Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 08, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | ATN International, Inc. | |
Entity Central Index Key | 879,585 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 15,957,354 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 167,107 | $ 207,956 |
Restricted cash | 1,071 | 833 |
Short-term investments | 1,595 | 7,076 |
Accounts receivable, net of allowances of $15.1 million and $15.0 million, respectively | 51,365 | 43,529 |
Inventory, materials and supplies | 7,789 | 15,398 |
Prepayments and other current assets | 35,386 | 68,136 |
Total current assets | 264,313 | 342,928 |
Fixed Assets: | ||
Property, plant and equipment | 1,255,975 | 1,169,806 |
Less accumulated depreciation | (553,007) | (526,660) |
Net fixed assets | 702,968 | 643,146 |
Telecommunication licenses, net | 95,952 | 95,952 |
Goodwill | 63,970 | 63,970 |
Customer relationships, net | 10,403 | 11,734 |
Restricted cash | 11,949 | 11,101 |
Other assets | 39,444 | 36,774 |
Total assets | 1,188,999 | 1,205,605 |
Current Liabilities: | ||
Current portion of long-term debt | 11,268 | 10,919 |
Accounts payable and accrued liabilities | 115,445 | 116,133 |
Dividends payable | 2,712 | 2,724 |
Accrued taxes | 10,238 | 6,751 |
Advance payments and deposits | 17,727 | 25,178 |
Total current liabilities | 157,390 | 161,705 |
Deferred income taxes | 30,755 | 31,732 |
Other liabilities | 41,612 | 37,072 |
Long-term debt, excluding current portion | 139,733 | 144,873 |
Total liabilities | 369,490 | 375,382 |
Commitments and contingencies (Note 13) | ||
ATN International, Inc. Stockholders’ Equity: | ||
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.01 par value per share; 50,000,000 shares authorized; 17,128,694 and 17,102,530 shares issued, respectively, 15,957,537 and 16,025,745 shares outstanding respectively | 170 | 170 |
Treasury stock, at cost; 1,171,157 and 1,076,785 shares, respectively | (40,268) | (36,110) |
Additional paid-in capital | 172,170 | 167,973 |
Retained earnings | 550,872 | 552,948 |
Accumulated other comprehensive income | 141 | 3,746 |
Total ATN International, Inc. stockholders’ equity | 683,085 | 688,727 |
Non-controlling interests | 136,424 | 141,496 |
Total equity | 819,509 | 830,223 |
Total liabilities and equity | $ 1,188,999 | $ 1,205,605 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 15.1 | $ 15 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 17,128,694 | 17,102,530 |
Common stock, shares outstanding | 15,957,537 | 16,025,745 |
Treasury stock, shares | 1,171,157 | 1,076,785 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
REVENUE: | ||||
Total Revenue | $ 117,788 | $ 123,245 | $ 222,263 | $ 251,360 |
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated): | ||||
Termination and access fees | 28,257 | 30,922 | 54,171 | 63,924 |
Engineering and operations | 18,409 | 19,378 | 36,561 | 39,061 |
Sales, marketing and customer service | 8,413 | 8,729 | 16,974 | 17,765 |
General and administrative | 26,754 | 26,011 | 52,296 | 50,370 |
Transaction-related charges | 438 | 148 | 465 | 826 |
Depreciation and amortization | 21,913 | 22,254 | 43,217 | 44,747 |
(Gain) loss on disposition of long-lived assets | (2,333) | (2,049) | 1,111 | |
Loss on damaged assets and other hurricane related charges, net of insurance recovery | 184 | 666 | ||
Total operating expenses | 102,035 | 107,442 | 202,301 | 217,804 |
Income from operations | 15,753 | 15,803 | 19,962 | 33,556 |
OTHER INCOME (EXPENSE) | ||||
Interest income | 487 | 347 | 853 | 633 |
Interest expense | (2,327) | (2,153) | (4,532) | (4,469) |
Loss on deconsolidation of subsidiary | (529) | |||
Other expense | (1,045) | (492) | (1,798) | (973) |
Other expense, net | (2,885) | (2,298) | (5,477) | (5,338) |
INCOME BEFORE INCOME TAXES | 12,868 | 13,505 | 14,485 | 28,218 |
Income tax provisions | 2,088 | 2,596 | 6,008 | 5,724 |
NET INCOME | 10,780 | 10,909 | 8,477 | 22,494 |
Net income attributable to non-controlling interests, net of tax expense of $0.3 million, $0.1 million, $0.6 million, and $0.4 million, respectively. | (3,564) | (5,026) | (6,816) | (9,751) |
NET INCOME ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS | $ 7,216 | $ 5,883 | $ 1,661 | $ 12,743 |
NET INCOME PER WEIGHTED AVERAGE SHARE ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS: | ||||
Basic (in dollars per share) | $ 0.45 | $ 0.36 | $ 0.10 | $ 0.79 |
Diluted (in dollars per share) | $ 0.45 | $ 0.36 | $ 0.10 | $ 0.78 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in shares) | 15,962 | 16,195 | 15,996 | 16,176 |
Diluted (in shares) | 16,010 | 16,274 | 16,046 | 16,263 |
DIVIDENDS PER SHARE APPLICABLE TO COMMON STOCK (in dollars per share) | $ 0.17 | $ 0.34 | $ 0.34 | $ 0.68 |
Wireless | ||||
REVENUE: | ||||
Total Revenue | $ 50,496 | $ 56,546 | $ 101,043 | $ 115,471 |
Wireline | ||||
REVENUE: | ||||
Total Revenue | 61,269 | 61,802 | 109,365 | 125,960 |
Renewable Energy | ||||
REVENUE: | ||||
Total Revenue | $ 6,023 | $ 4,897 | $ 11,855 | $ 9,929 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Noncontrolling interest income tax expense | $ 0.3 | $ 0.1 | $ 0.6 | $ 0.4 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income | $ 10,780 | $ 10,909 | $ 8,477 | $ 22,494 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (2,551) | 302 | (3,583) | 2,232 |
Reclassifications of gains on sale of marketable securities to net income | (755) | (1,044) | ||
Unrealized gain (loss) on securities | 42 | (90) | 181 | (130) |
Projected pension benefit obligation, net of tax of $0.0 million, $0.0 million, $0.0 million, and $0.4 million, respectively | 513 | |||
Other comprehensive income (loss), net of tax | (2,509) | (543) | (3,402) | 1,571 |
Comprehensive income | 8,271 | 10,366 | 5,075 | 24,065 |
Less: Comprehensive income attributable to non-controlling interests | (3,564) | (5,026) | (6,816) | (9,751) |
Comprehensive income (loss) attributable to ATN International, Inc. | $ 4,707 | $ 5,340 | $ (1,741) | $ 14,314 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Projected pension benefit obligation, tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0.4 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 8,477 | $ 22,494 |
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||
Depreciation and amortization | 43,217 | 44,747 |
Provision for doubtful accounts | 2,249 | 1,906 |
Amortization and write off of debt discount and debt issuance costs | 393 | 279 |
Stock-based compensation | 3,679 | 3,786 |
Unrealized loss on foreign currency | 1,066 | |
Deferred income taxes | (1,279) | 2,379 |
Loss on equity method investments | 2,033 | |
(Gain) loss on disposition of long-lived assets | (2,049) | 1,111 |
Gain on sale of investments | (1,055) | |
Loss on deconsolidation of subsidiary | 529 | |
Other non-cash activity | 177 | 509 |
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions: | ||
Accounts receivable | (10,605) | (6,062) |
Materials and supplies, prepayments, and other current assets | 1,254 | (6,586) |
Prepaid income taxes | 995 | |
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities | (2,137) | (3,331) |
Accrued taxes | 1,249 | (7,876) |
Other assets | (1,208) | 2,887 |
Other liabilities | 1,554 | 6,722 |
Net cash provided by operating activities | 46,037 | 65,467 |
Cash flows from investing activities: | ||
Capital expenditures | (40,594) | (78,559) |
Hurricane rebuild capital expenditures | (66,654) | |
Hurricane insurance proceeds | 34,606 | |
Receipt of government grants | 5,400 | |
Purchase of strategic investments | (2,000) | |
Divestiture of businesses, net of transferred cash of $0.0 million and $2.1 million, respectively | 926 | 22,597 |
Purchases of spectrum licenses and other intangible assets, including deposits | (36,832) | |
Proceeds from sale of investments | 5,348 | 2,761 |
Proceeds from sale of assets | 4,130 | |
Net cash used in investing activities | (58,838) | (90,033) |
Cash flows from financing activities: | ||
Dividends paid on common stock | (5,441) | (10,992) |
Proceeds from new borrowings | 8,571 | |
Distribution to non-controlling interests | (12,836) | (3,373) |
Payment of debt issuance costs | (326) | |
Proceeds from stock option exercises | 274 | |
Principal repayments of term loan | (4,786) | (5,447) |
Repurchase of common stock | (3,660) | (2,186) |
Acquisition of businesses, net of acquired cash of $0.0 million | (1,178) | |
Repurchases of non-controlling interests | (61) | (953) |
Investments made by minority shareholders in consolidated affiliates | 122 | |
Net cash used in provided by financing activities | (26,784) | (15,488) |
Effect of foreign currency exchange rates on cash and cash equivalents | (178) | 207 |
Net change in cash, cash equivalents, and restricted cash | (39,763) | (39,847) |
Total cash, cash equivalents, and restricted cash, beginning of period | 219,890 | 288,358 |
Total cash, cash equivalents, and restricted cash, end of period | 180,127 | 248,511 |
Noncash investing activity: | ||
Transfer from inventory, materials and supplies to property, plant and equipment | 6,708 | |
Purchases of property, plant and equipment included in accounts payable and accrued expenses | $ 13,266 | $ 13,107 |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Net of transferred cash | $ 0 | $ 2.1 |
Net of acquired cash | $ 0 |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 6 Months Ended |
Jun. 30, 2018 | |
ORGANIZATION AND BUSINESS OPERATIONS | |
ORGANIZATION AND BUSINESS OPERATIONS | 1. ORGANIZATION AND BUSINESS OPERATIONS The Company is a holding company that, through its operating subsidiaries, (i) provides wireless and wireline telecommunications services in North America, Bermuda and the Caribbean, (ii) develops, owns and operates commercial distributed generation solar power systems in the United States and India, and (iii) owns and operates terrestrial and submarine fiber optic transport systems in the United States and in the Caribbean. The Company was incorporated in Delaware in 1987 and began trading publicly in 1991. Since that time, the Company has engaged in strategic acquisitions and investments to grow its operations. The Company actively evaluates additional domestic and international acquisition, divestiture, and investment opportunities and other strategic transactions in the telecommunications, energy-related and other industries that meet its return-on-investment and other acquisition criteria. The Company offers the following principal services: · Wireless. In the United States, the Company offers wholesale wireless voice and data roaming services to national, regional, local and selected international wireless carriers in rural markets located principally in the Southwest and Midwest United States. The Company also offers wireless voice and data services to retail and wholesale customers in Bermuda, Guyana, the U.S. Virgin Islands, and the United States. · Wireline. The Company’s wireline services include local telephone and data services in Bermuda, the Cayman Islands, Guyana, the U.S. Virgin Islands, and the United States. The Company’s wireline services also include video services in Bermuda, the Cayman Islands, and the U.S Virgin Islands. The Company offers wholesale long‑distance voice services to telecommunications carriers. Through March 8, 2017, the Company also offered facilities‑based integrated voice and data communications services and wholesale transport services to enterprise and residential customers in New England, primarily Vermont, and in New York State. · Renewable Energy. In the United States, the Company provides distributed generation solar power to corporate and municipal customers. The Company also owns and develops projects in India providing distributed generation solar power to corporate customers. The following chart summarizes the operating activities of the Company’s principal subsidiaries, the segments in which the Company reports its revenue and the markets it served as of June 30, 2018: Segment Services Markets Tradenames U.S. Telecom Wireless United States (rural markets) Commnet, Choice, Choice NTUA Wireless, WestNet, Geoverse Wireline United States Essextel, Deploycom International Telecom Wireline Bermuda, Guyana, U.S. Virgin Islands, Cayman Islands One, GTT+, Viya, Logic, Fireminds Wireless Bermuda, Guyana, U.S. Virgin Islands One, GTT+, Viya Video Services Bermuda, U.S. Virgin Islands, Cayman Islands One, Viya, Logic Renewable Energy Solar United States (Massachusetts, California, and New Jersey), India Ahana Renewables, Vibrant Energy The Company actively evaluates potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, that meet its return on investment and other criteria. The Company provides management, technical, financial, regulatory, and marketing services to its subsidiaries and typically receives a management fee equal to a percentage of their respective revenue. Management fees from subsidiaries are eliminated in consolidation. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial information included herein is unaudited; however, the Company believes such information and the disclosures herein are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial position and results of operations for such periods. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Results of interim periods may not be indicative of results for the full year. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018. The condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and certain entities, which are consolidated in accordance with the provisions of the Financial Accounting Standards Board’s (“FASB”) authoritative guidance on the consolidation of variable interest entities, since it is determined that the Company is the primary beneficiary of these entities. The Company’s effective tax rate for the three months ended June 30, 2018 and 2017 was 16.2% and 19.2%, respectively. The effective tax rate for the three months ended June 30, 2018 was primarily impacted by the following items: (i) a $0.5 million benefit for the release of a capital loss valuation allowance due to a capital gain on a sale of a wireless license, and (ii) the mix of income generated among the jurisdictions in which the Company operates along with the exclusion of losses in jurisdictions where it cannot benefit from those losses as required by ASC 740-270-30-36(a), primarily in the U.S. Virgin Islands and India. The effective tax rate for the three months ended June 30, 2017 was impacted by the following items: (i) a benefit for the net capital loss due to the stock sales of our businesses in New England, New York and St. Maarten, and (ii) the mix of income generated among the jurisdictions in which it operates. The Company’s effective tax rate for the six months ended June 30, 2018 and 2017 was 41.5% and 20.3%, respectively. The effective tax rate for the six months ended June 30, 2018 was primarily impacted by the following items: (i) a $0.7 million provision for the intercompany sale of assets from the U.S. to the U.S. Virgin Islands, (ii) a $0.5 million increase (net) in unrecognized tax benefits recognized discretely, (iii) a $0.5 million benefit for the release of a capital loss valuation allowance due to a capital gain on a sale of a wireless license, and (iv) the mix of income generated among the jurisdictions in which it operates along with the exclusion of losses in jurisdictions where the Company cannot benefit from those losses as required by ASC 740-270-30-36(a), primarily in the U.S. Virgin Islands and India. The effective tax rate for the six months ended June 30, 2017 was impacted by the following items: (i) a benefit for the net capital loss due to the stock sales of our businesses in New England, New York and St. Maarten, and (ii) the mix of income generated among the jurisdictions in which the Company operates. The Company’s effective tax rate is based upon estimated income before provision for income taxes for the year, composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for potential tax consequences, benefits and/or resolutions of tax contingencies. The Company’s consolidated tax rate will continue to be impacted by any transactional or one-time items in the future and the mix of income in any given year generated among the jurisdictions in which it operates. The effective tax rate in 2018 could be affected by adjustments to the provisional amounts recorded under the guidance of SAB 118 for the one-time transition tax and the revaluation of deferred tax assets and liabilities due to the U.S. statutory rate change in 2017 however no change has been recorded as of June 30, 2018. While the Company believes it has 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 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 U.S. federal, state, and foreign tax matters in future periods as new information becomes available. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), and subsequently issued related updates, which provides a single, comprehensive revenue recognition model for all contracts with customers. The revenue standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard on January 1, 2018. Refer to Note 3. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted this standard on January 1, 2018. Upon adoption the Company held $20.1 million of equity investments that do not have readily determinable fair values. As a result these investments are measured at cost less impairments, adjusted for observable price changes of similar investments of the same issuer. The Company performs a qualitative impairment assessment of these investments quarterly by reviewing available information. The Company has not adjusted the cost of these investments since acquisition. Upon adoption, the Company held $0.6 million of equity investments with readily determinable fair values and reclassified $0.2 million of unrealized gains on this investment to retained earnings. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” and subsequently issued related updates (“ASU 2016-02”), which provide comprehensive lease accounting guidance. The standard requires entities to recognize lease assets and liabilities on the balance sheet as well as disclosure of key information about leasing arrangements. ASU 2016-02 will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is in the process of implementing new systems, processes and controls to implement the guidance. The Company will adopt the standard on January 1, 2019 by applying the new lease requirements at the effective date and recognize a cumulative-effect adjustment to the opening balance sheet retained earnings in the period of adoption with no adjustments to prior periods. The adoption will result in right to use asset and liabilities being recorded on the Company’s balance sheet. The Company is in the process of determining quantitative information related to the impact of the guidance. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The Company adopted ASU 2016-09 on January 1, 2017. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. This had no impact on the Company’s historical results. Also as a result of the adoption, the Company changed its policy election to account for forfeitures as they occur rather than on an estimated basis. The change resulted in the Company reclassifying $0.3 million from additional paid-in capital to retained earnings for the net cumulative-effect adjustment in stock compensation expense related to prior periods. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides further clarification on eight cash flow classification issues. The Company adopted this standard on January 1, 2018. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” (“ASU 2016-18”). The amendments in ASU 2016-18 are intended to reduce diversity in practice related to the classification and presentation of changes in restricted or restricted cash equivalents on the statement of cash flows. The amendments in ASU 2016-18 require that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard on January 1, 2018. The Company’s statement of cash flows reports the cash effects during a period of an entity’s operations, its investing transactions, and its financing transactions. The statement of cash flows explains the change during the period in the total cash which includes cash equivalents as well as restricted cash. The Company applies the predominance principle to classify separately identifiable cash flows based on the nature of the underlying cash flows. Debt prepayment or extinguishment costs are classified as cash outflows from financing activities. Contingent consideration payments made three months or less after a business combination are classified as investing activities and those made after that time are classified as financing activities. Proceeds from the settlement of insurance claims are classified on the basis of the nature of the loss. Prior to January 1, 2018, the Company classified all payments made in a business combination as investing activities and did not include restricted cash in total cash. This change impacted the Company’s cash flows for the six months ended June 30, 2017 as indicated below (amounts in thousands): Statement of Cash flows - Six months ended June 30, 2017 Reported Change Under previous guidance Net cash provided by operating activities $ 65,467 $ — $ 65,467 Net cash used in investing activities (90,033) 588 (89,445) Net cash used in financing activities (15,488) 1,178 (14,310) Effect of foreign currency exchange rates on total cash 207 — 207 Net change in total cash $ (39,847) $ 1,766 $ (38,081) Total cash, beginning of period 288,358 (18,637) 269,721 Total cash, end of period $ 248,511 $ (16,871) $ 231,640 In October 2016 the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory”. The new standard eliminates all intra-entity sales of assets other than inventory, the exception under current standards that permits the tax effects of intra-entity asset transfers to be deferred until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new standard was effective for the Company on January 1, 2018. There was not a material impact to the Company’s consolidated financial statements upon adoption. In January 2017, the FASB issued Accounting Standards Update 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” or (“ASU 2017-04”). The amendments in ASU 2017-04 simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities. Instead, under the amendments in ASU 2017-04, an entity performs its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but not more than the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2019, with early adoption permitted. The Company adopted this standard in the third quarter of 2017. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. The new guidance requires the service cost component to be presented separately from the other components of net benefit costs. Service cost will be presented with other employee compensation cost within income from operations. The other components of net benefit cost, such as interest cost, amortization of prior service cost and gains or losses are required to be presented in other income. The Company adopted this standard on January 1, 2018. The Company sponsors pension and other postretirement benefit plans for employees of certain subsidiaries. Net periodic pension expense consists of service cost, interest cost, expected return on plan assets, and amortization of actuarial gains and losses. Service cost is recognized in operating income and all other components of pension expense are recognized in other income in the Company’s Statement of Operations. The Company recognizes a pension or other postretirement plan’s funded status as either an asset or liability in its consolidated balance sheet. Actuarial gains and losses are reported as a component of other comprehensive income and amortized through other income in subsequent periods. Prior to January 1, 2018, all components of pension expense were recognized in operating income. This change impacted the Company’s Statement of Operations for the three and six months ended June 30, 2017 by increasing operating expenses $40 thousand and $80 thousand, respectively and decreasing other income by the same amount. There was no impact on income before income taxes. The Company elected the practical expedient allowing the use of the amounts disclosed for the various components of net benefit cost in the pension and other postretirement benefit plans footnote as the basis for the retrospective application. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). The standard: (a) expands and refines hedge accounting for both financial and non-financial risk components, (b) aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and (c) includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including the adoption in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The guidance related to cash flow and net investment hedges existing at the date of adoption should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The guidance related to presentation and disclosure should be applied prospectively. The Company is currently assessing the impact of ASU 2017-12 on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02 “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” (“ASU 2018-02”). The standard gives entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income that were impacted by the 2017 Tax Cuts and Jobs Act. The guidance is effective for all entities for fiscal years beginning after December 31, 2018 and interim periods within those fiscal years. Early adoption is permitted. The guidance may be applied in the period of adoption or retrospectively to each impacted period. The Company has elected to early adopt ASU 2018-02 on December 31, 2017 and recorded its impact in the period of adoption. The impact of the adoption results in a $0.8 million reclassification from accumulated other comprehensive income to retained earnings, which is offset by an equivalent valuation allowance, with the net impact being zero. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2018 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. Revenue Recognition The Company’s significant accounting policies are detailed in “Note 2 – Summary of Significant Accounting Policies” within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2017. The Company’s accounting policies are updated as a result of adopting ASC 606 on January 1, 2018. The adoption of ASC 606 impacted the accounting for contract acquisition costs, multiyear retail wireless contracts with promotional discounts, and deferral of certain activation fees as further described below. Revenue Recognition – The Company earns revenue from its telecommunication and renewable energy operations. The Company recognizes revenue through the following steps: - Identification of the contract with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognize revenue when, or as, we satisfy performance obligations Revenue Recognition- Telecommunications Wireless revenue consists of wholesale and retail revenue. Wholesale revenue is generated from providing mobile voice and data services to the customers of other wireless carriers, the provision of network switching services and certain transport services using the Company’s wireless networks. The transaction price of some wholesale revenue contracts includes variable consideration in the form of volume discounts. Management uses its judgment based on projected transaction volumes to estimate the transaction price and to allocate the transaction price to the performance obligations in the contract. Revenue is recognized over time as the service is rendered to the customer. Retail revenue is generated from providing mobile voice and data services to subscribers as well as roaming services provided to other carriers’ customers roaming into our retail markets. This revenue is recognized over time as the service is rendered. Lastly, wireless revenue includes revenues from equipment sold to customers which is recognized when the equipment is delivered to the customer. Management considers transactions where customers purchase subsidized or discounted equipment and mobile voice or data services to be a single contract. For these contracts, the transaction price is allocated to the equipment and mobile service based on their standalone selling prices. The standalone selling price is based on the amount the Company charges for the equipment and service to similar customers. Equipment revenue is recognized when the equipment is delivered to customers and service revenue is recognized as service is rendered. Wireline revenue is generated from access and usage fees for internet, voice and video services charged to subscribers as well as wholesale long-distance voice services provided to telecommunication carriers at contracted rates. Revenue from these contracts is recognized over time as the service is rendered to the customer. The Company’s wireless and wireline contracts occasionally include promotional discounts such as free service periods or discounted products. If a contract contains a substantive termination penalty, the transaction price is allocated to the performance obligations based on standalone selling price resulting in accelerated revenue recognition and the establishment of a contract asset that will be recognized over the life of the contract. If a contract includes a promotional discount but no substantive termination penalty the discount is recorded in the promotional period and no contract asset it established. The Company’s customers also have the option to purchase additional telecommunication services. Generally, these options are not performance obligations and are excluded from the transaction price because they do not provide the customers with a material right. The Company may charge upfront fees for activation and installation of some of its products and services. These fees are reviewed to determine if they represent a separate performance obligation. If they are not a separate performance obligation, the contract price associated with them is recognized over the life of the customer. If the fees represent a performance obligation they are recognized when delivered to the customer based on standalone selling price. Sales and use and state excise taxes collected from customers that are remitted to the governmental authorities are reported on a net basis and excluded from the revenues and sales. Revenue Recognition-Renewable Energy Revenue from the Company’s Renewable Energy segment is generated from the sale of electricity through power purchase agreements (“PPA’s”) with various customers that generally range from 10 to 25 years. The Company recognizes revenue at contractual PPA rates over time as electricity is generated and simultaneously consumed by the customer. The Company’s Renewable Energy segment also generates revenue from the sale of Solar Renewable Energy Credits (“SRECs”). Revenue is recognized over time as SRECs are sold through long-term purchase agreements at the contractual rate specified in the agreement. Disaggregation The Company's revenue is presented on a disaggregated basis in Note 12 based on an evaluation of disclosures outside the financial statements, information regularly reviewed by the chief operating decision maker for evaluating the financial performance of operating segments and other information that is used for performance evaluation and resource allocations. This includes revenue from wireline, wireless and renewable energy, as well as domestic versus international wireline and wireless services. This disaggregation of revenue depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. 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 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 asset and the noncurrent portion is included in other assets on our balance sheets. Contract liabilities consist of advance payments and billings in excess of revenue recognized. Retail 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 services, sold to customers is recorded as deferred revenue prior to the commencement of services. Contract liabilities are recorded in advanced payments and deposits on our balance sheets. Contract assets and liabilities consisted of the following (amounts in thousands): June 30, 2018 March 31, 2018 $ Change % Change Contract asset – current $ 1,434 $ 1,309 $ 125 Contract asset – noncurrent 568 498 70 Contract liabilities (9,552) (9,827) 275 -3% Net contract liability $ (7,550) $ (8,020) $ 470 -6% The contract asset-current is included in prepayments and other current assets, the contract asset – noncurrent is included in other assets, and the contract liabilities are included in advance payments and deposits on the Company’s balance sheet. The decrease in our net contract liability was due to the timing of customer prepayments and contract billings. In the second quarter of 2018, we recognized revenue of $8.5 million related to our March 31, 2018 contract liability and amortized $0.5 million of the March 31, 2018 contract asset into revenue. The Company recognized revenue of $0.6 million in the second quarter of 2018 related to performance obligations that were satisfied or partially satisfied in previous periods. Contract Acquisition Costs The Company pays sales commissions to its employees and agents for obtaining customer contracts. These costs are incremental because they would not have been incurred if the contract was not obtained. The Company recognizes an asset for these costs and subsequently amortizes the asset on a systematic basis consistent with the pattern of the transfer of the services to the customer. The amortization period, which is between 2 and 6 years, considers both the original contract period as well as anticipated contract renewals as appropriate. The amortization period also includes renewal commissions when those commissions are not commensurate with new commissions. The Company estimates contract renewals based on its actual renewals in recent periods. When the expected amortization period is one year or less the Company utilizes the practical expedient and expenses the costs as incurred. The June 30, 2018 balance sheet includes current contract acquisition costs of $1.3 million in prepayments and other current assets and long term contract acquisition costs of $0.9 million in other assets. During the three and six months ended June 30, 2018 the Company amortized $0.3 million and $0.6 million, respectively, of contract acquisition cost. Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to unsatisfied performance obligations of certain multiyear retail wireless contracts that include a promotional discount. The transaction price allocated to unsatisfied performance obligations was $10.6 million at June 30, 2018. The Company expects to satisfy the remaining performance obligations and recognize the transaction price within 24 months. The Company has certain retail, wholesale, and renewable energy contracts where transaction price is allocated to remaining performance obligations. However the company omits these contracts from the disclosure by applying the right to invoice, one year or less, and wholly unsatisfied performance obligation practical expedients. Impacts of adoption in the current period The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method. The Company elected the practical expedient to apply the new guidance only to contracts that were not substantially complete at the adoption date. The cumulative effect of adopting ASC 606 resulted in a contract asset of $1.6 million of which $1.2 million was recorded in prepayments and other current assets and $0.4 million was recorded in other assets, a contract liability of $0.2 million recorded in advance payments and deposits, contract acquisition costs of $1.5 million of which $0.9 million was recorded in prepayments and other current assets and $0.6 million was recorded in other assets, and a deferred tax liability of $0.3 million with the offset of $1.5 million recorded to retained earnings and $1.1 million recorded to minority interest. The tables below identify changes to the Company’s financial statements as of June 30, 2018 and for the three months then ended as a result of the adoption of ASC 606 as compared to previous revenue guidance (amounts in thousands): Balance Sheet – June 30, 2018 Reported Change Under previous guidance Prepayments and other current assets $ $ (2,757) $ Total current assets $ $ (2,757) $ Other assets $ $ (1,433) $ Total assets $ $ (4,190) $ Advance payments and deposits $ $ (299) $ Accrued taxes (142) - Total current liabilities $ $ (441) $ Deferred income taxes $ $ (301) $ Total liabilities $ $ (742) $ Retained earnings $ $ (1,967) $ Minority interest $ 136,424 $ (1,481) $ Total equity $ $ (3,448) $ Total liabilities and equity $ $ (4,190) $ Statement of Operations Three months ended June 30, 2018 Six months ended June 30, 2018 Reported Change Under previous guidance Reported Change Under previous guidance Wireless revenue $ 50,496 $ (204) $ 50,292 $ 101,043 $ (337) $ 100,706 Total revenue $ 117,788 $ (204) $ 117,584 $ 222,263 $ (337) $ 221,926 Sales, marketing and customer service $ 8,413 $ 240 $ 8,653 $ 16,974 $ 618 $ 17,592 Total operating expenses $ 102,035 $ 240 $ 102,275 $ 202,301 $ 618 $ 202,919 Income from operations $ 15,753 $ (444) $ 15,309 $ 19,962 $ (955) $ 19,007 Income before taxes 12,868 (444) 12,424 14,485 (955) 13,530 Income tax provision 2,088 (49) 2,039 6,008 (142) 5,866 Net income $ 10,780 $ (395) $ 10,385 $ 8,477 $ (813) $ 7,664 Net income attributable to non-controlling interests (3,564) 154 (3,410) (6,816) 335 (6,481) Net income attributable to ATN International, Inc. stockholders $ 7,216 $ (241) $ 6,975 $ 1,661 $ (478) $ 1,183 Statement of Comprehensive Loss Three months ended June 30, 2018 Six months ended June 30, 2018 Reported Change Under previous guidance Reported Change Under previous guidance Net income $ 10,780 $ (395) $ 10,385 $ 8,477 $ (813) $ 7,664 Other comprehensive loss, net of tax (2,509) - (2,509) (3,402) - (3,402) Comprehensive loss 8,271 (395) 7,876 5,075 (813) 4,262 Less: Comprehensive income attributable to non-controlling interests (3,564) 154 (3,410) (6,816) 335 (6,481) Comprehensive income (loss) attributable to ATN International, Inc. $ 4,707 $ (241) $ 4,466 $ (1,741) $ (478) $ (2,219) Statement of Cash Flows - Six months ended June 30, 2018 Reported Change (1) Under previous guidance Net income $ 8,477 $ (813) $ 7,664 Materials and supplies, prepayments and other current assets $ 1,254 $ (681) $ 573 Accrued taxes 1,249 142 1,391 Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities (2,137) 68 (2,069) Other assets $ (1,208) $ (342) $ (1,550) (1) The adoption of ASC 606 had no impact on operating cash flows, investing cash flows, financing cash flows or net change in total cash. |
USE OF ESTIMATES
USE OF ESTIMATES | 6 Months Ended |
Jun. 30, 2018 | |
USE OF ESTIMATES | |
USE OF ESTIMATES | 4. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates relate to the allowance for doubtful accounts, useful lives of the Company’s fixed and finite-lived intangible assets, allocation of purchase price to assets acquired and liabilities assumed in business combinations, fair value of indefinite-lived intangible assets, goodwill, assessing the impairment of assets, revenue, and income taxes. Actual results could differ significantly from those estimates. |
IMPACT OF HURRICANES IRMA AND M
IMPACT OF HURRICANES IRMA AND MARIA | 6 Months Ended |
Jun. 30, 2018 | |
IMPACT OF HURRICANES IRMA AND MARIA | |
IMPACT OF HURRICANES IRMA AND MARIA | 5. IMPACT OF HURRICANES IRMA AND MARIA During September 2017, the Company’s operations and customers in the U.S. Virgin Islands were severely impacted by Hurricanes Irma and Maria (collectively, the “Hurricanes”). Both the Company’s wireless and wireline networks and commercial operations were severely damaged by these storms. As a result of the significant damage to the Company’s wireline network and the lack of consistent commercial power in the territory, the Company During the six months ended June 30, 2018, the Company spent $66.7 million restoring and adding resiliency to its network which allowed it to reconnect roughly two-thirds of the households and three-quarters of businesses as of period end. The Company expects that its network restoration work will be substantially complete by the end of the third quarter of 2018. However, returning the Company’s revenue to pre-Hurricane levels may take significant time as a result of population movements, the economic impact the Hurricanes had on the market, and it’s subscriber base’s appetite for continued wireline services. |
DISPOSITIONS
DISPOSITIONS | 6 Months Ended |
Jun. 30, 2018 | |
DISPOSITIONS | |
DISPOSITIONS | 6. DISPOSITIONS International Telecom Disposition On August 18, 2017, the Company completed the sale of the Viya cable operations located in the British Virgin Islands. The Company did not recognize a gain or loss on the transaction. On January 3, 2017, the Company completed the sale of the Viya cable operations located in St. Maarten for $4.8 million and recognized a gain of $0.1 million on the transaction. The results of the British Virgin Islands and St. Maarten operations are not material to the Company’s historical results of operations. Since the dispositions do not relate to a strategic shift in its operations, the historical results and financial position of the operations are presented within continuing operations. U.S. Telecom Disposition On March 8, 2017, the Company completed the sale of its integrated voice and data communications and wholesale transport businesses in New England and New York for consideration of $25.9 million (the “Sovernet Transaction”). The consideration included $20.9 million of cash, $3.0 million of receivables, and $2.0 million of contingent consideration. The $3.0 million of receivables are held in escrow to satisfy working capital adjustments in favor of the acquirer, to fund certain capital expenditure projects related to the assets sold and to secure the Company’s indemnification obligations. The contingent consideration represents the fair value of future payments related to certain operational milestones of the disposed assets. The value of the contingent consideration was up to $4.0 million based on whether or not the operational milestones were achieved by December 31, 2017. The table below identifies the assets and liabilities transferred (amounts in thousands): Consideration Received $ 25,926 Assets and liabilities disposed Cash 1,821 Accounts receivable 1,696 Inventory 639 Prepaid 1,034 Property, plant and equipment 25,294 Other assets 288 Accounts payable and accrued liabilities (1,718) Advance payments and deposits (1,897) Net assets disposed 27,157 Consideration less net assets disposed (1,231) Transaction costs (1,156) Loss $ (2,387) Prior to the closing of the Sovernet Transaction, the Company repurchased non-controlling interests from minority shareholders in a Sovernet subsidiary for $0.7 million. The non-controlling interest had a book value of zero. Additionally the Company recorded a loss on deconsolidation of $0.5 million. The Company incurred $1.2 million of transaction related charges pertaining to legal, accounting and consulting services associated with the Sovernet Transaction, of which $ 0.6 million were incurred during the year ended December 31, 2017. Since the Sovernet Transaction does not relate to a strategic shift in our operations, the historic results and financial position of the operations are presented within continuing operations. Subsequent to close of the Sovernet Transaction, management continually monitored and assessed the probability of earning the contingent consideration. In September 2017, based on progress toward achieving the operational milestones, and the December 31, 2017 deadline under which to do so, management determined that earning the contingent consideration was unlikely. As a result the fair value of the contingent consideration was reduced to zero. The amount was recorded as a loss on disposition of assets within operating income during the year ended December 31, 2017. The disposed assets did not achieve the operational milestones by the December 31, 2017 deadline. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2018 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS In accordance with the provisions of fair value accounting, a fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model. The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds, debt and equity securities and derivative contracts that are traded in an active exchange market. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange‑traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes corporate obligations and non‑exchange traded derivative contracts. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments and intangible assets that have been impaired whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Assets and liabilities of the Company measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 are summarized as follows (in thousands): June 30, 2018 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 380 $ 380 Money market funds 23,440 — 23,440 Short term investments 382 1,213 1,595 Commercial paper — 11,997 11,997 Interest rate swap — 237 237 Total assets and liabilities measured at fair value $ 23,822 $ 13,827 $ 37,649 December 31, 2017 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 391 $ 391 Money market funds 2,894 — 2,894 Short term investments 555 6,521 7,076 Commercial paper — 49,954 49,954 Interest rate swap — 52 52 Total assets and liabilities measured at fair value $ 3,449 $ 56,918 $ 60,367 Certificate of Deposit As of June 30, 2018 and December 31, 2017, this asset class consisted of a time deposit at a financial institution denominated in U.S. dollars. The asset class is classified within Level 2 of the fair value hierarchy because the fair value was based on observable market data. Money Market Funds As of June 30, 2018 and December 31, 2017, this asset class consisted of a money market portfolio that comprises Federal government and U.S. Treasury securities. The asset class is classified within Level 1 of the fair value hierarchy because its underlying investments are valued using quoted market prices in active markets for identical assets. Short Term Investments and Commercial Paper As of June 30, 2018 and December 31, 2017, these asset classes consisted of short term foreign and U.S. corporate bonds, equity securities, and commercial paper. Corporate bonds and commercial paper are classified within Level 2 of the fair value hierarchy because the fair value is based on observable market data. Equity securities are classified within Level 1 because fair value is based on quoted market prices in active markets for identical assets. The Company held equity securities with a fair value of $0.4 million at June 30, 2018 and net income for the three months then ended included $0.1 million of losses on these securities. 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. At June 30, 2018, the Company holds $22.1 million of equity securities consisting of non-controlling 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 strategic investments was $ 22.1 million and $20.1 million at June 30, 2018 and December 31, 2017, respectively. As of June 30, 2018 no impairments or price adjustments were recorded on the investments. Strategic investments are included with other assets on the consolidated balance sheets. The fair value of long-term debt is estimated using Level 2 inputs. At June 30, 2018, the fair value of long-term debt, including the current portion, was $ 154.2 million and its book value was $ 151.0 million. At December 31, 2017, the fair value of long-term debt, including the current portion, was $ 159.2 million and its book value was $ 155.8 million. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2018 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 8. LONG-TERM DEBT The Company has a credit facility with CoBank, ACB and a syndicate of other lenders to provide for a $225 million revolving credit facility (the “Credit Facility”) that includes (i) up to $10 million under the Credit Facility for standby or trade letters of credit, (ii) up to $25 million under the Credit Facility for letters of credit that are necessary or desirable to qualify for disbursements from the FCC’s mobility fund and (iii) up to $10 million under a swingline sub-facility. Amounts the Company may borrow under the Credit Facility bear interest at a rate equal to, at its option, either (i) the London Interbank Offered Rate (LIBOR) plus an applicable margin ranging between 1.50% to 1.75% or (ii) a base rate plus an applicable margin ranging from 0.50% to 0.75%. Swingline loans will bear interest at the base rate plus the applicable margin for base rate loans. The base rate is equal to the higher of (i) 1.00% plus the higher of (x) the one-week LIBOR and (y) the one-month LIBOR; (ii) the federal funds effective rate (as defined in the Credit Facility) plus 0.50% per annum; and (iii) the prime rate (as defined in the Credit Facility). The applicable margin is determined based on the ratio (as further defined in the Credit Facility) of the Company’s indebtedness to EBITDA. Under the terms of the Credit Facility, the Company must also pay a fee ranging from 0.175% to 0.250% of the average daily unused portion of the Credit Facility over each calendar quarter. On January 11, 2016, the Company amended the Credit Facility to increase the amount the Company is permitted to invest in “unrestricted” subsidiaries of the Company, which are not subject to the covenants of the Credit Facility, from $275.0 million to $400.0 million (as such increased amount shall be reduced from time to time by the aggregate amount of certain dividend payments to the Company’s stockholders). The Amendment also provides for the incurrence by the Company of incremental term loan facilities, when combined with increases to revolving loan commitments under the Credit Facility, in an aggregate amount not to exceed $200.0 million, which facilities shall be subject to certain conditions, including pro forma compliance with the total net leverage ratio financial covenant under the Credit Facility. The Credit Facility contains customary representations, warranties and covenants, including a financial covenant that imposes a maximum ratio of indebtedness to EBITDA as well as covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. In addition, the Credit Facility contains a financial covenant that imposes a maximum ratio of indebtedness to EBITDA. As of June 30, 2018, the Company was in compliance with all of the financial covenants of the Credit Facility. As of June 30, 2018, the Company had no borrowings under the Credit Facility. Ahana Debt On December 24, 2014, in connection with the Ahana Acquisition, the Company assumed $38.9 million in long-term debt (the “Original Ahana Debt”). The Original Ahana Debt included multiple loan agreements with banks that bore interest at rates between 4.5% and 6.0%, matured at various times