UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | --- | |-------------------------------------------------------------------------------------|------------------------------------------------------------ ...

ATN International, Inc. (NASDAQ:ATNI) Q2 2020 Earnings Conference Call July 30, 2020 11:30 AM ET Company Participants Michael Prior - Chief Executive Officer Justin Benincasa - Chief Financial Officer Conference Call Participants Ric Prentiss - Raymond James Greg Burns - Sidoti & Company Allen Klee - National SEC Corp Hamed Khorsand - BWS Financial Operator Good afternoon, ladies and gentlemen and welcome to the ATN International Q2 2020’s Earnings Conference Call. At this time, all participants are in a li ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | --- | |-------------------------------------------------------------------------------------------------------------------|----------------------------- ...

ATN International, Inc. (NASDAQ:ATNI) Q1 2020 Earnings Conference Call April 30, 2020 11:30 AM ET Company Participants Justin Benincasa - Chief Financial Officer Michael Prior - Chief Executive Officer Conference Call Participants Greg Burns - Sidoti and Company Rick Prentiss - Raymond James Allen Klee - National Securities Hamed Khorsand - BWS Financial Operator Ladies and gentleman, thank you for standing by and welcome to the ATN International First Quarter 2020 Earnings Conference Call. At this time, al ...

Part I This section provides an overview of the company's business operations, including its telecommunications and renewable energy segments, along with associated risks and legal matters [Business](index=5&type=section&id=Item%201.%20Business) ATN International operates in International Telecom, US Telecom, and Renewable Energy, targeting underserved markets with disciplined capital allocation Segment Overview (as of Dec 31, 2019) | Segment | Services | Markets | Tradenames | | :--- | :--- | :--- | :--- | | **International Telecom** | Wireline, Wireless, Video | Bermuda, Cayman Islands, Guyana, US Virgin Islands | Fireminds, GTT+, One, Logic, Viya | | **US Telecom** | Wireless, Wireline | United States (rural markets) | Choice, Choice NTUA Wireless, Commnet, WestNet, Geoverse | | **Renewable Energy** | Solar | India | Vibrant Energy | Segment Revenue Contribution | Segment | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | International Telecom | **74%** | **70%** | **63%** | | US Telecom | **25%** | **26%** | **33%** | - The company's core strategy focuses on: - Targeting under-served or rural markets where it can be a leading provider - Collaborating with strong local management teams, supplemented by ATN's operational and financial expertise - Maintaining a disciplined, **return-on-investment** approach to capital allocation, including investments in early-stage, strategically relevant businesses[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) [Telecommunication Services](index=11&type=section&id=Telecommunication%20Services) This section details the company's International and US Telecom services, including subscriber data, network infrastructure, and the FirstNet project - The International Telecom segment provides wireless and wireline services in Guyana, Bermuda, the US Virgin Islands, and the Cayman Islands. As of December 31, 2019, it had approximately **284,000 wireless subscribers**, **167,000 wireline access lines**, **130,000 internet customers**, and **38,000 video customers**[22](index=22&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The US Telecom segment primarily offers wholesale wireless voice and data roaming services in rural markets to major national carriers. AT&T and Verizon collectively accounted for approximately **13%** of the company's total consolidated revenue in 2019. As of year-end 2019, the domestic network comprised **1,043 base stations** on **453 sites**[41](index=41&type=chunk)[43](index=43&type=chunk)[46](index=46&type=chunk) - In July 2019, the company entered into a major **Network Build and Maintenance Agreement** with AT&T for the First Responder Network Authority (**FirstNet**). This is expected to generate **$80 million** to **$85 million** in construction revenue over the next two years, followed by long-term maintenance, leasing, and transport service revenue[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - Operations in the US Virgin Islands were severely impacted by Hurricanes Irma and Maria in 2017. The company spent approximately **$89 million** on network restoration and resiliency enhancements through 2019. While restoration is complete, revenue recovery to pre-hurricane levels remains uncertain due to economic and population impacts[38](index=38&type=chunk)[40](index=40&type=chunk) [Renewable Energy Services](index=22&type=section&id=Renewable%20Energy%20Services) This section outlines the company's India solar portfolio, including capacity, development pipeline, and challenges in financing and land acquisition - The company sold its US solar operations on November 6, 2018, for a total value of approximately **$122.6 million**, including **$65.3 million** in cash and the assumption of **$57.3 million** in debt[19](index=19&type=chunk)[55](index=55&type=chunk) - The company's renewable energy focus is now on its solar power development portfolio in India. As of December 31, 2019, it has five projects with a total of **52 MWp** capacity and a development pipeline of up to an additional **180 MWp**[59](index=59&type=chunk) - Key challenges for the India solar business include securing third-party debt for capital-intensive projects, acquiring land, and competing with local businesses. The business model relies on selling electricity to commercial and industrial customers under