(13) CONDENSED CONSOLIDATING FINANCIAL INFORMATION

As discussed Note 5 – Long-Term Debt, as of March 31, 2017, the Company has outstanding $1,430.0 million 2023 Unsecured Notes, $900.0 million 2025 Unsecured Notes and $800.0 millions 2027 Unsecrued Notes. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Company’s current and future domestic restricted subsidiaries. Zayo Capital does not have independent assets or operations. The non-guarantor subsidiaries consist of the foreign subsidiaries that were acquired in conjunction with the Company's acquisitions.

The accompanying condensed consolidating financial information has been prepared and is presented to display the components of the Company’s balance sheets, statements of operations and statements of cash flows in a manner that allows an existing or future holder of the Company’s Notes to review and analyze the current financial position and recent operating results of the legal subsidiaries that guarantee the Company’s debt obligations.

The operating activities of the separate legal entities included in the Company’s consolidated financial statements are interdependent. The accompanying condensed consolidating financial information presents the results of operations, financial position and cash flows of each legal entity. Zayo Group and its guarantors provide services to each other during the normal course of business. These transactions are eliminated in the consolidated results of operations of the Company. Activity related to income taxes is included at the issuer, or Zayo Group level, and the Company's non-guarantor subsidiaries and is not allocated to the Company's guarantor subsidiaries in the condensed consolidated financial information presented below.

Condensed Consolidating Balance Sheets (Unaudited)

March 31, 2017


	Zayo Group,
	LLC		Guarantor		Non-Guarantor
	(Issuer)		Subsidiaries		Subsidiaries		Eliminations		Total
	(in millions)
Assets
Current assets
Cash and cash equivalents	$	104.6	$	2.2	$	90.9	$	—	$	197.7
Trade receivables, net of allowance		116.3		2.0		71.4		—		189.7
Prepaid expenses		45.3		0.4		26.7		—		72.4
Other assets		39.9		—		(3.2)		—		36.7
Total current assets		306.1		4.6		185.8		—		496.5
Property and equipment, net		4,151.9		—		687.6		—		4,839.5
Intangible assets, net		1,044.2		11.5		140.9		—		1,196.6
Goodwill		1,650.5		14.7		157.4		—		1,822.6
Deferred income taxes, net		51.8		—		—		—		51.8
Other assets		105.6		—		24.2		—		129.8
Related party receivable		330.2		—		—		(330.2)		—
Investment in subsidiary		586.5		—		—		(586.5)		—
Total assets	$	8,226.8	$	30.8	$	1,195.9	$	(916.7)	$	8,536.8
Liabilities and member's equity
Current liabilities
Current portion of long-term debt	$	25.0	$	—	$	—	$	—	$	25.0
Accounts payable		36.7		—		13.5		—		50.2
Accrued liabilities		207.0		0.6		82.2		—		289.8
Accrued interest		75.3		—		—		—		75.3
Capital lease obligations, current		6.6		—		1.2		—		7.8
Deferred revenue, current		109.8		0.2		34.2		—		144.2
Total current liabilities		460.4		0.8		131.1		—		592.3
Long-term debt, non-current		5,498.8		—		—		—		5,498.8
Related party debt, long-term		—		—		330.2		(330.2)		—
Capital lease obligation, non-current		66.1		—		10.4		—		76.5
Deferred revenue, non-current		839.4		—		101.2		—		940.6
Deferred income taxes, net		0.1		—		39.9		—		40.0
Other long-term liabilities		32.4		—		26.6		—		59.0
Total liabilities		6,897.2		0.8		639.4		(330.2)		7,207.2

Member's equity
Member's interest		1,884.1		18.7		546.2		(587.7)		1,861.3
Accumulated other comprehensive loss		(32.9)		—		13.7		—		(19.2)
Accumulated deficit		(521.6)		11.3		(3.4)		1.2		(512.5)
Total member's equity		1,329.6		30.0		556.5		(586.5)		1,329.6
Total liabilities and member's equity	$	8,226.8	$	30.8	$	1,195.9	$	(916.7)	$	8,536.8

