UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-12593

ATN INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)	47-0728886 (I.R.S. Employer Identification No.)
500 Cummings Center, Suite 2450 Beverly, Massachusetts (Address of principal executive offices)	01915 (Zip Code)

(978) 619-1300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	ATNI	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧◻		Accelerated filer ◻⌧

Non-accelerated filer ◻		Smaller reporting company ☐
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ⌧

As of May 10, ~~2021,~~2022, the registrant had outstanding ~~15,921,222~~15,744,687 shares of its common stock ($.01 par value).

Table of Contents

ATN INTERNATIONAL, INC.

FORM 10-Q

Quarter Ended March 31, ~~2021~~2022


CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS		3

PART I—FINANCIAL INFORMATION		4

Item 1	Unaudited Condensed Consolidated Financial Statements	4

	Condensed Consolidated Balance Sheets at March 31, ~~2021~~2022 and December 31, ~~2020~~2021	4

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	5

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	6

	Condensed Consolidated Statements of Equity for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	7

	Condensed Consolidated Statements of Cash Flows for ~~the~~ Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	8

	Notes to Unaudited Condensed Consolidated Financial Statements	9

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~30-50~~38-59

Item 3	Quantitative and Qualitative Disclosures About Market Risk	5059

Item 4	Controls and Procedures	5059

PART II—OTHER INFORMATION		5159

Item 1	Legal Proceedings	5159

Item 1A	Risk Factors	5160

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	5160

Item 5	Other Information	5261

Item 6	Exhibits	5261

SIGNATURES		5462

CERTIFICATIONS

Table of Contents

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (or the “Report”) contains forward-looking statements relating to, among other matters, our future financial performance and results of operations, including our expectations regarding the benefits of our acquisition of Alaska Communications; the impact of federal support program revenues; the ~~novel coronavirus pandemic~~impact of COVID-19 on the economies of the markets we serve, and on our business and operations; expectations regarding future revenue, operating income, EBITDA and capital expenditures; the competitive environment in our key markets, demand for our services and industry trends; our expectations regarding construction progress under our agreement as part of the FirstNet Transaction and the effect such progress will have on our financial results; expectations regarding litigation; our liquidity; and management’s plans and strategy for the future. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events or results. Actual future events and results could differ materially from the events and results indicated in these statements as a result of many factors, including, among others, (1) our ability to successfully transition our U.S. Telecom business away from wholesale wireless to other carrier and consumer-based services; (2) the general performance of our operations, including operating margins, revenues, capital expenditures, and the retention of and future growth ~~and retention~~ of our ~~major customers~~subscriber base and ~~subscriber base; (2)~~ARPU; (3) our ability to ~~maintain favorable roaming arrangements, receive roaming traffic~~realize cost synergies and expansion plans for our newly acquired Alaska Communications business; (4) our ability to satisfy the needs and demands of our major ~~wireless~~carrier customers; ~~(3)~~(5) our ability to efficiently and cost-effectively upgrade our networks and IT platforms to address rapid and significant technological changes in the telecommunications industry; ~~(4)~~(6) government subsidy program availability and regulation of our businesses, which may impact our ~~FCC~~revenue, expansion plans and ~~other telecommunications licenses; (5)~~operating costs; (7) our reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure; ~~(6)~~(8) economic, political and other risks and opportunities facing our operations, including those resulting from the ~~pandemic; (7)~~pandemic, geopolitical tensions, including the Ukraine invasion, and inflation, including increased costs and supply chain disruptions; (9) the loss of or an inability to recruit skilled personnel in our various jurisdictions, including key members of management; ~~(8) our ability to successfully complete our pending acquisition of Alaska Communications and recognize the expected benefits of such acquisition; (9)~~(10) our ability to find investment or acquisition or disposition opportunities that fit the strategic goals of the Company; ~~(10)~~(11) the occurrence of weather events and natural catastrophes and our ability to secure the appropriate level of insurance coverage for these assets; ~~(11)~~(12) increased competition; ~~(12)~~(13) the adequacy and expansion capabilities of our network capacity and customer service system to support our customer growth; ~~(13)~~and (14) our continued access to capital and credit ~~markets; (14) the impact of our investments and acquisitions; and (15) the risk of currency fluctuation for those markets in which we operate.~~ markets. These and other additional factors that may cause actual future events and results to differ materially from the events and results indicated in the forward-looking statements above are set forth more fully under Item 1A “Risk Factors” in each of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the SEC on March ~~1, 2021,~~16, 2022, and the other reports we file from time to time with the SEC. The Company undertakes no obligation and has no intention to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors that may affect such forward-looking statements, except as required by law.

In this Report, the words “the Company,” “we,” “our,” “ours,” “us” and “ATN” refer to ATN International, Inc. and its subsidiaries. This Report contains trademarks, service marks and trade names that are the property of, or licensed by, ATN and its subsidiaries.

Reference to dollars ($) refer to US dollars unless otherwise specifically indicated.

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

ATN INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In Thousands, Except Share Data)


	March 31,		December 31,		March 31,		December 31,
	2021		2020		2022		2021
ASSETS
Current Assets:
Cash and cash equivalents	$	91,259	$	103,925	$	75,748	$	79,601
Restricted cash		1,072		1,072		1,097		1,096
Accounts receivable, net of allowances for credit losses of $13.0 million and $12.1 million, respectively		41,600		44,152
Short-term investments						300		300
Accounts receivable, net of allowances for credit losses of $15.0 million and $13.9 million, respectively						70,109		73,701
Customer receivable		2,365		1,227		4,336		4,145
Inventory, materials and supplies		6,185		5,504		9,984		10,177
Prepayments and other current assets		52,796		49,450		59,267		63,597
Assets held for sale		—		34,735
Total current assets		195,277		240,065		220,841		232,617
Fixed Assets:
Property, plant and equipment		1,264,279		1,252,780		1,759,855		1,748,092
Less accumulated depreciation		(736,208)		(716,318)		(825,980)		(804,883)
Net fixed assets		528,071		536,462		933,875		943,209
Telecommunication licenses, net		114,083		114,083		113,766		113,766
Goodwill		60,690		60,691		40,104		40,104
Customer relationships, net		5,560		5,913
Intangible assets, net						41,067		44,294
Operating lease right-of-use assets		61,762		63,235		118,091		118,843
Customer receivable - long term		21,056		9,614		40,206		39,652
Other assets		71,223		53,648		82,757		76,119
Total assets	$	1,057,722	$	1,083,711	$	1,590,707	$	1,608,604
LIABILITIES AND EQUITY
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	3,750	$	3,750	$	3,743	$	4,665
Current portion of Customer receivable credit facility		1,101		—
Current portion of customer receivable credit facility						5,280		4,620
Accounts payable and accrued liabilities		74,529		96,205		113,698		151,463
Dividends payable		2,708		2,703		2,676		2,672
Accrued taxes		8,495		7,501		6,680		5,681
Current portion of lease liabilities		12,446		12,371		16,953		16,201
Advance payments and deposits		24,727		24,681		35,696		35,642
Liabilities held for sale		—		717
Total current liabilities		127,756		147,928		184,726		220,944
Deferred income taxes		8,171		10,675		21,651		21,460
Lease liabilities, excluding current portion		50,902		51,082		91,494		91,719
Other liabilities		50,738		50,617		140,246		142,033
Customer receivable credit facility, net of current portion		9,713		—		36,515		30,148
Long-term debt, excluding current portion		68,173		69,073		348,463		327,111
Total liabilities		315,453		329,375		823,095		833,415
Commitments and contingencies (Note 14)
Redeemable noncontrolling interests:
Preferred redeemable noncontrolling interests						51,412		50,296
Common redeemable noncontrolling interests						22,640		22,640
Total redeemable noncontrolling interests						74,052		72,936
ATN International, Inc. Stockholders’ Equity:
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, NaN issued and outstanding		—		—		—		—
Common stock, $0.01 par value per share; 50,000,000 shares authorized; 17,449,541 and 17,383,898 shares issued, respectively, 15,920,141 and 15,898,477 shares outstanding, respectively		172		172
Treasury stock, at cost; 1,529,400 and 1,485,421 shares, respectively		(61,677)		(59,456)
Common stock, $0.01 par value per share; 50,000,000 shares authorized; 17,562,666 and 17,476,542 shares issued, respectively, 15,742,780 and 15,712,941 shares outstanding, respectively						172		172
Treasury stock, at cost; 1,819,885 and 1,763,601 shares, respectively						(73,795)		(71,714)
Additional paid-in capital		186,930		187,754		193,164		192,132
Retained earnings		516,897		516,901		470,056		475,887
Accumulated other comprehensive income		269		278		5,195		4,773
Total ATN International, Inc. stockholders’ equity		642,591		645,649		594,792		601,250
Non-controlling interests		99,678		108,687
Noncontrolling interests						98,768		101,003
Total equity		742,269		754,336		693,560		702,253
Total liabilities and equity	$	1,057,722	$	1,083,711
Total liabilities, redeemable noncontrolling interests and equity					$	1,590,707	$	1,608,604

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ATN INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, ~~2021~~2022 AND ~~2020~~2021

(Unaudited)

(In Thousands, Except Per Share Data)

Three months ended March 31,

2021

2020
REVENUE:

Communication services

$
110,636

$
107,904
Other

13,874

3,001
Total revenue

124,510

110,905
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated):

Cost of services

49,507

46,602
Cost of construction revenue

12,606

—
Selling, general and administrative

37,693

34,427
Transaction-related charges

730

44
Depreciation and amortization

20,508

22,518
Loss on disposition of long-lived assets

117

15
Total operating expenses

121,161

103,606
Income from operations

3,349

7,299
OTHER INCOME (EXPENSE)

Interest income

(6)

243
Interest expense

(1,147)

(1,156)
Other income (expense)

2,375

(2,901)
Other income (expense), net

1,222

(3,814)
INCOME BEFORE INCOME TAXES

4,571

3,485
Income tax provisions

295

1,109
NET INCOME

4,276

2,376
Net income attributable to non-controlling interests, net of tax expense of $0.1 million and $0.3 million, respectively.

(1,570)

(3,390)
NET INCOME (LOSS) ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS

$
2,706

$
(1,014)
NET INCOME (LOSS) PER WEIGHTED AVERAGE SHARE ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS:

Basic

$
0.17

$
(0.06)
Diluted

$
0.17

$
(0.06)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

15,902

16,001
Diluted

15,952

16,001
DIVIDENDS PER SHARE APPLICABLE TO COMMON STOCK

$
0.17

$
0.17


	Three months ended March 31,
	2022		2021
REVENUE:
Communication services	$	166,543	$	110,636
Construction		1,987		12,306
Other		3,489		1,568
Total revenue		172,019		124,510
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated):
Cost of communication services and other		73,011		49,507
Cost of construction revenue		2,033		12,606
Selling, general and administrative		56,343		37,693
Transaction-related charges		554		730
Depreciation and amortization		33,292		20,111
Amortization of intangibles from acquisitions		3,258		397
Loss on disposition of long-lived assets		3,420		117
Total operating expenses		171,911		121,161
Income from operations		108		3,349
OTHER INCOME (EXPENSE)
Interest income		51		(6)
Interest expense		(3,363)		(1,147)
Other income		4,199		2,375
Other income (expense), net		887		1,222
INCOME BEFORE INCOME TAXES		995		4,571
Income tax provision		2,952		295
NET INCOME (LOSS)		(1,957)		4,276
Net income (loss) attributable to noncontrolling interests, net of tax expense (benefit) of $(0.5) million and $0.1 million, respectively.		1,009		(1,570)
NET INCOME (LOSS) ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS	$	(948)	$	2,706
NET INCOME (LOSS) PER WEIGHTED AVERAGE SHARE ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS:
Basic	$	(0.13)	$	0.17
Diluted	$	(0.13)	$	0.17
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		15,708		15,902
Diluted		15,708		15,952
DIVIDENDS PER SHARE APPLICABLE TO COMMON STOCK	$	0.17	$	0.17

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ATN INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, ~~2021~~2022 AND ~~2020~~2021

(Unaudited)

(In Thousands)



	Three months ended March 31,				Three months ended March 31,
	2021		2020		2022		2021
Net income	$	4,276	$	2,376
Net income (loss)					$	(1,957)	$	4,276
Other comprehensive income (loss):
Foreign currency translation adjustment		(40)		(4,425)		256		(40)
Unrealized gain (loss) on derivatives		31		(177)		166		31
Other comprehensive income (loss), net of tax		(9)		(4,602)		422		(9)
Comprehensive income		4,267		(2,226)
Less: Comprehensive income attributable to non-controlling interests		(1,570)		(3,390)
Comprehensive income (loss)						(1,535)		4,267
Less: Comprehensive income (loss) attributable to noncontrolling interests						1,009		(1,570)
Comprehensive income (loss) attributable to ATN International, Inc.	$	2,697	$	(5,616)	$	(526)	$	2,697

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ATN INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, ~~2021~~2022 AND ~~2020~~2021

(Unaudited)

(In Thousands, Except Per Share Data)

Accumulated

Total




Treasury

Additional

Other

ATNI

Non-

Common

Stock,

Paid In

Retained

Comprehensive

Stockholders’

Controlling

Total

Stock

at cost

Capital

Earnings

Income/(Loss)

Equity

Interests

Equity
Balance, December 31, 2020

$
172

$
(59,456)

$
187,754

$
516,901

$
278

$
645,649

$
108,687

$
754,336
Purchase of 43,978 shares of common stock

—

(2,221)

—

—

—

(2,221)

—

(2,221)
Stock-based compensation

—

—

1,262

—

—

1,262

74

1,336
Dividends declared on common stock ($0.17 per common share)

—

—

—

(2,710)

—

(2,710)

—

(2,710)
Distributions to non-controlling interests

—

—

—

—

—

—

(1,530)

(1,530)
Repurchase of non-controlling interests

—

—

(2,086)

—

—

(2,086)

(9,123)

(11,209)
Comprehensive income:

Net income

—

—

—

2,706

—

2,706

1,570

4,276
Other comprehensive loss

—

—

—

—

(9)

(9)

—

(9)
Total comprehensive income

—

—

—

—

—

2,697

1,570

4,267
Balance, March 31, 2021

$
172

$
(61,677)

$
186,930

$
516,897

$
269

$
642,591

$
99,678

$
742,269

Balance, December 31, 2019

$
172

$
(51,129)

$
188,471

$
541,890

$
(3,282)

$
676,122

$
129,961

$
806,083
Issuance of 62,892 shares of common stock upon exercise of stock options

—

(3,229)

—

—

—

(3,229)

—

(3,229)
Stock-based compensation

—

—

1,196

—

—

1,196

(36)

1,160
Dividends declared on common stock ($0.17 per common share)

—

—

—

(2,715)

—

(2,715)

—

(2,715)
Distributions to non-controlling interests

—

—

—

—

—

—

(4,220)

(4,220)
Repurchase of non-controlling interests

—

—

—

—

—

—

(1,774)

(1,774)
Comprehensive income (loss):

Net income (loss)

—

—

—

(1,014)

—

(1,014)

3,390

2,376
Other comprehensive income

—

—

—

—

(4,602)

(4,602)

—

(4,602)
Total comprehensive income (loss)

—

—

—

—

—

(5,616)

3,390

(2,226)
Balance, March 31, 2020

$
172

$
(54,358)

$
189,667

$
538,161

$
(7,884)

$
665,758

$
127,321

$
793,079


	Total Redeemable Noncontrolling Interests						Total Equity
		Redeemable		Redeemable		Total				Treasury		Additional				Redeemable		Other		ATNI		Non-
		Preferred		Common		Redeemable		Common		Stock,		Paid In		Retained		Common		Comprehensive		Stockholders’		Controlling		Total
		Units		Units		Noncontrolling Interests		Stock		at cost		Capital		Earnings		Units		Income/(Loss)		Equity		Interests		Equity
Balance, December 31, 2021	$	50,296	$	22,640	$	72,936	$	172	$	(71,714)	$	192,132	$	475,887	$	—	$	4,773	$	601,250	$	101,003	$	702,253
Purchase of 56,284 shares of common stock		—		—		—		—		(2,081)		—		—		—		—		(2,081)		—		(2,081)
Stock-based compensation		—		—		—		—		—		1,310		—		—		—		1,310		150		1,460
Dividends declared on common stock ($0.17 per common share)		—		—		—		—		—		—		(2,675)		—		—		(2,675)		(263)		(2,938)
Repurchase of noncontrolling interests		—		—		—		—		—		(278)		—		—		—		(278)		(2,205)		(2,483)
Accrued dividend - redeemable preferred units		1,116		—		1,116		—		—		—		(1,116)		—				(1,116)		—		(1,116)
Deemed dividend - redeemable common units		—		1,092		1,092		—		—		—		(1,092)		1,092		—		—		—		—
Comprehensive income:
Net income (loss)		—		(1,092)		(1,092)		—		—		—		(948)		(1,092)		—		(2,040)		83		(1,957)
Other comprehensive income		—		—		—		—		—		—		—		—		422		422		—		422
Total comprehensive income (loss)		—		(1,092)		(1,092)		—		—		—		(948)		(1,092)		422		(1,618)		83		(1,535)
Balance, March 31, 2022	$	51,412	$	22,640	$	74,052	$	172	$	(73,795)	$	193,164	$	470,056	$	—	$	5,195	$	594,792	$	98,768	$	693,560

Balance, December 31, 2020	$	—	$	—	$	—	$	172	$	(59,456)	$	187,754	$	516,901	$	—	$	278	$	645,649	$	108,687	$	754,336
Purchase of 43,978 shares of common stock		—		—		—		—		(2,221)		—		—		—		—		(2,221)		—		(2,221)
Stock-based compensation		—		—		—		—		—		1,262		—		—		—		1,262		74		1,336
Dividends declared on common stock ($0.17 per common share)		—		—		—		—		—		—		(2,710)		—		—		(2,710)		—		(2,710)
Distributions to non-controlling interests		—		—		—		—		—		—		—		—		—		—		(1,530)		(1,530)
Repurchase of noncontrolling interests		—		—		—		—		—		(2,086)		—		—		—		(2,086)		(9,123)		(11,209)
Comprehensive income:
Net income		—		—		—		—		—		—		2,706		—		—		2,706		1,570		4,276
Other comprehensive income (loss)		—		—		—		—		—		—		—		—		(9)		(9)		—		(9)
Total comprehensive income (loss)		—		—		—		—		—		—		2,706		—		(9)		2,697		1,570		4,267
Balance, March 31, 2021	$	—	$	—	$	—	$	172	$	(61,677)	$	186,930	$	516,897	$	—	$	269	$	642,591	$	99,678	$	742,269

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

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ATN INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR ~~THE~~ THREE MONTHS ENDED MARCH 31, ~~2021~~2022 AND ~~2020~~

~~(Unaudited)~~2021

(In Thousands)

Three Months Ended March 31,

2021

2020
Cash flows from operating activities:

Net income
$
4,276

$
2,376
Adjustments to reconcile net income to net cash flows provided by operating activities:

Depreciation and amortization

20,508

22,518
Provision for doubtful accounts

1,122

1,260
Amortization of debt discount and debt issuance costs

168

126
Stock-based compensation

1,336

1,160
Deferred income taxes

(2,504)

(1,135)
(Gain) loss on equity investments

(2,188)

1,775
Loss on disposition of long-lived assets

117

15
Unrealized (gain) loss on foreign currency

(81)

��
739
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions:

Accounts receivable

1,430

(10,887)
Customer receivable

(12,579)

—
Materials and supplies, prepayments, and other current assets

(253)

431
Prepaid income taxes

—

399
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities

(7,648)

(4,055)
Accrued taxes

1,810

355
Other assets

(242)

298
Other liabilities

51

84
Net cash provided by operating activities

5,323

15,459
Cash flows from investing activities:

Capital expenditures

(19,495)

(14,061)
Reimbursable capital expenditures

(6,185)

—
Receipt of government grants

3,292

—
Divestiture of businesses, net of transferred cash of $0.9 million

18,597

—
Purchases of strategic investments

(4,155)

(2,768)
Net cash used in investing activities

(7,946)

(16,829)
Cash flows from financing activities:

Dividends paid on common stock

(2,703)

(2,721)
Distributions to non-controlling interests

(3,530)

(4,220)
Payment of debt issuance costs

53

(1,010)
Principal repayments of term loan

(938)

(938)
Purchases of common stock – stock-based compensation

(1,677)

(1,625)
Purchases of common stock – share repurchase plan

(540)

(1,600)
Repurchases of non-controlling interests

(11,522)

(1,774)
Customer receivable credit facility borrowing

10,814

—
Net cash used in financing activities

(10,043)

(13,888)
Effect of foreign currency exchange rates on cash and cash equivalents

—

(115)
Net change in cash, cash equivalents, and restricted cash

(12,666)

(15,373)
Total cash, cash equivalents, and restricted cash, beginning of period

104,997

162,358
Total cash, cash equivalents, and restricted cash, end of period
$
92,331

$
146,985
Purchases of property, plant and equipment included in accounts payable and accrued expenses
$
10,075

$
8,393


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income	$	(1,957)	$	4,276
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation		33,292		20,111
Amortization of acquisition intangibles		3,258		397
Provision for doubtful accounts		1,913		1,122
Amortization of debt discount and debt issuance costs		501		168
Stock-based compensation		1,461		1,336
Deferred income taxes		191		(2,504)
Gain on equity investments		(4,222)		(2,188)
Loss on disposition of long-lived assets		3,420		117
Unrealized gain on foreign currency		—		(81)
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions:
Accounts receivable		1,677		1,430
Customer receivable		(746)		(12,579)
Materials and supplies, prepayments, and other current assets		(5,330)		(253)
Prepaid income taxes		6,206		—
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities		(27,465)		(7,648)
Accrued taxes		2,763		1,810
Other assets		(325)		(242)
Other liabilities		(3,249)		51
Net cash provided by operating activities		11,388		5,323
Cash flows from investing activities:
Capital expenditures		(34,220)		(19,495)
Reimbursable capital expenditures		(248)		(6,185)
Receipt of capital government grants		—		3,292
Divestiture of businesses, net of transferred cash of $0.9 million		—		18,597
Purchases of strategic investments		—		(4,155)
Net cash used in investing activities		(34,468)		(7,946)
Cash flows from financing activities:
Dividends paid on common stock		(2,672)		(2,703)
Distributions to noncontrolling interests		(263)		(3,530)
Payment of debt issuance costs		—		53
Finance lease payment		(338)		—
Term loan - repayments		(938)		(938)
Revolving credit facility – borrowings		36,500		—
Revolving credit facility – repayments		(15,500)		—
Repayment of customer receivable credit facility		(1,003)		—
Purchases of common stock – stock- based compensation		(1,136)		(1,677)
Purchases of common stock – share repurchase plan		(941)		(540)
Repurchases of noncontrolling interests		(2,481)		(11,522)
Proceeds from customer receivable credit facility		8,000		10,814
Net cash provided by (used in) financing activities of continuing operations		19,228		(10,043)
Net change in cash, cash equivalents, and restricted cash		(3,852)		(12,666)
Total cash, cash equivalents, and restricted cash, beginning of period		80,697		104,997
Total cash, cash equivalents, and restricted cash, end of period	$	76,845	$	92,331
Purchases of property, plant and equipment included in accounts payable and accrued expenses	$	13,221	$	10,075

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

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ATN INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.ORGANIZATION AND BUSINESS OPERATIONS

The Company strives to be a leading platform for the operation of, and investment in, smaller and specialty market communications services and technology companies. The Company has a long track record of deliveringprovides critical infrastructure-based ~~solutions to underserved markets. The Company’s majority-owned operating subsidiaries provide facilities-based~~ communications ~~services, along with~~and related information technology solutions to remote and historically underserved markets in the United States, Bermuda, and the Caribbean. The Company ~~also has non-controlling investments~~seeks to invest in ~~several communications~~its existing and ~~technology companies, and it continues to consider opportunities to make controlling and minority investments in businesses that it believes have the potential~~new markets for generating substantial and relatively steady cash flows over extended periods of time or have technologies or business models that might prove valuable to the Company’s main operating subsidiaries or create significant longerlong term growth ~~potential for the Company as a whole.~~led by its Glass and Steel and “fiber first” strategies that enable it to bring new or enhanced communications services to markets often overlooked by larger telecommunications providers.

At the holding company level, the Company oversees the allocation of capital within and among its subsidiaries, affiliates, new investments, and stockholders. The Company also has developed significant operational expertise and resources that it uses to augment the capabilities of its individual operating ~~subsidiaries.~~subsidiaries in its local markets. Over the past ~~ten~~10 years, the Company has built a platform of resources and expertise to support its operating subsidiaries and to improve their quality of service and customer acquisition, retention, and satisfaction while maintaining optimal operating efficiencies. The Company has a number of shared service functions, including billing, network and engineering and customer service, and the parent company also employs personnel with ~~specialized skills that provide~~ greater economies of scale and expertise than would typically be available at the operating subsidiary level.

