~~Security.~~ ~~Our~~GTT's Managed Security is available as a cloud-based or premises-based security service and ~~premise-based security services provide~~provides a comprehensive, multi-layered security solution that protects the network while meeting the most stringent security standards. Our Unified Threat Management ~~("UTM")~~ services include advanced firewall, intrusion detection, anti-virus, web filtering, and anti-spam. GTT's distributed denial of services ("DDoS") Mitigation service detects and removes malicious traffic, ensuring business continuity for our clients, even in the event of a large-scale DDoS attack. The service utilizes a next-generation DDoS platform technology, which provides immediate threat detection, deep packet inspection analytics and filtering of compromised traffic at GTT’s scrubbing centers. We offer a full range of compliancy packages, which include developing, deploying, configuring, and monitoring network and security assets, and providing documentation to comply with audits.

GTT’s Managed Hosting service includes application hosting and management.

Voice ~~and Unified Communication~~

We offer local voice service in over 60 countries around the world, along with global long-distance and toll-free services. Our SIP Trunking service ~~integrates voice, video, and chat onto a single IP~~delivers worldwide PSTN access to client telephony equipment over an integrated data connection, driving efficiency and productivity ~~organization-wide.~~organization-wide while allowing clients to retain control of their core voice infrastructure. Our ~~Enterprise~~Hosted PBX service allows clients to eliminate traditional voice infrastructure with communication services delivered through the ~~cloud. This unified communication service offering includes fully hosted~~cloud and ~~hybrid models~~a wide array of features and customization choices for ~~maximum flexibility.~~

~~Video Transport~~

We provide a suite of fully-managed video transport services. Our services are designed to support our clients' requirements for stringent broadcast quality, providing 100% quality of service for transmission of live events, sports entertainment,each site and news. Our service options include Dedicated, Occasional Use, and IP Video. We manage individual services, multicast distribution, and entire client networks, supporting all forms of signal management required for media workflow. GTT's video transport services are based on the core principle of "any signal, any format, anywhere." Our clients include many of the world's top broadcasters and cable programming providers.

~~Access Services~~

Within North America, GTT operates an access infrastructure composed of approximately 1,750 central offices ("COs"), which includes 835 COs that are Ethernet over Copper ("EoC") enabled. GTT Access Services include EoC and Digital Subscriber Line ("DSL") services, which are designed to provide reliable and affordable network access utilizing traditional copper wire infrastructure. EoC is available in both asymmetric and symmetric configurations. Our symmetric service offers guaranteed bandwidth, with available speeds from 2Mbps to 45Mbps.

user.

Operations

Supplier Management

We have strong, long-standing relationships with a diverse group of ~~approximately 2,000~~over 3,000 suppliers from which we source our global network connectivity, last-mile bandwidth capacity and other services. We maintain multiple supplier agreements covering diverse routes throughout our network to ensure service continuity, competitive pricing, bandwidth capacity and improved carrier responsiveness.

For our core global network, supplier agreements for lit capacity are typically one-year commitments with an option to renew, which enables us to (i) maintain significant flexibility regarding the amount of bandwidth purchased and (ii) consistently benefit from the latest competitive pricing. For last-mile connections, we typically structure the term to match the term of the underlying customer contract.

Our supplier management team continually monitors supplier performance, network information and pricing to provide greater choice, flexibility and cost savings for our customers.

Network Operations

Our network is supported by ~~global~~ Network Operations Centers ("NOCs") located in ~~Austin, Texas; Belfast, Northern Ireland; Dublin, Ireland; Denver, Colorado; Lemont Furnace, Pennsylvania; Pune, India;~~the U.S., Ireland, Bulgaria, and ~~Seattle, Washington.~~India. The NOCs provide active monitoring, prioritization and resolution of network-related events 24 hours per day, 365 days per year. Our NOCs also respond to customer network inquiries, and coordinate and notify customers of maintenance activities.

IT Systems

We maintain several proprietary client facing and internally focused IT systems. We provide customers with advanced routing control and visibility into their network performance. Our proprietary online client portal (EtherVision) provides customers with online access to monitor their network performance and track real-time statistics.

We have developed a comprehensive Client Management Database ("CMD") that manages our network, customer and supplier contracts, sales quoting, service provisioning, and customer invoicing. CMD also supports our financial reporting and other operational processes as well as our integration of acquired companies. Our CMD system has been in operation since our inception, and its capabilities and processes are continually enhanced and automated. The CMD system provides our management team with visibility into all areas of our operations and allows us to operate with simplicity, speed and agility.

Sales and Marketing

We market our products and services through a global direct sales force and indirect sales channels. We have sales representatives throughout North America, Europe, South America, the Middle East, and Asia. Our sales activities are specifically focused on building relationships with new clients and driving expansion within existing client accounts. Because we typically sell to large, global clients and our markets are highly competitive, we believe that personal relationships and quality of service delivery remain important in winning new and repeat customer business. We supplement our direct sales approach with a trusted community of agents and system integrators who already have personal relationships with many leading multinational clients.

GTT's marketing activities aim to generate broad awareness and promote our value proposition to multinational clients, applying both traditional and digital marketing methods that target key client decision makers.

Customers

Our customer base consists of enterprise, carrier, and government clients around the world. Our multinational enterprise client base includes leading organizations in financial services, healthcare, technology, manufacturing, retail, media and entertainment, and ~~business~~professional services. Carrier customers include some of the largest telecommunications ~~firms~~ in the world, who rely on our global network to meet their large capacity requirements and extend their reach.

Our customer contracts for network services range from one to three years or more for the initial term. Following the initial term, these agreements typically provide for automatic renewal for specified periods ranging from one month to one year. Our prices are fixed for the duration of the contract, and we typically bill monthly in advance for such services. If a customer terminates its agreement, the terms of our customer contracts typically require full recovery of any amounts due for the remainder of the term or, at a minimum, our liability to any underlying suppliers.

Competition

We operate in a highly competitive industry. Our competitors include incumbent ~~local exchange~~telecom carriers, competitive ~~local exchange~~telecom carriers, internet service providers, cable companies, and other facilities-based operators. Many of these competitors are large, well-capitalized, and have strong market presence, brand recognition, and existing customer relationships. We also face competition from smaller providers who offer network services and managed enterprise solutions similar to ours. Specific competitors vary based on geography, product offering, and vertical market.

Regulatory Matters

We are subject to US federal and state, and foreign regulations. In the United States, the Federal Communications Commission ("FCC") has jurisdiction over interstate telecommunications and international telecommunications that originate or terminate in the United States. State Public Utilities Commissions ~~("PUCs")~~ have similar powers with respect to intrastate telecommunications. Foreign country laws and regulations typically apply to telecommunications that originate or terminate in, or in some instances traverse, that country. The regulation of the telecommunications industry is constantly evolving, and varies from state to state and from country to country.

Where certification, licensing or authorization is required, carriers are required to comply with certain ongoing responsibilities. For example, we are required to submit periodic reports to various telecommunications regulatory authorities relating to the provision of services within relevant jurisdictions. In addition, we are responsible for the payment of certain regulatory fees and the collection and remittance of certain surcharges and fees associated with the provision of telecommunications services depending upon the jurisdiction, the type of service and the type of customer.

Intellectual Property

We do not own any material patent registrations, applications, or licenses.

Available Information

We make available free of charge, through our website, www.gtt.net, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and exhibits and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, promptly after they are electronically filed with the Securities and Exchange Commission (the "SEC"). We caution you that the information on our website is not part of this or any other report we file with, or furnish to, the SEC.

In addition to our website, you may read and copy any materials we file with the SEC at ~~www.sec.gov.~~www.sec.gov.

ITEM 1A. RISK FACTORS

We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control. Below are the risks and uncertainties we believe are most important for you to consider. Additional risks and uncertainties not presently known to us, which we currently deem immaterial or which are similar to those faced by other companies in our industry or telecommunications and/or technology companies in general, may also impair our business operations. If any of these risks or uncertainties actually occurs, our business, financial condition and operating results could be materially adversely affected.

Risks Related to Our Business and Operations

Our business could suffer delays and problems due to the actions of network providers on whom we are partially dependent.

Most of our customers are connected to our network by means of communications lines that are provided as services by local telephone companies and others. We may experience problems with the installation, maintenance, and pricing of these lines and other communications links, which could adversely affect our results of operations and our plans to add additional customers to our network using such services. We attempt to mitigate this risk by using many different providers so that we have alternatives for linking a customer to our network. Competition among the providers tends to improve installation intervals, maintenance, and pricing.

Our network may be the target of potential cyber-attacks and other security breaches that could have significant negative consequences.

Our business depends on our ability to limit and mitigate interruptions or degradation to our network availability. Our network, including our routers, may be vulnerable to unauthorized access, computer viruses, cyber-attacks, ~~distributed denial of service ("DDOS"),~~DDoS, and other security breaches. Cyber-attacks have increased in frequency, scope, and potential harm in recent years. An attack on or security breach of our network could result in interruption or cessation of services, our inability to meet our service level commitments, and potentially compromise customer data transmitted over our network. If cyber-thieves gain improper access to our network, they may be able to access, steal, publish, delete, misappropriate, or modify confidential customer data, and additional harm to customers could be perpetrated by third parties who are given access to such confidential customer data. We cannot guarantee that our security measures will not be circumvented, thereby resulting in compromised customer data or network failures or interruptions that could impact our network availability and have a material adverse effect on our business, financial condition, and operational results. We may be required to expend significant resources to protect against such threats, and may experience litigation, a reduction in revenues, ~~litigation,~~ and a diminution in goodwill, caused by a breach. Although our customer contracts limit our liability, affected customers and third parties may seek to recover damages from us under various legal theories.

We are required to maintain, repair, upgrade and replace our network and facilities and our network could suffer serious disruption if certain locations experience serious damage.

Our business requires that we maintain, upgrade, repair, and periodically replace parts of our network facilities. This requires, and will continue to require, management time and the expenditure of capital on a regular basis. In the event that we fail to maintain, upgrade, or replace essential portions of our network facilities, it could lead to a material degradation in the level of service that we provide, which would adversely affect our business.

There are certain locations through which a large amount of our Internet traffic passes. Examples are facilities in which we exchange traffic with other carriers, the facilities through which our ~~transatlantic~~subsea cable traffic passes, and certain of our network hub sites. If any of these facilities were destroyed or seriously damaged, a significant amount of our network traffic could be disrupted. Because of the large volume of traffic passing through these facilities, our ability (and the ability of carriers with whom we exchange traffic) to quickly restore service would be challenged. Our ~~transatlantic~~ subsea cables may require repairs for damage caused by natural disasters, fishing vessels, or intentional damage by activist groups. These repairs may take significant time and our ability to re-route traffic to other cable systems or procure services on competitors ~~transatlantic~~ subsea cables may affect our ability to service these customers.

In the event of such damage to any of our owned infrastructure, we will be required to incur expenses to repair such damage. There could be parts of our network or the networks of other carriers that could not be quickly restored or that would experience substantially reduced service for a significant time. If such a disruption occurs, ~~our reputation could be negatively impacted, which~~we may ~~cause us to~~ lose customers ~~and adversely affect our ability to attract~~or have difficulty attracting new customers, resulting in an adverse effect on our business, operating results, and cash flows.

We may have difficulty and experience disruptions as we add features and upgrade our network.

We are constantly upgrading our network and implementing new features and services. This process involves reconfiguring our network and making changes to our operating systems. In doing so we may experience disruptions that affect our customers, our revenue, and our ability to grow. We may require additional resources to accomplish this work in a timely manner. That could cause us to incur unexpected expenses or delay portions of this effort to the detriment of our ability to provide service to our customers.

We may make purchase commitments to vendors for longer terms or in excess of the volumes committed by our underlying customers, or we may occasionally have certain sales commitments to customers that extend beyond our commitments from our underlying suppliers.

We attempt to match our purchase of network capacity from our suppliers and service commitments from our customers. However, from time to time, we may contract for obligations to our suppliers that exceed the duration of the related customer contracts or that are for capacity in excess of the amount for which we have customer commitments. This could arise:

based upon the terms and conditions available from our suppliers;

from an expectation that we will be able to utilize the excess capacity;

as a result of a breach of a customer’s commitment to us; and

to support fixed elements of our network.

Under any of these circumstances, we may incur the cost of the network capacity from our supplier without having corresponding revenue from customers, which could result in a material and adverse impact on our operating results.

Conversely, from time to time, our customer may contract for services that extend beyond the duration of the underlying vendor commitment. This may cause us to seek a renewal of services orfor a shorter period than we typically seek, or a shortened service period at higher prices. Our financial results could be adversely affected if we are unable to purchase extended service from a supplier at a cost sufficiently low to maintain margins for the remaining term of our commitment to a customer. While we have not historically encountered material price increases from suppliers with respect to continuation or renewal of services after expiration of initial contract terms, we cannot be certain that we would be able to obtain similar terms and conditions from suppliers going forward.

Our connections to the Internet require us to establish and maintain peering relationships with other providers, which we may not be able to maintain.

The Internet is composed of various network providers who operate their own networks that interconnect at public and private interconnection points. Our network is one such network. In order to obtain Internet connectivity for our network, we must establish and maintain relationships with other providers, including many providers that are customers, and incur the necessary capital costs to locate our equipment and connect our network at these various interconnection points.

By entering into what are known as settlement-free peering arrangements, providers agree to exchange traffic between their respective networks without charging each other. Our ability to avoid the higher costs of acquiring paid dedicated network capacity (transit or paid peering) and to maintain high network performance is dependent upon our ability to establish and maintain peering relationships and to increase the capacity of these peering connections. The terms and conditions of our peering relationships may also be subject to adverse changes, which we may not be able to control. If we are not able to maintain or increase our peering relationships in all of our markets on favorable terms, we may not be able to provide our customers with high performance or affordable or reliable services, which could cause us to lose existing and potential customers, damage our reputation and have a material adverse effect on our business.

Our core network infrastructure equipment is provided by a ~~single vendor.~~concentrated number of vendors.

We purchase from ~~Juniper Networks, Inc. ("Juniper")~~ the majority of the routers and transmission equipment used in our core IP ~~network.~~network from a concentrated number of vendors. If ~~Juniper fails~~these vendors fail to provide equipment on a timely basis or ~~fails~~fail to meet our performance expectations, including in the event that ~~Juniper fails~~these vendors fail to enhance, maintain, upgrade or improve ~~its~~their products, hardware or software we purchase from them when and how we need, we may be delayed or unable to provide services as and when requested by our customers. We also may be unable to upgrade our network and face greater difficulty maintaining and expanding our network. Transitioning from Juniper to another vendor would be disruptive because of the time and expense required to learn to install, maintain, and operate the new vendor's equipment and to operate a multi-vendor network. Any ~~such~~ disruption could increase our costs, decrease our operating efficiencies, and have an adverse effect on our business, results of operations, and financial condition.

