ATN International(ATNI) - 2021 Q2 - Quarterly Report

Form 10-Q Filing Information This section provides essential filing details for the Form 10-Q, identifying the company and report period Form 10-Q Details This section provides basic Form 10-Q filing information for ATN International, Inc., a large accelerated filer, for Q2 2021 - The report is a Quarterly Report on Form 10-Q for the period ended June 30, 2021[2] - ATN International, Inc. is incorporated in Delaware, with its principal executive offices in Beverly, Massachusetts[3] - The registrant is a large accelerated filer and has filed all required reports and interactive data files during the preceding 12 months[3] Form 10-Q Metrics | Metric | Value | | :--- | :--- | | Commission File Number | 001-12593 | | Trading Symbol | ATNI | | Exchange | The Nasdaq Stock Market LLC | | Common Stock Outstanding (as of Aug 9, 2021) | 15,864,072 shares | Table of Contents This section outlines the Form 10-Q's structure, divided into Part I (Financial Information) and Part II (Other Information) Report Structure The Table of Contents outlines the Form 10-Q's structure, detailing financial statements and other information - The report is structured into two main parts: Part I – Financial Information and Part II – Other Information[6][7] - Part I includes Unaudited Condensed Consolidated Financial Statements (Balance Sheets, Statements of Operations, Comprehensive Income, Equity, Cash Flows) and Notes, Management's Discussion and Analysis, Market Risk Disclosures, and Controls and Procedures[6][7] - Part II covers Legal Proceedings, Risk Factors, Unregistered Sales of Equity Securities, Other Information, and Exhibits[7] Cautionary Statement Regarding Forward-Looking Statements This section warns that the report contains forward-looking statements subject to risks, with no obligation to update Forward-Looking Statements This section advises that the report contains forward-looking statements about future performance, subject to risks and uncertainties - The report contains forward-looking statements regarding future financial performance, results of operations, competitive environment, demand for services, industry trends, and management's plans and strategy[9] - Actual future events and results could differ materially due to factors such as operational performance, integration of acquisitions (e.g., Alaska Communications), roaming arrangements, network upgrades, government regulation, supplier reliance, economic risks (including the pandemic), personnel retention, investment opportunities, weather events, increased competition, network capacity, and access to capital[9] - The Company undertakes no obligation to update these forward-looking statements, except as required by law[9] PART I—FINANCIAL INFORMATION This part presents unaudited condensed consolidated financial statements and management's discussion and analysis Item 1 Unaudited Condensed Consolidated Financial Statements This section presents ATN International, Inc.'s unaudited condensed consolidated financial statements for Q2 2021 and 2020 Condensed Consolidated Balance Sheets Total assets and equity slightly decreased from December 2020 to June 2021, mainly due to reduced current assets Balance Sheet Metrics (in thousands) | Metric (in thousands) | June 30, 2021 | December 31, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $1,066,574 | $1,083,711 | $(17,137) | -1.6% | | Total Liabilities | $325,388 | $329,375 | $(3,987) | -1.2% | | Total Equity | $741,186 | $754,336 | $(13,150) | -1.7% | | Cash and cash equivalents | $94,885 | $103,925 | $(9,040) | -8.7% | | Assets held for sale | $— | $34,735 | $(34,735) | -100.0% | | Customer receivable - long term | $28,333 | $9,614 | $18,719 | 194.7% | Condensed Consolidated Statements of Operations Q2 2021 revenue increased, but operating and net income significantly decreased due to higher operating expenses Statements of Operations (in thousands) - 3 Months Ended June 30 | Metric (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $123,865 | $109,098 | $14,767 | 13.5% | | Income from Operations | $2,905 | $7,024 | $(4,119) | -58.6% | | Net Income | $3,290 | $8,364 | $(5,074) | -60.7% | | Net Income Attributable to ATN International, Inc. Stockholders | $2,019 | $4,746 | $(2,727) | -57.5% | | Basic EPS | $0.13 | $0.30 | $(0.17) | -56.7% | | Diluted EPS | $0.13 | $0.30 | $(0.17) | -56.7% | | Dividends Per Share | $0.17 | $0.17 | $0 | 0.0% | Statements of Operations (in thousands) - 6 Months Ended June 30 | Metric (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $248,375 | $220,004 | $28,371 | 12.9% | | Income from Operations | $6,254 | $14,324 | $(8,070) | -56.3% | | Net Income | $7,565 | $10,742 | $(3,177) | -29.6% | | Net Income Attributable to ATN International, Inc. Stockholders | $4,723 | $3,733 | $990 | 26.5% | | Basic EPS | $0.30 | $0.23 | $0.07 | 30.4% | | Diluted EPS | $0.30 | $0.23 | $0.07 | 30.4% | | Dividends Per Share | $0.34 | $0.34 | $0 | 0.0% | Condensed Consolidated Statements of Comprehensive Income (Loss) Comprehensive income attributable to ATN International, Inc. decreased for Q2 2021 but increased for H1, influenced by net income and currency Statements of Comprehensive Income (Loss) (in thousands) - 3 Months Ended June 30 | Metric (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Income | $3,290 | $8,364 | $(5,074) | -60.7% | | Foreign currency translation adjustment | $(370) | $1,782 | $(2,152) | -120.8% | | Comprehensive Income Attributable to ATN International, Inc. | $1,678 | $6,536 | $(4,858) | -74.3% | Statements of Comprehensive Income (Loss) (in thousands) - 6 Months Ended June 30 | Metric (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Income | $7,565 | $10,742 | $(3,177) | -29.6% | | Foreign currency translation adjustment | $(410) | $(2,644) | $2,234 | -84.5% | | Comprehensive Income Attributable to ATN International, Inc. | $4,373 | $921 | $3,452 | 374.8% | Condensed Consolidated Statements of Equity Total equity decreased for the six months ended June 30, 2021, primarily due to share repurchases and dividends Total Equity (in thousands) | Metric (in thousands) | June 30, 2021 | December 31, 2020 | Change | | :--- | :--- | :--- | :--- | | Total ATNI Stockholders' Equity | $641,926 | $645,649 | $(3,723) | | Non-controlling Interests | $99,260 | $108,687 | $(9,427) | | Total Equity | $741,186 | $754,336 | $(13,150) | - Key activities impacting equity for the six months ended June 30, 2021 include: purchase of 81,406 shares of common stock