long-term **Power Purchase Agreements (PPAs)**[59](index=59&type=chunk)[61](index=61&type=chunk) [Regulation](index=26&type=section&id=Regulation) This section addresses regulatory environments in Guyana, the US, and India, highlighting risks to exclusive licenses and Universal Service Fund support - In Guyana, the company's subsidiary GTT holds an **exclusive license** for domestic fixed and international voice/data services, renewed until 2030. However, new legislation passed in 2016, though not yet implemented, aims to introduce competition, creating significant regulatory risk for this **exclusive license**[37](index=37&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk) - The company receives significant funding from the FCC's Universal Service Fund (**USF**). In August 2018, it was awarded **$79.9 million** over 10 years from the **Connect America Fund Phase II Auction** to provide fixed broadband and voice services in certain US areas[94](index=94&type=chunk) - The company's US Virgin Islands (Viya) operations receive **USF support**, but the FCC is transitioning this to a new competitive **Connect USVI Fund**. This creates uncertainty, as Viya may experience a significant reduction in support if it is not selected as a recipient or if funding levels are lower than historical amounts[95](index=95&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - Operations in India are governed by The Electricity Act, 2003, which regulates the generation, transmission, and sale of electricity. The business model relies on "open access" rules allowing sales directly to consumers, subject to various charges determined by state electricity regulatory commissions[113](index=113&type=chunk)[115](index=115&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks across its segments, including potential adverse changes to USF support, regulatory threats to its exclusive license in Guyana, and execution risks associated with the FirstNet buildout - **International Telecom Risks:** A potential reduction in **USF support** for the US Virgin Islands through the new **Connect USVI Fund** could materially harm business in that market. The **exclusive license** in Guyana, which accounts for a significant portion of revenue, is at risk from new legislation intended to increase competition[133](index=133&type=chunk)[134](index=134&type=chunk)[140](index=140&type=chunk) - **US Telecom Risks:** The company faces execution risk on the **FirstNet project** for AT&T; failure to meet milestones could lead to termination and financial loss. A substantial portion of US wholesale revenue comes from four national carriers, and the loss of this business or a decision by them to build their own networks in ATN's service areas would be detrimental[146](index=146&type=chunk)[148](index=148&type=chunk)[151](index=151&type=chunk) - **Renewable Energy Risks:** The India solar business is exposed to rapid governmental and regulatory changes, difficulties in procuring land with clear title, and reliance on India's grid infrastructure. Growth is highly dependent on securing additional project financing[160](index=160&type=chunk)[163](index=163&type=chunk)[173](index=173&type=chunk) - **General Business Risks:** Operations, particularly in the Caribbean, are vulnerable to severe weather like hurricanes, which can cause major network damage and revenue loss. The company is also exposed to cybersecurity threats, rapid technological changes requiring significant capital expenditure, and reliance on a limited number of key equipment suppliers[177](index=177&type=chunk)[182](index=182&type=chunk)[190](index=190&type=chunk) [Properties](index=72&type=section&id=Item%202.%20Properties) The company leases its corporate headquarters in Beverly, MA, and globally utilizes extensive office, retail, and technical space, including owned and leased telecommunications towers and solar projects Approximate Square Footage of Operational Space | Type of space | International Telecom | US Telecom | Renewable Energy | | :--- | :--- | :--- | :--- | | Office | 291,072 | 71,215 | 5,720 | | Retail stores | 27,290 | 23,257 | — | | Technical operations | 1,930,181 | 115,631 | — | - The company's global telecommunications infrastructure includes **282 owned towers**, **371 leased towers**, and five switch locations. The renewable energy operations in India own **52MW of commercial solar projects** at five sites[223](index=223&type=chunk) [Legal Proceedings](index=72&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in significant legal and regulatory proceedings, primarily concerning its subsidiary in Guyana, GTT, including challenges to its exclusive license, lawsuits against a competitor, and tax disputes - GTT's **exclusive license** in Guyana is being challenged by competitor Digicel in a lawsuit filed in 2009. Concurrently, GTT has sued Digicel for alleged international bypass in violation of its exclusive rights. These cases have been consolidated and are scheduled for trial in 2020[226](index=226&type=chunk)[227](index=227&type=chunk) - GTT is in a dispute with the Guyana Revenue Authority over tax assessments dating back to 1991, with the total disputed amount being **$44.1 million**. The company believes any liability would be partially offset by contractual provisions ensuring a minimum **15% return on investment**. It has accrued **$5.0 million** for this matter as of December 31, 2019[228](index=228&type=chunk)[771](index=771&type=chunk) Part II This section covers market information for the company's common equity, selected financial data, management's discussion and analysis, and the consolidated financial statements [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=77&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) ATN