~~Juniper~~These vendors may also be subject to litigation with respect to the technology on which we depend, including litigation involving claims of patent infringement. Such claims have been growing rapidly in the communications industry. Regardless of the merit of these claims, they can result in the diversion of technical and management personnel, or require us to obtain non-infringing technology or enter into license agreements for the technology on which we depend. There can be no assurance that such non-infringing technology or licenses will be available on acceptable terms and conditions, if at all.

If the information systems that we depend on to support our customers, network operations, sales, billing, and financial reporting do not perform as expected, our operations and our financial results may be adversely affected.

We rely on complex information systems to operate our network and support our other business functions. Our ability to track sales leads, close sales opportunities, provision services, bill our customers for our services, and prepare our financial statements depends upon the effective integration of our various information systems. If our information systems, individually or collectively, fail or do not perform as expected, our ability to process and provision orders, to make timely payments to vendors, to ensure that we collect amounts owed to us and prepare our financial statements would be adversely affected. Such failures or delays could result in increased capital expenditures, customer and vendor dissatisfaction, loss of business or the inability to add new customers or additional services, and the inability to prepare accurate and timely financial statements, all of which would adversely affect our business and results of operations.

Our business depends on agreements with carrier neutral data center operators, which we could fail to obtain or maintain.

Our business depends upon access to customers in carrier neutral data centers, which are facilities in which many large users of the Internet house the computer servers that deliver content and applications to users by means of the Internet and provide access

to multiple Internet access networks. Most carrier neutral data centers allow any carrier to operate within the facility (for a standard fee). We expect to enter into additional agreements with carrier neutral data center operators as part of our growth plan. Current government regulations do not require carrier neutral data center operators to allow all carriers access on terms that are reasonable

or nondiscriminatory. We have been successful in obtaining agreements with these operators in the past and have generally found that the operators want to have us located in their facilities because we offer low-cost, high-capacity Internet service to their customers. Any deterioration in our existing relationships with these operators could harm our sales and marketing efforts and could substantially reduce our potential customer base.

We may be liable for the material that content providers distribute over our network.

Although we believe our liability for third-party information stored on or transmitted through our networks is limited, the liability of private network operators is impacted both by changing technology and evolving legal principles. As a private network provider, we could be exposed to legal claims relating to third-party content stored or transmitted on our networks. Such claims could involve, among others, allegations of defamation, invasion of privacy, copyright infringement, or aiding and abetting restricted activities such as online gambling or pornography. If we decide to implement additional measures to reduce our exposure to these risks or if we are required to defend ourselves against these kinds of claims, our operating results and financial condition could be negatively affected.

Historically, we have generated net losses and used more cash than we have generated from operations, and we may continue to do so.

We have historically generated net losses and such losses may continue in the future. These net losses primarily have been driven by acquisition-related expenses, depreciation, amortization, interest expense, and share-based compensation. We cannot assure you that we will generate net income in the future.

We have also consistently consumed our entire positive cash flow generated from operating activities with our investing activities. Our investing activities have consisted principally of the acquisition of businesses and customer contracts as well as additions to property and equipment. We have funded the excess of cash used in investing activities over cash provided by operating activities with proceeds from equity and debt issuances.

We intend to continue to invest in expanding our business and pursuing acquisitions that we believe provide an attractive return on our capital. These investments may continue to exceed the amount of cash flow available from operations after debt service requirements. To the extent that our investments exceed our cash flow from operations, we plan to rely on potential future debt or equity issuances, which could increase interest expense or dilute the interest of stockholders, as well as cash on hand and borrowings under our revolving credit facility. We cannot assure you, however, that we will be able to obtain or continue to have access to sufficient capital on reasonable terms, or at all, to successfully grow our business.

Our revenue is relatively concentrated among a small number of customers, and the loss of any of these customers could significantly harm our business, financial condition, results of operations, and cash flows.

Revenues from our top five customers accounted for ~~approximately~~less than 10% of our revenue for the year ended December 31, ~~2017.~~2018. We currently depend, and expect to continue to depend, upon a relatively small number of customers for a significant percentage of our revenue. Many of these customers are also competitors for some or all of our service offerings. Our customer contracts typically have terms of one to three years. Our customers may elect not to renew these contracts. Furthermore, our customer contracts are terminable for cause if we breach a material provision of the contract. We may face increased competition and pricing pressure as our customer contracts become subject to renewal. Our customers may negotiate renewal of their contracts at lower rates, for fewer services or for shorter terms. Many of our customers are in the telecommunications industry, which is undergoing consolidation. To the extent that two or more of our customers combine, they may be able to use their greater size to negotiate lower prices from us and may purchase fewer services from us, especially if their networks overlap. If we are unable to successfully renew our customer contracts on commercially acceptable terms, or if our customer contracts are terminated, our business could suffer.

We are also subject to credit risk associated with the concentration of our accounts receivable from our key customers. If one or more of these customers were to become bankrupt, insolvent or otherwise were unable to pay for the services provided by us, we may incur significant write-offs of accounts receivable or incur impairment charges.

Future acquisitions are a component of our strategic plan, and will include integration and other risks that could harm our business.

We have grown rapidly and intend to continue to acquire complementary businesses and assets. This exposes us to the risk that when we evaluate a potential acquisition target we over-estimate the target’s value and, as a result, pay too much for it. We also cannot be certain that we will be able to successfully integrate acquired assets or the operations of the acquired entity with our existing operations. Businesses and assets that we have acquired or may acquire in the future may be subject to unknown or contingent

liabilities for which we may have limited or no recourse against the sellers. While we usually require the sellers to indemnify us with respect to breaches of representations and warranties that survive, such indemnification is often limited and subject to various claim expiration periods, materiality thresholds, a significant deductible or an aggregate cap on losses. As a result, there is no guarantee that we will recover any amounts with respect to losses due to breaches by the sellers of their representations and warranties. In addition, the total amount of costs and expenses that we may incur with respect to liabilities associated with acquired properties and entities may exceed our expectations, which may adversely affect our operating results and financial condition.

Difficulties with integration could cause material customer disruption and dissatisfaction, which could in turn increase churn and reduce new sales. Additionally, we may not be able to integrate acquired businesses in a manner that permits us to realize the cost synergies we anticipate. Our actual cost synergies, cost savings, growth opportunities, and efficiency and operational benefits resulting from any acquisition may be lower and may take longer to realize than we currently expect.

We may incur additional debt or issue additional equity to assist in the funding of these potential transactions, which may increase our leverage and/or dilute the interest of stockholders. Further, additional transactions could cause disruption of our ongoing business and divert management’s attention from the management of daily operations to the closing and integration of the acquired business. Acquisitions also involve other operational and financial risks such as:

increased demand on our existing employees and management related to the increase in the size of the business and the possible distraction from our existing business due to the acquisition;

loss of key employees and salespeople of the acquired business;

liabilities of the acquired business, both unknown and known at the time of the consummation of the acquisition;

discovery that the financial statements we relied on to buy a business were incorrect;

expenses associated with the integration of the operations of the acquired business;

the possibility of future impairment, write-downs of goodwill and other intangibles associated with the acquired business;

finding that the services and operations of the acquired business do not meet the level of quality of those of our existing services and operations; and

determining that the internal controls of the acquired business were inadequate.

We are growing rapidly and may not maintain or efficiently manage our growth.

We have rapidly grown our company through acquisitions of companies and assets and the acquisition of new customers through our own sales efforts. In order to become consistently profitable and consistently cash flow positive, we need to both retain existing customers and continue to add a large number of new customers. While no single customer accounted for more than ~~10%~~5% of our ~~2017~~2018 revenue, the loss of or reduced purchases from several significant customers could impair our growth, cash flow, and profitability. Customers can be reluctant to switch providers of bandwidth services because it can involve substantial expense and technical difficulty. That can make it harder for us to acquire new customers through our own sales efforts. Our expansion may place strains on our management and our operational and financial infrastructure. Our ability to manage our growth will be particularly dependent upon our ability to:

expand, develop, and retain an effective sales force and other qualified personnel;

maintain the quality of our operations and our service offerings;

attract customers to switch from their current providers to us in spite of the costs associated with switching providers;

maintain and enhance our system of internal controls to ensure timely and accurate reporting; and

expand our operational information systems in order to support our growth, including integrating new customers without disruption.

We expect that economies of scale will allow us to increase revenue while incurring incremental costs that are proportionately lower than those applicable to our existing businesses. If the increased costs required to support our revenue growth turn out to be greater than anticipated, we may be unable to improve our profitability and/or cash flows even if our revenue growth goals are achieved.

We are highly dependent on our management team and other key employees.

We expect that our continued success will largely depend upon the efforts and abilities of members of our management team and other key employees. Our success also depends upon our ability to identify, attract, develop, and retain qualified employees.

If we lose members of our management team or other key employees, or if we are unable to recruit qualified employees in the future, it would likely have a material adverse effect on our business and our cash flows.

The international operations of our business expose us to risks that could materially and adversely affect the business.

We have operations and investments outside of the United States, as well as rights to subsea cable capacity extending to other countries, that expose us to risks inherent in international operations. These include:

general economic, social, and political conditions;

the difficulty of enforcing agreements and collecting receivables through certain foreign legal systems;

tax rates in some foreign countries may exceed those in the U.S.;

foreign currency exchange rates may fluctuate, which could adversely affect our results of operations and the value of our international assets and investments;

foreign earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls, or other restrictions;

difficulties and costs of compliance with foreign laws and regulations that impose restrictions on our investments and operations, with penalties for noncompliance, including loss of licenses and monetary fines;

difficulties in obtaining licenses or interconnection arrangements on acceptable terms, if at all; and

changes in U.S. laws and regulations relating to foreign trade and investment.

In addition, on June 23, 2016, the citizens of the United Kingdom voted to leave the European Union ("Brexit"). In March 2017, the British government invoked Article 50 of the Treaty on European Union, which formally triggered a negotiation process with the European Union. In March 2018, the parties agreed to a transition period of 21 months -- from March 29, 2019 until the end of 2020 -- before the United Kingdom leaves the European Union completely, assuming approval of the negotiated withdrawal agreement. Withdrawal from the European Union is controversial in the United Kingdom notwithstanding the 2016 vote. In December 2018, the European Court of Justice ruled that, subject to certain conditions, a member state could revoke notification of its intention to withdraw from the European Union. The British government and the European Union have now negotiated a withdrawal agreement and the European Union has approved that agreement, but the British Parliament has not yet approved it. As a result, there remains considerable uncertainty around the withdrawal. Failure to obtain parliamentary approval of the negotiated withdrawal agreement could mean that the United Kingdom would be forced to leave the European Union on March 29, 2019 (a so-called “hard Brexit”). The consequences for the economies of the European Union and the United Kingdom are unknown and unpredictable, especially in the case of a hard Brexit. Our operations in the United Kingdom and Europe, as well as our North American operations, could be impacted by the global economic uncertainty caused by Brexit. If we are unable to manage any of these risks effectively, our business could be adversely affected.

We may as part of our expansion strategy increase our exposure to international investments and operations.

Some of our customer agreements contain service level obligations that could subject us to liability or the loss of revenue.

Some of our contracts with customers contain service level guarantees (including network availability) and service delivery date targets, which, if not met, enable customers to claim credits and, under certain conditions, terminate their agreements. Our failure to meet our service level guarantees could adversely affect our business, financial condition, and results of operations. Lost revenue from failure to meet service level guarantees was de minimis for the years ended December 31, ~~2016~~2017 and ~~2017.~~2018. While we typically have carve-outs for force majeure events, many events, such as fiber cuts, equipment failure, and third-party vendors being unable to meet their underlying commitments with us, could impact our ability to meet our service level agreements, which could adversely affect our financial ~~conditions~~condition and operations.

Our international operations expose us to currency risk.

We conduct a portion of our business using foreign currencies, predominately the British Pound Sterling and the Euro. Fluctuation of the U.S. Dollar could adversely affect our consolidated revenue. Since we tend to incur costs in the same currency in which those operations realize revenue, the effect on operating income and operating cash flow is largely mitigated. However, if the U.S. Dollar ~~continues~~ to ~~fluctuate~~fluctuates significantly, future revenues, operating income, and operating cash flows could be adversely affected.

Our future tax liabilities are not predictable or controllable. If we become subject to increased levels of taxation, our financial condition and operations could be negatively impacted.

We provide telecommunication and other services in multiple jurisdictions primarily across the United States and Europe and are, therefore, subject to multiple sets of complex and varying tax laws and rules. We cannot predict the amount of future tax liabilities to which we may become subject. Any increase in the amount of taxation incurred as a result of our operations or due to legislative or regulatory changes would be adverse to us. In addition, we may become subject to income tax audits by many tax jurisdictions throughout the world. It is possible that certain tax positions taken by us could result in tax liabilities for us. While we

believe that our current provisions for taxes are reasonable and appropriate, we cannot assure you that these items would be settled for the amounts accrued or that we will not identify additional exposures in the future.

We cannot assure you whether, when or in what amounts we will be able to use our net operating losses, or when they will be depleted.

At December 31, ~~2017,~~2018, we had ~~$163.4~~$216.5 million of U.S. federal net operating loss carryforwards ("NOLs") net of limitations under Section ~~382.~~382 and $911.2 million of foreign NOLs. Under certain circumstances, these NOLs can be used to offset our future federal and certain state taxable income.

If we experience an "ownership change," as defined in Section 382 of the Internal Revenue Code and related Treasury regulations, our ability to use the NOLs could be substantially limited. This limit could impact the timing of the usage of the NOLs, thus accelerating cash tax payments or causing NOLs to expire prior to their use, which could affect the ultimate realization of the NOLs.

Furthermore, transactions that we enter into, as well as transactions by existing or future 5% stockholders that we do not participate in, could cause us to incur an "ownership change," which could prevent us from fully utilizing our NOLs to reduce our federal income taxes. These limitations could cause us not to pursue otherwise favorable acquisitions and other transactions involving our capital stock, or could reduce the net benefits to be realized from any such transactions.

We issue projected results and estimates for future periods from time to time, and such projections and estimates are subject to inherent uncertainties and may prove to be inaccurate.

Financial information, results of operations and other projections that we may issue from time to time are based upon our assumptions and estimates. While we believe these assumptions and estimates to be reasonable when they are developed, they are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. You should understand that certain unpredictable factors could cause our actual results to differ from our expectations and those differences may be material. No independent expert participates in the preparation of these estimates. These estimates should not be regarded as a representation by us as to our results of operations during such periods as there can be no assurance that any of these estimates will be realized. In light of the foregoing, we caution you not to place undue reliance on these estimates. These estimates constitute forward-looking statements.

If we do not comply with laws regarding corruption and bribery, we may become subject to monetary or criminal penalties.

