.60
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
56,248,530
|
|
|
48,221,341
|
|
|
56,045,002
|
|
|
46,435,245
|
|
||||
Diluted
|
56,248,530
|
|
|
48,221,341
|
|
|
56,045,002
|
|
|
46,435,245
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net loss
|
$
|
(33.3
|
)
|
|
$
|
(136.3
|
)
|
|
$
|
(60.6
|
)
|
|
$
|
(167.0
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
20.0
|
|
|
2.0
|
|
|
(15.9
|
)
|
|
3.1
|
|
||||
Comprehensive loss
|
$
|
(13.3
|
)
|
|
$
|
(134.3
|
)
|
|
$
|
(76.5
|
)
|
|
$
|
(163.9
|
)
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||||||
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|||||||||||||||||||
Balance, March 31, 2019
|
56,227,038
|
|
|
$
|
—
|
|
|
$
|
818.5
|
|
|
$
|
(395.6
|
)
|
|
$
|
(62.8
|
)
|
|
$
|
360.1
|
|
Share-based compensation for options issued
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Share-based compensation for restricted stock issued
|
(15,413
|
)
|
|
—
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|||||
Tax withholding related to the vesting of restricted stock
|
(714
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||||
Stock issued in connection with employee stock purchase plan
|
19,309
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||
Stock options exercised
|
28,666
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.3
|
)
|
|
—
|
|
|
(33.3
|
)
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|
20.0
|
|
|||||
Balance, June 30, 2019
|
56,258,886
|
|
|
$
|
—
|
|
|
$
|
826.9
|
|
|
$
|
(428.9
|
)
|
|
$
|
(42.8
|
)
|
|
$
|
355.2
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||||||
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|||||||||||||||||||
Balance, March 31, 2018
|
44,868,585
|
|
|
$
|
—
|
|
|
$
|
365.7
|
|
|
$
|
(155.6
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
207.3
|
|
Share-based compensation for options issued
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Share-based compensation for restricted stock issued
|
198,463
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
|
—
|
|
|
8.5
|
|
|||||
Tax withholding related to the vesting of restricted stock
|
(102,832
|
)
|
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
|||||
Stock issued in connection with employee stock purchase plan
|
6,801
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Equity offerings, net of issuance costs
|
9,589,094
|
|
|
—
|
|
|
424.5
|
|
|
—
|
|
|
—
|
|
|
424.5
|
|
|||||
Stock options exercised
|
49,400
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(136.3
|
)
|
|
—
|
|
|
(136.3
|
)
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
|||||
Balance, June 30, 2018
|
54,609,511
|
|
|
$
|
—
|
|
|
$
|
794.9
|
|
|
$
|
(291.9
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
502.2
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total
|
|||||||||||||
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|||||||||||||||||||
Balance, December 31, 2018
|
55,625,149
|
|
|
$
|
—
|
|
|
$
|
809.9
|
|
|
$
|
(368.3
|
)
|
|
$
|
(26.9
|
)
|
|
$
|
414.7
|
|
Share-based compensation for options issued
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Share-based compensation for restricted stock issued
|
546,972
|
|
|
—
|
|
|
16.0
|
|
|
—
|
|
|
—
|
|
|
16.0
|
|
|||||
Tax withholding related to the vesting of restricted stock
|
(10,021
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|||||
Stock issued in connection with employee stock purchase plan
|
33,370
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||
Stock issued in connection with acquisitions
|
(6,954
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|||||
Stock options exercised
|
70,370
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(60.6
|
)
|
|
—
|
|
|
(60.6
|
)
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.9
|
)
|
|
(15.9
|
)
|
|||||
Balance, June 30, 2019
|
56,258,886
|
|
|
$
|
—
|
|
|
$
|
826.9
|
|
|
$
|
(428.9
|
)
|
|
$
|
(42.8
|
)
|
|
$
|
355.2
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||||||
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|||||||||||||||||||
Balance, December 31, 2017
|
44,531,905
|
|
|
$
|
—
|
|
|
$
|
360.2
|
|
|
$
|
(124.9
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
231.4
|
|
Share-based compensation for options issued
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||
Share-based compensation for restricted stock issued
|
492,534
|
|
|
—
|
|
|
14.0
|
|
|
—
|
|
|
—
|
|
|
14.0
|
|
|||||
Tax withholding related to the vesting of restricted stock
|
(206,488
|
)
|
|
—
|
|
|
(10.2
|
)
|
|
—
|
|
|
—
|
|
|
(10.2
|
)
|
|||||
Stock issued in connection with employee stock purchase plan
|
12,425
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Stock issued in connection with acquisitions
|
79,930
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|||||
Equity offerings, net of issuance costs
|
9,589,094
|
|
|
—
|
|
|
424.5
|
|
|
—
|
|
|
—
|
|
|
424.5
|
|
|||||
Stock options exercised
|
110,111
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(167.0
