Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 09, 2017 | |
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, 2017 | |
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 | 16,016,566 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 224,597 | $ 269,721 |
Restricted cash | 833 | 524 |
Short-term investments | 7,857 | 9,237 |
Accounts receivable, net of allowances of $16.1 million and $13.1 million, respectively | 48,829 | 45,419 |
Materials and supplies | 14,809 | 14,365 |
Prepayments and other current assets | 37,813 | 28,103 |
Total current assets | 334,738 | 367,369 |
Fixed Assets: | ||
Property, plant and equipment | 1,130,117 | 1,138,362 |
Less accumulated depreciation | (505,522) | (490,650) |
Net fixed assets | 624,595 | 647,712 |
Telecommunication licenses, net | 95,952 | 48,291 |
Goodwill | 63,969 | 62,873 |
Customer relationships, net | 12,310 | 15,029 |
Restricted cash | 16,206 | 18,113 |
Other assets | 36,248 | 38,831 |
Total assets | 1,184,018 | 1,198,218 |
Current Liabilities: | ||
Current portion of long-term debt | 13,944 | 12,440 |
Accounts payable and accrued liabilities | 129,016 | 92,708 |
Dividends payable | 3,110 | 5,487 |
Accrued taxes | 9,370 | 13,531 |
Advance payments and deposits | 18,161 | 25,529 |
Other current liabilities | 76 | 410 |
Total current liabilities | 173,677 | 150,105 |
Deferred income taxes | 45,655 | 46,622 |
Other liabilities | 32,245 | 47,939 |
Long-term debt, excluding current portion | 145,707 | 144,383 |
Total liabilities | 397,284 | 389,049 |
Commitments and contingencies (Note 12) | ||
ATN International, Inc. Stockholders’ Equity: | ||
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.01 par value per share; 50,000,000 shares authorized; 17,093,351 and 16,971,634 shares issued, respectively, and 16,016,860 and 16,138,983 shares outstanding respectively | 169 | 169 |
Treasury stock, at cost; 1,076,491 and 832,652 shares, respectively | (36,095) | (23,127) |
Additional paid-in capital | 166,326 | 160,176 |
Retained earnings | 512,175 | 538,109 |
Accumulated other comprehensive income | 2,053 | 1,728 |
Total ATN International, Inc. stockholders’ equity | 644,628 | 677,055 |
Non-controlling interests | 142,106 | 132,114 |
Total equity | 786,734 | 809,169 |
Total liabilities and equity | $ 1,184,018 | $ 1,198,218 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 16.1 | $ 13.1 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
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 | 50,000,000 | 50,000,000 |
Common stock, shares issued | 17,093,351 | 16,971,634 |
Common stock, shares outstanding | 16,016,860 | 16,138,983 |
Treasury stock, shares | 1,076,491 | 832,652 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUE: | ||||
Total revenue | $ 122,132 | $ 138,795 | $ 373,492 | $ 328,471 |
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated): | ||||
Termination and access fees | 27,387 | 34,359 | 85,758 | 77,872 |
Engineering and operations | 18,852 | 19,372 | 57,881 | 40,621 |
Sales, marketing and customer service | 8,440 | 8,377 | 26,176 | 21,814 |
Equipment expense | 3,167 | 3,390 | 8,720 | 10,751 |
General and administrative | 26,620 | 26,854 | 76,969 | 62,525 |
Transaction-related charges | 61 | 2,091 | 887 | 16,156 |
Restructuring charges | 1,785 | |||
Depreciation and amortization | 21,157 | 21,866 | 65,904 | 52,913 |
Impairment of long-lived assets | 349 | 11,425 | ||
Bargain purchase gain | (7,304) | |||
(Gain) loss on disposition of long-lived assets | (593) | 56 | 513 | 27 |
Loss on damaged assets and other hurricane related charges | 36,566 | 36,566 | ||
Total operating expenses | 141,657 | 116,714 | 359,374 | 288,585 |
Income from operations | (19,525) | 22,081 | 14,118 | 39,886 |
OTHER INCOME (EXPENSE) | ||||
Interest income | 453 | 236 | 1,087 | 929 |
Interest expense | (2,098) | (1,787) | (6,567) | (3,674) |
Loss on deconsolidation of subsidiary | (529) | |||
Other income (expense) | (690) | 766 | (1,751) | 643 |
Other expense, net | (2,335) | (785) | (7,760) | (2,102) |
INCOME BEFORE INCOME TAXES | (21,860) | 21,296 | 6,358 | 37,784 |
Income taxes | (884) | 9,602 | 4,839 | 17,178 |
NET INCOME (LOSS) | (20,976) | 11,694 | 1,519 | 20,606 |
Net income attributable to non-controlling interests, net of tax expense of $0.3 million, $0.6 million, $0.7 million, and $1.0 million, respectively. | (3,784) | (4,523) | (13,535) | (10,400) |
NET INCOME (LOSS) ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS | $ (24,760) | $ 7,171 | $ (12,016) | $ 10,206 |
NET INCOME (LOSS) PER WEIGHTED AVERAGE SHARE ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS: | ||||
Basic (in dollars per share) | $ (1.53) | $ 0.44 | $ (0.74) | $ 0.63 |
Diluted (in dollars per share) | $ (1.53) | $ 0.44 | $ (0.74) | $ 0.63 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in shares) | 16,178 | 16,148 | 16,177 | 16,128 |
Diluted (in shares) | 16,178 | 16,241 | 16,177 | 16,228 |
DIVIDENDS PER SHARE APPLICABLE TO COMMON STOCK (in dollars per share) | $ 0.17 | $ 0.34 | $ 0.85 | $ 0.98 |
Wireless | ||||
REVENUE: | ||||
Total revenue | $ 57,254 | $ 61,151 | $ 167,945 | $ 177,300 |
Wireline | ||||
REVENUE: | ||||
Total revenue | 56,309 | 66,129 | 181,568 | 122,190 |
Renewable energy | ||||
REVENUE: | ||||
Total revenue | 4,974 | 5,784 | 14,765 | 16,935 |
Equipment and other | ||||
REVENUE: | ||||
Total revenue | $ 3,595 | $ 5,731 | $ 9,214 | $ 12,046 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Noncontrolling interest income tax expense (benefit) | $ 0.3 | $ 0.6 | $ 0.7 | $ 1 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ (20,976) | $ 11,694 | $ 1,519 | $ 20,606 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (1,311) | (164) | 921 | (200) |
Reclassifications of gains on sale of marketable securities to net income | (1,044) | |||
Unrealized gain (loss) on securities | 67 | (65) | ||
Projected pension benefit obligation | 513 | |||
Other comprehensive income (loss), net of tax | (1,244) | (164) | 325 | (200) |
Comprehensive income (loss) | (22,220) | 11,530 | 1,844 | 20,406 |
Less: Comprehensive income attributable to non-controlling interests | (3,784) | (4,523) | (13,535) | (10,400) |
Comprehensive income (loss) attributable to ATN International, Inc. | $ (26,004) | $ 7,007 | $ (11,691) | $ 10,006 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 1,519 | $ 20,606 |
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||
Depreciation and amortization | 65,904 | 52,913 |
Provision for doubtful accounts | 3,041 | 1,058 |
Amortization and write off of debt discount and debt issuance costs | 458 | 372 |
Stock-based compensation | 5,437 | 5,032 |
Deferred income taxes | 1,456 | (8,775) |
Loss in equity method investments | 2,033 | |
Bargain purchase gain | (7,304) | |
Loss on disposition of long-lived assets | 513 | 27 |
Loss on damaged asset from hurricanes | 35,213 | |
Gain on sale of investments | (1,055) | |
Impairment of long-lived assets | 11,425 | |
Loss on deconsolidation of subsidiary | 529 | |
Other non-cash activity | 512 | |
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions: | ||
Accounts receivable | (8,456) | (2,234) |
Materials and supplies, prepayments, and other current assets | (1,875) | (9,471) |
Prepaid income taxes | 995 | |
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities | 13,642 | (2,854) |
Accrued taxes | (8,966) | 21,886 |
Other assets | 3,794 | (2,169) |
Other liabilities | 7,294 | 11,593 |
Net cash provided by operating activities | 121,988 | 92,105 |
Cash flows from investing activities: | ||
Capital expenditures | (108,276) | (78,455) |
Strategic investments | (18,107) | (2,000) |
Divestiture of businesses, net of transferred cash of $2.1 million | 22,381 | |
Acquisition of businesses, net of acquired cash of $0 and $12.6 million | (2,363) | (145,454) |
Purchases of spectrum licenses and other intangible assets, including deposits | (36,832) | (10,860) |
Acquisition of non-controlling interest in subsidiary | (7,045) | |
Purchase of short-term investments | (7,422) | |
Proceeds from sale of investments | 2,761 | |
Change in restricted cash | 1,598 | (28,287) |
Proceeds from disposition of long-lived assets | 1,424 | |
Net cash used in investing activities | (138,838) | (278,099) |
Cash flows from financing activities: | ||
Dividends paid on common stock | (16,502) | (15,469) |
Proceeds from new borrowings | 8,571 | 60,000 |
Distribution to non-controlling interests | (3,583) | (7,667) |
Payment of debt issuance costs | (326) | (494) |
Proceeds from stock option exercises | 933 | 612 |
Principal repayments of term loan | (5,447) | (7,982) |
Purchase of common stock | (11,139) | (3,997) |
Repurchases of non-controlling interests | (1,103) | (767) |
Investments made by minority shareholders in consolidated affiliates | 122 | 22,409 |
Net cash (used in) provided by financing activities | (28,474) | 46,645 |
Effect of foreign currency exchange rates on cash and cash equivalents | 200 | (263) |
Net change in cash and cash equivalents | (45,124) | (139,612) |
Cash and cash equivalents, beginning of period | 269,721 | 392,045 |
Cash and cash equivalents, end of period | 224,597 | 252,433 |
Noncash investing activity | ||
Purchases of property, plant and equipment included in accounts payable and accrued expenses | $ 15,668 | $ 10,632 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Net of transferred cash | $ 2.1 | |
Cash acquired from acquisition | $ 0 | $ 12.6 |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended |
Sep. 30, 2017 | |
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 in the Caribbean. The Company was incorporated in Delaware in 1987 and began trading publicly in 1991. Since that time, the Company has engaged in strategic acquisitions and investments to grow its operations. The Company actively evaluates additional domestic and international acquisition, divestiture, and investment opportunities and other strategic transactions in the telecommunications, energy-related and other industries that meet its return-on-investment and other acquisition criteria. 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 and wholesale customers in Bermuda, Guyana, the U.S. Virgin Islands, and the United States. · Wireline. The Company’s wireline services include local telephone and data services in Bermuda, the Cayman Islands, Guyana, the U.S. Virgin Islands, and the United States. The Company’s wireline services also include video services in Bermuda, the Cayman Islands, and the U.S Virgin Islands. In addition, the Company offers wholesale long‑distance voice services to telecommunications carriers. Through March 8, 2017, the Company also offered 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 and municipal customers. The Company also owns and develops projects in India providing distributed generation solar power to corporate 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, 2017: Segment Services Markets Tradenames U.S. Telecom Wireless United States (rural markets) Commnet, Choice, Choice NTUA Wireless Wireline United States Essextel International Telecom Wireline Bermuda, Guyana, U.S. Virgin Islands, Cayman Islands One (formerly Logic in Bermuda), GTT+, Viya (formerly Innovative), Logic Wireless Bermuda, Guyana, U.S. Virgin Islands One (formerly CellOne), GTT+, Viya (formerly Innovative and Choice) Video Services Bermuda, U.S. Virgin Islands, Cayman Islands One (formerly Bermuda CableVision), Viya (formerly Innovative), Logic Renewable Energy Solar 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. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