International's common stock is traded on the Nasdaq Global Select Market under the symbol "ATNI", with a **stock repurchase plan** authorized in 2016, and **$37.5 million** remaining for repurchases as of December 31, 2019 - The company's Board of Directors authorized a **$50.0 million stock repurchase plan** in 2016. As of December 31, 2019, **$37.5 million** remains authorized for repurchases[239](index=239&type=chunk) 5-Year Cumulative Total Return Comparison | Index | 12/14 | 12/15 | 12/16 | 12/17 | 12/18 | 12/19 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **ATN International** | $100.00 | $117.70 | $122.71 | $85.99 | $112.51 | $88.17 | | **Russell 2000** | $100.00 | $95.59 | $115.95 | $132.94 | $118.30 | $148.49 | | **S&P Smallcap 600** | $100.00 | $98.03 | $124.06 | $140.48 | $128.56 | $157.85 | | **Nasdaq Telecommunication** | $100.00 | $97.52 | $102.36 | $127.62 | $127.16 | $142.60 | [Selected Financial Data](index=80&type=section&id=Item%206.%20Selected%20Financial%20Data) The company's financial performance shows a decline in **revenue** and a significant drop in **net income** from 2018 to 2019, primarily driven by lower **operating income** and non-recurring gains from asset sales in 2018 Selected Financial Data (in thousands, except per share data) | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Revenue** | $438,722 | $451,207 | $481,193 | | **Income from operations** | $13,377 | $61,023 | $55,308 | | **Net income attributable to ATN** | $(10,806) | $19,815 | $31,488 | | **Diluted EPS** | $(0.68) | $1.24 | $1.94 | | **Dividends per share** | $0.68 | $0.68 | $1.02 | | **Total assets** | $1,130,726 | $1,107,304 | $1,205,605 | | **Long-term debt, net** | $82,676 | $86,294 | $144,873 | | **Capital expenditures** | $(72,725) | $(185,921) | $(142,371) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=83&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2019, consolidated **revenue** decreased by **2.8%** to **$438.7 million**, while **operating income** fell sharply by **78.1%** to **$13.4 million**, driven by the sale of the US Solar business, reduced wholesale wireless traffic, and non-recurring gains from 2018 [Results of Operations: 2019 vs 2018](index=95&type=section&id=Results%20of%20Operations%3A%202019%20vs%202018) This section analyzes the consolidated financial performance for 2019 compared to 2018, detailing **revenue** and **operating income** changes across segments Consolidated Results Comparison (in thousands) | Metric | 2019 | 2018 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $438,722 | $451,207 | $(12,485) | (2.8)% | | **Income from Operations** | $13,377 | $61,023 | $(47,646) | (78.1)% | | **Net Income (Loss) Attributable to ATN** | $(10,806) | $19,815 | $(30,621) | (154.5)% | - **International Telecom:** **Revenue** increased **3.5%** to **$324.5 million**, driven by broadband growth. This growth overcame the non-recurrence of **$15.5 million** in **USF** hurricane recovery funds received in 2018[280](index=280&type=chunk) - **US Telecom:** **Revenue** decreased **6.0%** to **$108.6 million**. This was due to the July 2018 sale of **100 cell sites** and reduced wholesale traffic, partially offset by **$5.3 million** in new **revenue** from the **Connect America Fund II** award[282](index=282&type=chunk)[283](index=283&type=chunk) - **Renewable Energy:** **Revenue** decreased **75.2%** to **$5.5 million**, primarily due to the sale of the US Solar Operations in November 2018[286](index=286&type=chunk) - Operating expenses increased by **9.0%**, largely due to a **$29.3 million** swing in '(Gain) loss on disposition of long-lived assets'. 2018 included significant gains from the sale of **cell sites** (**$15.2 million**) and the US Solar business (**$12.4 million**), which did not recur in 2019[291](index=291&type=chunk)[335](index=335&type=chunk) [Results of Operations: 2018 vs 2017](index=111&type=section&id=Results%20of%20Operations%3A%202018%20vs%202017) This section analyzes the consolidated financial performance for 2018 compared to 2017, detailing **revenue** and **operating income** changes across segments Consolidated Results Comparison (in thousands) | Metric | 2018 | 2017 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $451,207 | $481,193 | $(29,986) | (6.2)% | | **Income from Operations** | $61,023 | $55,308 | $5,715 | 10.3% | | **Net Income Attributable to ATN** | $19,815 | $31,488 | $(11,673) | (37.1)% | - **US Telecom:** **Revenue** decreased by **$40.2 million** (**25.8%**), primarily due to a **$34.1 million** decline in wholesale wireless revenue from reduced roaming rates, lower traffic, and the sale of **100 cell sites**[358](index=358&type=chunk)[359](index=359&type=chunk) - **International Telecom:** **Revenue** increased by **$9.0 million** (**3.0%**), mainly due to receiving **$15.5 million** in additional **USF** funding to support recovery from the 2017 hurricanes in the US Virgin Islands[354](index=354&type=chunk)[355](index=355&type=chunk) - **Operating income** increased by **10.3%** to **$61.0 million**, largely due to a **$26.4 million** gain on the disposition of long-lived assets in 2018, including the sale of **cell sites** and the US Solar business[367](index=367&type=chunk)[395](index=395&type=chunk) - **Net income** decreased significantly due to a large income tax expense of **$18.9 million** in 2018 compared to a tax benefit of **$1.3 million** in 2017. The 2017 benefit was primarily due to the re-measurement of deferred tax liabilities following the Tax Cuts and Jobs Act[367](index=367&type=chunk)[402](index=402&type=chunk)[403](index=403&type=chunk) [Liquidity and Capital Resources](index=126&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's **total liquidity**, **capital expenditures**, **revolving