|
)
|
|
—
|
|
|
(167.0
|
)
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|
3.1
|
|
|||||
Balance, June 30, 2018
|
54,609,511
|
|
|
$
|
—
|
|
|
$
|
794.9
|
|
|
$
|
(291.9
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
502.2
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(60.6
|
)
|
|
$
|
(167.0
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
124.0
|
|
|
88.0
|
|
||
Share-based compensation
|
16.3
|
|
|
14.6
|
|
||
Debt discount amortization
|
3.5
|
|
|
0.2
|
|
||
Loss on debt extinguishment
|
—
|
|
|
13.8
|
|
||
Amortization of debt issuance costs
|
2.3
|
|
|
2.3
|
|
||
Change in fair value of derivative financial liability
|
35.2
|
|
|
115.3
|
|
||
Excess tax benefit from stock-based compensation
|
0.6
|
|
|
(4.7
|
)
|
||
Deferred income taxes
|
(2.4
|
)
|
|
4.2
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable, net
|
(72.4
|
)
|
|
(1.0
|
)
|
||
Prepaid expenses and other current assets
|
2.9
|
|
|
17.4
|
|
||
Other long-term assets
|
(3.0
|
)
|
|
(14.2
|
)
|
||
Accounts payable
|
34.8
|
|
|
9.5
|
|
||
Accrued expenses and other current liabilities
|
(31.8
|
)
|
|
(42.5
|
)
|
||
Operating lease liabilities
|
(6.3
|
)
|
|
—
|
|
||
Deferred revenue
|
(12.6
|
)
|
|
(8.4
|
)
|
||
Other long-term liabilities
|
0.7
|
|
|
1.0
|
|
||
Net cash provided by operating activities
|
31.2
|
|
|
28.5
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|||
Acquisition of businesses, net of cash acquired
|
(0.5
|
)
|
|
(2,207.4
|
)
|
||
Purchase of customer contracts
|
(0.2
|
)
|
|
—
|
|
||
Settlement of deal-contingent foreign currency hedge
|
—
|
|
|
(105.8
|
)
|
||
Purchases of property and equipment
|
(51.3
|
)
|
|
(32.5
|
)
|
||
Net cash used in investing activities
|
(52.0
|
)
|
|
(2,345.7
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|||
Proceeds from revolving line of credit
|
26.0
|
|
|
—
|
|
||
Proceeds from term loans
|
—
|
|
|
2,634.5
|
|
||
Repayment of term loans
|
(13.1
|
)
|
|
(693.0
|
)
|
||
Repayment of other secured borrowings
|
(8.0
|
)
|
|
(1.3
|
)
|
||
Payment of holdbacks
|
(6.5
|
)
|
|
(9.4
|
)
|
||
Debt issuance costs paid to third parties and lenders
|
(0.2
|
)
|
|
(58.5
|
)
|
||
Proceeds from equity issuance, net of issuance costs
|
—
|
|
|
424.5
|
|
||
Repayment of finance leases
|
(0.6
|
)
|
|
(1.7
|
)
|
||
Proceeds from issuance of common stock under employee stock purchase plan
|
0.8
|
|
|
0.4
|
|
||
Tax withholding related to the vesting of restricted stock
|
(0.4
|
)
|
|
(10.2
|
)
|
||
Exercise of stock options
|
0.8
|
|
|
1.2
|
|
||
Net cash (used in) provided by financing activities
|
(1.2
|
)
|
|
2,286.5
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
0.4
|
|
|
3.2
|
|
||
|
|
|
|
||||
Net decrease in cash, cash equivalents, and restricted cash
|
(21.6
|
)
|
|
(27.5
|
)
|
||
|
|
|
|
||||
Cash, cash equivalents, and restricted cash at beginning of period
|
55.3
|
|
|
101.2
|
|
||
|
|
|
|
||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
33.7
|
|
|
$
|
73.7
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Cash paid for interest
|
$
|
65.4
|
|
|
$
|
61.3
|
|
Cash paid for income taxes, net
|
$
|
0.5
|
|
|
$
|
0.4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Primary geographic market:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
195.7
|
|
|
$
|
189.7
|
|
|
$
|
397.3
|
|
|
$
|
379.6
|
|
Europe
|
186.1
|
|
|
120.4
|
|
|
382.1
|
|
|
179.3
|
|
||||
Other
|
11.5
|
|
|
3.2
|
|
|
23.3
|
|
|
9.4
|
|
||||
Total revenue from contracts with customers
|
393.3
|
|
|
313.3
|
|
|
802.7
|
|
|
568.3
|
|
||||
Lease revenue
|
40.5
|
|
|
13.5
|
|
|
81.3
|
|
|
19.1
|
|
||||
Total telecommunications services revenue
|
$
|
433.8
|
|
|
$
|
326.8
|
|
|
$
|
884.0
|
|
|
$
|
587.4
|
|
2019 remaining
|
$
|
12.8
|
|
2020
|
13.5
|
|
|
2021
|
11.8
|
|
|
2022
|
11.3
|
|
|
2023
|
9.8
|
|
|
2024 and beyond
|
12.6
|
|
|
|
$
|
71.8
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator for basic and diluted EPS – net loss available to common stockholders
|
$
|
(33.3
|
)
|
|
$
|
(136.3
|
)
|
|
$
|
(60.6
|
)
|
|
$
|
(167.0
|
)
|
Denominator for basic EPS – weighted average shares
|
56,248,530
|
|
|
48,221,341
|
|
|
56,045,002
|
|
|
46,435,245
|
|
||||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Denominator for diluted EPS – weighted average shares
|
56,248,530
|
|
|
48,221,341
|
|
|
56,045,002
|
|
|
46,435,245
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.59
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(1.08
|
)
|
|
$
|
(3.60
|
)
|
Diluted
|
$
|
(0.59
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(1.08
|
)
|
|
$
|
(3.60
|
)
|
Freehold buildings
|
30 years
|
Furniture and fixtures
|
7 years
|
Fiber optic cable
|
20 years
|
Duct
|
40 years
|
Fiber optic network equipment
|
3 - 15 years
|
Leasehold improvements
|
up to 10 years
|
Computer hardware and software
|
3-5 years
|
Level 1:
|
Quoted prices for identical assets or liabilities in active markets that can be assessed at the measurement date.