The Company ~~was incorporated~~also provides management, technical, financial, regulatory, and marketing services to its operating subsidiaries and typically receives a management fee calculated as a percentage of their revenues, which is eliminated in ~~Delaware in 1987, began trading publicly in 1991 and spun off more than half of its operations to stockholders in 1998.~~consolidation. The Company also actively evaluates potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, and generally looks for those that it believes fit the Company’s profile of telecommunications businesses and have the potential ~~for~~to complement its Glass and Steel and “fiber first” approach in markets while generating steady excess cash flows over extended periods of time. In addition, the Company considers non-controlling investments in earlier stage businesses that it considers strategically relevant, and which may offer long-term growth potential for us, either individually, or as research and development businesses that can support the Company’s operating subsidiaries in new technology, product, and service development and offerings. The Company ~~has used~~uses the cash generated from its ~~established operating units, and any asset sales,~~operations to re-invest in organic growth in its existing businesses, to make strategic investments in additional businesses, and to return cash to its investors through dividends or stock repurchases.

As of March 31, 2022, the ~~Company’s investors. The~~ Company ~~provides management, technical, financial, regulatory, and marketing~~offered the following types of services to its subsidiaries and typically receives a management fee calculated as a percentage of their revenues, which is eliminated in consolidation. For further information about the Company’s financial segments and geographical information about its operating revenues and assets, see Notes 1 and 14 to the Consolidated Financial Statements included in this Report.customers:

●

Mobility Telecommunications Services. The Company offers mobile communications services and equipment over our wireless networks to both its business and consumer subscribers. In certain markets, mobility services also includes private network services to business customers and municipalities.

●

Fixed Telecommunications Services. The Company provides fixed data and voice telecommunications services to both its business and consumer subscribers in all of its markets. These services include consumer broadband and high speed data solutions for businesses. For some markets, fixed services also include video services and revenue derived from support under certain government programs.

●

Carrier Telecommunication Services. The Company delivers services to other telecommunications providers such as wholesale roaming, the leasing of critical network infrastructure such as tower and transport facilities, site maintenance and international long-distance services.

●

Managed Services. The Company provides information technology services such as network, application, infrastructure and hosting services to both its business and consumer customers to complement its fixed services in its existing markets.

Through March 31, ~~2021,~~2022, the Company ~~had~~has identified 3 operating segments to manage and review its operations and to facilitate investor presentations of its results. These 3 operating segments are as follows:

●

International Telecom. ~~Businesses contained in~~In the Company’s international ~~telecom segment offer a mix of~~markets, it offers fixed ~~data, internet~~services, mobility services, carrier services and ~~voice services (“Fixed”) as well as retail mobility (“Mobility”)~~managed services to customers in Bermuda, the Cayman Islands, Guyana and the US Virgin Islands. The Company offers fixed video services in Bermuda, the Cayman Islands, and the US Virgin Islands and managed information technology services (“Managed Services”) to enterprise customers in all its markets. The Company also offers services to other telecom providers (“Carrier Services”), such as international long-distance, transport and access services, and roaming from such telecom providers’ customers traveling in its network service areas.

●

US Telecom. In the United States, ~~primarily in the Southwest,~~ the Company offers ~~Carrier Services, including wholesale roaming~~fixed services, ~~the leasing of critical network infrastructure such as towers~~carrier services, and ~~transport facilities, and site maintenance. The Company also provides Fixed, Mobility, and Managed~~managed

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~~Services~~services to ~~its retail~~business and ~~enterprise~~consumer customers in Alaska and the western United States. In the western United States, the Company also provides mobility services and private network services to enterprise ~~customers, municipalities~~ and ~~other service providers.~~consumer customers.

●

Renewable Energy. In India, the Company provided distributed generation solar power to commercial and industrial customers through January 27, 2021. See ~~Sale~~Disposition of ~~Renewable Energy Operations~~International Solar Business for further ~~details~~details.

The following chart summarizes the operating activities of the Company’s principal subsidiaries, the segments in which it reports its revenue and the markets it served during the three months ended March 31, ~~2021:~~2022:


Segment	Services	Markets	Tradenames
International Telecom	Mobility Services	Bermuda, Guyana, US Virgin Islands	One, GTT+, Viya
	Fixed Services	Bermuda, Cayman Islands, Guyana, US Virgin Islands	One, Logic, ~~GTT+,~~GTT, Viya
	Carrier Services	Bermuda, Guyana, US Virgin Islands	One, GTT+, Viya
	Managed Services	Bermuda, Cayman Islands, US Virgin Islands, Guyana	Fireminds, One, Logic, ~~GTT+,~~GTT, Viya
US Telecom	Mobility Services	United States (rural markets)	Choice, Choice NTUA Wireless, Geoverse
	Fixed Services	United States	Alaska Communications, Commnet, Choice, Choice NTUA Wireless ~~Deploycom~~
	Carrier Services	United States	Alaska Communications, Commnet, Essextel
	Managed Services	United States	Alaska Communications, Choice
RenewableEnergy (1)	Solar	India	Vibrant Energy

(1)

See ~~Sale~~Disposition of ~~Renewable Energy Operations~~International Solar Business for further details.

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. In addition, the Company considers non-controlling investments in earlier stage businesses that it considers strategically relevant, and which may offer long-term growth potential for the Company, either individually, or as research and development businesses that can support the Company’s operating subsidiaries in new product and service development and offerings. 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 revenues which is eliminated in consolidation. For further information about the Company’s financial segments and geographical information about its operating revenues and assets, see Note 13 to the Unaudited Condensed Consolidated Financial Statements included in this Report.

Acquisition of Alaska Communications

On July 22, 2021, the Company completed the acquisition of Alaska Communications Systems Group, Inc. (“Alaska Communications”), a publicly listed company, for approximately $339.5 million in cash, net of cash acquired, (the “Alaska Transaction”). Alaska Communications provides broadband telecommunication and managed information technology services to customers in the state of Alaska and beyond using its statewide and interstate telecommunications network. The Company completed the Alaska Transaction to enter a new market with similar characteristics to its existing operations.

In conjunction with the Alaska Transaction, the Company entered into an agreement with affiliates and investment funds managed by Freedom 3 Capital, LLC as well as other institutional investors (collectively the “Freedom 3 Investors”). The Freedom 3 Investors contributed approximately $71.5 million in conjunction with the Alaska

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Transaction (the “Freedom 3 Investment”). The Freedom 3 Investment consists of redeemable common and preferred equity instruments in a subsidiary of the Company which holds the ownership of Alaska Communications. The Company accounted for the Freedom 3 Investment as redeemable noncontrolling interests in its consolidated financial statements because the instruments contain put options allowing the holders to sell the instruments to a subsidiary of the Company. The put option is solely the obligation of the Alaska Communications subsidiary and is nonrecourse to the Company. The Company also entered into a financing transaction drawing $220 million on a new credit facility to complete the Alaska Transaction. As a result of the Alaska Transaction, the Company owns approximately 52% of the common equity of Alaska Communications and controls its operations and management. The Company incurred $11.0 million of transaction costs in conjunction with the Alaska Transaction. Beginning on July 22, 2021, the results of the Alaska Transaction are included in the Company’s US Telecom segment.

COVID-19

The Company ~~is continuing~~continues to monitor and assess the effects of the ongoing COVID-19 pandemic on its commercial operations, the safety of its employees and their families, its sales force and ~~customers and any potential impact on the Company’s revenue in 2021.~~customers.

The preparation of the condensed consolidated financial statements requires ~~the Company~~us to make estimates, judgments and assumptions, which are evaluated on an ongoing basis, that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. ~~On an ongoing basis, the Company evaluates estimates, judgments and methodologies.~~ The Company assessed certain accounting matters and estimates that generally require consideration of forecasted financial information in context with the information and estimates reasonably available to the Company and the unknown future impacts of COVID-19 as of March 31, ~~2021~~2022 and through the date of this report. The accounting

matters assessed included, but were not limited to, the ~~Company’s~~ allowance for credit losses, the carrying value of ~~the Company’s~~ goodwill and other long-lived assets, financial assets, valuation allowances for tax assets and revenue recognition.

The ~~Company assessed~~Company’s assessment of the ~~impacts~~impact of COVID-19 on its operations did not indicate that there was a material adverse impact to its consolidated financial statements as of and for the three months ended March 31, 2021, in particular the impacts on lines of revenues, operating expenses as well as the deferral and savings on other operating expenses and capital expenditures. During the three months ended March 31, 2021, while the Company’s International Telecom segment experienced strengthened demand for both its Mobility and Fixed services, its Carrier Services revenue declined as a result of a reduction in roaming revenue due to pandemic-related travel and stay-at-home restrictions in these markets as compared to the same period in 2020. Such restrictions also resulted in decreased Mobility and Carrier Services revenues within the Company’s US Telecom segment during the three months ended March 31, 2021 as compared to the same period of 2020.2022. However, in response to certain anticipated impacts, the Company was able to implement operating expense savings during 2020 and the first quarter of 2021, particularly with respect to the Company’s International Telecom segment, that when coupled with Company-wide travel expense savings and capital expenditure deferrals, acted to offset much of the revenue loss or additional credit loss allowances caused by anticipated customer non-payment activity in the year. As a result, the Company’s assessment did not indicate that there was a material impact to the Company’s consolidated financial statements as of and for the three months ended March 31, 2021. However, the Company’s future assessments of the impacts of COVID-19, ~~for the remainder of 2021 or the Company’s ability to realize continued operational expense savings,~~ as well as other factors, including the possible reinstatement of certain COVID-19 travel-related and stay-at-home restrictions, could result in material adverse impacts to ~~the Company’s~~its consolidated financial statements in future reporting periods. For example, the ~~local economies~~Company may experience difficulty in procuring network or retail equipment, such as handsets for subscribers, as a result of ~~many of the Company’s Caribbean markets are tourism-dependent and the decline in global travel activity resulting~~COVID-19 restrictions. Apart from COVID-19 may continue to impact the Company’s revenue and cash flows for certain services in these markets as the Company’s retail and enterprise customers may be unable to pay for services, and the Company’s international roaming revenue may decline. Apart frompossible government issued travel restrictions, wethe Company currently cannot assess how COVID-19 may influence ~~our~~ subscribers’ procurement behavior for ~~our~~ services or how that behavior will impact ~~our~~ revenues in the foreseeable future.

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 the periods described therein. 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, ~~2020,~~2021, filed with the SEC on March ~~1, 2021.~~16, 2022.

The condensed consolidated financial statements include the accounts of the Company, its subsidiaries in which the Company holds controlling interests 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.

~~Presentation of Revenue~~

Effective January 1, 2020, the Company changed its presentation of revenue in the Condensed Consolidated Statement of Operations and in the Selected Segment Financial Information tables. This change is intended to better align the Company’s financial performance with the views of management and industry competitors, and to facilitate a more constructive dialogue with the investment community.

Specifically, the previously disclosed revenue categories of wireless and wireline revenue are being represented as Mobility, Fixed and Carrier Services revenue within the Company’s segment information and are included within communications services revenue within its Statements of Operations. Managed services revenue, which was previously

~~a component~~Table of ~~wireline revenue, along with revenue from~~Contents

Presentation of Revenue

Effective October 1, 2021, the Company’s ~~Renewable Energy~~statement of operations ~~is now included in other revenue.~~separately reflects Construction ~~revenue is also included as a component of other revenue.~~Revenue. All periods presented have been adjusted to conform to these presentation updates.

Presentation of Operating Expenses

Effective January 1, 2021, the Company changed its presentation of operating expenses in the Condensed Consolidated ~~Statement~~Statements of Operations by combining the previously disclosed Termination and Access Fees with Engineering and Operations as the newly represented ~~Cost~~Costs of ~~Services.~~communication services and other. In addition, the previously disclosed Sales, Marketing and Customer Service expenses are now combined with the previously disclosed General and Administrative expenses within the newly represented Selling, ~~general~~General and ~~administrative~~Administrative expenses. The change in presentation was made to better align the Company’s results with industry standards. Cost of construction services continues to be broken out separately and all depreciation and amortization continues to be shown separately.

Recent Accounting Pronouncements

In ~~June 2016,~~October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company prospectively adopted this accounting standard in 2021.

In November 2021, the FASB issued ASU ~~2016-13, “Financial Instruments-Credit Losses~~2021-10, Government Assistance (Topic ~~326)~~832): ~~Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 requires~~Disclosures by Business Entities about Government Assistance, which required entities to ~~use~~make specific annual disclosures about transactions with a government. The new ~~forward-looking, expected loss model to estimate credit losses. It also requires additional disclosure relating to~~standard is effective for fiscal years beginning after December 15, 2021. We are currently evaluating the credit quality of trade and other receivables, including information relating to management’s estimate of credit allowances. The Company adopted ASU 2016-13 using the modified retrospective approach on its January 1, 2020 effective date. Refer to Note 3impact of the ~~Condensed Consolidated Financial Statements in this Report.~~

~~On December 18, 2019, the FASB issued new guidance that simplifies the accounting for income taxes. Amendments include the removal of certain exceptions~~standard, but we do not expect it to ~~the general principles of ASC 740, Income taxes. The Company adopted this guidance in 2021 using a prospective method. The adoption of this guidance did not~~ have a material impact on ~~the Company’s consolidated financial statements; however, the impact in future periods will be dependent on the extent of future events and circumstances.~~

our disclosures.

3. REVENUE RECOGNITION AND RECEIVABLES

Contract Assets and Liabilities

The Company recognizes contract assets and liabilities on its balance sheet. Contract assets represent unbilled amounts typically resulting from ~~retail wireless~~consumer Mobility contracts with both a multiyear service period and a promotional discount. In these contracts the revenue recognized exceeds the amount billed to the customer. The current portion of the contract asset is recorded in prepayments and other current assets and the noncurrent portion is included in other assets on the Company’s balance sheets.

Contract liabilities consist of advance payments and billings in excess of revenue recognized. ~~Retail~~Mobility and Fixed revenue for postpaid customers is generally billed one month in advance and recognized over the period that the corresponding service is rendered to customers. To the extent the service is not provided by the reporting date the amount is recognized as a contract liability. Prepaid service, including ~~mobile voice and data~~Mobility services, sold to customers is recorded as deferred revenue prior to the commencement of services. Contract liabilities are recorded in advanced payments and deposits and other liabilities on the Company’s balance sheets.

In July 2019, ~~August 2020 and May 2021,~~ the Company entered into a Network Build and Maintenance Agreement ~~(the “FirstNet Agreement”)~~ with AT&T Mobility, LLC (“AT&T”) and ~~the First~~subsequently entered into amendments in August 2020 and ~~Second Amendments to the FirstNet Agreement, respectively~~May 2021 (the “FirstNet ~~Transaction”~~Agreement”). In connection with the FirstNet ~~Transaction,~~Agreement, the Company ~~will build~~is building a portion of AT&T’s network for the First Responder Network Authority ~~(“FirstNet”) as well as a commercial wireless network~~ in or near the Company’s current operating area in the ~~Southwestern~~western United ~~States.~~States (the “FirstNet Transaction”). The FirstNet Transaction includes construction and service performance obligations. The Company allocated the transaction price of the FirstNet Agreement to each performance obligation based on the relative standalone selling price of each performance obligation in the contract. The standalone selling price is the estimated price the Company would charge for the good or service in a separate transaction with similar customers in similar

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~~the good or service in a separate transaction with similar customers in similar~~ circumstances. The current portion receivables under this agreement are recorded in ~~Customer~~customer receivable and the long-term portion is recorded in ~~Customer~~customer receivable long-term on the Company’s balance sheet.

The Company has certain ~~wholesale~~Carrier Services roaming agreements that contain ~~stand ready~~stand-ready performance obligations and management allocates transaction value to performance obligations based on the standalone selling price. The standalone selling price is the estimated price the Company would charge for the good or service with similar customers in similar circumstances. Management determined the performance obligations were obligations to make the service continuously available and will recognize revenue evenly over the service period.

Contract assets and liabilities consisted of the following (amounts in thousands)


	March 31, 2021		December 31, 2020			$ Change	% Change		March 31, 2022		December 31, 2021			$ Change	% Change
Contract asset – current	$	3,044	$	2,478	$	566	23	%	$	4,123	$	4,805	$	(682)	(14)	%
Contract asset – noncurrent		1,141		910		231	25	%		890		900		(10)	(1)	%
Contract liability – current		(17,159)		(18,544)		1,385	7	%		(23,756)		(25,332)		1,576	6	%
Contract liability – noncurrent		(2,255)		(2,193)		(62)	(3)	%		(78,861)		(81,391)		2,530	3	%
Net contract liability	$	(15,229)	$	(17,349)	$	2,120	12	%	$	(97,604)	$	(101,018)	$	3,414	3	%

The contract asset – current is included in prepayments and other current assets and the contract asset – noncurrent is included in other assets on the Company’s balance sheet. The contract liability – current is included in advance payments and deposits and the contract liability – noncurrent is included in other liabilities on the Company’s balance sheet. The decrease in the Company’s net contract liability was due to the timing of customer prepayments, contract billings, and ~~the FirstNet Transaction.~~recognition of deferred revenue. During the three months ended March 31, ~~2021,~~2022, the Company recognized revenue of ~~$15.1~~$15.0 million related to its December 31, ~~2020~~2021 contract liability and amortized $0.7 million of the December 31, ~~2020~~2021 contract asset into revenue. ~~The Company did 0t recognize any revenue in the three months ended March 31, 2021 related to performance obligations that were satisfied or partially satisfied in previous periods.~~

Contract Acquisition Costs

The March 31, ~~2021~~2022 balance sheet includes ~~current~~ contract acquisition costs of ~~$1.7 million in prepayments and other current assets and long term contract acquisition costs of $1.5~~$5.1 million in other assets. During the three months ended March 31, 2022 and 2021, the Company amortized $0.8 million and $0.6 million, respectively, of contract acquisition ~~cost.~~costs.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to unsatisfied performance obligations of certain multiyear ~~retail wireless~~Mobility contracts, which include a promotional discount, Managed Services contracts, and the Company’s Carrier Services construction and service contracts. The transaction price allocated to unsatisfied performance obligations was ~~$273~~$350 million and ~~$299~~$369 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The Company expects to satisfy approximately ~~60%~~52% of the remaining performance obligations and recognize the transaction price within 24 months and the remainder thereafter.

The Company has certain ~~retail, wholesale,~~Mobility, Fixed, and ~~renewable energy~~Carrier Services contracts where the transaction price is allocated to remaining performance obligations. However, the Company omits these contracts from its disclosure by applying the right to invoice, one year or less, and wholly unsatisfied performance obligation practical expedients.

Disaggregation

The Company's revenue is presented on a disaggregated basis in Note 13 based on an evaluation of disclosures outside the financial statements, information regularly reviewed by the chief operating decision makers for evaluating the financial performance of operating segments and other information that is used for performance evaluation and resource allocations. This includes revenue from Communication Services, Construction, and ~~other~~Other revenue. Communication Services

revenue is further disaggregated into business and consumer Mobility, business and consumer Fixed, Carrier Services, and ~~other~~Other services. Other revenue is further disaggregated into ~~renewable energy, managed services~~Renewable Energy and, ~~construction~~

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Managed Services revenue. This disaggregation of revenue depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

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Receivables

The Company adopted ASU 2016-13 on January 1, 2020. The standard requires that certain financial assets be measured at amortized cost reflecting an allowance for estimated credit losses expected to occur over the life of the assets. The estimate of credit losses is based on all relevant information including historical information, current conditions, and reasonable and supportable forecasts that affect the collectability of the amounts. The Company adopted ASU 2016-13 using the modified retrospective approach, however, there was 0 impact of adoption on retained earnings.

The standard impacted the Company’s calculation of credit losses from trade receivables. Historically, the Company recorded credit losses subsequent to the initial revenue transaction. After adoption of ASU 2016-13, the Company will recordrecords an estimate of future credit losses in conjunction with the revenue transaction based on the information available including historical experience and management’s expectations of future conditions. Those estimates will be updated as additional information becomes available. ~~Our~~The Company’s allowance for uncollectible accounts receivable is based on management’s assessment of the collectability of assets pooled together with similar risk characteristics. ~~There was no significant impact to the Company’s operating results due to the adoption of this standard.~~

At March 31, 2022 the Company had gross accounts receivable of $129.7 million and an allowance for credit losses of $15.0 million. The receivable under the FirstNet Agreement totaled $44.5 million of which $4.3 million was current and $40.2 million was long-term. At December 31, 2021, the Company had gross accounts receivable of ~~$78.0~~$131.4 million and an allowance for credit losses of ~~$13.0~~$13.9 million. The receivable under the FirstNet Agreement totaled ~~$23.4~~$43.8 million, of which ~~$2.4~~$4.1 million was current and ~~$21.0 million was long-term. At December 31, 2020, the Company had gross accounts receivable of~~ ~~$67.1 million and an allowance for credit losses of $12.1 million. The receivable under the FirstNet Agreement totaled $10.8 million of which $1.2 million was current and $9.6~~$39.7 million was long-term. The Company monitors receivables through the use of historical operating data adjusted for expectation of future performance as appropriate. Activity in the allowance for credit losses is below:


	Three months ended March 31, 2021		Three months ended March 31, 2020		Three months ended March 31, 2022		Three months ended March 31, 2021

Balance at beginning of period	$	12,121	$	12,724	$	13,885	$	12,121
Current period provision for expected losses		1,122		1,260		1,913		1,122
Write-offs charged against the allowance		(354)		(1,525)		(862)		(354)
Recoveries collected		124		208		108		124
Balance at end of period	$	13,013	$	12,667	$	15,044	$	13,013

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4. LEASES

Lessee Disclosure

The Company has operating and financing leases for towers, land, corporate offices, retail facilities, and data transport capacity. The lease terms are generally between 3 and 10 years, some of which include additional renewal options.

Supplemental lease information

The components of lease expense were as follows (in thousands):



	March 31, 2021		March 31, 2020		Three months ended March 31, 2022		Three months ended March 31, 2021
Operating lease cost:
Operating lease cost	$	4,225	$	4,047	$	6,142	$	4,225
Short-term lease cost		408		543		509		408
Variable lease cost		1,065		803		804		1,065
Total operating lease cost	$	5,698	$	5,393	$	7,455	$	5,698

Finance lease cost:
Amortization of right-of-use asset	$	574	$	571	$	797	$	574
Variable costs		196		272		248		196
Interest costs						102		-
Total finance lease cost	$	770	$	843	$	1,147	$	770

During ~~each of~~ the three month periods ended March 31, ~~2021~~2022 and ~~2020,~~2021, the Company paid $5.6 million and $3.5 million, respectively for operating lease liabilities. During the three months ended March 31, ~~2021,~~2022, the Company recorded ~~$2.2~~$3.7 million of operating lease liabilities arising from ROU assets. During the three months ended March 31, ~~2020~~2021, the Company ~~did not record any additional~~recorded $2.2 million of operating lease liabilities arising from ROU assets.

At March 31, 2022, finance leases with a cost of $28.1 million and accumulated amortization of $11.1 million were included in property, plant and equipment. During the three months ended March 31, 2022, the Company paid $0.3 million of financing cash flows and $0.1 million of operating cash flows for finance lease liabilities and recorded $0.8 million of additional finance lease liabilities. Additionally, during the three months ended March 31, 2022, the Company disposed of a finance lease with a net book value of $1.0 million recording a loss for that amount. At March 31, 2022, finance leases had a lease liability of $6.5 million, of which $1.1 million was current.

At March 31, 2021, finance leases with a cost of $26.5 million and accumulated amortization of $10.1 million were included in property, plant and equipment. During the three months ended March 31, 2021, the Company ~~paid $0.1 million for finance lease liabilities and~~ recorded $1.1 million of additional finance lease liabilities. At March 31, 2021, finance leases had a lease liability of $2.2 million, of which $0.4 million was current. At December 31, ~~2020,~~2021, finance leases with a cost of ~~$25.4~~$30.8 million and accumulated amortization of ~~$9.5~~$12.1 million were included in property, plant and ~~equipment~~equipment.

