Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 09, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | ATN International, Inc. | |
Entity Central Index Key | 879,585 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 16,139,477 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 252,433 | $ 392,045 |
Restricted cash | 29,426 | 824 |
Short-term Investments | 7,422 | |
Accounts receivable, net of allowances of $10.7 million and $9.3 million, respectively | 51,753 | 39,020 |
Materials and supplies | 14,734 | 8,220 |
Prepayments and other current assets | 29,129 | 28,383 |
Total current assets | 384,897 | 468,492 |
Fixed Assets: | ||
Property, plant and equipment | 1,083,301 | 807,247 |
Less accumulated depreciation | (464,766) | (433,744) |
Net fixed assets | 618,535 | 373,503 |
Telecommunication licenses, net | 50,625 | 43,468 |
Goodwill | 62,042 | 45,077 |
Trade name license, net | 1,929 | 417 |
Customer relationships, net | 15,800 | 1,081 |
Restricted cash | 5,163 | 5,477 |
Other assets | 27,066 | 7,489 |
Total assets | 1,166,057 | 945,004 |
Current Liabilities: | ||
Current portion of long-term debt | 11,969 | 6,284 |
Accounts payable and accrued liabilities | 84,495 | 54,289 |
Dividends payable | 5,498 | 5,142 |
Accrued taxes | 13,756 | 9,181 |
Advance payments and deposits | 22,530 | 9,459 |
Total current liabilities | 138,248 | 84,355 |
Deferred income taxes | 43,202 | 45,406 |
Other liabilities | 69,839 | 26,944 |
Long-term debt, excluding current portion | 106,928 | 26,575 |
Total liabilities | 358,217 | 183,280 |
Atlantic Tele-Network, Inc. Stockholders' Equity: | ||
Preferred stock, $0.01 par value per share; 10,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value per share; 50,000 shares authorized; 16,970 and 16,828 shares issued, respectively, and 16,139 and 16,068 shares outstanding respectively | 168 | 168 |
Treasury stock, at cost; 830 and 761 shares, respectively | (23,010) | (18,254) |
Additional paid-in capital | 156,750 | 154,768 |
Retained earnings | 541,702 | 547,321 |
Accumulated other comprehensive loss | (3,904) | (3,704) |
Total ATN International, Inc. stockholders’ equity | 671,706 | 680,299 |
Non-controlling interests | 136,134 | 81,425 |
Total equity | 807,840 | 761,724 |
Total liabilities and equity | $ 1,166,057 | $ 945,004 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 10.7 | $ 9.3 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 16,970 | 16,828 |
Common stock, shares outstanding | 16,139 | 16,068 |
Treasury stock, shares | 830 | 761 |
CONSOLIDATED INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENTS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUE: | ||||
Total revenue | $ 138,795 | $ 96,782 | $ 328,471 | $ 272,453 |
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated): | ||||
Termination and access fees | 36,728 | 20,275 | 80,479 | 57,755 |
Engineering and operations | 16,282 | 11,206 | 36,270 | 28,591 |
Sales and marketing | 8,954 | 6,406 | 22,387 | 17,634 |
Equipment expense | 3,146 | 3,591 | 10,498 | 10,228 |
General and administrative | 27,242 | 15,654 | 63,949 | 43,992 |
Transaction-related charges | 2,091 | 2,536 | 16,156 | 2,852 |
Restructuring charges | 1,785 | |||
Depreciation and amortization | 21,866 | 14,590 | 52,913 | 43,813 |
Impairment of intangible assets | 349 | 11,425 | ||
Bargain purchase gain | (7,304) | |||
(Gain) Loss on disposition of long-lived assets | 56 | 27 | (2,823) | |
Total operating expenses | 116,714 | 74,258 | 288,585 | 202,042 |
Income from operations | 22,081 | 22,524 | 39,886 | 70,411 |
OTHER INCOME (EXPENSE): | ||||
Interest income | 236 | 70 | 929 | 280 |
Interest expense | (1,787) | (865) | (3,674) | (2,433) |
Loss on deconsolidation of subsidiary | 19,900 | (19,937) | ||
Other income, net | 766 | 53 | 643 | 118 |
Other expense, net | (785) | (742) | (2,102) | (21,972) |
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 21,296 | 21,782 | 37,784 | 48,439 |
Income taxes | 9,602 | 10,134 | 17,178 | 22,655 |
INCOME FROM CONTINUING OPERATIONS | 11,694 | 11,648 | 20,606 | 25,784 |
Income from discontinued operations, net of tax | 390 | |||
NET INCOME | 11,694 | 11,648 | 20,606 | 26,174 |
Net income attributable to non-controlling interests, net of tax | (4,523) | (5,072) | (10,400) | (13,417) |
NET INCOME ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS | $ 7,171 | $ 6,576 | $ 10,206 | $ 12,757 |
NET INCOME PER WEIGHTED AVERAGE BASIC SHARE ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS: | ||||
Continuing operations (in dollars per share) | $ 0.44 | $ 0.41 | $ 0.63 | $ 0.77 |
Discontinued operations (in dollars per share) | 0.02 | |||
Total (in dollars per share) | 0.44 | 0.41 | 0.63 | 0.79 |
NET INCOME (LOSS) PER WEIGHTED AVERAGE DILUTED SHARE ATTRIBUTABLE TO ATLANTIC TELE-NETWORK, INC. STOCKHOLDERS: | ||||
Continuing operations (in dollars per share) | 0.44 | 0.41 | 0.63 | 0.77 |
Discontinued operations (in dollars per share) | 0.02 | |||
Total (in dollars per share) | $ 0.44 | $ 0.41 | $ 0.63 | $ 0.79 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in shares) | 16,148 | 16,049 | 16,128 | 16,009 |
Diluted (in shares) | 16,241 | 16,165 | 16,228 | 16,128 |
DIVIDENDS PER SHARE APPLICABLE TO COMMON STOCK (in dollars per share) | $ 0.34 | $ 0.32 | $ 0.98 | $ 0.90 |
U.S. Wireless | ||||
REVENUE: | ||||
Total revenue | $ 61,151 | $ 67,521 | $ 177,300 | $ 185,272 |
Wireline | ||||
REVENUE: | ||||
Total revenue | 66,129 | 21,760 | 122,190 | 63,520 |
Equipment and other | ||||
REVENUE: | ||||
Total revenue | 5,731 | 2,449 | 12,046 | 8,030 |
Renewable energy | ||||
REVENUE: | ||||
Total revenue | $ 5,784 | $ 5,052 | $ 16,935 | $ 15,631 |
CONSOLIDATED INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENTS (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONSOLIDATED INCOME STATEMENTS | ||||
Discontinued operations, tax expense (benefit) | $ 0.6 | $ 0.1 | $ 1 | $ 0.9 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 11,694 | $ 11,648 | $ 20,606 | $ 26,174 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (164) | 1 | (200) | 29 |
Other comprehensive income, net of tax | (164) | 1 | (200) | 29 |
Comprehensive income | 11,530 | 11,649 | 20,406 | 26,203 |
Less: Comprehensive income attributable to non-controlling interests | (4,523) | (5,072) | (10,400) | (13,417) |
Comprehensive income attributable to ATN International, Inc. | $ 7,007 | $ 6,577 | $ 10,006 | $ 12,786 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 20,606 | $ 26,174 |
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||
Depreciation and amortization | 52,913 | 43,813 |
Provision for doubtful accounts | 1,058 | 711 |
Amortization and write off of debt discount and debt issuance costs | 372 | 424 |
Stock-based compensation | 5,032 | 3,832 |
Deferred income taxes | (8,775) | |
Income from discontinued operations, net of tax | (390) | |
Bargain purchase gain | (7,304) | |
(Gain) Loss on disposition of long-lived assets | 27 | (2,823) |
Impairment of long-lived assets | 11,425 | |
Loss on deconsolidation of subsidiary | 19,937 | |
Changes in operating assets and liabilities, excluding the effects of acquisitions: | ||
Accounts receivable | (2,234) | 3,832 |
Materials and supplies, prepayments, and other current assets | (9,471) | (5,563) |
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities | (2,854) | 399 |
Accrued taxes | 21,886 | 27,684 |
Other assets | (2,169) | (35) |
Other liabilities | 11,593 | (5,450) |
Net cash provided by operating activities of continuing operations | 92,105 | 112,545 |
Net cash provided by operating activities of discontinued operations | 566 | |
Net cash provided by operating activities | 92,105 | 113,111 |
Cash flows from investing activities: | ||
Capital expenditures | (78,455) | (46,031) |
Purchase of marketable securities | (2,000) | |
Acquisition of businesses, net of acquired cash of $12.6 million and $6.6 million | (145,454) | (11,968) |
Purchases of spectrum licenses and other intangible assets, including deposits | (10,860) | |
Acquisition of non-controlling interest in subsidiary | (7,045) | |
Purchase of short-term investments | 7,422 | |
Change in restricted cash | (28,287) | 39,368 |
Proceeds from disposition of long-lived assets | 1,424 | 5,873 |
Net cash used in investing activities of continuing operations | (278,099) | (12,758) |
Cash flows from financing activities: | ||
Dividends paid on common stock | (15,469) | (13,920) |
Borrowings - Acquisition | 60,000 | |
Distribution to non-controlling stockholders | (7,667) | (11,363) |
Payment of debt issuance costs | (494) | (30) |
Proceeds from stock option exercises | 612 | 1,686 |
Principal repayments of term loan | (7,982) | (4,482) |
Purchase of common stock | (3,997) | (1,568) |
Repurchases of non-controlling interests | (767) | |
Investments made by minority shareholders in consolidated affiliates | 22,409 | 905 |
Net cash provided by (used in) financing activities | 46,645 | (28,772) |
Effect of foreign currency exchange rates on cash and cash equivalents | (263) | |
Net change in cash and cash equivalents | (139,612) | 71,581 |
Cash and cash equivalents, beginning of period | 392,045 | 326,216 |
Cash and cash equivalents, end of period | $ 252,433 | $ 397,797 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parantheticals) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Cash acquired from acquisition | $ 12.6 | $ 6.6 |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended |
Sep. 30, 2016 | |
ORGANIZATION AND BUSINESS OPERATIONS | |
ORGANIZATION AND BUSINESS OPERATIONS | 1. ORGANIZATION AND BUSINESS OPERATIONS The Company is a holding company that, through its operating subsidiaries, (i) provides wireless and wireline telecommunications services in North America, Bermuda and the Caribbean, (ii) develops, owns and operates commercial distributed generation solar power systems in the United States and India, and (iii) owns and operates terrestrial and submarine fiber optic transport systems in the United States and the Caribbean, respectively. The Company offers the following principal services: · Wireless. In the United States, the Company offers wholesale wireless voice and data roaming services to national, regional, local and selected international wireless carriers in rural markets located principally in the Southwest and Midwest United States. The Company also offers wireless voice and data services to retail customers in Bermuda, Guyana, and in other smaller markets in the Caribbean and the United States. · Wireline. The Company’s wireline services include local telephone, data, and cable television services in Bermuda, Guyana, the U.S. Virgin Islands, and in other smaller markets in the Caribbean and the United States. The Company is the exclusive licensed provider of domestic wireline local and long-distance telephone services in Guyana and international voice and data communications into and out of Guyana. In addition, the Company offers wholesale long-distance voice services to telecommunications carriers. The Company also offers facilities-based integrated voice and data communications services and wholesale transport services to enterprise and residential customers in New England, primarily Vermont, and in New York State. · Renewable Energy. In the United States, the Company provides distributed generation solar power to corporate, utility and municipal customers in Massachusetts, California and New Jersey. Beginning in April 2016, the Company began developing projects in India to provide distributed generation solar power to corporate and utility customers. The following chart summarizes the operating activities of the Company’s principal subsidiaries, the segments in which the Company reports its revenue and the markets it served as of September 30, 2016: Services Segment Markets Tradenames Wireless U.S. Telecom United States (rural markets) Commnet, Choice International Telecom Aruba, Bermuda, Guyana, U.S. Virgin Islands Mio, CellOne, Choice, Innovative Wireline U.S. Telecom United States (New England and New York State) Sovernet, ION, Essextel International Telecom Guyana, Bermuda, Cayman Islands, U.S. Virgin Islands, British Virgin Islands, St. Maarten GTT, KeyTech, Bermuda CableVision, Logic, Innovative Renewable Energy Renewable Energy United States (Massachusetts, California, and New Jersey), India Ahana Renewables, Vibrant Energy The Company actively evaluates potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, that meet its return on investment and other criteria. The Company provides management, technical, financial, regulatory, and marketing services to its subsidiaries and typically receives a management fee equal to a percentage of their respective revenue. Management fees from subsidiaries are eliminated in consolidation. To be consistent with how management allocates resources and assesses the performance of its business operations in 2016, the Company updated its reportable operating segments in the first quarter of the year to consist of the following: i) U.S. Telecom, consisting of the Company’s former U.S. Wireless and U.S. Wireline segments, ii) International Telecom, consisting of the Company’s former Island Wireless and International Integrated Telephony segments and the results of its KeyTech and Innovative Acquisitions as discussed below, and iii) Renewable Energy, consisting of the Company’s former Renewable Energy segment and the results of its Vibrant Energy Acquisition. The prior year segment information has been recast to conform to the current year’s segment presentation. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial information included herein is unaudited; however, the Company believes such information and the disclosures herein are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial position and results of operations for such periods. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Results of interim periods may not be indicative of results for the full year. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s 2015 Annual Report on Form 10-K. The consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and certain entities, which are consolidated in accordance with the provisions of the Financial Accounting Standards Board’s (“FASB”) authoritative guidance on the consolidation of variable interest entities since it is determined that the Company is the primary beneficiary of these entities. Certain reclassifications have been made in the prior period financial statements to conform the Company’s consolidated income statements to how management analyzes its operations in the current period. The changes did not impact operating income. For the three months ended September 30, 2015 the aggregate impact of the changes included a decrease to termination and access fees of $1.1 million, an increase to engineering and operations expenses of $0.6 million, an increase to sales and marketing expenses of $0.6 million, an increase to equipment expense of $0.1 million and a decrease to general and administrative expenses of $0.3 million. For the nine months ended September 30, 2015 the aggregate impact of the changes included a decrease to termination and access fees of $3.1 million, an increase to engineering and operations expenses of $2.4 million, an increase to sales and marketing expenses of $1.3 million, an increase to equipment expense of $0.2 million and a decrease to general and administrative expenses of $0.8 million. During the nine months ended September 30, 2016, the Company’s other assets increased primarily due to a deposit to purchase spectrum licenses of $10.9 million, a $2.0 million purchase of securities in an unaffiliated entity, $3.2 million of assets acquired in the KeyTech Transaction, and $4.3 million of assets acquired in the Innovative Transaction. The Company’s effective tax rates for the three months ended September 30, 2016 and 2015 were 45.1 % and 46.5%, respectively. The Company’s effective tax rates for the nine months ended September 30, 2016 and 2015 were 45.5 % and 46.8 %, respectively. The effective tax rate for the three months ended September 30, 2016 was impacted by the following items: (i) certain transactional charges incurred in connection with the Company’s recent acquisitions that had no tax benefit, (ii) the mix of income generated among the jurisdictions in which the Company operates, and (iii) $1.6 million provision (net) to record multiple discrete items. The effective tax rate for the three months ended September 30, 2015 was impacted by the following items: (i) the $19.9 million loss on deconsolidation within the Company’s International Telecom business that had no tax benefit and (ii) the mix of income generated among the jurisdictions in which the Company operates. The Company’s effective tax rate is based upon estimated income before provision for income taxes for the year, composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for potential tax consequences, benefits and/or resolutions of tax contingencies. The Company’s consolidated tax rate will continue to be impacted by the mix of income generated among the jurisdictions in which the Company operates. The effective tax rate for the nine months ended September 30, 2016 was impacted by the following items: (i) certain transactional charges incurred in connection with the Company’s recent acquisitions that had no tax benefit, (ii) an impairment charge to write down the value of assets related to the Company’s wireline business, (iii) the mix of income generated among the jurisdictions in which the Company operates, and (iv) $2.2 million provision (net) to record multiple discrete items. The effective tax rate for the nine months ended September 30, 2015 was impacted by the following items: (i) the $19.9 million loss on deconsolidation within the Company’s International Telecom business that had no tax benefit and (ii) the mix of income generated among the jurisdictions in which the Company operates. The Company’s effective tax rate is based upon estimated income before provision for income taxes for the year, composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for potential tax consequences, benefits and/or resolutions of tax contingencies. The Company’s consolidated tax rate will continue to be impacted by the mix of income generated among the jurisdictions in which the Company operates. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”, which provides a single, comprehensive revenue recognition model for all contracts with customers. The revenue standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. On July 9, 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard is now effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the adoption method options and the impact of the new guidance on its consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40),” which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU 2014-15 will be effective for annual reporting periods ending after December 15, 2016. Early application is permitted. The Company does not expect the adoption of ASU 2014-15 to have an impact on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs”, which amends the presentation of debt issuance costs on the consolidated balance sheet. Under the new guidance, debt issuance costs are presented as a direct deduction from the carrying amount of the debt liability rather than as an asset. The Company adopted ASU 2015-03 on January 1, 2016 and has determined that its adoption did not have a material impact on its consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”, which provides guidance about whether a cloud computing arrangement includes software and how to account for that software license. The new guidance does not change the accounting for a customer’s accounting for service contracts. The standard is effective beginning January 1, 2017, with early adoption permitted, and may be applied prospectively or retrospectively. The Company does not expect ASU 2015-05 to have a material impact on its consolidated financial position, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments”, which provides updated guidance related to simplifying the accounting for measurement period adjustments related to business combinations. The amended guidance eliminates the requirement to retrospectively account for adjustments made during the measurement period. The standard was adopted January 1, 2016, and did not have a material impact on its consolidated financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which provides comprehensive lease accounting guidance. The standard requires entities to recognize lease assets and liabilities on the balance sheet as well as disclosure of key information about leasing arrangements. ASU 2016-02 will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company is currently evaluating the impact that the standard will have on its consolidated financial statements. In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides further clarification on eight cash flow classification issues. The standard further clarifies the classification of the following: (i) debt prepayment or debt extinguishment costs; (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (iii) contingent consideration payments made after a business combination; (iv) proceeds from the settlement of insurance claims; (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (vi) distributions received from equity method investees; (vii) beneficial interests in securitization transactions; and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. ASU 2016-15 should be applied using a retrospective transition method for each period presented. The Company is currently evaluating the impact of the new standard on our consolidated financial statements. In October 2016 the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . The new standard eliminates for all intra-entity sales of assets other than inventory, the exception under current standards that permits the tax effects of intra-entity asset transfers to be deferred until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new standard will be effective for the Company on January 1, 2018. The Company is currently evaluating the potential impact that this standard may have on its results of operations. |
USE OF ESTIMATES
USE OF ESTIMATES | 9 Months Ended |
Sep. 30, 2016 | |
USE OF ESTIMATES | |
USE OF ESTIMATES | 3. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates relate to the allowance for doubtful accounts, useful lives of the Company’s fixed and finite-lived intangible assets, allocation of purchase price to assets acquired and liabilities assumed in business combinations, fair value of indefinite-lived intangible assets, goodwill and income taxes. Actual results could differ significantly from those estimates. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2016 | |
ACQUISITIONS | |
ACQUISITIONS | 4. ACQUISITIONS AND DISPOSITIONS International Telecom KeyTech Limited On May 3, 2016, the Company completed its acquisition of a controlling interest in KeyTech Limited (“KeyTech”), a publicly held Bermuda company listed on the Bermuda Stock Exchange (“BSX”) that provides broadband and cable television services and other telecommunications services to residential and enterprise customers under the “Logic” name in Bermuda and the Cayman Islands (the “KeyTech Transaction”). KeyTech also owned a minority interest of approximately 43% in the Company’s consolidated subsidiary, Bermuda Digital Communications Ltd. (“BDC”), which provides wireless services in Bermuda under the “CellOne” name. As part of the transaction, the Company contributed its ownership interest of approximately 43% in BDC and $41.6 million in cash in exchange for a 51% ownership interest in KeyTech. As part of the transaction, BDC was merged with and into a company within the KeyTech group and the approximate 15% interest in BDC held, in the aggregate, by BDC’s minority shareholders was converted into the right to receive common shares in KeyTech. Following the transaction, BDC is now wholly owned by KeyTech, and KeyTech continues to be listed on the BSX. A portion of the cash proceeds that KeyTech received upon closing was used to fund a one-time special dividend to KeyTech's pre-transaction shareholders and to retire KeyTech’s subordinated debt. On May 3, 2016, the Company began consolidating the results of KeyTech within its financial statements in its International Telecom segment. The KeyTech Transaction was accounted for as a business combination of a controlling interest in KeyTech in accordance with ASC 805, Business Combinations (“ASC 805”), and the acquisition of an incremental ownership interest in BDC in accordance with ASC 810, Consolidation . The total purchase consideration of $41.6 million of cash was allocated to the assets acquired and liabilities assumed at their estimated fair values as of the date of the acquisition. The table below represents the allocation of the consideration transferred to the net assets of KeyTech and incremental interest acquired in BDC based on their acquisition date fair values (in thousands): Consideration Transferred Cash consideration - KeyTech $ Cash consideration - BDC Total consideration transferred Non-controlling interests - KeyTech Total value to allocate $ Value to allocate KeyTech Value to allocate - BDC Purchase price allocation KeyTech: Cash Accounts receivable Other current assets Property, plant and equipment Identifiable intangible assets Other long term assets Accounts payable and accrued liabilities Advance payments and deposits Current debt Long term debt Net assets acquired Gain on KeyTech bargain purchase $ Purchase price allocation BDC: Carrying value of BDC non-controlling interest acquired Excess of purchase price paid over carrying value of non-controlling interest acquired $ The acquired property, plant and equipment is comprised of telecommunication equipment located in Bermuda and the Cayman Islands. The property, plant and equipment was valued using the income and cost approaches. Cash flows were discounted at approximately 15% rate to determine fair value under the income approach. The property, plant and equipment have useful lives ranging from 3 to 18 years and the customer relationships acquired have useful lives ranging from 9 to 12 years. The fair value of the non-controlling interest was determined using the income approach and a discount rate of approximately 15%. The acquired receivables consist of trade receivables incurred in the ordinary course of business. The Company expects to collect the full amount of the receivables. The purchase price and resulting bargain purchase gain are the result of the market conditions and competitive environment in which KeyTech operates along with the Company's strategic position and resources in those same markets. Both companies realized that their combined resources would accelerate the transformation of both companies to better serve customers in these markets. The bargain purchase gain is included in operating income in the accompanying income statement for the nine months ended September 30, 2016. The Company’s statement of