between 2018 and 2023 and were secured by certain solar facilities. Repayment of the Original Ahana Debt was being made in cash on a monthly basis until maturity. The Original Ahana Debt also included a loan from Public Service Electric & Gas (the “PSE&G Loan”). The PSE&G Loan bears interest at 11.3%, matures in 2027, and is secured by certain solar facilities. Repayment of the Original Ahana Debt with PSE&G can be made in either cash or SRECs, at the Company’s discretion, with the value of the SRECs being fixed at the time of the loan’s closing. Historically, the Company has made all repayments of the PSE&G Loan using SRECs. On December 19, 2016, Ahana’s wholly owned subsidiary, Ahana Operations, issued $20.6 million in aggregate principal amount of 4.427% senior notes due 2029 (the “Series A Notes”) and $45.2 million in aggregate principal amount of 5.327% senior notes due 2031 (the “Series B Notes” and collectively with the Series A Notes and the PSE&G Loan, the “Ahana Debt”). Interest and principal are payable semi-annually, until the respective maturity dates of March 31, 2029 (for the Series A Notes) and September 30, 2031 (for the Series B Notes). Cash flows generated by the solar projects that secure the Series A Notes and Series B Notes are only available for payment of such debt and are not available to pay other obligations or the claims of the creditors of Ahana or its subsidiaries. However, subject to certain restrictions, Ahana Operations holds the right to the excess cash flows not needed to pay the Series A Notes and Series B Notes and other obligations arising out of the securitizations. The Series A Notes and Series B Notes are secured by certain assets of Ahana and are guaranteed by certain of its subsidiaries. A portion of the proceeds from the issuances of the Series A Notes and Series B Notes was used to repay the Original Ahana Debt in full except for the PSE&G Loan which remained outstanding after the refinancing. The Series A Notes and the Series B Notes contain customary representations, warranties and certain affirmative and negative covenants, which limit additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. The Series A Notes and Series B Notes are subject to financial covenants that impose 1) a maximum debt service coverage ratio and 2) a maximum ratio of the present value of Ahana’s future cash flow to the aggregate principal amounts of all outstanding obligations. These financial covenants are tested semi-annually for Ahana Operations on a consolidated basis and on an individual basis for certain subsidiaries. Both the Series A Notes and Series B Notes may be redeemed at any time, in whole or part, subject to a make-whole premium. As of June 30, 2018, the Company was in compliance with all of the financial covenants of the Series A Notes and the Series B Notes. The Company capitalized $2.8 million of fees associated with the Series A Notes and Series B Notes which is recorded as a reduction to the debt carrying amount and will be amortized over the life of the notes. As of June 30, 2018, $ 2.1 million of the Original Ahana Debt and $58.6 million of the Series A Notes and Series B Notes remained outstanding, and $ 2.6 million of the capitalized fees remain unamortized. One Communications Debt In connection with the acquisition of One Communications on May 3, 2016, the Company assumed $35.4 million in debt (the “One Communications Debt”) in the form of a loan from HSBC Bank Bermuda Limited. The One Communications Debt was scheduled to mature in 2021, was bearing interest at the three-month LIBOR rate plus a margin of 3.25%, and had repayment being made quarterly. The One Communications Debt contained customary representations, warranties and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and a financial covenant that limited the maximum ratio of indebtedness less cash to annual operating cash flow. On May 22, 2017, the Company amended and restated the One Communications Debt to increase the original facility to $37.5 million. The amended and restated debt is scheduled to mature on May 22, 2022 and bears interest at the three month LIBOR rate plus an applicable margin rate ranging between 2.5% to 2.75% paid quarterly. The amended and restated One Communications Debt contains customary representations, warranties and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and financial covenants that limit the ratio of tangible net worth to long term debt and total net debt to EBITDA and require a minimum debt service coverage ratio (net cash generated from operating activities plus interest expense less net capital expenditures to debt repayments plus interest expense). The Company was in compliance with its covenants as of June 30, 2018 As a condition of the amendment and restatement of the One Communications Debt agreement, within 90 days of the refinance date the Company is required to enter into a hedging arrangement with a notional amount equal to at least 30% of the outstanding loan balance and a term corresponding to the maturity of the One Communications Debt. In July 2017, we entered into an amortizing interest rate swap. This swap has been designated as a cash flow hedge, has an original notional amount of $11.0 million, has an interest rate of 1.874%, and expires in March 2022. In connection with the amendment and restatement of the One Communications Debt agreement, the Company increased the limit of its overdraft facility from $5.0 million to $10.0 million. This facility has an interest rate of three month LIBOR plus 1.75%. The Company capitalized $0.3 million of fees associated with the One Communications Debt, which is recorded as a reduction to the debt carrying amount and will be amortized over the life of the debt. As of June 30, 2018, $ 33.8 million of the One Communications Debt was outstanding, there were no borrowings under the overdraft facility, and $ 0.3 million of the capitalized fees remain unamortized. Viya Debt (formerly Innovative Debt) On July 1, 2016, the Company and certain of its subsidiaries entered into a $60.0 million loan agreement (the “Viya Debt”) with Rural Telephone Finance Cooperative (“RFTC”). 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% and principal repayment is not required until maturity on July 1, 2026. Prepayment of the Viya Debt may be subject to a fee under certain circumstances. The debt is secured by certain assets of the Company’s Viya subsidiaries and is guaranteed by the Company. Earlier in 2018, the Company began funding the restoration of Viya’s network through an intercompany loan arrangement which exceeded certain limitations on Viya incurring additional debt. RTFC consented to these intercompany advances and increased the intercompany debt limit to $50.0 million. Subsequent to the end of the second quarter end, RTFC increased the limit to $75.0 million at the Company’s request due to an increase in the on-going restoration and resiliency costs. The Company paid a fee of $0.9 million 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 will be amortized over the life of the loan. As of June 30, 2018, $60.0 million of the Viya Debt remained outstanding and $ 0.7 million of the rate lock fee was unamortized. |
GOVERNMENT GRANTS
GOVERNMENT GRANTS | 6 Months Ended |
Jun. 30, 2018 | |
GOVERNMENT GRANTS | |
GOVERNMENT GRANTS | 9. GOVERNMENT GRANTS Universal Service Fund The Universal Service Fund (“USF”) is a system of subsidies and fees managed by the Federal Communications Commission’s (“FCC”). USF funds are disbursed to telecommunication providers through four programs: the Connect America Fund; Lifeline; Schools and Libraries Program (“E-Rate”); and Rural Health Care Support. We participate in the Connect America Fund; Lifeline, E-Rate programs, and Rural Health Care Support programs. The FCC’s Mobility Funds and High Cost Support programs are administered through the Connect America Fund. The High-Cost Support program subsidizes telecommunications services in rural and remote areas. The FCC created the Phase I Mobility Fund (“Phase I Mobility Fund”), a one-time award meant to support wireless coverage in underserved geographic areas in the United States. The Company received $21.1 million of Phase I Mobility Fund support to our wholesale wireless business (the “Mobility Funds”) by expanding voice and broadband networks in certain geographic areas in order to offer either 3G or 4G service. Of these funds, $7.2 million was recorded as an offset to the cost of the property, plant, and equipment associated with these projects and, consequentially, a reduction of future depreciation expense. The remaining $13.9 million received offsets operating expenses, of which $13.4 million has been recorded to date and $0.5 million is recorded within current liabilities in our consolidated balance sheet as of June 30, 2018. The Mobility Funds projects and their operating results are included within our U.S. Telecom segment. As part of the receipt of the Mobility Funds, the Company committed to comply with certain additional FCC construction and other requirements. The balance sheet presentation is based on the timing of the expected usage of the funds which will reduce future operations expenses through the expiration of the arrangement in July 2018. During the three and six months ended June 30, 2018, the Company recorded $4.1 million and $8.3 million, respectively, of revenue from High Cost Support in its International Telecom segment for U.S. Virgin Islands operations. Also, during the three and six months ended June 30, 2018, the Company recorded $0.3 million and $0.6 million, respectively, of High Cost Support revenue in its US Telecom segment. The Company is 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 addition, the Company received $8.2 million of additional funding authorized by the FCC for network restoration following the Hurricanes. The E-Rate program provides discounted telecommunication access to eligible schools and libraries. The program awards providers grants to build network connectivity for eligible participants and pays recurring charges for eligible broadband services. The grants are distributed upon completion of a project. As of June 30, 2018, the Company was awarded approximately $15.4 million of E-Rate grants with construction completion obligations between June 2019 and June 2020. Once these projects are constructed the Company is obligated to provide service to the program participants. The Company is in various stages of constructing the networks and has not received any of the funds. 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, Lifeline, and Rural Health Care Support Programs. During the three and six months ended June 30, 2018 the company recorded revenue of $2.1 million and $4.3 million, respectively, in the aggregate from these programs. The Company is subject to certain operational and reporting requirements under the programs and it believes that it is in compliance with all of these requirements. 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 $7.4 million under this program in the first quarter of 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 $5.4 million to offset capital costs and, consequently, a reduction in future depreciation expense and $2.0 million to offset the cost of supporting the network which will reduce future operating expense. 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 currently expects to comply with all applicable requirements related to these funds. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2018 | |
EQUITY | |
EQUITY | 10. EQUITY Stockholders’ equity was as follows (in thousands): Six months ended June 30, 2018 2017 ATN Non-Controlling ATN Non-Controlling Total International, Inc. Interests Total Equity International, Inc. Interests Equity Equity, beginning of period $ 688,727 $ 141,496 $ 830,223 $ 677,055 $ 132,114 $ 809,169 Stock-based compensation 3,679 — 3,679 3,764 — 3,764 Comprehensive income: Net income 1,660 6,817 8,477 12,743 9,751 22,494 Projected pension benefit obligation — — — 513 — 513 Unrealized (gain) loss on securities 181 — 181 (130) — (130) Reclassifications of gains on sale of marketable securities to net income — — — (1,044) — (1,044) Foreign Currency translation adjustment (3,583) — (3,583) 2,232 — 2,232 Total comprehensive income (loss) (1,742) 6,817 5,075 14,314 9,751 24,065 Issuance of common stock upon exercise of stock options 498 — 498 401 — 401 Dividends declared on common stock (5,407) — (5,407) (10,951) — (10,951) Distributions to non-controlling interests — (12,975) (12,975) — (3,491) (3,491) Investments made by non-controlling interests — — — — 123 123 Loss on deconsolidation of subsidiary — — — — 529 529 Change in accounting method- adoption of ASU 2016-09 — — — 110 — 110 Change in accounting method- adoption of ASU 2014-09 1,488 1,147 2,635 — — — Repurchase of non-controlling interests — (61) (61) (670) (285) (955) Purchase of treasury stock (4,158) — (4,158) (2,314) — (2,314) Equity, end of period $ 683,085 $ 136,424 $ 819,509 $ 681,709 $ 138,741 $ 820,450 |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
NET INCOME (LOSS) PER SHARE | |
NET INCOME (LOSS) PER SHARE | 11. NET INCOME (LOSS) PER SHARE For the three and six months ended June 30, 2018 and 2017, outstanding stock options were the only potentially dilutive securities. The reconciliation from basic to diluted weighted average shares of common stock outstanding is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Basic weighted-average shares of common stock outstanding 15,962 16,195 15,996 16,176 Stock options 48 79 50 87 Diluted weighted-average shares of common stock outstanding 16,010 16,274 16,046 16,263 |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2018 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 12. SEGMENT REPORTING The Company has the following three reportable and operating segments: i) U.S. Telecom, ii) International Telecom, and iii) Renewable Energy. The following tables provide information for each operating segment (in thousands): For the Three Months Ended June 30, 2018 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 28,582 $ 21,914 $ — $ — $ 50,496 Wireline 1,702 59,567 — — 61,269 Renewable Energy — — 6,023 — 6,023 Total Revenue 30,284 81,481 6,023 — 117,788 Depreciation and amortization 6,835 11,794 1,899 1,385 21,913 Non-cash stock-based compensation — 20 29 2,054 2,103 Operating income (loss) 7,841 15,571 1,927 (9,586) 15,753 For the Three Months Ended June 30, 2017 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 34,921 $ 21,625 $ — $ — $ 56,546 Wireline 2,057 59,745 — — 61,802 Renewable Energy — — 4,897 — 4,897 Total Revenue 36,978 81,370 4,897 — 123,245 Depreciation and amortization 6,246 13,134 1,830 1,044 22,254 Non-cash stock-based compensation — 8 29 2,061 2,098 Operating income (loss) 13,147 10,765 846 (8,955) 15,803 For the Six Months Ended June 30, 2018 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 55,983 $ 45,060 $ — $ — $ 101,043 Wireline 2,800 106,565 — — 109,365 Renewable Energy — — 11,855 — 11,855 Total Revenue 58,783 151,625 11,855 — 222,263 Depreciation and amortization 13,348 23,465 3,673 2,731 43,217 Non-cash stock-based compensation — 48 57 3,574 3,679 Operating income (loss) 13,065 21,211 3,863 (18,177) 19,962 For the Six Months Ended June 30, 2017 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 72,623 $ 42,848 $ — $ — $ 115,471 Wireline 8,148 117,812 — — 125,960 Renewable Energy — — 9,929 — 9,929 Total Revenue 80,771 160,660 9,929 — 251,360 Depreciation and amortization 12,797 26,250 3,284 2,416 44,747 Non-cash stock-based compensation — 138 57 3,591 3,786 Operating income (loss) 28,533 20,691 2,287 (17,955) 33,556 (1) Corporate and Other items refer to corporate overhead costs and consolidating adjustments Selected balance sheet data for each of our segments as of June 30, 2018 and December 31, 2017 consists of the following (in thousands): U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated June 30, 2018 Cash, Cash equivalents, and Investments $ 16,241 $ $ $ $ 168,702 Total current assets 43,413 264,313 Fixed assets, net 92,435 702,968 Goodwill 35,269 — 63,970 Total assets 195,587 1,188,999 Total current liabilities 44,618 157,390 Total debt — — 151,001 December 31, 2017 Cash, Cash equivalents, and Investments $ 19,585 $ 110,700 $ 8,120 $ 76,627 $ 215,032 Total current assets 40,975 190,396 18,060 93,497 342,928 Fixed assets, net 99,462 367,485 158,447 17,752 643,146 Goodwill 35,269 25,421 3,280 — 63,970 Total assets 200,142 629,007 192,406 184,050 1,205,605 Total current liabilities 41,248 91,887 14,754 13,816 161,705 Total debt — 94,577 61,215 — 155,792 Capital Expenditures U.S. International Renewable Corporate and Six months ended June 30, Telecom Telecom Energy Other (1) Consolidated 2018 $ 7,266 $ 95,520 (2) $ 1,388 $ 3,074 $ 107,248 2017 12,602 37,129 25,535 3,293 78,559 (1) Corporate and other items refer to corporate overhead costs and consolidating adjustments (2) Includes $66.7 million of expenditures used to rebuild the Company’s damaged networks in the U.S. Virgin Islands