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 Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 1, 2017. 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, 2016 the aggregate impact of the changes included a decrease to termination and access fees of $2.4 million, an increase to engineering and operations expenses of $3.1 million, a decrease to sales and marketing expenses of $0.6 million, an increase in equipment expense of $0.3 million, and a decrease to general and administrative expenses of $0.4 million. For the nine months ended September 30, 2016 the aggregate impact of the changes included a decrease to termination and access fees of $2.8 million, an increase to engineering and operations expenses of $4.4 million, a decrease to sales and marketing expenses of $0.6 million, an increase in equipment expense of $0.4 million, and a decrease to general and administrative expenses of $1.4 million. The Company’s effective tax rate for the three months ended September 30, 2017 and 2016 was 4.0% and 45.1%, respectively. When a company operates in a jurisdiction that generates ordinary losses but does not expect to realize them, ASC 740-270-30-36(a) requires the exclusion of the respective jurisdiction from the overall annual effective tax rate (“AETR”) calculation and instead, a separate AETR should be computed. The effective tax rate for the three months ended September 30, 2017 was primarily impacted by the following items: (i) the exclusion of losses in jurisdictions where the Company cannot benefit from those losses as required by ASC 740-270-30-36(a), primarily in the U.S. Virgin Islands, (ii) a $3.4 million benefit for the net capital loss due to the stock sales of our businesses in New England, New York and St. Maarten, (iii) a $3.4 million amended return refund claim filed for tax year 2013 recognized discretely, (iv) a $228 thousand increase (net) in unrecognized tax benefits recognized discretely, (v) a $536 thousand benefit (net) to record a return to accrual adjustment recognized discretely and, (vi) the mix of income generated among the jurisdictions in which it operates. 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 acquisitions that had no tax benefit, (ii) the mix of income generated among the jurisdictions in which we operate, and (iii) $1.6 million provision (net) to record multiple discrete items. 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 it operates. The Company’s effective tax rate for the nine months ended September 30, 2017 and 2016 was 76.1% and 45.5%, respectively. The effective tax rate for the nine months ended September 30, 2017 was primarily impacted by the following items: (i) the exclusion of losses in jurisdictions where the Company cannot benefit from those losses as required by ASC 740-270-30-36(a), primarily in the U.S. Virgin Islands, (ii) a $3.4 million benefit for the net capital loss due to the stock sales of its businesses in New England, New York and St. Maarten, (iii) a $3.4 million amended return refund claim filed for tax year 2013 recognized discretely in the third quarter, (iv) a $683 thousand increase (net) in unrecognized tax benefits related to current year and prior year positions recognized discretely in respective quarters, (v) a $367 thousand benefit (net) to record return to accrual adjustments recognized discretely in the respective quarter and, (vi) the mix of income generated among the jurisdictions in which it 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 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 we operate, and (iv) $2.2 million provision (net) to record multiple discrete items. 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 it 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. The FASB has since modified the standard with several ASU’s which must be adopted concurrently. The Company’s evaluation currently identifies the impacted areas to include, but not be limited to, the following: · The timing of revenue recognition and the allocation of revenue between equipment and services. The reallocation and timing impacts generally arise when bundle discounts are provided in a contract arrangement that includes equipment and service performance obligations. In these cases, the revenue will be allocated according to the relative stand-alone selling prices of the performance obligations included in the bundle and this may be different that how the products and services are billed to the customer and recognized under current guidance. The Company also notes that a large majority of its products and services are sold to customers at stand-alone selling prices and bundle discounts are limited to certain geographic markets and services. · Contract cost assets will be established to defer incremental contract acquisition costs. These costs generally relate to commissions paid to sales associates. The Company expects to utilize the practical expedient which allows expensing of contract acquisition costs when the expected amortization period is one year or less. · The new standard will require certain amounts be recorded as contract assets and liabilities on the balance sheet as well as enhanced disclosures around performance obligations. · Overall, with the exception of the impacts mentioned above, we do not expect the standard will result in a substantive change to the method or allocation of revenues between services and equipment or the timing of revenue recognition. The Company is in the process of determining quantitative information related to the impact of the new standard and our initial assessment may change due to changes in contractual terms or new service and product offerings. The Company has identified, and is in the process of implementing, new systems, processes and controls which are required to implement ASU 2014-09. The Company will adopt the standard on January 1, 2018. The Company will use the modified retrospective adoption method which requires it to apply the standard only to the most current period presented with the cumulative effect of applying the standard being recognized through retained earnings at the adoption date. 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 is effective for annual reporting periods ending after December 15, 2016. Early application is permitted. The Company adopted this guidance for the fourth quarter ended December 31, 2016. The adoption of this guidance did not impact The Company’s Consolidated Financial Statements. 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 the license for software. The new guidance does not change the accounting for a customer’s accounting for service contracts. The adoption of ASU 2015-05 by the Company on January 1, 2017 did not have a material impact on the Company’s financial position, result of operations or cash flows. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective January 1, 2018, with early adoption permitted under certain circumstances. At September 30, 2017, the Company holds approximately $20.1 million of equity investments accounted for under the cost method. The Company is continuing to evaluate the overall impact of this guidance and currently does not expect the adoption of ASU 2016-01 will have a material effect on our Consolidated Financial Statements. 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. The Company adopted ASU 2016-09 on January 1, 2017. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. This had no impact on the Company’s historical results. Also as a result of the adoption, the Company changed its policy election to account for forfeitures as they occur rather than on an estimated basis. The change resulted in the Company reclassifying $0.3 million from additional paid-in capital to retained earnings for the net cumulative-effect adjustment in stock compensation expense related to prior periods. 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 several elements of the statement of cash flows with the following being relevant to the company: · debt prepayment or debt extinguishment costs are classified as cash outflows from financing activities. This is consistent with the Company’s current accounting policy. · contingent consideration payments made three months or less after a business combination are classified as investing activities and those made after that time are classified as financing activities. The Company currently classifies all payments made in a business combination as investing activities. When adopted, the Company will reclassify $1.2 million of cash payments to financing activities for the nine months ended September 30, 2017. · proceeds from the settlement of insurance claims are classified on the basis of the nature of the loss. This is consistent with the Company’s current accounting policy. · distributions received from equity method investees are classified using either a cumulative earning or nature of distribution approach. The Company is currently evaluating both methods of adoption. · separately identifiable cash flows and application of the predominance principle. This is consistent with the Company’s current accounting policy. 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 is to be applied using a retrospective transition method for each period presented. The Company will adopt this standard on January 1, 2018. In October 2016 the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory”. The new standard eliminates 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 does not expect the impact of the new standard to be material to its Consolidated Financial Statements. In November 2016, the FASB issued Accounting Standards Update 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” or ASU 2016-18. The amendments in ASU 2016-18 are intended to reduce diversity in practice related to the classification and presentation of changes in restricted or restricted cash equivalents on the statement of cash flows. The amendments in ASU 2016-18 require that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. At September 30, 2017, the Company held $17.0 million of restricted cash. ASU 2016-18 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2017, with early adoption permitted. The Company will adopt this standard on January 1, 2018. Upon adoption of ASU 2016-18 the restricted cash balance at that time will be included in cash and cash equivalents in the statement of cash flows. In January 2017, the FASB issued Accounting Standards Update 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” or ASU 2017-01. The amendments in ASU 2017-01 provide a screen to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. Under ASU 2017-01, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business and the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. ASU 2017-01 also narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. ASU 2017-01 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2017, with early adoption permitted. The Company prospectively adopted ASU 2017-01 in the fourth quarter of 2016. The standard will result in the Company accounting for more transactions as asset acquisitions as opposed to business combination. In January 2017, the FASB issued Accounting Standards Update 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” or ASU 2017-04. The amendments in ASU 2017-04 simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities. Instead, under the amendments in ASU 2017-04, an entity performs its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but not more than the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2019, with early adoption permitted. The Company adopted this standard in the third quarter of 2017. Refer to Note 4 for discussion of impairment tests performed during 2017. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”). The new guidance requires the service cost component to be presented separately from the other components of net benefit costs. Service cost will be presented with other employee compensation cost within operations. The other components of net benefit cost, such as interest cost, amortization of prior service cost and gains or losses are required to be presented outside of operations. This is a change from the Company’s current accounting policy in which all components of net periodic pension and postretirement benefit costs are included within operating income. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The guidance should be applied retrospectively for the presentation of the service cost component in the income statement and allows a practical expedient for the estimation basis for applying the retrospective presentation requirements. The Company will adopt ASU 2017-07 on January 1, 2018 and we are currently in the process of evaluating the impact of this guidance on our Consolidated Financial Statements. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). The standard: (a) expands and refines hedge accounting for both financial and non-financial risk components, (b) aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and (c) includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including the adoption in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The guidance related to cash flow and net investment hedges existing at the date of adoption should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The guidance related to presentation and disclosure should be applied prospectively. The Company is currently assessing the impact of ASU 2017-12 on its Consolidated Financial Statements. |
USE OF ESTIMATES
USE OF ESTIMATES | 9 Months Ended |
Sep. 30, 2017 | |
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, assessing the impairment of assets, and income taxes. Actual results could differ significantly from those estimates. |
IMPACT OF THE HURRICANES IRMA A
IMPACT OF THE HURRICANES IRMA AND MARIA | 9 Months Ended |
Sep. 30, 2017 | |
IMPACT OF THE HURRICANES IRMA AND MARIA | |