operations for the nine months ended September 30, 2016 includes $34.7 million of revenue and $1.9 million of income before taxes attributable to the KeyTech Transaction. The Company incurred $4.3 million of transaction related charges pertaining to legal, accounting and consulting services associated with the transaction, of which $3.3 million were incurred during the nine months ended September 30, 2016. Innovative On July 1, 2016, the Company completed its acquisition of all of the membership interests of Caribbean Asset Holdings LLC (“CAH”), the holding company for the Innovative group of companies operating cable television, Internet, wireless and landline services in the U.S. Virgin Islands, British Virgin Islands and St. Maarten (“Innovative”), from the National Rural Utilities Cooperative Finance Corporation (“CFC”). The Company acquired the Innovative operations for a contractual purchase price of $145 million, reduced by purchase price adjustments of $4.9 million (the “Innovative Transaction”). In connection with the transaction, the Company financed $60 million of the purchase price with a loan from an affiliate of CFC, the Rural Telephone Finance Cooperative (“RTFC”) on the terms and conditions of a Loan Agreement by and among RTFC, CAH and ATN VI Holdings, LLC, the parent entity of CAH and a wholly-owned subsidiary of the Company. The Company funded $50.9 million of the purchase price in cash and will pay $27.8 million to fund Innovative’s pension and other postretirement benefit obligations in the fourth quarter of 2016. At September 30, 2016 approximately $1.4 million of purchase price was accrued to settle working capital adjustments. Following the purchase, the Company’s current operations in the U.S. Virgin Islands under the “Choice” name will be combined with Innovative to deliver residential and business subscribers a full range of telecommunications and media services. On July 1, 2016, the Company began consolidating the results of Innovative within its financial statements in its International Telecom segment. The Innovative Transaction was accounted as a business combination in accordance with ASC 805. The consideration transferred of $112.3 million, and used for the purchase price allocation, differed from the contractual purchase price of $145.0 million, due to certain GAAP purchase price adjustments including a reduction of $4.9 million related to working capital adjustments and the Company agreeing to subsequently settle assumed pension and other postretirement benefit liabilities of $27.8 million. As of September 30, 2016, the Company transferred consideration of $112.3 million which was allocated to the assets acquired and liabilities assumed at their estimated fair values as of the date of the acquisition. The table below represents the allocation of the consideration transferred to the net assets of Innovative based on their acquisition date fair values: Consideration Transferred $ Non-controlling interests Total value to allocate Preliminary Purchase price allocation: Cash Accounts receivable Materials & supplies Other current assets Property, plant and equipment Telecommunication licenses Goodwill Intangible assets Other Assets Accounts payable and accrued liabilities Advance payments and deposits Deferred tax liability Pension and other postretirement benefit liabilities Net assets acquired $ The acquired property, plant and equipment is comprised of telecommunication equipment located in the U.S Virgin Islands, British Virgin Islands and St. Maarten. The property, plant and equipment was valued using the income and cost approaches. Cash flows were discounted between 14% and 25% based on the risk associated with the cash flows to determine fair value under the income approach. The property, plant and equipment have useful lives ranging from 1 to 18 years and the customer relationships acquired have useful lives ranging from 9 to 16 years. The fair value of the non-controlling interest was determined using the income approach and a discount rates ranging from 15% to 25%. The acquired receivables consist of trade receivables incurred in the ordinary course of business. The Company expects to collect the full amount of the receivables. The goodwill generated from the Innovative Transaction is primarily related to value placed on the acquired employee workforces, service offerings, and capabilities of the acquired businesses as well as expected synergies from future combined operations. The goodwill is not deductible for income tax purposes. The Company also acquired Innovative’s pension and other postretirement benefit plans as part of the transaction. The plans cover employees located in the U.S. Virgin Islands and consist of noncontributory defined benefit pension plans and noncontributory defined medical, dental, vision and life benefit plans. As noted above, the contractual purchase price included an adjustment related to the funded status of Innovative’s pension and other postretirement benefit plans. As contemplated by the transaction, the Company will contribute approximately $27.8 million during the fourth quarter of 2016 to certain Innovative pension and other postretirement benefit plans. Due to the Company’s intent and the specific nature of this commitment, the amount is classified as restricted cash at September 30, 2016. The funded status of the pension plans as of June 30, 2016 is detailed in the table below (in thousands): Defined Benefit Pension Plans Other Postretirement Benefit Plans Fair value of plan assets $ $ - Benefit obligations Funded status at June 30, 2016 $ $ The Company recorded a liability equal to the funded status of the plans in its purchase price allocation. Discount rates between 3.6% and 3.9% were used to determine the benefit obligation. The Company is currently evaluating the net periodic pension expense which will be impacted by the Company’s contributions to the plans in the fourth quarter of 2016. The Company’s statement of operations for the nine months ended September 30, 2016 includes $26.5 million of revenue and $1.4 million of income before taxes attributable to the Innovative Transaction. The Company incurred $4.3 million of transaction related charges pertaining to legal, accounting and consulting services associated with the transaction, of which $2.4 million were incurred during the nine months ended September 30, 2016. Disposition In September 2016, the Company entered into an agreement to sell the Innovative cable operations located in St. Maarten. The sales price is subject to certain closing adjustments and is expected to approximate the carrying value of the assets. The transaction is subject to certain regulatory approvals and is expected to close in the fourth quarter of 2016. Pro forma Results The following table reflects unaudited pro forma operating results of the Company for the three months ended September 30, 2015 and the nine months ended September 30, 2016 and September 30, 2015 assuming that the KeyTech and Innovative Transactions occurred at the beginning of each period presented. No pro forma adjustments were made to the results for the three months ended September 30, 2016 because the transactions were complete at the beginning of that period. The pro forma amounts adjust KeyTech’s and Innovative’s results to reflect the depreciation and amortization that would have been recorded assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied from January 1, 2015. Also, the pro forma results were adjusted to reflect changes to the acquired entities’ financial structure related to the transaction. KeyTech’s results reflect the retirement of $24.7 million of debt. Innovative’s results reflect the retirement of $185.5 million of debt and the addition of $60 million of purchase price debt. Finally, ATN’s results were adjusted to reflect ATN’s incremental ownership in BDC. The pro forma results for the nine months ended September 30, 2016 include $5.4 million of impairment charges, $4.3 recorded by KeyTech and $1.1 million recorded by Innovative. The pro forma results for the nine months ended September 30, 2015 include $168.7 million of impairment charges, $85.6 million recorded by KeyTech and $83.1 million recorded by Innovative. Amounts are presented in thousands, except per share data: Three months ended September 30, Nine months ended September 30, 2015 2016 2015 As Pro- As Pro- As Pro- Reported Forma Reported Forma Reported Forma Revenue $ $ $ $ $ $ Net Income attributable to ATN International, Inc. Stockholders Earnings per share: Basic Diluted The unaudited pro forma data is presented for illustrative purposes only and is not necessarily indicative of the operating resulted that would have occurred if the acquisitions had been consummated on these dates or of future operating results of the combined company following this transaction. U.S. Telecom In July 2016, the Company acquired certain telecommunications fixed assets and the associated operations in the western United States. The acquisition qualified as a business combination for accounting purposes. The Company transferred $9.1 million of cash consideration in the acquisition. The consideration transferred was preliminarily allocated to approximately $10.2 million of acquired fixed assets and $1.7 million to other net liabilities, resulting in goodwill of $0.6 million. Results of operations for the business are included in the U.S. Telecom segment and are not material to the Company’s historical results of operations. Renewable Energy Vibrant Energy On April 7, 2016, the Company completed its acquisition of a solar power development portfolio in India from Armstrong Energy Global Limited (“Armstrong”), a well-known developer, builder, and owner of solar farms (the “Vibrant Energy Acquisition”). The business operates under the name Vibrant Energy. The Company also retained several Armstrong employees in the UK and India who are employed by the Company to oversee the development, construction and operation of the India solar projects. The projects to be developed initially are located in the states of Andhra Pradesh and Telangana and are based on a commercial and industrial business model, similar to the Company’s existing renewable energy operations in the United States. As of April 7, 2016, the Company began consolidating the results of Vibrant Energy in its financial statements within its Renewable Energy segment. The Vibrant Energy Acquisition was accounted for as a business combination in accordance with ASC 805. The total purchase consideration of $6.2 million cash was allocated to the assets acquired and liabilities assumed at their estimated fair values as of the date of the acquisition. The table below represents the allocation of the consideration transferred to the net assets of Vibrant Energy based on their acquisition date fair values (in thousands): Consideration Transferred $ Purchase price allocation: Cash $ Prepayments and other assets Property, plant and equipment Accounts payable and accrued liabilities Goodwill Net assets acquired $ The consideration transferred includes $3.5 million paid and $2.7 million payable at future dates, which is contingent upon the passage of time and achievement of initial production milestones which are considered probable. The acquired property, plant and equipment is comprised of solar equipment and the accounts payable and accrued liabilities consists mainly of amounts payable for certain asset purchases. The fair value of the property, plant, and equipment was based on recent acquisition costs for the assets, given their recent purchase dates from third parties. The goodwill is not deductible for income tax purposes and primarily relates to the assembled workforce of the business acquired. For the nine months ended September 30, 2016 the Vibrant Energy Acquisition accounted for $0.3 million of the Company’s revenue. The Company incurred $11.2 million of transaction related charges pertaining to legal, accounting and consulting services associated with the transaction, of which $9.9 million were incurred during the nine months ended September 30, 2016. Results of operations for the business are not material to the Company’s historical results of operations. |
LOSS ON DECONSOLIDATION OF SUBS
LOSS ON DECONSOLIDATION OF SUBSIDIARY | 9 Months Ended |
Sep. 30, 2016 | |
LOSS ON DECONSOLIDATION OF SUBSIDIARY | |
LOSS ON DECONSOLIDATION OF SUBSIDIARY | 5. LOSS ON DECONSOLIDATION OF SUBSIDIARY During March 2015, the Company sold certain assets and liabilities of its Turks and Caicos business in its International Telecom segment. As a result, the Company recorded a loss of approximately $19.9 million arising from the deconsolidation of non-controlling interests of $20.0 million and a gain of $0.1 million arising from an excess of sales proceeds over the carrying value of net assets disposed of. The net loss on disposition is included within other income (expense) and does not relate to a strategic shift in the Company’s operations. As a result, the subsidiary’s historical results and financial position are presented with continuing operations. |
IMPAIRMENT OF LONG LIVED ASSETS
IMPAIRMENT OF LONG LIVED ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2016 | |
IMPAIRMENT OF LONG LIVED ASSETS AND GOODWILL | |