The United States Foreign Corrupt Practices Act generally prohibits companies and their intermediaries from bribing foreign officials for the purpose of obtaining or keeping business. Other countries have similar laws to which we are subject. We currently take precautions to comply with these laws. However, these precautions may not protect us against liability, particularly as a result of actions that may be taken in the future by agents and other intermediaries through whom we have exposure under these laws even though we may have limited or no ability to control such persons. Our competitors include foreign entities that are not subject to the United States Foreign Corrupt Practices Act or laws of similar stringency, and hence we may be at a competitive disadvantage.

Risks Related to Our Industry

Consolidation among companies in the telecommunications industry could further strengthen our competitors and adversely impact our business.

The telecommunications industry is very competitive and continues to undergo significant consolidation. There are many reasons for consolidation in our industry, including the desire for companies to acquire customers or assets in regions where they currently have no or insufficient presence. The consolidation within the industry may cause customers to disconnect services to move them to their own networks, or consolidate buying with other providers. Additionally, consolidation in the industry could further strengthen our competitors, give them greater financial resources and geographic reach, and allow them to put additional pressure on prices for our services. Furthermore, consolidation can reduce the number of suppliers available to contract with, resulting in decreased flexibility and cost savings opportunity.

The sector in which we operate is highly competitive, and we may not be able to compete effectively.

We face significant competition from incumbent carriers, Internet service providers, and facilities-based network operators. Relative to us, many of these providers have significantly greater financial, technological, and personnel resources, more well-established brand names, superior marketing capabilities, greater network reach, larger customer bases, and more diverse strategic plans and service offerings. Most of these competitors are also our customers and suppliers. Intense competition from these traditional and new communications companies has led to declining prices and margins for many communications services, and we expect

this trend to continue as competition intensifies in the future. Our competitors may also introduce new technologies or services that could make our services less attractive to potential customers.

Certain of our services are subject to regulation that could change or otherwise impact us in an adverse manner.

Communications services are subject to domestic and international regulation at the federal, state, and local levels. These regulations affect our business and our existing and potential competitors. Our communications services and communications networks in Europe and elsewhere are subject to regulatory oversight by national communications regulators, such as the United Kingdom’s Office of Communications ("Ofcom"). In addition, in April 2016, the European Commission adopted the General Data Protection Regulation ("GDPR"), which will be in effect as of May 2018. The GDPR extends the scope of European privacy laws to any entity which processes personal data about E.U. residents in connection with the offer of goods or services or the monitoring of behavior. Complying with the GDPR and other emerging and changing privacy requirements may cause us to incur substantial

~~costs or require us to change our business practices. Noncompliance could result in penalties or significant legal liability, and could affect our ability to retain and attract customers.~~ In the United States, both the ~~Federal Communications Commission ("FCC")~~FCC and the state public utility commissions or similar regulatory authorities ~~(the "State PUCs")~~ typically require us to file periodic reports, pay various regulatory fees and assessments, and to comply with their regulations. Such compliance can be costly and burdensome and may affect the way we conduct our business. Delays in receiving required regulatory approvals (including approvals relating to acquisitions or financing activities or for interconnection agreements with other carriers), the enactment of new and adverse international or domestic legislation or regulations (including those pertaining to broadband initiatives and net-neutrality), or the denial, modification, or termination by a regulator of any approval or authorization, could have a material adverse effect on our business.

Our communications services and communications networks in Europe and elsewhere are also subject to regulatory oversight by national communications regulators, such as the United Kingdom’s Office of Communications ("Ofcom"). In addition, in April 2016, the European Commission adopted the General Data Protection Regulation ("GDPR"), which went into effect in May 2018. GDPR extends the scope of European privacy laws to any entity which processes personal data about European Union residents in connection with the offer of goods or services or the monitoring of behavior. GDPR imposes numerous new requirements for the collection, use and disclosure of personal information, including: more stringent requirements relating to data subject consent; what information must be shared with data subjects regarding how their personal information is used; the obligation to notify regulators and affected individuals of personal data breaches; extensive new internal privacy governance obligations; and obligations to honor expanded rights of individuals in relation to their personal information (e.g., the right to access, correct and delete their data). Complying with GDPR and other emerging and changing privacy requirements may cause us to incur substantial costs or require us to change our business practices. Noncompliance could result in penalties or significant legal liability, and could affect our ability to retain and attract customers.

Local governments also exercise legal authority that may have an adverse effect on our business because of our need to obtain rights-of-way for certain portions of our network. While local governments may not prohibit persons from providing telecommunications services nor treat telecommunications service providers in a discriminatory manner, they can affect the timing and costs associated with our use of public rights-of-way. Further, the current regulatory landscape is subject to change through judicial review of current legislation and rulemaking by the FCC, Ofcom, and other domestic, foreign, and international rulemaking bodies. These rulemaking bodies regularly consider changes to their regulatory framework and fee obligations. Changes in current regulation may make it more difficult to obtain the approvals necessary to operate our business, significantly increase the regulatory fees to which we are subject, or have other adverse effects on our future operations in the United States and Europe.

We are subject to various forms of regulation from the Federal Communications Commission and state regulatory commissions in the states in which we operate, which limit our pricing flexibility and cost structure for regulated voice and high-speed Internet products.

As of December 31, ~~2017~~2018 we had operating authority from each of the 48 states and the District of Columbia in which we conducted operations, and we are subject to various forms of regulation from the regulatory commissions in each of these areas as well as from the FCC. The FCC has primary jurisdiction over interstate services including the rates that we pay other telecommunications companies to use their network and other issues related to interstate service. Future revenues, costs, and capital investment in our acquired ~~Global Capacity business~~businesses could be adversely affected by material changes to or decisions regarding applicability of government requirements. Federal and state communications laws and regulations may be amended in the future, and other laws and regulations may affect our business. In addition, certain laws and regulations applicable to us and our competitors may be, and have been, challenged in the courts and could be changed at any time. We cannot predict future developments or changes to the regulatory environment or the impact such developments or changes would have. In addition, these regulations could create significant compliance costs for us.

Our growth and financial health are subject to a number of economic risks.

A downturn in the world economy, especially the economies of North America and Europe, would negatively impact our growth. We would be particularly impacted by a decline in the development of new applications and businesses that make use of the Internet, which depend on numerous factors beyond our control. Our revenue growth is predicated on growing use of the Internet that makes up for the declining prices of Internet service. An economic downturn could impact the Internet business more significantly than other businesses that are less dependent on new applications and growth in the use of those applications because of the retrenchment by consumers and businesses that typically occur in an economic downturn.

Unfavorable general global economic conditions could negatively impact our operating results and financial condition.

Unfavorable general global economic conditions could negatively affect our business. Although it is difficult to predict the impact of general economic conditions on our business, these conditions could adversely affect the affordability of, and customer demand for, our services, and could cause customers to delay or forgo purchases of our services. One or more of these circumstances could cause our revenue to decline. Also, our customers may not be able to obtain adequate access to credit, which could affect their ability to purchase our services or make timely payments to us. The current economic conditions, including federal fiscal and monetary policy actions, may lead to inflationary conditions in our cost base, particularly in our lease and personnel related expenses. This could harm our margins and profitability if we are unable to increase prices or reduce costs sufficiently to offset the effects of inflation in our cost base. For these reasons, among others, if challenging economic conditions persist or worsen, our operating results and financial condition could be adversely affected.

Terrorist activity throughout the world, military action to counter terrorism, or natural disasters could adversely impact our business.

The continued threat of terrorist activity and other acts of war or hostility have had, and may continue to have, an adverse effect on business, financial, and general economic conditions internationally. Effects from these events and any future terrorist activity, including cyber terrorism, may, in turn, increase our costs due to the need to provide enhanced security, which would adversely

affect our business and results of operations. These circumstances may also damage or destroy our Internet infrastructure and may adversely affect our ability to attract and retain customers, our ability to raise capital and the operation and maintenance of our network access points. We are also susceptible to other catastrophic events such as major natural disasters, extreme weather, fire, or similar events that could affect our headquarters, other offices, our network, infrastructure or equipment, which could adversely affect our business.

Risk Factors Related to Our Indebtedness

Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our debt agreements.

We have substantial indebtedness. Our substantial debt may have important consequences. For instance, it could:

make it more difficult for us to satisfy our financial obligations, including those relating to our debt;

require us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, which will reduce funds available for other business purposes, including the growth of our operations, capital expenditures, and acquisitions;

place us at a competitive disadvantage compared with some of our competitors that may have less debt and better access to capital resources; and

limit our ability to obtain additional financing required to fund working capital and capital expenditures, for strategic acquisitions, and for other general corporate purposes.

Our ability to satisfy our obligations, including our debt, depends on our future operating performance and on economic, financial, competitive, and other factors, many of which are beyond our control. Our business may not generate sufficient cash flow, and future financings may not be available to provide sufficient net proceeds, to meet these obligations or to successfully execute our business strategy.

Despite our leverage, we may still be able to incur more debt. This could further exacerbate the risks that we and our subsidiaries face.

We and our subsidiaries may incur additional indebtedness, including additional secured indebtedness, in the future. The terms of our debt facilities restrict, but do not completely prohibit, us from doing so. If new debt or other liabilities are added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.

We may be subject to interest rate risk, and increasing interest rates may increase our interest expense.

Borrowings under the credit agreement bear, and our future indebtedness may bear, interest at variable rates and expose us to interest rate risk. IfTo mitigate the risk of rising interest rates, we may use interest rate swap agreements and exchange fixed and variable rate interest payment obligations over the life of the arrangements, without exchange of the underlying principal amounts. We may not be successful in structuring such swap agreements to manage our risks effectively which could adversely affect our business, earnings and financial condition. Additionally, if interest rates increase, our debt service obligations on the variable rate

indebtedness would increase even though the amount borrowed remained the same, and our net income and cash available for servicing our indebtedness would decrease.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if at that time whether LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. The Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, announced replacement of U.S. dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by U.S. Treasury securities called the Secured Overnight Financing Rate (“SOFR”). The first publication of SOFR was released in April 2018. Whether or not SOFR gains market traction as a LIBOR replacement remains in question and the future of LIBOR at this time is uncertain. If LIBOR ceases to exist, we may need to renegotiate our loan documents that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with the new standard that is established.

The agreements governing our debt obligations impose restrictions on our business and could adversely affect our ability to undertake certain corporate actions.

The agreements governing our various debt obligations include covenants imposing significant restrictions on our business. These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise. These covenants place restrictions on our ability to, among other things:

incur additional debt;

create liens;

make certain investments;

consummate acquisitions;

enter into certain transactions with affiliates;

declare or pay dividends, redeem stock or make other distributions to stockholders; and

consolidate, merge or transfer or sell all or substantially all of our assets.

Our ability to comply with these agreements may be affected by events beyond our control, including prevailing economic, financial, and industry conditions. These covenants could have an adverse effect on our business by limiting our ability to take advantage of financing, ~~merger~~mergers and ~~acquisition,~~acquisitions, or other corporate opportunities.

In addition, the credit agreement requires us to comply with specified financial ratios, including ratios regarding secured leverage. Our ability to comply with these ratios may be affected by events beyond our control. These restrictions limit our ability to plan for or react to market conditions, meet capital needs, or otherwise constrain our activities or business plans. They also may adversely affect our ability to finance our operations, enter into acquisitions, or engage in other business activities that would be in our interest.

A breach of any of the covenants contained in our credit agreement or any future agreements related to indebtedness or our inability to comply with the financial ratios could result in an event of default, which would allow the lenders to declare all borrowings outstanding to be due and payable or to terminate the ability to borrow under ~~the Revolver.~~our revolving line of credit facility ("Revolver"). If the amounts outstanding under the credit agreement or other future indebtedness were to be accelerated, we cannot assure that our assets would be sufficient to repay in full the money owed. In such a situation, we could be forced to file for bankruptcy or seek other protections from creditors.

To service our indebtedness, we will require a significant amount of cash. However, our ability to generate cash depends on many factors, many of which are beyond our control.

Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future, which, in turn, is subject to general economic, financial, competitive, regulatory, and other factors, many of which are beyond our control.

Our business may not generate sufficient cash flow from operations and we may not have available to us future borrowings in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. In these circumstances, we may need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of our indebtedness on commercially reasonable terms or at all. Without this financing, we could be forced to sell assets or secure additional financing to make up for any shortfall in our payment obligations under unfavorable circumstances. However, we may not be able to secure additional financing on terms favorable to us or at all and, in addition, the terms of the indentures governing our notes limit our

ability to sell assets and also restrict the use of proceeds from such a sale. We may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations, including our obligations under our notes.

If we are unable to meet our debt service obligations, we would be in default under the terms of our credit agreement, permitting acceleration of the amounts due under the credit agreement and eliminating our ability to draw on the Revolver. If the amounts outstanding under the credit facilities or future indebtedness were to be accelerated, we could be forced to file for bankruptcy.

Risks Related to Our Common Stock and the Securities Markets

Because we do not currently intend to pay dividends on our common stock, stockholders will benefit from an investment in our common stock only if it appreciates in value.

We do not currently anticipate paying any dividends on shares of our common stock. Any determination to pay dividends in the future will be made by our Board of Directors and will depend upon results of operations, financial conditions, contractual restrictions, restrictions imposed by applicable law, and other factors our Board of Directors deems relevant. Accordingly, realization of a gain on stockholders’ investments will depend on the appreciation of the price of our common stock. There is no guarantee that our common stock will appreciate in value or even maintain the price at which stockholders purchased their shares.

The concentration of our capital stock ownership may limit a stockholder’s ability to influence corporate matters, and could discourage a takeover that stockholders may consider favorable and make it more difficult for a stockholder to elect directors of its choosing.

H. Brian Thompson, the Company’s Executive Chairman of the Board of Directors, and Universal Telecommunications, Inc., Mr. Thompson’s private equity investment and advisory firm, beneficially owned ~~6,807,575 shares~~approximately 12% of our common stock at February 27, 2018. Based on the number of shares of our common stock outstanding on February 27, 2018, Mr. Thompson and Universal Telecommunications, Inc. beneficially own approximately 15% of our common stock. In addition, as2019. As of February 27, ~~2018,~~2019, our executive officers, directors, and affiliated entities, excluding Mr. Thompson and Universal Telecommunications, Inc., together beneficially owned common stock representing approximately 8%7% of our common stock. In addition, based on filings with the Securities and Exchange Commission, four additional investors each held more than 5% of our common stock, representing approximately 43% of our common stock in aggregate. As a result, our management and these other stockholders have the ability to exert significant control over matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. The interests of these stockholders might conflict with your interests as a holder of our securities, and it may cause us to pursue transactions that, in their judgment, could enhance their equity investments, even though such transactions may involve significant risks to you as a security holder. The large concentration of ownership in a small group of stockholders might also have the effect of delaying or preventing a change of control that other stockholders may view as beneficial.

We might require additional capital to support business growth, and this capital might not be available on favorable terms, or at all.