credit facility**, and contractual obligations as of December 31, 2019 - As of December 31, 2019, the company had **total liquidity** of approximately **$162.8 million** in cash, cash equivalents, restricted cash, and short-term investments[201](index=201&type=chunk)[416](index=416&type=chunk) Capital Expenditures by Segment (in thousands) | Segment | 2019 | 2018 | | :--- | :--- | :--- | | International Telecom | $42,029 | $160,013 | | US Telecom | $17,490 | $13,389 | | Renewable Energy | $6,448 | $4,515 | | Corporate and Other | $6,758 | $8,004 | | **Total** | **$72,725** | **$185,921** | - The significant decrease in 2019 **capital expenditures** was due to the completion of major network restoration in the US Virgin Islands, which accounted for **$80.2 million** of the 2018 total[418](index=418&type=chunk) - The company has a **$200 million revolving credit facility** maturing in April 2024. As of December 31, 2019, there were no outstanding borrowings, and **$192.0 million** was available[433](index=433&type=chunk)[437](index=437&type=chunk) Contractual Obligations as of Dec 31, 2019 (in thousands) | Obligation | Total | Less Than 1 Year | 1 – 3 Years | 4 – 5 Years | More Than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Debt | $86,426 | $3,750 | $23,275 | $— | $59,401 | | Pension obligations | $49,667 | $5,066 | $9,926 | $9,506 | $25,169 | | Operating lease obligations | $79,766 | $14,526 | $26,501 | $20,384 | $18,355 | [Financial Statements and Supplementary Data](index=140&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements detail the company's financial position and performance, reporting **total assets** of **$1.13 billion**, **total liabilities** of **$324.6 million**, **total equity** of **$806.1 million**, and a **net loss** of **$10.8 million** on **revenues** of **$438.7 million** for 2019 Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $161,287 | $191,836 | | Net fixed assets | $605,581 | $626,852 | | Goodwill | $60,691 | $63,970 | | **Total Assets** | **$1,130,726** | **$1,107,304** | | **Liabilities & Equity** | | | | Total current liabilities | $119,669 | $140,650 | | Long-term debt | $82,676 | $86,294 | | **Total Liabilities** | **$324,643** | **$283,980** | | **Total Equity** | **$806,083** | **$823,324** | Consolidated Income Statement Summary (in thousands) | Account | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Total Revenue | $438,722 | $451,207 | $481,193 | | Income from Operations | $13,377 | $61,023 | $55,308 | | Net Income (Loss) Attributable to ATN | $(10,806) | $19,815 | $31,488 | Consolidated Cash Flow Summary (in thousands) | Account | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $87,903 | $115,865 | $145,725 | | Net cash used in investing activities | $(88,262) | $(87,319) | $(172,318) | | Net cash used in financing activities | $(29,908) | $(55,230) | $(42,101) | [Controls and Procedures](index=140&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's **disclosure controls and procedures** and **internal control over financial reporting** were effective as of December 31, 2019, with no material changes during the fourth quarter - The CEO and CFO concluded that the company's **disclosure controls and procedures** were effective as of December 31, 2019[476](index=476&type=chunk) - Management's report on **internal control over financial reporting** concluded that such controls were effective as of December 31, 2019, based on the COSO framework. This assessment was audited by PricewaterhouseCoopers LLP[477](index=477&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk) Part III This section details the company's directors, executive officers, and corporate governance practices [Directors, Executive Officers and Corporate Governance](index=144&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section, largely incorporated by reference from the 2020 Proxy Statement, lists the company's directors and executive officers as of March 2, 2020, with Michael T. Prior leading the executive team as Chairman, President, and CEO - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the registrant's Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders[496](index=496&type=chunk) Executive Officers (as of March 2, 2020) | Name | Age | Position | | :--- | :--- | :--- | | Michael T. Prior | 55 | Chairman, President, Chief Executive Officer, and Director | | Justin D. Benincasa | 57 | Chief Financial Officer | | Brad Martin | 44 | Executive Vice President, Business Operations | | William F. Kreisher | 57 | Senior Vice President, Corporate Development | | Mary Mabey | 38 | Senior Vice President, General Counsel and Secretary | Part IV This section lists the exhibits and financial statement schedules included in the report [Exhibits, Financial Statement Schedules](index=149&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K report, including the Consolidated Financial Statements, Schedule II for Valuation and Qualifying Accounts, and an index of all exhibits - The documents filed as part of the report include the Consolidated Financial Statements, Schedule II (Valuation and Qualifying Accounts), and a list of **30+ exhibits**[499](index=499&type=chunk)[500](index=500&type=chunk)[501](index=501&type=chunk)

ATN International, Inc. (NASDAQ:ATNI) Q4 2019 Earnings Conference Call February 20, 2020 9:30 AM ET Company Participants Justin Benincasa – Chief Financial Officer Michael Prior – Chief Executive Officer Conference Call Participants Allen Klee – National Securities Rick Prentiss – Raymond James Greg Burns – Sidoti & Co Hamed Khorsand – BWS Financial Operator Good afternoon, ladies and gentlemen, and welcome to the ATN International Fourth Quarter 2019 Earnings Conference Call and Webcast. [Operator Instruct ...