IMPAIRMENT OF GOODWILL AND LONG LIVED ASSETS | 6. IMPAIRMENT OF LONG LIVED ASSETS AND GOODWILL During June 2016, as a result of recent industry consolidation activities and a review of strategic alternatives for the Company’s U.S. Wireline business in the Northeast, the Company identified factors indicating the carrying amount of certain assets may not be recoverable. More specifically, the factors included the competitive environment, recent industry consolidation, and the Company’s view of future opportunities in the market which began to evolve in the second quarter of 2016. O n August 4, 2016, the Company entered into a stock purchase agreement to sell the majority of its U.S. Wireline business. The transaction is subject to certain regulatory approvals. As a result of this transaction and the recent developments in the market, the Company determined it was appropriate to assess the reporting unit’s assets for impairment. The reporting unit holds three types of assets for purposes of impairment testing: i) other assets such as accounts receivable and inventory, ii) long lived assets such as property plant and equipment, and iii) goodwill. Management first assessed the other assets for impairment and determined no impairment was appropriate. Second, the property, plant and equipment was assessed for impairment. The impairment test compared the undiscounted cash flows from the use and eventual disposition of the asset group to its carrying amount and determined the carrying amount was not recoverable. The impairment loss of $3.6 million was equal to the amount by which the carrying amount exceeded the fair value. Third management assessed goodwill for impairment following the two step impairment test. The carrying amount of the reporting unit exceeded its fair value, after considering the $3.6 million asset impairment. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of goodwill to measure the amount of impairment loss. The impairment loss equaled $7.5 million. The Company utilized the income approach, with Level 3 valuation inputs, which considered both the purchase agreement and cash flows discounted at a rate of 14% in its fair value calculations. In total, the Company recorded an impairment charge of $11.1 million. The impairment charge is included in income from operations for the nine months ended September 30, 2016. . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS In accordance with the provisions of fair value accounting, a fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model. The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds, debt and equity securities and derivative contracts that are traded in an active exchange market. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes corporate obligations and non-exchange traded derivative contracts. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments and intangible assets that have been impaired whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Assets and liabilities of the Company measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 are summarized as follows (in thousands): September 30, 2016 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ $ Money market funds $ $ — $ Short term investments $ — $ $ Total assets measured at fair value $ $ $ December 31, 2015 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ $ Money market funds $ $ — $ Total assets measured at fair value $ $ $ Certificate of Deposit As of September 30, 2016 and December 31, 2015, this asset class consisted of a time deposit at a financial institution denominated in U.S. dollars. The asset class is classified within Level 2 of the fair value hierarchy because the fair value was based on observable market data. Money Market Funds As of September 30, 2016 and December 31, 2015, this asset class consisted of a money market portfolio that comprises Federal government and U.S. Treasury securities. The asset class is classified within Level 1 of the fair value hierarchy because its underlying investments are valued using quoted market prices in active markets for identical assets. Short Term Investments As of September 30, 2016, this asset class consisted of short term foreign and U.S. corporate bonds. The asset class is classified within Level 2 of the fair value hierarchy because the fair value was based on observable market data. Other Fair Value Disclosures The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate their fair values because of the relatively short-term maturities of these financial instruments. The fair value of marketable securities is estimated using Level 2 inputs. At September 30, 2016, the fair value of marketable securities approximated its carrying amount of $ 2.0 million and is included in other assets on the condensed consolidated balance sheet. The fair value of long-term debt is estimated using Level 2 inputs. At September 30, 2016, the fair value of long-term debt, including the current portion, approximated its carrying amount of $ 118.9 million. At December 31, 2015, the fair value of the long-term debt, including the current portion, was equal to its carrying amount of $32 .9 million. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2016 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 8. LONG-TERM DEBT On December 19, 2014, the Company amended and restated its then existing credit facility with CoBank, ACB and a syndicate of other lenders to provide for a $225 million revolving credit facility (the “Credit Facility”) that includes (i) up to $10 million under the Credit Facility for standby or trade letters of credit, (ii) up to $25 million under the Credit Facility for letters of credit that are necessary or desirable to qualify for disbursements from the FCC’s mobility fund and (iii) up to $10 million under a swingline sub-facility. Amounts the Company may borrow under the Credit Facility bear interest at a rate equal to, at its option, either (i) the London Interbank Offered Rate ( LIBOR ) plus an applicable margin ranging between 1.50% to 1.75% or (ii) a base rate plus an applicable margin ranging from 0.50% to 0.75%. Swingline loans will bear interest at the base rate plus the applicable margin for base rate loans. The base rate is equal to the higher of (i) 1.00% plus the higher of (x) the one-week LIBOR and (y) the one-month LIBOR ; (ii) the federal funds effective rate (as defined in the Credit Facility ) plus 0.50% per annum; and (iii) the prime rate (as defined in the Credit Facility ). The applicable margin is determined based on the ratio (as further defined in the Credit Facility) of the Company’s indebtedness to EBITDA. Under the terms of the Credit Facility, the Company must also pay a fee ranging from 0.175% to 0.250% of the average daily unused portion of the Credit Facility over each calendar quarter. On January 11, 2016, the Company amended the Credit Facility (the “Amendment”) to provide for lender consent to, among other actions, (i) the contribution by the Company of all of its equity interests in ATN Bermuda Holdings, Ltd. to ATN Overseas Holdings, Ltd. in connection with the KeyTech Transaction, and subject to the closing of the KeyTech Transaction, a one-time, non-pro rata cash distribution by KeyTech in an aggregate amount not to exceed $13.0 million to certain of KeyTech’s shareholders; and (ii) the incurrence by certain subsidiaries of the Company of secured debt in an aggregate principal amount not to exceed $60.0 million in connection with the Company’s option to finance a portion of the Innovative Transaction. The Amendment increases the amount the Company is permitted to invest in “unrestricted” subsidiaries of the Company, which are not subject to the covenants of the Credit Facility , from $275.0 million to $400.0 million (as such increased amount shall be reduced from time to time by the aggregate amount of certain dividend payments to the Company’s stockholders). The Amendment also provides for the incurrence by the Company of incremental term loan facilities, when combined with increases to revolving loan commitments under the Credit Facility , in an aggregate amount not to exceed $200.0 million, which facilities shall be subject to certain conditions, including pro forma compliance with the total net leverage ratio financial covenant under the Credit Facility . The Credit Facility contains customary representations, warranties and covenants, including a financial covenant that imposes a maximum ratio of indebtedness to EBITDA as well as covenants by the Company limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. In addition, the Credit Facility contains a financial covenant by us that imposes a maximum ratio of indebtedness to EBITDA. As of September 30, 2016, the Company was in compliance with all of the financial covenants of the Credit Facility. As of September 30, 2016, the Company had no borrowings under the Credit Facility and approximately $10.6 million of outstanding letters of credit. Ahana Debt In connection with the Ahana Acquisition on December 24, 2014, the Company assumed $38.9 million in long-term debt (the “Ahana Debt”). The Ahana Debt includes multiple loan agreements with banks that bear interest at rates between 4.5% and 6.0 %, mature at various times between 2018 and 2023 and are secured by certain solar facilities. Repayment of the Ahana Debt with the banks is made on a monthly basis until maturity. The Ahana Debt also includes a loan from Public Service Electric & Gas (PSE&G). The note payable to PSE&G bears interest at 11.3%, matures in 2027, and is secured by certain solar facilities. Repayment of the Ahana Debt with PSE&G can be made in either cash or solar renewable energy credits (“SRECs”) , at the Company’s discretion, with the value of the SRECs being fixed at the time of the loan’s closing. Historically, the Company has made all repayments of the note payable to PSE&G using SRECs. As of September 30, 2016, $ 27.7 million of the Ahana Debt remained outstanding. KeyTech Debt In connection with the KeyTech Transaction on May 3, 2016, the Company assumed $35.4 million in debt (the “KeyTech Debt”) in the form of a loan from HSBC Bank Bermuda Limited. The KeyTech Debt matures in 2021, bears interest of the three-month LIBOR plus a margin of 3.25%, and repayment is made quarterly until maturity. The debt is secured by the property and assets of certain KeyTech subsidiaries. See Note 4 to the Unaudited Condensed Consolidated Financial Statements included in this Report. As of September 30, 2016, $32.1 million of the KeyTech Debt remained outstanding Innovative Debt In connection with the Innovative Transaction on July 1, 2016, the Company incurred $60 million in debt (the “Innovative Debt”) with a loan from an affiliate of CFC, the Rural Telephone Finance Cooperative (“RTFC”). The Company paid a fee of $0.9 million to lock the interest rate at 4% per annum over the term of the debt. The fee was recorded as a reduction to the debt carry amount and will be amortized over the life of the loan. Interest is paid quarterly and principal repayment is not required until maturity on July 1, 2026. See Note 4 to the Unaudited Condensed Consolidated Financial Statements included in this Report. As of September 30, 2016, $60.0 million of the Innovative Debt remained outstanding and $0.8 million of the rate lock fee was unamortized. |
GOVERNMENT GRANTS
GOVERNMENT GRANTS | 9 Months Ended |
Sep. 30, 2016 | |
GOVERNMENT GRANTS | |
GOVERNMENT GRANTS | 9. GOVERNMENT GRANTS The Company has received funding from the U.S. Government and its agencies under Stimulus and Universal Services Fund programs. These are generally designed to fund telecommunications infrastructure expansion into rural or underserved areas of the United States. The fund programs are evaluated to determine if they represent funding related to capital expenditures (capital grants) or operating activities (income grants). Phase I Mobility Fund Grants As part of the Federal Communications Commission’s (“FCC”) reform of its Universal Service Fund (“USF”) program, which previously provided support to carriers seeking to offer telecommunications services in high-cost areas and to low-income households, the FCC created two new funds, including the Phase I Mobility Fund (“Mobility Fund”), a one-time award meant to support wireless coverage in underserved geographic areas in the United States. In August 2013 and October 2014, the Company received FCC final approvals for $21.7 million and $2.4 million, respectively, of Mobility Fund support to its wholesale wireless business (the “Mobility Funds”), to expand voice and broadband networks in certain geographic areas in order to offer either 3G or 4G coverage. As part of the receipt of the Mobility Funds, the Company committed to comply with certain additional FCC construction and other requirements. A portion of these funds will be used to offset network capital costs and a portion is used to offset the costs of supporting the networks for a period of five years from the award date. In connection with the Company’s application for the Mobility Funds, the Company has issued approximately $10.6 million in letters of credit to the Universal Service Administrative Company (“USAC”) to secure these obligations. If the Company fails to comply with any of the terms and conditions upon which the Mobility Funds were granted, or if the Company loses eligibility for the Mobility Funds, USAC will be entitled to draw the entire amount of the letter of credit applicable to the affected project plus penalties and may disqualify the Company from the receipt of additional Mobility Fund support. The Mobility Funds projects and their results are included within the Company’s U.S. Telecom segment. As of September 30, 2016, the Company had received approximately $9. 3 million in Mobility Funds. Of these funds, $3.1 million was recorded as an offset to operating expenses, $5.8 million was recorded as an offset to the cost of the property, plant, and equipment associated with these projects and, consequentially, a reduction of future depreciation expense and the remaining $ 0.4 million of future operating costs is recorded within current liabilities in the Company’s consolidated balance sheet as of September 30, 2016. The balance sheet presentation is based on the timing of the expected usage of the funds which will reduce future operations expenses. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