for $3.9 million, stock-based compensation of $3.4 million, dividends declared of $5.4 million, and repurchase of non-controlling interests of $12.7 million[21] Condensed Consolidated Statements of Cash Flows Operating cash flow decreased for the six months ended June 30, 2021, leading to a net decrease in cash and equivalents Cash Flow Metrics (in thousands) - 6 Months Ended June 30 | Metric (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $27,460 | $40,375 | $(12,915) | | Net cash used in investing activities | $(25,285) | $(54,733) | $29,448 | | Net cash used in financing activities | $(11,215) | $(22,012) | $10,797 | | Net change in cash, cash equivalents, and restricted cash | $(9,040) | $(36,488) | $27,448 | | Total cash, cash equivalents, and restricted cash, end of period | $95,957 | $125,870 | $(29,913) | - The decrease in operating cash flow was primarily due to lower net income and changes in working capital, particularly customer receivables[22] - Investing activities saw a significant decrease in cash used, driven by proceeds from the divestiture of businesses ($18.6 million) and government grants ($3.3 million), partially offset by increased capital expenditures[22][284] - Financing activities used less cash, mainly due to proceeds from the customer receivable credit facility ($17.6 million) and reduced distributions to non-controlling interests, partially offset by increased repurchases of non-controlling interests[22][285] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements, covering accounting policies and key financial areas 1. Organization and Business Operations ATN International, Inc. operates as a platform for communications and technology in smaller markets, providing infrastructure solutions - The Company aims to be a leading platform for operating and investing in smaller and specialty market communications services and technology companies[25][153] - It provides facilities-based communications services and IT solutions in the United States, Bermuda, and the Caribbean, with a focus on rural and underserved markets[25][153] - The Company has three operating segments: International Telecom (fixed data, internet, voice, mobility, video, managed services, carrier services in Bermuda, Cayman Islands, Guyana, US Virgin Islands), US Telecom (carrier services, fixed, mobility, managed services, private network services in the US Southwest), and Renewable Energy (distributed generation solar power in India, sold in January 2021)[29][30][31][156][157][159] - The Company oversees capital allocation, provides shared service functions (billing, network, engineering, customer service), and offers management, technical, financial, regulatory, and marketing services to its subsidiaries[26][27][154][155] COVID-19 Impact The company found no material adverse COVID-19 impact in Q2 2021, with increased revenue in both International and US Telecom segments - No material adverse impact from COVID-19 was identified on consolidated financial statements for the three and six months ended June 30, 2021[36][165] - International Telecom segment experienced increased Mobility, Fixed, and Carrier Services revenue due to lifted pandemic restrictions and increased tourism[35][163] - US Telecom segment saw increased revenue from rural broadband services, driven by demand for remote working and connectivity[35][163] - Future assessments could result in material adverse impacts if COVID-19 travel or stay-at-home restrictions are reinstated, affecting tourism-dependent markets and equipment procurement[36][165] 2. Basis of Presentation This note clarifies consolidation principles, revenue/expense presentation, and new accounting pronouncements - The condensed consolidated financial statements include the Company, its controlling subsidiaries, and certain variable interest entities where the Company is the primary beneficiary[38] - Effective January 1, 2020, revenue presentation changed from 'wireless' and 'wireline' to 'Mobility,' 'Fixed,' and 'Carrier Services' within segment information, and 'Managed Services,' 'Renewable Energy,' and 'Construction' are now included in 'Other revenue'[39] - Effective January 1, 2021, operating expenses presentation changed by combining 'Termination and Access Fees' with 'Engineering and Operations' into 'Cost of Services,' and 'Sales, Marketing and Customer Service' with 'General and Administrative' into 'Selling, general and administrative expenses'[40] - The Company adopted ASU 2016-13 (Credit Losses) on January 1, 2020, using the modified retrospective approach, and new guidance simplifying income tax accounting in 2021 prospectively, neither of which had a material impact on consolidated financial statements[41][42] 3. Revenue Recognition and Receivables This note details revenue recognition, contract assets/liabilities, performance obligations, and ASU 2016-13 impact on receivables - Contract assets represent unbilled amounts from multiyear retail wireless contracts where revenue recognized exceeds billing, while contract liabilities consist of advance payments and billings in excess of recognized revenue[43][45] - The FirstNet Agreement involves building a portion of AT&T's network, with transaction price allocated to construction and service performance obligations based on standalone selling price[46] Contract Items (in thousands) | Contract Item (in thousands) | June 30, 2021 | December 31, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Contract asset – current | $3,536 | $2,478 | $1,058 | 43% | | Contract asset – noncurrent | $916 | $910 | $6 | 1% | | Contract liability – current | $(15,332) | $(18,544) | $3,212 | 17% | | Contract liability – noncurrent | $(2,125) | $(2,193) | $68 | 3% | | Net contract liability | $(13,005) | $(17,349) | $4,344 | 25% | - Remaining performance obligations were $249 million at June 30, 2021, down from $299 million at December 31, 2020, with approximately 60% expected to be satisfied within 24 months[52] - The Company adopted ASU 2016-13, requiring a forward-looking expected loss model for credit losses, which did not significantly impact operating results[54][55] Receivable Items (in thousands) | Receivable Item (in thousands) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Gross accounts receivable | $86,600 | $67,100 | | Allowance for credit losses | $13,500 | $12,100 | | FirstNet Agreement receivable (current) | $4,100 | $1,200 | | FirstNet Agreement receivable (long-term) | $28,300 | $9,600 | 4. Leases The company holds operating and financing