Investor Presentation August 2016
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by forward-looking words such as may, will, should, could, expect, plan, anticipate, believe, intend, estimate, predict, potential or continue, the negative of such terms or other comparable terminology, although not all forward-looking statements contain these words. These statements are only predictions. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. Such forward-looking statements are and will be subject to many risks, uncertainties and factors relating to our operations and the business environment that may cause our actual results to be materially different from any future results, express or implied, by such forward-looking statements. You are also urged to carefully review and consider the various disclosures made by us that attempt to advise interested parties of the factors that affect our business, including without limitation the disclosures made in our Annual Report on Form 10-K for the year ended December 31, 2015 under the caption Risk Factors. Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to: our ability to develop and market new products and services that meet customer demands and generate acceptable margins; our reliance on several large customers; our ability to negotiate and enter into acceptable contract terms with our suppliers; our ability to attract and retain qualified management and other personnel; competition in the industry in which we do business; failure of the third-party communications networks on which we depend; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which we are engaged; our ability to maintain our databases, management systems and other intellectual property; our ability to maintain adequate liquidity and produce sufficient cash flow to fund our capital expenditures and debt service; our ability to obtain capital to grow our business; technological developments and changes in the industry; our ability to complete acquisitions or divestures and to integrate any business or operation acquired; and general economic conditions. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. These forward-looking statements represent our estimates and assumptions only as of the date of this presentation regardless of any sale of our securities and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this presentation. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 2
GTT Overview GTT delivers cloud networking services to multinational clients Expansive Global Reach Top-five global IP network Broad Portfolio of Services Internet, wide area networking, managed services and voice services Unique Service Model Service lifecycle built on core values of simplicity, speed and agility Strong Growth Profile LQA Revenue: $516M (41% 5-YR CAGR) LQA Adj. EBITDA: $121M (68% 5-YR CAGR) Note: LQA refers to annualized 2Q16 results; refer to non-gaap reconciliation for Adjusted EBITDA definition 3
Extensive Global Network 100+ 2,000 Country deployments Top 5 Regional carriers for last mile access 250+ Ranked global Internet backbone (1) Core network Points of Presence (PoPs) 100,000+ Client locations served (1) Source: Dyn Research 4
A Better Way to Reach the Cloud Wide area network solutions to securely connect to any client location and application Client Remote Users Client Branch Office Client Branch Office GTT PoP Client Data Center Client HQ Office GTT PoP GTT PoP Client Branch Office GTT PoP Tier 1 Global IP Network Client Branch Office GTT PoP Cloud Service Providers Public Internet GTT PoP GTT PoP GTT PoP Core Network Connectivity Points of Presence (PoPs) in most major carrier neutral data centers worldwide Leased wavelengths between PoPs; typically purchased on 1-yr terms to maintain flexibility and leverage Not specific to customer contracts; based on aggregate traffic demand Last Mile Access Leased Ethernet/MPLS/Broadband connections Typically purchased back-to-back with customer contracts ~80% of monthly network spend 5
Compelling Portfolio of Services EtherCloud Services Secure connectivity to any location in the world and any application in the cloud Flexible wide area network solutions Point to point and multipoint configurations Ethernet and MPLS technologies ~2,000 regional carriers for last mile connectivity Managed Services End-to-end network management Managed Network Services Managed network connectivity Managed routers, firewalls, wifi Multi-layered Security Services Unified threat management PCI compliance and reporting Managed Secure Access Remote access from any device Internet Services One of the world s top 5 internet backbones IP Transit Dedicated Internet Access Broadband Internet Top Global Internet Providers (1) Voice and Unified Communications IP-based communication and collaboration SIP Trunking Hosted Enterprise PBX Cloud-based call center Extensive global telephony footprint 1. Level 3 2. NTT 3. Telia Sonera 4. 5. Cogent (1) Source: Dyn Research 6
Diversified Revenue Mix Customer Type Service Offering Geography (1) (1) Managed Services includes network connectivity as part of bundled service offering Note: Data represents 2Q 2016 revenue mix 7
Growth Strategy Drivers Differentiators Expand cloud networking services to multinational clients Extend secure network connectivity to any location in the world and with any application in the cloud Deliver outstanding client experience by living our core values of simplicity, speed and agility Capex Light model allows for global reach and rapid deployment of bandwidth to meet client needs Internally developed software platform (CMD) to handle all aspects of customer lifecycle and profitability Global scale and Top-5 IP backbone enable superior services and value Execute strategy through organic growth and accretive acquisitions Next Financial Objective: $1 Billion in Revenue, $250 Million in Adjusted EBITDA 8
Key Organic Growth Initiatives Grow direct sales team Increase indirect channel presence Expand Client Account Management (CAM) program Win share of Global Network Services contract (US Govt) Annual organic growth targets: Revenue = 8-10%; Adjusted EBITDA = 15-20% 9