EQUITY | |
EQUITY | 10. EQUITY Stockholders’ equity was as follows (in thousands): Nine months ended September 30, 2016 2015 ATN Non-Controlling ATN Non-Controlling Total International, Inc. Interests Total Equity International, Inc. Interests Equity Equity, beginning of period $ $ $ $ $ $ Stock-based compensation — — Comprehensive income: Net income Foreign Currency translation adjustment — — Total comprehensive income Issuance of common stock upon exercise of stock options — — Dividends declared on common stock — — Distributions to non-controlling interests — — Investments made by non-controlling interests — 22,409 (1) — Acquisition of KeyTech — — — — Acquisition of Innovative — — — — Acquisition from non-controlling interests — — — Sale of non-controlling interests — — — — Purchase of non-controlling interests — — — Purchase of treasury stock — — Equity, end of period $ $ $ $ $ $ (1) During the nine months ended September 30, 2016, the holder of a non-controlling interest in one of ATN’s U.S. Telecom subsidiaries contributed $21.7 million of cash to the subsidiary. ATN maintained a controlling interest in the subsidiary both before and after the contribution. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
NET INCOME PER SHARE | |
NET INCOME PER SHARE | 11. NET INCOME PER SHARE For the three and nine months ended September 30, 2016 and 2015, outstanding stock options were the only potentially dilutive securities. The reconciliation from basic to diluted weighted average shares of common stock outstanding is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Basic weighted-average shares of common stock outstanding Stock options Diluted weighted-average shares of common stock outstanding The above calculation does not include approximately 5,000 shares related to certain stock options because the effects of such options were anti-dilutive during both the three and nine months ended September 30, 2016, respectively. There were no anti-dilutive options for the three months ended September 30, 2015 or the nine months ended September 30, 2015. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 12. SEGMENT REPORTING For the three and nine months ended September 30, 2015, the Company had five reportable segments for separate disclosure in accordance with the FASB’s authoritative guidance on disclosures about segments of an enterprise. Those five segments were: i) U.S. Wireless, which generated all of its revenues in and had all of its assets located in the United States, ii) International Integrated Telephony, which generated all of its revenues in and had all of its assets located in Guyana, iii) Island Wireless, which generated a majority of its revenues in, and had a majority of its assets located in, Bermuda and which also generated revenues in and had assets located in the U.S. Virgin Islands, Aruba and Turks and Caicos (through March 23, 2015), iv) U.S. Wireline, which generated all of its revenues in and had all of its assets located in the United States, and v) Renewable Energy, which generated all of its revenues in and had all of its assets located in the United States. The operating segments were managed separately because each offers different services and serves different markets. To be consistent with how management allocates resources and assesses the performance of its business operations in 2016, the Company updated its reportable operating segments in the first quarter of the year to consist of the following: i) U.S. Telecom, consisting of the Company’s former U.S. Wireless and U.S. Wireline segments, ii) International Telecom, consisting of the Company’s former Island Wireless and International Integrated Telephony segments and the results of its KeyTech and Innovative Acquisitions as discussed below, and iii) Renewable Energy, consisting of the Company’s former Renewable Energy segment and the results of its Vibrant Energy Acquisition. The prior year segment information has been recast to conform to the current year’s segment presentation. The following tables provide information for each operating segment (in thousands): For the Three Months Ended September 30, 2016 U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated Revenue Wireless $ $ $ — $ — $ Wireline — — Equipment and Other — Renewable Energy — — — Total Revenue — Depreciation and amortization Non-cash stock-based compensation — — Operating income (loss) For the Three Months Ended September 30, 2015 U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated Revenue Wireless $ $ $ — $ — $ Wireline — — Equipment and Other — — Renewable Energy — — — Total Revenue — Depreciation and amortization Non-cash stock-based compensation — — Operating income (loss) For the Nine Months Ended September 30, 2016 U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated Revenue Wireless $ $ $ — $ — $ Wireline — — Equipment and Other — Renewable Energy — — — Total Revenue — Depreciation and amortization Non-cash stock-based compensation — — Operating income (loss) For the Nine Months Ended September 30, 2015 U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated Revenue Wireless $ $ $ — $ — $ Wireline — — Equipment and Other — — Renewable Energy — — — Total Revenue — Depreciation and amortization Non-cash stock-based compensation — — Operating income (loss) U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated September 30, 2016 Net fixed assets $ $ $ $ $ Goodwill — Total assets December 31, 2015 Net fixed assets $ $ $ $ $ Goodwill — — Total assets Capital Expenditures U.S. International Renewable Reconciling Nine months ended September 30, Telecom Telecom Energy Items (1) Consolidated 2016 $ $ $ $ $ 2015 (1) Reconciling items refer to corporate overhead costs and consolidating adjustments. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Regulatory and Litigation Matters The Company and its subsidiaries are subject to certain regulatory and legal proceedings and other claims arising in the ordinary course of business, some of which involve claims for damages and taxes that are substantial in amount. The Company believes that, except for the items discussed below, for which the Company is currently unable to predict the final outcome, the disposition of proceedings currently pending will not have a material adverse effect on the Company’s financial position or results of operations. As of September 30, 2016 the Company had approximately $10.6 million in letters of credit payable to USAC outstanding to cover its Mobility Fund obligations and there were no drawdowns against these letters of credit. The letters of credit accrue a fee at a rate of 1.75% per annum on the outstanding amounts. If the Company fails to comply with certain terms and conditions upon which the Mobility Funds are to be granted, or if it loses eligibility for Mobility Fund support, USAC will be entitled to draw the entire amount of the letter of credit applicable to the affected project including penalties. The results of the Company’s Mobility Fund projects are included in the Company’s “U.S. Telecom” segment. Currently, the Company’s Guyana subsidiary, GTT, holds a license to provide domestic fixed services and international voice and data services in Guyana on an exclusive basis until December 2030. Since 2001, the Government of Guyana has stated its intention to introduce additional competition into Guyana’s telecommunications sector. In connection therewith, the Company and GTT have met on several occasions with officials of the Government of Guyana to discuss potential modifications of GTT’s exclusivity and other rights under the existing agreement and license. On July 18, 2016, the Guyana Parliament passed telecommunications legislation, and on August 5, 2016, the legislation was signed into law, that introduces material changes to many features of Guyana’s existing telecommunications regulatory regime with the intention of creating a more competitive market. In contrast to prior legislative proposals, the legislation that passed does not include a provision that permits other telecommunications carriers to receive licenses automatically upon signing of the legislation, nor does it have the effect of terminating the Company’s exclusive license. Instead the legislation as passed requires the Minister of Telecommunications to conduct further proceedings and issue implementing orders to enact the various provisions of the legislation. The Company cannot predict the manner in which it will be implemented by the Minister of Telecommunications. In November 2016 the Government of Guyana invited the Company to discuss modifications of the Company’s exclusivity rights and other rights under its existing agreement and license. However, there can be no assurance that those discussions will be concluded before the Government issues new licenses contemplated by the legislation or at all, or that they will satisfactorily address contractual exclusivity rights. Although the Company believes that it would be entitled to damages or other compensation for any involuntary termination of its contractual exclusivity rights, it cannot guarantee that the Company would prevail in a proceeding to enforce its rights or that its actions would effectively halt any unilateral action by the Government. Historically, GTT has been subject to other litigation proceedings and disputes in Guyana that, while not conclusively resolved, to the Company’s knowledge have not been the subject of discussions or other significant activity in the last five years. It is possible, but not likely, that these disputes, as discussed below, may be revived. The Company believes that none of these additional proceedings would, in the event of an adverse outcome, have a material impact on the Company’s consolidated financial position, results of operation or liquidity. In a letter dated September 8, 2006, the National Frequency Management Unit (“NFMU”) agreed that total spectrum fees in Guyana should not increase for the years 2006 and 2007. However, that letter implied that spectrum fees in 2008 and onward may be increased beyond the amount GTT agreed to with the Government. GTT has objected to the NFMU’s proposed action and reiterated its position that an increase in fees prior to development of an acceptable methodology would violate the Government’s prior agreement. In 2011, GTT paid the NFMU $2.6 million representing payments in full for 2008, 2009 and 2010. However, by letter dated November 23, 2011, the NFMU stated that it did not concur with GTT’s inference that the amount was payment in full for the specified years as it was their continued opinion that the final calculation for GSM spectrum fees was not agreed upon and was still an outstanding issue. By further letter dated November 24, 2011, the NFMU further rejected a proposal that was previously submitted jointly by GTT and Digicel which outlined a recommended methodology for the calculation of these fees. The NFMU stated that it would prepare its own recommendation which it would send to the Minister of Telecommunications for decision of the matter. GTT has paid undisputed spectrum fees according to the methodology used for its 2011 payments, and has reserved amounts payable according to this methodology. There have been no further discussions on this subject and GTT has not had the opportunity to review any recommendation made to the Minister. In November 2007, Caribbean Telecommunications Limited (“CTL”) filed a complaint in the U.S. District Court for the District of New Jersey against GTT and ATN claiming breach of an interconnection agreement for domestic cellular services in Guyana and related claims. CTL asserted over $200 million in damages. GTT and ATN moved to dismiss the complaint on procedural and jurisdictional grounds. On January 26, 2009, the court granted the motions to dismiss the complaint on the grounds asserted. On November 7, 2009 and again on April 4, 2013, CTL filed a similar claim against GTT and the Public Utility Commission in the High Court of Guyana. The matter remained idle from the April 2013 filing until December 2015 when CTL filed a “Statement of Claim” reiterating the claims previously made in its prior filings. On April 7, 2016 the High Court of Guyana struck and dismissed CTL’s action as abandoned pursuant to the Court’s rules of civil procedure and the claim is no longer pending. On May 8, 2009, Digicel filed a lawsuit in Guyana challenging the legality of GTT’s exclusive license rights under Guyana’s constitution. Digicel initially filed this lawsuit against the Attorney General of Guyana in the High Court. On May 13, 2009, GTT petitioned to intervene in the suit in order to oppose Digicel’s claims and that petition was granted on May 18, 2009. GTT filed an answer to the charge on June 22, 2009 and the case is pending. The Company believes that any legal challenge to GTT’s exclusive license rights granted in 1990 is without merit and the Company intends to vigorously defend against such a legal challenge. GTT has filed several lawsuits in the High Court of Guyana asserting that, despite its denials, Digicel is engaged in international bypass in violation of GTT’s exclusive license rights, the interconnection agreement between the parties, and the laws of Guyana. GTT is seeking, among other things, injunctive relief to stop the illegal bypass activity, actual damages in excess of US$9 million and punitive damages of approximately US$5 million. Digicel filed counterclaims alleging that GTT has violated the terms of the interconnection agreement and Guyana laws. These suits, filed in 2010 and 2012, have yet to proceed to trial and it remains uncertain as to when a trial date may be set. GTT intends to vigorously prosecute these matters. GTT is also involved in several legal claims regarding its tax filings with the Guyana Revenue Authority dating back to 1991 regarding the deductibility of intercompany advisory fees as well as other tax assessments. Should GTT be held liable for any of the disputed tax assessments, totaling $44.1 million, the Company believes that the Government of Guyana would then be obligated to reimburse GTT for any amounts necessary to ensure that GTT’s return on investment was no less than 15% per annum for the relevant periods. The Company believes that some adverse outcome is probable and has accordingly accrued $5.0 million as of September 30, 2016 for these matters. The term of the Company’s telecommunications license to operate in Aruba expired on January 15, 2014. The government of Aruba informed the Company in January 2014 that a renewed license would be issued only upon payment by the Company of a fee in the amount of Afl 7.2 million (or approximately US$4 million). The Company is continuing to operate as it is actively contesting the assessment of such fee. |