[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents ATN International, Inc.'s unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2019, along with detailed notes on key accounting areas Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Total Current Assets** | $257,811 | $275,765 | | **Net Fixed Assets** | $605,501 | $626,852 | | **Total Assets** | **$1,162,800** | **$1,107,304** | | **Total Current Liabilities** | $141,030 | $140,650 | | **Total Liabilities** | $344,501 | $283,980 | | **Total Equity** | $818,299 | $823,324 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | 9M 2019 | 9M 2018 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $115,616 | $121,138 | $326,637 | $343,401 | | **Income from Operations** | $10,248 | $30,824 | $15,117 | $50,786 | | **Net Income (Loss) Attributable to ATN** | $1,385 | $17,022 | $(1,052) | $18,682 | | **Diluted EPS** | $0.09 | $1.06 | $(0.07) | $1.16 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $56,847 | $98,014 | | **Net cash used in investing activities** | $(62,658) | $(105,652) | | **Net cash used in financing activities** | $(20,719) | $(37,948) | | **Net change in cash** | $(26,556) | $(45,939) | [Note 1. Organization and Business Operations](index=10&type=section&id=Note%201.%20Organization%20and%20Business%20Operations) The company operates in three segments: US Telecom, International Telecom, and Renewable Energy, actively evaluating acquisitions and investments for growth - The company's operations are managed across three primary segments: US Telecom, International Telecom, and Renewable Energy[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) Operating Segments and Services | Segment | Services | Markets | | :--- | :--- | :--- | | **US Telecom** | Wireless, Wireline | United States (rural markets) | | **International Telecom** | Wireline, Wireless, Video | Bermuda, Cayman Islands, Guyana, US Virgin Islands | | **Renewable Energy** | Solar | India | [Note 3. Revenue Recognition](index=13&type=section&id=Note%203.%20Revenue%20Recognition) This note details the company's adoption of ASC 606, highlighting the increase in net contract liabilities and a significant surge in remaining performance obligations, primarily due to new multiyear contracts - In July 2019, the company entered into a Network Build and Maintenance Agreement with AT&T for the First Responder Network Authority (FirstNet), which includes significant construction and service performance obligations[42](index=42&type=chunk) - Remaining performance obligations increased significantly to **$275 million** at September 30, 2019, up from **$12 million** at December 31, 2018, with the majority expected to be recognized as revenue within 24 months[44](index=44&type=chunk) [Note 4. Leases](index=15&type=section&id=Note%204.%20Leases) The company adopted the new lease accounting standard ASC 842 on January 1, 2019, recognizing a $70.8 million operating lease right-of-use (ROU) asset and corresponding liabilities - Upon adoption of ASC 842 on January 1, 2019, the company recognized an operating lease ROU asset of **$70.8 million**, a short-term lease liability of **$8.2 million**, and a long-term lease liability of **$61.2 million**[48](index=48&type=chunk) Maturities of Operating Lease Liabilities (as of Sep 30, 2019, in thousands) | Period | Amount | | :--- | :--- | | 2019 (remainder) | $4,247 | | 2020 | $13,516 | | 2021 | $13,510 | | 2022 | $12,551 | | 2023 | $10,693 | | Thereafter | $28,062 | | **Total Lease Payments** | **$82,579** | [Note 6. Impact of Hurricanes Irma and Maria](index=17&type=section&id=Note%206.%20Impact%20of%20Hurricanes%20Irma%20and%20Maria) Network restoration in the US Virgin Islands is substantially complete following the 2017 hurricanes, with significantly reduced spending in 2019, though future revenue recovery remains uncertain - Network restoration spending following the hurricanes decreased significantly, from **$78.9 million** in the first nine months of 2018 to just **$0.1 million** in the same period of 2019, indicating the rebuild is substantially complete[60](index=60&type=chunk) [Note 9. Long-Term Debt](index=22&type=section&id=Note%209.%20Long-Term%20Debt) In April 2019, the company secured a new $200 million revolving credit facility maturing in 2024, with $189.4 million available as of September 30, 2019 - On April 10, 2019, the company replaced its 2014 credit facility with a new **$200 million** revolving credit facility maturing in 2024. As of September 30, 2019, no amounts were drawn, and **$189.4 million** was available[80](index=80&type=chunk)[84](index=84&type=chunk) [Note 14. Segment Reporting](index=28&type=section&id=Note%2014.%20Segment%20Reporting) For the nine months ended September 30, 2019, International Telecom was the largest segment by revenue and operating income, while US Telecom's operating income sharply declined Segment Revenue (in thousands) - Nine Months Ended Sep 30 | Segment | 2019 | 2018 | | :--- | :--- | :--- | | US Telecom | $80,799 | $90,591 | | International Telecom | $241,461 | $235,538 | | Renewable Energy | $4,377 | $17,272 | | **Total** | **$326,637** | **$343,401** | Segment Operating Income (Loss) (in thousands) - Nine Months Ended Sep 30 | Segment | 2019 | 2018 | | :--- | :--- | :--- | | US Telecom | $5,927 | $35,839 | | International Telecom | $35,802 | $37,449 | | Renewable Energy | $(750) | $3,687 | | Corporate and Other | $(25,862) | $(26,189) | | **Total** | **$15,117** | **$50,786** | [Note 15. Commitments and Contingencies](index=30&type=section&id=Note%2015.