leases for various assets, with stable operating lease costs and slightly increased finance lease costs - The Company has operating and financing leases for towers, land, corporate offices, retail facilities, and data transport capacity, with terms typically 3 to 10 years[59] Lease Costs (in thousands) | Lease Cost (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total operating lease cost | $5,993 | $6,298 | $11,690 | $11,690 | | Total finance lease cost | $812 | $708 | $1,582 | $1,552 | Lease Metrics | Lease Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Weighted-average remaining operating lease term | 5.7 years | 5.9 years | | Weighted-average remaining financing lease term | 10.5 years | 10.9 years | | Weighted-average operating lease discount rate | 4.8% | 5.0% | | Weighted-average financing lease discount rate | 4.3% | 3.3% | - Maturities of operating lease liabilities totaled $62.1 million and financing lease liabilities totaled $2.1 million as of June 30, 2021[65] 5. Use of Estimates Financial statement preparation requires significant management estimates and assumptions, which may differ from actual results - Significant estimates include allowance for credit losses, useful lives of fixed and finite-lived intangible assets, allocation of purchase price in business combinations, fair value of indefinite-lived intangible assets and goodwill, asset impairment, revenue, and income taxes[67][69] - Actual results could differ significantly from these estimates[69] 6. Acquisitions and Dispositions This note covers the post-period acquisition of Alaska Communications and the January 2021 disposition of the International Solar Business - The Company completed the acquisition of Alaska Communications Systems Group, Inc. for approximately $340 million on July 22, 2021, to enter a new market[70][145] - In January 2021, the Company sold 67% of its distributed generation solar power projects in India (Vibrant Transaction), resulting in a $21.5 million loss on sale in 2020 and an additional $0.7 million loss in Q2 2021[70][71][73][75] - Post-Vibrant Transaction, the Company's remaining 33% ownership in Vibrant is accounted for using the equity method, with its results recorded in the Corporate and Other operating segment[70][71][75] - The Vibrant Transaction did not qualify as discontinued operations as it was not a strategic shift with a major effect on the Company's operations[75] 7. Fair Value Measurements and Investments This note outlines the fair value hierarchy and details the valuation of investments, noting a decrease in Level 3 other investments - The Company uses a fair value hierarchy (Level 1, 2, 3) based on observable and unobservable inputs[76][77] Assets and Liabilities Measured at Fair Value (in thousands) | Asset/Liability (in thousands) | Level 1 | Level 2 | Level 3 | Total (June 30, 2021) | | :--- | :--- | :--- | :--- | :--- | | Certificates of deposit | $— | $380 | $— | $380 | | Money market funds | $3,134 | $— | $— | $3,134 | | Other investments | $— | $— | $2,016 | $2,016 | | Interest rate swap | $— | $(97) | $— | $(97) | | Total assets and liabilities measured at fair value | $3,134 | $283 | $2,016 | $5,433 | - Other investments measured using Level 3 inputs decreased by $11.3 million during the six months ended June 30, 2021, primarily due to the conversion of an $11.0 million convertible debt instrument to equity, now accounted for under the cost method[79][84] - Equity method investments include a privately held company (carrying value $16.6 million at June 30, 2021) and the remaining 33% interest in former India solar operations (carrying value $12.9 million at June 30, 2021)[86][87] - The fair value of long-term debt and the customer receivable credit facility was $88.6 million (book value $87.7 million) at June 30, 2021, estimated using Level 2 inputs[88] 8. Long-Term Debt This note details the company's long-term debt facilities, including CoBank, FirstNet, Viya, and One Communications, with covenant compliance - The 2019 CoBank Credit Facility is a $200 million revolving credit facility maturing April 10, 2024, with $184.0 million available as of June 30, 2021 (net of $16.0 million letters of credit)[89][93] - The FirstNet Receivables Credit Facility provides up to $75.0 million senior secured delayed draw term loan to finance AT&T receivables under the FirstNet Agreement, with $17.2 million outstanding and $57.4 million available as of June 30, 2021[94][97] - The Viya Debt is a $60.0 million loan agreement with RTFC, maturing July 1, 2026, bearing a fixed interest rate of 4.0% per annum, with $60.0 million outstanding as of June 30, 2021[98][103] - The One Communications Debt is an outstanding loan from HSBC Bank Bermuda Limited, maturing May 22, 2022, with $11.6 million outstanding as of June 30, 2021[98][104] - The Company was in compliance with all financial covenants for its debt facilities as of June 30, 2021[93][98] 9. Government Grants The company participates in various government grant programs (USF, CAF II, CARES Act, Tribal Bidding Credit) for telecom funding - The Company participates in the Federal Universal Service Fund (USF) programs, including High Cost, Lifeline, E-Rate, and Rural Health Care Support[99][104] USF Program Revenue (in thousands) | USF Program Revenue (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | High Cost Program (International Telecom) | $4,300 | $4,100 | $8,400 | $8,200 | | High Cost Program (US Telecom) | $300 | $300 | $600 | $600 | | Connect America Fund Phase II | $1,900 | $1,900 | $3,800 | $3,800 | | E-Rate, Lifeline, Rural Health Care Support (aggregate) | $1,800 | $2,200 | $3,900 | $4,400 | - Viya's USF High Cost Program support will be reduced over two years following the Connect USVI Fund award, eventually ceasing[100] - The Company received $18.7 million in CARES Act funding, with $18.4 million reducing property, plant and equipment and $0.3 million reducing operating expense for network infrastructure construction in US Telecom[107] - A $7.4 million Tribal Bidding Credit is being used to offset network capital costs ($6.1 million) and network support costs ($1.3 million), with $0.6 million offset in Q2 2021[108] - The Company was a winning bidder for $20.4 million in CBRS Priority Access Licenses (PALs) in 2020 and expects to receive approximately $20.1 million over 10 years from the RDOF Phase I Auction[109][110] 10. Retirement Plans The company maintains defined benefit pension and postretirement plans for International Telecom employees, with