Condensed Consolidating Balance Sheets (Unaudited)

June 30, 2016


	Zayo Group,
	LLC		Guarantor		Non-Guarantor
	(Issuer)		Subsidiaries		Subsidiaries		Eliminations		Total
	(in millions)
Assets
Current assets
Cash and cash equivalents	$	91.3	$	3.0	$	75.8	$	—	$	170.1
Trade receivables, net of allowance		75.5		2.1		70.8		—		148.4
Prepaid expenses		33.7		0.3		34.8		—		68.8
Other assets		(2.0)		—		11.3		—		9.3
Total current assets		198.5		5.4		192.7		—		396.6
Property and equipment, net		3,375.7		—		703.8		—		4,079.5
Intangible assets, net		775.5		12.9		146.5		—		934.9
Goodwill		1,025.5		14.6		174.4		—		1,214.5
Other assets		65.0		—		29.5		—		94.5
Related party receivable		346.7		—		—		(346.7)		—
Investment in subsidiary		550.9		—		—		(550.9)		—
Total assets	$	6,337.8	$	32.9	$	1,246.9	$	(897.6)	$	6,720.0
Liabilities and member's equity
Current liabilities
Accounts payable	$	70.3		—		26.7		—		97.0
Accrued liabilities		116.0		0.7		110.2		—		226.9
Accrued interest		28.6		—		—		—		28.6
Capital lease obligations, current		4.2		—		1.6		—		5.8
Deferred revenue, current		89.1		0.2		40.1		—		129.4
Total current liabilities		308.2		0.9		178.6		—		487.7
Long-term debt, non-current		4,085.3		—		—		—		4,085.3
Related party debt, long-term		—		—		346.7		(346.7)		—
Capital lease obligation, non-current		32.0		—		12.9		—		44.9
Deferred revenue, non-current		681.1		—		112.2		—		793.3
Deferred income taxes, net		3.3		—		44.7		—		48.0
Other long-term liabilities		24.1		—		32.9		—		57.0
Total liabilities		5,134.0		0.9		728.0		(346.7)		5,516.2

Member's equity
Member's interest		1,786.2		22.3		543.2		(579.1)		1,772.6
Accumulated other comprehensive loss		—		—		4.5		—		4.5
Accumulated deficit		(582.4)		9.7		(28.8)		28.2		(573.3)
Total member's equity		1,203.8		32.0		518.9		(550.9)		1,203.8
Total liabilities and member's equity	$	6,337.8	$	32.9	$	1,246.9	$	(897.6)	$	6,720.0

Condensed Consolidating Statements of Operations

For the three months ended March 31, 2017


	Zayo Group,
	LLC		Guarantor		Non-Guarantor
	(Issuer)		Subsidiaries		Subsidiaries		Eliminations		Total
	(in millions)
Revenue	$	394.5	$	5.4	$	150.3	$	—	$	550.2
Operating costs and expenses
Operating costs (excluding depreciation amortization and including stock-based compensation)		121.7		3.9		69.4		—		195.0
Selling, general and administrative expenses (including stock-based compensation)		73.9		0.3		34.6		—		108.8
Depreciation and amortization		126.8		0.5		28.4		—		155.7
Total operating costs and expenses		322.4		4.7		132.4		—		459.5
Operating income		72.1		0.7		17.9		—		90.7
Other expenses
Interest expense		(57.4)		—		(5.6)		—		(63.0)
Loss on extinguishment of debt		(4.5)		—		—		—		(4.5)
Foreign currency loss on intercompany loans		1.6		—		2.3		—		3.9
Other income		0.4		—		0.1		—		0.5
Equity in net earnings of subsidiaries		15.5		—		—		(15.5)		—
Total other expense, net		(44.4)		—		(3.2)		(15.5)		(63.1)
Income from operations before income taxes		27.7		0.7		14.7		(15.5)		27.6
Provision for income taxes		0.7		—		(0.1)		—		0.6
Net income	$	27.0		0.7		14.8		(15.5)	$	27.0