IMPACT OF THE HURRICANES IRMA AND MARIA | 4. IMPACT OF HURRICANES IRMA AND MARIA During September 2017, the Company’s operations and customers in the U.S. Virgin Islands were severely impacted by both Hurricane Irma and subsequently Hurricane Maria (collectively, the “Hurricanes”). Both its wireless and wireline networks and commercial operations were severely damaged by these storms. As a result of the significant damage to its wireline network and the ongoing lack of consistent commercial power in the territory since the Hurricanes, the Company has been unable to provide most of its wireline services, which comprise the majority of revenue, in the business. Accordingly, it issued approximately $4.4 million of service credits to its subscribers in September, which are reflected as a reduction of its wireline revenue within our International Telecom segment. Due to of the ongoing poor conditions on the islands, the continued lack of consistent commercial power, and the damage to its wireline infrastructure, the Company currently expects this impact to wireline revenue to continue for the next several quarters and estimates that it will be most pronounced in the fourth quarter of 2017. As of November 9, 2017, the Company’s preliminary assessment of the level of wireline and wireless network damage by the Hurricanes and corresponding loss on the disposal of network has been estimated as $35.2 million. This amount, along with $1.4 million of additional operating expenses that it specifically incurred during the quarter to address the impact of the Hurricanes, has been recorded in its statement of operations for the three and nine months ended September 30, 2017. The level of network damage assessment and losses on damaged assets is based on information known as of the filing of this Form 10-Q. Given the current conditions in the USVI, including curfews, limited access to areas of the islands and the lack of consistent commercial power, additional damages may be discovered upon being able to fully access these areas and/or once commercial power is restored and the Company can bring its networks fully online. This assessment will continue to be updated in subsequent quarters as more information becomes available. The Company has insurance coverage for a combination of replacement costs of damaged property, extra expenses and business interruption and could potentially receive proceeds up to an aggregate of approximately $34.0 million against these insurance claims but it believes that total losses for these items will exceed these aggregate proceeds. The Company does not expect to record any insurance recovery, however, until 2018, when its assessment is complete and the Company can determine the amount and nature of its claims under its insurance policies. In connection with the above, the Company also determined there was a triggering event to assess the related reporting unit’s goodwill and indefinite lived intangible assets for impairment. After consideration of the write-downs of other assets within the reporting unit described above, the impairment test for goodwill and indefinite lived intangible assets was performed by comparing the fair value of the reporting unit to its carrying amount. The Company calculated the fair value of the reporting unit by utilizing an income approach, with Level 3 valuation inputs, including a cash flow discount rate of 14.5%. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount rates, perpetual growth rates, and the amount and timing of expected future cash flows. The discount rate was based on a weighted‑average cost of capital, which represents the average rate the business would pay its providers of debt and equity. The cash flows employed in the discounted cash flow analysis were derived from internal and external forecasts. The impairment assessment concluded that no impairment was required for the goodwill and indefinite lived intangible assets because the fair value of the reporting unit exceeded its carrying amount. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 9 Months Ended |
Sep. 30, 2017 | |
ACQUISITIONS AND DISPOSITIONS | |
ACQUISITIONS AND DISPOSITIONS | 5. ACQUISITIONS AND DISPOSITIONS International Telecom Acquisitions One Communications (formerly KeyTech Limited) Acquisition On May 3, 2016, the Company completed its acquisition of a controlling interest in One Communications Ltd. (formerly known as KeyTech Limited, “One Communications”), a publicly held Bermuda company listed on the Bermuda Stock Exchange (“BSX”) that provides broadband and video services and other telecommunications services to residential and enterprise customers in Bermuda and the Cayman Islands (the “One Communications Acquisition”). Subsequent to the completion of the Company’s acquisition, One Communications changed its legal name from KeyTech Limited and changed its “CellOne” and “Logic” trade names in Bermuda to “One Communications”. Prior to the Company’s acquisition, One Communications also owned a minority interest of approximately 43% in the Company’s previously held and consolidated subsidiary, Bermuda Digital Communications Ltd. (“BDC”), that provides wireless services in Bermuda. As part of the transaction, the Company contributed its ownership interest of approximately 43% in BDC and approximately $42 million in cash in exchange for a 51% ownership interest in One Communications. As part of the transaction, BDC was merged with and into a company within the One Communications group. 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 One Communications. Following the transaction, BDC became wholly owned by One Communications, and One Communications continues to be listed on the BSX. A portion of the cash proceeds that One Communications received upon closing was used to fund a one-time special dividend to One Communications’ existing shareholders and to retire One Communications’ subordinated debt. On May 3, 2016, the Company began consolidating the results of One Communications within our financial statements in our International Telecom segment. The One Communications Acquisition was accounted for as a business combination of a controlling interest in One Communications in accordance with ASC 805, Business Combinations , 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. Consideration Transferred Cash consideration - One Communications $ 34,518 Cash consideration - BDC 7,045 Total consideration transferred 41,563 Non-controlling interests - One Communications 32,909 Total value to allocate $ 74,472 Value to allocate - One Communications 67,427 Value to allocate - BDC 7,045 Purchase price allocation One Communications: Cash 8,185 Accounts receivable 6,451 Other current assets 3,241 Property, plant and equipment 100,892 Identifiable intangible assets 10,590 Other long term assets 3,464 Accounts payable and accrued liabilities (16,051) Advance payments and deposits (6,683) Current debt (6,429) Long term debt (28,929) Net assets acquired 74,731 Gain on One Communications bargain purchase $ 7,304 Purchase price allocation BDC: 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 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 an approximate 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 has subsequently collected 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 One Communications operates along with the Company's strategic position and resources in those same markets. Each of the Company and One Communications realized that their combined resources could better serve customers in Bermuda. The bargain purchase gain is included in operating income for the nine months ended September 30, 2016. Viya (formerly Innovative) Transaction 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 group of companies operating video services, Internet, wireless and landline services in the U.S. Virgin Islands, British Virgin Islands and St. Maarten (collectively, “Viya”), from the National Rural Utilities Cooperative Finance Corporation (“CFC”). In April 2017, the U.S. Virgin Islands operations and the Company’s existing wireless operations rebranded their tradenames from “Innovative” and “Choice”, respectively, to “Viya.” The Company acquired the Viya operations for a contractual purchase price of $145.0 million, reduced by purchase price adjustments of $5.3 million (the “Viya Transaction”). In connection with the transaction, the Company financed $60.0 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 the remaining purchase price with (i) $51.9 million in cash paid to CFC, (ii) $22.5 million in additional cash paid directly to fund Viya’ s pension in the fourth quarter of 2016, and (iii) $5.3 million recorded as restricted cash to satisfy Viya’ s other postretirement benefit plans. On July 1, 2016, the Company began consolidating the results of Viya within its financial statements in its International Telecom segment. Subsequent to the Viya Transaction, the Company sold the acquired businesses in St. Maarten and the British Virgin Islands, as further described in “Dispositions” below. The Viya Transaction was accounted as a business combination in accordance with ASC 805. The consideration transferred to CFC of $111.9 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 $5.3 million related to working capital adjustments and the Company assuming pension and other postretirement benefit liabilities of $27.8 million as discussed above. The Company transferred $51.9 million in cash and $60.0 million in loan proceeds to CFC for total consideration of $111.9 million that 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 Viya based on their acquisition date fair values: Consideration Transferred $ 111,860 Non-controlling interests 221 Total value to allocate 112,081 Purchase price allocation: Cash 4,229 Accounts receivable 6,553 Materials & supplies 6,533 Other current assets 1,927 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 (15,971) Advance payments and deposits (7,793) Deferred tax liability (2,935) Pension and other postretirement benefit liabilities (29,149) Net assets acquired $ 112,081 The acquired property, plant and equipment is comprised of telecommunication equipment located in the U.S Virgin Islands, British Virgin Islands and St. Maarten (subsequently disposed, see below). 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 7 to 13 years. The fair value of the non-controlling interest was determined using the income approach with discount rates ranging from 15% to 25%. The acquired receivables consist of trade receivables incurred in the ordinary course of business. The Company has collected full amount of the receivables. 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 pension and postretirement benefit obligations. The goodwill generated from the Viya 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 acquired Viya’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 Viya’s pension and other postretirement benefit plans. As contemplated by the transaction, the Company contributed approximately $22.5 million during the fourth quarter of 2016 to Viya’s pension plans. This payment is recorded as a cash outflow from operations in the statement of cash flows in the fourth quarter of 2016. At September 30, 2017, the Company held $5.1 million of restricted cash equal to the unfunded status of the other postretirement benefit plans. The cash is restricted due to the Company’s intent to use the cash to satisfy future postretirement benefit obligations. Dispositions On December 15, 2016, the Company transferred control of its subsidiary in Aruba to another stockholder in a nonreciprocal transfer. Subsequent to that date, it no longer consolidated the results of the operations of the Aruba business. The Company did not recognize a gain or loss on the transaction. On January 3, 2017, the Company completed the sale of the Viya cable operations located in St. Maarten for $4.8 million and recognized a gain of $0.1 million on the transaction. On August 18, 2017, the Company completed the sale of the Viya cable operations located in the British Virgin Islands. The company did not recognize a gain or loss on the transaction. The results of the St. Maarten, Aruba, and British Virgin Islands operations are not material to the Company’s historical results of operations. Since the dispositions do not relate to a strategic shift in our operations, the historical results and financial position of the operations are presented within continuing operations. U.S. Telecom Acquisition In July 2016, the Company acquired certain telecommunications fixed assets and the associated operations located 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 allocated to $10.2 million of acquired fixed assets, $3.5 million of deferred tax liabilities, and $0.7 million to other net liabilities, and the resulting $3.1 million in goodwill which is not deductible for income tax purposes. 