H1 2021 pension expense showing a benefit - The Company has noncontributory defined benefit pension and postretirement benefit plans for eligible employees in its International Telecom segment[112] Net Periodic Benefit Cost (in thousands) | Net Periodic Benefit Cost (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net periodic pension expense (benefit) | $(61) | $137 | $(122) | $274 | | Net periodic postretirement benefits expense | $76 | $62 | $152 | $124 | - The Company was not required to make contributions to its pension plans during the six months ended June 30, 2021, but contributed $0.7 million in the same period of 2020[115] 11. Income Taxes The effective tax rate for Q2 and H1 2021 was negative, influenced by income mix across jurisdictions and discrete items Effective Tax Rate | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Effective Tax Rate | (88.2%) | (37.0%) | (19.7%) | (12.0%) | - For the three months ended June 30, 2021, the effective tax rate was impacted by a $3.4 million benefit from the reversal of an unrecognized tax position and a $0.5 million expense for interest on unrecognized tax positions[116] - For the six months ended June 30, 2021, the effective tax rate was impacted by a $3.4 million benefit from the reversal of an unrecognized tax position and a $1.0 million expense for interest on unrecognized tax positions[119] - The effective tax rate is sensitive to the mix of income generated among different jurisdictions and transactional or one-time items[121][235][273] 12. Net Income Per Share Basic and diluted net income per share for Q2 2021 decreased to $0.13, while for H1 2021, it increased to $0.30 Net Income Per Share and Shares Outstanding | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Basic Net Income Per Share | $0.13 | $0.30 | $0.30 | $0.23 | | Diluted Net Income Per Share | $0.13 | $0.30 | $0.30 | $0.23 | | Weighted Average Common Shares Outstanding (Basic, in thousands) | 15,912 | 15,970 | 15,907 | 15,958 | | Weighted Average Common Shares Outstanding (Diluted, in thousands) | 15,921 | 16,004 | 15,930 | 15,993 | - 5,000 shares relating to stock options were excluded from basic and diluted weighted average shares outstanding calculations for both periods as their effects were anti-dilutive[122] 13. Segment Reporting This note provides disaggregated financial information for the International Telecom, US Telecom, and Renewable Energy segments - The Company operates through three reportable segments: International Telecom, US Telecom, and Renewable Energy[124] Revenue by Segment (in thousands) - 3 Months Ended June 30 | Segment | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | International Telecom | $86,218 | $80,064 | $6,154 | 7.7% | | US Telecom | $37,647 | $28,160 | $9,487 | 33.7% | | Renewable Energy | $— | $874 | $(874) | -100.0% | | Consolidated Total | $123,865 | $109,098 | $14,767 | 13.5% | Operating Income (Loss) by Segment (in thousands) - 3 Months Ended June 30 | Segment | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | International Telecom | $14,643 | $14,617 | $26 | 0.2% | | US Telecom | $(556) | $1,826 | $(2,382) | -130.4% | | Renewable Energy | $(771) | $(620) | $(151) | -24.4% | | Corporate and Other | $(10,411) | $(8,799) | $(1,612) | 18.3% | | Consolidated Total | $2,905 | $7,024 | $(4,119) | -58.6% | Revenue by Segment (in thousands) - 6 Months Ended June 30 | Segment | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | International Telecom | $170,036 | $162,349 | $7,687 | 4.7% | | US Telecom | $77,921 | $55,459 | $22,462 | 40.5% | | Renewable Energy | $418 | $2,196 | $(1,778) | -81.0% | | Consolidated Total | $248,375 | $220,004 | $28,371 | 12.9% | Operating Income (Loss) by Segment (in thousands) - 6 Months Ended June 30 | Segment | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | International Telecom | $27,786 | $28,005 | $(219) | -0.8% | | US Telecom | $(1,090) | $4,019 | $(5,109) | -127.1% | | Renewable Energy | $(1,433) | $(1,077) | $(356) | 33.1% | | Corporate and Other | $(19,009) | $(16,623) | $(2,386) | 14.3% | | Consolidated Total | $6,254 | $14,324 | $(8,070) | -56.3% | Total Assets by Segment (in thousands) | Segment | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | International Telecom | $640,162 | $642,834 | | US Telecom | $308,514 | $265,797 | | Renewable Energy | $22,170 | $39,045 | | Corporate and Other | $95,728 | $136,035 | | Consolidated Total | $1,066,574 | $1,083,711 | 14. Commitments and Contingencies This note discloses the company's involvement in regulatory and legal proceedings, primarily in Guyana, and related financial accruals - The Government of Guyana implemented new telecommunications legislation in October 2020, ending GTT's exclusive license rights and introducing new regulatory fees, which could impact operations and services[134][136][137] - GTT is involved in long-standing litigation in Guyana regarding spectrum fees, with the NFMU disputing GTT's payment amounts, and a lawsuit challenging GTT's exclusive license rights[138][139] - GTT has filed lawsuits against Digicel for alleged international bypass activities, consolidated with Digicel's constitutional challenge[140] - The Company has accrued $5.0 million as of June 30, 2021, for disputed tax assessments with the Guyana Revenue Authority totaling $44.1 million, believing an adverse outcome is probable[141][143] - The Company has accrued $1.1 million as of June 30, 2021, for a foreign judgment enforcement application in Guyana related to a $2.8 million judgment from Trinidad & Tobago Electric Commission (TTEC)[144] 15. Subsequent Events This note details the July 2021 acquisition of Alaska Communications for $340 million, funded by a new credit facility and equity investment - On July 22, 2021, the Company completed the acquisition of Alaska Communications Systems Group, Inc. for approximately $340 million[145] - The acquisition was funded by a new Alaska credit facility ($220 million drawn), a $73.0 million draw from the 2019 CoBank Credit Facility, and a $70 million mezzanine equity investment from Freedom 3 Investors[146][148][151] - The Company now owns approximately 52% of Alaska Communications' common equity and controls its operations, with results to be included in the US Telecom segment from July 22, 2021[146] - The accounting for the business combination is not yet complete due to its size and complexity, with valuation and allocation of consideration still pending[147] - The Alaska Credit Facility includes a $35.0 million revolving