~~The weighted average remaining lease terms and discount rates as of March 31, 2021 and December 31, 2020 are noted in the table below:~~

March 31, 2021

December 31, 2020
Weighted-average remaining lease term

Operating leases

5.8 years

5.9 years
Financing leases

10.6 years

10.9 years

Weighted-average discount rate

Operating leases

4.9%

5.0%
Financing leases

4.2%

3.3%

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The weighted average remaining lease terms and discount rates as of March 31, 2022 and December 31, 2021 are noted in the table below:


	March 31, 2022		December 31, 2021
Weighted-average remaining lease term
Operating leases		11.3 years		11.3 years
Financing leases		9.6 years		9.5 years

Weighted-average discount rate
Operating leases		5.2%		5.4%
Financing leases		6.2%		6.4%

Maturities of lease liabilities as of March 31, ~~2021~~2022 were as follows (in thousands):


	Operating Leases		Financing Leases		Operating Leases		Financing Leases
2021 (excluding the three months ended March 31, 2021)	$	11,043	$	377
2022		14,479		502
2022 (excluding the three months ended March 31, 2022)					$	16,310	$	1,092
2023		12,086		502		18,466		1,463
2024		11,033		380		16,996		1,354
2025		8,133		281		14,156		1,132
2026						10,047		532
Thereafter		13,638		522		68,363		3,145
Total lease payments		70,412		2,564		144,338		8,718
Less imputed interest		(9,619)		(339)		(42,399)		(2,211)
Total	$	60,793	$	2,225	$	101,939	$	6,507

Maturities of lease liabilities as of December 31, ~~2020~~2021 were as follows (in thousands):


	Operating Leases		Financing Leases		Operating Leases		Financing Leases
2021	$	14,877	$	334
2022		14,202		333	$	20,474	$	1,269
2023		11,799		333		17,941		1,278
2024		10,633		211		16,634		1,169
2025		7,816		—		13,640		975
2026						9,610		484
Thereafter		13,094		—		65,902		3,145
Total lease payments		72,421		1,211		144,201		8,320
Less imputed interest		(10,097)		(82)		(42,333)		(2,268)
Total	$	62,324	$	1,129	$	101,868	$	6,052

As of March 31, ~~2021,~~2022, the Company did not have any material operating or finance leases that have not yet commenced.

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Lessor Disclosure

The Company is the lessor in agreements to lease the use of its network assets including its cell sites and buildings. For the three months ended March 31, 2022 the Company recorded $1.0 million of lease income from agreements in which the Company is the lessor. Lease income is classified as Carrier Services revenue in the statement of operations.

The following table presents the maturities of future undiscounted lease payments for the periods indicated:


2022 (excluding the three months ended March 31, 2022)	$	4,042
2023		4,807
2024		4,406
2025		4,288
2026		3,916
Thereafter		10,455
Total future lease payments	$	31,914

5. 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 credit losses, 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, revenue, and income taxes. Actual results could differ significantly from those estimates. See Note 1 to the Unaudited Condensed Consolidated Financial Statements included in this Report for a discussion of the impact of COVID-19 on the use of these estimates.

6. ACQUISITIONS AND DISPOSITIONS

~~Disposition~~US Telecom

Acquisition of ~~International Solar Business~~Alaska Communications

On ~~November 19, 2020,~~July 22, 2021 (“Closing Date”), the Company ~~entered into an agreement~~completed the acquisition of Alaska Communications pursuant to ~~sell 67%~~the terms of the ~~outstanding~~Merger Agreement whereby Alaska Communications became a consolidated subsidiary of the Company. At completion of the Merger, each Alaska Communications common share was converted into the right to receive $3.40 per share in cash representing a total value of $353.3 million of cash and consideration payable, (“Merger

Consideration”). The consideration transferred consists of $339.5 million of cash, net of $11.9 million of cash and restricted cash acquired and $1.9 million of accrued consideration representing amounts payable related to stock compensation payable within one year of the close date. The cash consideration was used to purchase $186.8 million of Alaska Communications equity ~~interests~~and repay $164.6 million of existing Alaska Communications debt.

The Company funded the acquisition with cash on hand, debt, and a contribution from the Freedom 3 Investors. The Company borrowed, through multiple financing transactions, a net of $283 million. On the Closing Date, the lenders advanced to Merger Sub (a) the full $210 million aggregate amount of the Alaska Term Loan (as defined below) in a single borrowing and (b) $10 million of the Alaska Revolving Facility (as defined below). The Company incurred $6.6 million of debt issuance and debt discount costs. Also, to fund the Merger Consideration in part, the Company drew a net $63.0 million under its ~~India solar operations~~ ~~that owns and operates distributed generation solar power projects~~revolving credit facility under the ~~Vibrant name~~2019 CoBank Credit Facility (as defined below). Lastly, the Freedom 3 Investors contributed $71.5 million in ~~India, or~~conjunction with the ~~Vibrant Transaction.~~ Merger. The Company ~~will retain~~has accounted for the Freedom 3 Investment as redeemable noncontrolling interests in its consolidated financial statements. On the Closing Date, the redeemable noncontrolling interests consisted of $22.6 million of redeemable common units, $48.3 million of redeemable preferred units, and $0.6 million of warrants to purchase common units. The common units contain a ~~33%~~ ownership interest in the India solar operations subsequent to the transaction. The sale agreement contains representations, warranties and covenants of the parties that are customary for transactions of this type. The sale was completed in ~~January 2021. The post-sale results of the~~put

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option allowing the holder to sell the common units to a subsidiary of the Company at the then fair market value. The put option begins at the earlier of a future initial public offering of the Alaska Communications operations or July 2028. The redeemable preferred units carry a 9% preferred dividend which compounds quarterly. The preferred units contain a put option allowing the holder to sell the preferred units to a subsidiary of the Company at the unpaid issue price plus unpaid dividends. The put option begins at the earlier of a future initial public offering of the Alaska Communications operations or July 2028. Lastly, the Company issued warrants in the Alaska Communications operations allowing the holders to purchase an additional 3% of the common units at a fixed price.

The fair value of the common units remained at $22.6 million at March 31, 2022, unchanged from the value at July 22, 2021. The value of the preferred units was $51.4 million at March 31, 2022 which consists of the original issue price of $48.3 million and $3.1 million of accrued preferred dividends. The value of the warrants was $0.6 million at March 31, 2022, unchanged from July 22, 2021.

As a result of the Alaska Transaction, the Company owns 52% of the common equity of Alaska Communications and controls its operations and management.

The table below represents the allocation of the total consideration transferred to the acquired assets and assumed liabilities based on management’s estimate of their acquisition date fair values (amounts in thousands):


Consideration Transferred	$	353,280
Noncontrolling interests		470
Total value to allocate		353,750
Purchase price allocation:
Cash and cash equivalents		10,553
Restricted cash		1,326
Short-term investments		434
Accounts receivable		30,453
Inventory, materials and supplies		1,374
Prepayments and other current assets		8,038
Fixed assets		408,694
Telecommunication licenses		683
Intangible assets		44,333
Operating lease right-of-use assets		60,402
Other assets		2,387
Accounts payable and accrued liabilities		(39,188)
Accrued taxes		(3,766)
Advance payments and deposits		(15,842)
Current portion of lease liabilities		(2,425)
Deferred income taxes		(17,040)
Lease liabilities, excluding current portion		(44,234)
Other liabilities		(92,432)
Net assets acquired	$	353,750

The acquired fixed assets are comprised of telecommunication equipment located in the Alaska and the Western United States. The fixed assets were valued using the income and cost approaches. Cash flows were discounted between 4% and 14% based on the risk associated with the cash flows to determine fair value under the income approach. The fixed assets have useful lives ranging from 2 to 30 years. The intangible assets consist of $34.9 million of customer relationships and $9.5 million of trade name. The intangibles were valued using an income approach based on data specific to Alaska Communications as well as market participant assumptions where appropriate. The estimated fair value of the customer relationships was determined using the multi-period excess earnings method. The estimated fair value of the trade name was determined using the relief from royalty method. The useful lives of the customer relationships and trade name are 5 and 15 years, respectively. The acquired receivables consist of trade receivables incurred in the ordinary course of business. The Company expects to collect the full amount of the receivables. Other liabilities includes $81.5 million of deferred revenue from long term customer contracts. The Company adopted ASU

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2021-08 in 2021, which requires contract liabilities to be accounted for consistently with how they were recognized and measured in the acquiree’s financial statements. As a result, the acquired deferred revenue was recorded at Alaska Communications’ book value as of the Closing Date.

The Company’s statement of operations for the three months ended March 31, 2022 includes $58.3 million of revenue and $2.8 million of losses before taxes attributable to the Alaska Transaction, excluding transaction fees. The Company incurred $11.0 million of transaction related charges pertaining to legal, accounting, consulting services, and employee related costs associated with the transaction, of which $0.5 million were incurred during the three months ended March 31, 2022.

The following table reflects unaudited pro forma operating results of the Company for the three months ended March 31, 2021 assuming the transaction occurred on January 1, 2020. The unaudited pro forma amounts adjust Alaska Communications’ results to reflect the depreciation and amortization that would have been recorded assuming the fair value adjustments to fixed assets and intangible assets had been applied from January 1, 2020. Additionally, all transaction costs associated with the Alaska Transaction were recorded on January 1, 2020 in the unaudited pro forma results. Lastly, the unaudited pro forma results were adjusted to reflect changes to the acquired entities’ financial structure related to the transaction. Specifically, the pre-Close debt of $164.6 million, and associated interest, was removed and $283.0 million of transaction debt, and associated interest, was included in the unaudited pro forma results. In addition, the pro forma results included the allocation of income and accrual of preferred dividends to the redeemable noncontrolling interest.


		Three months ended
		March 30, 2021
		As Reported		Pro Forma

Revenue	$	124,510	$	185,178
Net Income attributable to ATN International, Inc. Stockholders	$	2,706	$	1,034

Earnings Per Share
Basic	$	0.17	$	(0.01)
Diluted	$	0.17	$	(0.01)

The unaudited pro forma adjustments decreased net income attributable to ATN International, Inc. Stockholders by $1.7 million for the three months ended March 31, 2021. The increase was due to an increase from the net income of the Alaska Communications operations excluding transaction costs offset by increased acquisition related depreciation and amortization expenses.

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 this transaction.

Renewable Energy

Disposition of International Solar Business

In January 2021, the Company completed the sale of 67% of the outstanding equity in its business that owns and operates distributed generation solar power projects operated under the Vibrant name in India (the “Vibrant Transaction”). The post-sale results of the Company’s ownership interest in Vibrant are recorded through the equity method of accounting within the Corporate and Other operating segment. As such, the Company’s consolidated financial statements ~~will~~do not include revenue and operating expenses from Vibrant, but instead, “other income (expense)”

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within the Corporate and Other operating segment ~~will include its~~includes the Company’s share of Vibrant’s profits or losses. The Company will continue to present the historical results of its Renewable Energy segment for comparative purposes.

The table below identifies the assets and liabilities transferred (in thousands):


Consideration Received	$	35,218	$	35,218
Assets and liabilities disposed
Current assets		4,899		4,899
Property, plant and equipment		45,891		45,891
Other assets		439		439
Current liabilities		(759)		(759)
Net assets disposed	$	50,470	$	50,470

Consideration less net assets disposed		(15,252)		(15,252)

Foreign currency losses reclassified from accumulated other comprehensive income		6,258		(6,258)

Loss on sale		21,510		(21,510)
Transaction costs		1,283		(1,283)
Loss on sale including transaction costs	$	(22,793)	$	(22,793)

The Company reported a loss on sale of $21.5 million during the year ended December 31, 2020 ~~and Vibrant’s assets and liabilities were reported as held for sale at December 31, 2020.~~due to the Vibrant Transaction. The Company recorded transaction costs of ~~$1.3~~$1.3 million on the Vibrant Transaction, of which $0.7 million was recorded during the year ended December 31, 2020 and $0.6 million was recorded during the ~~three months~~year ended ~~March~~December 31, 2021. The consideration received includes ~~$19.5~~$19.5 million of cash and $3.9 million of receivables related to the amounts held in escrow and earn out ~~consideration, and~~consideration. The Company has recorded $11.8 million ofpursuant to an equity method investment with respect to its remaining 33% ownership interest in Vibrant. The Company is ~~finalizing~~assessing earn out and escrow amounts which will be finalized in 2023. During the year ended December 31, 2021, the Company recorded additional losses of $1.6 million related to the ongoing working capital, ~~adjustments~~escrow, and ~~the purchase price escrow will be held in escrow for a period of twelve months after the closing to secure the Company’s indemnification obligations.~~contingent consideration assessment. The Company has 24 months after the close of the transaction to satisfy the conditions necessary to receive the ~~earn out~~earn-out consideration.

The Vibrant Transaction does not qualify as discontinued operations because the disposition was not a strategic shift which will have a major effect on the Company’s operations, and as a result, the historical results and financial position of the operations are presented within continuing operations.

7. FAIR VALUE MEASUREMENTS AND INVESTMENTS

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.

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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.

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Assets and liabilities of the Company measured at fair value on a recurring basis as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 are summarized as follows (in thousands):


	March 31, 2021								March 31, 2022
	Significant Other								Significant Other
	Quoted Prices in		Observable		Unobservable				Quoted Prices in		Observable		Unobservable
	Active Markets		Inputs		Inputs				Active Markets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
Certificates of deposit	$	—	$	380	$	—	$	380
Money market funds		2,955		—		—		2,955	$	3,164	$	—	$	—	$	3,164
Short term investments										300		—		—		300
Other investments		—		—		2,110		2,110		—		—		2,024		2,024
Alaska Communications redeemable common units										—		—		(22,640)		(22,640)
Warrants on Alaska Communications redeemable common units										—		—		(559)		(559)
Interest rate swap		—		(126)		—		(126)		—		(279)		—		(279)
Total assets and liabilities measured at fair value	$	2,955	$	254	$	2,110	$	5,319	$	3,464	$	(279)	$	(21,175)	$	(17,990)


	December 31, 2020								December 31, 2021
	Significant Other								Significant Other
	Quoted Prices in		Observable		Unobservable				Quoted Prices in		Observable		Unobservable
	Active Markets		Inputs		Inputs				Active Markets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
Certificates of deposit	$	—	$	380	$	—	$	380
Money market funds		2,785		—		—		2,785	$	3,301	$	—	$	—	$	3,301
Short term investments										300		—		—		300
Other investments		—		—		13,357		13,357		—		—		1,925		1,925
Alaska Communications redeemable common units										—		—		(22,640)		(22,640)
Warrants on Alaska Communications redeemable common units										—		—		(559)		(559)
Interest rate swap		—		(157)		—		(157)		—		(894)		—		(894)
Total assets and liabilities measured at fair value	$	2,785	$	223	$	13,357	$	16,365	$	3,601	$	(894)	$	(21,274)	$	(18,567)

During the three months ended March 31, ~~2021, other investments measured using Level 3 inputs decreased $11.2 million. The decrease was the result of transferring $11.0 million out of Level 3 due to the conversion of a~~

convertible debt instrument. At December 31, 2020, the Company accounted for a convertible debt instrument at fair value. During the three months ended March 31, 2021, that instrument was converted to equity and the Company began accounting for the investment under the cost method of accounting. Refer to ~~Other Investments~~ ~~below. Also, during the three months ended March 31, 2021,~~2022, the fair value of the remaining Level 3 investments ~~decreased $0.2~~increased $0.1 million due to ~~$0.3 million of cash distributions and $0.1 million of~~ income recognized in the other income line of the Company’s statement of operations.

Certificate of Deposit

As of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 this asset class consisted of a time deposit at a financial institution denominated in US 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 March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, this asset class consisted of a money market portfolio that comprises Federal government and US 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.

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Other Investments

In 2019, the Company made a $14.4 million investment in a renewable energy ~~partnership.~~partnership as a tax equity investor. In 2020, the Company received an investment tax credit of $12.0 million from its investment and will receive future cash distributions from the partnership’s operations. The Company elected the deferral method to account for the credit and elected the fair value option to account for the equity investment. The Company’s investment had a fair value of ~~$2.1~~$2.0 million at March 31, ~~2021,~~2022, and ~~$2.3~~$1.9 million at December 31, ~~2020.~~2021. The asset is classified within Level 3 of the fair value hierarchy. The Company used the income approach to fair value the investment and the inputs consisted of a discount rate and future cash flows calculated based on the investment attributes.

Also in 2019, the Company made an investment in an early-stage venture through the acquisition of a convertible debt instrument. The instrument converted into equity during the first quarter of 2021. Upon conversion the Company ~~will account~~accounted for the investment under the cost method of accounting as the investment does not have a readily determinable fair value. Prior to conversion, the Company accounted for the investment under the fair value option using Level 3 inputs. ~~During the three months ended March 31, 2021, the Company recorded a gain of $2.5 million on the conversion and invested an additional $3.0 million of cash, increasing its~~The book value ~~from $11.0 million~~of the investment remained unchanged at ~~December 31, 2020 to~~ $16.5 million at March 31, 2022 and December 31, 2021.

The Company also holds investments in equity securities consisting of ~~non-controlling~~noncontrolling investments in privately held companies. These investments, over which the Company does not have the ability to exercise significant influence, are without readily determinable fair values. The investments are measured at cost, less any impairment, adjusted for observable price changes of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes in circumstances that may have an effect on the fair value of the investment. The carrying value of the ~~investments~~investment was $6.1 million and $1.3 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. This increase of $4.8 million is due to a gain recognized from an observable price change in the security during the three months ended March 31, 2022. These investments are included with other assets on the consolidated balance sheets.

Equity Method Investments

In the first quarter of 2020, the Company increased its ownership in one investment of a privately held company to approximately 24% of the outstanding voting equity through an additional $2.8 million investment. With this investment the Company obtained the ability to exercise significant influence over the investee and began accounting for the investment under the equity method of accounting including the recording of its share of the investee’s earnings or losses. The carrying value of the investment was $~~17.3 million and $17.9~~14.8 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The value ~~decreased~~ ~~$0.6 million~~remained unchanged from the December 31, ~~2020~~2021 balance due to ~~$0.4~~$0.4 million of the

Company’s share of investee losses ~~and~~offset by currency ~~losses~~gains of ~~$0.2~~$0.4 million. The investment is included with other assets on the consolidated balance sheets.

In the first quarter of 2021, the Company began to account for its former India solar operations under the equity method of accounting. Subsequent to the close of the Vibrant Transaction in January 2021, the ~~Company invested an additional $1.2 million into its operations and distributed $0.3 million to a minority investment partner. The book~~ value of the investment ~~was $12.7~~decreased from $13.9 million at December 31, 2021 to $13.4 million at March 31, ~~2021.~~2022. The decrease of $0.5 million was due to currency losses of $0.2 million and operating losses of $0.3 million.

Redeemable Common Units and Warrants

The Company issued redeemable common units, and warrants to purchase additional common units, in a subsidiary of the Company in conjunction with its acquisition of Alaska Communications. (Refer to Note 5). The instruments are redeemable at the option of the holder. Both the common units and warrants to purchase common units are recorded at fair value in the Company’s financial statements. The common units are recorded in redeemable noncontrolling interest and the warrants are recorded in other liabilities on the Company’s balance sheets. The Company calculates the fair value of the instruments using a market approach with Level 3 inputs.

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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.

The fair value of long-term debt ~~and the customer receivable credit facility~~ is estimated using Level 2 inputs. At March 31, ~~2021, the fair value of long-term debt and the customer receivable credit facility, including the current portion, was~~ ~~$83.1 million and its book value was $82.7~~ ~~million. At December 31, 2020,~~2022, the fair value of long-term debt, including the current portion, was ~~$73.3~~$400.8 million and its book value was ~~$72.8~~$394.0 million. At December 31, 2021, the fair value of long-term debt, including the current portion, was $373.7 million and its book value was $366.5 million.

8. LONG-TERM DEBT

On April 10, 2019, the Company entered into ~~the~~a credit facility, with CoBank, ACB and a syndicate of other lenders (the “2019 CoBank Credit Facility”). The 2019 CoBank Credit Facility provides for a $200 million revolving credit facility that includes (i) up to $75 million for standby or trade letters of credit and (ii) up to $10 million under a swingline sub-facility. Approximately ~~$16.0~~$18.0 million of performance letters of credit have been issued and remain outstanding and undrawn as of March 31, ~~2021.~~2022. The 2019 CoBank Credit Facility matures on April 10, 2024.

Amounts borrowed under the 2019 CoBank Credit Facility bear interest at a rate equal to, at the Company’s option, either (i) the London Interbank Offered Rate (“LIBOR”) plus an applicable margin ranging between 1.25% to 2.25% or (ii) a base rate plus an applicable margin ranging from 0.25% to 1.25%. Swingline loans 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) LIBOR for an interest period of one month and (y) LIBOR for an interest period of one week; (ii) the Federal Funds Effective Rate (as defined in the 2019 CoBank Credit Facility) plus 0.50% per annum; and (iii) the Prime Rate (as defined in the 2019 CoBank Credit Facility). The applicable margin is determined based on the Total Net Leverage Ratio (as defined in the 2019 CoBank Credit Facility). Under the terms of the 2019 CoBank Credit Facility, the Company must also pay a fee ranging from 0.150% to 0.375% of the average daily unused portion of the 2019 CoBank Credit Facility over each calendar quarter.

The 2019 CoBank 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. The Company’s investments in “unrestricted” subsidiaries and certain dividend payments to its stockholders are not limited unless the Total Net Leverage Ratio is equal to or greater than 1.75 to 1.0. The Total Net Leverage Ratio is measured each fiscal quarter and is required to be less than or equal to 2.75 to 1.0. In the event of a Qualifying Acquisition (as defined in the 2019 CoBank Credit Facility), the Total Net Leverage Ratio increases to 3.25 to 1.0 for the subsequent three fiscal quarters.

The 2019 CoBank Credit Facility also provides for the incurrence by the Company of incremental term loan facilities, when combined with increases to revolving loan commitments, in an aggregate amount not to exceed $200 million (the “Accordion”). Amounts borrowed under the Accordion are also subject to proforma compliance with a net leverage ratio financial covenant.

As of March 31, ~~2021,~~2022, the Company was in compliance with all of the financial covenants, had 0$71.5 million outstanding in borrowings and, net of the ~~$16.0~~$18.0 million of outstanding performance letters of credit, had ~~$184.0~~$110.5 million of availability under the 2019 CoBank Credit Facility.

Alaska Credit Facility

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Loan”). As of March 31, 2022, $210.0 million was outstanding under the Alaska Term Loan and $13.0 million was outstanding under the Alaska Revolving Facility. Both facilities mature on July 22, 2026.

The Company capitalized $6.6 million of fees associated with the Alaska Credit Facility which are being amortized over the life of the debt and $5.6 million were unamortized at March 31, 2022.

The Alaska Credit Facility also provides for incremental term loans up to an aggregate principal amount of the greater of $70.0 million and Alaska Communications’ trailing twelve month Consolidated EBITDA (as defined in the Alaska Credit Facility).

The key terms and conditions of the Alaska Credit Facility include the following:

●

Amounts outstanding bear an interest rate of LIBOR, or a LIBOR replacement rate as applicable, plus a margin ranging from 3.00% to 4.00% based on Alaska Communications’ Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) or an alternate base rate may be selected at a margin that is 1% lower than the counterpart LIBOR margin;

●

Principal repayments are due quarterly commencing in the fourth quarter of 2023 in quarterly amounts as follows: from the fourth quarter of 2023 through the third quarter of 2024, $1.3 million; and from the fourth quarter of 2024 through the third quarter of 2026, $2.6 million. The remaining unpaid balance is due on the final maturity date;

●

Alaska Communications is required to maintain financial ratios subsequent to the closing of the Alaska Transaction, as defined in the Alaska Credit Facility, including (a) a maximum Consolidated Net Total Leverage Ratio of 4.00 to 1, stepping down to 3.75 to 1 beginning with the second quarter of 2024; and (b) a minimum Consolidated Fixed Charge Coverage Ratio of not less than 1.25 to 1; and

●

The Alaska Credit Facility is non-recourse to the Company and is secured by substantially all of the personal property and certain material real property owned by Alaska Communications.

Alaska Communication entered into an amortizing interest rate swap that has been designated as a cash flow hedge that has an interest rate of 1.6735% and expires on June 30, 2022. As of March 31, 2022, the swap had an unamortized notional amount of $119.8 million.

FirstNet Receivables Credit Facility

On March 26, 2020, Commnet Finance, a wholly owned subsidiary of Commnet Wireless, entered into a receivables credit facility with the Company, Commnet Wireless, and CoBank, ACB (the “Receivables Credit Facility”).

The Receivables Credit Facility provides for a senior secured delayed draw term loan in an aggregate principal amount of up to $75.0 million and the proceeds may be used to acquire certain receivables from Commnet Wireless. The receivables to be financed and sold under the Receivables Credit Facility, which provide the loan security, relate to the obligations of AT&T under the FirstNet Agreement. ~~The~~On December 29, 2021, CoBank amended the Receivables Credit Facility and extended the delayed draw period ~~will expire on~~to December 31, ~~2021.~~2022.

The maturity date for each loan will be set by CoBank and will match the weighted average maturity of the certain receivables financed.

Interest on the loans accrues at a ~~rate based on (i) LIBOR plus 2.50%, (ii) a base rate plus 1.50%~~ ~~or (iii) a~~ fixed annual interest rate to be quoted by CoBank. ~~If the Company selects a variable interest rate option, it is required to enter an interest rate swap fixing the interest rate.~~

The Receivables Credit Facility contains customary events of termination, representations and warranties, affirmative and negative covenants and events of default customary for facilities of this type.

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As of March 31, ~~2021,~~2022, the Company had ~~$10.8~~$42.5 million outstanding, of which ~~$1.1~~$5.3 million was current, and ~~$64.2~~$29.7 million of availability under the Receivables Credit Facility. The Company capitalized $0.9 million of fees associated with the Receivables Credit Facility which are being amortized over the life of the debt and ~~$0.8~~$0.7 million were unamortized at March 31, ~~2021.~~2022.