|
Level 2:
|
Inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
Level 3:
|
Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation.
|
|
June 30, 2019
|
||||||||||||||
|
|
|
Quoted Prices in Active Markets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
(57.5
|
)
|
|
$
|
—
|
|
|
$
|
(57.5
|
)
|
|
$
|
—
|
|
|
December 31, 2018
|
||||||||||||||
|
|
|
Quoted Prices in Active Markets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
(22.4
|
)
|
|
$
|
—
|
|
|
$
|
(22.4
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
Fair Value Measurement Using
|
||||||||||
|
|
Total Carrying Value in Condensed Consolidated Balance Sheet
|
|
Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities (1)
(Level 1) |
||||||||||||
(amounts in millions)
|
|
June 30, 2019
|
|
December 31, 2018
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
Liabilities not recorded at fair value in the Financial Statements:
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt, including the current portion:
|
|
|
|
|
|
|
|
|
||||||||
US Term loan
|
|
$
|
1,752.3
|
|
|
$
|
1,761.2
|
|
|
$
|
1,585.8
|
|
|
$
|
1,648.9
|
|
EMEA Term loan
|
|
843.5
|
|
|
857.6
|
|
|
792.9
|
|
|
827.5
|
|
||||
7.875% Senior unsecured notes
|
|
575.0
|
|
|
575.0
|
|
|
465.8
|
|
|
488.8
|
|
||||
Revolving line of credit
|
|
85.0
|
|
|
59.0
|
|
|
85.0
|
|
|
59.0
|
|
||||
Other secured loans
|
|
10.1
|
|
|
18.1
|
|
|
10.1
|
|
|
18.1
|
|
||||
Total long-term debt, including current portion
|
|
$
|
3,265.9
|
|
|
$
|
3,270.9
|
|
|
$
|
2,939.6
|
|
|
$
|
3,042.3
|
|
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
||||
(Amounts in millions, except per share and share data)
|
|
|
|
||||
Revenue
|
$
|
461.3
|
|
|
$
|
932.5
|
|
Net loss
|
$
|
(40.3
|
)
|
|
$
|
(60.5
|
)
|
|
|
|
|
||||
Loss per share:
|
|
|
|
||||
Basic
|
$
|
(0.84
|
)
|
|
$
|
(1.30
|
)
|
Diluted
|
$
|
(0.84
|
)
|
|
$
|
(1.30
|
)
|
|
|
|
|
||||
Denominator for basic EPS – weighted average shares
|
48,221,341
|
|
|
46,435,245
|
|
||
Denominator for diluted EPS – weighted average shares
|
48,221,341
|
|
|
46,435,245
|
|
Goodwill - December 31, 2018
|
$
|
1,738.0
|
|
Adjustments to prior year business combinations
|
47.4
|
|
|
Foreign currency translation adjustments
|
(12.0
|
)
|
|
Goodwill - June 30, 2019
|
$
|
1,773.4
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Amortization
Period |
|
Gross Asset Cost
|
|
Accumulated Amortization
|
|
Net Book Value
|
|
Gross Asset Cost
|
|
Accumulated Amortization
|
|
Net Book Value
|
||||||||||||
Customer lists
|
3-20 years
|
|
$
|
756.2
|
|
|
$
|
274.3
|
|
|
$
|
481.9
|
|
|
$
|
757.7
|
|
|
$
|
233.7
|
|
|
$
|
524.0
|
|
Non-compete agreements
|
3-5 years
|
|
4.7
|
|
|
4.6
|
|
|
0.1
|
|
|
4.7
|
|
|
4.6
|
|
|
0.1
|
|
||||||
Intellectual property
|
10 years
|
|
38.5
|
|
|
13.3
|
|
|
25.2
|
|
|
38.6
|
|
|
11.3
|
|
|
27.3
|
|
||||||
Tradename
|
1-3 years
|
|
6.0
|
|
|
5.9
|
|
|
0.1
|
|
|
6.0
|
|
|
5.0
|
|
|
1.0
|
|
||||||
|
|
|
$
|
805.4
|
|
|
$
|
298.1
|
|
|
$
|
507.3
|
|
|
$
|
807.0
|
|
|
$
|
254.6
|
|
|
$
|
552.4
|
|
2019 remaining
|
$
|
41.6
|
|
2020
|
81.6
|
|
|
2021
|
80.0
|
|
|
2022
|
67.0
|
|
|
2023
|
54.5
|
|
|
2024 and beyond
|
182.6
|
|
|
Total
|
$
|
507.3
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Prepaid carrier costs
|
$
|
14.2
|
|
|
$
|
18.9
|
|
Prepaid selling, general and administrative
|
11.8
|
|
|
14.7
|
|
||
Short-term deposits
|
0.1
|
|
|
1.3
|
|
||
Taxes receivable
|
2.8
|
|
|
2.5
|
|
||
Deferred commissions
|
6.6
|
|
|
3.4
|
|
||
Other
|
7.1
|
|
|
8.4
|
|
||
|
$
|
42.6
|
|
|
$
|
49.2
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Compensation and benefits
|
$
|
27.2
|
|
|
$
|
36.9
|
|
Carrier costs
|
66.6
|
|
|
101.1
|
|
||
Restructuring
|
13.6
|
|
|
25.8
|
|
||
Interest rate swaps
|
57.5
|
|
|
22.4
|
|
||
Interest
|
23.7
|
|
|
3.2
|
|
||
Acquisition holdbacks
|
—
|
|
|
6.7
|
|
||
Accrued taxes
|
9.7
|
|
|
2.8
|
|
||
Selling, general and administrative
|
13.8
|
|
|
8.3
|
|
||