facility and a $210.0 million term loan, with principal payments starting Q4 2023 and maturity on July 22, 2026. It is non-recourse to ATN International, Inc[148][150] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial condition and results, discussing key drivers, segment performance, and significant events Overview ATN International, Inc. focuses on operating and investing in communications and technology in smaller markets, providing infrastructure solutions - The Company's core strategy is to be a leading platform for operating and investing in smaller and specialty market communications services and technology companies, delivering critical infrastructure-based solutions to rural and underserved markets[153] - Operations span the United States, Bermuda, and the Caribbean, providing facilities-based communications services and related information technology solutions[153] - The Company oversees capital allocation, provides operational expertise and shared services (billing, network, engineering, customer service) to its subsidiaries, and actively evaluates strategic acquisitions and investments[154][155] - Operating segments include International Telecom (fixed, mobility, carrier, managed services), US Telecom (carrier, fixed, mobility, managed, private network services), and Renewable Energy (solar power in India, divested in January 2021)[156][157][159] COVID-19 The company's Q2 2021 financials showed no material adverse COVID-19 impact, with revenue growth in both telecom segments, but future risks remain - No material adverse impact from COVID-19 was indicated for the consolidated financial statements as of and for the three months ended June 30, 2021[165] - International Telecom segment experienced increased Mobility, Fixed, and Carrier Services revenue due to lifted pandemic-related travel and stay-at-home restrictions and increased tourism[163] - US Telecom segment saw increased revenue for rural broadband services, supporting demand for remote working and connectivity[163] - Future material adverse impacts are possible if COVID-19 travel or stay-at-home restrictions are reinstated, particularly affecting tourism-dependent Caribbean markets and potentially causing difficulties in procuring network or retail equipment[165] Acquisition of Alaska Communications The company acquired Alaska Communications on July 22, 2021, for $340 million, gaining a 52% equity stake for US Telecom integration - The acquisition of Alaska Communications Systems Group, Inc. was completed on July 22, 2021, for approximately $340 million[166] - The Company now owns approximately 52% of Alaska Communications' common equity[166] - Funding included a $220 million draw from a new Alaska credit facility and a $73.0 million draw from the Company's 2019 CoBank Credit Facility[166] - Alaska Communications' results will be included in the US Telecom segment starting July 22, 2021[166] Sale of Renewable Energy Operations In January 2021, the company sold 67% of its Indian solar power business; the remaining 33% is now equity-accounted within Corporate and Other - The sale of 67% of the distributed generation solar power projects in India (Vibrant Transaction) was completed in January 2021[167] - The post-sale results of the Company's 33% ownership interest in Vibrant are recorded through the equity method of accounting within the Corporate and Other operating segment[167] - The disposition did not qualify as discontinued operations as it did not represent a strategic shift with a major effect on operations[167] FirstNet Agreement The FirstNet Agreement involves building AT&T's network in the Southwestern US, with $80-85 million construction revenue expected through 2022 - The Company is building a portion of AT&T's network for the First Responder Network Authority (FirstNet) in the Southwestern United States under the FirstNet Agreement[168] - Construction revenue of approximately $80 million to $85 million is expected through 2022, mainly offset by construction costs, with minimal impact on operating income[168] - Following site acceptance, AT&T will own the cell sites, and the Company will provide ongoing equipment and site maintenance and high-capacity transport services until 2029[169][171] - Overall operating income contributions from the FirstNet Transaction are expected to have a relatively steady impact going forward[171] Universal Service Fund The company receives funding from various USF programs for telecommunication services in high-cost areas, though Viya's support will phase out - The Company participates in Federal Universal Service Fund (USF) programs: High Cost, Lifeline, E-Rate, and Rural Health Care Support[173] USF Program Revenue (in thousands) | USF Program Revenue (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | High Cost Program (International Telecom - Viya) | $4,300 | $4,100 | $8,400 | $8,200 | | High Cost Program (US Telecom) | $300 | $300 | $600 | $600 | | Connect America Fund Phase II | $1,900 | $1,900 | $3,800 | $3,800 | | E-Rate, Lifeline, Rural Health Care Support (aggregate) | $1,800 | $2,200 | $3,900 | $4,400 | - Viya's USF High Cost Program support will be reduced to two-thirds ($10.9 million) in the first year and one-third ($5.5 million) in the second year following the Connect USVI Fund award, then cease[174] - The Company was awarded $79.9 million over 10 years under the Connect America Fund Phase II Auction, recorded as revenue upon receipt, and receives construction grants for network connectivity[176][177] CARES Act The company received $18.7 million in CARES Act funding, primarily used for US Telecom network infrastructure, reducing property, plant and equipment - The Company received a total of $18.7 million in funding under the CARES Act[180] - The funding was utilized to construct network infrastructure in the US Telecom segment, with construction completed as of June 30, 2021[180] - $18.4 million of the funding was recorded as a reduction to property, plant and equipment, and $0.3 million was recorded as a reduction to operating expense in the six months ended June 30, 2021[180] Tribal Bidding Credit The company received a $7.4 million Tribal Bidding Credit for wireless service deployment on tribal lands, offsetting capital and network costs - The Company received a $7.4 million Tribal Bidding Credit in 2018 from the FCC to encourage wireless service deployment on tribal lands[181] - An estimated $6.1 million will offset capital costs (reducing future depreciation expense), and $1.3 million will