ORGANIZATION AND BUSINESS OPE22
ORGANIZATION AND BUSINESS OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
ORGANIZATION AND BUSINESS OPERATIONS | |
Schedule of the operating activities of the Company's principal subsidiaries, the segments in which the Company reports its revenue and markets served | Services Segment Markets Tradenames Wireless U.S. Telecom United States (rural markets) Commnet, Choice International Telecom Aruba, Bermuda, Guyana, U.S. Virgin Islands Mio, CellOne, Choice, Innovative Wireline U.S. Telecom United States (New England and New York State) Sovernet, ION, Essextel International Telecom Guyana, Bermuda, Cayman Islands, U.S. Virgin Islands, British Virgin Islands, St. Maarten GTT, KeyTech, Bermuda CableVision, Logic, Innovative Renewable Energy Renewable Energy United States (Massachusetts, California, and New Jersey), India Ahana Renewables, Vibrant Energy |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Acquisitions | |
Schedule of the preliminary purchase price allocation | Consideration Transferred $ Non-controlling interests Total value to allocate Preliminary Purchase price allocation: Cash Accounts receivable Materials & supplies Other current assets Property, plant and equipment Telecommunication licenses Goodwill Intangible assets Other Assets Accounts payable and accrued liabilities Advance payments and deposits Deferred tax liability Pension and other postretirement benefit liabilities Net assets acquired $ |
Schedule of pro forma results of operations | Amounts are presented in thousands, except per share data: |
Schedule of funded status of the pension plans | The Company also acquired Innovative’s pension and other postretirement benefit plans as part of the transaction. The plans cover employees located in the U.S. Virgin Islands and consist of noncontributory defined benefit pension plans and noncontributory defined medical, dental, vision and life benefit plans. As noted above, the contractual purchase price included an adjustment related to the funded status of Innovative’s pension and other postretirement benefit plans. As contemplated by the transaction, the Company will contribute approximately $27.8 million during the fourth quarter of 2016 to certain Innovative pension and other postretirement benefit plans. Due to the Company’s intent and the specific nature of this commitment, the amount is classified as restricted cash at September 30, 2016. The funded status of the pension plans as of June 30, 2016 is detailed in the table below (in thousands): Defined Benefit Pension Plans Other Postretirement Benefit Plans Fair value of plan assets $ $ - Benefit obligations Funded status at June 30, 2016 $ $ |
KeyTech and BDC | |
Acquisitions | |
Schedule of assessment of total acquisition costs to net assets based on acquisition date fair values | The table below represents the allocation of the consideration transferred to the net assets of KeyTech and incremental interest acquired in BDC based on their acquisition date fair values (in thousands): Consideration Transferred Cash consideration - KeyTech $ Cash consideration - BDC Total consideration transferred Non-controlling interests - KeyTech Total value to allocate $ Value to allocate KeyTech Value to allocate - BDC Purchase price allocation KeyTech: Cash Accounts receivable Other current assets Property, plant and equipment Identifiable intangible assets Other long term assets Accounts payable and accrued liabilities Advance payments and deposits Current debt Long term debt Net assets acquired Gain on KeyTech bargain purchase $ Purchase price allocation BDC: Carrying value of BDC non-controlling interest acquired Excess of purchase price paid over carrying value of non-controlling interest acquired $ |
Vibrant Energy | |
Acquisitions | |
Schedule of assessment of total acquisition costs to net assets based on acquisition date fair values | The table below represents the allocation of the consideration transferred to the net assets of Vibrant Energy based on their acquisition date fair values (in thousands): Consideration Transferred $ Purchase price allocation: Cash $ Prepayments and other assets Property, plant and equipment Accounts payable and accrued liabilities Goodwill Net assets acquired $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities of the entity measured at fair value on a recurring basis | Assets and liabilities of the Company measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 are summarized as follows (in thousands): September 30, 2016 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ $ Money market funds $ $ — $ Short term investments $ — $ $ Total assets measured at fair value $ $ $ December 31, 2015 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ $ Money market funds $ $ — $ Total assets measured at fair value $ $ $ |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
EQUITY | |
Schedule of stockholders' equity | Stockholders’ equity was as follows (in thousands): Nine months ended September 30, 2016 2015 ATN Non-Controlling ATN Non-Controlling Total International, Inc. Interests Total Equity International, Inc. Interests Equity Equity, beginning of period $ $ $ $ $ $ Stock-based compensation — — Comprehensive income: Net income Foreign Currency translation adjustment — — Total comprehensive income Issuance of common stock upon exercise of stock options — — Dividends declared on common stock — — Distributions to non-controlling interests — — Investments made by non-controlling interests — 22,409 (1) — Acquisition of KeyTech — — — — Acquisition of Innovative — — — — Acquisition from non-controlling interests — — — Sale of non-controlling interests — — — — Purchase of non-controlling interests — — — Purchase of treasury stock — — Equity, end of period $ $ $ $ $ $ |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
NET INCOME PER SHARE | |
Schedule of reconciliation from basic to diluted weighted average common shares outstanding | The reconciliation from basic to diluted weighted average shares of common stock outstanding is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Basic weighted-average shares of common stock outstanding Stock options Diluted weighted-average shares of common stock outstanding |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT REPORTING | |
Schedule of information for each operating segment | The following tables provide information for each operating segment (in thousands): For the Three Months Ended September 30, 2016 U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated Revenue Wireless $ $ $ — $ — $ Wireline — — Equipment and Other — Renewable Energy — — — Total Revenue — Depreciation and amortization Non-cash stock-based compensation — — Operating income (loss) For the Three Months Ended September 30, 2015 U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated Revenue Wireless $ $ $ — $ — $ Wireline — — Equipment and Other — — Renewable Energy — — — Total Revenue — Depreciation and amortization Non-cash stock-based compensation — — Operating income (loss) For the Nine Months Ended September 30, 2016 U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated Revenue Wireless $ $ $ — $ — $ Wireline — — Equipment and Other — Renewable Energy — — — Total Revenue — Depreciation and amortization Non-cash stock-based compensation — — Operating income (loss) For the Nine Months Ended September 30, 2015 U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated Revenue Wireless $ $ $ — $ — $ Wireline — — Equipment and Other — — Renewable Energy — — — Total Revenue — Depreciation and amortization Non-cash stock-based compensation — — Operating income (loss) U.S. International Renewable Reconciling Telecom Telecom Energy Items (1) Consolidated September 30, 2016 Net fixed assets $ $ $ $ $ Goodwill — Total assets December 31, 2015 Net fixed assets $ $ $ $ $ Goodwill — — Total assets Capital Expenditures U.S. International Renewable Reconciling Nine months ended September 30, Telecom Telecom Energy Items (1) Consolidated 2016 $ $ $ $ $ 2015 (1) Reconciling items refer to corporate overhead costs and consolidating adjustments. |
BASIS OF PRESENTATION - Reclass
BASIS OF PRESENTATION - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Prior period corrections | |||
Purchases of spectrum licenses and other intangible assets, including deposits | $ 10,860 | ||
Payment for purchase of securities | 2,000 | ||
Keytech | |||
Prior period corrections | |||
Other asset acquired | 3,200 | ||
Innovative | |||
Prior period corrections | |||
Other asset acquired | $ 4,300 | ||
Termination and Access Fees [Member] | |||
Prior period corrections | |||
Reclassification, decrease (increase) to expense | $ 1,100 | $ 3,100 | |
Engineering and Operations Expenses [Member] | |||
Prior period corrections | |||
Reclassification, decrease (increase) to expense | 600 | 2,400 | |
Equipment Expense [Member] | |||
Prior period corrections | |||
Reclassification, decrease (increase) to expense | 100 | 200 | |
Selling and Marketing Expense [Member] | |||
Prior period corrections | |||
Reclassification, decrease (increase) to expense | (600) | (1,300) | |
General and administrative expense | |||
Prior period corrections | |||
Reclassification, decrease (increase) to expense | $ (300) | $ (800) |
BASIS OF PRESENTATION - Tax (De
BASIS OF PRESENTATION - Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
BASIS OF PRESENTATION | ||||
Effective tax rate (as a percent) | 45.10% | 46.50% | 45.50% | 46.80% |
Provision (net) write off tax refund receivable | $ 1,600 | $ 2,200 | ||
Loss on deconsolidation of Island Wireless business | $ 19,900 | $ (19,937) |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jul. 01, 2016 | May 03, 2016 | May 03, 2016 | Apr. 07, 2016 | Apr. 07, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Acquisitions | ||||||||||
Total consideration | $ 41,563 | |||||||||
Purchase of non-controlling interests | $ 7,045 | |||||||||
Revenue | $ 138,795 | $ 96,782 | 328,471 | $ 272,453 | ||||||
Income (Loss) from Continuing Operations before Income Taxes | 21,296 | 21,782 | 37,784 | 48,439 | ||||||
Transaction related charges | 2,091 | $ 2,536 | 16,156 | $ 2,852 | ||||||
Borrowings - Acquisition | 60,000 | |||||||||
Bermuda wireless operations | ||||||||||
Acquisitions | ||||||||||
Total consideration | 7,045 | |||||||||
Vibrant Energy | ||||||||||
Acquisitions | ||||||||||
Cash consideration | $ 3,500 | |||||||||
Purchase price | 6,193 | $ 6,193 | ||||||||
Remaining purchase price | $ 2,700 | 2,700 | ||||||||
Total consideration | $ 6,193 | |||||||||
Revenue | 300 | |||||||||
Transaction related charges | $ 11,200 | 9,900 | ||||||||
Innovative | ||||||||||
Acquisitions | ||||||||||
Purchase price | $ 112,522 | |||||||||
Retirement of debt | 185,500 | |||||||||
Total consideration | 112,301 | |||||||||
Transaction fee | 2,400 | 4,300 | 2,400 | 2,400 | ||||||
Assumed debt | 4,900 | |||||||||
Revenue | 26,500 | |||||||||
Income (Loss) from Continuing Operations before Income Taxes | 1,400 | |||||||||
Cash-on-hand used to fund the purchase price | $ 50,900 | |||||||||
Keytech | ||||||||||
Acquisitions | ||||||||||
Purchase price | $ 74,731 | $ 74,731 | ||||||||
Ownership percentage | 51.00% | 51.00% | ||||||||
Retirement of debt | 24,700 | |||||||||
Total consideration | $ 34,518 | |||||||||
Transaction fee | $ 3,300 | $ 4,300 | $ 4,300 | $ 3,300 | 3,300 | |||||
Revenue | 34,700 | |||||||||
Income (Loss) from Continuing Operations before Income Taxes | $ 1,900 | |||||||||
Keytech | CellOne [Member] | ||||||||||
Acquisitions | ||||||||||
Ownership percentage | 43.00% | 43.00% | ||||||||
KeyTech and BDC | ||||||||||
Acquisitions | ||||||||||
Ownership interest held by minority shareholders | 15.00% | 15.00% | ||||||||
Telecommunication Equipment | ||||||||||
Acquisitions | ||||||||||