Accrued capital expenditures
|
1.5
|
|
|
7.7
|
|
||
Other
|
7.4
|
|
|
11.9
|
|
||
|
$
|
221.0
|
|
|
$
|
226.8
|
|
|
Six Months Ended June 30, 2019
|
||||||||||
|
Contract Term
|
|
|
||||||||
|
Less than 1 Year
|
|
Greater than 1 Year
|
|
Total
|
||||||
Balance, December 31, 2018
|
$
|
28.7
|
|
|
$
|
342.5
|
|
|
$
|
371.2
|
|
Revenue recognized from beginning balance
|
(24.3
|
)
|
|
(31.4
|
)
|
|
(55.7
|
)
|
|||
Increase in deferred revenue (gross)
|
107.1
|
|
|
12.2
|
|
|
119.3
|
|
|||
Revenue recognized on increase in deferred revenue
|
(75.7
|
)
|
|
(0.5
|
)
|
|
(76.2
|
)
|
|||
Foreign currency translation adjustments
|
—
|
|
|
(1.7
|
)
|
|
(1.7
|
)
|
|||
Balance, June 30, 2019
|
$
|
35.8
|
|
|
$
|
321.1
|
|
|
$
|
356.9
|
|
|
Contract Term
|
|
|
||||||||
|
Less than 1 Year
|
|
Greater than 1 Year
|
|
Total
|
||||||
2019 remaining
|
$
|
34.7
|
|
|
$
|
27.2
|
|
|
$
|
61.9
|
|
2020
|
1.1
|
|
|
40.0
|
|
|
41.1
|
|
|||
2021
|
—
|
|
|
36.7
|
|
|
36.7
|
|
|||
2022
|
—
|
|
|
35.3
|
|
|
35.3
|
|
|||
2023
|
—
|
|
|
33.6
|
|
|
33.6
|
|
|||
2024 and beyond
|
—
|
|
|
148.3
|
|
|
148.3
|
|
|||
|
$
|
35.8
|
|
|
$
|
321.1
|
|
|
$
|
356.9
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
US Term loan
|
$
|
1,752.3
|
|
|
$
|
1,761.2
|
|
EMEA Term loan
|
843.5
|
|
|
857.6
|
|
||
7.875% Senior unsecured notes
|
575.0
|
|
|
575.0
|
|
||
Revolving line of credit
|
85.0
|
|
|
59.0
|
|
||
Other secured loans
|
10.1
|
|
|
18.1
|
|
||
Total debt obligations
|
3,265.9
|
|
|
3,270.9
|
|
||
Unamortized debt issuance costs
|
(29.5
|
)
|
|
(31.6
|
)
|
||
Unamortized original issuance discount, net
|
(44.3
|
)
|
|
(47.8
|
)
|
||
Carrying value of debt
|
3,192.1
|
|
|
3,191.5
|
|
||
Less current portion
|
(34.8
|
)
|
|
(39.9
|
)
|
||
Long-term debt less current portion
|
$
|
3,157.3
|
|
|
$
|
3,151.6
|
|
Committed capacity
|
$
|
250.0
|
|
Borrowings outstanding
|
(85.0
|
)
|
|
Letters of credit issued
|
(10.9
|
)
|
|
Unused and available
|
$
|
154.1
|
|
Fiscal Quarter Ending
|
|
Maximum Ratio
|
June 30, 2019
|
|
6.50:1
|
September 30, 2019
|
|
6.50:1
|
December 31, 2019
|
|
6.50:1
|
March 31, 2020
|
|
6.50:1
|
June 30, 2020
|
|
6.50:1
|
September 30, 2020
|
|
6.25:1
|
December 31, 2020
|
|
6.25:1
|
March 31, 2021
|
|
5.50:1
|
June 30, 2021
|
|
5.00:1
|
September 30, 2021
|
|
5.00:1
|
December 31, 2021
|
|
4.50:1
|
March 31, 2022
|
|
4.50:1
|
June 30, 2022 and thereafter
|
|
4.25:1
|
Trade date
|
April 6, 2018
|
|
|
May 17, 2018
|
|
|
May 17, 2018
|
|
|
May 17, 2018
|
|
||||
Notional amount (in millions)
|
$
|
500.0
|
|
|
$
|
200.0
|
|
|
$
|
300.0
|
|
|
€
|
317.0
|
|
Term (years)
|
5
|
|
|
7
|
|
|
3
|
|
|
7
|
|
||||
Effective date
|
4/30/2018
|
|
|
6/29/2018
|
|
|
6/29/2018
|
|
|
6/29/2018
|
|
||||
Termination date
|
4/30/2023
|
|
|
5/31/2025
|
|
|
6/30/2021
|
|
|
5/31/2025
|
|
||||
Fixed rate
|
2.6430
|
%
|
|
3.0370
|
%
|
|
2.8235
|
%
|
|
0.8900
|
%
|
||||
Floating rate
|
1-month LIBOR
|
|
|
1-month LIBOR
|
|
|
1-month LIBOR
|
|
|
1-month EURIBOR
|
|
|
|
|
|
|
Fair Value
|
||||||||||||||||
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||
Derivative Instrument
|
Aggregate Notional Amount
|
Effective Date
|
Maturity Date
|
|
Asset Derivatives
|
|
Liability Derivatives
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||
Interest rate swap
|
$
|
500.0
|
|
4/30/2018
|
4/30/2023
|
|
$
|
—
|
|
|
$
|
(19.6
|
)
|
|
$
|
—
|
|
|
$
|
(4.4
|
)
|
Interest rate swap
|
$
|
200.0
|
|
6/29/2018
|
5/31/2025
|
|
—
|
|
|
(15.7
|
)
|
|
—
|
|
|
(6.9
|
)
|
||||
Interest rate swap
|
$
|
300.0
|
|
6/29/2018
|
6/30/2021
|
|
—
|
|
|
(7.0
|
)
|
|
—
|
|
|
(2.8
|
)
|
||||
Interest rate swap
|
€
|
317.0
|
|
6/29/2018
|
5/31/2025
|
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
(8.3
|
)
|
||||
|
|
|
|
|
$
|
—
|
|
|
$
|
(57.5
|
)
|
|
$
|
—
|
|
|
$
|
(22.4
|
)
|
|
Total Debt
|
||
2019 remaining
|
$
|
18.6
|
|
2020
|
30.4
|
|
|
2021
|
26.6
|
|
|
2022
|
26.2
|
|
|
2023
|
111.3
|
|
|
2024 and beyond
|
3,052.8
|
|
|
|
$
|