Our operations or expansion efforts may require substantial additional financial, operational, and managerial resources. While we believe we have sufficient liquidity as of December 31, ~~2017~~2018 to fund our working capital and other operating requirements, we may raise additional funds for acquisitions or to expand our operations. If we obtain additional funding in the future, we may seek debt financing or obtain additional equity capital. Additional capital may not be available to us, or may only be available on terms that adversely affect our existing stockholders, or that restrict our operations. For example, if we raise additional funds through issuances of equity or convertible debt securities, our existing stockholders could suffer dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock.

Disruptions in the financial markets could affect our ability to obtain debt or equity financing or to refinance our existing indebtedness on reasonable terms or at all.

Disruptions in the financial markets could impact our ability to obtain debt or equity financing, or lines of credit, in the future as well as impact our ability to refinance our existing indebtedness on reasonable terms or at all, which could affect our strategic operations and our financial performance and force modifications to our operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

As of December 31, ~~2017,~~2018, we lease approximately ~~275,000~~795,000 square feet of space for offices, data centers, colocation facilities, and PoPs throughout North America, Europe, Asia, ~~the Middle East,~~South America, Africa, and ~~South America.~~Australia. Additionally, as of December 31, ~~2017,~~2018, we owned ~~eight~~ten cable landing stations in North America and Europe comprising approximately ~~88,000~~79,000 square feet.

Our corporate headquarters facility consists of approximately 19,000 square feet, located in McLean, Virginia.

We believe our properties, taken as a whole, are in good operating condition and are adequate for our business needs.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings arising in the normal course of business. We do not believe that we are party to any current or pending legal action that could reasonably be expected to have a material adverse effect on our financial condition or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market for Equity Securities

Our common stock trades on the NYSE under the symbol "GTT" and has traded on the NYSE since November 28, 2014. Prior to November 28, 2014, our common stock traded on the NYSE ~~MKT.~~MKT and on the OTCBB.

As of February 27, ~~2018,~~2019, there were ~~137~~152 holders of record of our common stock, par value $.0001 per share. ~~The following table sets forth, for the calendar quarters indicated, the quarterly high and low sales information of our common stock as reported on the NYSE.~~

Common Stock
High Low
2016
First Quarter $ 18.70
$ 12.31
Second Quarter $ 18.88
$ 14.96
Third Quarter $ 24.20
$ 17.55
Fourth Quarter $ 29.75
$ 20.80
2017
First Quarter $ 29.70
$ 22.95
Second Quarter $ 34.20
$ 23.10
Third Quarter $ 32.60
$ 28.30
Fourth Quarter $ 47.75
$ 31.51

Dividends

We have not paid any dividends on our common stock to date, and do not anticipate paying any dividends in the foreseeable future. Moreover, restrictive covenants existing from the credit agreement that we have entered into preclude us from paying dividends until certain conditions are met.

Performance Graph

The following performance graph compares the relative changes in the cumulative total return of our common stock for the period from December 31, ~~2012~~2013 to December 31, ~~2017,~~2018, against the cumulative total return for the same period of (1) The Standard & Poor's 500 (S&P 500) Index, (2) The Standard & Poor's (S&P) Telecom Select Industry Index, and (3) NASDAQ Telecommunication Index. The comparison below assumes $100 was invested on December 31, ~~2012,~~2013 in our common stock, the S&P 500 Index, the S&P Telecom Select Industry Index, and NASDAQ Telecommunication Index.

* $100 invested on December 31, ~~2012~~2013 in stock or index. Fiscal year ending December 31.


	Dec-12		Dec-13		Dec-14		Dec-15		Dec-16		Dec-17		Dec-13		Dec-14		Dec-15		Dec-16		Dec-17		Dec-18
GTT Communications, Inc.	$	100.00	$	260.71	$	472.50	$	609.29	$	1,026.79	$	1,676.79	$	100.00	$	181.23	$	233.70	$	393.84	$	643.15	$	324.11
S&P 500 ^® Index	100.00		129.60		144.36		143.31		156.98		187.47		100.00		111.39		110.58		121.13		144.65		135.63
S&P Telecom Select Industry Index	100.00		122.04		126.25		122.42		151.73		149.36		100.00		103.45		100.31		124.32		122.38		113.13
NASDAQ Telecommunications Index	100.00		124.02		135.07		124.94		143.52		138.31		100.00		108.91		100.74		115.72		135.90		140.02

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with ~~GAAP,~~accounting principles generally accepted in the United States ("GAAP"), from time to time we may use or publicly disclose certain "non-GAAP financial measures" in the course of our financial presentations, earnings releases, earnings conference calls, and otherwise. For these purposes, the SEC defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial positions, or cash flows that (i) exclude amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with GAAP in financial statements, and (ii) include amounts, or is subject to adjustments that effectively include amounts, that are excluded from the most directly comparable measure so calculated and presented.

Non-GAAP financial measures are provided as additional information to investors to provide an alternative method for assessing our financial condition and operating results. We believe that these non-GAAP measures, when taken together with our GAAP financial measures, allow us and our investors to better evaluate our performance and profitability. These measures are not in accordance with, or a substitute for, GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. These measures should be used in addition to and in conjunction with results presented in accordance with GAAP, and should not be relied upon to the exclusion of GAAP financial measures.

Pursuant to the requirements of Regulation G, whenever we refer to a non-GAAP financial measure, we will also present the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference with such comparable GAAP financial measure.

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")

Adjusted EBITDA is defined as net income/(loss) before interest, income taxes, depreciation and amortization ("EBITDA") adjusted to exclude severance, restructuring and other exit costs, acquisition-related transaction and integration costs, losses on extinguishment of debt, share-based compensation, and from time to time, other non-cash or non-recurring items.

We use Adjusted EBITDA to evaluate operating performance, and this financial measure is among the primary measures we use for planning and forecasting future periods. We further believe that the presentation of Adjusted EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by management and makes it easier to compare our results with the results of other companies that have different financing and capital structures. In addition, we have debt covenants that are based on a leverage ratio that utilizes a modified EBITDA calculation, as defined in our ~~credit agreement.~~Credit Agreement. The modified EBITDA calculation is similar to our definition of Adjusted EBITDA; however, it includes the pro forma Adjusted EBITDA of and expected cost synergies from the companies acquired by us during the applicable reporting period. Finally, Adjusted EBITDA results, along with other quantitative and qualitative information, are utilized by management and our compensation committee for purposes of determining bonus payouts to our employees.

The following is a reconciliation of Adjusted EBITDA ~~Less Capital Expenditures~~from Net (loss) income:



	Year Ended December 31,
(Amounts in millions)	2018			2017			2016
				(Unaudited)
Adjusted EBITDA
Net (loss) income	$	(243.4	)	$	(71.5	)	$	5.3
(Benefit from) provision for income taxes	(5.5		)	17.3			3.9
Interest and other expense, net	274.8			71.0			30.0
Loss on debt extinguishment	13.8			8.6			1.6
Depreciation and amortization	211.4			132.6			62.8
Severance, restructuring and other exit costs	37.1			22.4			0.9
Transaction and integration costs	40.5			19.1			4.8
Share-based compensation	34.4			22.2			15.8
Adjusted EBITDA	$	363.1		$	221.7		$	125.1

Adjusted ~~EBITDA~~Free Cash Flow and Adjusted Unlevered Free Cash Flow

Adjusted Free Cash Flow is defined as net cash provided by operating activities less purchases of property and equipment, ~~which we also refer~~adjusted to exclude cash paid for severance, restructuring and other exit costs, and acquisition-related transaction and integration costs. Adjusted Unlevered Free Cash Flow is defined as ~~capital expenditures~~Adjusted Free Cash Flow before interest. Adjusted Free Cash Flow and Adjusted Unlevered Free Cash Flow are not a measurement of our financial performance under GAAP and should not be considered in isolation or ~~capex, is a~~as alternatives to net cash flows provided by operating activities, total net cash flows, or any other performance measure ~~that we~~derived in accordance with GAAP.

We use Adjusted Free Cash Flow as a measure to evaluate cash generated through normal operating activities. We believe that the ~~appropriate level~~presentation of ~~capital expenditures needed~~Adjusted Free Cash Flow is relevant and useful to ~~support~~investors because it provides a measure of cash available to pay the principal on our ~~expected revenue,~~debt and ~~to provide a comparable view~~pursue acquisitions of ~~our performance relative to~~businesses or other ~~telecommunications companies who may utilize different strategies for providing access to fiber-based services and related infrastructure.~~strategic investments or uses of capital. We use Adjusted Unlevered Free Cash Flow as a ~~"capex light" strategy, which means we purchase last-mile services and select core IP network services from other providers on an as-needed basis, pursuant~~measure to evaluate cash generated through normal operating activities prior to debt service as our ~~customers' requirements. Many other telecommunications companies spend significant amounts of~~debt capital expenditures to construct their own fiber networks and data centers, and attempt to purchase as little as possible from other providers. As a result of our strategy, we typically have lower Adjusted EBITDA margins compared to other providers, but also spend much less on capital expenditures relative to our revenue.structure will change over time. We believe that the presentation of Adjusted Unlevered Free Cash Flow is relevant and useful for investors because it ~~is important~~allows investors to ~~take both~~view results in a manner similar to the method used by management and makes it easier to compare our results with the results of ~~these factors into account when evaluating our performance.~~other companies that have different financing and capital structures.

The following is a reconciliation of Adjusted ~~EBITDA~~Free Cash Flow and Adjusted ~~EBITDA less capital expenditures~~Unlevered Free Cash Flow from ~~Net Income (Loss)~~Cash provided by operating activities (amounts in millions):

Year Ended December 31,
(Amounts in millions) 2017 2016 2015
(Unaudited)
Adjusted EBITDA
Net (loss) income $ (71.5 ) $ 5.3
$ 19.3
(Benefit from) provision for income taxes 17.3
3.9
(34.1 )
Interest and other expense, net 71.0
30.0
15.1
Loss on debt extinguishment 8.6
1.6
3.4
Depreciation and amortization 132.6
62.8
46.7
Severance, restructuring and other exit costs 22.4
0.9
12.7
Transaction and integration costs 19.1
4.8
6.1
Share-based compensation 22.2
15.8
7.9
Adjusted EBITDA 221.7
125.1
77.1

Purchases of property and equipment (42.0 ) (24.2 ) (14.1 )
Adjusted EBITDA less capital expenditures $ 179.7
$ 100.9
$ 63.0



	Year Ended December 31,
	2018			2017			2016
Net cash provided by operating activities	$	82.4		$	63.4		$	60.4
Purchases of property and equipment	(77.7		)	(42.0		)	(24.2		)
Severance, restructuring and other exit costs	34.7			15.9			4.5
Transaction and integration costs	34.3			19.1			4.8
Adjusted Free Cash Flow	73.7			56.4			45.5
Cash paid for interest ⁽¹⁾	158.8			47.2			26.3
Adjusted Unlevered Free Cash Flow	$	232.5		$	103.6		$	71.8
(1) Cash paid for interest for the year ended December 31, 2018 includes three semi-annual interest payments on the 7.875% Senior Unsecured Notes.

Critical Accounting Policies and Estimates

The discussion of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with ~~accounting principles generally accepted in the United States ("GAAP").~~GAAP. In the preparation of our consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosures of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. The results of our analysis form the basis for making assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and the impact of such differences may be material to our consolidated financial statements. Our critical accounting policies have been discussed with the Audit Committee of our Board of Directors. We believe that the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements, and believe that an understanding of these policies is important to a proper evaluation of the reported consolidated financial results. Our significant accounting policies are described in Note 2 – Significant Accounting Policies of the notes to the consolidated financial statements (Part II, Item 8 of this Form 10-K).

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on reported results of operations.

Segment Reporting

We report operating results and financial data in one operating and reporting segment. Our Chief Executive Officer is the chief operating decision maker and manages our business as a single profit center in order to promote collaboration, provide comprehensive service offerings across our entire customer base, and provide incentives to employees based on the success of the organization as a whole. Although certain information regarding selected products or services is discussed for purposes of promoting an understanding of our complex business, the chief operating decision maker manages our business and allocates resources at the consolidated level. Additionally, integration efforts related to Interoute are nearing completion, but have not currently changed the manner in which the chief operating decision maker has managed the consolidated business. These integration efforts are designed to establish scale and align Interoute's network assets and product offerings within our existing business.

Revenue Recognition

Our revenue is derived primarily from telecommunications services, which includes both revenue from contracts with customers and lease revenues. Lease revenue services include dark fiber, duct, and colocation services. All other services are considered reveue from contracts with customers. Revenue from contracts with customers is recognized when services are provided to the customer, in an amount that reflects the consideration we expect to receive in exchange for those services. Lease revenue represents an arrangement where the customer has the right to use an identified asset for a specified term and such revenue is recognized over the term the customer is given exclusive access to the asset.

We deliver ~~eight~~five primary services to our customers — ~~private~~wide area networking; transport & infrastructure services; internet; ~~optical transport; SD-WAN;~~ managed services; ~~voice~~ and unified communications; video transport; and access services. Certain of our current commercial activities have features that may be considered multiple elements, specifically, when we sell connectivity services in addition to Customer Premise Equipment ("CPE"). We believe that there is sufficient evidence to determine each element’s fair value and, as a result, in those arrangements where there are multiple elements, the service revenue is recorded ratably over the term of the agreement and the equipment is accounted for as a sale, at the time of sale, as long as collectability is reasonably assured.voice.

Our services are provided under contracts that typically ~~provide for~~include an installation or provisioning charge along with payments of recurring charges on a monthly basis for use of the services over a committed term. Our contracts with customers specify the terms

and conditions for providing such services, including installation date, recurring and non-recurring fees, payment terms, and length of term. These contracts call for us to provide the service in question (e.g., data transmission between point A and point Z), to manage the activation process, and to provide ongoing support (in the form of service maintenance and trouble-shooting) during the service term. The contracts do not typically provide the customer any rights to use specifically identifiable assets. Furthermore, the contracts generally provide us with discretion to engineer (or re-engineer) a particular network solution to satisfy each customer’s data transmission requirement, and typically prohibit physical access by the customer to the network infrastructure used by us and our suppliers to deliver the services.

~~We recognize revenue as follows:~~

~~Recurring Revenue.~~ ~~Recurring revenue represents the substantial majority of our revenue, and consists of fees we charge~~Fees charged for ongoing services ~~that~~ are generally fixed in price and billed on a recurring monthly basis (one month in advance) for a specified term. Fees may also be based on specific usage of the related services, or usage above a fixed threshold, which are billed monthly in arrears. The usage based fees represent variable consideration, however, the nature of the fees are such that we are not able to estimate these amounts with a high degree of certainty and therefore the usage based fees are excluded from the transaction price and are instead recognized as revenue based on actual usage charges billed using the rates and/or thresholds specified in each contract. At the end of the term, most contracts provide for a continuation of services on the same terms, either for a specified renewal period (e.g., one year) or on a month-to-month basis. ~~We record recurring revenue~~Revenue is generally recognized over time for these contracts as the customers simultaneously receive and consume the benefit of the service as we perform. Fees may also be billed for early terminations based on contractually stated amounts. The early termination fees represent variable consideration. We estimate the ~~fees agreed~~amount of variable consideration we expect to be entitled to receive for such arrangements using the expected value method.