Condensed Consolidating Statements of Operations

For the nine months ended March 31, 2017


	Zayo Group,
	LLC		Guarantor		Non-Guarantor
	(Issuer)		Subsidiaries		Subsidiaries		Eliminations		Total
	(in millions)
Revenue	$	1,087.9	$	14.0	$	459.9	$	—	$	1,561.8
Operating costs and expenses
Operating costs (excluding depreciation amortization and including stock-based compensation)		320.4		10.0		218.3		—		548.7
Selling, general and administrative expenses (including stock-based compensation)		207.5		1.0		110.6		—		319.1
Depreciation and amortization		352.2		1.4		72.0		—		425.6
Total operating costs and expenses		880.1		12.4		400.9		—		1,293.4
Operating income		207.8		1.6		59.0		—		268.4
Other expenses
Interest expense		(153.4)		—		(16.6)		—		(170.0)
Loss on extinguishment of debt		(4.5)		—		—		—		(4.5)
Foreign currency loss on intercompany loans		(5.6)		—		(19.1)				(24.7)
Other income		0.4		—		0.3		—		0.7
Equity in net earnings of subsidiaries		27.0		—		—		(27.0)		—
Total other expense, net		(136.1)		—		(35.4)		(27.0)		(198.5)
Income from operations before income taxes		71.7		1.6		23.6		(27.0)		69.9
Provision/(benefit) for income taxes		9.2		—		(1.8)		—		7.4
Net income	$	62.5	$	1.6	$	25.4	$	(27.0)	$	62.5

Condensed Consolidating Statements of Operations (Unaudited)

For the three months ended March 31, 2016


	Zayo Group,
	LLC		Guarantor		Non-Guarantor
	Issuer		Subsidiaries		Subsidiaries		Eliminations		Total
	(in millions)
Revenue	$	331.6	$	4.6	$	141.8	$	—	$	478.0
Operating costs and expenses
Operating costs (excluding depreciation amortization and including stock-based compensation)		105.0		3.1		62.7		—		170.8
Selling, general and administrative expenses (including stock-based compensation)		57.6		0.3		54.6		—		112.5
Depreciation and amortization		110.1		0.5		26.6		—		137.2
Total operating costs and expenses		272.7		3.9		143.9		—		420.5
Operating income		58.9		0.7		(2.1)		—		57.5
Other expenses
Interest expense		(52.2)		—		(5.5)		—		(57.7)
Foreign currency loss on intercompany loans		(11.0)		—		(0.1)		—		(11.1)
Other expense		(0.2)		—		—		—		(0.2)
Equity in net earnings of subsidiaries		(0.4)		—		—		0.4		—
Total other expense, net		(63.8)		—		(5.6)		0.4		(69.0)
(Loss)/Income from operations before income taxes		(4.9)		0.7		(7.7)		0.4		(11.5)
Provision for income taxes		8.0		—		(0.2)		—		7.8
Net (loss)/income	$	(12.9)	$	0.7	$	(7.5)	$	0.4	$	(19.3)

Condensed Consolidating Statements of Operations (Unaudited)

For the nine months ended March 31, 2016


	Zayo Group,
	LLC		Guarantor		Non-Guarantor
	Issuer		Subsidiaries		Subsidiaries		Eliminations		Total
	(in millions)
Revenue	$	979.0	$	13.8	$	221.6	$	—	$	1,214.4
Operating costs and expenses
Operating costs (excluding depreciation amortization and including stock-based compensation)		297.7		9.9		88.4		—		396.0
Selling, general and administrative expenses (including stock-based compensation)		205.2		0.8		76.1		—		282.1
Depreciation and amortization		319.4		1.4		47.2		—		368.0
Total operating costs and expenses		822.3		12.1		211.7		—		1,046.1
Operating income		156.7		1.7		9.9		—		168.3
Other expenses
Interest expense		(146.7)		—		(16.0)		—		(162.7)
Foreign currency loss on intercompany loans		(28.4)		—		(0.5)		—		(28.9)
Other expense		—		—		(0.4)		—		(0.4)
Equity in net earnings of subsidiaries		0.5		—		—		(0.5)		—
Total other expense, net		(174.6)		—		(16.9)		(0.5)		(192.0)
(Loss)/income from operations before income taxes		(17.9)		1.7		(7.0)		(0.5)		(23.7)
Provision for income taxes		20.0		—		1.6		—		21.6
Net (loss)/income	$	(37.9)	$	1.7	$	(8.6)	$	(0.5)	$	(45.3)