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. Disposition On August 4, 2016, the Company entered into a stock purchase agreement to sell its integrated voice and data communications and wholesale transport businesses in New England and New York (“Sovernet”). On March 8, 2017, the Company completed the sale for consideration of $25.9 million (the “Sovernet Transaction”). The consideration included $20.9 million of cash, $3.0 million of receivables, and $2.0 million of contingent consideration. The $3.0 million of receivables are held in escrow to satisfy working capital adjustments in favor of the acquirer, to fund certain capital expenditure projects related to the assets sold and to secure the Company’s indemnification obligations. The contingent consideration represents the fair value of future payments related to certain operational milestones of the disposed assets. The value of the contingent consideration could be up to $4.0 million based on whether or not the operational milestones are achieved by December 31, 2017. The table below identifies the assets and liabilities transferred (amounts in thousands): Consideration Received $ 25,926 Assets and liabilities disposed Cash 1,821 Accounts receivable 1,696 Inventory 639 Prepaid 1,034 Property, plant and equipment 25,294 Other assets 288 Accounts payable and accrued liabilities (1,718) Advance payments and deposits (1,897) Net assets disposed 27,157 Consideration less net assets disposed (1,231) Transaction costs (1,156) Loss $ (2,387) Prior to the closing of the transaction, the Company repurchased non-controlling interests from minority shareholders in a Sovernet subsidiary for $0.7 million. The non-controlling interest had a book value of zero. Additionally the Company recorded a loss on deconsolidation of $0.5 million. The Company incurred $1.2 million of transaction related charges pertaining to legal, accounting and consulting services associated with the transaction, of which $ 0.6 million were incurred during the nine months ended September 30, 2017. Since the Sovernet disposition does not relate to a strategic shift in our operations, the historic results and financial position of the operations are presented within continuing operations. Subsequent to close of the Sovernet Transaction, management continually monitored and assessed the probability of earning the contingent consideration. In September 2017, based on progress toward achieving the operational milestones necessary to earn the contingent consideration and the December 31, 2017 deadline under which such milestones are to be achieved, management has determined that the Company is unlikely to earn the contingent consideration or any material portion thereof. As a result the fair value of the contingent consideration was reduced to zero. The amount was recorded as a loss on disposition of assets within operating income during the three and nine months ended September 30, 2017. Prior to the Sovernet Transaction, in the second quarter of 2016, the Company recorded an impairment loss of $11.1 million on assets related to Sovernet. The impairment consisted of a $3.6 million impairment of property, plant and equipment and $7.5 million impairment of goodwill. Pro forma Results The following table reflects unaudited pro forma operating results of the Company for the nine months ended September 30, 2016 as if the One Communications and Viya Transactions occurred on January 1, 2016. The pro forma amounts adjust One Communications’ and Viya’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, 2016. Also, the pro forma results were adjusted to reflect changes to the acquired entities’ capital structure related to the transaction. One Communications’ results reflect the retirement of $24.7 million of debt. Viya’s results reflect the retirement of $185.8 million of debt and the addition of $60 million of purchase price debt. Finally, the Company’s results were adjusted to reflect the Company’s incremental ownership in BDC. The historical results of the Vibrant Energy, and Western United States acquisitions are not included in the pro forma results as their impacts were not material to the Company’s historical results. The pro forma results for the nine months ended September 30, 2016 include $5.4 million of impairment charges recorded by One Communications and Viya prior to the Company’s acquisition of the businesses. Amounts are presented in thousands, except per share data. Nine months ended September 30, (unaudited) 2016 As Pro- Reported Forma Revenue $ 328,471 $ 407,096 Net income attributable to ATN International, Inc. Stockholders 10,206 12,768 Earnings per share: Basic 0.63 0.79 Diluted 0.63 0.79 The three months ended September 30, 2016 is not presented because both the One Communications and Viya transactions were completed on or before July 1, 2016. As a result there are no pro forma adjustments. The unaudited pro forma data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred if the acquisitions had been consummated on these dates or of future operating results of the combined company following the transactions. Renewable Energy Vibrant Energy On April 7, 2016, the Company completed its acquisition of a solar power development portfolio in India (the “Vibrant Energy Acquisition”). The business operates under the name Vibrant Energy. The Company also retained several employees of the seller in the United Kingdom and India 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, Maharashtra 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 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 $ 6,193 Purchase price allocation: Cash 136 Prepayments and other assets 636 Property, plant and equipment 7,321 Goodwill 3,279 Accounts payable and accrued liabilities (5,179) Net assets acquired $ 6,193 The consideration transferred includes $4.9 million paid as of September 30, 2017 and $1.3 million payable at future dates, which is contingent upon the passage of time and achievement of initial production milestones that 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. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 6. 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, 2017 and December 31, 2016 are summarized as follows (in thousands): September 30, 2017 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 391 $ 391 Money market funds $ 2,287 $ — $ 2,287 Short term investments $ 371 $ 7,486 $ 7,857 Commercial paper $ — $ 50,107 $ 50,107 Interest rate swap $ — $ (42) $ (42) Total assets and liabilities measured at fair value $ 2,658 $ 57,942 $ 60,600 December 31, 2016 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 391 $ 391 Money market funds $ 29,027 $ — $ 29,027 Short term investments $ 1,751 $ 7,486 $ 9,237 Commercial paper $ — $ 29,981 $ 29,981 Total assets measured at fair value $ 30,778 $ 37,858 $ 68,636 Certificate of Deposit As of September 30, 2017 and December 31, 2016, 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, 2017 and December 31, 2016, 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 and Commercial Paper As of September 30, 2017 and December 31, 2016, this asset class consisted of short term foreign and U.S. corporate bonds, equity securities, and commercial paper. Corporate bonds and including commercial paper are classified within Level 2 of the fair value hierarchy because the fair value is based on observable market data. Equity securities are classified within Level 1 because fair value is based on quoted market prices in active markets for identical assets. 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 the interest rate swap is measured using level 2 inputs. In the third quarter of 2017, the Company made strategic investments totaling $18.1 million. The investments are accounted for as cost method investments. At September 30, 2017, the Company holds $20.1 million of investments accounted for under the cost method. The Company has not estimated the fair value of these investments because the fair value is not readily determinable and there have been no changes in circumstances which would have an adverse effect on the fair value of the investments. The fair value of long-term debt is estimated using Level 2 inputs. At September 30, 2017, the fair value of long-term debt, including the current portion, was $ 163.1 million and its book value was $ 159.7 million. At December 31, 2016, the fair value of long-term debt, including the current portion, was $15 9.9 million and its book value was $ 156.8 million. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2017 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 7. LONG-TERM DEBT The Company has a 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 to increase 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 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 that imposes a maximum ratio of indebtedness to EBITDA. As of September 30, 2017, the Company was in compliance with all of the financial covenants of the Credit Facility. As of September 30, 2017, the Company had no borrowings under the Credit Facility. Ahana Debt On December 24, 2014, in connection with the Ahana Acquisition, the Company assumed $38.9 million in long-term debt (the “Original Ahana Debt”). The Original Ahana Debt included multiple loan agreements with banks that bore interest at rates between 4.5% and 6.0%, matured at various times between 2018 and 2023 and were secured by certain solar facilities. Repayment of the Original Ahana Debt was being made in cash on a monthly basis until maturity. The Original Ahana Debt also included a loan from Public Service Electric & Gas (the “PSE&G Loan”). The PSE&G Loan bears interest at 11.3%, matures in 2027, and is secured by certain solar facilities. Repayment of the Original 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 PSE&G Loan using SRECs. On December 19, 2016, Ahana’s wholly owned subsidiary, Ahana Operations, issued $20.6 million in aggregate principal amount of 4.427% senior notes due 2029 (the “Series A Notes”) and $45.2 million in aggregate principal amount of 5.327% senior notes due 2031 (the “Series B Notes” and collectively with the Series A Notes and the PSE&G Loan, the “Ahana Debt” ). Interest and principal are payable semi-annually, until the respective maturity dates of March 31, 2029 (for the Series A Notes) and September 30, 2031 (for the Series B Notes). Cash flows generated by the solar projects that secure the Series A Notes and Series B Notes are only available for payment of such debt and are not available to pay other obligations or the claims of the creditors of Ahana or its subsidiaries. However, subject to certain restrictions, Ahana Operations holds the right to the excess cash flows not needed to pay the Series A Notes and Series B Notes and other obligations arising out of the securitizations. The Series A and Series B Notes are secured by certain assets of Ahana and are guaranteed by certain of its subsidiaries. A portion of the proceeds from the issuances of the Series A Notes and Series B Notes were used to repay the Original Ahana Debt in full except for the PSE&G Loan which remains outstanding after the refinancing. The Series A Notes and the Series B Notes contain customary representations, warranties and certain affirmative and negative covenants, which limit additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. The Series A Notes and Series B Notes are subject to financial covenants that imposes 1) a maximum debt service coverage ratio and 2) a maximum ratio of the present value of Ahana’s future cash flow to the aggregate principal amounts of all outstanding obligations. These financial covenants are tested semi-annually for Ahana Operations on a consolidated basis and on an individual basis for certain subsidiaries. Both the Series A Notes and Series B Notes may be redeemed at any time, in whole or part, subject to a make-whole premium. As of September 30, 2017, the Company was in compliance with all of the financial covenants of the Series A Notes and the Series B Notes. The Company capitalized $2.8 million of fees associated with the Series A and Series B Notes which is recorded as a reduction to the debt carrying amount and will be amortized over the life of the notes. As of September 30, 2017, $2.3 million of the Original Ahana Debt, $64.6 million of the Series A Notes and Series B Notes remained outstanding, and $2.7 million of the capitalized fees remain unamortized. One Communications Debt In connection with the One Communications Transaction on May 3, 2016, the Company assumed $35.4 million in debt (the “One Communications Debt”) in the form of a loan from HSBC Bank Bermuda Limited. The One Communications Debt was scheduled to mature in 2021, was bearing interest at the three-month LIBOR rate plus a margin of 3.25%, and had repayment being made quarterly. As of March 31, 2017, $28.9 million of the One Communications Debt was outstanding. The One Communications Debt contained customary representations, warranties and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and a financial covenant that limited the maximum ratio of indebtedness less cash to annual operating cash flow. On May 22, 2017, the Company amended and restated the One Communications Debt to increase the original facility to $37.5 million. The amended and restated debt is scheduled to mature on May 22, 2022 and bears an interest at the three month LIBOR rate plus an applicable margin rate ranging between 2.5% to 2.75% paid quarterly. The amended and restated One Communications Debt contains customary representations, warranties and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and financial covenants that limit the ratio of tangible net worth to long term debt and total net debt to EBITDA and require a minimum debt service coverage ratio (net cash generated from operating activities plus interest expense less net