Primary geographical market. Our operations are located primarily in ~~each contract, as long as~~ the ~~contract~~United States and Europe. The nature and timing of revenue from contracts with customers across geographic markets is ~~in effect, for the period the service is provided.~~similar.

~~Usage Revenue.~~Contracts with multiple performance obligations. ~~Usage~~The majority of our contracts with customers have a single performance obligation - telecommunication services. The related installation services are generally considered not material within the context of the contract and we do not recognize these immaterial promised services as a separate performance obligation. Certain contracts with customers may include multiple performance obligations, specifically when the Company sells its connectivity services in addition to customer premise equipment ("CPE"). For such arrangements, revenue ~~represents variable charges for certain services,~~is allocated to each performance obligation based on ~~specific usage of those services, or usage above a fixed threshold, billed monthly in arrears. We record usage revenue~~its relative standalone selling price. The standalone selling price for each performance obligation is based on ~~actual usage charges billed~~observable prices charged to customers in similar transactions or using ~~the rates and/or thresholds specified in each contract.~~expected cost plus margin.

~~Non-recurring Revenue.~~ Non-recurring revenue consists of charges for installation in connection with the delivery of recurring communications services, late payments, cancellation fees, early termination fees, and equipment sales. Fees billed for installation services are initially recorded as deferred revenue then recognized ratably over the contractual term of the recurring service. Fees charged for late payments, cancellation (pre-installation) or early termination (post-installation) are typically fixed or determinable per the terms of the respective contract, and are recognized as revenue when billed. In addition, from time to time we sell communications and/or networking equipmentWe apply certain permitted practical expedients to our ~~customers in connection with our data networking services.~~revenue recognition. We ~~recognize revenue from~~do not adjust the ~~sale~~promised amount of ~~equipment~~consideration for the effects of a significant financing component if we expect, at contract inception, that the ~~contracted selling price~~period between when ~~title~~we transfer a promised good or service to ~~the equipment passes to~~a customer and when the customer ~~(generally F.O.B. origin).~~pays for that good or service will be one year or less.

Prepaid Capacity Sales and Indefeasible Right to Use. ~~From time to time we~~We sell capacity on a long-term basis, where a certain portion of the contracted revenue is prepaid upon acceptance of the service by the customer. This prepaid amount is initially recorded as deferred revenue and amortized ratably over the term of the contract. Certain of these prepaid capacity sales are in the form of Indefeasible Rights to Use ("IRUs"), where the customer has the right to use the capacity ~~for the life~~ of the fiber optic ~~cable.~~cable for a specified term. We record revenues from these prepaid leases of fiber optic cable IRUs over the term that the customer is given exclusive access to the ~~assets, generally 20 years, consistent with our assumed useful life of the associated fiber optic cable.~~assets.

Universal Service Fund ~~(USF)~~("USF"), Gross Receipts Taxes and Other Surcharges. We are liable in certain cases for collecting regulatory fees and/or certain sales taxes from ~~our~~its customers and remitting the fees and taxes to the applicable governing authorities. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Conversely, USF contributions are assessed to us by and paid to the Universal Service Administration Company ("USAC") and are based on our interstate and inter-nation end-user revenues. We ~~record certain excise taxes and surcharges on~~may assess our customers a ~~gross basis and include them~~separate fee to recoup our USF expense. These fees are included in ~~our~~ telecommunications services revenue and costs of telecommunications services.

~~We record revenue only when collectability is reasonably assured, irrespective of the type of revenue.~~

Share-Based Compensation

We issue three types of grants under our share-based compensation plan: time-based restricted stock, time-based stock options, and performance-based restricted stock. The time-based restricted stock and stock options generally vest over a four-year period, contingent upon meeting the requisite service period requirement. Performance awards typically vest over a shorter period, e.g., one to two years, starting when the performance criteria established in the grant have been met and maintained.

The share price of our common stock as reported on the NYSE on the date of grant is used as the fair value for all restricted stock. We use the Black-Scholes option-pricing model to determine the estimated fair value for stock options. Critical inputs into

the Black-Scholes option-pricing model include the following: option exercise price, fair value of the stock price, expected life of the option, annualized volatility of the stock, annual rate of quarterly dividends on the stock, and risk-free interest rate.

Implied volatility is calculated as of each grant date based on our historical stock price volatility along with an assessment of a peer group. Other than the expected life of the option, volatility is the most sensitive input to our option grants. The risk-free interest rate used in the Black-Scholes option-pricing model is determined by referencing the U.S. Treasury yield curve rates with the remaining term equal to the expected life assumed at the date of grant. Forfeitures are estimated based on our historical analysis of attrition levels. Forfeiture estimates are updated quarterly for actual forfeitures.

The share-based compensation expense for time-based restricted stock and stock options is recognized on a straight-line basis over the vesting period. We ~~recognize~~begin recognizing share-based compensation expense for performance awards when we consider the achievement of the performance criteria to be ~~probable.~~probable through the expected vesting period.

Income Taxes

Income taxes are accounted for under the asset and liability method pursuant to GAAP. Under this method, deferred tax assets and liabilities are recognized for the expected future consequences attributable to the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the change. Further, deferred tax assets are recognized for the expected realization of available net operating loss and tax credit carryforwards. A valuation allowance is recorded on gross deferred tax assets when it is "more likely than not" that such asset will not be realized. When evaluating the realizability of deferred tax assets, all evidence, both positive and negative, is evaluated. Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future earnings. We review our deferred tax assets on a quarterly basis to determine if a valuation allowance is required based upon these factors. Changes in our assessment of the need for a valuation allowance could give rise to a change in such allowance, potentially resulting in additional expense or benefit in the period of change.

Our income tax provision includes U.S. federal, state, local, and foreign income taxes and is based on pre-tax income or loss. In determining the annual effective income tax rate, we analyzed various factors, including our annual earnings and taxing jurisdictions in which the earnings were generated, the impact of state and local income taxes, and our ability to use tax credits and net operating loss carryforwards.

Under GAAP, the amount of tax benefit to be recognized is the amount of benefit that is "more likely than not" to be sustained upon examination. We analyze our tax filing positions in all of the U.S. federal, state, local, and foreign tax jurisdictions where we are required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, we determine that uncertainties in tax positions exist, a liability is established in the consolidated financial statements. We recognize accrued interest and penalties related to unrecognized tax positions in the provision for income taxes.

Estimating Allowances ~~and Accrued Liabilities~~

Allowance for Doubtful Accounts

We establish an allowance for bad debts for accounts receivable amounts that may not be collectible. We state our accounts receivable balances at amounts due from the customer net of an allowance for doubtful accounts. We determine this allowance by considering a number of factors, including the length of time receivables are past due, the customer's payment history, and current ability to pay its obligation to the Company, and the condition of the general economy. The allowance for doubtful accounts was ~~$5.1~~$11.1 million and ~~$2.7~~$5.1 million as of December 31, ~~2017~~2018 and ~~2016,~~2017, respectively.

Allowance for Vendor Disputes

In the normal course of business, we identify errors by suppliers with respect to the billing of services. We perform bill verification procedures to ensure that errors in our suppliers’ billed invoices are identified and resolved. If we conclude that a vendor has billed us inaccurately, we will record a liability only for the amount that we believe is owed. As of December 31, ~~2017~~2018 and ~~2016,~~2017, we had ~~$5.3~~$9.1 million and ~~$5.8~~$5.3 million, respectively, in disputed billings from suppliers that were not accrued because we do not believe we owe them.

Deferred Costs

Installation costs related to provisioning of recurring communications services that we incur from third-party suppliers, directly attributable and necessary to fulfill a particular service contract, and which costs would not have been incurred but for the occurrence of that service contract, are recorded as deferred costs and expensed ratably over the contractual term of service in the same manner as the deferred revenue arising from that contract. Based on historical experience, we believe the initial contractual term is the best

estimate for the period of earnings. If any installation costs exceed the amount of corresponding deferred revenue, the excess cost is recognized in the current period.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is reviewed for impairment at least annually, in October, or more frequently if a triggering event occurs between impairment testing dates. We operate as a single operating segment and as a single reporting unit for the purpose of evaluating goodwill impairment. Our impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. The qualitative assessment includes comparing our overall financial performance against the planned results used in the last quantitative goodwill impairment test. Additionally, we assess the fair value in light of certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and Company specific events. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgments and estimates. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a two-step quantitative impairment test is performed. Under the first step, the estimated fair value of the Company would be compared with our carrying value (including goodwill). If the fair value of the Company exceeds the carrying value, step two does not need to be performed. If the estimated fair value of the Company is less than the carrying value, an indication of goodwill impairments exists and we would need to perform step two of the impairment test. Under step two, an impairment loss would be recognized for any excess of the carrying amount of our goodwill over the implied fair value of that goodwill. The fair value under the two-step assessment is determined using a combination of both income and market-based approaches. There were no goodwill impairments identified for the years ended December 31, 2018, 2017, ~~2016,~~ and ~~2015.~~2016.

Intangible assets arising from business combinations, such as acquired customer contracts and relationships, (collectively "customer relationships"), trade names, or intellectual property, ~~or know-how,~~ are initially recorded at fair value. We amortize these intangible assets over the determined useful life, which generally ranges from three to ~~eight~~twenty years. We review the intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized for the difference between fair value and the carrying value of the asset. There were no intangible asset impairments recognized for the years ended December 31, 2018, 2017, ~~2016,~~ and ~~2015.~~2016.

Further information is available in Note 4 – Goodwill and Intangible Assets of the notes to the consolidated financial statements (Part II, Item 8 of this Form 10-K).

Business Combinations and Asset Purchases

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated acquisition date fair values. The excess of the fair value of the purchase consideration over the fair values of the identifiable assets acquired and liabilities assumed is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to intangible assets.

We recognize the purchase of assets and the assumption of liabilities as an asset purchase if the transaction does not constitute a business combination. The excess of the fair value of the purchase consideration is allocated on a relative fair value basis to the identifiable assets acquired and liabilities assumed. No goodwill is recorded in an asset purchase.

Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and developed technology, discount rates, and terminal values. Our estimate of fair value is based upon assumptions believed to be reasonable, but actual results may differ from estimates.

Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed, as more fully discussed in Note 3 – Business Acquisitions of the notes to the consolidated financial statements (Part II, Item 8 of this Form 10-K).

Recent Accounting Pronouncements

Refer to Note 2 – Significant Accounting Policies of the notes to the consolidated financial statements (Part II, Item 8 of this Form 10-K) for further discussion.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks. These risks, which include interest rate risk and foreign currency exchange risk, arise in the normal course of business rather than from trading activities.

Interest Rate Sensitivity

Our exposure to market risk for changes in interest rates is primarily related to our outstanding term loans and revolving loans. As of December 31, 2018, we had $2,618.8 million in term loans and $59.0 million in revolving loans with variable interest rates. The interest expense associated with our term ~~loans~~loan and ~~any loans under our~~ revolving ~~credit facility~~loan will vary with market rates.

~~For purposes of the following hypothetical calculations, we have used the 2017 Credit Agreement, which~~The US Term Loan Facility carries an interest rate equal to either Base Rate Loans with applicable margin at ~~2.25%~~1.75% or ~~Eurodollar~~Eurocurrency Loans at ~~3.25%~~2.75%, subject to a floor of ~~1.0%~~0.00%. Based on current rates, a hypothetical 100 basis point increase in ~~the~~ Eurodollar rate would increase annual interest expense by approximately ~~$6.9~~$17.6 million, ~~as of December 31, 2017,~~ which would decrease our income and cash flows by the same amount. ~~A hypothetical increase~~This sensitivity analysis takes into account the impact of the ~~Eurodollar~~LIBOR-based interest rate swaps entered into during 2018.

The EMEA Term Loan Facility carries an interest rate equal to 4%the European Money Markets Institute EURIBOR Rate plus the applicable margin of 3.25%, ~~the average historical three-month~~subject to a EURIBOR floor of 0.00%. Based on current rates, a hypothetical 100 basis point increase in EURIBOR rate would increase annual interest expense by approximately ~~$18.2~~€4.7 million, which would decrease our income and cash flows by the same amount. This sensitivity analysis takes into account the impact of the EURIBOR-based interest rate swap entered into during 2018.

We ~~do not currently use~~may enter into additional derivative financial instruments ~~and have not entered into any interest rate hedging transactions, but we may do so~~ in the future.

Exchange Rate Sensitivity

Our exposure to market risk for changes in foreign currency rate relates to our global operations. Our consolidated financial statements are denominated in U.S. Dollars, but a portion of our revenue ~~cost of telecommunication services provided,~~ and ~~selling, general and administrative~~ expenses are generated in the local currency of our foreign subsidiaries. Accordingly, changes in exchange rates between the applicable foreign currency and the U.S. Dollar will affect the translation of each foreign subsidiary’s financial results into U.S. Dollars for purposes of reporting consolidated financial results.

~~Approximately 12%~~ The following is a summary of our revenues and expenses generated by non-US entities for the three months ended December 31, 2017 was generated by non-US entities, of which approximately 9% was recorded in GBP, approximately 2% was recorded in Euros, and the remainder was recorded predominantly in Canadian dollars. Approximately 14% of our cost of telecommunications services provided and approximately 12% of our selling, general and administrative expenses for the three months ended December 31, 2017 were generated by the same non-US entities. Therefore, it is highly unlikely that changes in exchange rates would have a material impact on our financial condition or results of operations.2018:

~~We do not currently use derivative financial instruments and have not entered into any foreign currency hedging transactions, but we may do so in the future.~~



	Three Months Ended December 31, 2018
	Revenues		Cost of Telecommunication Services		Selling, general and administrative expenses		Depreciation and amortization		Interest expense, net
EUR	36	%	27	%	32	%	10	%	27	%
GBP	12	%	17	%	4	%	6	%	—	%
Other	3	%	3	%	3	%	3	%	—	%
Total non-US	51	%	47	%	39	%	19	%	27	%

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to the consolidated financial statements, the notes thereto, and the report thereon, commencing on page F-1 of this Annual Report, which consolidated financial statements, notes, and report are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer (CEO) and chief financial officer (CFO), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our CEO and CFO have concluded that as of December 31, ~~2017,~~2018, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods

specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Our evaluation excluded Interoute which was acquired in May 2018. As of and for the year ended December 31, 2018 Interoute represented approximately 64% of total assets and 31% of revenue. In accordance with guidance issued by the SEC, companies are allowed to exclude acquisitions from their ~~first~~ assessment of internal ~~control~~controls over financial reporting during the first year subsequent to the ~~date of~~ acquisition while integrating ~~the~~with acquired operations. ~~Our assessment~~

The effectiveness of our or any system of disclosure controls and procedures is subject to certain limitations, including the ~~effectiveness~~exercise of judgment in designing, implementing and evaluating the controls and procedures, the assumptions used in identifying the likelihood of future events and the inability to eliminate misconduct completely. As a result, there can be no assurance that our disclosure controls and procedures will detect all errors or fraud. By their nature, our or any system of disclosure controls and procedures can provide only reasonable assurance regarding management's control objectives.