offset network support costs (reducing future operating expense)[181] - Through June 30, 2021, $6.1 million has been spent on capital expenditures, and $0.6 million was recorded as offsets to network support costs during the six months ended June 30, 2021[181] CBRS Auction In Q3 2020, the company successfully bid $20.4 million for CBRS Priority Access Licenses (PALs) and expects to meet build-out obligations - The Company participated in the FCC's Citizens Broadband Radio Service (CBRS) auction in Q3 2020, winning Priority Access Licenses (PALs) in the 3.5 GHz spectrum band[182] - The total cost for these strategically located PALs was approximately $20.4 million[182] - The Company expects to comply with all CBRS spectrum build-out obligations associated with these 10-year renewable licenses[182] RDOF The company anticipates $20.1 million over 10 years from the RDOF Phase I Auction, obligating broadband and voice services to over 10,000 households - The Company expects to receive approximately $20.1 million over 10 years from the 2020 Rural Digital Opportunity Fund (RDOF) Phase I Auction, pending FCC conclusion of the award process[183] - This funding will obligate the Company to provide broadband and voice services to over 10,000 eligible households in the United States[183] Selected Segment Financial Information (Three Months) Q2 2021 saw International Telecom revenue growth and a surge in US Telecom revenue, while US Telecom's operating income declined due to increased costs Revenue by Segment (in thousands) - 3 Months Ended June 30 | Segment | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | International Telecom | $86,218 | $80,064 | $6,154 | 7.7% | | US Telecom | $37,647 | $28,160 | $9,487 | 33.7% | | Renewable Energy | $— | $874 | $(874) | -100.0% | | Consolidated Total | $123,865 | $109,098 | $14,767 | 13.5% | Operating Income (Loss) by Segment (in thousands) - 3 Months Ended June 30 | Segment | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | International Telecom | $14,643 | $14,617 | $26 | 0.2% | | US Telecom | $(556) | $1,826 | $(2,382) | -130.4% | | Renewable Energy | $(771) | $(620) | $(151) | -24.4% | | Corporate and Other | $(10,411) | $(8,799) | $(1,612) | 18.3% | | Consolidated Total | $2,905 | $7,024 | $(4,119) | -58.6% | - International Telecom revenue increased by 7.6% due to growth in Fixed and Mobility subscribers, higher average revenue per subscriber, and increased Carrier Services revenue from tourism[189] - US Telecom revenue increased by 33.3% primarily due to construction revenue from the FirstNet Transaction and higher Fixed revenues, partially offset by reduced Carrier Services revenue[191] - US Telecom operating income decreased to a loss of $0.6 million from income of $1.8 million, driven by increased construction costs for FirstNet, CARES Act-funded build-outs, and private network investments[192] - Renewable Energy segment generated no revenue or operating expenses in Q2 2021 following the Vibrant Transaction completion[193] Results of Operations for the Three Months Ended June 30, 2021 and 2020 Q2 2021 total revenue increased by 13.5%, but operating and net income decreased significantly due to higher operating expenses Key Financial Metrics (in thousands) - 3 Months Ended June 30 | Metric (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $123,865 | $109,098 | $14,767 | 13.5% | | Income from Operations | $2,905 | $7,024 | $(4,119) | -58.6% | | Net Income Attributable to ATN International, Inc. Stockholders | $2,019 | $4,746 | $(2,727) | -57.5% | - Total operating expenses increased by 18.5% to $120.9 million, largely due to new cost of construction revenue ($9.5 million), a 19.1% rise in selling, general and administrative expenses, and a significant increase in transaction-related charges (1,838.9%)[196] - Depreciation and amortization expenses decreased by 8.3%, while loss on disposition of long-lived assets increased significantly[196] - Income before income taxes decreased by 71.4% to $1.7 million[196] Communications services revenue Communication services revenue increased by 6.3% for Q2 2021, driven by growth in Mobility and Fixed services Communication Services Revenue (in thousands) | Revenue Type (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Communication services | $112,964 | $106,240 | $6,724 | 6.3% | | Mobility revenue | $25,161 | $21,429 | $3,732 | 17.4% | | Fixed communications revenue | $65,003 | $61,504 | $3,499 | 5.7% | | Carrier Services revenue | $22,561 | $22,753 | $(192) | -0.8% | | Other communications services revenue | $239 | $554 | $(315) | -56.9% | Other revenue Other revenue surged by 281.4% for Q2 2021, primarily due to $9.3 million in new construction revenue from the FirstNet Agreement Other Revenue (in thousands) | Revenue Type (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Other revenue | $10,901 | $2,858 | $8,043 | 281.4% | | Renewable energy revenue | $— | $874 | $(874) | -100.0% | | Managed Services revenue | $1,576 | $1,984 | $(408) | -20.6% | | Construction revenue | $9,325 | $— | $9,325 | 100.0% | - Construction revenue of $9.3 million was recognized from the FirstNet Agreement, with 40% of cell sites completed as of June 30, 2021[214] Operating expenses Total operating expenses increased by 18.5% for Q2 2021, driven by construction costs, higher SG&A, and transaction charges Operating Expenses (in thousands) | Expense Type (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total operating expenses | $120,960 | $102,074 | $18,886 | 18.5% | | Cost of services | $48,479 | $45,837 | $2,642 | 5.8% | | Cost of construction revenue | $9,535 | $— | $9,535 | 100.0% | | Selling, general and administrative | $40,652 | $34,125 | $6,527 | 19.1% | | Transaction-related charges | $1,396 | $72 | $1,324 | 1,838.9% | | Depreciation and amortization | $20,155 | $21,991 | $(1,836) | -8.3% | | Loss on disposition of long-lived assets | $743 | $49 | $694 | 1,416.3% | - Cost of services increased by 5.8%, driven by increased demand for products in International Telecom and private network development, data transport costs for FirstNet, and CARES Act-funded operations in US Telecom[216] - Selling, general and administrative expenses increased by 19.1%, mainly due to higher telecommunications license, legal, and regulatory fees in International Telecom, increased spending in US Telecom's private network and retail operations, and higher non-cash equity compensation and integration costs at Corporate Overhead[220][221][222] - Transaction-related charges