capital expenditures to debt repayments plus interest expense). The covenants are tested annually commencing the fiscal year ending December 31, 2017. As a condition of the amended and restated agreement, within 90 days of the refinance date the Company is required to enter into a hedging arrangement with a notional amount equal to at least 30% of the outstan ding loan balance and a term corresponding to the maturity of the One Communications Debt. As of July 2017, we entered into an amortizing interest rate swap. This swap has been designated as a cash flow hedge, has an original notional amount of $11.0 million, has an interest rate of 1.874%, and expires in March 2022. In connection with the amended and restated debt, the Company increased the limit of its overdraft facility from $5.0 million to $10.0 million. This facility has an interest rate of three month LIBOR plus 1.75%. The Company capitalized $0.3 million of fees associated with the One Communications Debt, which is recorded as a reduction to the debt carrying amount and will be amortized over the life of the debt. As of September 30, 2017, $36.6 million of the One Communications Debt was outstanding, there were no borrowings under the overdraft facility, and $0.3 million of the capitalized fees remain unamortized. Viya Debt (formerly Innovative Debt) On July 1, 2016, the Company and certain of its subsidiaries entered into a $60.0 million loan agreement (the “Viya Debt”). The Viya Debt agreement contains customary representations, warranties and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and a financial covenant that limits the maximum ratio of indebtedness less cash to annual operating cash flow. The covenant is tested on an annual basis commencing in 2017. Interest is paid quarterly at a fixed rate of 4.0% and principal repayment is not required until maturity on July 1, 2026. Prepayment of the Viya Debt may be subject to a fee under certain circumstances. The debt is secured by certain assets of the Company’s Viya subsidiaries and is guaranteed by the Company. 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 carrying amount and will be amortized over the life of the loan. As of September 30, 2017, $60.0 million of the Viya Debt remained outstanding and $0.8 million of the rate lock fee was unamortized. |
GOVERNMENT GRANTS
GOVERNMENT GRANTS | 9 Months Ended |
Sep. 30, 2017 | |
GOVERNMENT GRANTS | |
GOVERNMENT GRANTS | 8. 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 the Phase I Mobility Fund (“Phase I Mobility Fund”), a one-time award meant to support wireless coverage in underserved geographic areas in the United States. The Company has received $21.1 million of Phase I 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 was 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. The Mobility Funds projects and their results are included within our U.S. Telecom segment. As of September 30, 2017, the Company had received approximately $ 21.1 million in Mobility Funds. Of these funds, $ 7.2 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. The remaining $13.9 million received offsets operating expenses, of which $9.0 million has been recorded to date; $ 4.9 million is recorded within current liabilities in the Company’s consolidated balance sheet as of September 30, 2017. The balance sheet presentation is based on the timing of the expected usage of the funds which will reduce future operations expenses through the expiration of the arrangement in July 2018. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
EQUITY | |
EQUITY | 9. EQUITY Stockholders’ equity was as follows (in thousands): Nine months ended September 30, 2017 2016 ATN Non-Controlling ATN Non-Controlling Total International, Inc. Interests Total Equity International, Inc. Interests Equity Equity, beginning of period $ 677,055 $ 132,114 $ 809,169 $ 680,299 $ 81,425 $ 761,724 Stock-based compensation 5,415 — 5,415 5,034 — 5,034 Comprehensive income: Net income (12,016) 13,535 1,519 10,206 10,400 20,606 Projected pension benefit obligation 513 — 513 — — — Unrealized loss on securities (65) — (65) — — — Reclassifications of gains on sale of marketable securities to net income (1,044) — (1,044) — — — Foreign Currency translation adjustment 921 — 921 (200) — (200) Total comprehensive income (11,691) 13,535 1,844 10,006 10,400 20,406 Issuance of common stock upon exercise of stock options 1,057 — 1,057 1,371 — 1,371 Dividends declared on common stock (13,680) — (13,680) (15,838) — (15,838) Distributions to non-controlling interests — (3,761) (3,761) — (7,828) (7,828) Investments made by non-controlling interests — 123 123 — 22,409 (1) 22,409 Acquisition of One Communications — — — — 32,717 32,717 Acquisition of Viya — — — — 221 221 Acquisition from non-controlling interests — — — (306) (270) (576) Loss on deconsolidation of subsidiary — 529 529 — — — Change in accounting method- adoption of ASC 2016-09 110 — 110 — — — Repurchase of non-controlling interests (670) (434) (1,104) (4,105) (2,940) (7,045) Purchase of treasury stock (12,968) — (12,968) (4,755) — (4,755) Equity, end of period $ 644,628 $ 142,106 $ 786,734 $ 671,706 $ 136,134 $ 807,840 (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 (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
NET INCOME (LOSS) PER SHARE | |
NET INCOME (LOSS) PER SHARE | 10. NET INCOME (LOSS) PER SHARE For the three and nine months ended September 30, 2017 and 2016, 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, 2017 2016 2017 2016 Basic weighted-average shares of common stock outstanding 16,178 16,148 16,177 16,128 Stock options — 93 — 100 Diluted weighted-average shares of common stock outstanding 16,178 16,241 16,177 16,228 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. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2017 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 11. SEGMENT REPORTING The Company’s reportable segments 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 One Communications and Viya 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 following tables provide information for each operating segment (in thousands): For the Three Months Ended September 30, 2017 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 36,830 $ 20,424 $ — $ — $ 57,254 Wireline 2,336 53,973 — — 56,309 Renewable Energy — — 4,974 — 4,974 Equipment and Other 945 2,614 36 — 3,595 Total Revenue 40,111 77,011 5,010 — 122,132 Depreciation and amortization 6,301 12,088 1,656 1,112 21,157 Non-cash stock-based compensation — 8 29 1,621 1,658 Operating income (loss) 15,987 (28,491) 976 (7,997) (19,525) For the Three Months Ended September 30, 2016 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 40,076 $ 21,075 $ — $ — $ 61,151 Wireline 6,936 59,193 — — 66,129 Renewable Energy — — 5,784 — 5,784 Equipment and Other 548 5,045 138 — 5,731 Total Revenue 47,560 85,313 5,922 — 138,795 Depreciation and amortization 6,211 12,861 1,227 1,567 21,866 Non-cash stock-based compensation — — 28 1,371 1,399 Operating income (loss) 18,120 11,358 2,822 (10,219) 22,081 For the Nine Months Ended September 30, 2017 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 108,499 $ 59,446 $ — $ — $ 167,945 Wireline 10,443 171,125 — — 181,568 Renewable Energy — — 14,765 — 14,765 Equipment and Other 1,939 7,101 174 — 9,214 Total Revenue 120,881 237,672 14,939 — 373,492 Depreciation and amortization 19,098 38,339 4,941 3,526 65,904 Non-cash stock-based compensation — 146 86 5,205 5,437 Operating income (loss) 44,520 (7,713) 3,263 (25,952) 14,118 For the Nine Months Ended September 30, 2016 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 117,194 $ 60,106 $ — $ — $ 177,300 Wireline 18,793 103,397 — — 122,190 Renewable Energy — — 16,935 — 16,935 Equipment and Other 1,716 10,071 259 — 12,046 Total Revenue 137,703 173,574 17,194 — 328,471 Depreciation and amortization 17,510 27,376 3,642 4,385 52,913 Non-cash stock-based compensation — — 86 4,946 5,032 Operating income (loss) 39,698 28,320 (734) (27,398) 39,886 (1) Corporate and Other items refer to corporate overhead costs and consolidating adjustments Selected balance sheet data for each of our segments as of September 30, 2017 and December 31, 2016 consists of the following (in thousands): U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated September 30, 2017 Cash, Cash equivalents, and Investments $ 31,328 $ $ 19,147 $ 70,643 $ 232,454 Total current assets 61,473 25,301 84,729 334,738 Fixed assets, net 100,349 347,421 158,554 18,271 624,595 Goodwill 35,268 25,421 3,280 — 63,969 Total assets 221,528 586,747 201,024 174,719 1,184,018 Total current liabilities 53,065 86,359 18,561 15,692 173,677 Total debt — 95,464 64,187 — 159,651 December 31, 2016 Cash, Cash equivalents, and Investments $ 22,235 $ 97,681 $ 27,378 $ 131,664 $ 278,958 Total current assets 50,983 143,201 37,440 135,745 367,369 Fixed assets, net 129,274 372,741 130,268 15,429 647,712 Goodwill 35,268 24,326 3,279 — 62,873 Total assets 240,006 597,454 190,253 170,505 1,198,218 Total current liabilities 23,162 95,502 12,603 18,838 150,105 Total debt — 91,316 65,507 — 156,823 Capital Expenditures U.S. International Renewable Corporate and Nine months ended September 30, Telecom Telecom Energy Other (1) Consolidated 2017 $ 17,396 $ 54,775 $ 31,327 $ 4,778 $ 108,276 2016 26,709 36,543 10,326 4,877 78,455 (1) Corporate and Other items refer to corporate overhead costs and consolidating adjustments. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 12. 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. 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. The legislation does not 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, including the issuance of competing licenses. The Company cannot predict the manner in which or when the legislation will be implemented by the Minister of Telecommunications. In December 2016 the Government of Guyana and the Company met to discuss modifications of the Company’s exclusivity rights and other rights under its existing agreement and license. Those discussions are on-going, 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 such discussions will satisfactorily address the Company’s 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 another communications provider that outlined a recommended methodology for the calculation of these fees. The NFMU stated that it would prepare its own recommendation for consideration by the Minister of Telecommunications, who would decide 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 limited further discussions on this subject and GTT has not had the opportunity to review any recommendation made to the Minister. On May 8, 2009, a GTT competitor, 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 on May 13, 2009, GTT petitioned to intervene in the suit in order to oppose Digicel’s claims and GTT’s petition was granted on May 18, 2009. GTT filed an answer to the charge on June 22, 2009. The case remains 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 defend vigorously against such 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 injunctive relief to stop the illegal bypass activity and money damages. 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 prosecute these matters vigorously. 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. The Company maintains that any liability GTT might be found to have with respect to the disputed tax assessments, totaling $44.1 million, would be offset in part by the 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, 2017 for these matters. |
ORGANIZATION AND BUSINESS OPE21
ORGANIZATION AND BUSINESS OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 | Segment Services Markets Tradenames U.S. Telecom Wireless United States (rural markets) Commnet, Choice, Choice NTUA Wireless Wireline United States Essextel International Telecom Wireline Bermuda, Guyana, U.S. Virgin Islands, Cayman Islands One (formerly Logic in Bermuda), GTT+, Viya (formerly Innovative), Logic Wireless Bermuda, Guyana, U.S. Virgin Islands One (formerly CellOne), GTT+, Viya (formerly Innovative and Choice) Video Services Bermuda, U.S. Virgin Islands, Cayman Islands One (formerly Bermuda CableVision), Viya (formerly Innovative), Logic Renewable Energy Solar United States (Massachusetts, California, and New Jersey), India Ahana Renewables, Vibrant Energy |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Acquisitions and Dispositions | |
Schedule of pro forma results of operations | Amounts are presented in thousands, except per share data. Nine months ended September 30, (unaudited) 2016 As Pro- Reported Forma Revenue $ 328,471 $ 407,096 Net income attributable to ATN International, Inc. Stockholders 10,206 12,768 Earnings per share: Basic 0.63 0.79 Diluted 0.63 0.79 |
Sovernet | |
Acquisitions and Dispositions | |