Viya Debt

The Company, and certain of its subsidiaries, have entered into a $60.0 million loan agreement (the “Viya Debt”) with Rural Telephone Finance Cooperative (“RTFC”). 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 to annual operating cash flow to 3.5 to 1.0 (the “Net Leverage Ratio”). This covenant is tested on an annual basis at the end of each fiscal year. Interest is paid quarterly at a fixed rate of 4.0% per annum 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~~our Viya subsidiaries and is guaranteed by ~~the Company.~~us. With RTFC’s consent, the Company funded the restoration of Viya’s network, following Hurricanes Irma and Maria in 2017, through an intercompany loan arrangement ~~with a $75.0 million limit. The Company was not~~ in ~~compliance with~~ the ~~Net Leverage Ratio covenant~~amount of ~~the Viya Debt agreement for the year ending December 31, 2020 and received a waiver from the RTFC on February 25, 2021.~~$51.6 million.

The Company paid a fee of ~~$0.9~~$0.9 million in 2016 to lock the interest rate at 4% per annum over the term of the Viya Debt. The fee was recorded as a reduction to the Viya Debt carrying amount and is being amortized over the life of the loan.

As of March 31, ~~2021,~~2022, $60.0 million of the Viya Debt remained outstanding and ~~$0.5~~$0.4 million of the rate lock fee was unamortized.

On May 5, 2022, RTFC agreed to amend the Net Leverage Ratio to 7.0 to 1.0 through the maturity date of July 1, 2026. This covenant will be tested on December 31, 2022.

One Communications Debt

The Company has an outstanding loan from HSBC Bank Bermuda Limited (the “One Communications Debt”) which is scheduled to mature on May 22, 2022 and bears interest at the one-month LIBOR plus a margin ranging between 2.5% to 2.75% per annum paid quarterly.

The 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, tested annually as of and for the twelve months ended December 31st, 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 (as defined in the One Communications Debt agreement). ~~The Company was in compliance with its covenants as of December 31, 2020.~~

As a condition of the One Communications Debt, the Company was required to enter into a hedging arrangement with a notional amount equal to at least 30% of the outstanding loan balance and a term corresponding to the term of the One Communications Debt. As such, theThe Company entered into an amortizing interest rate swap that has been designated as a cash flow hedge, which ~~had~~has an original notional amount of $11.0 million, ~~has~~ an interest rate of 1.874%, and expires in ~~March~~May 2022. As of March 31, ~~2021,~~2022, the swap had an unamortized notional amount of ~~$7.1~~$3.8 million.

The Company capitalized $0.3 million of fees associated with the One Communications Debt which are being amortized over the life of the debt and are recorded as a reduction to the debt carrying amount.

As of March 31, ~~2021, $12.5~~2022, $3.8 million of the One Communications Debt was ~~outstanding and $0.1 million of the capitalized fees remained unamortized.~~outstanding.

9. GOVERNMENT ~~GRANTS~~SUPPORT AND SPECTRUM PROGRAMS

Universal Service Fund and Connect America Fund Phase II Programs

The ~~Federal~~Company recognizes revenue from several government funded programs including the Universal Service Fund (“USF”) is, a subsidy program managed by the Federal Communications Commission (“FCC”), and the Alaska Universal Service Fund (“AUSF”), a similar program managed by the Regulatory Commission of Alaska (the “RCA”).

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USF funds are disbursed to telecommunication providers through 4 programs: the High Cost Program; the Low Income Program (“Lifeline Program”); the Schools and Libraries Program (“E-Rate Program”); and the Rural Health Care Support Program.

The Company ~~participates~~also recognizes revenue from the Connect America Fund Phase II program (“CAF II”) which offers subsidies to carriers to expand broadband coverage in designated areas. Under CAF II, the ~~High Cost Program, Lifeline Program, E-Rate Program,~~Company’s US Telecom segment will receive an aggregate of $27.7 million annually through December 2025 and ~~Rural Health Care Support Program as further described below. All~~an aggregate of ~~these funding~~$8.0 million annually from January 2026 through July 2028.

Both the USF and CAFII programs are subject to certain operational and reporting compliance requirements. The Company believes it is in compliance with ~~all applicable requirements.~~these requirements as of March 31, 2022.

~~During each of the three month periods ended March 31, 2021 and 2020, the~~The Company recorded ~~$4.1 million of~~the amounts below as communication services revenue ~~from~~for the ~~High Cost Program in its International Telecom segment for its US Virgin Islands operations under the “Viya” name.~~ reported periods:


	Three months ended
	March 31, 2022

	US Telecom		International Telecom		Total

High cost support	$	1,056	$	2,761	$	3,817
CAF II		6,822		—		6,822
Other Programs		5,554		—		5,554
Total	$	13,432	$	2,761	$	16,193


	Three months ended
	March 31, 2021

	US Telecom		International Telecom		Total

High cost support	$	311	$	4,090	$	4,401
CAF II		1,899		—		1,899
Other Programs		2,132		—		2,132
Total	$	4,342	$	4,090	$	8,432

In 2018, the FCC initiated a proceeding to ~~reform~~replace the High Cost Program support received by Viya in the US Virgin Islands and Puerto Rico in which it proposed to allocate USF funding of up to $18.7 million per year (inclusive of the $16.4 million per year currently allocated to Viya) for 10 years to supplant the $16.4 million that Viya currently receives per year. While Viya applied forwith a new Connect USVI ~~Fund support allocated for the US Virgin Islands, on~~Fund. On November 16, 2020, the FCC announced that Viya was not the recipient of the ~~provisional~~Connect USVI Fund award and ~~that~~authorized funding to be issued to the ~~FCC had provisionally accepted a bid of approximately $8.5 million per year for a term of 10 years. Viya has challenged this decision and its challenge remains pending before the FCC. If Viya’s challenge is not granted, pursuant~~new awardee in June 2021. Pursuant to the terms of the program and effective in July 2021, Viya’s annual USF support was reduced from $16.4 million to $10.9 million. In July 2022, this support will be reduced again to~~two-thirds of the legacy total amount, or $10.9 million, during the first year following the finalization of the award and to~~ ~~one-third of the legacy total amount, or~~ $5.5 million ~~during~~for the ~~second year.~~annual period through June 2023. Thereafter, Viya will not receive High Cost Program support.

~~Also, during each of the three month periods ended March 31, 2021 and 2020, the Company recorded $0.3~~ million of High Cost Program revenue in its US Telecom segment. The Company is subject to certain operational, reporting and construction requirements as a result of this funding, and the Company believes that it is in compliance with all of these requirements.

~~In August 2018, the Company was awarded $79.9 million over~~ 10 years under the Connect America Fund Phase II Auction. Under this program, the Company is required to provide fixed broadband and voice services to certain eligible areas in the United States and is subject to operational and reporting requirements. The Company determined the award is a revenue grant, and as a result the Company will record the funding as revenue upon receipt. The Company recorded $1.9 million in each of the three-month periods ended March 31, 2021 and 2020 from the Connect America Fund Phase II program.RDOF (“Rural Digital Opportunities Fund”)

The Company expects to receive approximately $20.1 million over 10 years to provide broadband and voice coverage to over 10,000 households in the United States (not including Alaska) under the 2020 Rural Digital Opportunity Fund Phase I Auction (“RDOF”). The Company recorded $0.5 million of revenue from the RDOF program in the three months ended March 31, 2022.

Construction Grants

The Company has also ~~receives~~been awarded construction grants to build network connectivity for eligible communities. The funding isof these grants, used to reimburse the Company for its construction costs, ~~and~~ is distributed upon completion of a project. As of December 31, ~~2020,~~2021, the Company ~~has~~had been awarded approximately ~~$16.8~~$27.9 million of such grants. The Company was awarded ~~$6.5~~$0.4 million of additional grants and cancelled $2.1 million of previously awarded

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grants in the three months ended March 31, ~~2021. The~~2022. Of this $28.3 million of awards, the Company has completed its construction obligations on ~~$10.2~~$15.0 million of these projects and ~~$13.1~~$11.2 million of such construction obligations remain with completion deadlines beginning in ~~June 2021.~~July 2022. Once these projects are constructed, the Company is obligated to provide service to the participants. The Company ~~receives funds upon construction completion. The Company received~~ ~~$1.3 million during the three months ended March 31, 2021. The Company~~ expects to meet all requirements associated with these grants.

The Company also receives funding to provide discounted telecommunication services to eligible customers under the E-Rate Program, Lifeline Program, and Rural Health Care Support Program. During the three months ended March 31, 2021 and 2020, the Company recorded revenue of ~~$2.1 million and $2.2~~ million, respectively, in the aggregate from these programs. The Company is subject to certain operational and reporting requirements under the above mentioned programs and it believes that it is in compliance with all of these requirements.

CARES Act

As of December 31, 2020, the Company had received $16.3 million of funding under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). to construct network infrastructure within the Company’s US Telecom segment. During the ~~three months~~year ended ~~March~~December 31, 2021, the Company received an additional ~~$2.4~~$2.4 million of ~~funding. In total~~funding for the ~~Company received~~ ~~$18.7~~ ~~of funding under this program. The funding was utilized to construct network infrastructure in the Company’s US Telecom segment.~~same purpose. The construction was completed as of ~~March~~December 31, 2021 and ~~$18.4~~$18.4 million of the funding was recorded as a reduction to property, plant and equipment ~~and~~with a subsequent reduction to depreciation expense. The remaining ~~$0.3~~$0.3 million was recorded as a reduction to operating expense in the ~~three months~~year ended ~~March~~December 31, 2021.

~~Tribal Bidding Credit~~

As part of the broadcast television spectrum incentive auction, the FCC implemented a tribal lands bidding credit to encourage deployment of wireless services utilizing 600 MHz spectrum on the lands of federally recognized tribes. The Company received a bidding credit of $7.4 million under this program in 2018. A portion of these funds will be used to offset network capital costs and a portion will be used to offset the costs of supporting the networks. The Company’s current estimate is that it will use $6.1 million to offset capital costs, consequently reducing future depreciation expense and $1.3 million to offset the cost of supporting the network which will reduce future operating expense. Through March 31, 2021, the Company has spent $6.1 million on capital expenditures and has recorded $0.3 million in offsets to the cost of supporting the network. The credits are subject to certain requirements, including deploying service by January 2021 and meeting minimum coverage metrics. If the requirements are not met the funds may be subject to claw back provisions. The Company believes it is in compliance with all applicable requirements related to these funds.

CBRS Auction

During the third quarter of 2020, the Company participated in the FCC’s Citizens Broadband Radio Service (CBRS) auction for Priority Access Licenses (PALs) in the 3.5 GHz spectrum band. These PALs are licensed on a county-by-county basis and are awarded for a 10-year renewable term. The Company was a winning bidder for PALs located strategically throughout the United States at a total cost of approximately $20.4 million. In connection with the

awarded licenses, the Company will have to achieve certain CBRS spectrum build out obligations. The Company currently expects to comply with all applicable requirements related to these licenses.

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~~RDOF~~

~~In the 2020 Rural Digital Opportunity Fund Phase I Auction (“RDOF”), pending the FCC’s conclusion~~Table of ~~the award process, we expect to receive approximately $20.1 million over~~ ~~10 years to provide broadband coverage to over 10,000 households. Once confirmed, we will be obligated to provide broadband and voice services to certain eligible areas in the United States.~~Contents

10. RETIREMENT PLANS

Multi-employer Defined Benefit Plan

Pension benefits for substantially all of the Company’s Alaska-based employees are provided through the Alaska Electrical Pension Fund (“AEPF”). The Company pays a contractual hourly amount based on employee classification or base compensation to the AEPF. As a multi-employer defined benefit plan, the accumulated benefits and plan assets are not determined for, or allocated separately to, the individual employer. This plan was not in endangered or critical status during the plan year.

Defined Benefit Plan

The Company has noncontributory defined benefit pension and noncontributory defined medical, dental, vision, and life benefit plans for eligible employees in its International Telecom segment who meet certain eligibility criteria. As part of the Alaska Transaction, the Company acquired a defined benefit pension plan and a post-retirement medical plan covering certain employees. The pension plan had a projected benefit obligation of $15.4 million and plan assets of $12.1 million on July 22, 2021. The post-retirement medical plan is unfunded and had a projected benefit obligation of $0.4 million on July 22, 2021.

The Company recorded the net periodic benefit cost identified below (in thousands):


	Three months ended								Three months ended
	March 31, 2021				March 31, 2020				March 31, 2022				March 31, 2021
	Pension benefits		Postretirement benefits		Pension benefits		Postretirement benefits		Pension benefits		Postretirement benefits		Pension benefits		Postretirement benefits
Operating expense
Service cost	$	54	$	35	$	423	$	32	$	57	$	36	$	54	$	35
Non-operating expense
Interest cost		572		41		879		45		565		33		572		41
Expected return on plan assets		(687)		—		(1,158)		—		(925)		—		(687)		—
Actuarial (gain)/ loss		—		—		(7)		(15)		—		—		—		—
Net periodic pension expense (benefit)	$	(61)	$	76	$	137	$	62	$	(303)	$	69	$	(61)	$	76

In the first quarter of 2020, the Company began the process of winding up one of its pension plans. At December 31, 2020 this plan had assets of $15.6 million and a projected benefit obligation of $15.6 million.

The Company was not required to make contributions to its pension plans during the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. However, the Company periodically evaluates whether to make discretionary contributions. The Company funds its postretirement benefit plans as claims are made and did not make contributions to its pension plans during the three months ended March 31, ~~2021~~2022 and ~~2020.~~

2021.

11. INCOME TAXES

The Company’s effective tax rate for the three months ended March 31, 2022 and 2021 was 296.7% and ~~2020 was~~ 6.5% ~~and 31.8%~~, respectively.

The Company recorded an income tax provision of $3.0 million in relation to income before taxes of $1.0 million for the three months ended March 31, 2022. The effective tax rate for the three months ended March 31, 2022 was primarily impacted by the following items: (i) a $0.5 million net increase of unrecognized tax positions recognized discretely, (ii) a $2.1 million net expense recognized discretely to record a valuation allowance on certain deferred tax assets that are not expected to be realizable based on the weight of positive and negative evidence, and (iii) the mix of income generated among the jurisdictions in which the Company operates.

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The effective tax rate for the three months ended March 31, 2021 was primarily impacted by the following items: (i) the mix of income generated among the jurisdictions in which the Company operates and (ii) a discrete expense of $0.5 million for interest on unrecognized tax positions.

The effective tax rate for the three months ended March 31, 2020 was primarily impacted by the following items: (i) the remeasurement of a forecasted domestic loss at a higher tax rate due to carryback provisions as provided by the CARES Act, (ii) the mix of income generated among the jurisdictions in which the Company operates along with the exclusion of losses in the US Virgin Islands and India where the Company cannot benefit from those losses as required by ASC 740-270-30-36(a), (iii) discrete items including a $0.5 million expense for interest on unrecognized tax positions, a $0.4 million expense to record a valuation allowance against an investment write-down which cannot be benefitted for tax purposes, and a $0.3 million benefit (net) related to the remeasurement of existing losses and temporary differences at a higher tax rate due to carryback provisions as provided by the CARES Act.

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 any transactional or one-time items in the future and the mix of income in any given year generated among the jurisdictions in which the Company operates. While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from the Company’s accrued positions as a result of uncertain and complex application of tax law and regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgment by management. Accordingly, the Company could record additional provisions or benefits for US federal, state, and foreign tax matters in future periods as new information becomes available.

12. ~~NET INCOME (LOSS)~~EARNINGS PER SHARE AND REDEEMABLE NONCONTROLLING INTERESTS

Earnings Per Share

The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share (in thousands):


	Three months ended March 31,
	2022		2021
Numerator:
Net loss attributable to ATN International, Inc. stockholders		(948)		2,706
Less: Preferred dividends		(1,116)		—
Net loss attributable to ATN International, Inc. common stockholders	$	(2,064)	$	2,706

Denominator:
Weighted-average shares outstanding- Basic		15,708		15,902
Effective of dilutive securities:
Stock options, restricted stock units and performance stock units		—		50
Weighted-average shares outstanding- Diluted		15,708		15,952

For each of the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the calculations of basic and diluted weighted average shares of common stock outstanding do not include 5,000 shares relating to stock options as the effects of those options were anti-dilutive.

Redeemable Noncontrolling Interests

In connection with the Alaska Transaction, the Company has accounted for the Freedom 3 Investment as redeemable noncontrolling interests in its consolidated financial statements. The redeemable noncontrolling interests consist of $22.6 million of redeemable common units and $48.3 million of redeemable preferred units. The common units contain a put option allowing the holder to sell the common units to a subsidiary of the Company at the then fair market value. The put option is solely the obligation of Alaska Communications and is nonrecourse to the Company. The put option begins at the earlier of a future initial public offering of the Alaska Communications operations or July 2028. The fair value of the common units remained at $22.6 million at March 31, 2022, unchanged from the value at July 22, 2021. The redeemable preferred equity carries a 9% preferred dividend which compounds quarterly. The preferred units contain a put option allowing the holder to sell the preferred units to a subsidiary of the Company at the unpaid issue price plus unpaid dividends. The put option is solely the obligation of the Alaska Communications and is nonrecourse to the Company. The put option begins at the earlier of a future initial public offering of the Alaska Communications operations or July 2028. The unpaid preferred dividend was $3.1 million at March 31, 2022.

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For the three months ended March 31, 2022, the Company allocated losses of $1.1 million to the redeemable common units representing their proportionate share of operating losses. Additionally, the fair value of the redeemable common units increased by $1.1 million during the three months ended March 31, 2022.

The following table provides a roll forward of the activity related to the Company’s redeemable noncontrolling interests for the three months ended March 31, 2022:


	Redeemable Preferred Units		Redeemable Common Units		Total Redeemable Noncontrolling Interests
Balance, December 31, 2021	$	50,296	$	22,640	$	72,936
Accrued preferred dividend		1,116		—		1,116
Allocated net loss		—		(1,092)		(1,092)
Change in fair value		—		1,092		1,092
Balance, March 31, 2022	$	51,412	$	22,640	$	74,052

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13. SEGMENT REPORTING

The Company has the following 3 reportable and operating segments: i) International Telecom, ii) US Telecom, and iii) Renewable Energy.

The following tables provide information for each operating segment (in thousands):


For the Three Months Ended March 31, 2021
For the Three Months Ended March 31, 2022											For the Three Months Ended March 31, 2022

	International		US		Renewable		Corporate and					International		US		Renewable		Corporate and
	Telecom		Telecom		Energy		Other (1)		Consolidated			Telecom		Telecom		Energy		Other (1)		Consolidated
Revenue
Communication Services
Mobility	$	21,821	$	2,860	$	—	$	—	$	24,681
Fixed		58,748		6,370		—		—		65,118
Mobility - Business												$	3,616	$	374	$	—	$	—	$	3,990
Mobility - Consumer													19,970		1,456		—		—		21,426
Total Mobility													23,586		1,830		—		—		25,416
Fixed - Business													17,254		27,145		—		—		44,399
Fixed - Consumer													41,093		18,968		—		—		60,061
Total Fixed													58,347		46,113		—		—		104,460
Carrier Services		1,883		18,736		—		—		20,619			3,402		32,989		—		—		36,391
Other		218		—		—		—		218			276		—		—		—		276
Total Communication Services Revenue		82,670		27,966		—		—		110,636			85,611		80,932		—		—		166,543
Construction													—		1,987		—		—		1,987
Other
Renewable Energy		—		—		418		—		418
Managed Services		1,150		—		—		—		1,150			1,176		2,313		—		—		3,489
Construction		—		12,306		—		—		12,306
Total Other Revenue		1,150		12,306		418		—		13,874			1,176		2,313		—		—		3,489
Total Revenue		83,820		40,272		418		—		124,510			86,787		85,232		—		—		172,019
Depreciation and amortization		13,826		5,193		188		1,301		20,508
Depreciation													13,897		18,442		—		953		33,292
Amortization of intangibles from acquisitions													418		2,840		—		—		3,258
Non-cash stock-based compensation		37		15		22		1,262		1,336			60		90		—		1,311		1,461
Operating income (loss)		13,116		(534)		(662)		(8,571)		3,349			11,803		(4,635)		(23)		(7,037)		108

For the Three Months Ended March 31, 2020









International

US

Renewable

Corporate and

Telecom

Telecom

Energy

Other (1)

Consolidated
Revenue

Communication Services

Mobility

$
20,230

$
2,403

$
—

$
—

$
22,633
Fixed

57,741

4,825

—

—

62,566
Carrier Services

2,298

20,071

—

—

22,369
Other

336

—

—

—

336
Total Communication Services Revenue

80,605

27,299

—

—

107,904
Other

Renewable Energy

—

—

1,322

—

1,322
Managed Services

1,679

—

—

1,679
Total Other Revenue

1,679

—

1,322

—

3,001
Total Revenue

82,284

27,299

1,322

—

110,905
Depreciation and amortization

14,315

5,886

614

1,703

22,518
Non-cash stock-based compensation

(37)

—

—

1,197

1,160
Operating income (loss)

13,477

2,193

(456)

(7,915)

7,299

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For the Three Months Ended March 31, 2021

	International		US		Renewable		Corporate and
	Telecom		Telecom		Energy		Other (1)		Consolidated
Revenue
Communication Services
Mobility - Business	$	1,197	$	576	$	—	$	—	$	1,773
Mobility - Consumer		20,624		2,284		—		—		22,908
Total Mobility		21,821		2,860		—		—		24,681
Fixed - Business		16,634		2,696		—		—		19,330
Fixed - Consumer		42,114		3,674		—		—		45,788
Total Fixed		58,748		6,370		—		—		65,118
Carrier Services		1,883		18,736		—		—		20,619
Other		218		—		—		—		218
Total Communication Services Revenue		82,670		27,966		—		—		110,636
Construction		—		12,306		—		—		12,306
Other
Renewable Energy		—		—		418		—		418
Managed Services		1,150		—		—		—		1,150
Total Other Revenue		1,150		—		418		—		1,568
Total Revenue		83,820		40,272		418		—		124,510
Depreciation		13,429		5,193		188		1,301		20,111
Amortization of intangibles from acquisitions		397		—		—		—		397
Non-cash stock-based compensation		37		15		22		1,262		1,336
Operating income (loss)		13,116		(534)		(662)		(8,571)		3,349

(1)

Corporate and Other items refer to corporate overhead costs and consolidating adjustments

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Selected balance sheet data for each of the Company’s segments as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 consists of the following (in thousands):



	International		US		Renewable		Corporate and				International		US		Renewable		Corporate and
	Telecom		Telecom		Energy		Other (1)		Consolidated		Telecom		Telecom		Energy		Other (1)		Consolidated
March 31, 2021
Cash, Cash equivalents, and Investments	$	40,505	$	29,389	$	5,822	$	15,543	$	91,259
March 31, 2022
Cash, cash equivalents, and short term investments											$	40,101	$	29,285	$	705	$	5,957	$	76,048
Total current assets		100,470		67,739		9,716		17,352		195,277		105,551		108,779		3,653		2,858		220,841
Fixed assets, net		448,690		67,829		—		11,552		528,071		448,064		476,491		—		9,320		933,875
Goodwill		25,421		35,269		—		—		60,690		4,835		35,269		—		—		40,104
Total assets		634,344		302,966		22,369		98,043		1,057,722		623,497		868,338		17,053		81,819		1,590,707
Total current liabilities		77,100		33,216		356		17,084		127,756		80,857		87,434		356		16,079		184,726
Total debt		71,923		10,814		—		—		82,737		63,342		259,159		—		71,500		394,001
December 31, 2020
Cash, Cash equivalents, and Investments	$	45,848	$	26,921	$	4,311	$	26,845	$	103,925
December 31, 2021
Cash, cash equivalents, and short term investments											$	43,128	$	28,486	$	659	$	7,628	$	79,901
Total current assets		107,315		65,806		39,057		27,887		240,065		108,677		111,741		3,585		8,614		232,617
Fixed assets, net		449,888		73,717		—		12,857		536,462		452,856		480,250		—		10,103		943,209
Goodwill		25,421		35,270		—		—		60,691		4,835		35,269		—		—		40,104
Total assets		642,834		265,797		39,045		136,035		1,083,711		630,515		877,041		17,481		83,567		1,608,604
Total current liabilities		80,875		43,200		1,038		22,815		147,928		91,090		108,950		356		20,548		220,944
Total debt		72,823		—		—		—		72,823		64,243		240,802		—		61,499		366,544


	Capital Expenditures										Capital Expenditures

		International		US		Renewable		Corporate and				International		US		Corporate and
Three months ended March 31,		Telecom		Telecom		Energy		Other (1)		Consolidated		Telecom		Telecom		Other (1)		Consolidated
2022											$	15,170	$	19,095	$	203	$	34,468
2021	$	10,506	$	14,939	$	—	$	235	$	25,680		10,506		14,939		235		25,680
2020		10,465		1,972		720		904		14,061

(1)

Corporate and other items refer to corporate overhead costs and consolidating adjustments

14. 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.