%20Commitments%20and%20Contingencies) The company faces significant regulatory uncertainty in Guyana regarding its subsidiary GTT's exclusive license and ongoing tax disputes with the Guyana Revenue Authority - The Government of Guyana passed legislation in 2016 to increase telecommunications competition, which could impact GTT's exclusive license. Discussions with the government are ongoing, but the timing and outcome are uncertain[126](index=126&type=chunk)[127](index=127&type=chunk) - GTT is involved in tax disputes with the Guyana Revenue Authority dating back to 1991, with total disputed assessments of **$44.1 million**. The company believes an adverse outcome is probable and has accrued **$5.0 million** for these matters[132](index=132&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting revenue and operating income declines in Q3 2019, while emphasizing strong liquidity and the strategic importance of the new FirstNet agreement [Results of Operations](index=37&type=section&id=Results%20of%20Operations) This section details the company's Q3 and nine-month operational results, noting a decline in total revenue and operating income, primarily due to asset sales and segment performance shifts Q3 2019 vs Q3 2018 Revenue by Type (in thousands) | Revenue Type | Q3 2019 | Q3 2018 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Wireless | $54,555 | $52,003 | $2,552 | 4.9% | | Wireline | $59,623 | $63,717 | $(4,094) | (6.4)% | | Renewable Energy | $1,438 | $5,418 | $(3,980) | (73.5)% | | **Total Revenue** | **$115,616** | **$121,138** | **$(5,522)** | **(4.6)%** | - The decrease in Q3 operating income to **$10.2 million** from **$30.8 million** in the prior year was primarily driven by a non-recurring gain of **$13.5 million** on the disposition of long-lived assets in Q3 2018[169](index=169&type=chunk)[211](index=211&type=chunk) - For the nine months ended Sep 30, 2019, the company reported a net loss attributable to stockholders of **$1.1 million**, a significant reversal from the **$18.7 million** net income in the same period of 2018[273](index=273&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) This section reviews the company's liquidity and capital resources, noting a decrease in operating cash flow due to tax payments and segment performance, alongside significantly reduced capital expenditures - Cash from operations decreased by **$41.2 million** year-over-year for the nine-month period, primarily due to a **$28.5 million** tax payment related to the US Solar Transaction and reduced cash flow from the US Telecom and Renewable Energy segments[287](index=287&type=chunk)[288](index=288&type=chunk) - Capital expenditures for the first nine months of 2019 were **$49.5 million**, a sharp decrease from **$154.3 million** in the same period of 2018, which included **$78.9 million** for hurricane-related network restoration in the US Virgin Islands[280](index=280&type=chunk) - The company has a **$50.0 million** share repurchase plan authorized in 2016, with **$37.5 million** remaining available as of September 30, 2019[285](index=285&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency fluctuations, primarily the Indian Rupee and Guyana Dollar, and interest rate risk from its variable rate debt - The company's primary foreign currency exposures are to the Indian Rupee and the Guyana Dollar. Fluctuations in these currencies are recorded as a foreign currency translation adjustment in other comprehensive income[319](index=319&type=chunk) - As of September 30, 2019, the company had **$20.3 million** of variable rate debt, exposing it to interest rate fluctuations[322](index=322&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of September 30, 2019, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[323](index=323&type=chunk) [PART II—OTHER INFORMATION](index=64&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 15 of the financial statements, detailing ongoing legal and regulatory matters, primarily concerning the company's subsidiary GTT in Guyana - The company directs investors to Note 15 for details on legal proceedings, which primarily involve regulatory and tax issues in Guyana[325](index=325&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) The company highlights key risks including potential termination of the AT&T FirstNet agreement due to unmet milestones and the impact of changes in USF funding in the U.S. Virgin Islands - A significant risk is the failure to meet milestones or quality standards under the Network Build and Maintenance Agreement with AT&T, which could result in the agreement's termination and a material adverse impact on the US Telecom segment[328](index=328&type=chunk)[330](index=330&type=chunk) - Changes in USF funding in the U.S. Virgin Islands, as the FCC establishes the new Connect USVI Fund, pose a risk. The company may not be selected to receive funding or may receive less than historical levels, which could harm its business and financial results in the region[331](index=331&type=chunk)[332](index=332&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a $50.0 million share repurchase plan authorized in 2016, with $37.5 million remaining, and repurchased shares from employees for tax obligations in Q3 2019 - As of September 30, 2019, **$37.5 million** remained authorized for share repurchases under the 2016 Repurchase Plan[334](index=334&type=chunk) - During Q3 2019, the company repurchased shares from employees to cover tax obligations from vested stock awards, which were separate from the formal 2016 Repurchase Plan[335](index=335&type=chunk)[336](index=336&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Network Build and Maintenance Agreement with AT&T and required CEO/CFO certifications - Key exhibits filed include the Network Build and Maintenance Agreement with AT&T Mobility LLC, dated July 31, 2019, and required CEO/CFO certifications[338](index=338&type=chunk)[339](index=339&type=chunk)

ATN International, Inc. (NASDAQ:ATNI) Q3 2019 Earnings Conference Call October 24, 2019 9:30 AM ET Company Participants Justin Benincasa - CFO Michael Prior - President, CEO & Chairman Conference Call Participants Richard Prentiss - Raymond James & Associates Gregory Burns - Sidoti & Company Allen Klee - National Securities Corporation Hamed Khorsand - BWS Financial Inc. Operator Ladies and gentlemen, thank you for standing by, and welcome to the ATN International Third Quarter 2019 Earnings Conference Call ...