which was impacted by the Hurricanes. These expenditures were financed, in part, by the $34.6 million of insurance proceeds the Company received during the first quarter of 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Regulatory and Litigation Matters The Company and its subsidiaries are subject to certain regulatory and legal proceedings and other claims arising in the ordinary course of business, some of which involve claims for damages and taxes that are substantial in amount. The Company believes that, except for the items discussed below, for which the Company is currently unable to predict the final outcome, the disposition of proceedings currently pending will not have a material adverse effect on the Company’s financial position or results of operations. The Company’s Guyana subsidiary, GT&T, holds a license to provide domestic fixed services and international voice and data services in Guyana on an exclusive basis until December 2030. Since 2001, the Government of Guyana has stated its intention to introduce additional competition into Guyana’s telecommunications sector. In connection therewith, the Company and GT&T have met on several occasions with officials of the Government of Guyana to discuss potential modifications of GT&T’s exclusivity and other rights under the existing agreement and license. On July 18, 2016, the Guyana Parliament passed telecommunications legislation, and on August 5, 2016, the legislation was signed into law and introduces material changes to many features of Guyana’s existing telecommunications regulatory regime with the intention of creating a more competitive market. The legislation does not have the effect of terminating the Company’s exclusive license. Instead the legislation as passed requires the Minister of Telecommunications to conduct further proceedings and issue implementing orders to enact the various provisions of the legislation, including the issuance of competing licenses. The Company cannot predict the manner in which or when the legislation will be implemented by the Minister of Telecommunications. In January 2018 the Government of Guyana and the Company met to discuss modifications of the Company’s exclusivity rights and other rights under its existing agreement and license. Those discussions are on-going, however, there can be no assurance that those discussions will be concluded before the Government issues new licenses contemplated by the legislation or at all, or that such discussions will satisfactorily address the Company’s contractual exclusivity rights. Although the Company believes that it would be entitled to damages or other compensation for any involuntary termination of its contractual exclusivity rights, it cannot guarantee that the Company would prevail in a proceeding to enforce its rights or that its actions would effectively halt any unilateral action by the Government. Historically, GT&T has been subject to other litigation proceedings and disputes in Guyana that, while not conclusively resolved, to the Company’s knowledge have not been the subject of discussions or other significant activity in the last five years. It is possible, but the Company believes unlikely, that these disputes, as discussed below, may be revived. The Company believes that none of these additional proceedings would, in the event of an adverse outcome, have a material impact on the Company’s consolidated financial position, results of operation or liquidity. In a letter dated September 8, 2006, the National Frequency Management Unit (“NFMU”) agreed that total spectrum fees in Guyana should not increase for the years 2006 and 2007. However, that letter implied that spectrum fees in 2008 and onward may be increased beyond the amount GT&T agreed to with the Government. GT&T 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, GT&T 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 GT&T’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 GT&T 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. GT&T 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 GT&T has not had the opportunity to review any recommendation made by the NFMU to the Minister. In November 2007, Caribbean Telecommunications Limited (“CTL”) filed a complaint in the U.S. District Court for the District of New Jersey against GT&T and ATN claiming breach of an interconnection agreement for domestic cellular services in Guyana and related claims. CTL asserted over $200 million in damages. GT&T and ATN moved to dismiss the complaint on procedural and jurisdictional grounds. On January 26, 2009, the court granted the motions to dismiss the complaint on the grounds asserted. In November 2009 and again in April 2013, CTL filed and then abandoned a similar claim against GT&T and the Public Utility Commission in the High Court of Guyana. CTL once more filed a similar claim against the Company in December 2017, seeking damages of $25 million; however, this matter was dismissed in May 2018. CTL made an untimely filing for an appeal thereafter, which the court has not yet ruled on. On May 8, 2009, a GT&T competitor, Digicel, filed a lawsuit in Guyana challenging the legality of GT&T’s exclusive license rights under Guyana’s constitution. Digicel initially filed this lawsuit against the Attorney General of Guyana on May 13, 2009, GT&T petitioned to intervene in the suit in order to oppose Digicel’s claims and GT&T’s petition was granted on May 18, 2009. GT&T filed an answer to the charge on June 22, 2009. The case remains pending. The Company believes that any legal challenge to GT&T’s exclusive license rights granted in 1990 is without merit and the Company intends to defend vigorously against such legal challenge. GT&T has filed several lawsuits in the High Court of Guyana asserting that, despite its denials, Digicel is engaged in international bypass in violation of GT&T ’s exclusive license rights, the interconnection agreement between the parties, and the laws of Guyana. GT&T is seeking injunctive relief to stop the illegal bypass activity and money damages. Digicel filed counterclaims alleging that GT&T has violated the terms of the interconnection agreement and Guyana laws. These suits, filed in 2010 and 2012, have yet to proceed to trial and it remains uncertain as to when a trial date may be set. GT&T intends to prosecute these matters vigorously. GT&T 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 GT&T 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 GT&T’s return on investment was no less than 15% per annum for the relevant periods. The Company believes that some adverse outcome is probable and has accordingly accrued $5.0 million as of June 30, 2018 for these matters. |
PLATFORM INVESTMENTS
PLATFORM INVESTMENTS | 6 Months Ended |
Jun. 30, 2018 | |
PLATFORM INVESTMENTS | |
PLATFORM INVESTMENTS | 14. PLATFORM INVESTMENTS During the third quarter of 2017, the Company completed its investment in a managed services and technology business based in Bermuda. During the second quarter of 2018, the Company established a new platform, based in the United States, to develop in-building wireless network technology which enables building owners to capitalize on the growing demand for better indoor wireless solutions. Also during the second quarter of 2018, the Company established a new platform, based in the United States, to further develop large scale fiber networks to serve the telecommunications and content provider industries with network infrastructure to develop network solutions. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2018 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS On August 7, 2018, the FCC authorized, approximately, an additional $7.3 million in funding to the Company for network restoration and hardening following the Hurricanes. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial information included herein is unaudited; however, the Company believes such information and the disclosures herein are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial position and results of operations for such periods. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Results of interim periods may not be indicative of results for the full year. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018. The condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and certain entities, which are consolidated in accordance with the provisions of the Financial Accounting Standards Board’s (“FASB”) authoritative guidance on the consolidation of variable interest entities, since it is determined that the Company is the primary beneficiary of these entities. The Company’s effective tax rate for the three months ended June 30, 2018 and 2017 was 16.2% and 19.2%, respectively. The effective tax rate for the three months ended June 30, 2018 was primarily impacted by the following items: (i) a $0.5 million benefit for the release of a capital loss valuation allowance due to a capital gain on a sale of a wireless license, and (ii) the mix of income generated among the jurisdictions in which the Company operates along with the exclusion of losses in jurisdictions where it cannot benefit from those losses as required by ASC 740-270-30-36(a), primarily in the U.S. Virgin Islands and India. The effective tax rate for the three months ended June 30, 2017 was impacted by the following items: (i) a benefit for the net capital loss due to the stock sales of our businesses in New England, New York and St. Maarten, and (ii) the mix of income generated among the jurisdictions in which it operates. The Company’s effective tax rate for the six months ended June 30, 2018 and 2017 was 41.5% and 20.3%, respectively. The effective tax rate for the six months ended June 30, 2018 was primarily impacted by the following items: (i) a $0.7 million provision for the intercompany sale of assets from the U.S. to the U.S. Virgin Islands, (ii) a $0.5 million increase (net) in unrecognized tax benefits recognized discretely, (iii) a $0.5 million benefit for the release of a capital loss valuation allowance due to a capital gain on a sale of a wireless license, and (iv) the mix of income generated among the jurisdictions in which it operates along with the exclusion of losses in jurisdictions where the Company cannot benefit from those losses as required by ASC 740-270-30-36(a), primarily in the U.S. Virgin Islands and India. The effective tax rate for the six months ended June 30, 2017 was impacted by the following items: (i) a benefit for the net capital loss due to the stock sales of our businesses in New England, New York and St. Maarten, and (ii) the mix of income generated among the jurisdictions in which the Company operates. The Company’s effective tax rate is based upon estimated income before provision for income taxes for the year, composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for potential tax consequences, benefits and/or resolutions of tax contingencies. The Company’s consolidated tax rate will continue to be impacted by any transactional or one-time items in the future and the mix of income in any given year generated among the jurisdictions in which it operates. The effective tax rate in 2018 could be affected by adjustments to the provisional amounts recorded under the guidance of SAB 118 for the one-time transition tax and the revaluation of deferred tax assets and liabilities due to the U.S. statutory rate change in 2017 however no change has been recorded as of June 30, 2018. While the Company believes it has 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 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 U.S. federal, state, and foreign tax matters in future periods as new information becomes available. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), and subsequently issued related updates, which provides a single, comprehensive revenue recognition model for all contracts with customers. The revenue standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard on January 1, 2018. Refer to Note 3. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted this standard on January 1, 2018. Upon adoption the Company held $20.1 million of equity investments that do not have readily determinable fair values. As a result these investments are measured at cost less impairments, adjusted for observable price changes of similar investments of the same issuer. The Company performs a qualitative impairment assessment of these investments quarterly by reviewing available information. The Company has not adjusted the cost of these investments since acquisition. Upon adoption, the Company held $0.6 million of equity investments with readily determinable fair values and reclassified $0.2 million of unrealized gains on this investment to retained earnings. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” and subsequently issued related updates (“ASU 2016-02”), which provide comprehensive lease accounting guidance. The standard requires entities to recognize lease assets and liabilities on the balance sheet as well as disclosure of key information about leasing arrangements. ASU 2016-02 will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is in the process of implementing new systems, processes and controls to implement the guidance. The Company will adopt the standard on January 1, 2019 by applying the new lease requirements at the effective date and recognize a cumulative-effect adjustment to the opening balance sheet retained earnings in the period of adoption with no adjustments to prior periods. The adoption will result in right to use asset and liabilities being recorded on the Company’s balance sheet. The Company is in the process of determining quantitative information related to the impact of the guidance. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The Company adopted ASU 2016-09 on January 1, 2017. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. This had no impact on the Company’s historical results. Also as a result of the adoption, the Company changed its policy election to account for forfeitures as they occur rather than on an estimated basis. The change resulted in the Company reclassifying $0.3 million from additional paid-in capital to retained earnings for the net cumulative-effect adjustment in stock compensation expense related to prior periods. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides further clarification on eight cash flow classification issues. The Company adopted this standard on January 1, 2018. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” (“ASU 2016-18”). The amendments in ASU 2016-18 are intended to reduce diversity in practice related to the classification and presentation of changes in restricted or restricted cash equivalents on the statement of cash flows. The amendments in ASU 2016-18 require that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard on January 1, 2018. The Company’s statement of cash flows reports the cash effects during a period of an entity’s operations, its investing transactions, and its financing transactions. The statement of cash flows explains the change during the period in the total cash which includes cash equivalents as well as restricted cash. The Company applies the predominance principle to classify separately identifiable cash flows based on the nature of the underlying cash flows. Debt prepayment or extinguishment costs are classified as cash outflows from financing activities. Contingent consideration payments made three months or less after a business combination are classified as investing activities and those made after that time are classified as financing activities. Proceeds from the settlement of insurance claims are classified on the basis of the nature of the loss. Prior to January 1, 2018, the Company classified all payments made in a business combination as investing activities and did not include restricted cash in total cash. This change impacted the Company’s cash flows for the six months ended June 30, 2017 as indicated below (amounts in thousands): Statement of Cash flows - Six months ended June 30, 2017 Reported Change Under previous guidance Net cash provided by operating activities $ 65,467 $ — $ 65,467 Net cash used in investing activities (90,033) 588 (89,445) Net cash used in financing activities (15,488) 1,178 (14,310) Effect of foreign currency exchange rates on total cash 207 — 207 Net change in total cash $ (39,847) $ 1,766 $ (38,081) Total cash, beginning of period 288,358 (18,637) 269,721 Total cash, end of period $ 248,511 $ (16,871) $ 231,640 In October 2016 the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory”. The new standard eliminates all intra-entity sales of assets other than inventory, the exception under current standards that permits the tax effects of intra-entity asset transfers to be deferred until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new standard was effective for the Company on January 1, 2018. There was not a material impact to the Company’s consolidated financial statements upon adoption. In January 2017, the FASB issued Accounting Standards Update 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” or (“ASU 2017-04”). The amendments in ASU 2017-04 simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities. Instead, under the amendments in ASU 2017-04, an entity performs its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but not more than the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2019, with early adoption permitted. The Company adopted this standard in the third quarter of 2017. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. The new guidance requires the service cost component to be presented separately from the other components of net benefit costs. Service cost will be presented with other employee compensation cost within income from operations. The other components of net benefit cost, such as interest cost, amortization of prior service cost and gains or losses are required to be presented in other income. The Company adopted this standard on January 1, 2018. The Company sponsors pension and other postretirement benefit plans for employees of certain subsidiaries. Net periodic pension expense consists of service cost, interest cost, expected return on plan assets, and amortization of actuarial gains and losses. Service cost is recognized in operating income and all other components of pension expense are recognized in other income in the Company’s Statement of Operations. The Company recognizes a pension or other postretirement plan’s funded status as either an asset or liability in its consolidated balance sheet. Actuarial gains and losses are reported as a component of other comprehensive income and amortized through other income in subsequent periods. Prior to January 1, 2018, all components of pension expense were recognized in operating income. This change impacted the Company’s Statement of Operations for the three and six months ended June 30, 2017 by increasing operating expenses $40 thousand and $80 thousand, respectively and decreasing other income by the same amount. There was no impact on income before income taxes. The Company elected the practical expedient allowing the use of the amounts disclosed for the various components of net benefit cost in the pension and other postretirement benefit plans footnote as the basis for the retrospective application. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). The standard: (a) expands and refines hedge accounting for both financial and non-financial risk components, (b) aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and (c) includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including the adoption in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The guidance related to cash flow and net investment hedges existing at the date of adoption should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The guidance related to presentation and disclosure should be applied prospectively. The Company is currently assessing the impact of ASU 2017-12 on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02 “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” (“ASU 2018-02”). The standard gives entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income that were impacted by the 2017 Tax Cuts and Jobs Act. The guidance is effective for all entities for fiscal years beginning after December 31, 2018 and interim periods within those fiscal years. Early adoption is permitted. The guidance may be applied in the period of adoption or retrospectively to each impacted period. The Company has elected to early adopt ASU 2018-02 on December 31, 2017 and recorded its impact in the period of adoption. The impact of the adoption results in a $0.8 million reclassification from accumulated other comprehensive income to retained earnings, which is offset by an equivalent valuation allowance, with the net impact being zero. |
ORGANIZATION AND BUSINESS OPE26
ORGANIZATION AND BUSINESS OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
ORGANIZATION AND BUSINESS OPERATIONS | |
Schedule of the operating activities of the Company's principal subsidiaries, the segments in which the Company reports its revenue and markets served | Segment Services Markets Tradenames U.S. Telecom Wireless United States (rural markets) Commnet, Choice, Choice NTUA Wireless, WestNet, Geoverse Wireline United States Essextel, Deploycom International Telecom Wireline Bermuda, Guyana, U.S. Virgin Islands, Cayman Islands One, GTT+, Viya, Logic, Fireminds Wireless Bermuda, Guyana, U.S. Virgin Islands One, GTT+, Viya Video Services Bermuda, U.S. Virgin Islands, Cayman Islands One, Viya, Logic Renewable Energy Solar United States (Massachusetts, California, and New Jersey), India Ahana Renewables, Vibrant Energy |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
ASU 2016-18 | |
Recent accounting pronouncements | |
Summary of changes to the Company’s financial statements as a result of the adoption | This change impacted the Company’s cash flows for the six months ended June 30, 2017 as indicated below (amounts in thousands): Statement of Cash flows - Six months ended June 30, 2017 Reported Change Under previous guidance Net cash provided by operating activities $ 65,467 $ — $ 65,467 Net cash used in investing activities (90,033) 588 (89,445) Net cash used in financing activities (15,488) 1,178 (14,310) Effect of foreign currency exchange rates on total cash 207 — 207 Net change in total cash $ (39,847) $ 1,766 $ (38,081) Total cash, beginning of period 288,358 (18,637) 269,721 Total cash, end of period $ 248,511 $ (16,871) $ 231,640 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue Recognition | |
Summary of contracts asset and liabilities | Contract assets and liabilities consisted of the following (amounts in thousands): June 30, 2018 March 31, 2018 $ Change % Change Contract asset – current $ 1,434 $ 1,309 $ 125 Contract asset – noncurrent 568 498 70 Contract liabilities (9,552) (9,827) 275 -3% Net contract liability $ (7,550) $ (8,020) $ 470 -6% |
ASU 2014-09 | |
Revenue Recognition | |
Summary of changes to the Company’s financial statements as a result of the adoption of ASC 606 | The tables below identify changes to the Company’s financial statements as of June 30, 2018 and for the three months then ended as a result of the adoption of ASC 606 as compared to previous revenue guidance (amounts in thousands): Balance Sheet – June 30, 2018 Reported Change Under previous guidance Prepayments and other current assets $ $ (2,757) $ Total current assets $ $ (2,757) $ Other assets $ $ (1,433) $ Total assets $ $ (4,190) $ Advance payments and deposits $ $ (299) $ Accrued taxes (142) - Total current liabilities $ $ (441) $ Deferred income taxes $ $ (301) $ Total liabilities $ $ (742) $ Retained earnings $ $ (1,967) $ Minority interest $ 136,424 $ (1,481) $ Total equity $ $ (3,448) $ Total liabilities and equity $ $ (4,190) $ Statement of Operations Three months ended June 30, 2018 Six months ended June 30, 2018 Reported Change Under previous guidance Reported Change Under previous guidance Wireless revenue $ 50,496 $ (204) $ 50,292 $ 101,043 $ (337) $ 100,706 Total revenue $ 117,788 $ (204) $ 117,584 $ 222,263 $ (337) $ 221,926 Sales, marketing and customer service $ 8,413 $ 240 $ 8,653 $ 16,974 $ 618 $ 17,592 Total operating expenses $ 102,035 $ 240 $ 102,275 $ 202,301 $ 618 $ 202,919 Income from operations $ 15,753 $ (444) $ 15,309 $ 19,962 $ (955) $ 19,007 Income before taxes 12,868 (444) 12,424 14,485 (955) 13,530 Income tax provision 2,088 (49) 2,039 6,008 (142) 5,866 Net income $ 10,780 $ (395) $ 10,385 $ 8,477 $ (813) $ 7,664 Net income attributable to non-controlling interests (3,564) 154 (3,410) (6,816) 335 (6,481) Net income attributable to ATN International, Inc. stockholders $ 7,216 $ (241) $ 6,975 $ 1,661 $ (478) $ 1,183 Statement of Comprehensive Loss Three months ended June 30, 2018 Six months ended June 30, 2018 Reported Change Under previous guidance Reported Change Under previous guidance Net income $ 10,780 $ (395) $ 10,385 $ 8,477 $ (813) $ 7,664 Other comprehensive loss, net of tax (2,509) - (2,509) (3,402) - (3,402) Comprehensive loss 8,271 (395) 7,876 5,075 (813) 4,262 Less: Comprehensive income attributable to non-controlling interests (3,564) 154 (3,410) (6,816) 335 (6,481) Comprehensive income (loss) attributable to ATN International, Inc. $ 4,707 $ (241) $ 4,466 $ (1,741) $ (478) $ (2,219) Statement of Cash Flows - Six months ended June 30, 2018 Reported Change (1) Under previous guidance Net income $ 8,477 $ (813) $ 7,664 Materials and supplies, prepayments and other current assets $ 1,254 $ (681) $ 573 Accrued taxes 1,249 142 1,391 Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities (2,137) 68 (2,069) Other assets $ (1,208) $ (342) $ (1,550) (1) The adoption of ASC 606 had no impact on operating cash flows, investing cash flows, financing cash flows or net change in total cash. |
DISPOSITIONS (Tables)
DISPOSITIONS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
DISPOSITIONS | |
Schedule of assets and liabilities transferred | The table below identifies the assets and liabilities transferred (amounts in thousands): Consideration Received $ 25,926 Assets and liabilities disposed Cash 1,821 Accounts receivable 1,696 Inventory 639 Prepaid 1,034 Property, plant and equipment 25,294 Other assets 288 Accounts payable and accrued liabilities (1,718) Advance payments and deposits (1,897) Net assets disposed 27,157 Consideration less net assets disposed (1,231) Transaction costs (1,156) Loss $ (2,387) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities of the entity measured at fair value on a recurring basis | Assets and liabilities of the Company measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 are summarized as follows (in thousands): June 30, 2018 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 380 $ 380 Money market funds 23,440 — 23,440 Short term investments 382 1,213 1,595 Commercial paper — 11,997 11,997 Interest rate swap — 237 237 Total assets and liabilities measured at fair value $ 23,822 $ 13,827 $ 37,649 December 31, 2017 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 391 $ 391 Money market funds 2,894 — 2,894 Short term investments 555 6,521 7,076 Commercial paper — 49,954 49,954 Interest rate swap — 52 52 Total assets and liabilities measured at fair value $ 3,449 $ 56,918 $ 60,367 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
EQUITY | |
Schedule of stockholders' equity | Stockholders’ equity was as follows (in thousands): Six months ended June 30, 2018 2017 ATN Non-Controlling ATN Non-Controlling Total International, Inc. Interests Total Equity International, Inc. Interests Equity Equity, beginning of period $ 688,727 $ 141,496 $ 830,223 $ 677,055 $ 132,114 $ 809,169 Stock-based compensation 3,679 — 3,679 3,764 — 3,764 Comprehensive income: Net income 1,660 6,817 8,477 12,743 9,751 22,494 Projected pension benefit obligation — — — 513 — 513 Unrealized (gain) loss on securities 181 — 181 (130) — (130) Reclassifications of gains on sale of marketable securities to net income — — — (1,044) — (1,044) Foreign Currency translation adjustment (3,583) — (3,583) 2,232 — 2,232 Total comprehensive income (loss) (1,742) 6,817 5,075 14,314 9,751 24,065 Issuance of common stock upon exercise of stock options 498 — 498 401 — 401 Dividends declared on common stock (5,407) — (5,407) (10,951) — (10,951) Distributions to non-controlling interests — (12,975) (12,975) — (3,491) (3,491) Investments made by non-controlling interests — — — — 123 123 Loss on deconsolidation of subsidiary — — — — 529 529 Change in accounting method- adoption of ASU 2016-09 — — — 110 — 110 Change in accounting method- adoption of ASU 2014-09 1,488 1,147 2,635 — — — Repurchase of non-controlling interests — (61) (61) (670) (285) (955) Purchase of treasury stock (4,158) — (4,158) (2,314) — (2,314) Equity, end of period $ 683,085 $ 136,424 $ 819,509 $ 681,709 $ 138,741 $ 820,450 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
NET INCOME (LOSS) PER SHARE | |
Schedule of reconciliation from basic to diluted weighted average common shares outstanding | The reconciliation from basic to diluted weighted average shares of common stock outstanding is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Basic weighted-average shares of common stock outstanding 15,962 16,195 15,996 16,176 Stock options 48 79 50 87 Diluted weighted-average shares of common stock outstanding 16,010 16,274 16,046 16,263 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
SEGMENT REPORTING | |
Schedule of information for each operating segment | The following tables provide information for each operating segment (in thousands): For the Three Months Ended June 30, 2018 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 28,582 $ 21,914 $ — $ — $ 50,496 Wireline 1,702 59,567 — — 61,269 Renewable Energy — — 6,023 — 6,023 Total Revenue 30,284 81,481 6,023 — 117,788 Depreciation and amortization 6,835 11,794 1,899 1,385 21,913 Non-cash stock-based compensation — 20 29 2,054 2,103 Operating income (loss) 7,841 15,571 1,927 (9,586) 15,753 For the Three Months Ended June 30, 2017 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 34,921 $ 21,625 $ — $ — $ 56,546 Wireline 2,057 59,745 — — 61,802 Renewable Energy — — 4,897 — 4,897 Total Revenue 36,978 81,370 4,897 — 123,245 Depreciation and amortization 6,246 13,134 1,830 1,044 22,254 Non-cash stock-based compensation — 8 29 2,061 2,098 Operating income (loss) 13,147 10,765 846 (8,955) 15,803 For the Six Months Ended June 30, 2018 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 55,983 $ 45,060 $ — $ — $ 101,043 Wireline 2,800 106,565 — — 109,365 Renewable Energy — — 11,855 — 11,855 Total Revenue 58,783 151,625 11,855 — 222,263 Depreciation and amortization 13,348 23,465 3,673 2,731 43,217 Non-cash stock-based compensation — 48 57 3,574 3,679 Operating income (loss) 13,065 21,211 3,863 (18,177) 19,962 For the Six Months Ended June 30, 2017 U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 72,623 $ 42,848 $ — $ — $ 115,471 Wireline 8,148 117,812 — — 125,960 Renewable Energy — — 9,929 — 9,929 Total Revenue 80,771 160,660 9,929 — 251,360 Depreciation and amortization 12,797 26,250 3,284 2,416 44,747 Non-cash stock-based compensation — 138 57 3,591 3,786 Operating income (loss) 28,533 20,691 2,287 (17,955) 33,556 (1) Corporate and Other items refer to corporate overhead costs and consolidating adjustments |
Schedule of selected balance sheet data for each segment | Selected balance sheet data for each of our segments as of June 30, 2018 and December 31, 2017 consists of the following (in thousands): U.S. International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated June 30, 2018 Cash, Cash equivalents, and Investments $ 16,241 $ $ $ $ 168,702 Total current assets 43,413 264,313 Fixed assets, net 92,435 702,968 Goodwill 35,269 — 63,970 Total assets 195,587 1,188,999 Total current liabilities 44,618 157,390 Total debt — — 151,001 December 31, 2017 Cash, Cash equivalents, and Investments $ 19,585 $ 110,700 $ 8,120 $ 76,627 $ 215,032 Total current assets 40,975 190,396 18,060 93,497 342,928 Fixed assets, net 99,462 367,485 158,447 17,752 643,146 Goodwill 35,269 25,421 3,280 — 63,970 Total assets 200,142 629,007 192,406 184,050 1,205,605 Total current liabilities 41,248 91,887 14,754 13,816 161,705 Total debt — 94,577 61,215 — 155,792 |
Schedule of segment capital expenditures | Capital Expenditures U.S. International Renewable Corporate and Six months ended June 30, Telecom Telecom Energy Other (1) Consolidated 2018 $ 7,266 $ 95,520 (2) $ 1,388 $ 3,074 $ 107,248 2017 12,602 37,129 25,535 3,293 78,559 (1) Corporate and other items refer to corporate overhead costs and consolidating adjustments (2) Includes $66.7 million of expenditures used to rebuild the Company’s damaged networks in the U.S. Virgin Islands which was impacted by the Hurricanes. These expenditures were financed, in part, by the $34.6 million of insurance proceeds the Company received during the first quarter of 2018. |
BASIS OF PRESENTATION - Tax (De
BASIS OF PRESENTATION - Tax (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
BASIS OF PRESENTATION | ||||
Effective tax rate (as a percent) | 16.20% | 19.20% | 41.50% | 20.30% |
Income tax expenses benefit from release of capital loss valuation allowance | $ 0.5 | $ 0.5 | ||
Provision for the intercompany sale of assets | 0.7 | |||
Increase (net) in unrecognized tax benefits recognized discretely | $ 0.5 |
BASIS OF PRESENTATION - Recent
BASIS OF PRESENTATION - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Recent accounting pronouncements | |||||||
Equity investments with readily determinable fair values | $ 400 | $ 400 | |||||
Additional paid-in capital | 172,170 | 172,170 | $ 167,973 | ||||
Accumulated other comprehensive income | 141 | 141 | 3,746 | ||||
Retained earnings | 550,872 | 550,872 | $ 552,948 | ||||
Net cash provided by operating activities | 46,037 | $ 65,467 | |||||
Net cash used in investing activities | (58,838) | (90,033) | |||||
Net cash used in financing activities | (26,784) | (15,488) | |||||