3,265.9
|
|
|
US Term Loan
|
|
EMEA Term Loan
|
|
7.875% Senior Unsecured Notes
|
|
Revolving Line of Credit
|
|
Total
|
||||||||||
Balance, December 31, 2018
|
$
|
(11.5
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
(14.3
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(31.6
|
)
|
Debt issuance costs incurred
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||||
Amortization
|
0.8
|
|
|
0.3
|
|
|
0.9
|
|
|
0.3
|
|
|
2.3
|
|
|||||
Balance, June 30, 2019
|
$
|
(10.7
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
(13.4
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(29.5
|
)
|
|
US Term Loan
|
|
EMEA Term Loan
|
|
7.875% Senior Unsecured Notes
|
|
Total
|
||||||||
Balance, December 31, 2018
|
$
|
(39.8
|
)
|
|
$
|
(22.0
|
)
|
|
$
|
14.0
|
|
|
$
|
(47.8
|
)
|
Amortization
|
2.8
|
|
|
1.6
|
|
|
(0.9
|
)
|
|
3.5
|
|
||||
Balance, June 30, 2019
|
$
|
(37.0
|
)
|
|
$
|
(20.4
|
)
|
|
$
|
13.1
|
|
|
$
|
(44.3
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Stock options
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
Restricted stock
|
7.4
|
|
|
8.4
|
|
|
15.7
|
|
|
13.9
|
|
||||
ESPP
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
||||
Total
|
$
|
7.6
|
|
|
$
|
8.8
|
|
|
$
|
16.3
|
|
|
$
|
14.6
|
|
|
June 30, 2019
|
||||
|
Unrecognized Compensation Cost
|
|
Weighted Average Remaining Period to be Recognized (Years)
|
||
Time-based stock options
|
$
|
0.2
|
|
|
0.59
|
Time-based restricted stock
|
62.8
|
|
|
2.44
|
|
Performance-based restricted stock (1)
|
7.2
|
|
|
1.00
|
|
Total
|
$
|
70.2
|
|
|
2.29
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Time-based restricted stock granted
|
84,590
|
|
|
242,465
|
|
|
682,731
|
|
|
618,687
|
|
||||
Fair value of time-based restricted stock granted
|
$
|
2.3
|
|
|
$
|
11.7
|
|
|
$
|
21.6
|
|
|
$
|
29.6
|
|
|
|
|
|
|
|
|
|
||||||||
Performance-based restricted stock granted
|
20,000
|
|
|
—
|
|
|
44,000
|
|
|
8,000
|
|
||||
Fair value of performance-based restricted stock granted
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
0.4
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Operating lease expense
|
$
|
25.0
|
|
|
$
|
53.6
|
|
Finance lease expense:
|
|
|
|
||||
Amortization of right of use assets
|
0.5
|
|
|
1.0
|
|
||
Interest on lease liabilities
|
0.9
|
|
|
2.1
|
|
||
Total finance lease expense
|
1.4
|
|
|
3.1
|
|
||
Short-term lease expense
|
5.3
|
|
|
10.7
|
|
||
Variable lease expense
|
7.3
|
|
|
15.0
|
|
||
Total lease expense
|
$
|
39.0
|
|
|
$
|
82.4
|
|
|
Six Months Ended June 30, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
59.9
|
|
Operating cash flows from finance leases
|
2.1
|
|
|
Financing cash flows from finance leases
|
0.6
|
|
|
|
|
||
Right of use assets obtained in exchange for new operating lease liabilities
|
12.8
|
|
|
Right of use assets obtained in exchange for new finance lease liabilities
|
—
|
|
|
June 30, 2019
|
|
Weighted average remaining lease term (amounts in years)
|
|
|
Operating leases
|
6.49
|
|
Finance leases
|
23.37
|
|
|
|
|
Weighted average discount rate
|
|
|
Operating leases
|
5.5
|
%
|
Finance leases
|
13.0
|
%
|
|
Operating Leases
|
|
Finance Leases
|
||||
2019 remaining
|
$
|
49.4
|
|
|
$
|
2.7
|
|
2020
|
91.4
|
|
|
5.5
|
|
||
2021
|
81.9
|
|
|
5.2
|
|
||
2022
|
63.3
|
|
|
5.2
|
|
||
2023
|
48.1
|
|
|
5.2
|
|
||
2024 and beyond
|
128.4
|
|
|
117.0
|
|
||
Total lease payments
|
462.5
|
|
|
140.8
|
|
||
Less: Present value discount
|
(80.8
|
)
|
|
(98.7
|
)
|
||
Present value of lease obligations
|
$
|
381.7
|
|
|
$
|
42.1
|
|
|
Network Supply
|
|
Other
|
||||
2019 remaining
|
$
|
245.8
|
|
|
$
|
4.0
|
|
2020
|
402.0
|
|
|
7.4
|
|
||
2021
|
281.0
|
|
|
5.6
|
|
||
2022
|
140.7
|
|
|
2.9
|
|
||
2023
|
32.9
|
|
|
2.1
|
|
||
2024 and beyond
|
128.1
|
|
|
5.8
|
|
||
|
$
|
1,230.5
|
|
|
$
|
27.8
|
|
•
|
We are subject to risks associated with the actions of network providers and a concentrated number of vendors and customers.
