Zayo To Advance Evaluation of REIT Conversion

Completion of Analysis Phase Leads to Engagement with the IRS and Conversion Preparation

BOULDER, Colo.--(BUSINESS WIRE)-- Zayo Group Holdings, Inc. (NYSE: ZAYO) announces that it has completed the first phase of its investigation on the advisability and feasibility of a conversion to a real estate investment trust for federal income tax purposes (a “REIT”), working diligently over the past several months both internally and with external advisors, including J.P. Morgan Securities LLC, Sullivan & Worcester LLP, and KPMG. Zayo has also closely followed market developments in the fiber optic cable space, including speaking with other similarly situated companies and learning from their experiences.

As previously disclosed, Zayo has been exploring the possibility of pursuing conversion to a REIT. Based on its findings, it is likely Zayo will have alternatives that would enable REIT conversion and, as a result, has begun the next phase of evaluation and preparation. To that end, Zayo has begun a direct dialog with the IRS in an effort to obtain clarity and support for its position, which may include seeking a private letter ruling from the IRS. Zayo has also begun to execute the organizational changes that are required to operate as a REIT, including the realignment of its business segments to clearly delineate the leasing of network assets from ancillary services, which includes the separation and potential divestiture or deconsolidation of Zayo’s Allstream business segment. Finally, Zayo is assessing what changes may be required to its financial systems and reporting that would be required in connection with any conversion to a REIT.

“At Zayo, we have a long and successful track record of creating shareholder value,” said Dan Caruso, chairman and CEO at Zayo. “Creating the optionality to convert to a REIT is potentially another avenue of value creation and is a high priority for Zayo, although the timing and probability of conversion remains uncertain.”

Zayo will continue to provide interim updates on its progress, including on its earnings calls. As with other companies that have considered REIT conversions, the dialog with the IRS could take anywhere from several quarters to perhaps as long as two to three years.

For more information about Zayo, visit zayo.com.

About Zayo Group

Zayo Group Holdings, Inc. (NYSE: ZAYO) provides communications infrastructure solutions, including fiber and bandwidth connectivity, colocation and cloud infrastructure to the world’s leading businesses. Customers include wireless and wireline carriers, media and content companies and finance, healthcare and other large enterprises. Zayo’s 128,000-mile network in North America and Europe includes extensive metro connectivity to thousands of buildings and data centers. In addition to high-capacity dark fiber, wavelength, Ethernet and other connectivity solutions, Zayo offers colocation and cloud infrastructure in its carrier-neutral data centers. Zayo provides users with flexible, customized solutions and self-service through Tranzact, an innovative online platform for managing and purchasing bandwidth. For more information, visit zayo.com.

Forward Looking Statements

This press release contains a number of forward-looking statements. Words, and variations of words such as “believe,” “expect,” “plan,” “continue,” “will,” “should,” and similar expressions are intended to identify our forward-looking statements. No assurance can be given that future results expressed or implied by the forward-looking statements will be achieved and actual results may differ materially from those contemplated by the forward-looking statements. These forward-looking statements involve risks and uncertainties, many of which are beyond our control. For additional information on these and other factors that could affect our forward-looking statements, see our risk factors, as they may be amended from time to time, set forth in our filings with the SEC, including our 10-K dated August 22, 2017. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation.

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Zayo Group

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Source: Zayo Group