Effect of foreign currency exchange rates on total cash | (178) | 207 | |||||
Net change in cash, cash equivalents, and restricted cash | (39,763) | (39,847) | |||||
Total cash, cash equivalents, and restricted cash, beginning of period | 219,890 | 288,358 | |||||
Total cash, cash equivalents, and restricted cash, end of period | 180,127 | $ 248,511 | 180,127 | 248,511 | |||
Operating Expenses | 102,035 | 107,442 | 202,301 | 217,804 | |||
Operating income (loss) | 15,753 | 15,803 | 19,962 | 33,556 | |||
ASU 2016-01 | |||||||
Recent accounting pronouncements | |||||||
Equity investments that do not have readily determinable fair values | $ 20,100 | ||||||
Equity investments with readily determinable fair values | 600 | ||||||
Adjustment | ASU 2016-01 | |||||||
Recent accounting pronouncements | |||||||
Accumulated other comprehensive income | (200) | ||||||
Retained earnings | $ 200 | ||||||
Adjustment | ASU 2016-09 | |||||||
Recent accounting pronouncements | |||||||
Additional paid-in capital | $ (300) | ||||||
Retained earnings | $ 300 | ||||||
Adjustment | ASU 2018-02 | Early Adoption | |||||||
Recent accounting pronouncements | |||||||
Accumulated other comprehensive income | (800) | (800) | |||||
Retained earnings | 800 | 800 | |||||
Valuation allowance | $ 800 | $ 800 | |||||
Change | ASU 2016-18 | |||||||
Recent accounting pronouncements | |||||||
Net cash used in investing activities | (588) | ||||||
Net cash used in financing activities | (1,178) | ||||||
Net change in cash, cash equivalents, and restricted cash | (1,766) | ||||||
Total cash, cash equivalents, and restricted cash, beginning of period | 18,637 | ||||||
Total cash, cash equivalents, and restricted cash, end of period | 16,871 | 16,871 | |||||
Change | ASU 2017-07 | |||||||
Recent accounting pronouncements | |||||||
Operating Expenses | 40 | 80 | |||||
Other Income | (40) | (80) | |||||
Under previous guidance | ASU 2016-18 | |||||||
Recent accounting pronouncements | |||||||
Net cash provided by operating activities | 65,467 | ||||||
Net cash used in investing activities | (89,445) | ||||||
Net cash used in financing activities | (14,310) | ||||||
Effect of foreign currency exchange rates on total cash | 207 | ||||||
Net change in cash, cash equivalents, and restricted cash | (38,081) | ||||||
Total cash, cash equivalents, and restricted cash, beginning of period | 269,721 | ||||||
Total cash, cash equivalents, and restricted cash, end of period | $ 231,640 | $ 231,640 |
Revenue Recognition - Renewable
Revenue Recognition - Renewable Energy (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Minimum | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Term of power purchase agreements with various customers (in years) | 10 years |
Maximum | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Term of power purchase agreements with various customers (in years) | 25 years |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | |
Contract Assets and Liabilities | ||
Contract asset, current | $ 1,434 | $ 1,309 |
Change in contract asset - current | $ 125 | |
% of change in contract asset - current | 10.00% | |
Contract asset, noncurrent | $ 568 | 498 |
Change in contract Asset – noncurrent | $ 70 | |
% of change in contract Asset – noncurrent | 14.00% | |
Contract liabilities | $ (9,552) | (9,827) |
Change in contract liabilities | $ 275 | |
% of change in contract liabilities | (3.00%) | |
Net contract liability | $ (7,550) | $ (8,020) |
Change in net contract liability | $ 470 | |
% of change in net contract liability | (6.00%) | |
Revenue recognized related to contract liability | $ 8,500 | |
Amortization of contract assets | 500 | |
Revenue recognized in the period related to performance obligations that were satisfied or partially satisfied in previous periods | $ 600 |
Revenue Recognition - Contrac38
Revenue Recognition - Contract Acquisition Costs (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | |
Contract Acquisition Costs | ||
Expected amortization period, when the Company utilizes the practical expedient and expenses the costs as incurred | true | |
Amortization of contract acquisition cost | $ 300 | $ 600 |
Prepayments and other current assets | ||
Contract Acquisition Costs | ||
Current contract acquisition costs | 1,300 | 1,300 |
Other assets | ||
Contract Acquisition Costs | ||
Long term contract acquisition costs | $ 900 | $ 900 |
Minimum | ||
Contract Acquisition Costs | ||
Amortization period | 2 years | |
Maximum | ||
Contract Acquisition Costs | ||
Amortization period | 6 years |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligations (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Remaining Performance Obligations | |
Transaction price allocated to unsatisfied performance obligations | $ 10.6 |
Period to satisfy the remaining performance obligations and recognize the transaction price | 24 months |
Right to invoice and wholly unsatisfied performance obligation practical expedients | true |
Revenue Recognition - Impacts o
Revenue Recognition - Impacts of adoption in the current period - (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Contracts | ||||
Contract asset, current | $ 1,434 | $ 1,309 | ||
Contract asset, noncurrent | 568 | 498 | ||
Contract liability | 9,552 | $ 9,827 | ||
Deferred tax liability | 30,755 | $ 31,732 | ||
Retained earnings | 550,872 | 552,948 | ||
Minority interest | 136,424 | $ 141,496 | ||
Prepayments and other current assets | ||||
Contracts | ||||
Contract acquisition costs, current | 1,300 | |||
Other assets | ||||
Contracts | ||||
Contract acquisition costs, noncurrent | 900 | |||
Change | ASU 2014-09 | ||||
Contracts | ||||
Contract asset | $ 1,600 | |||
Contract acquisition costs | 1,500 | |||
Deferred tax liability | 301 | 300 | ||
Retained earnings | 1,967 | 1,500 | ||
Minority interest | $ 1,481 | 1,100 | ||
Change | ASU 2014-09 | Prepayments and other current assets | ||||
Contracts | ||||
Contract asset, current | 1,200 | |||
Contract acquisition costs, current | 900 | |||
Change | ASU 2014-09 | Other assets | ||||
Contracts | ||||
Contract asset, noncurrent | 400 | |||
Retained earnings | 600 | |||
Change | ASU 2014-09 | Advance Payments And Deposits | ||||
Contracts | ||||
Contract liability | $ 200 |
Revenue Recognition - Impacts41
Revenue Recognition - Impacts of adoption in the current period - BS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
Prepayments and other current assets | $ 35,386 | $ 68,136 | |||
Total current assets | 264,313 | 342,928 | |||
Other assets | 39,444 | 36,774 | |||
Total assets | 1,188,999 | 1,205,605 | |||
Advance payments and deposits | 17,727 | 25,178 | |||
Accrued taxes | 10,238 | 6,751 | |||
Total current liabilities | 157,390 | 161,705 | |||
Deferred tax liability | 30,755 | 31,732 | |||
Total liabilities | 369,490 | 375,382 | |||
Retained earnings | 550,872 | 552,948 | |||
Minority interest | 136,424 | 141,496 | |||
Total Equity | 819,509 | 830,223 | $ 820,450 | $ 809,169 | |
Total liabilities and equity | 1,188,999 | $ 1,205,605 | |||
ASU 2014-09 | Change | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
Prepayments and other current assets | 2,757 | ||||
Total current assets | 2,757 | ||||
Other assets | 1,433 | ||||
Total assets | 4,190 | ||||
Advance payments and deposits | 299 | ||||
Accrued taxes | 142 | ||||
Total current liabilities | 441 | ||||
Deferred tax liability | 301 | $ 300 | |||
Total liabilities | 742 | ||||
Retained earnings | 1,967 | 1,500 | |||
Minority interest | 1,481 | $ 1,100 | |||
Total Equity | 3,448 | ||||
Total liabilities and equity | 4,190 | ||||
ASU 2014-09 | Under previous guidance | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
Prepayments and other current assets | 32,629 | ||||
Total current assets | 261,556 | ||||
Other assets | 38,011 | ||||
Total assets | 1,184,809 | ||||
Advance payments and deposits | 17,428 | ||||
Accrued taxes | 10,096 | ||||
Total current liabilities | 156,949 | ||||
Deferred tax liability | 30,454 | ||||
Total liabilities | 368,748 | ||||
Retained earnings | 548,905 | ||||
Minority interest | 134,943 | ||||
Total Equity | 816,061 | ||||
Total liabilities and equity | $ 1,184,809 |
Revenue Recognition - Impacts42
Revenue Recognition - Impacts of adoption in the current period - IS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 117,788 | $ 222,263 | ||
Sales, marketing and customer service | 8,413 | $ 8,729 | 16,974 | $ 17,765 |
Total operating expenses | 102,035 | 107,442 | 202,301 | 217,804 |
Income from operations | 15,753 | 15,803 | 19,962 | 33,556 |
Income before taxes | 12,868 | 13,505 | 14,485 | 28,218 |
Income tax provisions | 2,088 | 2,596 | 6,008 | 5,724 |
Net income | 10,780 | 10,909 | 8,477 | 22,494 |
Net income attributable to non-controlling interests | (3,564) | (5,026) | (6,816) | (9,751) |
Net income attributable to ATN International, Inc. stockholders | 7,216 | $ 5,883 | 1,661 | $ 12,743 |
ASU 2014-09 | Change | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | 204 | 337 | ||
Sales, marketing and customer service | (240) | (618) | ||
Total operating expenses | (240) | (618) | ||
Income from operations | 444 | 955 | ||
Income before taxes | 444 | 955 | ||
Income tax provisions | 49 | 142 | ||
Net income | 395 | 813 | ||
Net income attributable to non-controlling interests | (154) | (335) | ||
Net income attributable to ATN International, Inc. stockholders | 241 | 478 | ||
ASU 2014-09 | Under previous guidance | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | 117,584 | 221,926 | ||
Sales, marketing and customer service | 8,653 | 17,592 | ||
Total operating expenses | 102,275 | 202,919 | ||
Income from operations | 15,309 | 19,007 | ||
Income before taxes | 12,424 | 13,530 | ||
Income tax provisions | 2,039 | 5,866 | ||
Net income | 10,385 | 7,664 | ||
Net income attributable to non-controlling interests | (3,410) | (6,481) | ||
Net income attributable to ATN International, Inc. stockholders | 6,975 | 1,183 | ||
Wireless | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | 50,496 | 101,043 | ||
Wireless | ASU 2014-09 | Change | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | 204 | 337 | ||
Wireless | ASU 2014-09 | Under previous guidance | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 50,292 | $ 100,706 |
Revenue Recognition - Impacts43
Revenue Recognition - Impacts of adoption in the current period - CIS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income | $ 10,780 | $ 10,909 | $ 8,477 | $ 22,494 |
Other comprehensive loss, net of tax | (2,509) | (543) | (3,402) | 1,571 |
Comprehensive income | 8,271 | 10,366 | 5,075 | 24,065 |
Less: Comprehensive income attributable to non-controlling interests | (3,564) | (5,026) | (6,816) | (9,751) |
Comprehensive income (loss) attributable to ATN International, Inc. | 4,707 | $ 5,340 | (1,741) | $ 14,314 |
ASU 2014-09 | Change | ||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income | 395 | 813 | ||
Comprehensive income | 395 | 813 | ||
Less: Comprehensive income attributable to non-controlling interests | (154) | (335) | ||
Comprehensive income (loss) attributable to ATN International, Inc. | 241 | 478 | ||
ASU 2014-09 | Under previous guidance | ||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income | 10,385 | 7,664 | ||
Other comprehensive loss, net of tax | (2,509) | (3,402) | ||
Comprehensive income | 7,876 | 4,262 | ||
Less: Comprehensive income attributable to non-controlling interests | (3,410) | (6,481) | ||
Comprehensive income (loss) attributable to ATN International, Inc. | $ 4,466 | $ (2,219) |
Revenue Recognition - Impacts44
Revenue Recognition - Impacts of adoption in the current period - SOCF (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Net income | $ 10,780 | $ 10,909 | $ 8,477 | $ 22,494 |
Materials and supplies, prepayments, and other current assets | 1,254 | (6,586) | ||
Accrued taxes | 1,249 | (7,876) | ||
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities | (2,137) | (3,331) | ||
Other assets | (1,208) | 2,887 | ||
Net Cash Provided by (Used in) Operating Activities | 46,037 | 65,467 | ||
Net Cash Provided by (Used in) Investing Activities | (58,838) | (90,033) | ||
Net Cash Provided by (Used in) Financing Activities | (26,784) | (15,488) | ||
Net change in cash, cash equivalents, and restricted cash | (39,763) | $ (39,847) | ||
ASU 2014-09 | Change | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Net income | 395 | 813 | ||
Materials and supplies, prepayments, and other current assets | 681 | |||
Accrued taxes | (142) | |||
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities | (68) | |||
Other assets | 342 | |||
Net Cash Provided by (Used in) Operating Activities | 0 | |||
Net Cash Provided by (Used in) Investing Activities | 0 | |||
Net Cash Provided by (Used in) Financing Activities | 0 | |||
Net change in cash, cash equivalents, and restricted cash | 0 | |||
ASU 2014-09 | Under previous guidance | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Net income | $ 10,385 | 7,664 | ||
Materials and supplies, prepayments, and other current assets | 573 | |||
Accrued taxes | 1,391 | |||
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities | (2,069) | |||
Other assets | $ (1,550) |
IMPACT OF HURRICANES IRMA AND45
IMPACT OF HURRICANES IRMA AND MARIA (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | |
IMPACT OF THE HURRICANES IRMA AND MARIA | ||
Revenue | $ 117,788 | $ 222,263 |
Payments for restoring and adding resiliency to network | 66,654 | |
HURRICANES IRMA AND MARIA | ||
IMPACT OF THE HURRICANES IRMA AND MARIA | ||
Hurricane impact, decrease in revenue | 3,000 | 16,200 |
Decrease in revenue due to disposal of business | $ 1,200 | 2,300 |
Payments for restoring and adding resiliency to network | $ 66,700 | |
Percentage of household networks reconnected | 66.70% | 66.70% |
Percentage of business networks reconnected | 75.00% | 75.00% |
High-Cost Support Program | Grants | HURRICANES IRMA AND MARIA | ||
IMPACT OF THE HURRICANES IRMA AND MARIA | ||
Revenue | $ 8,200 |
DISPOSITIONS - Disposition - Vi
DISPOSITIONS - Disposition - Viya (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Viya (formerly Innovative) Cable operations - USD ($) $ in Millions | Aug. 18, 2017 | Jan. 03, 2017 |
St. Maarten | ||
Disposition | ||
Consideration for sale of operations | $ 4.8 | |
Gain on disposition | $ 0.1 | |
British Virgin Islands | ||
Disposition | ||
Gain on disposition | $ 0 |
DISPOSITIONS - Disposition - So
DISPOSITIONS - Disposition - Sovernet (Details) - USD ($) $ in Thousands | Mar. 08, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Assets and liabilities disposed | ||||
Purchase of non-controlling interests | $ 61 | $ 955 | ||
Loss on deconsolidation of subsidiary | $ 529 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Sovernet | ||||
Disposition | ||||
Cash proceeds | $ 20,900 | |||
Receivables, escrowed | 3,000 | |||
Contingent consideration | 2,000 | |||
Fair value of contingent consideration | $ 0 | |||
Total cash proceeds including working capital adjustments | 25,926 | |||
Assets and liabilities disposed | ||||
Cash | 1,821 | |||
Accounts receivable | 1,696 | |||
Inventory | 639 | |||
Prepaid | 1,034 | |||
Property, plant and equipment | 25,294 | |||
Other assets | 288 | |||
Accounts payable and accrued liabilities | (1,718) | |||
Advance payments and deposits | (1,897) | |||
Net assets disposed | 27,157 | |||
Consideration less net assets disposed | (1,231) | |||
Transaction costs: | (1,156) | |||
Loss | (2,387) | |||
Purchase of non-controlling interests | 700 | |||
Non-controlling interest book value | 0 | |||
Loss on deconsolidation of subsidiary | 500 | |||
Transaction-related charges | $ 600 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Sovernet | Maximum | ||||
Disposition | ||||
Contingent consideration | $ 4,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Fair value measurements | ||
Equity investments with readily determinable fair values | $ 400 | |
Loss on equity securities | 100 | |
Impairment or price adjustments for strategic investments | 0 | |
Carrying Value | ||
Fair value measurements | ||
Long-term debt | 151,000 | $ 155,800 |
Carrying Value | Other Assets | ||
Fair value measurements | ||
Strategic investments | 22,100 | 20,100 |
Level 2 | Estimated Fair Value | ||
Fair value measurements | ||
Long-term debt | 154,200 | 159,200 |
Recurring basis | ||
Fair value measurements | ||
Total assets and liabilities measured at fair value | 37,649 | 60,367 |
Recurring basis | Interest rate swap | ||
Fair value measurements | ||
Derivative liabilities | 237 | 52 |
Recurring basis | Certificate of deposit | ||
Fair value measurements | ||
Cash and cash equivalents | 380 | 391 |
Recurring basis | Money market funds | ||
Fair value measurements | ||
Cash and cash equivalents | 23,440 | 2,894 |
Recurring basis | Short Term Investments | ||
Fair value measurements | ||
Investments | 1,595 | 7,076 |
Recurring basis | Commercial paper | ||
Fair value measurements | ||
Cash and cash equivalents | 11,997 | 49,954 |
Recurring basis | Level 1 | ||
Fair value measurements | ||
Total assets and liabilities measured at fair value | 23,822 | 3,449 |