Condensed Consolidating Statements of Cash Flows

Nine months ended March 31, 2017


	Zayo Group,
	LLC		Guarantor		Non-Guarantor
	(Issuer)		Subsidiaries		Subsidiaries		Total
	(in millions)
Net cash provided by operating activities	$	575.9	$	2.8	$	86.2	$	664.9

Cash flows from investing activities:
Purchases of property and equipment		(573.7)		—		(56.5)		(630.2)
Acquisitions, net of cash acquired		(1,428.3)		—		1.5		(1,426.8)
Other		1.5		—		—		1.5
Net cash used in investing activities		(2,000.5)		—		(55.0)		(2,055.5)
Cash flows from financing activities:
Proceeds from debt		3,293.8		—		—		3,293.8
Principal payments on long-term debt		(1,837.4)		—		—		(1,837.4)
Principal repayments on capital lease obligations		(3.8)		—		(1.0)		(4.8)
Payment of debt issuance costs		(29.0)		—		—		(29.0)
Contributions to parent		10.8		—		(10.8)		—
Receipt from/(payment of) principal balance of intercompany loans		3.6		(3.6)		—		—
Net cash provided by/(used in) financing activities		1,438.0		(3.6)		(11.8)		1,422.6
Net cash flows		13.4		(0.8)		19.4		32.0
Effect of changes in foreign exchange rates on cash		(0.1)		—		(4.3)		(4.4)
Net (decrease)/increase in cash and cash equivalents		13.3		(0.8)		15.1		27.6
Cash and cash equivalents, beginning of period		91.3		3.0		75.8		170.1
Cash and cash equivalents, end of period	$	104.6	$	2.2	$	90.9	$	197.7

Condensed Consolidating Statements of Cash Flows

Nine months ended March 31, 2016


	Zayo Group,
	LLC		Guarantor		Non-Guarantor
	(Issuer)		Subsidiaries		Subsidiaries		Total
	(in millions)
Net cash provided by operating activities	$	464.2	$	1.5	$	72.2	$	537.9

Cash flows from investing activities:
Purchases of property and equipment		(475.2)		—		(41.5)		(516.7)
Acquisitions, net of cash acquired		(323.7)		—		(93.3)		(417.0)
Net cash used in investing activities		(798.9)		—		(134.8)		(933.7)
Cash flows from financing activities:
Proceeds from debt		395.2		—		—		395.2
Principal payments on long-term debt		(13.4)		—		—		(13.4)
Principal payments on capital lease obligations		(3.0)		—		(0.3)		(3.3)
Payment of debt issuance costs		(2.9)		—		—		(2.9)
Contributions to parent		(95.8)		—		14.7		(81.1)
Loan to parent		(99.1)		—		99.1		—
Excess tax benefit from stock-based compensation		9.0		(1.1)		—		7.9
Net cash provided by financing activities		190.0		(1.1)		113.5		302.4
Net cash flows		(144.7)		0.4		50.9		(93.4)
Effect of changes in foreign exchange rates on cash		—		—		0.1		0.1
Net decrease in cash and cash equivalents		(144.7)		0.4		51.0		(93.3)
Cash and cash equivalents, beginning of period		275.9		3.1		29.0		308.0
Cash and cash equivalents, end of period	$	131.2	$	3.5	$	80.0	$	214.7