Schedule of assessment of total acquisition costs to net assets based on acquisition date fair values | The table below identifies the assets and liabilities transferred (amounts in thousands): Consideration Received $ 25,926 Assets and liabilities disposed Cash 1,821 Accounts receivable 1,696 Inventory 639 Prepaid 1,034 Property, plant and equipment 25,294 Other assets 288 Accounts payable and accrued liabilities (1,718) Advance payments and deposits (1,897) Net assets disposed 27,157 Consideration less net assets disposed (1,231) Transaction costs (1,156) Loss $ (2,387) |
One Communications (formerly Keytech) and BDC | |
Acquisitions and Dispositions | |
Schedule of assessment of total acquisition costs to net assets based on acquisition date fair values | Consideration Transferred Cash consideration - One Communications $ 34,518 Cash consideration - BDC 7,045 Total consideration transferred 41,563 Non-controlling interests - One Communications 32,909 Total value to allocate $ 74,472 Value to allocate - One Communications 67,427 Value to allocate - BDC 7,045 Purchase price allocation One Communications: Cash 8,185 Accounts receivable 6,451 Other current assets 3,241 Property, plant and equipment 100,892 Identifiable intangible assets 10,590 Other long term assets 3,464 Accounts payable and accrued liabilities (16,051) Advance payments and deposits (6,683) Current debt (6,429) Long term debt (28,929) Net assets acquired 74,731 Gain on One Communications bargain purchase $ 7,304 Purchase price allocation BDC: 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 |
Viya (formerly Innovative) | |
Acquisitions and Dispositions | |
Schedule of assessment of total acquisition costs to net assets based on acquisition date fair values | Consideration Transferred $ 111,860 Non-controlling interests 221 Total value to allocate 112,081 Purchase price allocation: Cash 4,229 Accounts receivable 6,553 Materials & supplies 6,533 Other current assets 1,927 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 (15,971) Advance payments and deposits (7,793) Deferred tax liability (2,935) Pension and other postretirement benefit liabilities (29,149) Net assets acquired $ 112,081 |
Vibrant Energy | |
Acquisitions and Dispositions | |
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 $ 6,193 Purchase price allocation: Cash 136 Prepayments and other assets 636 Property, plant and equipment 7,321 Goodwill 3,279 Accounts payable and accrued liabilities (5,179) Net assets acquired $ 6,193 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 and December 31, 2016 are summarized as follows (in thousands): September 30, 2017 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 391 $ 391 Money market funds $ 2,287 $ — $ 2,287 Short term investments $ 371 $ 7,486 $ 7,857 Commercial paper $ — $ 50,107 $ 50,107 Interest rate swap $ — $ (42) $ (42) Total assets and liabilities measured at fair value $ 2,658 $ 57,942 $ 60,600 December 31, 2016 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 391 $ 391 Money market funds $ 29,027 $ — $ 29,027 Short term investments $ 1,751 $ 7,486 $ 9,237 Commercial paper $ — $ 29,981 $ 29,981 Total assets measured at fair value $ 30,778 $ 37,858 $ 68,636 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
EQUITY | |
Schedule of stockholders' equity | 9. EQUITY Stockholders’ equity was as follows (in thousands): Nine months ended September 30, 2017 2016 ATN Non-Controlling ATN Non-Controlling Total International, Inc. Interests Total Equity International, Inc. Interests Equity Equity, beginning of period $ 677,055 $ 132,114 $ 809,169 $ 680,299 $ 81,425 $ 761,724 Stock-based compensation 5,415 — 5,415 5,034 — 5,034 Comprehensive income: Net income (12,016) 13,535 1,519 10,206 10,400 20,606 Projected pension benefit obligation 513 — 513 — — — Unrealized loss on securities (65) — (65) — — — Reclassifications of gains on sale of marketable securities to net income (1,044) — (1,044) — — — Foreign Currency translation adjustment 921 — 921 (200) — (200) Total comprehensive income (11,691) 13,535 1,844 10,006 10,400 20,406 Issuance of common stock upon exercise of stock options 1,057 — 1,057 1,371 — 1,371 Dividends declared on common stock (13,680) — (13,680) (15,838) — (15,838) Distributions to non-controlling interests — (3,761) (3,761) — (7,828) (7,828) Investments made by non-controlling interests — 123 123 — 22,409 (1) 22,409 Acquisition of One Communications — — — — 32,717 32,717 Acquisition of Viya — — — — 221 221 Acquisition from non-controlling interests — — — (306) (270) (576) Loss on deconsolidation of subsidiary — 529 529 — — — Change in accounting method- adoption of ASC 2016-09 110 — 110 — — — Repurchase of non-controlling interests (670) (434) (1,104) (4,105) (2,940) (7,045) Purchase of treasury stock (12,968) — (12,968) (4,755) — (4,755) Equity, end of period $ 644,628 $ 142,106 $ 786,734 $ 671,706 $ 136,134 $ 807,840 (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 (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
NET INCOME (LOSS) PER SHARE | |
Schedule of reconciliation from basic to diluted weighted average common shares outstanding | Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Basic weighted-average shares of common stock outstanding 16,178 16,148 16,177 16,128 Stock options — 93 — 100 Diluted weighted-average shares of common stock outstanding 16,178 16,241 16,177 16,228 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 36,830 $ 20,424 $ — $ — $ 57,254 Wireline 2,336 53,973 — — 56,309 Renewable Energy — — 4,974 — 4,974 Equipment and Other 945 2,614 36 — 3,595 Total Revenue 40,111 77,011 5,010 — 122,132 Depreciation and amortization 6,301 12,088 1,656 1,112 21,157 Non-cash stock-based compensation — 8 29 1,621 1,658 Operating income (loss) 15,987 (28,491) 976 (7,997) (19,525) For the Three Months Ended September 30, 2016 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 40,076 $ 21,075 $ — $ — $ 61,151 Wireline 6,936 59,193 — — 66,129 Renewable Energy — — 5,784 — 5,784 Equipment and Other 548 5,045 138 — 5,731 Total Revenue 47,560 85,313 5,922 — 138,795 Depreciation and amortization 6,211 12,861 1,227 1,567 21,866 Non-cash stock-based compensation — — 28 1,371 1,399 Operating income (loss) 18,120 11,358 2,822 (10,219) 22,081 For the Nine Months Ended September 30, 2017 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 108,499 $ 59,446 $ — $ — $ 167,945 Wireline 10,443 171,125 — — 181,568 Renewable Energy — — 14,765 — 14,765 Equipment and Other 1,939 7,101 174 — 9,214 Total Revenue 120,881 237,672 14,939 — 373,492 Depreciation and amortization 19,098 38,339 4,941 3,526 65,904 Non-cash stock-based compensation — 146 86 5,205 5,437 Operating income (loss) 44,520 (7,713) 3,263 (25,952) 14,118 For the Nine Months Ended September 30, 2016 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 117,194 $ 60,106 $ — $ — $ 177,300 Wireline 18,793 103,397 — — 122,190 Renewable Energy — — 16,935 — 16,935 Equipment and Other 1,716 10,071 259 — 12,046 Total Revenue 137,703 173,574 17,194 — 328,471 Depreciation and amortization 17,510 27,376 3,642 4,385 52,913 Non-cash stock-based compensation — — 86 4,946 5,032 Operating income (loss) 39,698 28,320 (734) (27,398) 39,886 (1) Corporate and Other items refer to corporate overhead costs and consolidating adjustments Selected balance sheet data for each of our segments as of September 30, 2017 and December 31, 2016 consists of the following (in thousands): U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated September 30, 2017 Cash, Cash equivalents, and Investments $ 31,328 $ $ 19,147 $ 70,643 $ 232,454 Total current assets 61,473 25,301 84,729 334,738 Fixed assets, net 100,349 347,421 158,554 18,271 624,595 Goodwill 35,268 25,421 3,280 — 63,969 Total assets 221,528 586,747 201,024 174,719 1,184,018 Total current liabilities 53,065 86,359 18,561 15,692 173,677 Total debt — 95,464 64,187 — 159,651 December 31, 2016 Cash, Cash equivalents, and Investments $ 22,235 $ 97,681 $ 27,378 $ 131,664 $ 278,958 Total current assets 50,983 143,201 37,440 135,745 367,369 Fixed assets, net 129,274 372,741 130,268 15,429 647,712 Goodwill 35,268 24,326 3,279 — 62,873 Total assets 240,006 597,454 190,253 170,505 1,198,218 Total current liabilities 23,162 95,502 12,603 18,838 150,105 Total debt — 91,316 65,507 — 156,823 Capital Expenditures U.S. International Renewable Corporate and Nine months ended September 30, Telecom Telecom Energy Other (1) Consolidated 2017 $ 17,396 $ 54,775 $ 31,327 $ 4,778 $ 108,276 2016 26,709 36,543 10,326 4,877 78,455 (1) Corporate and Other items refer to corporate overhead costs and consolidating adjustments. |
BASIS OF PRESENTATION - Reclass
BASIS OF PRESENTATION - Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Termination and access fees | ||
Reclassification, decrease (increase) to expense | $ 2.4 | $ 2.8 |
Engineering and operations expenses | ||
Reclassification, decrease (increase) to expense | (3.1) | (4.4) |
Selling and marketing expense. | ||
Reclassification, decrease (increase) to expense | 0.6 | 0.6 |
Equipment expense | ||
Reclassification, decrease (increase) to expense | (0.3) | (0.4) |
General and administrative expense | ||
Reclassification, decrease (increase) to expense | $ 0.4 | $ 1.4 |
BASIS OF PRESENTATION - Tax (De
BASIS OF PRESENTATION - Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
BASIS OF PRESENTATION | ||||
Effective tax rate (as a percent) | 4.00% | 45.10% | 76.10% | 45.50% |
Net capital loss carryback | $ 3,400 | $ 3,400 | ||
Refund claim for prior year recognized | 3,400 | 3,400 | ||
Increase (decrease) in unrecognized tax benefits | 228 | 683 | ||
Income tax benefit net accrual adjustment discrete items | 536 | 367 | ||
Income tax benefit from acquisitions | 0 | 0 | ||
Net tax provision for discrete items | $ 1,600 | $ 2,200 |
BASIS OF PRESENTATION - Recent
BASIS OF PRESENTATION - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2017 | Sep. 30, 2017 |
Equity investments under cost method | $ 20,100 | |
Accounting Standards Update 2015-17 | Additional Paid In Capital | ||
Cumulative Effect on Retained Earnings, Net of Tax | $ (300) | |
Accounting Standards Update 2015-17 | Retained Earnings | ||
Cumulative Effect on Retained Earnings, Net of Tax | $ 300 | |
Accounting Standards Update 2016-09 | ||
Cumulative Effect on Retained Earnings, Net of Tax | 110 | |
Accounting Standards Update 2016-01 | ||
Equity investments under cost method | 20,100 | |
Accounting Standards Update 2016-15 | Proforma Adjustment | ||
Payment for Contingent Consideration Liability, Investing Activities | (1,200) | |
Payment for Contingent Consideration Liability, Financing Activities | 1,200 | |
Accounting Standards Update 2016-18 | ||
Restricted cash | $ 17,000 |
IMPACT OF THE HURRICANES IRMA30
IMPACT OF THE HURRICANES IRMA AND MARIA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
IMPACT OF THE HURRICANES IRMA AND MARIA | ||
Loss on disposal of network | $ 35,213 | |
HURRICANES IRMA AND MARIA | ||
IMPACT OF THE HURRICANES IRMA AND MARIA | ||
Loss on disposal of network | $ 35,200 | 35,200 |
Additional operating expenses | 1,400 | $ 1,400 |
Potential business interruption insurance proceeds | $ 34,000 | |
Discounted rate used for cash flows | 14.50% | |
Impairment charges | $ 0 | |
International Telecom segment | HURRICANES IRMA AND MARIA | ||
IMPACT OF THE HURRICANES IRMA AND MARIA | ||
Service credit | $ 4,400 |
ACQUISITIONS AND DISPOSITIONS -
ACQUISITIONS AND DISPOSITIONS - One Communications (Details) - USD ($) $ in Thousands | May 03, 2016 | May 02, 2016 |
One Communications (formerly KeyTech) | ||
Acquisitions and Dispositions | ||
Ownership interest held by minority shareholders | 43.00% | |
One Communications (formerly KeyTech) | ||
Acquisitions and Dispositions | ||
Minority ownership contributed in acquisition (as a percent) | 43.00% | |
Cash consideration | $ 34,518 | |
One Communications (formerly Keytech) and BDC | ||
Acquisitions and Dispositions | ||
Ownership interest held by minority shareholders | 15.00% | |
Ownership interest acquired (as a percent) | 51.00% | |
Cash consideration | $ 41,563 |
ACQUISITIONS AND DISPOSITIONS32
ACQUISITIONS AND DISPOSITIONS - Purchase Price Allocation - One Communications (Details) - USD ($) $ in Thousands | May 03, 2016 | Sep. 30, 2016 |
Purchase price allocation: | ||
Gain on One Communications bargain purchase | $ 7,304 | |
One Communications (formerly KeyTech) | ||
Consideration Transferred | ||
Cash consideration | $ 34,518 | |
Total value to allocate | ||
Non-controlling interests | 32,909 | |
Business Combination Total Value Allocation | 67,427 | |
Purchase price allocation: | ||
Cash | 8,185 | |
Accounts receivable | 6,451 | |
Other current assets | 3,241 | |
Property, plant and equipment | 100,892 | |
Identifiable intangible assets | 10,590 | |
Other long term assets | 3,464 | |
Accounts payable and accrued liabilities | (16,051) | |
Advance payments and deposits | (6,683) | |
Current debt | (6,429) | |
Long-term debt | (28,929) | |
Net assets acquired | 74,731 | |
Gain on One Communications bargain purchase | $ 7,304 | |
One Communications (formerly KeyTech) | Telecommunication Equipment | ||
Purchase price allocation BDC: | ||
Discounted rate used for cash flows | 15.00% | |
BDC | ||
Consideration Transferred | ||
Cash consideration | $ 7,045 | |
Total value to allocate | ||
