Network operator still expecting to hit 6% to 8% growth target in future, while also pursuing REIT options.

August 22, 2018

2 Min Read

BOULDER, Colo -- Zayo Group Holdings, Inc., a global player in Communications Infrastructure, announced results for the three months ended June 30, 2018.

Fourth quarter operating income increased $14.9 million and net income increased by $20.4 million over the previous quarter. Basic and diluted net income per share during the quarter was $0.18. During the three months ended June 30, 2018, capital expenditures were $208.0 million.

As of June 30, 2018, the Company had $256.7 million of cash and $441.9 million available under its revolving credit facility.

Fourth Fiscal Quarter 2018 Financial Highlights included:

  • $657.6 million of consolidated revenue, including $546.6 million from the Communications Infrastructure segments and $111.0 million from the Allstream segment.

  • Net income of $43.8 million, including $30.6 million from the Communications Infrastructure segments and a net income of $13.2 million from the Allstream segment.

  • $324.9 million of adjusted EBITDA, including $300.7 million from Communications Infrastructure and $24.2 million from the Allstream segment.

  • Bookings of $8.0 million, gross installs of $7.7 million, churn of 1.2% and net installs of $1.5 million, all on a monthly recurring revenue (MRR) and monthly amortized revenue (MAR) basis, excluding the Allstream segment.

  • Adjusted unlevered free cash flow of $155.4 million.

On May 3, 2018, the Company announced that it completed the first phase of its investigation on the advisability and feasibility of a conversion to a real estate investment trust (REIT) for U.S. federal income tax purposes. The Company has begun the next phase of its evaluation and preparation for a potential conversion to a REIT. As part of these efforts, the Company has begun a direct dialogue with the U.S. Internal Revenue Service (IRS) in an effort to obtain clarity and support for its position, and is seeking a private letter ruling from the IRS. The Company’s ability to qualify for taxation as a REIT will depend upon its continuing compliance following REIT conversion with various requirements, including requirements related to the nature of its assets, the sources of its income and the distributions to its stockholders.

The Company is requesting that its PLR address whether its revenues from dark and lit fiber satisfy applicable REIT income tests, and the Company’s ultimate decision to convert to a REIT may depend upon a favorable ruling from the IRS on this topic. The Company submitted a PLR request to the IRS in July 2018, but the IRS may not provide a response until 2019 or later or may not respond at all.

Zayo Group Inc. (NYSE: ZAYO)

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like