Annualized Revenue ($ millions) Transformation through Strategic M&A Adds enterprisegrade voice services Adds indirect channel platform Completes transformation to Tier 1 IP network Adds managed network services Proven Approach Strong strategic fit Expand services / reach Add clients / sales talent Successful integration of organization, systems and networks (within two quarters) Highly accretive based on multiple of post-synergy EBITDA (within two quarters) 10
Demonstrated Ability to Balance Organic and Strategic Growth Over the past three years, GTT has delivered revenue growth of 5X and Adjusted EBITDA growth of nearly 9X $ millions Revenue Adjusted EBITDA Notes: All data presented on an annualized basis; 1Q13 Run Rate and Tinet are presented in constant currency using 2Q16 rates; acquisitions presented as of last full quarter prior to closing; Organic/Other includes immaterial acquisitions; refer to non-gaap reconciliation for Adjusted EBITDA definition 11
($ in Millions) Financial Highlights Revenue Gross Profit (1) Adjusted EBITDA (1) Unlevered FCF (1) (1) Refer to non-gaap Financial Information for Gross Profit, Adjusted EBITDA and Unlevered FCF definitions Note: Financial results are as reported, not including constant currency adjustments and only including acquisitions after their respective close dates 12
($ in Millions) Pro Forma Financial Highlights Revenue As Reported (1) Pro Forma (2) Adjusted EBITDA As Reported (1) Pro Forma (2) (1) As reported results include acquisitions only after their respective close dates and do not include constant currency adjustments (2) Refer to Non-GAAP Financial Information for definitions of Pro Forma Revenue and Adjusted EBITDA (Pro Forma information includes only material acquisitions) (3) Growth rates calculated using constant currency 13
($ in Millions) Liquidity and Credit Profile $404.3 (1) Total Debt divided by annualized 2Q16 Adjusted EBITDA; refer to Non-GAAP Financial Information for calculation of Adjusted EBITDA (2) Total Debt less Cash divided by annualized 2Q16 Adjusted EBITDA Note: Data presented as of 6/30/16 14
Investment Highlights Significant Market Opportunity IP-based and cloud traffic forecasted to grow rapidly, at 132% and 191% CAGR (1), creating significant need for bandwidth and networking services Increasing complexity of IT and security requirements driving demand for managed services Higher propensity to purchase networking services from non-incumbent providers Compelling Business Strategy Global tier 1 IP network with top 5 internet backbone Targeting multinational clients underserved by global incumbents Trusted by clients to deliver mission-critical services with simplicity, speed and agility Proven Track Record Significant growth; 41% Revenue CAGR and 68% Adjusted EBITDA CAGR from 2011-2Q16 Proven ability to identify, close and integrate accretive acquisitions Large, diversified, blue-chip customer base Superior Financial Profile Monthly recurring revenue model (90%+ of total revenue) with expanding margins Low capital expenditures (4-5% of revenue) delivering high unlevered free cash flow Strong balance sheet to fund organic and strategic growth Experienced Leadership Team Deep expertise managing high-growth communications businesses Long tenured and experienced board of directors Significant management and board ownership (1) Sources: Cisco Visual Networking Index: Forecast and Methodology, 2015, Cisco Global Cloud Index: Forecast and Methodology, 2014 2019 White Paper Note: Refer to non-gaap Financial Information for Adjusted EBITDA and Unlevered FCF definition 15
Non-GAAP Financial Information 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. Adjusted EBITDA, Gross Profit, and Unlevered Free Cash Flow We use Adjusted EBITDA and Gross Profit to evaluate operating performance and profitability, and we use Unlevered Free Cash Flow to evaluate the level of capital expenditures needed to support our revenue and Adjusted EBITDA. A reconciliation of these non-gaap financial measures to the most directly comparable GAAP financial measures is included below. Pro Forma Financial Information In addition to financial measures prepared in accordance with GAAP, from time to time we may use or publicly disclose certain "pro forma financial measures. We believe certain pro forma financial measures provide a more comparable view of our results relative to prior periods, particularly given the number of acquisitions we have completed in the past. The following unaudited pro forma financial information and related notes present the historical financial information of GTT as if the acquisition of One Source Networks, Inc. ("OSN") had occurred on the first day of the applicable period presented, and do not include any add-backs for expected post-acquisition cost synergies in pre-acquisition periods. Note: pro forma information is only prepared for material acquisitions. Constant Currency We evaluate our results of operations both as reported and on a constant currency basis. The constant currency presentation, which is a non- GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, consistent with how we evaluate our performance. We calculate constant currency results by converting our current period local currency financial results using prior period exchange rates and comparing these adjusted amounts to our prior period reported results. 16
($ in Millions) Non-GAAP Reconciliation (Annual) 17
($ in Millions) Non-GAAP Reconciliation (Quarterly) 18
($ in Millions) Pro Forma Reconciliation (1) Represents revenue recognized by GTT from acquired companies prior to their respective close dates (2) Represents (i) revenue recognized by acquired companies from GTT prior to their respective close dates and (ii) non-recurring installation revenue historically recognized on a cash basis by acquired companies (3) Represents revenue, net of expense, recognized by GTT from acquired companies prior to their respective close dates (4) Represents (i) revenue, net of expense, recognized by acquired companies from GTT prior to their respective close dates, (ii) non-recurring installation revenue, net of non-recurring installation expenses, historically recognized on a cash basis by acquired companies, (iii) non-cash stock compensation, and (iv) non-recurring expenses outside of the normal course of business Note: Pro forma adjustments do not include any add-backs for expected post-acquisition cost synergies in pre-acquisition periods 19