Remediation of Material Weakness in Internal Control Over Financial Reporting

As previously disclosed, the Company’s management, including our CEO and CFO, identified a material weakness in the Company’s internal control over financial reporting ~~excluded Global Capacity,~~during the three months ended March 31, 2018. The Company’s operating effectiveness of controls over accounting for complex and unusual transactions failed to operate during the quarter ended March 31, 2018 in that the Company failed to correctly account for a deal-contingent foreign currency hedge as a derivative. This derivative was entered into during the quarter ended March 31, 2018, in which we entered into the Agreement for Sale and Purchase of Interoute, and the derivative was ~~acquired in September 2017. Approximately 4%~~settled at the closing of ~~total assets and 7%~~the Interoute acquisition on May 31, 2018. The fair value of ~~total revenue are associated with the Global Capacity acquisition and are included~~this derivative was correctly recorded in the condensed consolidated financial statements ~~of the Company~~ as of and for the ~~year~~three months ended March 31, 2018, and subsequent changes to the fair value through the settlement date were correctly recorded as of and for the three months ended June 30, 2018.

To address the material weakness described above, the Company designed and implemented new and enhanced controls to ensure that complex and unusual transactions are accounted for correctly and that in-house accounting personnel have training to ensure they have the relevant expertise related to complex and unusual transactions, including derivative contracts. The enhanced controls were implemented during the second quarter of 2018, and the Company's management, including our CEO and CFO, determined that we fully remediated the material weakness as of December 31, ~~2017.~~2018. We will continue to monitor the effectiveness of these controls and will make any further changes management determines appropriate.

Management’s Report on Internal Control over Financial Reporting and ~~Attestation~~Audit Report of the Registered Public Accounting Firm

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ~~(2013 framework)~~(2013). Based on the assessment, management has concluded that its internal control over financial reporting was effective as of December 31, ~~2017,~~2018, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. The effectiveness of our internal control over financial reporting as of December 31, ~~2017,~~2018, has been audited by CohnReznick LLP, an independent registered public accounting firm, as stated in their report, which appears herein.

Changes in Internal Control Over Financial Reporting

Except for the 1) Company's design and implementation of new and enhanced controls to remediate the material weakness described above, and 2) the implementation of certain internal controls related to the adoption of the new ~~revenue recognition~~leasing standard (Topic ~~606)~~842), there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the ~~year~~three months ended December 31, ~~2017,~~2018, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The Company implemented new controls as part of its effort to adopt Topic ~~606.~~842. The adoption of Topic ~~606~~842 required the implementation of new accounting processes, which changed the Company's internal controls over ~~revenue recognition and financial reporting.~~lease accounting. We implemented these internal controls to ensure we adequately evaluated our ~~contracts~~leases and properly assessed the impact of Topic ~~606~~842 on our financial statements to facilitate its adoption in ~~2018.~~

2019.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~The Shareholders and~~To the Board of Directors and Stockholders of GTT Communications, Inc.

Opinion on Internal Control over Financial Reporting

We have audited GTT Communications, Inc. and subsidiaries’ (the “Company’s”) internal control over financial reporting ~~of GTT Communications, Inc. and subsidiaries (the “Company”)~~ as of December 31, ~~2017,~~2018, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at ~~Global Capacity,~~Interoute, which was acquired on ~~September 15, 2017~~May 31, 2018 and whose financial statements constitute 4%64% of total assets and 7%31% of total revenues of the consolidated financial statement amounts as of and for the year ended December 31, ~~2017.~~2018. Accordingly, our audit did not include the internal control over financial reporting at ~~Global Capacity.~~Interoute. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2017,~~2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the consolidated balance sheets ~~of GTT Communications, Inc. and subsidiaries as of December 31, 2017 and 2016,~~ and the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows ~~for each~~ of the ~~three years in the period ended December 31, 2017, and the related notes and the schedule listed in the index at 15(a),~~Company and our report dated March 1, ~~2018~~2019 expressed an unqualified ~~opinion on those financial statements and schedules.~~opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists and, testing and evaluating the design and operating effectiveness of internal control based on the assessed ~~risk, and~~risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with ~~accounting principles~~ generally accepted ~~in the United States of America.~~accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with ~~accounting principles~~ generally accepted ~~in the United States of America,~~accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ CohnReznick LLP

~~Tysons, Virginia~~New York, New York

March 1, ~~2018~~

2019

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our ~~2018~~2019 Annual Meeting of Stockholders.

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements


1.	Financial Statements are listed in the Index to Financial Statements on page F-1 of this annual report.


2.	Financial Statement Schedules. The Financial Statement Schedule described below is filed as part of this report.

Description

Schedule II - Valuation and Qualifying Accounts.

All other financial statement schedules are not required under the relevant instructions or are inapplicable and therefore have been omitted.

(b) Exhibits

The following exhibits, which are numbered in accordance with Item 601 of Regulation S-K, are filed herewith or, as noted, incorporated by reference herein:



2.1	~~Share~~Agreement for the Sale and Purchase ~~Agreement,~~of the entire issued share capital of Interoute Communications Holdings S.A., dated ~~as of November 8, 2016,~~February 23, 2018, by and among ~~the Registrant, Murosa Development S.A.R.L.~~Emasan AG, Turbo Holdings Lux II Sarl, Interoute Communications Holdings S.A., a company organized under the laws of Luxembourg ("Murosa"), Columbia Ventures Corporation, a Washington corporation, Hibernia NGS Limited, a private company limited by shares formed under the laws of the Republic of Ireland,GTT Americas, LLC, as Purchaser, and ~~Murosa as the Seller Representative (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 15, 2016).~~
~~2.2~~	~~Agreement and Plan of Merger, dated as of September 15, 2015, by and among the Registrant, Global Telecom & Technology Americas,~~GTT Communications, Inc., ~~a Virginia corporation, Duo Merger Sub, Inc., a Delaware corporation, One Source Networks Inc., a Texas corporation, Ernest Cunningham,~~ as representative of the equityholders in One Source Networks Inc. and, for limited portions of the Agreement and Plan of Merger, certain key employees of One Source named therein (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed September 18, 2015).
~~2.3~~	Agreement and Plan of Merger Amendment No.1 to the Agreement and Plan of Merger, dated as of September 15, 2015, by and among the Registrant, Global Telecom & Technology Americas, Inc., a Virginia corporation, Duo Merger Sub, Inc., a Delaware corporation, One Source Networks Inc., a Texas corporation, Ernest Cunningham, as representative of the equityholders in One Source Networks Inc. and, for limited portions of the Agreement and Plan of Merger, certain key employees of One Source named therein (incorporated by reference to Exhibit 2.7 to the Registrant’s Annual Report on Form 10-K filed March 9, 2016).
~~2.4~~	Agreement and Plan of Merger Amendment No. 2 to the Agreement and Plan of Merger, dated as of September 15, 2015, by and among the Registrant, Global Telecom & Technology Americas, Inc., a Virginia corporation, Duo Merger Sub, Inc., a Delaware corporation, One Source Networks Inc., a Texas corporation, Ernest Cunningham, as representative of the equityholders in One Source Networks Inc. and, for limited portions of the Agreement and Plan of Merger, certain key employees of One Source named therein (incorporated by reference to Exhibit 2.8 to the Registrant’s Annual Report on Form 10-K filed March 9, 2016).
~~2.5~~	Stock Purchase Agreement, dated February 19, 2015, by and among Global Telecom & Technology Americas, Inc., a Delaware corporation, the Registrant, MegaPath Group, Inc., a Delaware corporation, and MegaPath Corporation, a Virginia corporationPurchaser Guarantor (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed February ~~25, 2015)~~27, 2018).
~~2.6~~2.2	~~Agreement and Plan of Merger,~~Management Warranty Deed, dated ~~as of October 1, 2014,~~February 23, 2018, by and among the ~~Registrant, Global Telecom & Technology~~Management Warrantors, as named therein, and GTT Americas, ~~Inc., GTT UNSI, Inc., American Broadband, Inc. (d/b/a United Network Services, Inc.) and Francis D. John, as stockholder representative~~LLC (incorporated by reference to Exhibit ~~2.1~~10.2 to the Registrant’s Current Report on Form 8-K filed ~~October 7, 2014)~~February 27, 2018).
3.1	Second Amended and Restated Certificate of Incorporation, dated October 16, 2006 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed October 19, 2006).



3.2	Certificate of Amendment to Second Amended and Restated Certificate of Incorporation, dated December 31, 2013 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed January 6, 2014).
3.3	Amended and Restated Bylaws, dated October 15, 2006 (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed October 19, 2006).
3.4	Amendment to Amended and Restated Bylaws, dated May 7, 2007 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed May 10, 2007).
4.1	Specimen of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q filed November 14, 2006).
4.2	Form of Registration Rights Agreement, dated as of 2005, among the Registrant, Universal Telecommunications, Inc., Hackman Family Trust, Charles Schwab & Company Custodian FBO David Ballarini IRA and Mercator Capital L.L.C. (incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1 (File No. 333-122303) filed January 26, 2005).
4.3	Registration Rights Agreement, dated April 30, 2012, among the Registrant, Jordon Lowe and Daniel Brosk Trust dated December 22, 2006 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed May 4, 2012).
4.4	~~Form of Registration Rights~~Amended and Restated Securities Purchase Agreement, dated as of February 23, 2018, by and between GTT Communications, Inc., a Delaware corporation, and The Spruce House Partnership LP, a Delaware limited partnership (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed February 27, 2018).
4.5	Amended and Restated Securities Purchase Agreement, dated as of February 23, 2018, by and among GTT Communications, Inc., a Delaware corporation, Acacia Partners, L.P and the funds affiliated with Acacia Partners, L.P. named therein (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed February 27, 2018).



4.6	Securities Purchase Agreement, dated as of March ~~28, 2013~~25, 2018, by and between GTT Communications, Inc., a Delaware corporation, and Aleph Tiger Investors LP, a Guernsey limited partnership (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed ~~April 3, 2013)~~March 27, 2018).
~~4.5~~4.7	Amended and Restated Securities Purchase Agreement, dated as of May 30, 2018, by and between GTT Communications, Inc. and The Spruce House Partnership LP (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed June 6, 2018).
4.8	Amended and Restated Securities Purchase Agreement, dated as of May 30, 2018, by and among GTT Communications, Inc., Acacia Partners, L.P and the funds affiliated with Acacia Partners, L.P. named therein (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed June 6, 2018).
4.9	Investor Rights Agreement, dated as of May 31, 2018, by and among GTT Communications, Inc., The Spruce House Partnership LP, Acacia Partners, LP, and the funds affiliated with Acacia Partners, L.P. named therein (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed June 6, 2018).
4.10	Investor Rights Agreement, dated as of May 31, 2018, by between GTT Communications, Inc. and Aleph Tiger Investors LP (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed June 6, 2018).
4.11	Indenture, dated as of December 22, 2016, by and between GTT Escrow Corporation and Wilmington Trust, National Association, as trustee December 22, 2016 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed December 22, 2016).
~~4.6~~4.12	First Supplemental Indenture, dated as of January 9, 2017, by and among the Registrant, the Guaranteeing Subsidiaries party thereto and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed January 13, 2017).
10.1 +	2006 Employee, Director and Consultant Stock Plan, as amended (incorporated by reference to Annex E to the Registrant’s Definitive Proxy Statement on Schedule 14A filed October 2, 2006).
10.2 +	2011 Employee, Director and Consultant Stock Plan (incorporated by reference to Annex A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed April 29, 2011).
10.3 +	2015 Stock Option and Incentive Plan (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed April 30, 2015).
10.4 +	GTT Communications, Inc. 2018 Stock Option and Incentive Plan (incorporated by reference to Appendix A to the Company's Definitive Proxy Statement on Schedule 14A filed on April 30, 2018 (file number 001-35965))
10.5 +	Employment Agreement for H. Brian Thompson, dated October 15, 2006 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed October 19, 2006).
~~10.5~~10.6 +	Employment Agreement for Richard D. Calder, Jr., dated May 7, 2007 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed May 10, 2007).
~~10.6~~10.7 +	Amendment No. 1 to the Employment Agreement for Richard D. Calder, Jr., dated July 18, 2008 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed August 4, 2008).
~~10.7~~10.8 +	Amendment No. 2 to the Employment Agreement for Richard D. Calder, Jr., dated September 7, 2011 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed September 16, 2011).
~~10.8~~10.9 +	Amendment No. 3 to the Employment Agreement for Richard D. Calder, Jr., dated May 4, 2017 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 10-Q filed May 9, 2017).
~~10.9~~10.10 +	Employment Agreement for Christopher McKee, dated September 12, 2011 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed September 16, 2011).
~~10.10~~10.11 +	Amendment No. 1 to the Employment Agreement for Christopher McKee, dated May 4, 2017 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 10-Q filed May 9, 2017).
~~10.11~~10.12 +	Employment Agreement for Michael Sicoli, dated as of April 13, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed May 7, 2015).
~~10.12~~10.13 +	Amendment No. 1 to the Employment Agreement for Michael Sicoli, dated May 4, 2017 (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 10-Q filed May 9, 2017).
10.14	Credit Agreement, dated as of May 31, 2017, by and among by and among (1) the Company, as U.S. Borrower, (2) GTT Communications B.V., a subsidiary of the Company formed under the laws of The Netherlands, as EMEA Borrower, (3) KeyBank National Association, as administrative agent and letter of credit issuer, and (4) the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed June 6, 2018).