Business Combination Total Value Allocation | 7,045 | |
Purchase price allocation: | ||
Carrying value of BDC non-controlling interest acquired | 2,940 | |
Purchase price allocation BDC: | ||
Excess of purchase price paid over carrying value of non-controlling interest acquired | 4,105 | |
One Communications (formerly Keytech) and BDC | ||
Consideration Transferred | ||
Cash consideration | 41,563 | |
Total value to allocate | ||
Business Combination Total Value Allocation | $ 74,472 | |
Minimum | One Communications (formerly KeyTech) | Income Approach | ||
Purchase price allocation BDC: | ||
Discounted rate used for fair value of noncontrolling interests | 15.00% | |
Minimum | One Communications (formerly KeyTech) | Telecommunication Equipment | ||
Purchase price allocation BDC: | ||
Useful life | 3 years | |
Minimum | One Communications (formerly KeyTech) | Customer relationships | ||
Purchase price allocation BDC: | ||
Useful life | 9 years | |
Maximum | One Communications (formerly KeyTech) | Telecommunication Equipment | ||
Purchase price allocation BDC: | ||
Useful life | 18 years | |
Maximum | One Communications (formerly KeyTech) | Customer relationships | ||
Purchase price allocation BDC: | ||
Useful life | 12 years |
ACQUISITIONS AND DISPOSITIONS33
ACQUISITIONS AND DISPOSITIONS - Purchase Price Allocation - Viya (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2016 | Sep. 30, 2017 |
Purchase price allocation: | |||
Goodwill | $ 62,873 | $ 63,969 | |
Viya (formerly Innovative) | |||
Consideration Transferred | |||
Purchase price | $ 145,000 | ||
Purchase price adjustments | 5,300 | ||
Cash consideration | 51,900 | ||
Pension funding required by acquisition | 22,500 | ||
Total consideration | 111,860 | ||
Restricted cash | 5,300 | ||
Working capital adjustments and pension funding | $ 27,800 | ||
Total value to allocate | |||
Total consideration | 111,860 | ||
Non-controlling interests | 221 | ||
Value to allocate | 112,081 | ||
Purchase price allocation: | |||
Cash | 4,229 | ||
Accounts receivable | 6,553 | ||
Materials & supplies | 6,533 | ||
Other current assets | 1,927 | ||
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 | (15,971) | ||
Advance payments and deposits | (7,793) | ||
Deferred tax liability | (2,935) | ||
Pension liability | (29,149) | ||
Net assets acquired | 112,081 | ||
Viya (formerly Innovative) | Term loans | |||
Consideration Transferred | |||
Debt instrument, face amount | $ 60,000 | ||
Viya (formerly Innovative) | Innovative Pension Benefit | |||
Consideration Transferred | |||
Restricted cash | $ 5,100 | ||
Minimum | Viya (formerly Innovative) | Income Approach | |||
Purchase price allocation: | |||
Discounted rate used for fair value of noncontrolling interests | 15.00% | ||
Minimum | Viya (formerly Innovative) | Customer relationships | |||
Purchase price allocation: | |||
Useful life | 7 years | ||
Minimum | Viya (formerly Innovative) | Innovative Pension Benefit | |||
Purchase price allocation: | |||
Discount rate (as a percent) | 3.60% | ||
Minimum | Viya (formerly Innovative) | Telecommunication Equipment | |||
Purchase price allocation: | |||
Useful life | 1 year | ||
Minimum | Viya (formerly Innovative) | Telecommunication Equipment | Income Approach | |||
Purchase price allocation: | |||
Discounted rate used for cash flows | 14.00% | ||
Maximum | Viya (formerly Innovative) | Income Approach | |||
Purchase price allocation: | |||
Discounted rate used for fair value of noncontrolling interests | 25.00% | ||
Maximum | Viya (formerly Innovative) | Customer relationships | |||
Purchase price allocation: | |||
Useful life | 13 years | ||
Maximum | Viya (formerly Innovative) | Innovative Pension Benefit | |||
Purchase price allocation: | |||
Discount rate (as a percent) | 3.90% | ||
Maximum | Viya (formerly Innovative) | Telecommunication Equipment | |||
Purchase price allocation: | |||
Useful life | 18 years | ||
Maximum | Viya (formerly Innovative) | Telecommunication Equipment | Income Approach | |||
Purchase price allocation: | |||
Discounted rate used for cash flows | 25.00% |
ACQUISITIONS AND DISPOSITIONS34
ACQUISITIONS AND DISPOSITIONS - Disposition - Viya (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Viya (formerly Innovative) Cable operations - USD ($) $ in Millions | Aug. 18, 2017 | Jan. 03, 2017 |
St. Maarten | ||
Disposition | ||
Consideration for sale of operations | $ 4.8 | |
Gain on disposition | $ 0.1 | |
British Virgin Islands | ||
Disposition | ||
Gain on disposition | $ 0 |
ACQUISITIONS AND DISPOSITIONS35
ACQUISITIONS AND DISPOSITIONS - Purchase Price Allocation - US Telecom (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Jul. 31, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Purchase price allocation: | |||
Goodwill | $ 63,969 | $ 62,873 | |
U.S. Telecom | |||
Consideration Transferred | |||
Cash consideration | $ 9,100 | ||
Purchase price allocation: | |||
Property, plant and equipment | 10,200 | ||
Deferred tax liabilities | 3,500 | ||
Other long term liabilities | 700 | ||
Goodwill | $ 3,100 |
ACQUISITIONS AND DISPOSITIONS36
ACQUISITIONS AND DISPOSITIONS - Disposition - Sovernet (Details) - USD ($) $ in Thousands | Mar. 08, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Assets and liabilities disposed | ||||
Purchase of non-controlling interests | $ 1,104 | $ 7,045 | ||
Loss on deconsolidation of subsidiary | 529 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Sovernet | ||||
Disposition | ||||
Cash proceeds | $ 20,900 | |||
Receivables, escrowed | 3,000 | |||
Contingent consideration | 2,000 | 0 | ||
Total cash proceeds including working capital adjustments | 25,926 | |||
Assets and liabilities disposed | ||||
Cash | 1,821 | |||
Accounts receivable | 1,696 | |||
Inventory | 639 | |||
Prepayments and other current assets | 1,034 | |||
Property, plant and equipment | 25,294 | |||
Other assets | 288 | |||
Accounts payable and accrued liabilities | (1,718) | |||
Advance payments and deposits | (1,897) | |||
Net assets disposed | 27,157 | |||
Consideration less net assets disposed | (1,231) | |||
Transaction costs: | (1,156) | |||
Loss | (2,387) | |||
Purchase of non-controlling interests | 700 | |||
Non-controlling interest book value | 0 | |||
Loss on deconsolidation of subsidiary | 500 | |||
Transaction-related charges | $ 600 | |||
Impairment charges | $ 11,100 | |||
Impairment of long-lived assets | 3,600 | |||
Goodwill impairment | $ 7,500 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Sovernet | Maximum | ||||
Disposition | ||||
Contingent consideration | $ 4,000 |
ACQUISITIONS AND DISPOSITIONS37
ACQUISITIONS AND DISPOSITIONS - Pro Forma Results (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 01, 2016 | May 03, 2016 | Sep. 30, 2016 | Sep. 30, 2016 |
One Communications (formerly KeyTech) | ||||
Acquisition | ||||
Retirement of debt | $ 24,700 | |||
Viya (formerly Innovative) | ||||
Acquisition | ||||
Retirement of debt | $ 185,800 | |||
Viya (formerly Innovative) | Term loans | ||||
Acquisition | ||||
Debt Instrument, Face Amount | $ 60,000 | |||
One Communications and Viya | ||||
Pro Forma | ||||
Revenue | $ 407,096 | |||
Net income (loss) attributable to ATN International, Inc. Stockholders | $ 12,768 | |||
Earnings per share: Basic (in dollars per share) | $ 0.79 | |||
Earnings per share: Diluted (in dollars per share) | $ 0.79 | |||
One Communications and Viya | As reported | ||||
Pro Forma | ||||
Revenue | $ 328,471 | |||
Net income (loss) attributable to ATN International, Inc. Stockholders | $ 10,206 | |||
Earnings per share: Basic (in dollars per share) | $ 0.63 | |||
Earnings per share: Diluted (in dollars per share) | $ 0.63 | |||
One Communications and Viya | ||||
Acquisition | ||||
Impairment charges | $ 5,400 |
ACQUISITIONS AND DISPOSITIONS38
ACQUISITIONS AND DISPOSITIONS - Purchase Price Allocation - Vibrant Energy (Details) - USD ($) $ in Thousands | Apr. 07, 2016 | Sep. 30, 2017 | Dec. 31, 2016 |
Purchase price allocation: | |||
Goodwill | $ 63,969 | $ 62,873 | |
Vibrant Energy | |||
Purchase price allocation: | |||
Cash | $ 136 | ||
Prepayments and other assets | 636 | ||
Property, plant and equipment | 7,321 | ||
Goodwill | 3,279 | ||
Accounts payable and accrued liabilities | (5,179) | ||
Net assets acquired | 6,193 | ||
Consideration Transferred | |||
Total consideration | $ 6,193 | ||
Cash consideration | 4,900 | ||
Contingent Consideration | $ 1,300 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Fair value measurements | |||
Strategic investments | $ 18,107 | $ 2,000 | |
Cost method investments | 20,100 | ||
Carrying Value | |||
Fair value measurements | |||
Long-term debt | 159,700 | $ 156,800 | |
Significant Other Observable Inputs (Level 2) | Estimated Fair Value | |||
Fair value measurements | |||
Long-term debt | 163,100 | 159,900 | |
Recurring basis | |||
Fair value measurements | |||
Total assets measured at fair value | 68,636 | ||
Recurring basis | Certificate of deposit | |||
Fair value measurements | |||
Cash and cash equivalents | 391 | ||
Recurring basis | Money market funds | |||
Fair value measurements | |||
Cash and cash equivalents | 29,027 | ||
Recurring basis | Short Term Investments | |||
Fair value measurements | |||
Investments | 9,237 | ||
Recurring basis | Commercial paper | |||
Fair value measurements | |||
Investments | 29,981 | ||
Recurring basis | Quoted Prices in Active Markets (Level 1) | |||
Fair value measurements | |||
Total assets and liabilities measured at fair value | 2,658 | ||
Total assets measured at fair value | 30,778 | ||
Recurring basis | Quoted Prices in Active Markets (Level 1) | Money market funds | |||
Fair value measurements | |||
Cash and cash equivalents | 2,287 | 29,027 | |
Recurring basis | Quoted Prices in Active Markets (Level 1) | Short Term Investments | |||
Fair value measurements | |||
Investments | 371 | 1,751 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | |||
Fair value measurements | |||
Total assets and liabilities measured at fair value | 57,942 | ||
Total assets measured at fair value | 37,858 | ||
Recurring basis | Significant Other Observable Inputs (Level 2) | Interest rate swap | |||
Fair value measurements | |||
Derivative liabilities | (42) | ||
Recurring basis | Significant Other Observable Inputs (Level 2) | Certificate of deposit | |||
Fair value measurements | |||
Cash and cash equivalents | 391 | 391 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Short Term Investments | |||
Fair value measurements | |||
Investments | 7,486 | 7,486 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Commercial paper | |||
Fair value measurements | |||
Investments | 50,107 | $ 29,981 | |
Recurring basis | Unobservable Inputs (Level 3) | |||
Fair value measurements | |||
Total assets and liabilities measured at fair value | 60,600 | ||
Recurring basis | Unobservable Inputs (Level 3) | Interest rate swap | |||
Fair value measurements | |||
Derivative liabilities | (42) | ||
Recurring basis | Unobservable Inputs (Level 3) | Certificate of deposit | |||
Fair value measurements | |||
Cash and cash equivalents | 391 | ||
Recurring basis | Unobservable Inputs (Level 3) | Money market funds | |||
Fair value measurements | |||
Cash and cash equivalents | 2,287 | ||
Recurring basis | Unobservable Inputs (Level 3) | Short Term Investments | |||
Fair value measurements | |||
Investments | 7,857 | ||
Recurring basis | Unobservable Inputs (Level 3) | Commercial paper | |||
Fair value measurements | |||
Investments | $ 50,107 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | May 22, 2017 | May 03, 2016 | Sep. 30, 2017 | Jul. 31, 2017 | May 21, 2017 | Mar. 31, 2017 | Dec. 19, 2016 | Jul. 01, 2016 | Jan. 11, 2016 | Jan. 10, 2016 | Dec. 24, 2014 | Dec. 19, 2014 |
Interest rate swap | Cash flow hedge | ||||||||||||
Long-term debt | ||||||||||||
Notional amount | $ 11 | |||||||||||
Interest rate | 1.874% | |||||||||||
Revolver loan | Amended Credit Facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 400 | $ 275 | $ 225 | |||||||||
Borrowings | $ 0 | |||||||||||
Revolver loan | Amended Credit Facility | Minimum | ||||||||||||
Long-term debt | ||||||||||||
Commitment fee (as a percent) | 0.175% | |||||||||||
Revolver loan | Amended Credit Facility | Minimum | LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 1.50% | |||||||||||
Revolver loan | Amended Credit Facility | Minimum | Base rate | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||||||
Revolver loan | Amended Credit Facility | Maximum | ||||||||||||
Long-term debt | ||||||||||||
Commitment fee (as a percent) | 0.25% | |||||||||||
Revolver loan | Amended Credit Facility | Maximum | LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 1.75% | |||||||||||
Revolver loan | Amended Credit Facility | Maximum | Base rate | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 0.75% | |||||||||||
Swingline sub-facility | Amended Credit Facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | 10 | |||||||||||
Swingline sub-facility | Amended Credit Facility | Federal Funds Effective Rate | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||||||