|
•
|
We could be subject to cyber-attacks and other security breaches.
|
•
|
Our network could suffer serious disruption if certain locations experience damage or as we add features and update our network.
|
•
|
We are subject to risks associated with purchase commitments to vendors for longer terms or in excess of the volumes committed by our underlying customers, or sales commitments to customers that extend beyond our commitments from our underlying suppliers.
|
•
|
We may be unable to establish and maintain peering relationships with other providers or agreements with carrier neutral data center operators.
|
•
|
We may be affected by information systems that do not perform as expected or by consolidation, competition, regulation, or a downturn in our industry.
|
•
|
We may be liable for the material that content providers distribute over our network.
|
•
|
We have generated net losses historically and may continue to do so.
|
•
|
We may fail to successfully integrate any future acquisitions or to efficiently manage our growth.
|
•
|
We may be unable to retain or hire key employees.
|
•
|
We are subject to risks relating to the international operations of our business.
|
•
|
We may be affected by future increased levels of taxation.
|
•
|
We have substantial indebtedness, which could prevent us from fulfilling our obligations under our debt agreements or subject us to interest rate risk.
|
•
|
Wide area networking, including software-defined wide area networking (“SD-WAN”), multiprotocol label switching ("MPLS") and virtual private LAN service ("VPLS");
|
•
|
Internet services, including IP transit, dedicated internet access, and broadband internet;
|
•
|
Transport & infrastructure services, including wavelength, Ethernet, colocation, dark fiber and video transport;
|
•
|
Voice services, including Session Initiation Protocol ("SIP") trunking and hosted Private Branch Exchange ("PBX"); and
|
•
|
Other managed services, including managed equipment, managed security, and managed hosting.
|
Fiscal Quarter Ending
|
|
Maximum Ratio
|
June 30, 2019
|
|
6.50:1
|
September 30, 2019
|
|
6.50:1
|
December 31, 2019
|
|
6.50:1
|
March 31, 2020
|
|
6.50:1
|
June 30, 2020
|
|
6.50:1
|
September 30, 2020
|
|
6.25:1
|
December 31, 2020
|
|
6.25:1
|
March 31, 2021
|
|
5.50:1
|
June 30, 2021
|
|
5.00:1
|
September 30, 2021
|
|
5.00:1
|
December 31, 2021
|
|
4.50:1
|
March 31, 2022
|
|
4.50:1
|
June 30, 2022 and thereafter
|
|
4.25:1
|
|
Three Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Variance
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Telecommunications services
|
$
|
433.8
|
|
|
$
|
326.8
|
|
|
$
|
107.0
|
|
|
32.7
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Cost of telecommunications services
|
237.5
|
|
|
179.4
|
|
|
58.1
|
|
|
32.4
|
%
|
|||
Selling, general and administrative expenses
|
97.6
|
|
|
89.7
|
|
|
7.9
|
|
|
8.8
|
%
|
|||
Severance, restructuring and other exit costs
|
6.4
|
|
|
5.3
|
|
|
1.1
|
|
|
20.8
|
%
|
|||
Depreciation and amortization
|
61.2
|
|
|
48.2
|
|
|
13.0
|
|
|
27.0
|
%
|
|||
Total operating expenses
|
402.7
|
|
|
322.6
|
|
|
80.1
|
|
|
24.8
|
%
|
|||
Operating income
|
31.1
|
|
|
4.2
|
|
|
26.9
|
|
|
640.5
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other expense:
|
|
|
|
|
|
|
|
|||||||
Interest expense, net
|
(49.3
|
)
|
|
(30.2
|
)
|
|
(19.1
|
)
|
|
63.2
|
%
|
|||
Loss on debt extinguishment
|
—
|
|
|
(13.8
|
)
|
|
13.8
|
|
|
*
|
|
|||
Other expense, net
|
(14.9
|
)
|
|
(97.6
|
)
|
|
82.7
|
|
|
(84.7
|
)%
|
|||
Total other expense
|
(64.2
|
)
|
|
(141.6
|
)
|
|
77.4
|
|
|
(54.7
|
)%
|
|||
Loss before income taxes
|
(33.1
|
)
|
|
(137.4
|
)
|
|
104.3
|
|
|
(75.9
|
)%
|
|||
Provision for (benefit from) income taxes
|
0.2
|
|
|
(1.1
|
)
|
|
1.3
|
|
|
(118.2
|
)%
|
|||
Net loss
|
$
|
(33.3
|
)
|
|
$
|
(136.3
|
)
|
|
$
|
103.0
|
|
|
(75.6
|
)%
|
* - Not meaningful
|
|
Three Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Variance
|
|
% Change
|
|||||||
Employee related compensation (excluding share-based compensation)
|
$