~~10.13~~10.15	Credit Agreement, dated as of January 9, 2017, by and among (1) the Registrant, as borrower, (2) KeyBank National Association, as the administrative agent and as an LC Issuer, (3) KeyBanc Capital Markets Inc., Credit Suisse Securities (USA) LLC and SunTrust Robinson Humphrey, Inc., as joint lead arrangers and joint bookrunners, (4) Credit Suisse AG, Cayman Islands Branch, and SunTrust Bank, as the syndication agents, (5) Citizens Bank, Wells Fargo Bank, National Association, and ING Capital LLC, as the documentation agents and (6) the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed January 13, 2017).
~~10.14~~10.16	Amendment No. 1, dated as of July 10, 2017, among GTT Communications, Inc., a Delaware corporation, as the borrower, the lenders party thereto, and KeyBank National Association, as the administrative agent and as the Additional Tranche B Term Loan Lender (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed July 14, 2017).
~~10.15~~10.17	Credit Agreement, dated as of October 22, 2015, among: (i) the Registrant, as the borrower; (ii) the lenders from time to time party hereto; (ii) KeyBank National Association, as the administrative agent, as the Swing Line Lender, and as LC Issuer, (iv) SunTrust Bank, as a Lender and as the syndication agent; (v) KeyBank Capital Markets Inc. and SunTrust Robinson Humphrey, Inc., as joint lead arrangers and joint bookrunners; and (vi) MUFG Union Bank, N.A., Pacific Western Bank, CIT Bank, N.A., ING Capital LLC, Société Générale and CoBank, ACB as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed October 27, 2015).
~~10.16~~10.18	Incremental Term Loan Assumption Agreement, dated as of May 3, 2016, among (1) the Registrant, as the borrower, (2) KeyBank National Association, as the administrative agent, and (3) KeyBank National Association, as the Initial Term Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed May 5, 2016).
~~10.17~~10.19	Amendment No. 1, dated as of June 28, 2016, to the October 15, 2015 Credit Agreement among the Registrant, as the borrower, the lenders party thereto, and KeyBank National Association, as the administrative agent and as the Additional Tranche B Term Loan Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed June 29, 2016).
~~10.18~~	Second Amended and Restated Credit Agreement, dated August 6, 2014, among the Registrant, Global Telecom & Technology Americas, Inc., GTT Global Telecom Government Services, LLC, nLayer Communications, Inc., PacketExchange (USA), Inc., PacketExchange, Inc., TEK Channel Consulting, LLC, WBS Connect LLC, Communication Decisions-SNVC, LLC, Core180, LLC, Electra, LTD, IDC Global, Inc., NT Network Services, LLC, GTT 360, Inc. and Wall Street Network Solutions, LLC, as co-borrows, and Webster Bank, N.A., as administrative agent, lead arranger and lender, the other lenders (as defined therein) party thereto, Pacific Western Bank, as syndication agent and East West Bank and Fifth Third Bank, as co-document agents (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed August 12, 2014).
~~10.19~~	Amendment Agreement, dated April 1, 2015, to the Second Amended and Restated Credit Agreement, dated August 6, 2014, among the Registrant, Global Telecom & Technology Americas, Inc., GTT Global Telecom Government Services, LLC, Communication Decisions-SNVC, LLC, Core180, LLC, Electra, LTD, NT Network Services, LLC, GTT 360, Inc., Wall Street Network Solutions, LLC, American Broadband, Inc., Airband Communications, Inc., Sparkplug, Inc., and MegaPath Corporation, as borrows, and Keybank National Association, as administrative agent, joint lead arranger, L/C issuer and lender, the other lenders (as defined therein) party thereto, Webster Bank, N.A. as joint lead arranger, syndication agent, L/C issuer and lender, Pacific Western Bank, Cobank, ACB and MUFG Union Bank, N.A., as co-document agents (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed April 7, 2015).
10.20	Amendment Agreement, dated June 4, 2015, to the Second Amended and Restated Credit Agreement, dated August 6, 2014, among the Registrant, Global Telecom & Technology Americas, Inc., GTT Global Telecom Government Services, LLC, Communication Decisions-SNVC, LLC, Core180, LLC, Electra, LTD, IDC Global, Inc., NT Network Services, LLC, GTT 360, Inc., Wall Street Network Solutions, LLC, American Broadband, Inc., Airband Communications, Inc., Sparkplug, Inc., and GTT Communications (MP), Inc., as borrows, and Keybank National Association, as administrative agent, joint lead arranger, L/C issuer and lender, the other lenders (as defined therein) party thereto, Webster Bank, N.A., as joint lead arranger, syndication agent, L/C issuer and lender, Pacific Western Bank, Cobank, ACB and MUFG Union Bank, N.A., as co-document agents (incorporated by reference to Exhibit 99.4 to the Registrant’s Current Report on Form 8-K/A filed June 15, 2015).



~~10.21~~	Amended and Restated Credit Agreement, dated December 30, 2013, among the Registrant, Global Telecom & Technology Americas, Inc., GTT Global Telecom Government Services, LLC, nLayer Communications, Inc., PacketExchange (USA), Inc., PacketExchange, Inc., TEK Channel Consulting, LLC, WBS Connect LLC, Communication Decisions-SNVC, LLC, Core180, LLC, Electra, LTD, IDC Global, Inc., NT Network Services, LLC, Webster Bank, N.A., and the other Lenders (as defined therein) party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed January 6, 2014).
~~10.22~~	Warrant Purchase and Exercise Agreement, dated as of August 6, 2014, by and among the Registrant, BIA Digital Partners SBIC II LP, BNY Mellon-Alcentra Mezzanine III, L.P., Plexus Fund II, L.P. and GTT Communications, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed August 12, 2014).
~~10.23~~	Incremental Revolving Credit Assumption Agreement, dated as of October 12, 2017, among GTT Communications, Inc., a Delaware corporation, as the borrower, KeyBank National Association, as the administrative agent, and the Incremental Revolving Credit Lenders party hereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 10-Q filed November 3, 2017).
21.1*	Subsidiaries of the Registrant.
23.1*	Consent of CohnReznick LLP.
24.1*	Power of Attorney (included on the signature page to this Annual Report).
31.1*	Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.
31.2*	Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1 +	2016 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-210488) filed March 30, 2016).
101.INS**	XBRL Instance Document
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
101.INS**	XBRL Instance Document
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
101.INS**	XBRL Instance Document

*	Filed herewith
**	Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

+	Denotes a management or compensatory plan or arrangement.

ITEM 16. FORM 10-K SUMMARY

Not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	GTT COMMUNICATIONS, INC.

	By:	/s/ Richard D. Calder, Jr.
		Richard D. Calder, Jr.
		President and Chief Executive Officer

Date: March 1, ~~2018~~2019

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard D. Calder, Jr. and Michael T. Sicoli, jointly and severally, his attorney-in-fact, each with the full power of substitution, for such person, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might do or could do in person hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his substitute, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on or before March 1, ~~2018~~2019 by the following persons on behalf of the registrant and in the capacities indicated.



Signature		Title
/s/ Richard D. Calder, Jr.		President, Chief Executive Officer and
Richard D. Calder, Jr.		Director (Principal Executive Officer)

/s/ Michael T. Sicoli		Chief Financial Officer
Michael T. Sicoli		(Principal Financial Officer)

/s/ Daniel M. Fraser		Vice President and Controller
Daniel M. Fraser		(Principal Accounting Officer)

/s/ H. Brian Thompson		Chairman of the Board and Executive
H. Brian Thompson		Chairman

/s/ Nicola A. Adamo		Director
Nicola A. Adamo

/s/ S. Joseph Bruno		Director
S. Joseph Bruno

/s/ Julius Erving		Director
Julius Erving

/s/ Rhodric C. Hackman		Director
Rhodric C. Hackman

/s/ Howard Janzen		Director
Howard Janzen

/s/ Elizabeth Satin		Director
Elizabeth Satin

/s/ Theodore B. Smith, III		Director
Theodore B. Smith, III

INDEX TO FINANCIAL STATEMENTS



GTT Communications, Inc.
Report of Independent Registered Public Accounting Firm	F - 2
Consolidated Balance Sheets as of December 31, ~~2017~~2018 and ~~2016~~2017	F - 3
Consolidated Statements of Operations for the Years Ended December 31, 2018, 2017, ~~2016,~~ and ~~2015~~2016	F - 4
Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2018, 2017, ~~2016,~~ and ~~2015~~2016	F - 5
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2018, 2017, ~~2016,~~ and ~~2015~~2016	F - 6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017, ~~2016,~~ and ~~2015~~2016	F - 7
Notes to Consolidated Financial Statements	F - 8

F - 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the ~~Shareholders and~~ Board of Directors and Stockholders of GTT Communications, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of GTT Communications, Inc. and subsidiaries (the “Company”) as of December 31, ~~2017~~2018 and ~~2016,~~2017, and the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows for each of the ~~three~~ years in the three-year period ended December 31, ~~2017,~~2018, and the related notes and the schedule listed in the index at 15(a) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2018 and ~~2016,~~2017, and the results of its operations and its cash flows for each of the ~~three~~ years in the three-year period ended December 31, ~~2017,~~2018, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the Company’s internal control over financial reporting as of December 31, ~~2017,~~2018, based on criteria established in Internal Control-Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 1, ~~2018,~~2019, expressed an unqualified ~~opinion on the Company’s internal control over financial reporting.~~opinion.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial ~~statement presentation.~~statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ CohnReznick LLP

We have served as the Company's auditor since 2005.

~~Tysons, Virginia~~New York, New York

March 1, ~~2018~~

2019

F - 2

GTT Communications, Inc.

Consolidated Balance Sheets

(Amounts in millions, except for share and per share data)


	December 31, 2017			December 31, 2016			December 31, 2018			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	101.2		$	29.7		$	55.3		$	101.2
Accounts receivable, net of allowances of $5.1 and $2.7, respectively	102.8			76.3
Deferred costs	2.1			3.4
Prepaid expenses	10.4			5.8
Other assets	11.6			3.6
Accounts receivable, net of allowances of $11.1 and $5.1, respectively							174.5			90.0
Prepaid expenses and other current assets							49.2			24.1
Total current assets	228.1			118.8			279.0			215.3
Restricted cash and cash equivalents	—			304.3
Property and equipment, net	499.3			43.4			1,870.4			499.3
Intangible assets, net	417.1			193.9			552.4			417.1
Goodwill	644.5			280.6			1,738.0			644.5
Other long-term assets	9.2			12.3			97.8			9.2
Total assets	$	1,798.2		$	953.3		$	4,537.6		$	1,785.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	22.5		$	11.3		$	89.2		$	22.5
Accrued expenses and other current liabilities	89.0			36.9			226.8			103.0
Acquisition earn-outs and holdbacks	14.0			24.4
Current portion of capital lease obligations	1.5			1.0			6.7			1.5
Current portion of long-term debt	7.0			4.3			39.9			7.0
Deferred revenue	53.7			17.9			84.2			40.9
Total current liabilities	187.7			95.8			446.8			174.9
Capital lease obligations, long-term portion	0.3			0.1			35.1			0.3
Long-term debt	1,236.5			725.2			3,151.6			1,236.5
Deferred revenue, long-term portion	108.0			3.4			287.0			108.0
Deferred tax liability	26.3			—
Deferred tax liabilities							176.2			26.3
Other long-term liabilities	8.0			1.0			26.2			8.0
Total liabilities	1,566.8			825.5			4,122.9			1,554.0
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $.0001 per share, 80,000,000 shares authorized, 44,531,905 and 37,228,144 shares issued and outstanding as of December 31, 2017 and 2016, respectively	—			—
Common stock, par value $.0001 per share, 80,000,000 shares authorized, 55,625,149 and 44,531,905 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively							—			—
Additional paid-in capital	360.2			197.3			809.9			360.2
Accumulated deficit	(124.9		)	(64.6		)	(368.3		)	(124.9		)
Accumulated other comprehensive loss	(3.9		)	(4.9		)
Accumulated other comprehensive income (loss)							(26.9		)	(3.9		)
Total stockholders’ equity	231.4			127.8			414.7			231.4
Total liabilities and stockholders’ equity	$	1,798.2		$	953.3		$	4,537.6		$	1,785.4

The accompanying notes are an integral part of these consolidated financial statements.

F - 3

GTT Communications, Inc.

Consolidated Statements of Operations

(Amounts in millions, except for share and per share data)


	Year Ended December 31,									Year Ended December 31,
	2017			2016			2015			2018			2017			2016
Revenue:
Telecommunications services	$	827.9		$	527.3		$	372.5		$	1,490.8		$	827.9		$	527.3

Operating expenses:
Cost of telecommunications services	432.1			279.6			207.7			819.4			432.1			279.6
Selling, general and administrative expenses	215.4			143.2			101.7			383.2			215.4			143.2
Severance, restructuring and other exit costs	22.4			0.9			12.7			37.1			22.4			0.9
Depreciation and amortization	132.6			62.8			46.7			211.4			132.6			62.8

Total operating expenses	802.5			486.5			368.8			1,451.1			802.5			486.5

Operating income	25.4			40.8			3.7			39.7			25.4			40.8

Other expense:
Interest expense, net	(71.2		)	(29.4		)	(13.9		)	(146.9		)	(71.2		)	(29.4		)
Loss on debt extinguishment	(8.6		)	(1.6		)	(3.4		)	(13.8		)	(8.6		)	(1.6		)
Other income (expense), net	0.2			(0.6		)	(1.2		)
Other (expense) income, net										(127.9		)	0.2			(0.6		)

Total other expense	(79.6		)	(31.6		)	(18.5		)	(288.6		)	(79.6		)	(31.6		)

(Loss) income before income taxes	(54.2		)	9.2			(14.8		)	(248.9		)	(54.2		)	9.2

Provision for (benefit from) income taxes	17.3			3.9			(34.1		)
(Benefit from) provision for income taxes										(5.5		)	17.3			3.9

Net (loss) income	$	(71.5	)	$	5.3		$	19.3		$	(243.4	)	$	(71.5	)	$	5.3

(Loss) earnings per share:
(Loss) income per share:
Basic	$	(1.71	)	$	0.14		$	0.55		$	(4.80	)	$	(1.71	)	$	0.14
Diluted	$	(1.71	)	$	0.14		$	0.54		$	(4.80	)	$	(1.71	)	$	0.14

Weighted average shares:
Basic	41,912,952			37,055,663			34,973,284			50,718,279			41,912,952			37,055,663
Diluted	41,912,952			37,568,915			35,801,395			50,718,279			41,912,952			37,568,915



Delaware		20-2096338
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)



Large Accelerated Filer	þ		Accelerated Filer	¨
Non-Accelerated Filer	¨	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	¨
			Emerging growth company	¨



		Page
	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	15
Item 2.	Properties	15
Item 3.	Legal Proceedings	1516
Item 4.	Mine Safety Disclosures	1516
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	1617
Item 6.	Selected Financial Data	1718
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1920
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	3538
Item 8.	Financial Statements and Supplementary Data	3538
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	3538
Item 9A.	Controls and Procedures	3539
Item 9B.	Other Information	3942
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	3942
Item 11.	Executive Compensation	3942
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	3942
Item 13.	Certain Relationships and Related Transactions, and Director Independence	3942
Item 14.	Principal Accounting Fees and Services	3942
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	4043
Item 16.	Form 10-K Summary	4346
	Signatures	4446



	December 31, 2018			December 31, 2017

US Term loan	$	1,761.2		$	693.0
EMEA Term loan	857.6			—
7.875% Senior unsecured notes	575.0			575.0
Revolving line of credit	59.0			—
Other secured loans	18.1			—
Total debt obligations	3,270.9			1,268.0
Unamortized debt issuance costs	(31.6		)	(33.8		)
Unamortized original issuance (discount) premium, net	(47.8		)	9.3
Carrying value of debt	3,191.5			1,243.5
Less current portion	(39.9		)	(7.0		)
Long-term debt less current portion	$	3,151.6		$	1,236.5