PART I—FINANCIAL INFORMATION [Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Presents ATN International's unaudited condensed consolidated financial statements for Q2 and H1 2019 and 2018 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total current assets** | $250,229 | $275,765 | | **Total assets** | $1,146,976 | $1,107,304 | | **Total current liabilities** | $130,301 | $140,650 | | **Total liabilities** | $328,435 | $283,980 | | **Total equity** | $818,541 | $823,324 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $107,721 | $117,788 | $211,020 | $222,263 | | **Income from Operations** | $2,754 | $15,753 | $4,868 | $19,962 | | **Net Income (Loss) Attributable to ATNI** | $(856) | $7,216 | $(2,436) | $1,661 | | **Diluted EPS** | $(0.05) | $0.45 | $(0.15) | $0.10 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $18,522 | $46,037 | | **Net cash used in investing activities** | $(50,283) | $(58,838) | | **Net cash used in financing activities** | $(14,495) | $(26,784) | | **Net change in cash, cash equivalents, and restricted cash** | $(46,225) | $(39,763) | [Note 1. Organization and Business Operations](index=9&type=section&id=Note%201.%20ORGANIZATION%20AND%20BUSINESS%20OPERATIONS) The company operates as a holding company with three segments: US Telecom, International Telecom, and Renewable Energy - The company manages its operations through three identified segments: US Telecom, International Telecom, and Renewable Energy[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) Operating Segments and Markets (as of June 30, 2019) | Segment | Services | Markets | | :--- | :--- | :--- | | **US Telecom** | Wireless, Wireline | United States | | **International Telecom** | Wireline, Wireless, Video | Bermuda, Cayman Islands, Guyana, US Virgin Islands | | **Renewable Energy** | Solar | India | [Note 4. Leases](index=13&type=section&id=Note%204.%20LEASES) Adopted ASC 842 on January 1, 2019, recognizing a **$70.8 million** operating lease ROU asset and liabilities - Upon adopting ASC 842 on January 1, 2019, the company recognized an operating lease right-of-use (ROU) asset of **$70.8 million**, a short-term lease liability of **$8.2 million**, and a long-term lease liability of **$61.2 million**[42](index=42&type=chunk) Lease Metrics as of June 30, 2019 | Metric | Value | | :--- | :--- | | **Weighted Average Remaining Lease Term (Operating)** | 7.1 years | | **Weighted Average Remaining Lease Term (Financing)** | 11.9 years | | **Weighted Average Discount Rate (Operating)** | 5.1% | [Note 6. Impact of Hurricanes Irma and Maria](index=15&type=section&id=Note%206.%20IMPACT%20OF%20HURRICANES%20IRMA%20AND%20MARIA) Hurricanes Irma and Maria impacted US Virgin Islands operations; **$34.6 million** insurance recoveries received - The company received **$34.6 million** in insurance recoveries in February 2018 to aid recovery from the hurricanes[54](index=54&type=chunk) Hurricane Rebuild Expenditures (in millions) | Period | Expenditure | | :--- | :--- | | **Six Months Ended June 30, 2019** | $0.1 | | **Six Months Ended June 30, 2018** | $66.7 | [Note 9. Long-Term Debt](index=19&type=section&id=Note%209.%20LONG-TERM%20DEBT) Entered a new **$200 million** revolving credit facility in April 2019, with no outstanding borrowings - The company entered into a new five-year, **$200 million** revolving credit facility on April 10, 2019. As of June 30, 2019, there were no borrowings, and availability was **$192.0 million** net of letters of credit[73](index=73&type=chunk)[77](index=77&type=chunk) - The company was not in compliance with the Net Leverage Ratio covenant for its Viya Debt for the year ending December 31, 2018, and received a waiver from the lender[81](index=81&type=chunk) [Note 14. Segment Reporting](index=25&type=section&id=Note%2014.%20SEGMENT%20REPORTING) Details financial performance of US Telecom, International Telecom, and Renewable Energy segments, noting mixed results Segment Revenue (in thousands) - Six Months Ended June 30 | Segment | 2019 | 2018 | | :--- | :--- | :--- | | **US Telecom** | $47,906 | $58,783 | | **International Telecom** | $160,175 | $151,625 | | **Renewable Energy** | $2,939 | $11,855 | | **Total Revenue** | **$211,020** | **$222,263** | Segment Operating Income (Loss) (in thousands) - Six Months Ended June 30 | Segment | 2019 | 2018 | | :--- | :--- | :--- | | **US Telecom** | $(2,006) | $13,065 | | **International Telecom** | $24,935 | $21,211 | | **Renewable Energy** | $(16) | $3,863 | | **Corporate and Other** | $(18,045) | $(18,177) | | **Total Operating Income** | **$4,868** | **$19,962** | [Note 15. Commitments and Contingencies](index=27&type=section&id=Note%2015.%20COMMITMENTS%20AND%20CONTINGENCIES) Faces significant legal challenges in Guyana, including GTT's exclusive license and **$44.1 million** in disputed tax assessments - The Government of Guyana passed legislation in 2016 to introduce more competition, which could affect GTT's exclusive license. Discussions with the government are ongoing[112](index=112&type=chunk)[113](index=113&type=chunk) - GTT is involved in several legal claims with the Guyana Revenue Authority regarding tax filings dating back to 1991, with disputed assessments totaling **$44.1 million**. The company has accrued **$5.0 million** for these matters as of June 30, 2019[118](index=118&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial performance for Q2 and H1 2019 vs. 2018, focusing on segment performance, liquidity, and capital [Results of Operations (Three Months Ended June 30, 2019 vs. 2018)](index=33&type=section&id=Results%20of%20Operations%20(Three%20Months%20Ended%20June%2030%2C%202019%20vs.