Discounted rate used for cash flows | 15.00% | |||||||||
Telecommunication Equipment | Minimum | ||||||||||
Acquisitions | ||||||||||
Useful life | 1 year | 3 years | ||||||||
Telecommunication Equipment | Maximum | ||||||||||
Acquisitions | ||||||||||
Useful life | 18 years | 18 years | ||||||||
Telecommunication Equipment | Customer relationships | Minimum | ||||||||||
Acquisitions | ||||||||||
Useful life | 9 years | |||||||||
Estimated life | 9 years | |||||||||
Telecommunication Equipment | Customer relationships | Maximum | ||||||||||
Acquisitions | ||||||||||
Useful life | 16 years | |||||||||
Estimated life | 12 years |
ACQUISITIONS - Purchase Price A
ACQUISITIONS - Purchase Price Allocation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 01, 2016 | May 03, 2016 | Apr. 07, 2016 | Jul. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Consideration Transferred | |||||||||||
Total consideration | $ 41,563 | ||||||||||
Total value to allocate | |||||||||||
Total consideration | 41,563 | ||||||||||
Business Combination Total Value Allocation | 74,472 | ||||||||||
Preliminary purchase price allocation: | |||||||||||
Goodwill | $ 62,042 | $ 62,042 | $ 45,077 | ||||||||
Gain on KeyTech bargain purchase | $ 7,304 | ||||||||||
Purchase price allocation BDC: | |||||||||||
Discount rate (as a percent) | 14.00% | ||||||||||
Revenue | 138,795 | $ 96,782 | $ 328,471 | $ 272,453 | |||||||
Income (Loss) from Continuing Operations before Income Taxes | 21,296 | 21,782 | 37,784 | 48,439 | |||||||
CellOne [Member] | |||||||||||
Purchase price allocation BDC: | |||||||||||
Acquired carrying value of BDC non-controlling interest acquired | 2,940 | ||||||||||
Excess of purchase price paid over carrying value of non-controlling interest acquired | 4,105 | ||||||||||
Bermuda wireless operations | |||||||||||
Consideration Transferred | |||||||||||
Total consideration | 7,045 | ||||||||||
Total value to allocate | |||||||||||
Total consideration | 7,045 | ||||||||||
Business Combination Total Value Allocation | 7,045 | ||||||||||
Vibrant Energy | |||||||||||
Consideration Transferred | |||||||||||
Total consideration | $ 6,193 | ||||||||||
Total value to allocate | |||||||||||
Total consideration | 6,193 | ||||||||||
Preliminary purchase price allocation: | |||||||||||
Cash | 136 | ||||||||||
Property, plant and equipment | 7,321 | ||||||||||
Goodwill | 3,279 | ||||||||||
Accounts payable and accrued liabilities | (5,179) | ||||||||||
Net assets acquired | 6,193 | ||||||||||
Prepayments and other assets | $ 636 | ||||||||||
Purchase price allocation BDC: | |||||||||||
Revenue | 300 | ||||||||||
Keytech | |||||||||||
Consideration Transferred | |||||||||||
Total consideration | 34,518 | ||||||||||
Non-controlling interests | 32,909 | ||||||||||
Total value to allocate | |||||||||||
Total consideration | 34,518 | ||||||||||
Business Combination Total Value Allocation | 67,427 | ||||||||||
Preliminary purchase price allocation: | |||||||||||
Cash | 8,185 | ||||||||||
Accounts receivable | 6,451 | ||||||||||
Other current assets | 3,241 | ||||||||||
Property, plant and equipment | 100,892 | ||||||||||
Intangible assets | 10,590 | ||||||||||
Other Assets | 3,464 | ||||||||||
Accounts payable and accrued liabilities | (16,051) | ||||||||||
Advance payments and deposits | (6,683) | ||||||||||
Net assets acquired | 74,731 | ||||||||||
Gain on KeyTech bargain purchase | 7,304 | ||||||||||
Current debt | (6,429) | ||||||||||
Long-term debt | (28,929) | ||||||||||
Non-controlling interests | 32,909 | ||||||||||
Purchase price allocation BDC: | |||||||||||
Revenue | 34,700 | ||||||||||
Income (Loss) from Continuing Operations before Income Taxes | 1,900 | ||||||||||
External acquisition related charges relating to legal, accounting and consulting services. | $ 4,300 | 3,300 | 3,300 | ||||||||
Innovative | |||||||||||
Consideration Transferred | |||||||||||
Total consideration | $ 112,301 | ||||||||||
Cash-on-hand used to fund the purchase price | 50,900 | ||||||||||
Working capital adjustments | 4,900 | ||||||||||
Purchase price | 145,000 | 1,400 | |||||||||
Purchase price adjustments | 4,900 | ||||||||||
Total value to allocate | |||||||||||
Total consideration | 112,301 | ||||||||||
Non-controlling interests | 221 | ||||||||||
Business Combination Total Value Allocation | 112,522 | ||||||||||
Preliminary purchase price allocation: | |||||||||||
Cash | 4,229 | ||||||||||
Accounts receivable | 6,553 | ||||||||||
Materials & supplies | 6,533 | ||||||||||
Other current assets | 2,286 | ||||||||||
Property, plant and equipment | 108,284 | ||||||||||
Telecommunication licenses | 7,623 | ||||||||||
Goodwill | 20,586 | ||||||||||
Intangible assets | 7,800 | ||||||||||
Other Assets | 4,394 | ||||||||||
Accounts payable and accrued liabilities | (15,889) | ||||||||||
Advance payments and deposits | (7,793) | ||||||||||
Deferred tax liability | (2,935) | ||||||||||
Pension liability | (29,149) | ||||||||||
Net assets acquired | 112,522 | ||||||||||
Purchase price allocation BDC: | |||||||||||
Revenue | 26,500 | ||||||||||
Income (Loss) from Continuing Operations before Income Taxes | 1,400 | ||||||||||
External acquisition related charges relating to legal, accounting and consulting services. | 4,300 | $ 2,400 | 2,400 | ||||||||
Innovative | Defined Benefit Pension Plans | |||||||||||
Funded status of plan | |||||||||||
Fair value of plan assets | $ 45,117 | ||||||||||
Benefit obligations | 69,178 | ||||||||||
Funded status of plan | (24,061) | ||||||||||
Innovative | Other Post-retirement Benefit Plans | |||||||||||
Funded status of plan | |||||||||||
Benefit obligations | 5,472 | ||||||||||
Funded status of plan | $ (5,472) | ||||||||||
Innovative | Term loans | |||||||||||
Consideration Transferred | |||||||||||
Debt instrument, face amount | $ 60,000 | ||||||||||
Telecommunication Equipment | |||||||||||
Purchase price allocation BDC: | |||||||||||
Discounted rate used for cash flows | 15.00% | ||||||||||
US Telecom | |||||||||||
Consideration Transferred | |||||||||||
Total consideration | $ 9,100 | ||||||||||
Total value to allocate | |||||||||||
Total consideration | 9,100 | ||||||||||
Preliminary purchase price allocation: | |||||||||||
Property, plant and equipment | 10,200 | ||||||||||
Goodwill | 600 | ||||||||||
Other long term liabilities | $ 1,700 | ||||||||||
As reported | |||||||||||
Pro Forma (unaudited) | |||||||||||
Revenue | 96,782 | 328,471 | 272,453 | ||||||||
Net income attributable to ATN stockholders | $ 6,576 | $ 10,206 | $ 12,757 | ||||||||
Earnings per shares: | |||||||||||
Earnings per share: Basic (in dollars per share) | $ 0.41 | $ 0.63 | $ 0.79 | ||||||||
Earnings per share: Diluted (in dollars per share) | $ 0.41 | $ 0.63 | $ 0.79 | ||||||||
Forecast | Innovative | |||||||||||
Consideration Transferred | |||||||||||
Cash-on-hand used to fund the purchase price | $ 27,800 | ||||||||||
Minimum | Defined Benefit Pension Plans | |||||||||||
Funded status of plan | |||||||||||
Discounted rate used for pension benefit obligation | 3.60% | ||||||||||
Minimum | Innovative | Income Approach | Non-Controlling Interests | |||||||||||
Purchase price allocation BDC: | |||||||||||
Discount rate (as a percent) | 15.00% | ||||||||||
Minimum | Innovative | Income Approach | Cash flow | |||||||||||
Purchase price allocation BDC: | |||||||||||
Discount rate (as a percent) | 14.00% | ||||||||||
Minimum | Telecommunication Equipment | |||||||||||
Purchase price allocation BDC: | |||||||||||
Useful life | 1 year | 3 years | |||||||||
Minimum | Telecommunication Equipment | Customer relationships | |||||||||||
Purchase price allocation BDC: | |||||||||||
Useful life | 9 years | ||||||||||
Maximum | Defined Benefit Pension Plans | |||||||||||
Funded status of plan | |||||||||||
Discounted rate used for pension benefit obligation | 3.90% | ||||||||||
Maximum | Innovative | Income Approach | Non-Controlling Interests | |||||||||||
Purchase price allocation BDC: | |||||||||||
Discount rate (as a percent) | 25.00% | ||||||||||
Maximum | Innovative | Income Approach | Cash flow | |||||||||||
Purchase price allocation BDC: | |||||||||||
Discount rate (as a percent) | 25.00% | ||||||||||
Maximum | Telecommunication Equipment | |||||||||||
Purchase price allocation BDC: | |||||||||||
Useful life | 18 years | 18 years | |||||||||
Maximum | Telecommunication Equipment | Customer relationships | |||||||||||
Purchase price allocation BDC: | |||||||||||
Useful life | 16 years |
ACQUISITIONS - Pro Forma Result
ACQUISITIONS - Pro Forma Results (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 01, 2016 | May 03, 2016 | Apr. 07, 2016 | Apr. 07, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||||||
Consideration Transferred | $ 41,563 | |||||||
Goodwill | $ 62,042 | $ 45,077 | ||||||
Pro forma | ||||||||
Business Acquisition [Line Items] | ||||||||
Impairment charges | 5,400 | $ 168,700 | ||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||||
Revenue | $ 146,074 | 407,096 | 415,501 | |||||
Net Income attributable to ATN International, Inc. Stockholders | $ 6,566 | $ 12,767 | $ (101,631) | |||||
Earnings per share: Basic (in dollars per share) | $ 0.41 | $ 0.79 | $ (6.35) | |||||
Earnings per share: Diluted (in dollars per share) | $ 0.41 | $ 0.79 | $ (6.30) | |||||
As reported | ||||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||||
Revenue | $ 96,782 | $ 328,471 | $ 272,453 | |||||
Net Income attributable to ATN International, Inc. Stockholders | $ 6,576 | $ 10,206 | $ 12,757 | |||||
Earnings per share: Basic (in dollars per share) | $ 0.41 | $ 0.63 | $ 0.79 | |||||
Earnings per share: Diluted (in dollars per share) | $ 0.41 | $ 0.63 | $ 0.79 | |||||
Keytech | ||||||||
Business Acquisition [Line Items] | ||||||||
Retirement of debt | $ 24,700 | |||||||
Consideration Transferred | 34,518 | |||||||
Consideration attributable to Fixed Assets | $ 100,892 | |||||||
Keytech | Pro forma | ||||||||
Business Acquisition [Line Items] | ||||||||
Impairment charges | 4,300 | $ 85,600 | ||||||
Innovative | ||||||||
Business Acquisition [Line Items] | ||||||||
Retirement of debt | 185,500 | |||||||
Addition of debt | 60,000 | |||||||
Consideration Transferred | $ 112,301 | |||||||
Consideration attributable to Fixed Assets | 108,284 | |||||||
Goodwill | $ 20,586 | |||||||
Innovative | Pro forma | ||||||||
Business Acquisition [Line Items] | ||||||||
Impairment charges | $ 1,100 | $ 83,100 | ||||||
Vibrant Energy | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration Transferred | $ 6,193 | |||||||
Consideration attributable to Fixed Assets | $ 7,321 | 7,321 | ||||||
Goodwill | 3,279 | $ 3,279 | ||||||
Consideration paid | $ 3,500 |
LOSS ON DECONSOLIDATION OF SU33
LOSS ON DECONSOLIDATION OF SUBSIDIARY (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Loss on deconsolidation of subsidiary | $ (19,900) | $ 19,937 | ||
Deconsolidation of non-controlling interests | $ (576) | |||
Island Wireless | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||
Deconsolidation of non-controlling interests | $ 20,000 | |||
Gain arising from excess of proceeds over the carrying value of net assets | 100 | |||
Island Wireless | Nonoperating Income (Expense) [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||
Loss on deconsolidation of subsidiary | $ 19,900 |
IMPAIRMENT OF LONG LIVED ASSE34
IMPAIRMENT OF LONG LIVED ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Goodwill | ||
Impairment of long-lived assets | $ 3,600 | |
Goodwill impairment | $ 7,500 | |
Discount rate (as a percent) | 14.00% | |
Non-cash impairment charges | $ 349 | $ 11,425 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Level 2 | ||
Fair value measurements | ||
Long-term debt, fair value | $ 118,900 | $ 32,900 |
Marketable securities, fair value | 2,000 | |
Recurring basis | Total | ||
Fair value measurements | ||
Total assets measured at fair value | 23,634 | 76,640 |
Recurring basis | Certificate of deposit | Total | ||
Fair value measurements | ||
Certificates of deposit | 388 | 377 |
Recurring basis | Money market funds | Total | ||
Fair value measurements | ||
Investments, Fair Value Disclosure | 15,824 | 76,263 |
Recurring basis | Short Term Investments | Total | ||
Fair value measurements | ||
Investments, Fair Value Disclosure | 7,422 | |
Recurring basis | Level 1 | ||
Fair value measurements | ||
Total assets measured at fair value | 15,824 | 76,263 |
Recurring basis | Level 1 | Money market funds | ||
Fair value measurements | ||
Investments, Fair Value Disclosure | 15,824 | 76,263 |
Recurring basis | Level 2 | ||
Fair value measurements | ||
Total assets measured at fair value | 7,810 | 377 |
Recurring basis | Level 2 | Certificate of deposit | ||
Fair value measurements | ||
Certificates of deposit | 388 | $ 377 |
Recurring basis | Level 2 | Short Term Investments | ||
Fair value measurements | ||
Investments, Fair Value Disclosure | $ 7,422 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | Jul. 01, 2016 | May 03, 2016 | Sep. 30, 2016 | Jan. 11, 2016 | Jan. 10, 2016 | Dec. 24, 2014 | Dec. 19, 2014 |
Universal Service Administrative Company | |||||||
Long-term debt | |||||||
Commitment fee (as a percent) | 1.75% | ||||||
Amended Credit Facility [Member] | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | $ 400 | $ 275 | |||||
Term loans | Three month LIBOR | Keytech Ltd. | |||||||
Long-term debt | |||||||
Description of variable rate basis | three-month LIBOR | ||||||
Term loans | Ahana Debt | |||||||
Long-term debt | |||||||
Term loan assumed | $ 38.9 | ||||||
Outstanding debt | $ 27.7 | ||||||
Term loans | Ahana Debt | Minimum | |||||||