Committed capacity	$	200.0
Borrowings outstanding	(59.0		)
Letters of credit issued	(11.5		)
Unused and available	$	129.5



Title of each class	Name of each exchange on which registered
Common stock, par value $.0001 per share	NYSE

Securities registered pursuant to Section 12(g) of the Act:
None



	Common Stock
	High		Low
2016
First Quarter	$	18.70	$	12.31
Second Quarter	$	18.88	$	14.96
Third Quarter	$	24.20	$	17.55
Fourth Quarter	$	29.75	$	20.80
2017
First Quarter	$	29.70	$	22.95
Second Quarter	$	34.20	$	23.10
Third Quarter	$	32.60	$	28.30
Fourth Quarter	$	47.75	$	31.51



Fiscal Quarter Ending		Maximum Ratio
December 31, 2018		6.50:1.00
March 31, 2019		6.50:1.00
June 30, 2019		6.50:1.00
September 30, 2019		6.25:1.00
December 31, 2019		6.25:1.00
March 31, 2020		6.00:1.00
June 30, 2020		6.00:1.00
September 30, 2020		5.50:1.00
December 31, 2020		5.50:1.00
March 31, 2021		5.50:1.00
June 30, 2021		5.00:1.00
September 30, 2021		5.00:1.00
December 31, 2021		4.50:1.00
March 31, 2022		4.50:1.00
June 30, 2022 and thereafter		4.25:1.00



	December 31, 2017			December 31, 2016

Term loan	$	693.0		$	425.8
7.875% Senior unsecured notes	575.0			300.0
Revolving line of credit	—			20.0
Total debt obligations	1,268.0			745.8
Unamortized debt issuance costs	(33.8		)	(9.3		)
Unamortized original issuance premium (discount), net	9.3			(7.0		)
Carrying value of debt	1,243.5			729.5
Less current portion	(7.0		)	(4.3		)
Long-term debt less current portion	$	1,236.5		$	725.2



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
					December 31, 2018
Derivative Instrument	Aggregate Notional Amount		Effective Date	Maturity Date	Asset Derivatives		Liability Derivatives
Interest rate swap	$	500.0	4/30/2018	4/30/2023	$	—	$	(4.4	)
Interest rate swap	$	200.0	6/29/2018	5/31/2025	—		(6.9		)
Interest rate swap	$	300.0	6/29/2018	6/30/2021	—		(2.8		)
Interest rate swap	€	317.0	6/29/2018	5/31/2025	—		(8.3		)
					$	—	$	(22.4	)


	Year Ended December 31,									Year-over-Year				Year Ended December 31,									Year-over-Year
	2017			2016			2015			2017 to 2016		2016 to 2015		2018			2017			2016			2018 to 2017		2017 to 2016
Revenue:
Telecommunications services	$	827.9		$	527.3		$	372.5		57.0	%	41.6	%	$	1,490.8		$	827.9		$	527.3		80.1	%	57.0	%

Operating expenses:
Cost of telecommunications services	432.1			279.6			207.7			54.5	%	34.7	%	819.4			432.1			279.6			89.6	%	54.5	%
Selling, general and administrative expenses	215.4			143.2			101.7			50.4	%	40.8	%	383.2			215.4			143.2			77.9	%	50.4	%
Severance, restructuring and other exit costs	22.4			0.9			12.7			2,474.7	%	(93.1	)%	37.1			22.4			0.9			65.6	%	2,388.9	%
Depreciation and amortization	132.6			62.8			46.7			111.2	%	34.4	%	211.4			132.6			62.8			59.4	%	111.1	%

Total operating expenses	802.5			486.5			368.8			65.0	%	31.9	%	1,451.1			802.5			486.5			80.8	%	65.0	%

Operating income	25.4			40.8			3.7			(37.8	)%	1,018.5	%	39.7			25.4			40.8			56.3	%	(37.7	)%

Other expense:
Interest expense, net	(71.2		)	(29.4		)	(13.9		)	141.9	%	111.1	%	(146.9		)	(71.2		)	(29.4		)	106.3	%	142.2	%
Loss on debt extinguishment	(8.6		)	(1.6		)	(3.4		)	427.0	%	(52.3	)%	(13.8		)	(8.6		)	(1.6		)	*		*
Other income (expense), net	0.2			(0.6		)	(1.2		)	(134.7	)%	(50.6	)%
Other (expense) income, net														(127.9		)	0.2			(0.6		)	*		*

Total other expense	(79.6		)	(31.6		)	(18.5		)	151.6	%	70.7	%	(288.6		)	(79.6		)	(31.6		)	262.6	%	151.9	%

(Loss) income before income taxes	(54.2		)	9.2			(14.8		)	(689.9	)%	(162.0	)%	(248.9		)	(54.2		)	9.2			*		*

Provision for (benefit from) income taxes	17.3			3.9			(34.1		)	*		*
(Benefit from) provision for income taxes														(5.5		)	17.3			3.9			*		*

Net (loss) income	$	(71.5	)	$	5.3		$	19.3		(1,459.3	)%	(72.8	)%	$	(243.4	)	$	(71.5	)	$	5.3		*		*


Consolidated Statements of Cash Flows Data	Year Ended December 31,									Year Ended December 31,
(amounts in millions)	2017			2016			2015			2018			2017			2016
Net cash provided by operating activities	$	63.4		$	60.4		$	24.6		$	82.4		$	63.4		$	60.4
Net cash used in investing activities	(460.4		)	(362.6		)	(314.8		)	(2,426.3		)	(764.7		)	(58.3		)
Net cash provided by financing activities	469.7			318.6			253.6			2,304.3			469.7			318.6


	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Term loan	$	693.0	$	7.0	$	14.0	$	14.0	$	658.0
7.875% Senior Note	575.0		—		—		—		575.0
Term loans											$	2,618.8	$	26.3	$	52.7	$	52.7	$	2,487.1
7.875% senior note											575.0		—		—		—		575.0
Revolving line of credit											59.0		—		—		59.0		—
Other secured loans											18.1		13.6		4.5		—		—
Operating leases	42.0		6.3		12.1		9.4		14.2		128.0		24.5		40.3		23.7		39.5
Capital leases	1.8		1.5		0.3		—		—		41.8		6.7		9.1		5.6		20.4
Network supplier agreements ⁽¹⁾	308.6		144.1		111.8		13.7		39.0		1,576.5		602.8		667.8		102.7		203.2
Other ⁽²⁾	15.1		8.4		5.4		1.3		—		6.7		2.8		3.9		—		—
	$	1,635.5	$	167.3	$	143.6	$	38.4	$	1,286.2	$	5,023.9	$	676.7	$	778.3	$	243.7	$	3,325.2



	Year Ended December 31, 2018
Primary geographic market
United States	$	785.4
Europe	598.7
Other	46.2
Total revenue from contracts with customers	1,430.3
Lease revenue	60.5
Total telecommunications services revenue	$	1,490.8



2019	$	26.2
2020	10.9
2021	9.2
2022	8.7
2023	8.0
2024 and beyond	12.7
	$	75.7



~~Buildings~~Freehold buildings	30 years
Furniture and ~~Fixtures~~fixtures	7 years
Fiber ~~Optic Cable~~optic cable and duct	20 - 40 years
Fiber ~~Optic Network Equipment~~optic network equipment	3 - 15 years
Leasehold ~~Improvements~~improvements	up to 10 years
Computer ~~Hardware~~hardware and ~~Software~~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.



	December 31, 2018
				Quoted Prices in Active Markets		Significant Other Observable Inputs			Significant Unobservable Inputs
(amounts in millions)	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 Consolidated Balance Sheet				Unadjusted Quoted Prices in Active Markets for Identical Assets or Liabilities ⁽¹⁾(Level 1)
(amounts in millions)	December 31, 2018		December 31, 2017		December 31, 2018		December 31, 2017
Liabilities not recorded at fair value in the Financial Statements:
Long-term debt, including the current portion:
US Term loan	$	1,761.2	$	693.0	$	1,648.9	$	697.3
EMEA Term loan	857.6		—		827.5		—
7.875% Senior unsecured notes	575.0		575.0		488.8		608.1
Revolving line of credit	59.0		—		59.0		—
Other secured loans	18.1		—		18.1		—
Total long-term debt, including current portion	$	3,270.9	$	1,268.0	$	3,042.3	$	1,305.4



	Interoute
Purchase Price
Cash paid at closing	$	2,239.3
Purchase consideration	$	2,239.3

Purchase Price Allocation
Assets acquired:
Cash	$	66.1
Accounts receivable	86.6
Prepaid expenses and other current assets	51.3
Property and equipment	1,435.9
Other assets	24.5
Intangible assets - customer lists	171.5
Intangible assets - tradename	2.1
Intangible assets - other	15.4
Deferred tax assets	35.9
Goodwill	1,040.6
Total assets acquired	2,929.9

Liabilities assumed:
Accounts payable	(75.5		)
Accrued expenses and other current liabilities	(115.2		)
Capital leases ⁽¹⁾	(42.4		)
Debt	(27.7		)
Deferred revenue	(243.0		)
Deferred tax liabilities	(148.8		)
Other long-term liabilities	(38.0		)
Total liabilities assumed	(690.6		)
Net assets acquired	$	2,239.3
(1) Includes $38.8 million of assumed long-term building leases.



	Interoute
Intangible assets - customer lists	14.7
Intangible assets - tradename	1.0
Intangible assets - other	7.0
Weighted average	13.9



2019	$	16.1
2020	15.2
2021	15.2
2022	15.2
2023	15.2
2024 and beyond	98.9
Total	$	175.8



	Hibernia			Global Capacity			Other 2017 Acquisitions
Purchase Price
Cash paid at closing, including working capital estimate	$	529.6		$	104.0		$	92.8
Deferred cash consideration	—			—			2.0
Common stock ⁽¹⁾	86.1			53.6			2.2
Purchase consideration	$	615.7		$	157.6		$	97.0

Purchase Price Allocation
Assets acquired:
Current assets	$	42.6		$	25.7		$	8.5
Property and equipment	432.5			34.4			9.8
Other assets	0.1			2.5			0.5
Intangible assets - customer lists	166.7			41.2			39.8
Intangible assets - tradename	0.7			—			0.1
Intangible assets - other	—			4.6			0.2
Deferred tax asset	—			—			—
Goodwill	201.1			88.8			73.7
Total assets acquired	843.7			197.2			132.6

Liabilities assumed:
Current liabilities	(40.6		)	(24.1		)	(23.0		)
Capital leases, long-term portion	—			—			(2.3		)
Deferred revenue	(163.3		)	(15.5		)	(1.4		)
Deferred tax liability	(24.1		)	—			(8.7		)
Other long-term liabilities	—			—			(0.2		)
Total liabilities assumed	(228.0		)	(39.6		)	(35.6		)
Net assets acquired	$	615.7		$	157.6		$	97.0



2018	$	30.5
2019	26.9
2020	26.9
2021	26.9
2022	26.9
2023 and beyond	94.1
Total	$	232.2


Goodwill - January 1, 2016	$	271.0
Initial goodwill associated with 2016 business combinations	5.1
Adjustments to prior year business combinations	4.5
Goodwill - December 31, 2016	280.6		$	280.6
Initial goodwill associated with 2017 business combinations	334.7		334.7
Adjustments to current year business combinations	28.9
Adjustments to 2017 business combinations			28.9
Adjustments to prior year business combinations	0.3		0.3
Goodwill - December 31, 2017	$	644.5	644.5
Initial goodwill associated with 2018 business combinations			1,130.9
Adjustments to 2018 business combinations			(37.9		)
Adjustments to prior year business combinations			22.2
Foreign currency translation adjustments			(21.7		)
Goodwill - December 31, 2018			$	1,738.0


2018	$	73.8
2019	65.4		$	85.6
2020	62.3		81.7
2021	60.8		80.1
2022	47.7		67.1
2023 and beyond	107.1
2023			54.6
2024 and beyond			183.3
Total	$	417.1	$	552.4



	December 31,
	2017			2016
Land and Buildings	$	14.2		$	—
Furniture and Fixtures	1.9			1.0
Fiber Optic Cable	411.0			—
Fiber Optic Network Equipment	199.8			116.2
Leasehold Improvements	5.0			4.4
Computer Hardware and Software	25.9			15.6
Property and equipment, gross	657.8			137.2
Less accumulated depreciation	(158.5		)	(93.8		)
Property and equipment, net	$	499.3		$	43.4



	Contract Term
	Less than 1 Year			Greater than 1 Year			Total
Balance, December 31, 2016	$	13.2		$	3.4		$	16.6
Revenue recognized from beginning balance	(7.7		)	(3.4		)	(11.1		)
Increase in deferred revenue, net	12.9			—			12.9
Business combinations (gross)	22.6			157.6			180.2
Revenue recognized from business combinations	(22.4		)	(27.3		)	(49.7		)
Balance, December 31, 2017	$	18.6		$	130.3		$	148.9
Revenue recognized from beginning balance	(18.6		)	(21.7		)	(40.3		)
Increase in deferred revenue, net	28.7			13.4			42.1
Business combinations (gross)	0.4			242.6			243.0
Revenue recognized from business combinations	(0.4		)	(22.1		)	(22.5		)
Balance, December 31, 2018	$	28.7		$	342.5		$	371.2


	Capacity Sales and IRUs		Contract Term
2018	$	15.8
			Less than 1 Year		Greater than 1 Year		Total
2019	11.3		$	28.7	$	55.5	$	84.2
2020	11.0		—		37.3		37.3
2021	10.1		—		34.4		34.4
2022	10.1		—		32.9		32.9
2023 and beyond	63.8
2023			—		32.1		32.1
2024 and beyond			—		150.3		150.3
	$	122.1	$	28.7	$	342.5	$	371.2



Committed capacity	$	100.0
Borrowings outstanding	—
Letters of credit issued	(4.6		)
Unused and available	$	95.4


	Total debt		Total debt
2018	$	7.0
2019	7.0		$	39.9
2020	7.0		30.6
2021	7.0		26.6
2022	7.0		26.3
2023 and beyond	1,233.0
2023			85.4
2024 and beyond			3,062.1
	$	1,268.0	$	3,270.9



	Balance, December 31, 2017		Charges		Acquired Costs		Payments			Foreign Currency Translation Adjustments			Balance, December 31, 2018
Employee termination benefits	$	5.5	$	19.2	$	6.0	$	(23.2	)	$	(0.1	)	$	7.4
Lease terminations	2.4		2.6		7.8		(3.5		)	—			9.3
Other contract terminations	1.8		15.3		—		(8.0		)	—			9.1
	$	9.7	$	37.1	$	13.8	$	(34.7	)	$	(0.1	)	$	25.8