%202018)) Q2 2019 total revenue decreased **8.5%** to **$107.7 million**, with operating income down **82.5%** Consolidated Results of Operations - Q2 2019 vs Q2 2018 (in thousands) | Metric | Q2 2019 | Q2 2018 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $107,721 | $117,788 | $(10,067) | (8.5)% | | **Income from Operations** | $2,754 | $15,753 | $(12,999) | (82.5)% | | **Net Income (Loss) Attributable to ATNI** | $(856) | $7,216 | $(8,072) | (111.9)% | - US Telecom revenue decreased by **12.9%** to **$26.4 million**, primarily due to a **$2.9 million** decline in wireless revenue from reduced wholesale traffic and the sale of 100 cell sites in July 2018[144](index=144&type=chunk)[145](index=145&type=chunk) - Renewable Energy revenue decreased by **76.7%** to **$1.4 million**, primarily as a result of the November 2018 sale of the US Solar Operations[151](index=151&type=chunk) [Results of Operations (Six Months Ended June 30, 2019 vs. 2018)](index=47&type=section&id=Results%20of%20Operations%20(Six%20Months%20Ended%20June%2030%2C%202019%20vs.%202018)) H1 2019 total revenue decreased **5.1%** to **$211.0 million**, with operating income down **75.6%** Consolidated Results of Operations - H1 2019 vs H1 2018 (in thousands) | Metric | H1 2019 | H1 2018 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $211,020 | $222,263 | $(11,243) | (5.1)% | | **Income from Operations** | $4,868 | $19,962 | $(15,094) | (75.6)% | | **Net Income (Loss) Attributable to ATNI** | $(2,436) | $1,661 | $(4,097) | (246.7)% | - US Telecom revenue decreased by **18.5%** to **$47.9 million**, leading to an operating loss of **$2.0 million** compared to an income of **$13.1 million** in H1 2018[213](index=213&type=chunk)[217](index=217&type=chunk) - International Telecom revenue increased by **5.7%** to **$160.2 million**, and operating income grew **17.9%** to **$25.0 million**, largely due to increased broadband revenues[218](index=218&type=chunk)[220](index=220&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2019, cash was **$146.7 million**, with operating cash flow at **$18.5 million** and capital expenditures at **$35.4 million** - Cash and cash equivalents decreased by **$46.2 million** during the first six months of 2019 to **$146.7 million**, primarily due to capital expenditures (**$35.4 million**), investments (**$10.0 million**), and dividends (**$5.4 million**), partially offset by cash from operations (**$18.5 million**)[270](index=270&type=chunk)[271](index=271&type=chunk) Capital Expenditures by Segment (in thousands) - Six Months Ended June 30 | Segment | 2019 | 2018 | | :--- | :--- | :--- | | **US Telecom** | $6,368 | $7,266 | | **International Telecom** | $23,692 | $95,520 | | **Renewable Energy** | $817 | $1,388 | | **Corporate and Other** | $4,519 | $3,074 | | **Total** | **$35,396** | **$107,248** | - The company expects 2019 capital expenditures for the International Telecom segment to be approximately **$50.0 million** to **$55.0 million**[266](index=266&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks are foreign currency translation and interest rate sensitivity on **$21.3 million** of variable rate debt - The company is exposed to foreign currency risk from its operations in India (Indian Rupee) and Guyana (Guyana Dollar)[301](index=301&type=chunk) - As of June 30, 2019, the company had **$21.3 million** of variable rate debt outstanding, creating exposure to interest rate fluctuations[304](index=304&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2019, with no material changes in Q2 2019 - Based on an evaluation as of June 30, 2019, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[305](index=305&type=chunk) - No changes in internal control over financial reporting occurred during Q2 2019 that have materially affected, or are reasonably likely to materially affect, internal controls[306](index=306&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 15 for details on ongoing legal matters, including GTT's exclusive license and tax disputes in Guyana - The company is engaged in significant legal and regulatory proceedings in Guyana concerning the exclusivity of its telecommunications license and tax disputes. For full details, see Note 15[111](index=111&type=chunk)[307](index=307&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) Refers to risk factors in the 2018 Annual Report on Form 10-K; no new or updated risks in this report - The report refers to the risk factors previously disclosed in the company's 2018 Annual Report on Form 10-K[308](index=308&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the stock repurchase program, with **$37.7 million** remaining available and no shares repurchased during the quarter - As of June 30, 2019, **$37.7 million** remains authorized for share repurchases under the 2016 Repurchase Plan[309](index=309&type=chunk) - No shares were repurchased under the publicly announced plan during the quarter ended June 30, 2019[310](index=310&type=chunk) [Exhibits](index=64&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including CEO and CFO certifications and Inline XBRL financial data files - The filing includes required CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[312](index=312&type=chunk)