Zayo Group Holdings, Inc. (Exact Name of Registrant As Specified in Its Charter)

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Zayo Group Holdings, Inc. (Exact Name of Registrant As Specified in Its Charter) Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36690 Zayo Group Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) DELAWARE 26-1398293 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1821 30th Street, Unit A, Boulder, CO 80301 (Address of Principal Executive Offices) (303) 381-4683 (Registrant’s Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: ZAYo Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.001 per share ZAYO New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ ☐ Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of December 31, 2018, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $5.2 billion based on the closing price as reported on the New York Stock Exchange. As of August 29, 2019, the number of outstanding shares of common stock of Zayo Group Holdings, Inc. was 236,270,377 shares. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement for the 2019 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. Table of Contents INDEX GLOSSARY OF TERMS i PART I. Item 1. BUSINESS 1 Item 1A. RISK FACTORS 18 Item 1B. UNRESOLVED STAFF COMMENTS 36 Item 2. PROPERTIES 36 Item 3. LEGAL PROCEEDINGS 36 Item 4. MINE SAFETY DISCLOSURE 37 PART II. Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 38 Item 6. SELECTED FINANCIAL DATA 40 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 41 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 68 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 69 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 69 Item 9A. CONTROLS AND PROCEDURES 69 Item 9B OTHER INFORMATION 70 PART III. Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 71 Item 11. EXECUTIVE COMPENSATION 71 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 71 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 71 Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 71 PART IV. Item 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 72 SIGNATURES 76 Table of Contents GLOSSARY OF TERMS Our industry uses many terms and acronyms that may not be familiar to you. To assist you in reading this Annual Report on Form 10-K, we have provided definitions of some of these terms below. Bandwidth infrastructure—Offerings of fiber and lit fiber (i.e., fiber that has been activated, or “lit”, by provider-supplied components) provisioned over the fiber network, mobile infrastructure connected to (or capable of being connected to) the fiber network, and data center based colocation and interconnection offerings. Lit fiber-based bandwidth infrastructure offerings include Wavelength, Ethernet, IP and SONET; fiber-based offerings that are not lit are sold as dark fiber capacity. Data center-based bandwidth infrastructure offerings include colocation (space and power) as well as interconnection within facilities. Capacity—The information‑carrying ability of a lit fiber offering. Below is a list of some common units of capacity for various lit fiber offerings: · 1G, 2.5G, 10G, 40G and 100G—Data communication circuits capable of accommodating Wavelengths at 1G, 2.5G, 10G, 40G, and 100G, respectively. · 10Mb and 100Mb—Data communication circuits capable of accommodating Ethernet communications at 10 Mb and 100 Mb, respectively. Carrier—A provider of communications services that commonly include voice, data, and Internet services. Carrier hotel—A data center facility containing many carriers and other telecommunications service providers, all of which may be widely interconnected. These facilities generally have high‑capacity power service, backup batteries and generators, fuel storage, riser cable systems, large cooling capability, and advanced fire suppression systems. Cellular tower—An outdoor structure primarily used to attach and house antennae used by wireless carriers to aggregate and transmit mobile voice and data. CLEC—Competitive local exchange carrier; a local telecommunications provider licensed to compete with some or all of the offerings of the ILEC. Colocation—The housing of telecommunications equipment, other communications equipment, servers and storage components within the same location. Operators of these colocation facilities typically also make available interconnection offerings to their tenants, enabling the tenants to cross connect with other customers located within the same facility and/or with bandwidth infrastructure providers. Conduit—A pipe usually made of metal, ceramic, or plastic that protects underground fiber optic cables. Cybersecurity— Preventative techniques used to protect the integrity of networks, programs and data from attack, damage, or unauthorized access. Dark fiber—Fiber that has not yet been connected to telecommunications access components or optronics and, therefore, has not yet been activated or “lit” by the provider-supplied components. Data center—A facility used to house computer systems, backup storage components, routers, servers and other Internet and other telecommunications equipment. Data centers generally have environmental controls (air conditioning, fire suppression, etc.), redundant/backup power supplies, redundant data communications connections, and high security. DWDM—Dense Wavelength-division multiplexing. The term “dense” refers to the number of channels being multiplexed. A DWDM system typically has the capability to multiplex up to 40 Wavelength channels. Ethernet—The standard local area network (LAN) protocol. Ethernet was originally specified as a standard for connection of components that share a company or home network, as well as to a cable modem or DSL modem for Internet access. Due to its ubiquity in the LAN, Ethernet has become a popular communication protocol in metropolitan, regional and long haul networks as well. i Table of Contents Fiber or fiber optic cables—Thin filaments of glass through which light beams travel over long distances. Fiber miles—The number of route miles in a network multiplied by the number of fiber strands within each cable on that network. For example, if a ten‑mile network segment has a 144 count fiber installed, it would represent 10x144 or 1,440 fiber miles. Fiber‑to‑the‑Tower or FTT—The connection of cellular tower sites to the wider terrestrial network via fiber connections. G—Gigabits per second, a measure of telecommunications speed. One gigabit equals one billion bits of information. ILEC—Incumbent local exchange carrier; a traditional telecommunications provider that, prior to the Telecommunications Act of 1996, had the exclusive right and responsibility for providing telecommunications offerings in its local service area, and in connection therewith typically built or acquired access to key elements of bandwidth infrastructure. Interconnection—A connection between two customers who are located within a single data center or within a single colocation space using fiber and/or other means. IP—Internet protocol; the network protocol used in accommodating movement of data over the Internet. IRU and IRU contract—Indefeasible right of use. The exclusive, unrestricted, and indefeasible right to use one, a pair, or more strands of fiber of a fiber cable. IRU contracts are typically long‑term in nature (20 years) and may or may not contain restrictions on the use of the fiber by the lessee.
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