In 1990, the Company’s Guyana subsidiary, GTT, was awarded a license to provide domestic 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 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 October 5, 2020, the Prime Minister of Guyana formally implemented telecommunications legislation previously passed by the Guyana Parliament in 2016 that introduces material changes to many features of Guyana’s existing telecommunications regulatory regime with the intention of creating a more competitive market. At that time, the Company was issued a new

license to provide domestic and international voice as well as data services and mobile services in Guyana. NaN of the

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Company’s competitors were issued service licenses as well. While the Company has requested details of its competitors’ licenses, such information has not been made public by the Guyana Telecommunications Agency, and the Company is not yet able to ascertain whether the licenses issued to its competitors permit any competitors to provide services that have been subject to GTT’s exclusive rights contained in its 1990 license.

On October 23, 2020, the Government of Guyana also brought into effect new telecommunications regulations called for by the telecommunications legislation. The regulations include new requirements for the market as a whole, which impose costly additional regulatory fees and impact the Company’s operations, administrative reporting and services. There can be no assurance that these regulations will be effectively implemented, or that they will be administered in a fair and transparent manner.

Historically, GTT has been subject to other long-standing litigation proceedings and disputes in Guyana that have not yet been resolved. 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 operations 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 of Guyana. 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 NFMU’s continued opinion that the final calculation for 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 been given the opportunity to review recommendations made by the NFMU to the Minister on spectrum fee methodology, if any.

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 and GTT intervened in the suit in order to oppose Digicel’s claims. 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~~continues 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 monetary 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 been consolidated with Digicel’s constitutional challenge described above. Prior to the declaration of COVID-19 related travel and business restrictions in Guyana, the consolidated cases were scheduled to proceed to trial in 2020. GTT expects to resume the litigation following the lifting of COVID-19 related restrictions and intends to prosecute these matters vigorously; however, the Company cannot accurately predict at this time when the consolidated suit will go to trial.

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.

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On May 20, 2021, the Company was served with a notice of application for enforcement of a foreign judgment with respect to a matter brought by the Trinidad & Tobago Electric Commission (“TTEC”) in the High Court of Justice in the Republic of Trinidad and Tobago in August 2013 against the Company and other defendants, alleging breach of contract due to the Company’s failure to pay TTEC in connection with amounts alleged to be owed as reimbursement for cable repair costs. In May 2015, the Company failed to appear in the matter and a default judgment was entered against the Company in the amount of approximately $2.8 million. In May 2021, TTEC took steps to enforce the judgment by commencing proceedings against GTT in Guyana, however, in May of 2022, the High Court of Guyana denied TTEC’s petition. GTT intends to continue to defend its position against the legitimacy of the claim.

In February 2020, the Company’s Alaska Communications subsidiary received a draft audit report from USAC in connection with USAC’s inquiry into Alaska Communications’ funding requests under the Rural Health Care Support Program for certain customers for the time period of July 2012 through June 2017. The draft audit report alleges violations of the FCC’s rules for establishing rural rates and urban rates, the provisioning and billing of ineligible services and products, and violations of the FCC’s competitive bidding rules. Alaska Communications has provided USAC with extensive comments in response to its draft audit report seeking correction of numerous factual and legal errors that it believed it had identified. As a result of these conversations and comments being submitted by Alaska Communications, USAC’s auditors may revise their findings, including the amounts they recommend USAC seek to recover. USAC’s auditors are expected to issue a final audit report incorporating Alaska Communications’ responses that will be sent to USAC’s Rural Health Care Division to review and determine if corrective action would be appropriate. In the event that the Company disagrees with USAC’s final audit report, the Company can appeal that decision to USAC’s Rural Health Care Division and/or the FCC. At this time, the Company cannot predict the contents or timing of the final USAC audit report, the outcome of the audit or the impact on the Company’s business, financial condition, results of operations, or liquidity.

Alaska Communications also received a Letter of Inquiry on March 18, 2018, and subsequent follow up information requests, from the FCC Enforcement Bureau requesting historical information regarding Alaska Communications’ participation in the FCC’s Rural Health Care Support Program. The Company will continue to work constructively with the FCC’s Enforcement Bureau to provide it the information it is seeking. At this time, the Company cannot predict the outcome of the FCC Enforcement Bureau’s inquiry or the impact it may have on its business, financial condition, results of operations or liquidity.

With respect to all of the foregoing matters, the Company believes that some adverse outcome is probable and has accordingly accrued ~~$5.0~~$13.3 million as of March 31, ~~2021~~2022 for these ~~matters.~~and other potential liabilities arising in various claims, legal actions and regulatory proceedings arising in the ordinary course of business. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. It is the Company’s policy to expense costs associated with loss contingencies, including any related legal fees, as they are incurred.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis of our financial condition and results of operations that follows is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ significantly from these estimates under different assumptions or conditions. This discussion should be read in conjunction with our condensed consolidated financial statements herein and the accompanying notes thereto, and our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 1, 2021, (the “2020 Annual Report on Form 10-K”), and in particular, the information set forth therein under Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Overview

We ~~strive to be a leading platform for the operation of, and investment in, smaller and specialty market communications services and technology companies.~~ ~~We have a long track record of delivering~~provide critical infrastructure-based ~~solutions to underserved markets.~~ ~~Our majority-owned operating subsidiaries provide facilities-based~~ communications ~~services, along with~~and related information technology solutions to remote and historically underserved markets in the United States, Bermuda, and the Caribbean. We ~~also have non-controlling investments~~seek to invest in ~~several communications~~our existing and ~~technology companies, and we continue to consider opportunities to make controlling and minority investments in businesses that we believe have the potential~~new markets for generating substantial and relatively steady cash flows over extended periods of time or have technologies or business models that might prove valuable to our main operating subsidiaries or create significant longerlong term growth ~~potential for~~led by our Glass and Steel and “fiber first” strategies that enables us ~~as a whole.~~to bring new or enhanced communications services to markets often overlooked by larger telecommunications providers.

At the holding company level, we oversee the allocation of capital within and among our subsidiaries, affiliates, new investments, and stockholders. We also have developed significant operational expertise and resources that we use to augment the capabilities of our individual operating ~~subsidiaries.~~subsidiaries in our local markets. Over the past 10 years, we have built a platform of resources and expertise to support our operating subsidiaries and to improve their quality of service and customer acquisition, retention, and satisfaction while maintaining optimal operating efficiencies. We have a number of shared service functions, including billing, network and engineering and customer service, and the parent company also employs personnel with ~~specialized skills that provide~~ greater economies of scale and expertise than would typically be available at the operating subsidiary level.

We were incorporated in Delaware in 1987, began trading publicly in 1991 and spun off more than half of our operations to stockholders in 1998. We actively evaluate potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, and generally we look for those that we believe have the potential for generating steady excess cash flows over extended periods of time. In addition, we consider non-controlling investments in earlier stage businesses that we consider strategically relevant, and which may offer long-term growth potential for us, either individually, or as research and development businesses that can support our operating subsidiaries in new technology, product, and service development and offerings. We have used the cash generated from our established operating units, and any asset sales, to re-invest in our existing businesses, to make strategic investments in additional businesses, and to return cash to our investors. Wealso provide management, technical, financial, regulatory, and marketing services to our operating subsidiaries and typically receive a management fee calculated as a percentage of their revenues, which is eliminated in consolidation. We also actively evaluate potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, and generally look for those that we believe fit our profile of telecommunications businesses and have the potential to complement our Glass and Steel and “fiber first” approach in markets while generating steady excess cash flows over extended periods of time. We use the cash generated from our operations to re-invest in organic growth in our existing businesses, to make strategic investments in additional businesses, and to return cash to our investors through dividends or stock repurchases.

For further information about our financial segments and geographical information about our operating revenues and assets, see Notes 1 and 13 to the Consolidated Financial Statements included in this Report.

30As of March 31, 2022, we offer the following types of services to our customers:

●

Mobility Telecommunications Services. We offer mobile communications services and equipment (“Mobility”) over our wireless networks to both our business and consumer subscribers. In certain markets, mobility services also includes private network services to business customers and municipalities.

●

Fixed Telecommunications Services. We provide fixed data and voice telecommunications services (“Fixed”) to both our business and consumer subscribers in all of our markets. These services include consumer broadband and high speed data solutions for businesses. For some markets, fixed services also include video services and revenue derived from support under certain government programs.

●

Carrier Telecommunication Services. We deliver services (“Carrier Services”) such as wholesale roaming, the leasing of critical network infrastructure such as tower and transport facilities, site maintenance and international long-distance services to other telecommunications providers.

●

Managed Services. We provide information technology services (“Managed Services”) such as network, application, infrastructure and hosting services to both our business and consumer customers to complement our Fixed Services in our existing markets.

Through March 31, ~~2021,~~2022, we ~~had~~have identified three operating segments to manage and review our operations and to facilitate investor presentations of our results. These three operating segments are as follows:

●

International Telecom. ~~Businesses contained in~~In our international ~~telecom segment~~markets, we offer ~~a mix of fixed data, internet~~Fixed Services, Mobility Services, Carrier Services and ~~voice services (“Fixed”) as well as retail mobility (“Mobility”) services~~Managed Services to customersin Bermuda, the Cayman Islands, Guyana and the

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US Virgin Islands. We offer fixed video services in Bermuda, the Cayman Islands, and the US Virgin Islands and managed information technology services (“Managed Services”) to enterprise customers in all our markets. We also offer services to other telecom providers (“Carrier Services”), such as international long-distance, transport and access services, and roaming from such telecom providers’ customers traveling in our network service areas.

●

US Telecom. In the United States, ~~primarily in the Southwest,~~ we offer Fixed Services, Carrier Services, ~~including wholesale roaming services, the leasing of critical network infrastructure such as towers and transport facilities, and site maintenance. We also provide Fixed, Mobility,~~ and Managed Services to ~~our retail~~business and ~~enterprise~~consumer customers in Alaska and the western United States. In the western United States, we also provide Mobility Services and private network services to enterprise ~~customers, municipalities~~ and ~~other service providers~~consumer customers.

●

Renewable Energy. In India, we provided distributed generation solar power to commercial and industrial customers through January 27, 2021. See ~~Sale~~Disposition of ~~Renewable Energy Operations~~International Solar Business for further details.

The following chart summarizes the operating activities of our principal subsidiaries, the segments in which we report our revenue and the markets we served as of March 31, ~~2021:~~2022:


Segment	Services	Markets	Tradenames
International Telecom	Mobility Services	Bermuda, Guyana, US Virgin Islands	One, GTT+, Viya
	Fixed Services	Bermuda, Cayman Islands, Guyana, US Virgin Islands	One, Logic, ~~GTT+,~~GTT, Viya
	Carrier Services	Bermuda, Guyana, US Virgin Islands	One, GTT+, Viya
	Managed Services	Bermuda, Cayman Islands, US Virgin Islands, Guyana	Fireminds, One, Logic, ~~GTT+,~~GTT, Viya
US Telecom	Mobility Services	United States (rural markets)	Choice, Choice NTUA Wireless, Geoverse
	Fixed Services	United States	Alaska Communications, Commnet, Choice, Choice NTUA Wireless ~~Deploycom~~
	Carrier Services	United States	Alaska Communications, Commnet, Essextel
	Managed Services	United States	Alaska Communications, Choice
RenewableEnergy (1)	Solar	India	Vibrant Energy

(1)

See ~~Sale~~Disposition of ~~Renewable Energy Operations~~International Solar Business for further details.

~~We actively evaluate potential acquisitions, investment opportunities~~Acquisition of Alaska Communications

On July 22, 2021, we completed the acquisition of Alaska Communications Systems Group, Inc. (“Alaska Communications”), a publicly listed company, for approximately $339.5 million in cash, net of cash acquired, (the “Alaska Transaction”). Alaska Communications provides broadband telecommunication and other strategic transactions, both domestic and international, that meet our return on investment and other criteria. In addition, we consider non-controlling investments in earlier stage businesses that we consider strategically relevant, and which may offer long-term growth potential for us, either individually, or as research and development businesses that can support our operating subsidiaries in new product and service development and offerings. We provide management, technical, financial, regulatory, and marketingmanaged information technology services to customers in the state of Alaska and beyond using its statewide and interstate telecommunications network.

In conjunction with the Alaska Transaction, we entered into an agreement with affiliates and investment funds managed by Freedom 3 Capital, LLC as well as other institutional investors (collectively the “Freedom 3 Investors”). The Freedom 3 Investors contributed $71.5 million in conjunction with the Alaska Transaction (the “Freedom 3 Investment”). The Freedom 3 Investment consists of common and preferred equity instruments in our ~~subsidiaries~~subsidiary of which holds the ownership of Alaska Communications. We accounted for the Freedom 3 Investment as a redeemable noncontrolling interest in our consolidated financial statements and ~~typically receive~~we also entered into a ~~management fee equal~~financing transaction drawing $220 million on a new credit facility to complete the Alaska Transaction. As a ~~percentage~~result of ~~their revenues, which is eliminated in consolidation. For further information about our financial segments~~the Alaska Transaction, we own approximately 52% of the common equity of Alaska Communications and ~~geographical information about our operating revenues~~control its operations and ~~assets see Notes 1 and 13 to~~management. Beginning on July 22, 2021, the ~~Unaudited Condensed Consolidated Financial Statements~~results of Alaska Communications are included in ~~this Report.~~our US Telecom segment.

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See Liquidity and Capital Resources for a discussion regarding the credit agreement used to help finance the Alaska Transaction.

COVID-19

We are continuing to monitor and assess the effects of the ongoing COVID-19 pandemic on our commercial operations, the safety of our employees and their families, our sales force and ~~customers and any potential impact on our revenue in 2021.~~customers.

The preparation of the condensed consolidated financial statements requires us to make estimates, judgments and assumptions, which are evaluated on an ongoing basis, that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. ~~On an ongoing basis, we evaluate estimates, judgments and methodologies.~~ We assessed certain accounting matters and estimates that generally require consideration of forecasted financial information in context with the information and estimates reasonably available to us and the unknown future impacts of COVID-19 as of March 31, ~~2021~~2022 and through the date of this report. The accounting matters assessed included, but were not limited to, ~~our~~the allowance for credit losses, the carrying value of ~~our~~ goodwill and other long-lived assets, financial assets, valuation allowances for tax assets and revenue recognition. ~~We assessed~~

Our assessment of the ~~impacts~~impact of COVID-19 on our consolidated financial statements as of and for the three months ended March 31, 2021, in particular the impacts on lines of revenues, operating expenses as well as the deferral and savings on other operating expenses and capital expenditures. During the three months ended March 31, 2021, while our International Telecom segment experienced strengthened demand for both its Mobility and Fixed services, its Carrier Services revenue declined as a result of a reduction in roaming revenue due to pandemic-related travel and stay-at-home restrictions as compared to 2019. Such restrictions also resulted in decreased Mobility and Carrier Services revenues within our US Telecom segment during the three months ended March 31, 2021 as compared to the same period of 2020. However, in response to certain anticipated impacts, we were able to implement operating expense savings during 2020 and the first quarter of 2021, particularly with respect to our International Telecom segment, that when coupled with Company-wide travel expense savings and capital expenditure deferrals, acted to offset much of the revenue loss or additional credit loss allowances caused by anticipated customer non-payment activity in the year. As a result, our assessmentoperations did not indicate that there was a material adverse impact to our consolidated financial statements as of and for the three months ended March 31, ~~2021.~~2022. However, ~~our~~ future assessments of the impacts of COVID-19, ~~for the remainder of 2021 or our ability to realize continued operational expense savings,~~ as well as other factors, including the possible reinstatement of certain COVID-19 travel-related and stay-at-home restrictions, could result in material adverse impacts to our consolidated financial statements in future reporting periods. For example, ~~the local economies~~we may experience difficulty in procuring network or retail equipment, such as handsets for subscribers, as a result of ~~many of our Caribbean markets are tourism-dependent and the decline in global travel activity resulting~~COVID-19 restrictions. Apart from COVID-19 may continue to impact our revenue and cash flows for certain services in these markets as our retail and enterprise customers may be unable to pay for services, and our international roaming revenue may decline as compared to last year. Apart frompossible government issued travel restrictions, we currently cannot assess how COVID-19 may influence ~~our~~ subscribers’ procurement behavior for ~~our~~ services or how that behavior will impact ~~our~~ revenues in the foreseeable future.

Disposition of International Solar Business

~~Pending Acquisition of Alaska Communications System Group, Inc~~.

On December 31, 2020, we announced that we entered into an Agreement and Plan of Merger (the “Alaska Merger Agreement”) with Freedom 3 Capital, LLC (“Freedom3”) to acquire all of the shares of Alaska Communications Systems Group, Inc. (“Alaska Communications”), a publicly listed company (Nasdaq:ALSK) for approximately $340 million, including the assumption of debt (the “Alaska Transaction”). Following the closing of the Alaska Transaction, we will, through our subsidiaries, own and control approximately 51% of Alaska Communications and Freedom3, through its affiliates, will own the remaining 49%. In February 2021, the required waiting period under the Hart Scott Rodino Antitrust Improvements Act of 1976 expired. In March 2021, the stockholders of Alaska Communications approved the Alaska Merger Agreement. However, the Alaska Transaction remains subject to customary closing terms and conditions including (i) the absence of certain legal impediments and (ii) obtaining the necessary consents from the Federal Communications Commissions (“FCC”) and the Regulatory Commission of Alaska.

~~Sale of Renewable Energy Operations~~

In January 2021, we completed the sale of 67% of the outstanding equity in our business that owns and operates distributed generation solar power projects operated under the Vibrant name in India (the “Vibrant Transaction”). The post-sale results of our ownership interest in Vibrant, representing 33% of Vibrant’s profits and losses, will be recorded through the equity method of accounting within

the Corporate and Other operating segment. As such, our consolidated financial statements will no longer include revenue and operating expenses from Vibrant, but instead, “other income (expense)” within the Corporate and Other operating segment will include our 33% share of Vibrant’s profits or losses. We will continue to present the historical results of our Renewable Energy segment for comparative purposes.

The operations of Vibrant did not qualify as discontinued operations because the disposition did not represent a strategic shift that had a major effect on our operations and financial results.

FirstNet Agreement

In July 2019, ~~August 2020 and May 2021,~~ we entered into a Network Build and Maintenance Agreement ~~(the “FirstNet Agreement”)~~ with AT&T Mobility, LLC (“AT&T”) that we amended in August 2020 and ~~the First and Second Amendments to the FirstNet Agreement, respectively~~May 2021 (the “FirstNet ~~Transaction”~~Agreement”). In connection with the FirstNet ~~Transaction,~~Agreement, we ~~will build~~are building a portion of AT&T’s network for the First Responder Network Authority (“FirstNet”) ~~as well as a commercial wireless network~~ in or near our current operating area in the ~~Southwestern~~Western United States. Pursuant to the FirstNet Agreement and subject to certain limitations contained therein, all cell sites must be completed and accepted within a specified period of time. WeSince inception of the project through March 31, 2022, we have recorded $48.8 million in construction revenue, including $2.0 million during 2022, and expect to ~~recognize construction revenue of approximately $80~~record an additional $31.0 million to ~~$85~~$36.0 million ~~through~~in 2022 ~~that will be mainly offset by construction costs~~ as sites are completed. In 2022, we also expect to record additional costs of construction revenue, as sites are completed, that will approximate that revenue. Revenues from construction are expected to have minimal impact on operating income. The network build portion of the FirstNet Agreement has continued during the COVID-19 pandemic, but the overall timing of the build schedule has been delayed. ~~Subject to ongoing delays caused by COVID-19 related restrictions, we currently expect construction revenues to continue into the first half of 2022.~~

Following acceptance of a cell site, AT&T will own the cell site and we will assign to AT&T any third-party tower lease applicable to such cell site. If the cell site is located on a communications tower we own, AT&T will pay us

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pursuant to a separate lease agreement for an initial term of ~~eight~~8 years. In addition to building the network, we will provide ongoing equipment and site maintenance and ~~high capacity~~high-capacity transport to and from these cell sites for an initial term ending in 2029.

AT&T will continue to use our wholesale domestic ~~Mobility~~mobility network for roaming services at a fixed rate per site during the construction period until such time as the cell site is transferred to AT&T. Thereafter, revenue from the maintenance, leasing and transport services provided to AT&T is expected to generally offset revenue from wholesale ~~Mobility~~mobility roaming services. We are currently receiving revenue from the FirstNet Transaction and expect overall operating income contributions from the FirstNet Transaction to have a relatively steady impact going forward.

~~See~~ ~~Sources of Cash~~ ~~below for a discussion regarding our March 26, 2020 credit agreement providing the ability to finance the assets built under the FirstNet Agreement.~~

Universal Service Fund and Connect America Fund Phase II Programs

~~The Federal Universal Service Fund (“USF”) is~~We recognize revenue from several government funded programs including the USF, a subsidy program managed by the Federal Communications Commission (“FCC”), and the Alaska Universal Service Fund (“AUSF”), a similar program managed by the Regulatory Commission of Alaska (the “RCA”). USF funds are disbursed to telecommunication providers through four programs: the High Cost Program; the Low Income Program (“Lifeline Program”); the Schools and Libraries Program (“E-Rate Program”); and the Rural Health Care Support Program.

We ~~participate~~also recognize revenue from the Connect America Fund Phase II program (“CAF II”) which offers subsidies to carriers to expand broadband coverage in designated areas. Under CAF II, our US Telecom segment will receive an aggregate of $27.7 million annually through December 2025 and an aggregate of $8.0 million annually from January 2026 through July 2028.

Both the ~~High Cost Program, Lifeline Program, E-Rate Program,~~USF and ~~Rural Health Care Support Program as further described below. All of these funding~~CAFII programs are subject to certain operational and reporting compliance requirements. We believe we are in compliance with ~~all applicable requirements.~~these requirements as of March 31, 2022.

During each the three month periods ended March 31, 2021 and 2020, we recorded $4.1 million of revenue from the High Cost Program in our International Telecom segment for our US Virgin Islands operations under the “Viya” name. In 2018, the FCC initiated a proceeding to ~~reform~~replace the High Cost Program support received by Viya in the US Virgin Islands and Puerto Rico in which it proposed to allocate USF funding of up to $18.7 million per year (inclusive of the $16.4 million per year currently allocated to Viya) for 10 years to supplant the $16.4 million that Viya currently receives per year. While Viya applied forwith a new Connect USVI ~~Fund support allocated for the US Virgin Islands, on~~Fund. On November 16, 2020, the FCC announced that Viya was not the recipient of the ~~provisional~~Connect USVI Fund award and ~~that~~authorized funding to be issued to the ~~FCC had provisionally accepted a bid of approximately $8.5 million per year for a term of 10 years. Viya has challenged this decision and its challenge~~

~~remains pending before the FCC. If Viya’s challenge is not granted, pursuant~~new awardee in June 2021. Pursuant to the terms of the program and effective in July 2021, Viya’s annual USF support was reduced from $16.4 million to $10.9 million. In July 2022, this support will be reduced again to ~~two-thirds of the legacy total amount, or $10.9 million, during the first year following the finalization of the award and to one-third of the legacy total amount, or~~ $5.5 million ~~during~~for the ~~second year.~~annual period through June 2023. Thereafter, Viya will not receive High Cost Program support.

Also, during each of the three month periods ended March 31, 2021 and 2020, we recorded $0.3 million of High Cost Program revenue in our US Telecom segment. We are subject to certain operational, reporting and construction requirements as a result of this funding, and we believe that we are in compliance with all of these requirements.

In August 2018, we are awarded $79.9 million over 10 years under the Connect America Fund Phase II Auction. We are required to provide fixed broadband and voice services to certain eligible areas in the United States. We are subject to operational and reporting requirements under the program and we expect to incur additional capital expenditures to comply with these requirements. We determined the award is a revenue grant, and as a result we will record the funding as revenue upon receipt. During each of the three month periods ended March 31, 2021 and 2020, we recorded $1.9 million of revenue from the Connect America Fund Phase II program.RDOF (“Rural Digital Opportunities Fund”)

We expect to receive approximately $20.1 million over 10 years to provide broadband and voice coverage to over 10,000 households in the United States (not including Alaska) under the 2020 Rural Digital Opportunity Fund Phase I Auction (“RDOF”). We recorded $0.5 million of revenue from the RDOF program in the three months ended March 31, 2022.

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Construction Grants

We have also ~~receive~~been awarded construction grants to build network connectivity for eligible communities. The funding isof these grants, used to reimburse us for our construction costs, ~~and~~ is distributed upon completion of a project. As of December 31, ~~2020,~~2021, we ~~have~~had been awarded approximately ~~$16.8~~$27.9 million of such grants. We were awarded ~~$6.5~~$0.4 million of additional grants ~~in 2021. We~~and cancelled $2.1 million of previously awarded grants during the three months ended March 31, 2022. Of this $28.3 million of awards, we have completed our construction obligations on ~~$10.2~~$15.0 million of these projects and ~~$13.1~~$11.2 million of such construction obligations remain with completion deadlines beginning in ~~June 2021.~~July 2022. Once these projects are constructed, we are obligated to provide service to the participants. We ~~receive funds upon construction completion. We received $1.3 million during the three months ended March 31, 2021. We~~ expect to meet all requirements associated with these grants.