Swingline sub-facility | Amended Credit Facility | Minimum | Base rate | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 1.00% | |||||||||||
Letter of credit sub-facility | Amended Credit Facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | 10 | |||||||||||
Term loans | Amended Credit Facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 200 | |||||||||||
Ahana Debt | ||||||||||||
Long-term debt | ||||||||||||
Term loan assumed | $ 38.9 | |||||||||||
Ahana Debt | Minimum | ||||||||||||
Long-term debt | ||||||||||||
Effective interest rate (as a percent) | 4.50% | |||||||||||
Ahana Debt | Maximum | ||||||||||||
Long-term debt | ||||||||||||
Effective interest rate (as a percent) | 6.00% | |||||||||||
PSE&G | ||||||||||||
Long-term debt | ||||||||||||
Stated interest rate | 11.30% | |||||||||||
Outstanding debt | $ 2.3 | |||||||||||
Series A Notes And Series B Notes | Ahana Operations | ||||||||||||
Long-term debt | ||||||||||||
Financing costs | 2.8 | |||||||||||
Outstanding debt | 64.6 | |||||||||||
Unamortized financing costs | 2.7 | |||||||||||
Series A Notes | Ahana Operations | ||||||||||||
Long-term debt | ||||||||||||
Debt instrument, face amount | $ 20.6 | |||||||||||
Stated interest rate | 4.427% | |||||||||||
Series B Notes | Ahana Operations | ||||||||||||
Long-term debt | ||||||||||||
Debt instrument, face amount | $ 45.2 | |||||||||||
Stated interest rate | 5.327% | |||||||||||
One Communications Debt | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 37.5 | |||||||||||
Financing costs | $ 0.3 | |||||||||||
Outstanding debt | 36.6 | |||||||||||
Unamortized financing costs | 0.3 | |||||||||||
One Communications Debt | Minimum | ||||||||||||
Long-term debt | ||||||||||||
Percentage of notional amount required for hedging arrangement | 30.00% | |||||||||||
One Communications Debt | Minimum | Three month LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 2.50% | |||||||||||
One Communications Debt | Maximum | ||||||||||||
Long-term debt | ||||||||||||
Period to enter into hedging arrangement | 90 days | |||||||||||
One Communications Debt | Maximum | Three month LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 2.75% | |||||||||||
One Communications Debt | Overdraft Facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 10 | $ 5 | ||||||||||
Borrowings | $ 0 | |||||||||||
One Communications Debt | Overdraft Facility | Three month LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 1.75% | |||||||||||
Viya Debt | ||||||||||||
Long-term debt | ||||||||||||
Debt instrument, face amount | $ 60 | |||||||||||
Financing costs | $ 0.9 | |||||||||||
Stated interest rate | 4.00% | |||||||||||
Outstanding debt | $ 60 | |||||||||||
Unamortized financing costs | $ 0.8 | |||||||||||
One Communications (formerly KeyTech) | Term loans | ||||||||||||
Long-term debt | ||||||||||||
Term loan assumed | $ 35.4 | |||||||||||
Outstanding debt | $ 28.9 | |||||||||||
One Communications (formerly KeyTech) | Term loans | Three month LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 3.25% | |||||||||||
Mobility Funds | Letter of credit sub-facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 25 |
GOVERNMENT GRANTS (Details)
GOVERNMENT GRANTS (Details) - Mobility Funds - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2017 | |
MOBILITY FUND GRANTS | ||
Mobility Funds received | $ 21.1 | |
Period over which a portion of the Mobility Funds is used to offset the costs of supporting the networks | 5 years | |
U.S. Telecom | ||
MOBILITY FUND GRANTS | ||
Mobility Funds received | 21.1 | |
Grant funds used to offset operating expenses | 13.9 | |
Mobility funds received and recorded to date | 9 | |
U.S. Telecom | Property, Plant and Equipment | ||
MOBILITY FUND GRANTS | ||
Grant funds used to offset fixed asset related costs | 7.2 | |
U.S. Telecom | Other current liabilities | ||
MOBILITY FUND GRANTS | ||
Grant funds used to offset operating expenses | $ 4.9 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stockholders' equity | ||||
Equity, beginning of period | $ 809,169 | $ 761,724 | ||
Stock-based compensation | 5,415 | 5,034 | ||
Comprehensive income: | ||||
Net income | $ (20,976) | $ 11,694 | 1,519 | 20,606 |
Projected pension benefit obligation | 513 | |||
Unrealized gain (loss) on securities | 67 | (65) | ||
Reclassifications of gains on sale of marketable securities to net income | (1,044) | |||
Foreign currency translation adjustment | (1,311) | (164) | 921 | (200) |
Comprehensive income (loss) | (22,220) | 11,530 | 1,844 | 20,406 |
Issuance of common stock upon exercise of stock options | 1,057 | 1,371 | ||
Dividends declared on common stock | (13,680) | (15,838) | ||
Distributions to non-controlling interests | (3,761) | (7,828) | ||
Investments made by non-controlling interests | 123 | 22,409 | ||
Acquisition from non-controlling interest | (576) | |||
Loss on deconsolidation of subsidiary | 529 | |||
Repurchase of non-controlling interests | (1,104) | (7,045) | ||
Purchase of treasury stock | (12,968) | (4,755) | ||
Equity, end of period | 786,734 | 807,840 | 786,734 | 807,840 |
One Communications (formerly KeyTech) | ||||
Comprehensive income: | ||||
Acquisition | 32,717 | |||
Viya (formerly Innovative) | ||||
Comprehensive income: | ||||
Acquisition | 221 | |||
Accounting Standards Update 2016-09 | ||||
Comprehensive income: | ||||
Change in accounting method- adoption of ASC 2016-09 | 110 | |||
Total ATNI Stockholders' Equity | ||||
Stockholders' equity | ||||
Equity, beginning of period | 677,055 | 680,299 | ||
Stock-based compensation | 5,415 | 5,034 | ||
Comprehensive income: | ||||
Net income | (12,016) | 10,206 | ||
Projected pension benefit obligation | 513 | |||
Unrealized gain (loss) on securities | (65) | |||
Reclassifications of gains on sale of marketable securities to net income | (1,044) | |||
Foreign currency translation adjustment | 921 | (200) | ||
Comprehensive income (loss) | (11,691) | 10,006 | ||
Issuance of common stock upon exercise of stock options | 1,057 | 1,371 | ||
Dividends declared on common stock | (13,680) | (15,838) | ||
Acquisition from non-controlling interest | (306) | |||
Repurchase of non-controlling interests | (670) | (4,105) | ||
Purchase of treasury stock | (12,968) | (4,755) | ||
Equity, end of period | 644,628 | 671,706 | 644,628 | 671,706 |
Total ATNI Stockholders' Equity | Accounting Standards Update 2016-09 | ||||
Comprehensive income: | ||||
Change in accounting method- adoption of ASC 2016-09 | 110 | |||
Non-Controlling Interests | ||||
Stockholders' equity | ||||
Equity, beginning of period | 132,114 | 81,425 | ||
Comprehensive income: | ||||
Net income | 13,535 | 10,400 | ||
Comprehensive income (loss) | 13,535 | 10,400 | ||
Distributions to non-controlling interests | (3,761) | (7,828) | ||
Investments made by non-controlling interests | 123 | 22,409 | ||
Acquisition from non-controlling interest | (270) | |||
Loss on deconsolidation of subsidiary | 529 | |||
Repurchase of non-controlling interests | (434) | (2,940) | ||
Equity, end of period | $ 142,106 | $ 136,134 | $ 142,106 | 136,134 |
Non-controlling interest's cash contribution to subsidiary | 21,700 | |||
Non-Controlling Interests | One Communications (formerly KeyTech) | ||||
Comprehensive income: | ||||
Acquisition | 32,717 | |||
Non-Controlling Interests | Viya (formerly Innovative) | ||||
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation from basic to diluted weighted average common shares outstanding | ||||
Basic weighted-average shares of common stock outstanding | 16,178,000 | 16,148,000 | 16,177,000 | 16,128,000 |
Stock options (in shares) | 93,000 | 100,000 | ||
Diluted weighted-average shares of common stock outstanding | 16,178,000 | 16,241,000 | 16,177,000 | 16,228,000 |
Anti-dilutive potential shares excluded from the computation of diluted weighted average shares outstanding (in shares) | 5,000 | 5,000 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenue | |||||
Revenue | $ 122,132 | $ 138,795 | $ 373,492 | $ 328,471 | |
Depreciation and amortization | 21,157 | 21,866 | 65,904 | 52,913 | |
Non-cash stock-based compensation | 1,658 | 1,399 | 5,437 | 5,032 | |
Operating income (loss) | (19,525) | 22,081 | 14,118 | 39,886 | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 232,454 | 232,454 | $ 278,958 | ||
Total current assets | 334,738 | 334,738 | 367,369 | ||
Fixed assets, net | 624,595 | 624,595 | 647,712 | ||
Goodwill | 63,969 | 63,969 | 62,873 | ||
Total assets | 1,184,018 | 1,184,018 | 1,198,218 | ||
Total current liabilities | 173,677 | 173,677 | 150,105 | ||
Total debt | 159,651 | 159,651 | 156,823 | ||
Capital Expenditures | |||||
Capital expenditures | 108,276 | 78,455 | |||
Wireless | |||||
Revenue | |||||
Revenue | 57,254 | 61,151 | 167,945 | 177,300 | |
Wireline | |||||
Revenue | |||||
Revenue | 56,309 | 66,129 | 181,568 | 122,190 | |
Renewable energy | |||||
Revenue | |||||
Revenue | 4,974 | 5,784 | 14,765 | 16,935 | |
Equipment and other | |||||
Revenue | |||||
Revenue | 3,595 | 5,731 | 9,214 | 12,046 | |
Corporate and Other | |||||
Revenue | |||||
Depreciation and amortization | 1,112 | 1,567 | 3,526 | 4,385 | |
Non-cash stock-based compensation | 1,621 | 1,371 | 5,205 | 4,946 | |
Operating income (loss) | (7,997) | (10,219) | (25,952) | (27,398) | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 70,643 | 70,643 | 131,664 | ||
Total current assets | 84,729 | 84,729 | 135,745 | ||
Fixed assets, net | 18,271 | 18,271 | 15,429 | ||
Total assets | 174,719 | 174,719 | 170,505 | ||
Total current liabilities | 15,692 | 15,692 | 18,838 | ||
Capital Expenditures | |||||
Capital expenditures | 4,778 | 4,877 | |||
U.S. Telecom | Operating segments | |||||
Revenue | |||||
Revenue | 40,111 | 47,560 | 120,881 | 137,703 | |
Depreciation and amortization | 6,301 | 6,211 | 19,098 | 17,510 | |
Operating income (loss) | 15,987 | 18,120 | 44,520 | 39,698 | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 31,328 | 31,328 | 22,235 | ||
Total current assets | 61,473 | 61,473 | 50,983 | ||
Fixed assets, net | 100,349 | 100,349 | 129,274 | ||
Goodwill | 35,268 | 35,268 | 35,268 | ||
Total assets | 221,528 | 221,528 | 240,006 | ||
Total current liabilities | 53,065 | 53,065 | 23,162 | ||
Capital Expenditures | |||||
Capital expenditures | 17,396 | 26,709 | |||
U.S. Telecom | Operating segments | Wireless | |||||
Revenue | |||||
Revenue | 36,830 | 40,076 | 108,499 | 117,194 | |
U.S. Telecom | Operating segments | Wireline | |||||
Revenue | |||||
Revenue | 2,336 | 6,936 | 10,443 | 18,793 | |
U.S. Telecom | Operating segments | Equipment and other | |||||
Revenue | |||||
Revenue | 945 | 548 | 1,939 | 1,716 | |
International Telecom segment | Operating segments | |||||
Revenue | |||||
Revenue | 77,011 | 85,313 | 237,672 | 173,574 | |
Depreciation and amortization | 12,088 | 12,861 | 38,339 | 27,376 | |
Non-cash stock-based compensation | 8 | 146 | |||
Operating income (loss) | (28,491) | 11,358 | (7,713) | 28,320 | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 111,336 | 111,336 | 97,681 | ||
Total current assets | 163,235 | 163,235 | 143,201 | ||
Fixed assets, net | 347,421 | 347,421 | 372,741 | ||
Goodwill | 25,421 | 25,421 | 24,326 | ||
Total assets | 586,747 | 586,747 | 597,454 | ||
Total current liabilities | 86,359 | 86,359 | 95,502 | ||
Total debt | 95,464 | 95,464 | 91,316 | ||
Capital Expenditures | |||||
Capital expenditures | 54,775 | 36,543 | |||
International Telecom segment | Operating segments | Wireless | |||||
Revenue | |||||
Revenue | 20,424 | 21,075 | 59,446 | 60,106 | |
International Telecom segment | Operating segments | Wireline | |||||
Revenue | |||||
Revenue | 53,973 | 59,193 | 171,125 | 103,397 | |
International Telecom segment | Operating segments | Equipment and other | |||||
Revenue | |||||
Revenue | 2,614 | 5,045 | 7,101 | 10,071 | |
Renewable energy | Operating segments | |||||
Revenue | |||||
Revenue | 5,010 | 5,922 | 14,939 | 17,194 | |
Depreciation and amortization | 1,656 | 1,227 | 4,941 | 3,642 | |
Non-cash stock-based compensation | 29 | 28 | 86 | 86 | |
Operating income (loss) | 976 | 2,822 | 3,263 | (734) | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 19,147 | 19,147 | 27,378 | ||
Total current assets | 25,301 | 25,301 | 37,440 | ||
Fixed assets, net | 158,554 | 158,554 | 130,268 | ||
Goodwill | 3,280 | 3,280 | 3,279 | ||
Total assets | 201,024 | 201,024 | 190,253 | ||
Total current liabilities | 18,561 | 18,561 | 12,603 | ||
Total debt | 64,187 | 64,187 | $ 65,507 | ||
Capital Expenditures | |||||
Capital expenditures | 31,327 | 10,326 | |||
Renewable energy | Operating segments | Renewable energy | |||||
Revenue | |||||
Revenue | 4,974 | 5,784 | 14,765 | 16,935 | |
Renewable energy | Operating segments | Equipment and other | |||||
Revenue | |||||
Revenue | $ 36 | $ 138 | $ 174 | $ 259 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2011 | |
Contingency related to spectrum fees | ||
Commitments and contingencies | ||
Spectrum fees paid | $ 2.6 | |
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 | |
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% |