|
53.4
|
|
|
$
|
44.3
|
|
|
$
|
9.1
|
|
|
20.5
|
%
|
Share-based compensation
|
7.6
|
|
|
8.8
|
|
|
(1.2
|
)
|
|
(13.6
|
)%
|
|||
Transaction and integration expense
|
5.7
|
|
|
8.4
|
|
|
(2.7
|
)
|
|
(32.1
|
)%
|
|||
Other SG&A(1)
|
30.9
|
|
|
28.2
|
|
|
2.7
|
|
|
9.6
|
%
|
|||
Total
|
$
|
97.6
|
|
|
$
|
89.7
|
|
|
$
|
7.9
|
|
|
8.8
|
%
|
|
Six Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Variance
|
|
% Change
|
|||||||
Employee related compensation (excluding share-based compensation)
|
$
|
107.0
|
|
|
$
|
79.8
|
|
|
$
|
27.2
|
|
|
34.1
|
%
|
Share-based compensation
|
16.3
|
|
|
14.6
|
|
|
1.7
|
|
|
11.6
|
%
|
|||
Transaction and integration expense
|
14.9
|
|
|
14.3
|
|
|
.6
|
|
|
4.2
|
%
|
|||
Other SG&A(1)
|
63.5
|
|
|
49.1
|
|
|
14.4
|
|
|
29.3
|
%
|
|||
Total
|
$
|
201.7
|
|
|
$
|
157.8
|
|
|
$
|
43.9
|
|
|
27.8
|
%
|
Condensed Consolidated Statements of Cash Flows Data
|
Six Months Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
$ Variance
|
||||||
Net cash provided by operating activities
|
$
|
31.2
|
|
|
$
|
28.5
|
|
|
$
|
2.7
|
|
Net cash used in investing activities
|
(52.0
|
)
|
|
(2,345.7
|
)
|
|
2,293.7
|
|
|||
Net cash (used in) provided by financing activities
|
(1.2
|
)
|
|
2,286.5
|
|
|
(2,287.7
|
)
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Term loans
|
$
|
2,595.8
|
|
|
$
|
26.2
|
|
|
$
|
52.4
|
|
|
$
|
52.4
|
|
|
$
|
2,464.8
|
|
7.875% senior note
|
575.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
575.0
|
|
|||||
Other secured loans
|
10.1
|
|
|
8.5
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|||||
Revolving line of credit
|
85.0
|
|
|
—
|
|
|
—
|
|
|
85.0
|
|
|
—
|
|
|||||
Operating leases
|
462.5
|
|
|
96.2
|
|
|
161.1
|
|
|
96.2
|
|
|
109.0
|
|
|||||
Finance leases
|
140.8
|
|
|
5.5
|
|
|
10.5
|
|
|
10.5
|
|
|
114.3
|
|
|||||
Network supplier agreements (1)
|
1,230.5
|
|
|
489.2
|
|
|
561.9
|
|
|
66.1
|
|
|
113.3
|
|
|||||
Other (2)
|
27.8
|
|
|
8.0
|
|
|
10.9
|
|
|
3.9
|
|
|
5.0
|
|
|||||
|
$
|
5,127.5
|
|
|
$
|
633.6
|
|
|
$
|
798.4
|
|
|
$
|
314.1
|
|
|
$
|
3,381.4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Adjusted EBITDA
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(33.3
|
)
|
|
$
|
(136.3
|
)
|
|
$
|
(60.6
|
)
|
|
$
|
(167.0
|
)
|
Provision for income taxes
|
0.2
|
|
|
(1.1
|
)
|
|
2.0
|
|
|
0.5
|
|
||||
Interest and other expense, net
|
64.2
|
|
|
127.8
|
|
|
128.4
|
|
|
166.2
|
|
||||
Loss on debt extinguishment
|
—
|
|
|
13.8
|
|
|
—
|
|
|
13.8
|
|
||||
Depreciation and amortization
|
61.2
|
|
|
48.2
|
|
|
124.0
|
|
|
88.0
|
|
||||
Severance, restructuring and other exit costs
|
6.4
|
|
|
5.3
|
|
|
9.2
|
|
|
7.2
|
|
||||
Transaction and integration costs
|
5.7
|
|
|
8.4
|
|
|
14.9
|
|
|
14.3
|
|
||||
Share-based compensation
|
7.6
|
|
|
8.8
|
|
|
16.3
|
|
|
14.6
|
|
||||
Adjusted EBITDA
|
$
|
112.0
|
|
|
$
|
74.9
|
|
|
$
|
234.2
|
|
|
$
|
137.6
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
$
|
31.2
|
|
|
$
|
28.5
|
|
Purchases of property and equipment
|
(51.3
|
)
|
|
(32.5
|
)
|
||
Free Cash Flow
|
(20.1
|
)
|
|
(4.0
|
)
|
||
Severance, restructuring and other exit costs
|
16.9
|
|
|
11.6
|
|
||
Transaction and integration costs
|
14.8
|
|
|
13.8
|
|
||
Adjusted Free Cash Flow
|
11.6
|
|
|
21.4
|
|
||
Cash paid for interest
|
65.4
|
|
|
61.3
|
|
||
Adjusted Unlevered Free Cash Flow
|
$
|
77.0
|
|
|
$
|
82.7
|
|
|
Three Months Ended June 30, 2019
|
|||||||||||||
|
Revenues
|
|
Cost of Telecommunication Services
|
|
Selling, general and administrative expenses
|
|
Depreciation and amortization
|
|
Interest expense, net
|
|||||
EUR
|
37
|
%
|
|
26
|
%
|
|
36
|
%
|
|
45
|
%
|
|
21
|
%
|
GBP
|
12
|
%
|
|
18
|
%
|
|
7
|
%
|
|
9
|
%
|
|
—
|
%
|
Other
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
|
3
|
%
|
|
—
|
%
|
Total non-US
|
51
|
%
|
|
46
|
%
|
|
44
|
%
|
|
57
|
%
|
|
21
|
%
|
Exhibit Number
|
Description of Document
|
Second Amended and Restated Certificate of Incorporation, dated October 16, 2006 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed October 19, 2006).