We also receive funding to provide discounted telecommunication services to eligible customers under the E-Rate Program, Lifeline Program, and Rural Health Care Support Program. During the three months ended March 31, 2021 and 2020, we recorded revenue of $2.1 million and $2.2 million, respectively, in the aggregate from these programs. We are subject to certain operational and reporting requirements under the above mentioned programs and we believe that we are in compliance with all of these requirements.

~~CARES Act~~

As of December 31, 2020, we had received $16.3 million of funding under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). During the three months ended March 31, 2021, we received an additional $2.4 million of funding. In total we received $18.7 of funding under this program. The funding was utilized to construct network infrastructure in our US Telecom segment. The construction was complete as of March 31, 2021 and $18.4 million of the funding was recorded as a reduction to property, plant and equipment and a subsequent reduction to depreciation expense. The remaining $0.3 million was recorded as a reduction to operating expense in the three months ended March 31, 2021.

~~Tribal Bidding Credit~~

As part of the broadcast television spectrum incentive auction, the FCC implemented a tribal lands bidding credit to encourage deployment of wireless services utilizing 600 MHz spectrum on the lands of federally recognized tribes. We received a bidding credit of $7.4 million under this program in 2018. A portion of these funds will be used to offset network capital costs and a portion will be used to offset the costs of supporting the networks. Our current estimate is that we will use $6.1 million to offset capital costs, consequently reducing future depreciation expense and $1.3 million to offset the cost of supporting the network which will reduce future operating expense. Through March 31, 2021, we have spent $6.1 million on capital expenditures and have recorded $0.3 million in offsets to the cost of supporting the network. The credits are subject to certain requirements, including deploying service by January 2021 and meeting minimum coverage metrics. If the requirements are not met the funds may be subject to claw back provisions. We believe we are in compliance with all applicable requirements related to these funds.

CBRS Auction

During the third quarter of 2020, we participated in the FCC’s Citizens Broadband Radio Service (CBRS) auction for Priority Access Licenses (PALs) in the 3.5 GHz spectrum band. These PALs are licensed on a county-by-county basis and are awarded for a 10-year renewable term. We were a winning bidder for PALs located strategically throughout the United States at a total cost of approximately $20.4 million. In connection with the awarded licenses, we will have to achieve certain CBRS spectrum build out obligations. We currently expect to comply with all applicable requirements related to these licenses.

~~RDOF~~

InPresentation of Revenue

Effective July 1, 2021, we began to categorize Mobility revenue and Fixed revenue as either “consumer” or “business” based upon the ~~2020 Rural Digital Opportunity Fund Phase I Auction (“RDOF”), pending~~characteristics of our subscribers. Effective October 1, 2021, the ~~FCC’s conclusion~~Company’s statement of ~~the award process,~~operations separately reflects Construction Revenue. All periods presented have been adjusted to conform to these presentation updates.

Presentation of Operating Expenses

Effective January 1, 2021, we expect to receive approximately $20.1 million over 10 years to provide broadband coverage to over 10,000 households. Once confirmed, we will be obligated to provide broadband and voice services to certain eligible areaschanged our presentation of operating expenses in the ~~United States.~~Condensed Consolidated Statements of Operations by combining the previously disclosed Termination and Access Fees with Engineering and Operations as the newly represented Cost of communications services and other. In addition, the previously disclosed Sales, Marketing and Customer Service expenses are now combined with the previously disclosed General and Administrative expenses within the newly represented Selling, General and Administrative expenses. The change in presentation was made to better align our results with industry standards. Cost of construction services continues to be broken out separately and all depreciation and amortization continues to be shown separately.

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Selected Segment Financial Information

The following represents selected segment information for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 (in thousands):

For the Three Months Ended March 31, 2021











International

US

Renewable

Corporate and

Telecom

Telecom

Energy

Other (1)

Consolidated
Revenue

Communication Services

Mobility

$
21,821

$
2,860

$
—

$
—

$
24,681
Fixed

58,748

6,370

—

—

65,118
Carrier Services

1,883

18,736

—

—

20,619
Other

218

—

—

—

218
Total Communication Services Revenue

82,670

27,966

—

—

110,636
Other

Renewable Energy

—

—

418

—

418
Managed Services

1,150

—

—

—

1,150
Construction

—

12,306

—

—

12,306
Total Other Revenue

1,150

12,306

418

—

13,874
Total Revenue

83,820

40,272

418

—

124,510

Operating income (loss)

13,116

(534)

(662)

(8,571)

3,349


For the Three Months Ended March 31, 2020
For the Three Months Ended March 31, 2022											For the Three Months Ended March 31, 2022

	International		US		Renewable		Corporate and					International		US		Renewable		Corporate and
	Telecom		Telecom		Energy		Other (1)		Consolidated			Telecom		Telecom		Energy		Other (1)		Consolidated
Revenue
Communication Services
Mobility	$	20,230	$	2,403	$	—	$	—	$	22,633
Fixed		57,741		4,825		—		—		62,566
Mobility - Business												$	3,616	$	374	$	—	$	—	$	3,990
Mobility - Consumer													19,970		1,456		—		—		21,426
Total Mobility													23,586		1,830		—		—		25,416
Fixed - Business													17,254		27,145		—		—		44,399
Fixed - Consumer													41,093		18,968		—		—		60,061
Total Fixed													58,347		46,113		—		—		104,460
Carrier Services		2,298		20,071		—		—		22,369			3,402		32,989		—		—		36,391
Other		336		—		—		—		336			276		—		—		—		276
Total Communication Services Revenue		80,605		27,299		—		—		107,904			85,611		80,932		—		—		166,543
Construction													—		1,987		—		—		1,987
Other
Renewable Energy		—		—		1,322		—		1,322
Managed Services		1,679		—		—		—		1,679			1,176		2,313		—		—		3,489
Total Other Revenue		1,679		—		1,322		—		3,001			1,176		2,313		—		—		3,489
Total Revenue		82,284		27,299		1,322		—		110,905			86,787		85,232		—		—		172,019

Operating income (loss)		13,477		2,193		(456)		(7,915)		7,299			11,803		(4,635)		(23)		(7,037)		108

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For the Three Months Ended March 31, 2021

	International		US		Renewable		Corporate and
	Telecom		Telecom		Energy		Other (1)		Consolidated
Revenue
Communication Services
Mobility - Business	$	1,197	$	576	$	—	$	—	$	1,773
Mobility - Consumer		20,624		2,284		—		—		22,908
Total Mobility		21,821		2,860		—		—		24,681
Fixed - Business		16,634		2,696		—		—		19,330
Fixed - Consumer		42,114		3,674		—		—		45,788
Total Fixed		58,748		6,370		—		—		65,118
Carrier Services		1,883		18,736		—		—		20,619
Other		218		—		—		—		218
Total Communication Services Revenue		82,670		27,966		—		—		110,636
Construction		—		12,306		—		—		12,306
Other
Renewable Energy		—		—		418		—		418
Managed Services		1,150		—		—		—		1,150
Total Other Revenue		1,150		—		418		—		1,568
Total Revenue		83,820		40,272		418		—		124,510

Operating income (loss)		13,116		(534)		(662)		(8,571)		3,349

(1) ~~Reconciling~~Corporate and Other items refer to corporate overhead costs and consolidating adjustments

A ~~year-to-date~~ comparison of our segment results for the three months ended March 31, 2022, and 2021 is as follows:

International Telecom. Revenues within our International Telecom segment increased ~~$1.5~~$3.0 million, or ~~1.8%~~3.6%, to ~~$83.8~~ $86.8 million from ~~$82.3~~$83.8 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, as a result of an increase in ~~broadband services in many of~~Fixed and Mobility subscribers within our international ~~telecom~~markets. In addition, our US Virgin Islands and Bermuda markets ~~as well as~~recognized an increase in ~~Mobility services~~Carrier Services revenue as a result of increased ~~subscribers. These increases were partially offset by the impact of~~tourism as certain COVID-19 related travel and stay-at-home restrictions ~~which resulted in~~were lifted. These increases, however, were partially offset by a $1.3 million reduction in ~~Carrier Services revenue.~~federal support revenues in the US Virgin Islands.

Operating expenses within our International Telecom segment increased by ~~$1.9~~$4.3 million, or ~~2.8%~~6.1%, to ~~$70.7~~ $75.0 million from ~~$68.8~~$70.7 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The increase was primarily the result of an increase in ~~network maintenance~~direct costs, primarily roaming expenses due to increased tourism in the US Virgin Islands and ~~regulatory~~Bermuda and equipment expenses due to increased handset sales, and certain costs ~~partially offset by~~being incurred during the three months ended March 31, 2022 that were not incurred during the three months ended March 31, 2021 as a result of the impact of COVID-19 ~~which reduced roaming costs throughout all of our markets within this segment.~~restrictions.

As a result, our International Telecom segment’s operating income decreased ~~$0.4~~$1.3 million, or ~~3.0%~~9.9%, to ~~$13.1~~$11.8 million from ~~$13.5~~$13.1 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

US Telecom. Revenue within our US Telecom segment increased by ~~$13.0~~$44.9 million, or ~~47.6%~~111.4%, to ~~$40.3~~$85.2 million from ~~$27.3~~$40.3 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, primarily as a result of ~~an increase~~$58.3 million associated with the Alaska Transaction partially offset by a $10.3 million reduction in construction revenue ~~from~~related to the FirstNet Transaction ~~and an increase~~as well as a reduction in ~~Fixed revenues, including broadband services, partially offset by reductions~~roaming revenue due to the restructuring of certain carrier contracts in ~~Carrier Services revenue.~~our western United States operations.

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Operating expenses within our US Telecom segment increased ~~$15.7~~$49.0 million, or ~~62.5%~~120.1%, to ~~$40.8~~$89.8 million from ~~$25.1~~$40.8 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, as a result of ~~construction costs~~$58.4 million being incurred in relation to the Alaska Transaction and increases in other expenses being incurred in connection with both the FirstNet Transaction ~~as well as the completion of~~and the CARES Act-funded build-out of rural broadband operations, ~~and costs to further fund our private network business,~~ partially offset bybe a decrease in FirstNet construction costs of $10.6 million, In addition, certain costs were incurred during the three months ended March 31, 2022 that were not incurred during the three months ended December 31, 2020 as a result of the impact of COVID-19 ~~related travel and stay-at-home~~ restrictions.

As a result of the above, our US Telecom segment’s operating income decreased ~~$2.7~~by $4.1 million to a loss of ~~$0.5~~$4.6 million from ~~income~~a loss of ~~$2.2~~$0.5 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Renewable Energy. ~~Revenue~~Until the completion of the Vibrant Transaction on January 27, 2021, we distributed generation solar power to commercial and industrial customers under the Vibrant name in India. Accordingly, we did not generate revenue or incur operating expenses within our Renewable Energy segment ~~decreased $0.9 million, or 69.2%,~~subsequent to ~~$0.4 million from $1.3 million for~~that date. For the three months ended March 31, 2021, we generated revenue, incurred operating expenses and ~~2020, respectively, primarily as a result of a decrease in production as a result of the impact of COVID-19.~~

~~Operating expenses within our Renewable Energy segment decreased to $1.1 million from $1.8~~ ~~million for the three months ended March 31, 2021 and 2020 as a result of the Vibrant Transaction.~~

~~As a result of the above, our Renewable Energy segment’s~~reported an operating loss ~~increased to $0.7~~of $0.4 million, ~~for the three months ended March 31, 2021 as compared to a loss of $0.5~~$1.1 million ~~for the three months ended March 31, 2020.~~

and $0.7 million, respectively.

The following represents a year over year discussion and analysis of our results of operations for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 (in thousands):



	Three Months Ended				Amount of		Percent	Three Months Ended				Amount of		Percent
	March 31,				Increase		Increase	March 31,				Increase		Increase
	2021		2020		(Decrease)		(Decrease)	2022		2021		(Decrease)		(Decrease)
REVENUE:
Communication services	$	110,636	$	107,904	$	2,732	2.5	$	166,543	$	110,636	$	55,907	50.5	%
Construction									1,987		12,306		(10,319)	(83.9)
Other		13,874		3,001		10,873	362.3		3,489		1,568		1,921	122.5
Total revenue		124,510		110,905		13,605	12.3		172,019		124,510		47,509	38.2
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated):
Cost of services		49,507		46,602		2,905	6.2
Cost of communications services and other									73,011		49,507		23,504	47.5
Cost of construction revenue		12,606		—		12,606	100.0		2,033		12,606		(10,573)	(83.9)
Selling, general and administrative		37,693		34,427		3,266	9.5		56,343		37,693		18,650	49.5
Transaction-related charges		730		44		686	1,559.1		554		730		(176)	(24.1)
Depreciation and amortization		20,508		22,518		(2,010)	(8.9)
Depreciation									33,292		20,111		13,181	65.5
Amortization of intangibles from acquisitions									3,258		397		2,861	n/m
Loss on disposition of long-lived assets		117		15		102	680.0		3,420		117		3,303	n/m
Total operating expenses		121,161		103,606		17,555	16.9		171,911		121,161		50,750	41.9
Income from operations		3,349		7,299		(3,950)	(54.1)		108		3,349		(3,241)	(96.8)
OTHER INCOME (EXPENSE):
Interest income		(6)		243		(249)	(102.5)		51		(6)		57	n/m
Interest expense		(1,147)		(1,156)		9	(0.8)		(3,363)		(1,147)		(2,216)	193.2
Other income (expense)		2,375		(2,901)		5,276	(181.9)		4,199		2,375		1,824	76.8
Other income (expense), net		1,222		(3,814)		5,036	(132.0)		887		1,222		(335)	(27.4)
INCOME BEFORE INCOME TAXES		4,571		3,485		1,086	31.2		995		4,571		(3,576)	(78.2)
Income tax expense		295		1,109		(814)	(73.4)
NET INCOME		4,276		2,376		1,900	80.0
Net income attributable to non-controlling interests, net of tax:		(1,570)		(3,390)		1,820	(53.7)
Income tax provision									2,952		295		2,657	n/m
NET INCOME (LOSS)									(1,957)		4,276		(6,233)	(145.8)
(Net income) loss attributable to noncontrolling interests, net of tax:									1,009		(1,570)		2,579	(164.3)
NET INCOME (LOSS) ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS	$	2,706	$	(1,014)	$	3,720	(366.9)	$	(948)	$	2,706	$	(3,654)	(135.0)	%

n/m = not meaningful

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Communications ~~services revenue~~Services Revenue

Mobility ~~revenue.~~Revenue. Our Mobility revenue consists of retail revenue generated within both our International Telecom and US Telecom segments by providing retail mobile voice and data services over our wireless networks as well as through the sale and repair services of related equipment, such as handsets and other accessories, to our retail subscribers. Mobility revenue increased by ~~$2.1~~$0.7 million, or ~~9.3%~~2.8%, to $~~24.7~~$25.4 million for the three months ended March 31, ~~2021~~2022 from ~~$22.6~~ $24.7 million for the three months ended March 31, ~~2020.~~2021. Of this increase, $2.2 million related to an increase in revenue from business customers while revenue from consumers declined by $1.5 million. The increase in Mobility revenue, within our segments, consisted of the following:

●

International Telecom. Within our International Telecom segment, Mobility revenue increased by ~~$1.6~~$1.8 million, or ~~7.9%~~8.3%, to $~~21.8~~$23.6 million for the three months ended March 31, ~~2021~~2022 from ~~$20.2~~$21.8 million for the three months ended March 31, ~~2020~~2021. Mobility revenue increased in each of our markets as total revenue from business customers increased by $2.4 million which was partially offset by a decline of $0.6 million in revenue from consumers. The increases were the result of improved retail and marketing strategies which lead to an increase in subscribers ~~due to better retail~~ and ~~marketing strategies, partially offset~~equipment sales in certain markets. In addition, the three months ended March 31, 2022 include the results of our handset repair business which we acquired in May 2021. Furthermore, the three months ended March 31, 2021 was negatively affected by the impact ofthat COVID-19 related travel and stay-at-home ~~restrictions.~~restrictions had during those three months.

●

US Telecom. Mobility revenue within our US Telecom segment ~~increased~~decreased by ~~$0.5~~$1.1 million, or ~~20.8%~~37.9%, to ~~$2.9~~$1.8 million from ~~$2.4~~ $2.9 million for the three months ended March 31, 2022 and 2021, ~~and 2020, respectively, as~~respectively. Of this decrease, $0.8 million related to a decrease in revenue from consumers within our retail operations due to a decrease in subscribers while the remaining decrease was the result of ~~an increase~~a decrease in ~~subscribers and~~ revenue ~~generated by~~from our ~~early stage~~ private ~~network~~networks business. ~~This increase was partially offset by the impact of COVID-19 related travel and stay-at-home restrictions.~~

We expect that Mobility revenue within both our US Telecom and International Telecom segments may increase as a result of an increase in ~~subscribers. Mobility revenue within our US Telecom segment may also increase as a result of our expanding early stage private network business.~~subscribers if certain COVID-19 travel related restrictions continue to be lifted. However, such growth in both segments may be partially offset due to increased competition, and if COVID-19 related travel restrictions ~~continue for an extended period of time or become more severe~~are reinstated so as to

result in significant business interruptions and retail store closures.

Apart from possible government issued travel restrictions, we currently cannot assess how the impact of COVID-19 may influence our subscribers’ procurement behavior for our services or how that behavior will affect our Mobility revenues in the foreseeable future.

Fixed ~~communications revenue.~~Revenue. Fixed ~~communications~~ revenue is primarily generated by ~~internet,~~broadband, voice, and video service revenues provided to retail and ~~enterprise~~business customers over our wireline networks. Fixed revenue within our US Telecom segment also includes revenue from the Connect America Fund Phase II program ~~award.~~awards in the western United States and Alaska, as well as revenue from the Alaska Universal Service Fund. Within our International Telecom segment, Fixed ~~communications~~revenue also includes funding under the FCC’s High Cost Program in the US Virgin Islands. Fixed revenue increased by ~~$2.5 million,~~$39.4 million, or ~~4.0%~~60.5%, to ~~$65.1~~$104.5 million from ~~$62.6~~$65.1 million for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively. Of this increase, $25.1 million relates to revenue from business customers while the remaining increase of $14.3 million pertains to consumers. The increase in Fixed ~~communications~~ revenue, within our segments, consisted of the following:

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International Telecom. Within our International Telecom segment, Fixed ~~communications~~ revenue ~~increased~~decreased by ~~$1.0~~$0.4 million, or ~~1.7%~~0.7%, to ~~$58.7~~$58.3 million from ~~$57.7~~ $58.7 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, primarily as a result of ~~an increase~~a $1.3 million reduction in ~~Fixed broadband services in order to enable remote working and better connectivity during~~revenue from the ~~COVID-19 pandemic. This increase was partially offset by~~FCC’s High Cost Program, a decrease in revenue from certain enterprise customers, ~~such~~and a decrease in revenue from video services as ~~hotels, which were impacted by the effects~~a result of ~~COVID-19 related travel~~a decline in those subscribers. Partially offsetting these decreases was an increase in revenue from fixed broadband fiber subscribers and ~~stay-at-home restrictions.~~services to further enable and support remote working in our markets.

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US Telecom. Fixed ~~communications~~ revenue within our US Telecom segment increased by ~~$1.6~~$39.7 million, or ~~33.3%,~~ to ~~$6.4~~$46.1 million from ~~$4.8~~$6.4 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. This increase was related to the Alaska Transaction, which generated $39.4 million of Fixed revenue during the three months ended March 31,

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2022, and a $0.3 million increase, within the western United States, related to an increase in usage for both ~~enterprise~~business and ~~residential~~consumer subscribers to support remote working and better connectivity during the COVID-19 pandemic.

~~We expect that~~ Fixed revenue within our International Telecom segment may ~~decline~~further decrease as a result of the ~~response, such as long delays~~loss of USF funding in the ~~return of tourism activity to the COVID-19 pandemic which could result~~US Virgin Islands, a decrease in ~~significant business interruptions that might impact our customers’ ability to pay~~demand for our ~~services. Fixed revenue may also decline in many of our international markets as a result of a decline in~~ video ~~revenues~~services due to subscribers using alternative methods to receive video ~~content.~~

~~We expect that Fixed revenue within the US Telecom segment~~content, and if COVID-19 travel related restrictions are reinstated in some of our international markets. Such decreases, however, may ~~also decline~~be partially offset as a result of an increase in broadband subscribers as workers continue to shift to remote working, subscribers adopting higher bandwidth offerings at higher price points and in connection with certain new contracts with oil and gas providers in Guyana.

Within our customers’ inability to pay for our services if COVID-19 related travel restrictions continue for an extended period of time or become more severe. However, those declines may be partially offset by the stable nature of our federal support contracts, such as the Connect America Fund Phase II program award, which areUS Telecom segment, Fixed Revenue is expected to ~~provide steady~~increase as both our Alaska operations and ~~predictable revenues.~~our western United States operations further deploy broadband access to both consumers and businesses.

Apart from possible government issued travel restrictions, we currently cannot assess how the impact of any COVID-19 restrictions may influence our subscribers’ procurement behavior for our services or how that behavior will affect our ~~revenues~~Fixed revenue in the foreseeable future.

Carrier Services ~~revenue.~~Revenue. Carrier Services revenue is generated by both our International Telecom and US Telecom segments. Within our International Telecom segment, Carrier Services revenue includes international long-distance services, roaming revenues generated by other carriers’ customers roaming into our retail markets, transport services and access services provided to other telecommunications carriers. Within our US Telecom segment, Carrier Services revenue includes services provided under the FirstNet Transaction, wholesale roaming revenues, the provision of network switching services, tower lease revenue and other services provided to other carriers. Carrier Services revenue ~~decreased~~increased by ~~$1.8~~$15.8 million, or ~~8.0%~~76.7%, to ~~$20.6~~$36.4 million from ~~$22.4~~ $20.6 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~decrease,~~increase, within our segments, consisted of the following:

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International Telecom. Within our International Telecom segment, Carrier Services revenue ~~decreased~~increased by ~~$0.4~~ $1.5 million, or ~~17.4%~~78.9%, to ~~$1.9~~$3.4 million from ~~$2.3~~ $1.9 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, as a result of ~~decreased~~an increase in tourism, primarily within the US Virgin Islands and Bermuda, that resulted in increased roaming ~~revenues within most of our International Telecom markets caused by the travel and stay-at-home restrictions implemented in response to COVID-19.~~revenues.

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US Telecom. Carrier Services revenue within our US Telecom segment ~~decreased~~increased by $~~1.4~~$14.3 million, or ~~7.0%~~76.5%, to ~~$18.7~~$33.0 million from ~~$20.1~~ $18.7 million, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, primarily as a result of the ~~2020 restructuring~~Alaska Transaction, which generated $16.6 million of Carrier Services revenue during 2022 partially offset by the revenue reductions as a result of the restructure of certain carrier ~~contracts.~~contracts in our western United Stated operations.

Within our International Telecom segment, ~~we expect that~~ Carrier Services revenue may continue to ~~decline~~increase if ~~COVID-19 related travel restrictions continue for an extended period of time or become more severe.~~tourism continues to move toward a return to pre-pandemic levels. Apart from possible government issued travel restrictions, we currently cannot assess how the impact of COVID-19 may influence our subscribers’ procurement behavior for our services or how that behavior will affect our revenues in the foreseeable future. Also, within our International Telecom segment, we expect that Carrier Services revenue from our international ~~long-distance~~long-distance business in Guyana ~~will continue to~~may decrease as consumers seek to use alternative technology services to place long-distance calls. In addition, such revenue may decline as the result of the implementation, by the Government of Guyana, of ~~recently-passed~~passed legislation which terminates our right to be the exclusive provider of domestic Fixed and international long-distance service in Guyana. While the loss of our exclusive rights may cause an immediate reduction inour Carrier Services revenue, the complete impact of the new legislation to our operations will not be fully known until the Government of Guyana makes the terms and conditions of licenses issued to two of our competitors available to us. Over the longer term, such declines in Carrier Services revenue may be offset by increased Fixed revenue from broadband services to consumers and enterprises in Guyana, increased Mobility revenue from an increase in regulated local calling rates in Guyana or possible economic growth within that country. ~~See Note 14 to the Condensed Consolidated Financial Statements included in this report.~~

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Within our US Telecom segment, ~~we expect~~ Carrier Services revenue tomay decrease ~~as we progress through the construction phase of the FirstNet Transaction and~~ from the impact of continued reduced contractual wholesale roaming rates and imposed revenue ~~caps.~~caps with our Carrier customers. We believe that maintaining roaming ~~and other Carrier Services~~ favorable to our carrier customers allows us to preserve revenue for a longer period of time while creating the potential for long-lived shared infrastructure solutions for carriers in areas they may consider to be non-strategic.