of $1.4 million were primarily related to the Alaska Transaction[224] - Depreciation and amortization expenses decreased by 8.3% due to certain assets becoming fully depreciated across segments[226][227] Other income (expense) Net other income (expense) shifted to a $0.1 million expense in Q2 2021, due to non-controlling investment losses and foreign currency Other Income (Expense) (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Interest income | $46 | $66 | $(20) | -30.3% | | Interest expense | $(1,137) | $(1,574) | $437 | -27.8% | | Other income (expense) | $(66) | $590 | $(656) | -111.2% | | Other income (expense), net | $(1,157) | $(918) | $(239) | 26.0% | - Interest income decreased due to reduced cash balances and returns[229] - Interest expense decreased due to reduced debt balances in International Telecom, despite new borrowings under the Receivables Credit Facility[230] - Other income (expense) in Q2 2021 was a $0.1 million expense, mainly from losses on non-controlling investments and foreign currency transactions[232] Income taxes The effective tax rate for Q2 2021 was (88.2%), significantly lower than the prior year, influenced by income mix and discrete items Effective Tax Rate and Income Tax Provisions (in thousands) | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | | :--- | :--- | :--- | | Effective Tax Rate | (88.2%) | (37.0%) | | Income tax provisions (in thousands) | $(1,542) | $(2,258) | - The effective tax rate was impacted by the mix of income among jurisdictions and discrete items, including a $3.4 million benefit from the reversal of an unrecognized tax position and a $0.5 million expense for interest on unrecognized tax positions[233] Net income attributable to non-controlling interests, net of tax Net income attributable to non-controlling interests decreased by 64.9% for Q2 2021, due to increased ownership and decreased subsidiary profitability Net Income Attributable to Non-Controlling Interests (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to non-controlling interests, net of tax | $(1,271) | $(3,618) | $2,347 | -64.9% | - International Telecom saw a 28.0% decrease in non-controlling interests' net income due to increased Company ownership and decreased profitability in some subsidiaries[236] - US Telecom shifted from an allocation of income of $1.1 million to a loss of $0.6 million for non-controlling interests, driven by decreased profitability in US Mobility retail operations and allocation of Alaska Transaction costs[237] Net income attributable to ATN International, Inc. stockholders Net income attributable to ATN International, Inc. stockholders decreased by 57.5% to $2.0 million for Q2 2021, with diluted EPS of $0.13 Net Income Attributable to ATN International, Inc. Stockholders (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to ATN International, Inc. stockholders | $2,019 | $4,746 | $(2,727) | -57.5% | | Diluted EPS | $0.13 | $0.30 | $(0.17) | -56.7% | Selected Segment Financial Information (Six Months) H1 2021 saw International Telecom revenue growth and significant US Telecom revenue growth, while US Telecom's operating income shifted to a loss Revenue by Segment (in thousands) - 6 Months Ended June 30 | Segment | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | International Telecom | $170,036 | $162,349 | $7,687 | 4.7% | | US Telecom | $77,921 | $55,459 | $22,462 | 40.5% | | Renewable Energy | $418 | $2,196 | $(1,778) | -81.0% | | Consolidated Total | $248,375 | $220,004 | $28,371 | 12.9% | Operating Income (Loss) by Segment (in thousands) - 6 Months Ended June 30 | Segment | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | International Telecom | $27,786 | $28,005 | $(219) | -0.8% | | US Telecom | $(1,090) | $4,019 | $(5,109) | -127.1% | | Renewable Energy | $(1,433) | $(1,077) | $(356) | 33.1% | | Corporate and Other | $(19,009) | $(16,623) | $(2,386) | 14.3% | | Consolidated Total | $6,254 | $14,324 | $(8,070) | -56.3% | - International Telecom revenue increased by 4.7% due to growth in Fixed and Mobility subscribers and increased Carrier Services revenue from tourism[243] - US Telecom revenue increased by 40.4% primarily due to construction revenue from the FirstNet Transaction and higher Fixed revenues, partially offset by reduced Carrier Services revenue[245] - US Telecom operating income decreased to a loss of $1.1 million from income of $4.0 million, driven by increased construction costs for FirstNet, CARES Act-funded build-outs, and private network investments[246] - Renewable Energy segment generated minimal revenue and incurred operating losses in Q2 2021 following the Vibrant Transaction completion[247] Results of Operations for the Six Months Ended June 30, 2021 and 2020 H1 2021 total revenue increased by 12.9%, but operating income decreased significantly due to substantial increases in operating expenses Key Financial Metrics (in thousands) - 6 Months Ended June 30 | Metric (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $248,375 | $220,004 | $28,371 | 12.9% | | Income from Operations | $6,254 | $14,324 | $(8,070) | -56.3% | | Net Income | $7,565 | $10,742 | $(3,177) | -29.6% | | Net Income Attributable to ATN International, Inc. Stockholders | $4,723 | $3,733 | $990 | 26.5% | - Total operating expenses increased by 17.7% to $242.1 million, driven by new cost of construction revenue ($22.1 million), a 14.3% rise in selling, general and administrative expenses, and a significant increase in transaction-related charges (1,732.8%)[250] - Other income (expense), net, significantly improved from an expense of $4.7 million to an income of $0.1 million, primarily due to gains from non-controlling investments[250] - Income before income taxes decreased by 34.1% to $6.3 million[250] Communications services revenue Communication services revenue increased by 4.4% for H1 2021, driven by growth in Mobility and Fixed services Communication Services Revenue (in thousands) | Revenue Type (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Communication services | $223,599 | $214,145 | $9,454 | 4.4% | | Mobility revenue | $49,842 | $43,968 | $5,874 | 13.4% | | Fixed communications revenue | $130,121 | $124,818 | $5,303 | 4.2% | | Carrier Services revenue | $43,180 | $44,468 | $(1,288) | -2.9% | | Other communications services revenue | $456 | $891 | $(435) | -48.8% | Other revenue Other revenue significantly increased by 322.9% for H1 2021, primarily due to $21.6 million in new construction revenue from FirstNet Other Revenue (in thousands) | Revenue