Recurring basis | Level 1 | Money market funds | ||
Fair value measurements | ||
Cash and cash equivalents | 23,440 | 2,894 |
Recurring basis | Level 1 | Short Term Investments | ||
Fair value measurements | ||
Investments | 382 | 555 |
Recurring basis | Level 2 | ||
Fair value measurements | ||
Total assets and liabilities measured at fair value | 13,827 | 56,918 |
Recurring basis | Level 2 | Interest rate swap | ||
Fair value measurements | ||
Derivative liabilities | 237 | 52 |
Recurring basis | Level 2 | Certificate of deposit | ||
Fair value measurements | ||
Cash and cash equivalents | 380 | 391 |
Recurring basis | Level 2 | Short Term Investments | ||
Fair value measurements | ||
Investments | 1,213 | 6,521 |
Recurring basis | Level 2 | Commercial paper | ||
Fair value measurements | ||
Cash and cash equivalents | $ 11,997 | $ 49,954 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) $ in Millions | May 22, 2017USD ($) | May 03, 2016USD ($) | Jun. 30, 2018USD ($) | Aug. 08, 2018USD ($) | Jul. 31, 2017USD ($) | May 21, 2017USD ($) | Dec. 19, 2016USD ($) | Jul. 01, 2016USD ($) | Jan. 11, 2016USD ($) | Jan. 10, 2016USD ($) | Dec. 24, 2014USD ($) | Dec. 19, 2014USD ($) |
PSE&G | ||||||||||||
Long-term debt | ||||||||||||
Stated interest rate | 11.30% | |||||||||||
Outstanding debt | $ 2.1 | |||||||||||
One Communications Debt | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 37.5 | |||||||||||
Term loan assumed | $ 35.4 | |||||||||||
Financing costs | $ 0.3 | |||||||||||
Outstanding debt | 33.8 | |||||||||||
Unamortized financing costs | 0.3 | |||||||||||
One Communications Debt | Three month LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 3.25% | |||||||||||
One Communications Debt | Minimum | ||||||||||||
Long-term debt | ||||||||||||
Percentage of notional amount required for hedging arrangement | 30.00% | |||||||||||
One Communications Debt | Minimum | Three month LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 2.50% | |||||||||||
One Communications Debt | Maximum | ||||||||||||
Long-term debt | ||||||||||||
Period to enter into hedging arrangement | 90 days | |||||||||||
One Communications Debt | Maximum | Three month LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 2.75% | |||||||||||
One Communications Debt | Overdraft Facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 10 | $ 5 | ||||||||||
Borrowings outstanding | 0 | |||||||||||
One Communications Debt | Overdraft Facility | Three month LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 1.75% | |||||||||||
Viya Debt | ||||||||||||
Long-term debt | ||||||||||||
Secured debt principal amount | $ 60 | |||||||||||
Net leverage ratio | 3.5 | |||||||||||
Stated interest rate | 4.00% | |||||||||||
Financing costs | $ 0.9 | |||||||||||
Intercompany debt limit | 50 | $ 75 | ||||||||||
Outstanding debt | 60 | |||||||||||
Unamortized financing costs | 0.7 | |||||||||||
Revolver loan | Credit facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 400 | $ 275 | $ 225 | |||||||||
Borrowings outstanding | $ 0 | |||||||||||
Revolver loan | Credit facility | Minimum | ||||||||||||
Long-term debt | ||||||||||||
Commitment fee (as a percent) | 0.175% | |||||||||||
Revolver loan | Credit facility | Minimum | LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 1.50% | |||||||||||
Revolver loan | Credit facility | Minimum | Base rate | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||||||
Revolver loan | Credit facility | Maximum | ||||||||||||
Long-term debt | ||||||||||||
Commitment fee (as a percent) | 0.25% | |||||||||||
Revolver loan | Credit facility | Maximum | LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 1.75% | |||||||||||
Revolver loan | Credit facility | Maximum | Base rate | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 0.75% | |||||||||||
Letter of credit sub-facility | Credit facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | 10 | |||||||||||
Swingline sub-facility | Credit facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | 10 | |||||||||||
Base rate before one-week or one-month LIBOR (as a percent) | 1.00% | |||||||||||
Swingline sub-facility | Credit facility | Federal Funds Effective Rate | ||||||||||||
Long-term debt | ||||||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||||||
Term loans | Credit facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 200 | |||||||||||
Term loans | Ahana Debt | ||||||||||||
Long-term debt | ||||||||||||
Term loan assumed | $ 38.9 | |||||||||||
Term loans | Ahana Debt | Minimum | ||||||||||||
Long-term debt | ||||||||||||
Effective interest rate (as a percent) | 4.50% | |||||||||||
Term loans | Ahana Debt | Maximum | ||||||||||||
Long-term debt | ||||||||||||
Effective interest rate (as a percent) | 6.00% | |||||||||||
Mobility Funds | Letter of credit sub-facility | Credit facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 25 | |||||||||||
Ahana Operations | Series A Notes | ||||||||||||
Long-term debt | ||||||||||||
Secured debt principal amount | $ 20.6 | |||||||||||
Stated interest rate | 4.427% | |||||||||||
Ahana Operations | Series B Notes | ||||||||||||
Long-term debt | ||||||||||||
Secured debt principal amount | $ 45.2 | |||||||||||
Stated interest rate | 5.327% | |||||||||||
Ahana Operations | Series A and Series B Notes | ||||||||||||
Long-term debt | ||||||||||||
Financing costs | $ 2.8 | |||||||||||
Outstanding debt | 58.6 | |||||||||||
Unamortized financing costs | $ 2.6 | |||||||||||
Cash flow hedge | Interest rate swap | ||||||||||||
Long-term debt | ||||||||||||
Notional amount | $ 11 | |||||||||||
Interest rate (as a percent) | 1.874% |
GOVERNMENT GRANTS (Details)
GOVERNMENT GRANTS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2018USD ($)item | |
Government Grants | |||
Revenue | $ 117,788 | $ 222,263 | |
Universal Service Fund programs | |||
Government Grants | |||
Number of fund disbursement programs | item | 4 | ||
Mobility Funds | |||
Government Grants | |||
Mobility Funds received | 21,100 | $ 21,100 | |
Mobility Funds | U.S. Telecom | |||
Government Grants | |||
Grant funds used to offset fixed asset related costs | 7,200 | 7,200 | |
Mobility funds received and recorded to date | 13,400 | 13,400 | |
Mobility Funds | U.S. Telecom | Property, Plant and Equipment | |||
Government Grants | |||
Grant funds used to offset operating expenses | 13,900 | 13,900 | |
Mobility Funds | U.S. Telecom | Other long-term liabilities | |||
Government Grants | |||
Mobility Funds received | 500 | 500 | |
High-Cost Support Program | Grants | HURRICANES IRMA AND MARIA | |||
Government Grants | |||
Revenue | 8,200 | ||
High-Cost Support Program | Grants | U.S. Telecom | |||
Government Grants | |||
Revenue | 300 | 600 | |
High-Cost Support Program | Grants | International Telecom segment | |||
Government Grants | |||
Revenue | 4,100 | 8,300 | |
E-Rate, Lifeline and Rural Health Care Support Programs | Grants | |||
Government Grants | |||
Revenue | 2,100 | 4,300 | |
E-Rate | Grants | |||
Government Grants | |||
Revenue | $ 15,400 | ||
Tribal Bidding Credit | |||
Government Grants | |||
Wireless service spectrum (in Mhz) | item | 600 | ||
Grant funds estimated to offset fixed asset related costs | 5,400 | $ 5,400 | |
Grant funds estimated to offset operating expenses | $ 2,000 | $ 2,000 | |
Tribal Bidding Credit | Grants | |||
Government Grants | |||
Revenue | $ 7,400 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stockholders' equity | ||||
Equity, beginning of period | $ 830,223 | $ 809,169 | ||
Stock-based compensation | 3,679 | 3,764 | ||
Comprehensive income: | ||||
Net income | $ 10,780 | $ 10,909 | 8,477 | 22,494 |
Projected pension benefit obligation | 513 | |||
Unrealized gain (loss) on securities | 42 | (90) | 181 | (130) |
Reclassifications of gains on sale of marketable securities to net income | (755) | (1,044) | ||
Foreign currency translation adjustment | (2,551) | 302 | (3,583) | 2,232 |
Comprehensive income | 8,271 | 10,366 | 5,075 | 24,065 |
Issuance of common stock upon exercise of stock options | 498 | 401 | ||
Dividends declared on common stock | (5,407) | (10,951) | ||
Distributions to non-controlling interests | (12,975) | (3,491) | ||
Investments made by non-controlling interests | 123 | |||
Loss on deconsolidation of subsidiary | 529 | |||
Repurchase of non-controlling interests | (61) | (955) | ||
Purchase of treasury stock | (4,158) | (2,314) | ||
Equity, end of period | 819,509 | 820,450 | 819,509 | 820,450 |
ASU 2016-09 | ||||
Comprehensive income: | ||||
Change in accounting method- adoption | 110 | 110 | ||
ASU 2014-09 | ||||
Comprehensive income: | ||||
Change in accounting method- adoption | 2,635 | 2,635 | ||
Total ATNI Stockholders' Equity | ||||
Stockholders' equity | ||||
Equity, beginning of period | 688,727 | 677,055 | ||
Stock-based compensation | 3,679 | 3,764 | ||
Comprehensive income: | ||||
Net income | 1,660 | 12,743 | ||
Projected pension benefit obligation | 513 | |||
Unrealized gain (loss) on securities | 181 | (130) | ||
Reclassifications of gains on sale of marketable securities to net income | (1,044) | |||
Foreign currency translation adjustment | (3,583) | 2,232 | ||
Comprehensive income | (1,742) | 14,314 | ||
Issuance of common stock upon exercise of stock options | 498 | 401 | ||
Dividends declared on common stock | (5,407) | (10,951) | ||
Repurchase of non-controlling interests | (670) | |||
Purchase of treasury stock | (4,158) | (2,314) | ||
Equity, end of period | 683,085 | 681,709 | 683,085 | 681,709 |
Total ATNI Stockholders' Equity | ASU 2016-09 | ||||
Comprehensive income: | ||||
Change in accounting method- adoption | 110 | 110 | ||
Total ATNI Stockholders' Equity | ASU 2014-09 | ||||
Comprehensive income: | ||||
Change in accounting method- adoption | 1,488 | 1,488 | ||
Non-Controlling Interests | ||||
Stockholders' equity | ||||
Equity, beginning of period | 141,496 | 132,114 | ||
Comprehensive income: | ||||
Net income | 6,817 | 9,751 | ||
Comprehensive income | 6,817 | 9,751 | ||
Distributions to non-controlling interests | (12,975) | (3,491) | ||
Investments made by non-controlling interests | 123 | |||
Loss on deconsolidation of subsidiary | 529 | |||
Repurchase of non-controlling interests | (61) | (285) | ||
Equity, end of period | 136,424 | $ 138,741 | 136,424 | $ 138,741 |
Non-Controlling Interests | ASU 2014-09 | ||||
Comprehensive income: | ||||
Change in accounting method- adoption | $ 1,147 | $ 1,147 |
NET INCOME (LOSS) PER SHARE (De
NET INCOME (LOSS) PER SHARE (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reconciliation from basic to diluted weighted average common shares outstanding | ||||
Basic weighted-average shares of common stock outstanding | 15,962 | 16,195 | 15,996 | 16,176 |
Stock options (in shares) | 48 | 79 | 50 | 87 |
Diluted weighted-average shares of common stock outstanding | 16,010 | 16,274 | 16,046 | 16,263 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment reporting | |||||
Number of reportable segments | segment | 3 | ||||
Revenue | |||||
Revenue | $ 117,788 | $ 123,245 | $ 222,263 | $ 251,360 | |
Depreciation and amortization | 21,913 | 22,254 | 43,217 | 44,747 | |
Non-cash stock-based compensation | 2,103 | 2,098 | 3,679 | 3,786 | |
Operating income (loss) | 15,753 | 15,803 | 19,962 | 33,556 | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 168,702 | 168,702 | $ 215,032 | ||
Total current assets | 264,313 | 264,313 | 342,928 | ||
Fixed assets, net | 702,968 | 702,968 | 643,146 | ||
Goodwill | 63,970 | 63,970 | 63,970 | ||
Total assets | 1,188,999 | 1,188,999 | 1,205,605 | ||
Total current liabilities | 157,390 | 157,390 | 161,705 | ||
Total debt | 151,001 | 151,001 | 155,792 | ||
Capital Expenditures | |||||
Capital expenditures | 107,248 | 78,559 | |||
Hurricane rebuild capital expenditures | 66,654 | ||||
Hurricane insurance proceeds | 34,606 | ||||
Wireless | |||||
Revenue | |||||
Revenue | 50,496 | 56,546 | 101,043 | 115,471 | |
Wireline | |||||
Revenue | |||||
Revenue | 61,269 | 61,802 | 109,365 | 125,960 | |
Renewable Energy | |||||
Revenue | |||||
Revenue | 6,023 | 4,897 | 11,855 | 9,929 | |
Corporate and Other | |||||
Revenue | |||||
Depreciation and amortization | 1,385 | 1,044 | 2,731 | 2,416 | |
Non-cash stock-based compensation | 2,054 | 2,061 | 3,574 | 3,591 | |
Operating income (loss) | (9,586) | (8,955) | (18,177) | (17,955) | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 90,176 | 90,176 | 76,627 | ||
Total current assets | 105,220 | 105,220 | 93,497 | ||
Fixed assets, net | 17,657 | 17,657 | 17,752 | ||
Total assets | 197,503 | 197,503 | 184,050 | ||
Total current liabilities | 20,910 | 20,910 | 13,816 | ||
Capital Expenditures | |||||
Capital expenditures | 3,074 | 3,293 | |||
U.S. Telecom | Operating segments | |||||
Revenue | |||||
Revenue | 30,284 | 36,978 | 58,783 | 80,771 | |
Depreciation and amortization | 6,835 | 6,246 | 13,348 | 12,797 | |
Operating income (loss) | 7,841 | 13,147 | 13,065 | 28,533 | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 16,241 | 16,241 | 19,585 | ||
Total current assets | 43,413 | 43,413 | 40,975 | ||
Fixed assets, net | 92,435 | 92,435 | 99,462 | ||
Goodwill | 35,269 | 35,269 | 35,269 | ||
Total assets | 195,587 | 195,587 | 200,142 | ||
Total current liabilities | 44,618 | 44,618 | 41,248 | ||
Capital Expenditures | |||||
Capital expenditures | 7,266 | 12,602 | |||
U.S. Telecom | Operating segments | Wireless | |||||
Revenue | |||||
Revenue | 28,582 | 34,921 | 55,983 | 72,623 | |
U.S. Telecom | Operating segments | Wireline | |||||
Revenue | |||||
Revenue | 1,702 | 2,057 | 2,800 | 8,148 | |
International Telecom segment | Operating segments | |||||
Revenue | |||||
Revenue | 81,481 | 81,370 | 151,625 | 160,660 | |
Depreciation and amortization | 11,794 | 13,134 | 23,465 | 26,250 | |
Non-cash stock-based compensation | 20 | 8 | 48 | 138 | |
Operating income (loss) | 15,571 | 10,765 | 21,211 | 20,691 | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 49,882 | 49,882 | 110,700 | ||
Total current assets | 97,603 | 97,603 | 190,396 | ||
Fixed assets, net | 442,854 | 442,854 | 367,485 | ||
Goodwill | 25,421 | 25,421 | 25,421 | ||
Total assets | 611,654 | 611,654 | 629,007 | ||
Total current liabilities | 79,484 | 79,484 | 91,887 | ||
Total debt | 92,774 | 92,774 | 94,577 | ||
Capital Expenditures | |||||
Capital expenditures | 95,520 | 37,129 | |||
International Telecom segment | Operating segments | Wireless | |||||
Revenue | |||||
Revenue | 21,914 | 21,625 | 45,060 | 42,848 | |
International Telecom segment | Operating segments | Wireline | |||||
Revenue | |||||
Revenue | 59,567 | 59,745 | 106,565 | 117,812 | |
Renewable Energy | Operating segments | |||||
Revenue | |||||
Revenue | 6,023 | 4,897 | 11,855 | 9,929 | |
Depreciation and amortization | 1,899 | 1,830 | 3,673 | 3,284 | |
Non-cash stock-based compensation | 29 | 29 | 57 | 57 | |
Operating income (loss) | 1,927 | 846 | 3,863 | 2,287 | |
Segment Assets | |||||
Cash, Cash equivalents, and Investments | 12,403 | 12,403 | 8,120 | ||
Total current assets | 18,077 | 18,077 | 18,060 | ||
Fixed assets, net | 150,022 | 150,022 | 158,447 | ||
Goodwill | 3,280 | 3,280 | 3,280 | ||
Total assets | 184,255 | 184,255 | 192,406 | ||
Total current liabilities | 12,378 | 12,378 | 14,754 | ||
Total debt | 58,227 | 58,227 | $ 61,215 | ||
Capital Expenditures | |||||
Capital expenditures | 1,388 | 25,535 | |||
Renewable Energy | Operating segments | Renewable Energy | |||||
Revenue | |||||
Revenue | $ 6,023 | $ 4,897 | $ 11,855 | $ 9,929 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Nov. 30, 2007 | Jun. 30, 2018 | Dec. 31, 2011 | |
Contingency related to spectrum fees | ||||
Commitments and contingencies | ||||
Spectrum fees paid | $ 2.6 | |||
Litigation proceedings and disputes in Guyana | ||||
Commitments and contingencies | ||||
Period for which litigation proceedings and other disputes have not been the subject of discussions or other significant activity | 5 years | |||
Lawsuit filed by CTL | ||||
Commitments and contingencies | ||||
Damages asserted | $ 25 | $ 200 | ||
Legal claims regarding tax filings with the Guyana Revenue Authority | ||||
Commitments and contingencies | ||||
Future payments related to disputed tax assessments | $ 44.1 | |||
Accrued contingent liability | $ 5 | |||
Legal claims regarding tax filings with the Guyana Revenue Authority | Minimum | ||||
Commitments and contingencies | ||||
Percentage of return on investment ensured by the government of Guyana | 15.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event $ in Millions | Aug. 07, 2018USD ($) | Jul. 31, 2018USD ($)item | Sep. 30, 2018USD ($) |
SUBSEQUENT EVENT | |||
Amount of funding authorized for restoration and hardening following the Hurricanes | $ 7.3 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Asset Purchase Agreement | U.S. Telecom | |||
SUBSEQUENT EVENT | |||
Number of cell sites sold | item | 100 | ||
Additional cash proceeds from transaction | $ 0 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Asset Purchase Agreement | U.S. Telecom | Forecast | |||
SUBSEQUENT EVENT | |||
Gain (Loss) on Disposition of Business | $ 15 |