The most significant competitive factor we face within our US Telecom segment is the extent to which our carrier customers in our wholesale ~~Mobility~~carrier services business choose to roam on our networks and lease our tower space and transport services or elect to build or acquire their own infrastructure in a market, reducing or eliminating their need for our services in those markets. We also face competition from other providers of such shared infrastructure solutions. In the past, we have entered into buildout projects with existing carrier customers to help these customers accelerate the buildout of a given area in exchange for the carrier’s agreement to lease us spectrum in that area and enter into a contract with specific pricing and terms. Historically, these arrangements have differed from our FirstNet Transaction and have typically included a purchase right in favor of the carrier to purchase that portion of the network for a predetermined price, depending on when the right to purchase is exercised.

Other ~~communications services revenue.~~Communications Services Revenue. Other ~~communications services~~Communications Services revenue includes miscellaneous services that the operations within our International Telecom segment provide to retail subscribers. Other ~~communications services~~Communications Services revenue ~~decreased~~increased to ~~$0.2~~$0.3 million from ~~$0.3~~$0.2 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

~~Other revenue~~Construction Revenue

~~Renewable energy revenue.~~ Renewable energy revenue included the generation of power through Power Purchase Agreements (“PPAs”) from our solar plants in India. Our PPAs, which were typically priced at or below local retail electricity rates and allowed our customers to secure electricity at predictable and stable prices over the duration of their long-term contracts, provided us with high-quality contracted cash flows.

Renewable energy revenue decreased by $0.9 million, or 69.2%, to $0.4 million from $1.3 million for the three months ended March 31, 2021 and 2020, respectively, as a result of the impact of the Vibrant Transaction.

~~As a result of the Vibrant Transaction, we will no longer record renewable energy revenue.~~

~~Managed Services revenue.~~ ~~Managed Services revenue is generated primarily in our International Telecom segment and includes network, application, infrastructure, and hosting services.~~

Managed Services revenue decreased by $0.5 million, or 29.4%, to $1.2 million from $1.7 million for the three months ended March 31, 2021 and 2020, respectively, primarily as a result of a decrease in equipment sales as well as consulting and hosting services.

We expect that Managed Services revenue may continue to decrease if COVID-19 related travel restrictions continue for an extended period of time or become more severe so as to result in significant business interruptions to our customers.

~~Construction revenue.~~ Construction revenue represents revenue generated within our US Telecom segment for the construction of network cell sites related to the FirstNet Agreement. During the three months ended March 31, 2022 and 2021, ~~we recognized $12.3~~ Construction revenue decreased to $2.0 million from $12.3 million, respectively, as a result of ~~construction revenue.~~a decrease in the number of sites completed during 2022 as compared to 2021. As of March 31, ~~2021, 30%~~2022, 60% of the cell sites related to the FirstNet Agreement were ~~complete with an expected 65%~~completed and we expect another 30% of the ~~sites to be completed by the end of 2021. We expect the remaining 35% of sites~~total build to be completed during 2022 with the ~~first half~~remainder to be completed in early 2023.

Other Revenue

Renewable Energy Revenue. Our Renewable Energy segment generated $0.4 million of ~~2022.~~renewable energy revenue during the three months ended March 31, 2021. We did not generate any renewable energy revenue during the three months ended March 31, 2022 as a result of the Vibrant Transaction.

Managed Services Revenue. Managed Services revenue is generated within both our International and US Telecom segments and includes network, application, infrastructure, and hosting services.

Managed Services revenue increased by $2.3 million to $3.5 million from $1.2 million for the three months ended March 31, 2022 and 2021, respectively, as a result of the Alaska Transaction. Our Managed Services revenue in our International Telecom segment remained consistent at approximately $1.2 million for each of the three months ended March 31, 2022 and 2021.

We expect that Managed Services revenue may increase in our both our US and International Telecom segments as a result of our continued effort to sell certain Managed Services solutions to both our consumer and business customers in all of our markets.

Operating ~~expenses~~Expenses

Cost of ~~services.~~communication services and other. Cost of communication services and other are charges that we incur for voice and data transport circuits (in particular, the circuits between our Mobility sites and our switches), internet capacity, video programming costs, access fees we pay to terminate our calls, telecommunication spectrum fees and direct costs associated within our ~~Managed Services and technology business.~~managed services businesses. Cost of communication services and other also ~~include~~includes expenses associated with developing, operating, upgrading and supporting our telecommunications networks,

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including the salaries and benefits paid to employees directly involved in the development and operation of those businesses, as well as bad debt reserves and the cost of handsets and customer resale equipment incurred by our retail businesses.

Cost of communication services and other increased by ~~$2.9~~$23.5 million, or ~~6.2%~~47.5%, to ~~$49.5~~$73.0 million from ~~$46.6~~ $49.5 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The net increase in cost of communication services and other, within our segments, consisted of the following:

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International Telecom. Within our International Telecom segment, cost of communication services ~~increased~~and other decreased by $~~1.0~~$0.3 million, or ~~3.0%~~0.9%, to ~~$34.4~~$34.1 million from ~~$33.4~~ $34.4 million, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. This decrease was the result of reduced network maintenance and facility costs partially offset by an increase ~~was primarily related~~in roaming expense, due to an increase in ~~certain network~~ related ~~costs, such as repairs~~roaming revenues from higher levels of travel and ~~maintenance, and telecommunication spectrum fees partially offset by a decrease~~tourism in the ~~cost of retail~~US Virgin Islands and Bermuda, as well as an increase in equipment ~~sales as many of our retail stores were closed during the three months ended March 31, 2021~~expense as a result of ~~the impact of COVID-19.~~
improved retail and marketing strategies which lead to an increase in handset sales.

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US Telecom. Cost of communication services and other within our US Telecom segment increased by ~~$2.0~~$24.3 million, or ~~15.3~~%160.9%, to ~~$15.1~~$39.4 million from ~~$13.1~~$15.1 million for the three months ended March 31, 2022 and 2021, ~~and 2020, respectively. This increase was primarily~~respectively, as a result of anthe Alaska Transaction which incurred $23.8 million of these costs during 2022 and a $1.5 million increase in data transport costs in connection with the fully constructed cell sites as part of the FirstNet ~~Transaction~~Transaction. These increases were partially offset by decreases in both our private network business and wholesale long-distance voice services businesses.

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~~Renewable Energy~~~~. Cost of services within our Renewable Energy segment were a nominal amount for the three months ended March 31, 2021 and 2020 and will no longer be recorded as a result of the Vibrant Transaction.~~

We expect that cost of communication services and other may increase within both our International and US Telecom segments due to an expected increase in roaming and other termination costs ~~when the~~if COVID-19 related travel restrictions ~~are~~continue to be lifted. Within the US Telecom segment, we expect an increase in ~~termination and access fees due to~~ the ~~anticipated expansion of our early stage private network business,~~ expenses associated with our recent funding award under the CARES Act and ~~as a result of~~anticipated expenses in connection with our performance under the construction phase of our FirstNet Transaction ~~during the construction phase~~ which is expected to be completed during early 2023. In addition, we expect cost of services may increase as a result of continued inflationary pressure, issues facing the ~~first half of 2022.~~global supply chain, and geopolitical uncertainty.

Cost of construction revenue. Cost of construction revenue includes the expenses incurred in connection with the construction of and the delivery to AT&T of cell sites in accordance with our FirstNet ~~Agreement and were $12.6 million during~~Agreement. During the three months ended March 31, 2022 and March 31, 2021, cost of construction revenue decreased to $2.0 million from $12.6 million as a result of a decrease in the number of sites completed during 2022 as compared to 2021. As of March 31, ~~2021, 30%~~2022, 60% of the cell sites related to the

FirstNet Agreement were completed and we expect ~~an additional 35%~~another 30% of ~~sites to be completed by~~ the ~~end of 2021. We expect the remaining 35% of sites~~total build to be completed during 2022 with the ~~first half of 2022.~~remainder to be completed in early 2023.

Selling, general and administrative expenses. Selling, general and administrative expenses include salaries and benefits we pay to sales personnel, customer service expenses and the costs associated with the development and implementation of our promotional and marketing campaigns. Selling, general and administrative expenses also include salaries, benefits and related costs for general corporate functions including executive management, finance and administration, legal and regulatory, facilities, information technology and human resources as well as internal costs associated with our performance of due-diligence and integration related costs associated with acquisition activities.

Selling, general and administrative expenses increased by ~~$3.3 million,~~$18.6 million, or ~~9.5%~~49.3%, to ~~$37.7~~ $56.3 million from ~~$34.4~~$37.7 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The net increase in selling, general and administrative expenses, within our segments, consisted of the following:

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International Telecom. Within our International Telecom segment, our selling, general and administrative expenses increased by ~~$1.4~~$3.0 million, or ~~6.6%~~13.3%, to ~~$22.5~~ $25.5 million from ~~$21.1~~$22.5 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. This increase was incurred within certain international markets primarily as a result of an increase in ~~regulatory related fees and marketing costs. These increases~~brand positioning costs as well as expenses incurred during the three months ended March 31, 2022 that were ~~partially offset by~~reduced during the three months ended March 31, 2021 as a result of the impact of ~~COVID-19 related travel and stay-at-home restrictions.~~COVID-19.

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US Telecom. Selling, general and administrative expenses increased within our US Telecom segment by ~~$1.8~~$16.3 million ~~or 29.5%,~~ to ~~$7.9~~ $24.2 million from ~~$6.1~~$7.9 million, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, primarily as a result of ~~increased~~the Alaska Transaction, which generated $17.8 million of these costs during 2021 partially offset by a decrease in spending within our ~~expanding early stage~~ private network ~~business and within our Mobility retail operations. These increases were partially offset by the impact of COVID-19 related travel and stay-at-home restrictions.~~business.

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Renewable ~~Energy~~Energy. ~~. Selling, general and administrative expenses within our Renewable Energy segment decreased $0.7 million, or 63.6%, to $0.4 million from $1.1~~ ~~million for~~During the three months ended March 31, 2021, our Renewable Energy segment incurred $0.4 million of selling, general and ~~2020, respectively. We will no longer record~~administrative expenses. This segment did not incur any selling, general and administrative expenses ~~within our renewable energy segment~~during the three months ended March 31, 2022 as a result of the Vibrant ~~Transaction.~~Transaction

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Corporate ~~Overhead~~Overhead. . Selling, general and administrative expenses within our corporate overhead ~~increased~~decreased by $~~0.8~~$0.3 million, or ~~13.1%~~4.3%, to ~~$6.9~~$6.6 million from ~~$6.1~~$6.9 million, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, primarily related to ~~an increase in information technology expenditures to further enhance our network security as well as~~reduced professional service expenses and integration costs associated with the ~~anticipated~~ completion of the Alaska ~~Transaction.~~Transaction that were incurred during 2021.

Within both our International and US Telecom ~~segment,~~segments, we expect that selling, general and administrative expenses may increase ~~due to an expected increase in roaming and other termination costs when the~~if COVID-19 related travel restrictions ~~are~~continue to be lifted. ~~Within the US Telecom segment, we~~We also expect an increase ~~due to the anticipated expansion~~in 2022 in these costs as a result of ~~our early stage private network business, expenses~~expected costs associated with our recent funding award under the CARES Act and ~~as a result~~the impact of our performance ~~under~~during the construction phase of the FirstNet Transaction ~~during its construction phase,~~ which is expected to be completed during ~~the first half of 2022.~~early 2023. Our Corporate Overhead segment may also experience an increase in these expenses ~~for~~to support our expanding operations. In addition, we expect our selling, general, and administrative expenses may increase as a result of continued inflationary pressure, issues facing the ~~continued integration-related costs associated with the anticipated completion of the Alaska Transaction.~~global supply chain and geopolitical uncertainty.

Transaction-related charges. Transaction-related charges include the external costs, such as legal, tax, accounting and consulting fees directly associated with acquisition and disposition-related activities, which are expensed as incurred. Transaction-related charges do not include internal costs, such as employee salary and travel-related expenses, incurred in connection with acquisitions or dispositions or any integration-related costs.

We incurred ~~$0.7~~ $0.6 million and ~~a nominal amount~~$0.7 million of transaction-related charges during the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively. ~~The transaction-related~~Transaction-related charges incurred during both 2022 and 2021 were primarily related to the ~~Vibrant Transaction and the~~ Alaska Transaction.

Depreciation and amortization expenses. Depreciation and amortization expenses represent the depreciation and amortization charges we record on our property and ~~equipment and on certain intangible assets.~~equipment.

Depreciation and amortization expenses ~~decreased~~increased by ~~$2.0~~$13.2 million, or ~~8.9%~~65.7%, to ~~$20.5~~$33.3 million from ~~$22.5~~$20.1 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The net ~~decrease~~increase in depreciation and amortization expenses, within our segments, consisted primarily of the following:

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International Telecom. Depreciation and amortization expenses ~~decreased~~increased within our International Telecom segment by ~~$0.5~~$0.5 million, or ~~3.5%~~3.7%, to ~~$13.8~~$13.9 million from ~~$14.3~~$13.4 million, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. This ~~decrease~~increase was a result of ~~certain assets becoming fully depreciated in recent periods partially offset by~~ recent upgrades and expansions to this segment’s ~~network assets.~~network.

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US Telecom. Depreciation and amortization expenses ~~decreased~~increased within our US Telecom segment by ~~$0.7~~$13.2 million ~~or 11.9%,~~ to ~~$5.2~~$18.4 million from ~~$5.9~~$5.2 million, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, primarily as a result of ~~certain assets becoming fully depreciated in recent periods partially offset by capital expenditures within our US Mobility and early-stage private network business.~~the Alaska Transaction.

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Renewable Energy. ~~Depreciation~~Our Renewable Energy segment incurred $0.2 million of depreciation and amortization expenses ~~within our Renewable Energy segment decreased by $0.4 million, or 66.7%, to $0.2 million from $0.6 million, for~~during the three months ended March 31, ~~2021~~2021. This segment did not incur depreciation and ~~2020, respectively,~~amortization expenses during the three months ended March 31, 2022 as a result of the Vibrant Transaction.

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Corporate Overhead. Depreciation and amortization expenses decreased within our corporate overhead by ~~$0.4~~$0.3 million, or ~~23.5%~~23.1%, to ~~$1.3~~$1.0 million from ~~$1.7~~$1.3 million, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, primarily as a result of certain assets becoming fully depreciated in recent periods.

We expect depreciation and amortization expense to increase inwithin all of our ~~International Telecom, US Telecom and Corporate Overhead~~ segments as we acquire tangible assets to expand or upgrade our telecommunications networks. As

Amortization of intangibles from acquisitions.Amortization of intangibles from acquisitions include the amortization of customer relationships and trade names related to our completed acquisitions.

Amortization of intangibles from acquisitions increased by $2.9 million to $3.3 million from $0.4 million for the three months ended March 31, 2022 and 2021, respectively, as a result of the ~~Vibrant Transaction, we will no longer record depreciation and amortization within our Renewable Energy segment.~~Alaska Transaction.

Loss on disposition of long-lived assets. During the three months ended March 31, 2022, we recorded a loss on the disposition of long-lived assets of $3.4 million. Of this amount, $2.4 million was incurred in our US Telecom segment relating to the disposal of certain assets while $1.0 million was incurred in our International Telecom segment as a result of the modification of agreements for the use of other certain assets.

During the three months ended March 31, 2021, we recorded a loss on the disposition of long-lived assets of $0.1 million, primarily related to the Vibrant Transaction.

Interest income. Interest income represents interest earned on our cash, cash equivalents, restricted cash and ~~short term~~short-term investment ~~balances.~~

~~Interest income decreased to a~~balances and were nominal ~~amount from $0.2 million for~~amounts during both the three months ended March 31, ~~2021~~2022 and ~~2020, respectively, as a result of a reduction in the balances of our cash, cash equivalents and short-term investments as well as our return on those balances.~~2021.

Interest expense. We incur interest expense on the 2019 CoBank Credit Facility, the Alaska Credit Facility, the Viya Debt, ~~and~~ the One Communications Debt and the Receivables Credit Facility (each as defined below)~~, as well as~~. Interest expense also includes commitment fees, letter of credit fees and the amortization of debt issuance costs on our 2019 Credit Facility (as defined below). During the three months ended March 31, 2021, we began borrowing under the Receivables Credit Facility (as defined below) and incurred interest expense on those borrowings as well as the amortization of debt issuance costs.

Interest expense ~~decreased~~increased to ~~$1.1~~$3.4 million from ~~$1.2~~$1.1 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, as additional interest expense ~~being~~was incurred as a result of an increase in interest rates and for new borrowings under the 2019 CoBank Credit Facility, the Alaska Credit Facility and the Receivables Credit ~~Facility was offset by reduced debt balances within our International Telecommunications segment.~~Facility.

We expect that interest expense ~~may~~will increase in future periods as a result of ~~future~~an expected increase in both interest rates and borrowings under the 2019 CoBank Credit Facility and the Receivables Credit Facility.

Other income ~~(expense)~~(expenses). Other income ~~(expense)~~(expenses) represents miscellaneous non-operational income earned and expenses incurred.

For the three months ended March 31, 2022, other income (expenses) was $4.8 million of income primarily related to gains from our non-controlling investments.

For the three months ended March 31, 2021, other income (expense) was income of $2.4 million which was primarily related to gains from our non-controlling investments partially offset by a net loss on foreign currency transactions.

For the three months ended March 31, 2020, other income (expense) was an expense of $2.9 million which was primarily related to a $2.0 million write down of a previously acquired non-controlling equity investment and $0.9 million relating to a net loss on foreign currency transactions.

~~We expect that the impact of foreign currency fluctuations may decline as a result of the Vibrant Transaction.~~

Income taxes. Our effective tax rate for the three months ended March 31, 2022 and 2021 was 296.7% and ~~2020 was~~ 6.5% ~~and 31.8%~~, respectively.

We recorded an income tax provision of $3.0 million in relation to income before taxes of $1.0 million for the three months ended March 31, 2022. The effective tax rate for the three months ended March 31, 2022 was primarily impacted by the following items: (i) a $0.5 million net increase of unrecognized tax positions recognized discretely, (ii) a $2.1 million net expense recognized discretely to record a valuation allowance on certain deferred tax assets that are not

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expected to be realizable based on the weight of positive and negative evidence, and (iii) the mix of income generated among the jurisdictions in which we operate.

The effective tax rate for the three months ended March 31, 2021 was primarily impacted by the following items: (i) the mix of income generated among the jurisdictions in which we operate and (ii) a discrete expense of $0.5 million for interest on unrecognized tax positions.

Our effective tax rate for the three months ended March 31, 2020 was primarily impacted by the following items: (i) the remeasurement of a forecasted domestic loss at a higher tax rate due to carryback provisions as provided by the CARES Act, (ii) the mix of income generated among the jurisdictions in which we operate along with the exclusion of losses in the US Virgin Islands and India where we cannot benefit from those losses as required by ASC 740-270-30-36(a), (iii) discrete items including a $0.5 million expense for interest on unrecognized tax positions, a $0.4 million expense to record a valuation allowance against an investment write-down which cannot be benefitted for tax purposes, and a $0.3 million benefit (net) related to the remeasurement of existing losses and temporary differences at a higher tax rate due to carryback provisions as provided by the CARES Act.

Our 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. Our consolidated tax rate will continue to be impacted by any transactional or one-time items in the future and the mix of income in any given year generated among the jurisdictions in which we operate. While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from our accrued positions as a result of uncertain and complex ~~applications~~application of tax law and regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgment by management. Accordingly, we could record additional provisions or benefits for US federal, state, and foreign tax matters in future periods as new information becomes available.

Net income attributable to ~~non-controlling~~noncontrolling interests, net of tax. Net income attributable to ~~non-controlling~~noncontrolling interests, net of tax reflected an allocation of ~~$1.6~~$1.0 million of losses and ~~$3.4~~$1.6 million of income generated by our less than wholly owned subsidiaries for the three months ended March 31, 2022 and 2021, ~~and 2020, respectively, a decrease of $1.8 million, or 53.7~~%.respectively. Changes in net income attributable to ~~non-controlling~~noncontrolling interests, net of tax, within our segments, consisted of the following:

●

International Telecom. Net income attributable to ~~non-controlling~~noncontrolling interests, net of tax decreased by ~~$0.8~~$0.2 million, or ~~32.0%~~11.8%, to ~~$1.7~~an allocation of $1.5 million of income from ~~$2.5~~an allocation of $1.7 million of income for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, primarily as a result of an increase in our ownership in ~~certain less than wholly owned~~ profitable ~~subsidiaries as well as a decrease in profitability in other less than wholly owned~~ subsidiaries.

●

US Telecom.Net income attributable to ~~non-controlling~~noncontrolling interests, net of tax decreased by ~~$0.3~~$3.2 million ~~or 30.0%,~~ to ~~$0.7~~an allocation of losses of $2.5 million from ~~$1.0~~an allocation of income of $0.7 million for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively, ~~primarily~~ as a result of ~~decreased~~the Alaska Transaction and reduced profitability atin certain less than wholly owned subsidiaries within our US Mobility ~~retail~~ operations.

Net income (loss) attributable to ATN International, Inc. stockholders. Net income (loss) attributable to ATN International, Inc. stockholders was ~~income of $2.7 million and~~ a loss of ~~$1.0~~$0.9 million for the three months ended March 31, ~~2021 and 2020, respectively.~~2022 as compared to income of $2.7 million for the three months ended March 31, 2021.

On a per diluted share basis, net ~~income(loss)~~income (loss) was ~~income of $0.17 and~~ a loss of ~~$0.06~~$0.13 per diluted share for the three months ended March 31, ~~2021 and 2020, respectively.~~2022 (which includes the impact of accrued preferred dividends of $1.1 million) as compared to income of $0.17 per diluted share for the three months ended March 31, 2021.

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Regulatory and Tax Issues

We are involved in a number of regulatory and tax proceedings. A material and adverse outcome in one or more of these proceedings could have a material adverse impact on our financial condition and future operations. For a discussion of ongoing proceedings, see Note 14 to the Consolidated Financial Statements in this Report.

Tax Reform

The Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was signed into law on December 22, 2017, has resulted in significant changes to the US corporate income tax system and the US Virgin Islands mirror code which replaces “United States” with “US Virgin Islands” throughout the Internal Revenue Code. The Tax Act transitions international taxation from a worldwide system to a modified territorial system and includes two base erosion prevention measures on non-US earnings, which has the effect of subjecting certain earnings of our foreign subsidiaries to US taxation as global intangible low taxed income (“GILTI”), eliminates the deduction of certain payments made to related foreign corporations, and imposes a minimum tax if greater than regular tax under the base-erosion and anti-abuse tax (“BEAT”). These changes became effective beginning in 2018 but did not have an impact on us in the initial or following years. Based on our forecasted income for ~~2021,~~2022, we are not currently projecting a GILTI inclusion. We do not expect we will be subject to BEAT and therefore have not included any tax impacts of BEAT in our consolidated financial statements for the quarter ended March 31, ~~2021.~~2022.

~~CARES Act~~

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. Certain provisions of the CARES Act impact our income tax provision computations.

Liquidity and Capital Resources

Historically, we have met our operational liquidity needs and have funded our capital expenditures and acquisitions through a combination of cash-on-hand, ~~and~~ internally generated funds, ~~and have funded capital expenditures and acquisitions with a combination of internally generated funds, cash-on-hand,~~ proceeds from dispositions, borrowings under our credit facilities and seller financings. We believe our current cash, cash equivalents, short term investments and availability under our current credit ~~facility~~facilities will be sufficient to meet our cash needs for at least the next twelve months for working capital needs and capital expenditures.

Total liquidity. As of March 31, ~~2021,~~2022, we had approximately ~~$92.3~~$77.1 million in cash, cash equivalents, restricted cash and ~~restricted cash.~~short-term investments. Of this amount, ~~$34.9~~$32.3 million was held by our foreign subsidiaries and is indefinitely invested outside the United States. In addition, we had approximately ~~$82.7~~$394.0 million of debt, net of unamortized deferred financing costs, as of March 31, ~~2021.~~2022. How and when we deploy our balance sheet capacity will figure prominently in our longer-term growth prospects and stockholder returns.

Uses of Cash

Acquisitions and investments. We have historically funded our acquisitions with a combination of cash-on-hand, borrowings under our credit facilities as well as equity investor and seller financings.

Alaska Transaction. ~~We have secured~~On July 22, 2021, Alaska Communications entered into a ~~commitment for certain~~new debt financing in connection with the Alaska Transaction. See ~~Pending~~ Acquisition of Alaska Communications System Group, ~~Inc.~~Inc.

We continue to explore opportunities to expand our telecommunications business or acquire new businesses and telecommunications licenses in the United States, the Caribbean and elsewhere. Such acquisitions may require external financing. While there can be no assurance as to whether, when or on what terms we will be able to acquire any such businesses or licenses or make such investments, such acquisitions may be ~~accomplished~~completed through the issuance of shares of our capital stock, payment of cash or incurrence of additional debt. From time to time, we may raise capital ahead of any definitive use of proceeds to allow us to move more quickly and opportunistically if an attractive investment materializes.