|
|
Certificate of Amendment to Second Amended and Restated Certificate of Incorporation, dated December 31, 2013 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed January 6, 2014).
|
|
Certificate of Designations (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on August 8, 2019).
|
|
Section 382 Rights Agreement, dated August 8, 2019, by and between GTT Communications, Inc. and American Stock Transfer & Trust Company, LLC as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed August 8, 2019).
|
|
Incremental Revolving Credit Assumption Agreement, dated as of June 5, 2019, by and among GTT Communications, Inc., KeyBank National Association, as administrative agent and a letter of credit issuer, and the incremental revolving credit lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed June 11, 2019).
|
|
Amendment No. 1 to Credit Agreement, dated as of August 8, 2019, among GTT Communications, Inc., a Delaware corporation, as the borrower, GTT Communications B.V., KeyBank National Association, as administrative agent, and the lenders party thereto.
|
|
Certification of Chief Executive Officer of the Registrant, pursuant to Rules 13a-14(a) of the Securities Exchange Act of 1934.
|
|
Certification of Chief Financial Officer of the Registrant, pursuant to Rules 13a-14(a) of the Securities Exchange Act of 1934.
|
|
Certification of Chief Executive Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Financial Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
104*
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)
|
*
|
Filed herewith
|
|
|
GTT Communications, Inc.
|
|
|
|
|
|
|
|
By:
|
/s/ Richard D. Calder, Jr.
|
|
|
|
Richard D. Calder, Jr.
|
|
|
|
President, Chief Executive Officer and
|
|
|
|
Director (Principal Executive Officer)
|
|
|
|
|
|
|
By:
|
/s/ Michael T. Sicoli
|
|
|
|
Michael T. Sicoli
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
By:
|
/s/ Daniel M. Fraser
|
|
|
|
Daniel M. Fraser
|
|
|
|
Senior Vice President and Controller
|
Date:
|
August 8, 2019
|
|
(Principal Accounting Officer)
|
|
|
|
|
GIVEN under the common seal of/s/ Jessica Kaman
HIBERNIA NGS LIMITEDJessica Kaman, Director
and DELIVERED as a DEED:
/s/ Michael T. Sicoli
Michael T. Sicoli
Director/Secretary/Person
duly authorised by the board
|
GIVEN under the common seal of/s/ Jessica Kaman
HIBERNIA ATLANTIC CABLE SYSTEM LIMITEDJessica Kaman, Director
and DELIVERED as a DEED:
/s/ Michael T. Sicoli
Michael T. Sicoli
Director/Secretary/Person
duly authorised by the board
|
GIVEN under the common seal of/s/ Jessica Kaman
HIBERNIA EXPRESS (IRELAND) LIMITEDJessica Kaman, Director
and DELIVERED as a DEED:
/s/ Michael T. Sicoli
Michael T. Sicoli
Director/Secretary/Person
duly authorised by the board
|
GIVEN under the common seal of/s/ Jessica Kaman
PERSEUS TELECOM LIMITEDJessica Kaman, Director
and DELIVERED as a DEED:
/s/ Michael T. Sicoli
Michael T. Sicoli
Director/Secretary/Person
duly authorised by the board
|
Date:
|
August 8, 2019
|
/s/ Richard D. Calder, Jr.
|
|
|
Richard D. Calder, Jr.
|
|
|
President and Chief Executive Officer
|
Date:
|
August 8, 2019
|
/s/ Michael T. Sicoli
|
|
|
Michael T. Sicoli
|
|
|
Chief Financial Officer
|
Date:
|
August 8, 2019
|
/s/ Richard D. Calder, Jr.
|
|
|
Richard D. Calder, Jr.
|
|
|
President and Chief Executive Officer
|
Date:
|
August 8, 2019
|
/s/ Michael T. Sicoli
|
|
|
Michael T. Sicoli
|
|
|
Chief Financial Officer
|