Type (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Other revenue | $24,776 | $5,859 | $18,917 | 322.9% | | Renewable energy revenue | $418 | $2,196 | $(1,778) | -81.0% | | Managed Services revenue | $2,726 | $3,663 | $(937) | -25.6% | | Construction revenue | $21,632 | $— | $21,632 | 100.0% | - Construction revenue of $21.6 million was recognized from the FirstNet Agreement, with 40% of cell sites completed as of June 30, 2021[257] Operating expenses Total operating expenses increased by 17.7% for H1 2021, driven by construction costs, higher SG&A, and transaction charges Operating Expenses (in thousands) | Expense Type (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total operating expenses | $242,121 | $205,680 | $36,441 | 17.7% | | Cost of services | $97,986 | $92,439 | $5,547 | 6.0% | | Cost of construction revenue | $22,142 | $— | $22,142 | 100.0% | | Selling, general and administrative | $78,344 | $68,552 | $9,792 | 14.3% | | Transaction-related charges | $2,126 | $116 | $2,010 | 1,732.8% | | Depreciation and amortization | $40,662 | $44,509 | $(3,847) | -8.6% | | Loss on disposition of long-lived assets | $861 | $64 | $797 | 1,245.3% | - Cost of services increased by 6.0%, driven by increased demand in International Telecom and higher data transport costs for FirstNet in US Telecom[260] - Selling, general and administrative expenses increased by 14.3%, mainly due to higher legal and regulatory fees in International Telecom, increased spending in US Telecom's private network and retail operations, and higher non-cash equity compensation and integration costs at Corporate Overhead[262][263][264] - Transaction-related charges of $2.1 million were primarily related to the Alaska Transaction[265] - Depreciation and amortization expenses decreased by 8.5% due to certain assets becoming fully depreciated across segments, partially offset by capital expenditures[265][266] Other income (expense) Net other income (expense) significantly improved to a $2.3 million income in H1 2021, primarily due to gains from non-controlling investments Other Income (Expense) (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Interest income | $40 | $309 | $(269) | -87.1% | | Interest expense | $(2,285) | $(2,730) | $445 | -16.3% | | Other expense | $2,309 | $(2,310) | $4,619 | -200.0% | | Other expense, net | $64 | $(4,731) | $4,795 | -101.4% | - Other income (expense) in H1 2021 was $2.3 million income, primarily from gains on non-controlling investments, partially offset by foreign currency losses[268] - Interest expense decreased due to reduced debt balances in International Telecom, despite new borrowings under the Receivables Credit Facility[268] Income taxes The effective tax rate for H1 2021 was (19.7%), influenced by income mix across jurisdictions and discrete items Effective Tax Rate and Income Tax Expense (in thousands) | Metric | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :--- | :--- | :--- | | Effective Tax Rate | (19.7%) | (12.0%) | | Income tax expense (in thousands) | $(1,247) | $(1,149) | - The effective tax rate was impacted by the mix of income among jurisdictions and discrete items, including a $3.4 million benefit from the reversal of an unrecognized tax position and a $1.0 million expense for interest on unrecognized tax positions[271] Net income attributable to non-controlling interests, net of tax Net income attributable to non-controlling interests decreased by 59.5% for H1 2021, due to increased ownership and decreased subsidiary profitability Net Income Attributable to Non-Controlling Interests (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to non-controlling interests, net of tax | $(2,842) | $(7,009) | $4,167 | -59.5% | - International Telecom saw a 30.0% decrease in non-controlling interests' net income due to increased Company ownership and decreased profitability in some subsidiaries[274] - US Telecom saw a $2.0 million decrease in non-controlling interests' net income, driven by decreased profitability in US Mobility retail operations and allocation of Alaska Transaction costs[275] Net income attributable to ATN International, Inc. stockholders Net income attributable to ATN International, Inc. stockholders increased by 26.5% to $4.7 million for H1 2021, with diluted EPS of $0.30 Net Income Attributable to ATN International, Inc. Stockholders (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to ATN International, Inc. stockholders | $4,723 | $3,733 | $990 | 26.5% | | Diluted EPS | $0.30 | $0.23 | $0.07 | 30.4% | Regulatory and Tax Issues The company faces regulatory and tax proceedings, particularly in Guyana, and addresses Tax Cuts and Jobs Act and CARES Act implications - The Company is involved in regulatory and tax proceedings, particularly in Guyana, where adverse outcomes could materially impact its financial condition and future operations[278] - The Tax Cuts and Jobs Act of 2017 (Tax Act) introduced significant changes to US corporate income tax, including GILTI and BEAT, but the Company does not currently project a GILTI inclusion for 2021 and does not expect to be subject to BEAT[279] - The CARES Act permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years before 2021 and allows NOLs from 2018-2020 to be carried back five years, impacting income tax provision computations[280] Liquidity and Capital Resources The company's liquidity is met through cash, internal funds, and credit facilities, with $96.0 million cash and $87.7 million debt as of June 30, 2021 - The Company's liquidity needs are met through cash-on-hand, internally generated funds, and credit facilities, with current resources believed sufficient for at least the next twelve months[281] Liquidity Metrics (in thousands) | Metric (in thousands) | June 30, 2021 | | :--- | :--- | | Cash, cash equivalents, and restricted cash | $96,000 | | Debt, net of unamortized deferred financing costs | $87,700 | | Foreign subsidiaries' cash (indefinitely invested) | $40,100 | Uses of Cash Cash is used for acquisitions, capital expenditures, working capital, income taxes, dividends, and stock repurchases, with decreased investing and financing cash use for H1 2021 - Cash is used for acquisitions, capital expenditures, working capital, income taxes, dividends, and stock repurchases[282][286][287][290] Cash Flow Items (in thousands) | Cash Flow Item (in thousands) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change | | :--- | :--- | :--- | :--- | | Cash used in investing activities | $(25,285) | $(54,733) | $29,448 |