Cash used in investing activities. Cash used in investing activities was ~~$7.9~~$34.5 million and ~~$16.8~~ $7.9 million for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively. ~~The net decrease in~~For the three months ended March 31, 2022, the entire $34.5 million of cash used ~~for~~in investing activities ~~of $8.9 million was primarily~~ related to ~~$18.6~~capital expenditures. For the three months ended March 31, 2021, we used $25.7 million and ~~$3.3~~$4.2 million ~~in cash received from the Vibrant Transaction and government grants, respectively, partially offset by increases in cash used~~ for capital expenditures and strategic investments, respectively. Partially

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offsetting the 2021 expenditures were cash receipts of $18.6 million and ~~$1.4~~$3.3 million for the receipt of the proceeds from the Vibrant Transaction and from government grants, respectively.

Cash ~~used in~~provided by (used in) financing activities. ~~Cash used in~~Net cash provided by financing activities relating to the Alaska Transaction and FirstNet Agreement was ~~$10.0~~an aggregate of $18.0 million and ~~$13.9~~$10.8 million during the three months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022, we received $11.0 million in net borrowings (net of $13.0 million of repayments of those borrowings) under the Alaska Credit Facility and, ~~2020, respectively.~~ relating to the construction phase of the FirstNet Agreement, we borrowed a net $7.0 million (net of $1.0 million of repayments of those borrowings). During the three months ended March 31, 2021 we borrowed $10.8 million under the FirstNet Receivables Credit Facility.

~~The decrease in~~

Excluding the impact of the Alaska Transaction and FirstNet Agreement, we were provided with $1.2 million of cash and used ~~for~~$20.9 million of cash relating to financing activities for the three months ended March 31, 2022 and 2021, respectively. This $22.1 million change was the result of ~~$3.9~~an increase of $12.5 million ~~was primarily related to cash received for~~in borrowings under the ~~Receivables~~2019 CoBank Credit Facility during 2022 as well as reductions in our payments to acquire noncontrolling interests in our less than wholly owned subsidiaries and distributions to those noncontrolling interests of ~~$10.8~~$9.0 million and ~~a reduction~~$3.3 million, respectively. Offsetting those decreases in ~~cash used~~expenditures were increases in expenditures of $2.8 million for ~~debt issuance costs and to repurchase our common stock under~~ the ~~2016 Repurchase Plan (as defined below)~~repayment of ~~$1.1 million. Partially offsetting these amounts was a $~~long-term debt.~~9.7 million increase in cash used to acquire non-controlling interests in One Communications (our subsidiary in Bermuda and the Cayman Islands.~~

Working Capital. Historically, we have internally funded our working capital needs. Pursuant to the FirstNet Agreement, AT&T has the option to repay construction costs, with interest, over an ~~eight year~~eight-year period. To fund the working capital needs created by AT&T’s option to extend its payment terms, we completed the Receivables Credit Facility, as discussed below, on March 26, 2020.

Capital expenditures. Historically, a significant use of our cash has been for capital expenditures to expand and upgrade our telecommunications networks and to expand our previously owned renewable energy operations.

For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, we spent approximately ~~$25.7~~$34.5 million and ~~$14.1~~$25.7 million, respectively, on capital ~~expenditures.~~expenditures relating to our telecommunications networks and our business support systems of which $0.2 million and $6.2 million, respectively, are reimbursable. The following notes our capital expenditures, by operating segment, for these periods (in thousands):


	Capital Expenditures										Capital Expenditures

		International		US		Renewable		Corporate and				International		US		Corporate and
Three months ended March 31,		Telecom		Telecom		Energy		Other (1)		Consolidated		Telecom		Telecom		Other (1)		Consolidated
2022											$	15,170	$	19,095	$	203	$	34,468
2021	$	10,506	$	14,939	$	—	$	235	$	25,680		10,506		14,939		235		25,680
2020		10,465		1,972		720		904		14,061

(1)

Corporate and other items refer to corporate overhead costs and consolidating adjustments

We are continuing to invest in our telecommunication networks along with our operating and business support systems in many of our markets. Such investments ~~include~~primarily relate to the upgrade and expansion of both our Mobility and Fixed telecommunications networks as well as our service delivery platforms. For ~~2021, we expect International Telecom capital expenditures to be approximately $45 million to $55 million. In the US Telecom segment,~~2022, we expect capital expenditures to be approximately ~~$40~~$150 million to ~~$50~~$160 million, ~~for 2021 including $20 million to $30 million related to towers and backhaul in conjunction with the FirstNet Agreement.~~

net of reimbursable amounts.

We expect to fund our current capital expenditures primarily from our current cash balances, cash generated from operations and our existing credit facilities including the Receivables Credit Facility.

Income taxes. We have historically used cash-on-hand to make payments for income taxes. Our policy is to allocate capital where we believe we will get the best returns and to date has been to indefinitely reinvest the undistributed earnings of our foreign subsidiaries. As we continue to reinvest our remaining foreign earnings, no additional provision for income taxes has been made on accumulated earnings of foreign subsidiaries.

Dividends. We use cash-on-hand to make dividend payments to our stockholders when declared by our Board of Directors. For the three months ended March 31, ~~2021,~~2022, our Board of Directors declared $2.7 million of dividends to

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our stockholders which includes a $0.17 per share dividend declared on March ~~17, 2021~~28, 2022 and paid on April ~~9, 2021.~~15, 2022. We have declared quarterly dividends ~~for~~since the ~~last 89 fiscal quarters.~~fourth quarter of 1998.

Stock Repurchase Plan. On September 19, 2016, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock from time to time on the open market or in privately negotiated transactions (the “2016 Repurchase Plan”). We repurchased ~~$0.5~~$0.9 million and ~~$1.6~~$0.5 million of our common stock under the 2016 Repurchase Plan during the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. As of March 31, ~~2021,~~2022, we ~~have $30.4~~had $19.5 million authorized and available for share repurchases under the 2016 Repurchase Plan.

Sources of Cash

Cash provided by operations. Cash provided by operating activities was $11.4 million for the three months ended March 31, 2022 as compared to $5.3 million for the three months ended March 31, ~~2021 as compared to $15.5 million for the three months ended March 31, 2020.~~ 2021. The ~~decrease~~increase of ~~$10.2~~$6.1 million was primarily related to an increase in ~~working capital investments made~~operating income (excluding a $16.0 million increase in depreciation and amortization expenses and a $3.3 million increase in losses on the disposal of assets) of $16.1 million. Partially offsetting this increase was the greater usage of cash as a part of the ~~FirstNet construction project as well as an increase~~decline in ~~payments of accounts payable and~~ accrued ~~expenses.~~expenses within our US Telecom segment.

CoBank Credit ~~facility~~. Facility

On April 10, 2019, we entered into ~~the 2019 Credit Facility,~~a credit facility, with CoBank, ACB and a syndicate of other lenders (the “2019 CoBank Credit Facility”). The 2019 CoBank Credit Facility provides for a $200 million revolving credit facility that includes (i) up to $75 million for standby or trade letters of credit and (ii) up to $10 million under a swingline sub-facility. Approximately ~~$16.0~~$18.0 million of performance letters of credit have been issued and remain outstanding and undrawn as of March 31, ~~2021.~~2022. The 2019 CoBank Credit Facility matures on April 10, 2024.

Amounts borrowed under the 2019 CoBank Credit Facility bear interest at a rate equal to, at our option, either (i) the London Interbank Offered Rate (“LIBOR”) plus an applicable margin ranging between 1.25% to 2.25% or (ii) a base rate plus an applicable margin ranging from 0.25% to 1.25%. Swingline loans 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) LIBOR for an interest period of one month and (y) LIBOR for an interest period of one week; (ii) the Federal Funds Effective Rate (as defined in the 2019 CoBank Credit Facility) plus 0.50% per annum; and (iii) the Prime Rate (as defined in the 2019 CoBank Credit Facility). The applicable margin is determined based on the Total Net Leverage Ratio (as defined in the 2019 CoBank Credit Facility). Under the terms of the 2019 CoBank Credit Facility, we must also pay a fee ranging from 0.150% to 0.375% of the average daily unused portion of the 2019 CoBank Credit Facility over each calendar quarter.

The 2019 CoBank 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. Our investments in “unrestricted” subsidiaries and certain dividend payments to our stockholders are not limited unless the Total Net Leverage Ratio is equal to or greater than 1.75 to 1.0. The Total Net Leverage Ratio is measured each fiscal quarter and is required to be less than or equal to 2.75 to 1.0. In the event of a Qualifying Acquisition (as defined in the 2019 CoBank Credit Facility), the Total Net Leverage Ratio increases to 3.25 to 1.0 for the subsequent three fiscal quarters.

The 2019 CoBank Credit Facility also provides for the incurrence by us of incremental term loan facilities, when combined with increases to revolving loan commitments, in an aggregate amount not to exceed $200 million (the “Accordion”). Amounts borrowed under the Accordion are also subject to proforma compliance with a net leverage ratio financial covenant.

As of March 31, ~~2021,~~2022, we were in compliance with all of the financial covenants, had no$71.5 million outstanding in borrowings and, net of the ~~$16.0~~$18.0 million of outstanding performance letters of credit, had ~~$184.0~~$110.5 million of availability under the 2019 CoBank Credit Facility.

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Alaska Credit Facility

On July 22, 2021, Alaska Communications entered into a Credit Agreement (the “Alaska Credit Facility”) with Fifth Third Bank, National Association, as Administrative Agent, and a syndicate of lenders to provide a $35.0 million revolving facility (the “Alaska Revolving Facility”) and a $210.0 million initial term loan facility (the “Alaska Term Loan”). As of March 31, 2022, $210.0 million was outstanding under the Alaska Term Loan and $13.0 million was outstanding under the Alaska Revolving Facility. Both facilities mature on July 22, 2026.

We capitalized $6.6 million of fees associated with the Alaska Credit Facility which are being amortized over the life of the debt and $5.6 million were unamortized at March 31, 2022.

The key terms and conditions of the Alaska Credit Facility include the following:

●

Alaska Communications is required to maintain financial ratios as defined in the Alaska Credit Facility, including (a) a maximum Consolidated Net Total Leverage Ratio of 4.00 to 1., stepping down to 3.75 to 1 beginning with the second quarter of 2024; and (b) a minimum Consolidated Fixed Charge Coverage Ratio of not less than 1.25 to 1; and

●

The Alaska Credit Facility is non-recourse to the Company and is secured by substantially all of the personal property and certain material real property owned by Alaska Communications.

FirstNet Receivables Credit Facility

The maturity date for each loan will be set by CoBank and will match the weighted average maturity of the certain receivables financed.

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Interest on the loans accrues at ~~a rate based on (i) LIBOR plus 2.50%, (ii) a base rate plus 1.50% or (iii)~~ a fixed annual interest rate to be quoted by CoBank. ~~If we select a variable interest rate option, we are required to enter an interest rate swap fixing the interest rate.~~

As of March 31, ~~2021,~~2022, we had ~~$10.8~~$42.5 million outstanding, of which ~~$1.1~~$5.3 million was current, and ~~$64.2~~$29.7 million of availability under the Receivables Credit Facility. We capitalized $0.9 million of fees associated with the Receivables Credit Facility which are being amortized over the life of the debt and ~~$0.8~~$0.7 million were unamortized at March 31, ~~2021.~~2022.

Viya Debt

We, and certain of our subsidiaries, have entered into a $60.0 million loan agreement (the “Viya Debt”) with Rural Telephone Finance Cooperative (“RTFC”). 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 to annual operating cash flow to 3.5 to 1.0 (the “Net Leverage Ratio”). This covenant is tested on an annual basis at the end of each fiscal year. Interest is paid quarterly at a fixed rate of 4.0% per annum 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 our Viya subsidiaries and is guaranteed by us. With RTFC’s consent, we funded the restoration of Viya’s network, following Hurricanes Irma and Maria in 2017, through an intercompany loan arrangement ~~with a $75.0 million limit. We were not~~ in ~~compliance with~~ the ~~Net Leverage Ratio covenant~~amount of ~~the Viya Debt agreement for the year ending December 31, 2020 and received a waiver from the RTFC on February 25, 2021.~~$51.6 million.

We paid a fee of ~~$0.9~~$0.9 million in 2016 to lock the interest rate at 4% per annum over the term of the Viya Debt. The fee was recorded as a reduction to the Viya Debt carrying amount and is being amortized over the life of the loan.

As of March 31, ~~2021,~~2022, $60.0 million of the Viya Debt remained outstanding and ~~$0.5~~$0.4 million of the rate lock fee was unamortized.

48On May 5, 2022, RTFC agreed to amend the Net Leverage Ratio to 7.0 to 1.0 through the maturity date of July 1, 2026. This covenant will be tested on December 31, 2022.

One Communications Debt

We have an outstanding loan from HSBC Bank Bermuda Limited (the “One Communications Debt”) which is scheduled to mature on May 22, 2022 and bears interest at the one-month LIBOR plus a margin ranging between 2.5% to 2.75% per annum paid quarterly.

The 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, tested annually as of and for the twelve months ended December 31st, 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 (as defined in the One Communications Debt agreement). ~~We were in compliance with our covenants as of December 31, 2020.~~

As a condition of the One Communications Debt, we were required to enter into a hedging arrangement with a notional amount equal to at least 30% of the outstanding loan balance and a term corresponding to the term of the One Communications Debt. As such, weWe entered into an amortizing interest rate swap that has been designated as a cash flow hedge, which ~~had~~has an original notional amount of $11.0 million, ~~has~~ an interest rate of 1.874%, and expires in ~~March~~May 2022. As of March 31, ~~2021,~~2022, the swap had an unamortized notional amount of ~~$7.1~~$3.8 million.

~~We capitalized $0.3 million of fees associated with the One Communications Debt which are being amortized over the life of the debt and are recorded as a reduction to the debt carrying amount.~~

As of March 31, ~~2021, $12.5~~2022, $3.8 million of the One Communications Debt was ~~outstanding and $0.1 million of the capitalized fees remained unamortized.~~outstanding.

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Factors Affecting Sources of Liquidity

Internally generated funds. The key factors affecting our internally generated funds are demand for our services, competition, regulatory developments, economic conditions in the markets where we operate our businesses and industry trends within the telecommunications and renewable energy industries.

Restrictions under Credit Facility. Our 2019 CoBank Credit Facility contains customary representations, warranties and covenants, including 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 2019 CoBank Credit Facility contains a financial covenant that imposes a maximum ratio of indebtedness to EBITDA. As of March 31, ~~2021,~~2022, we were in compliance with all of the financial covenants of the 2019 CoBank Credit Facility.

Capital markets. Our ability to raise funds in the capital markets depends on, among other things, general economic conditions, the conditions of the telecommunications and renewable energy industries, our financial performance, the state of the capital markets and our compliance with SEC requirements for the offering of securities. On May 12, 2020, we filed a “universal” shelf registration statement with the SEC, which automatically became effective upon filing. This filing registered potential future offerings of our securities.

Foreign Currency

We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies, primarily ~~the Indian Rupee and~~ the Guyana Dollar, to US Dollars at the appropriate rates as of the balance sheet date. Changes in the carrying value of these assets and liabilities attributable to fluctuations in rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income on our balance sheet. Income statement accounts are translated using the monthly average exchange rates during the year. Monetary assets and liabilities denominated in a currency that is different from a reporting entity’s functional currency must first be remeasured from the applicable currency to the legal entity’s functional currency. The effect of this remeasurement process is reported in other income within our income statement. During the three months ended March 31, 2022 and 2021, ~~and~~

~~2020,~~ we recorded ~~$0.1~~$0.2 million and ~~$0.9~~$0.1 million, respectively, in losses on foreign currency transactions. ~~With the completion of the Vibrant Transaction, we will no longer have exposure to the Indian Rupee.~~ We will continue to assess the impact of our exposure to the Guyana Dollar.

Inflation

~~We do not believe~~If inflation continues or worsens, it could negatively impact our Company by increasing our operating expenses. Inflation may lead to cost increases in multiple areas across our business, for example, rises in the prices of raw materials and manufactured goods, increased energy rates, as well as increased wage pressures and other expenses related to our employees. In particular, where we have agreed to undertake infrastructure build outs on a fixed budget for our carrier customers or by accepting government grants, inflation may result in build costs that ~~inflation has had a significant~~exceed our original budget given the long delays experienced in procuring equipment and materials due to global supply chain delays. To the extent that we are unable to pass on these costs through increased prices, revised budget estimates, or offset them in other ways, they may impact ~~on our consolidated operations in any of the periods presented in this Report.~~ out financial condition and cash flows.

Recent Accounting Pronouncements

See Note 2 to the Unaudited Condensed Consolidated Financial Statements included in this Report.

Critical Accounting Estimates

There were no changes to critical accounting estimates from those disclosed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” of our Annual Report on Form 10-K for the year ended December 31, 2021.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Translation and Remeasurement. We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies, primarily ~~the Indian Rupee and~~ the Guyana Dollar, to US Dollars at the appropriate rates as of the balance sheet date. Changes in the carrying value of these assets and liabilities attributable to fluctuations in rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income on our balance sheet. Income statement accounts are translated using the monthly average exchange rates during the year.

Monetary assets and liabilities denominated in a currency that is different from a reporting entity’s functional currency must first be remeasured from the applicable currency to the legal entity’s functional currency. The effect of this remeasurement process is reported in other income on our income statement.

Employee Benefit Plans. We sponsor pension and other postretirement benefit plans for employees of certain subsidiaries. Net periodic pension expense is recognized in our income statement. We recognize a pension or other postretirement plan’s funded status as either an asset or liability in our consolidated balance sheet. Actuarial gains and losses are reported as a component of other comprehensive income and amortized through other income in subsequent periods.

~~Interest Rate Sensitivity.~~As of March 31, ~~2021,~~2022, we had ~~$5.4~~$161.7 million of variable rate debt outstanding, which is subject to fluctuations in interest rates. Our interest expense may be affected by changes in interest rates. We believe that a 10% increase in the interest rates on our variable rate debt would have an immaterial impact on our Financial Statements. We may have additional exposure to fluctuations in interest rates if we again borrow amounts under our revolver loan within our 2019 CoBank Credit Facility.

Item 4. CONTROLS AND PROCEDURES

Management’s Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, ~~2021.~~2022. Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, ~~2021,~~2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Note 14 to the Unaudited Condensed Consolidated Financial Statements included in this Report.

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Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should carefully consider the factors discussed under Part I, Item 1A “Risk Factors” of our ~~2020~~2021 Annual Report on Form 10-K. The risks described herein and in our ~~2020~~2021 Annual Report on Form 10-K, as amended, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer

On September 19, 2016, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock from time to time on the open market or in privately negotiated transactions (the “2016 Repurchase Plan”). We have ~~$30.4~~$19.5 million available to be repurchased under that plan as of March 31, ~~2021.~~2022.

The following table reflects the repurchases by us of our common stock during the quarter ended March 31, ~~2021:~~2022:

(d)

Maximum

Number (or

(c)

Approximate

(b)

Total Number of

Dollar Value) of

(a)

Average

Shares Purchased

Shares that May

Total Number

Price

as Part of Publicly

be Purchased

of Shares

Paid per

Announced Plans

Under the Plans or
Period

Purchased

Share

or Programs

Programs
January 1, 2021 — January 31, 2021

—

$
—

—

$
30,938,016
February 1, 2021 — February 28, 2021

—

—

—

30,938,016
March 1, 2021 — March 31, 2021

43,978
(1)

50.40

11,501

30,398,450


						(d)
						Maximum
						Number (or
					(c)	Approximate
			(b)		Total Number of	Dollar Value) of
	(a)		Average		Shares Purchased	Shares that May
	Total Number		Price		as Part of Publicly	be Purchased
	of Shares		Paid per		Announced Plans	Under the Plans or
Period	Purchased		Share		or Programs	Programs
January 1, 2022— January 31, 2022	23,714		$	39.70	23,714	$	19,451,514
February 1, 2022 — February 28, 2022	—			—	—		19,451,514
March 1, 2022 — March 31, 2022	32,570	(1)		34.89	—		19,451,514

(1)

~~Includes 32,477~~Represents shares purchased on March 7, ~~2021,~~2022, March ~~8, 2021,~~9, 2022, March 11, ~~2021~~2022 and March 13, ~~2021~~2022 from our executive officers and other employees who tendered these shares to us to satisfy their tax withholding obligations incurred in connection with the vesting of restricted stock ~~awards~~units at such date. These shares were not purchased under the 2016 Repurchase Plan discussed above. The price paid per share was the closing price per share of our common stock on the Nasdaq Stock Market on the date those shares were purchased.

Table of Contents

Item 5. Other Information

On May 4, 2021, we amended our FirstNet Agreement with AT&T to extend the overall build schedule due to delays caused by the COVID-19 pandemic. For more information about our FirstNet Agreement with AT&T, please refer to “FirstNet Agreement” under Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.None

Item 6. Exhibits:



~~2.1~~10.1*			Agreement and Plan of Merger, by and among Alaska Communications, Parent and Merger Sub (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-12593) filed on January 4, 2021).

~~10.1*#~~			~~Second~~ Amendment to ~~Network Build and Maintenance~~Loan Agreement dated ~~as of the 4th day of~~ May ~~2021 and effective as of the 1st day of January, 2021 by and~~5, 2022 between ~~Commnet Wireless,~~ATN VI Holdings, LLC and ~~AT&T Mobility LLC.~~

~~10.2~~			~~Voting Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-12593) filed on January 4, 2021).~~

~~10.3~~			Form of Performance Stock Unit Award Grant Notice and Performance Stock Unit Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-12593) filed on March 15, 2021).

~~10.4~~			Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-12593) filed on March 15, 2021).Rural Telephone Finance Cooperative.

31.1*			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**			Certification of Chief Executive Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**			Certification of Chief Financial Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*			Inline XBRL Taxonomy Extension Schema Document

101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document

104			Cover Page Interactive Data file (formatted as Inline XBRL and embedded within Exhibit 101).

* Filed herewith.

** The certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Report and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates them by reference.

~~# Portions of this exhibit (indicated by asterisks) have been omitted in accordance with the rules of the Securities and Exchange Commission.~~

5361

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ATN International, Inc.

Date: May 10, ~~2021~~2022	/s/ Michael T. Prior
	Michael T. Prior
	President and Chief Executive Officer

Date: May 10, ~~2021~~2022	/s/ Justin D. Benincasa
	Justin D. Benincasa
	Chief Financial Officer

5462


									Accumulated		Total
			Treasury		Additional				Other		ATNI		Non-
	Common		Stock,		Paid In		Retained		Comprehensive		Stockholders’		Controlling		Total
	Stock		at cost		Capital		Earnings		Income/(Loss)		Equity		Interests		Equity
Balance, December 31, 2020	$	172	$	(59,456)	$	187,754	$	516,901	$	278	$	645,649	$	108,687	$	754,336
Purchase of 43,978 shares of common stock		—		(2,221)		—		—		—		(2,221)		—		(2,221)
Stock-based compensation		—		—		1,262		—		—		1,262		74		1,336
Dividends declared on common stock ($0.17 per common share)		—		—		—		(2,710)		—		(2,710)		—		(2,710)
Distributions to non-controlling interests		—		—		—		—		—		—		(1,530)		(1,530)
Repurchase of non-controlling interests		—		—		(2,086)		—		—		(2,086)		(9,123)		(11,209)
Comprehensive income:
Net income		—		—		—		2,706		—		2,706		1,570		4,276
Other comprehensive loss		—		—		—		—		(9)		(9)		—		(9)
Total comprehensive income		—		—		—		—		—		2,697		1,570		4,267
Balance, March 31, 2021	$	172	$	(61,677)	$	186,930	$	516,897	$	269	$	642,591	$	99,678	$	742,269

Balance, December 31, 2019	$	172	$	(51,129)	$	188,471	$	541,890	$	(3,282)	$	676,122	$	129,961	$	806,083
Issuance of 62,892 shares of common stock upon exercise of stock options		—		(3,229)		—		—		—		(3,229)		—		(3,229)
Stock-based compensation		—		—		1,196		—		—		1,196		(36)		1,160
Dividends declared on common stock ($0.17 per common share)		—		—		—		(2,715)		—		(2,715)		—		(2,715)
Distributions to non-controlling interests		—		—		—		—		—		—		(4,220)		(4,220)
Repurchase of non-controlling interests		—		—		—		—		—		—		(1,774)		(1,774)
Comprehensive income (loss):
Net income (loss)		—		—		—		(1,014)		—		(1,014)		3,390		2,376
Other comprehensive income		—		—		—		—		(4,602)		(4,602)		—		(4,602)
Total comprehensive income (loss)		—		—		—		—		—		(5,616)		3,390		(2,226)
Balance, March 31, 2020	$	172	$	(54,358)	$	189,667	$	538,161	$	(7,884)	$	665,758	$	127,321	$	793,079