Long-term debt | |||||||
Effective interest rate (as a percent) | 4.50% | ||||||
Term loans | Ahana Debt | Maximum | |||||||
Long-term debt | |||||||
Effective interest rate (as a percent) | 6.00% | ||||||
Term loans | Public Service Electric & Gas Note [Member] | |||||||
Long-term debt | |||||||
Stated interest rate | 11.30% | ||||||
Revolving credit facility | Amended Credit Facility [Member] | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | $ 225 | ||||||
Revolving credit facility | Amended Credit Facility [Member] | Minimum | |||||||
Long-term debt | |||||||
Commitment fee (as a percent) | 0.175% | ||||||
Revolving credit facility | Amended Credit Facility [Member] | Minimum | LIBOR | |||||||
Long-term debt | |||||||
Basis spread on variable rate (as a percent) | 1.50% | ||||||
Revolving credit facility | Amended Credit Facility [Member] | Minimum | Base rate | |||||||
Long-term debt | |||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||
Revolving credit facility | Amended Credit Facility [Member] | Maximum | |||||||
Long-term debt | |||||||
Commitment fee (as a percent) | 0.25% | ||||||
Revolving credit facility | Amended Credit Facility [Member] | Maximum | LIBOR | |||||||
Long-term debt | |||||||
Basis spread on variable rate (as a percent) | 1.75% | ||||||
Revolving credit facility | Amended Credit Facility [Member] | Maximum | Base rate | |||||||
Long-term debt | |||||||
Basis spread on variable rate (as a percent) | 0.75% | ||||||
Revolving credit facility | Amended Credit Facility [Member] | Amended Credit Facility [Member] | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | 200 | ||||||
Swingline sub-facility | Amended Credit Facility [Member] | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | 10 | ||||||
Swingline sub-facility | Amended Credit Facility [Member] | Federal Funds Effective Rate | |||||||
Long-term debt | |||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||
Swingline sub-facility | Amended Credit Facility [Member] | Minimum | Base rate | |||||||
Long-term debt | |||||||
Basis spread on variable rate (as a percent) | 1.00% | ||||||
Letter of credit sub-facility | |||||||
Long-term debt | |||||||
Outstanding letters of credit | $ 10.6 | ||||||
Letter of credit sub-facility | Wholesale Mobility Funds | |||||||
Long-term debt | |||||||
Borrowings | 0 | ||||||
Letter of credit sub-facility | Amended Credit Facility [Member] | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | 10 | ||||||
Letter of credit sub-facility | Amended Credit Facility [Member] | Wholesale Mobility Funds | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | $ 25 | ||||||
Keytech | |||||||
Long-term debt | |||||||
Termination of facility | 24.7 | ||||||
Keytech | Amended Credit Facility [Member] | Amended Credit Facility [Member] | |||||||
Long-term debt | |||||||
Secured debt principal amount | 60 | ||||||
Keytech | Amended Credit Facility [Member] | Amended Credit Facility [Member] | Maximum | |||||||
Long-term debt | |||||||
Potential cash dividend | $ 13 | ||||||
Keytech | Term loans | |||||||
Long-term debt | |||||||
Term loan assumed | $ 60 | $ 35.4 | |||||
Stated interest rate | 4.00% | ||||||
Deferred financing costs | $ 0.9 | ||||||
Outstanding debt | 32.1 | ||||||
Keytech | Term loans | Three month LIBOR | |||||||
Long-term debt | |||||||
Basis spread on variable rate (as a percent) | 3.25% | ||||||
Innovative | |||||||
Long-term debt | |||||||
Termination of facility | 185.5 | ||||||
Deferred financing costs | 0.8 | ||||||
Outstanding debt | $ 60 | ||||||
Innovative | Term loans | |||||||
Long-term debt | |||||||
Secured debt principal amount | $ 60 |
GOVERNMENT GRANTS (Details)
GOVERNMENT GRANTS (Details) $ in Millions | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2014USD ($) | Aug. 31, 2013USD ($) | Sep. 30, 2016USD ($)item | |
MOBILITY FUND GRANTS | |||
Number of new funds created by FCC | item | 2 | ||
Period over which a portion of the Mobility Funds is used to offset the costs of supporting the networks | 5 years | ||
Letter of credit sub-facility | |||
MOBILITY FUND GRANTS | |||
Letters of credit posted to USAC | $ 10.6 | ||
Wholesale Mobility Funds | |||
MOBILITY FUND GRANTS | |||
Mobility Funds approved by FCC | $ 2.4 | $ 21.7 | |
Wholesale Mobility Funds | U.S. Telecom | |||
MOBILITY FUND GRANTS | |||
Mobility Funds received | 9.3 | ||
Wholesale Mobility Funds | U.S. Telecom | Operating Expenses [Member] | |||
MOBILITY FUND GRANTS | |||
Grant funds used to offset fixed asset related costs | 3.1 | ||
Wholesale Mobility Funds | U.S. Telecom | Property, Plant and Equipment [Member] | |||
MOBILITY FUND GRANTS | |||
Grant funds used to offset fixed asset related costs | 5.8 | ||
Wholesale Mobility Funds | U.S. Telecom | Other long-term liabilities | |||
MOBILITY FUND GRANTS | |||
Mobility Funds received | $ 0.4 |
EQUITY (Details)
EQUITY (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)subsidiary | Sep. 30, 2015USD ($) | |
Stockholders' equity | ||||
Equity, beginning of period | $ 761,724 | $ 738,182 | ||
Stock-based compensation | 5,034 | 3,832 | ||
Comprehensive income: | ||||
Net income | $ 11,694 | $ 11,648 | 20,606 | 26,174 |
Other comprehensive income | ||||
Foreign currency translation adjustment | (164) | 1 | (200) | 29 |
Comprehensive income | 11,530 | 11,649 | 20,406 | 26,203 |
Issuance of common stock upon exercise of stock options | 1,371 | 2,073 | ||
Dividends declared on common stock | (15,838) | (14,442) | ||
Distributions to non-controlling interests | (7,828) | (11,513) | ||
Investment made by non-controlling interests | 22,409 | 905 | ||
Acquisition from non-controlling interests | (576) | |||
Sale of non-controlling interests | 20,013 | |||
Acquisition of non-controlling interest in subsidiary | (7,045) | |||
Purchase of treasury stock | (4,755) | (1,955) | ||
Equity, end of period | 807,840 | 763,298 | 807,840 | 763,298 |
Keytech | ||||
Other comprehensive income | ||||
Acquisition | 32,717 | |||
Innovative | ||||
Other comprehensive income | ||||
Acquisition | 221 | |||
Atlantic Tele-Network, Inc. | ||||
Stockholders' equity | ||||
Equity, beginning of period | 680,299 | 677,222 | ||
Stock-based compensation | 5,034 | 3,832 | ||
Comprehensive income: | ||||
Net income | 10,206 | 12,757 | ||
Other comprehensive income | ||||
Foreign currency translation adjustment | (200) | 29 | ||
Comprehensive income | 10,006 | 12,786 | ||
Issuance of common stock upon exercise of stock options | 1,371 | 2,073 | ||
Dividends declared on common stock | (15,838) | (14,442) | ||
Investment made by non-controlling interests | (21,700) | |||
Acquisition from non-controlling interests | (306) | |||
Acquisition of non-controlling interest in subsidiary | (4,105) | |||
Purchase of treasury stock | (4,755) | (1,955) | ||
Equity, end of period | 671,706 | 679,516 | $ 671,706 | 679,516 |
Number of subsidiaries | subsidiary | 1 | |||
Non-Controlling Interests | ||||
Stockholders' equity | ||||
Equity, beginning of period | $ 81,425 | 60,960 | ||
Comprehensive income: | ||||
Net income | 10,400 | 13,417 | ||
Other comprehensive income | ||||
Comprehensive income | 10,400 | 13,417 | ||
Distributions to non-controlling interests | (7,828) | (11,513) | ||
Investment made by non-controlling interests | 22,409 | 905 | ||
Acquisition from non-controlling interests | (270) | |||
Sale of non-controlling interests | 20,013 | |||
Acquisition of non-controlling interest in subsidiary | (2,940) | |||
Equity, end of period | $ 136,134 | $ 83,782 | 136,134 | $ 83,782 |
Non-Controlling Interests | Keytech | ||||
Other comprehensive income | ||||
Acquisition | 32,717 | |||
Non-Controlling Interests | Innovative | ||||
Other comprehensive income | ||||
Acquisition | $ 221 |
NET INCOME (LOSS) PER SHARE (De
NET INCOME (LOSS) PER SHARE (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation from basic to diluted weighted average common shares outstanding | ||||
Basic weighted-average shares of common stock outstanding | 16,148,000 | 16,049,000 | 16,128,000 | 16,009,000 |
Stock options (in shares) | 93,000 | 116,000 | 100,000 | 119,000 |
Diluted weighted-average shares of common stock outstanding | 16,241,000 | 16,165,000 | 16,228,000 | 16,128,000 |
Anti-dilutive potential shares excluded from the computation of diluted weighted average shares outstanding (in shares) | 5,000,000 | 0 | 5,000,000 | 0 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment reporting | |||||
Number of reportable segments | segment | 5 | 5 | |||
Revenue | |||||
Revenue | $ 138,795 | $ 96,782 | $ 328,471 | $ 272,453 | |
Depreciation and amortization | 21,866 | 14,590 | 52,913 | 43,813 | |
Non-cash stock-based compensation | 1,399 | 1,156 | 5,032 | 3,832 | |
Operating income (loss) | 22,081 | 22,524 | 39,886 | 70,411 | |
Segment Assets | |||||
Net fixed assets | 618,535 | 618,535 | $ 373,503 | ||
Goodwill | 62,042 | 62,042 | 45,077 | ||
Total assets | 1,166,057 | 1,166,057 | 945,004 | ||
Capital Expenditures | |||||
Capital expenditures | 78,455 | 46,031 | |||
U.S. Wireless | |||||
Revenue | |||||
Revenue | 61,151 | 67,521 | 177,300 | 185,272 | |
Wireline | |||||
Revenue | |||||
Revenue | 66,129 | 21,760 | 122,190 | 63,520 | |
Equipment and other | |||||
Revenue | |||||
Revenue | 5,731 | 2,449 | 12,046 | 8,030 | |
Renewable energy | |||||
Revenue | |||||
Revenue | 5,784 | 5,052 | 16,935 | 15,631 | |
Reconciling Items | |||||
Revenue | |||||
Depreciation and amortization | 1,567 | 1,270 | 4,384 | 3,616 | |
Non-cash stock-based compensation | 1,371 | 1,127 | 4,946 | 3,594 | |
Operating income (loss) | (10,219) | (9,316) | (27,398) | (23,187) | |
Segment Assets | |||||
Net fixed assets | 10,229 | 10,229 | 14,085 | ||
Total assets | 144,925 | 144,925 | 315,739 | ||
Capital Expenditures | |||||
Capital expenditures | 4,877 | 2,576 | |||
U.S. Telecom | |||||
Revenue | |||||
Revenue | 47,560 | 53,825 | 137,703 | 143,682 | |
Depreciation and amortization | 6,176 | 5,715 | 17,405 | 16,874 | |
Operating income (loss) | 18,120 | 24,218 | 39,698 | 64,114 | |
Segment Assets | |||||
Net fixed assets | 134,219 | 134,219 | 119,596 | ||
Goodwill | 32,739 | 32,739 | 39,639 | ||
Total assets | 252,827 | 252,827 | 227,707 | ||
Capital Expenditures | |||||
Capital expenditures | 26,709 | 27,632 | |||
U.S. Telecom | U.S. Wireless | |||||
Revenue | |||||
Revenue | 40,076 | 47,047 | 117,194 | 122,993 | |
U.S. Telecom | Wireline | |||||
Revenue | |||||
Revenue | 6,936 | 6,243 | 18,793 | 18,915 | |
U.S. Telecom | Equipment and other | |||||
Revenue | |||||
Revenue | 548 | 535 | 1,716 | 1,774 | |
International Telecom | |||||
Revenue | |||||
Revenue | 85,313 | 37,905 | 173,574 | 113,140 | |
Depreciation and amortization | 12,896 | 6,400 | 27,482 | 19,710 | |
Operating income (loss) | 11,358 | 4,928 | 28,320 | 21,447 | |
Segment Assets | |||||
Net fixed assets | 357,733 | 357,733 | 133,262 | ||
Goodwill | 26,024 | 26,024 | 5,438 | ||
Total assets | 588,190 | 588,190 | 278,770 | ||
Capital Expenditures | |||||
Capital expenditures | 36,543 | 15,797 | |||
International Telecom | U.S. Wireless | |||||
Revenue | |||||
Revenue | 21,075 | 20,474 | 60,106 | 62,279 | |
International Telecom | Wireline | |||||
Revenue | |||||
Revenue | 59,193 | 15,517 | 103,397 | 44,605 | |
International Telecom | Equipment and other | |||||
Revenue | |||||
Revenue | 5,045 | 1,914 | 10,071 | 6,256 | |
Renewable energy | |||||
Revenue | |||||
Revenue | 5,922 | 5,052 | 17,194 | 15,631 | |
Depreciation and amortization | 1,227 | 1,205 | 3,642 | 3,613 | |
Non-cash stock-based compensation | 28 | 29 | 86 | 238 | |
Operating income (loss) | 2,822 | 2,694 | (734) | 8,037 | |
Segment Assets | |||||
Net fixed assets | 116,354 | 116,354 | 106,560 | ||
Goodwill | 3,279 | 3,279 | |||
Total assets | 180,115 | 180,115 | $ 122,788 | ||
Capital Expenditures | |||||
Capital expenditures | 10,326 | 26 | |||
Renewable energy | Equipment and other | |||||
Revenue | |||||
Revenue | 138 | 259 | |||
Renewable energy | Renewable energy | |||||
Revenue | |||||
Revenue | $ 5,784 | $ 5,052 | $ 16,935 | $ 15,631 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) AWG in Millions, $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2007USD ($) | Sep. 30, 2016AWG | Sep. 30, 2016USD ($) | Dec. 31, 2011USD ($) | |
Commitments and contingencies | ||||
Renewal fee of telecommunications license | AWG 7.2 | $ 4 | ||
Contingency related to spectrum fees | ||||
Commitments and contingencies | ||||
Spectrum fees paid | $ 2.6 | |||
Letter of credit sub-facility | ||||
Commitments and contingencies | ||||
Outstanding letters of credit | $ 10.6 | |||
Universal Service Administrative Company | ||||
Commitments and contingencies | ||||
Commitment fee (as a percent) | 1.75% | 1.75% | ||
Lawsuit filed by CTL | ||||
Commitments and contingencies | ||||
Damages asserted | $ 200 | |||
Litigation proceedings and disputes in Guyana | ||||
Commitments and contingencies | ||||
Period for which litigation proceedings and other disputes have not been the subject of discussions or other significant activity | 5 years | 5 years | ||
Lawsuit filed by GT&T against Digicel | ||||
Commitments and contingencies | ||||
Damages asserted | $ 9 | |||
Punitive damages | 5 | |||
Legal claims regarding tax filings with the Guyana Revenue Authority | ||||
Commitments and contingencies | ||||
Future payments related to disputed tax assessments | 44.1 | |||
Accrued contingent liability | $ 5 | |||
Legal claims regarding tax filings with the Guyana Revenue Authority | Minimum | ||||
Commitments and contingencies | ||||
Percentage of return on investment ensured by the government of Guyana | 15.00% | 15.00% |