ATN International Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
ATNI$28.02+5.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001558370-24-011708
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001558370-24-015284
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 224 previous paragraphs and 247 current paragraphs.
106 unchanged; 96 reworded; 41 added; 20 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 56 previous and 57 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
business customers and consumers in Alaska and the western United States. As of September 30, 2024, we provided mobility services to retail customers in the western United States.
Current report
Operating expenses within our International Telecom segment increased by $0.3 million to $81.4 million from $81.1 million for the three months ended September 30, 2024 and 2023, respectively. The net increase was the result of an increase in marketing costs incurred in connection with the rebranding of our operations in a certain market partially offset by certain cost savings initiatives that were implemented in the current and previous periods.
Current report
Operating expenses within our US Telecom segment increased $34.4 million, or 36.6%, to $128.5 million from $94.1 million for the three months ended September 30, 2024 and 2023, respectively, as a result of the $35.3 million goodwill impairment charge, $3.8 million of transaction-related expenses that were recorded during the three months ended September 30, 2024 and a $1.5 million loss on the transfer of certain assets. Partially offsetting these increases was the impact of certain cost savings initiatives that were implemented in the current and previous periods.
Current report
Fixed revenue decreased by $5.5 million, or 4.6%, to $112.8 million from $118.3 million for the three months ended September 30, 2024 and 2023, respectively. Of this decrease, revenue from business and consumer customers decreased by $5.4 million and $0.1 million, respectively. The net decrease in Fixed revenue, within our segments, consisted of the following:
Current report
Carrier Services revenue decreased by $3.1 million, or 8.7%, to $32.7 million from $35.8 million for the three months ended September 30, 2024 and 2023, respectively. The decrease, within our segments, consisted of the following:
Current report
Within our International Telecom segment, Managed Services revenue decreased $0.2 million, or 14.3%, to $1.2 million from $1.4 million for the three months ended September 30, 2024 and 2023, respectively.
Current report
Within our US Telecom segment, Managed Services revenue decreased $0.4 million, or 13.3%, to $2.6 million from $3.0 million for the three months ended September 30, 2024 and 2023, respectively.
Current report
We incurred $3.8 million of transaction-related charges in connection with the refinancing of our Alaska subsidiary debt during the three months ended September 30, 2024 and a nominal amount during the three months ended September 30, 2023.
Current report
**Restructuring and reorganization expenses.**In our efforts to advance our cost management actions to drive higher operating margins, we incurred certain reductions in force and contract termination costs totaling $2.3 million during the three months ended September 30, 2024. Of this amount, $0.3 million, $1.2 million and $0.8 million was incurred in the International Telecom segment, US Telecom segment and Corporate and Other segment, respectively.
Current report
During the three months ended September 30, 2023, we recorded a loss on the disposition of long-lived assets of $0.2 million within our US Telecom segment.
Current report
**Goodwill impairment.**During the quarter ended September 30, 2024, we completed our impairment assessment for our US Telecom segment after identifying events that indicate that the fair value of a reporting unit may be below its carrying value. These events included, the Company’s continued shift away from wholesale roaming and retail operations towards carrier managed services and fixed broadband services, delays in completing significant network upgrade projects, the conclusion of certain government subsidy programs leading to slower consumer growth, and delays in enterprise sales and delivery. The combination of these events led to the reporting unit being unable to meet key financial and operational forecasted targets.
Current report
As a result of that analysis, we recorded an impairment of $35.3 million during the three months ended September 30, 2024.
Current report
**Income taxes.**Our effective tax rate for the three months ended September 30, 2024 and 2023 was 23.4% and 12.7% respectively.
Current report
We recorded an income tax benefit of $12.0 million in relation to a pretax loss of $51.5 million for the three months ended September 30, 2024. The effective tax rate for the three months ended September 30, 2024 was primarily impacted by the following items (i) the mix of income generated among the jurisdictions in which we operate, (ii) net expense related to valuation allowances placed on certain deferred tax assets that are not expected to be realizable based
Current report
We recorded an income tax benefit of $0.5 million in relation to a pretax loss of $4.3 million for the three months ended September 30, 2023. The effective tax rate for the three months ended September 30, 2023 was primarily impacted by the following items (i) the mix of income generated among the jurisdictions in which we operate, (ii) net expense related to valuation allowances placed on certain deferred tax assets that are not expected to be realizable based on the weight of positive and negative evidence and (iii) discrete item including a $0.7 million expense for interest on unrecognized tax positions.
Current report
conclusion of the Emergency Connectivity Fund and Affordable Care Program, both of which provided revenue through April 2024.
Current report
Operating expenses within our US Telecom segment increased $18.0 million, or 6.2%, to $308.7 million from $290.7 million for the nine months ended September 30, 2024 and 2023, respectively, as a result of the $35.3 million goodwill impairment charge that was recorded during the nine months ended September 30, 2024 as well as a $3.8 million increase in transaction-related expenses. Partially offsetting these increases was a $3.5 million decrease in the restructuring and reorganization expenses and the impact of certain cost savings initiatives that were implemented in the current and previous periods.
Current report
respectively, as a result of the transition of legacy roaming arrangements to carrier service management contracts.
Current report
**Restructuring and reorganization expenses.**In our efforts to advance our cost management actions to drive higher operating margins, we incurred contract terminations and reductions in force costs totaling $3.5 million during the nine months ended September 30, 2024. Of this amount, $1.5 million, $1.1 million and $0.9 million was incurred in the International Telecom segment, US Telecom segment and Corporate and Other segment, respectively.
Current report
**Goodwill impairment.**During the nine months ended September 30, 2024, we completed our impairment assessment for our US Telecom segment after identifying events that indicate that the fair value of a reporting unit may be below its carrying value. These events included, the Company’s continued shift away from wholesale roaming and retail operations towards carrier managed services and fixed broadband services, delays in completing significant network upgrade projects, the conclusion of certain government subsidy programs leading to slower consumer growth, and delays in enterprise sales and delivery. The combination of these events led to the reporting unit being unable to meet key financial and operational forecasted targets.
Current report
As a result of that analysis, we recorded an impairment of $35.3 million during the nine months ended September 30, 2024.
Current report
Income taxes. Our effective tax rate for the nine months ended September 30, 2024 and 2023 was 22.1% and 35.8%, respectively.
Current report
Capital expenditures. Historically, a significant use of our cash has been for capital expenditures to expand and upgrade our telecommunications networks and business support systems.
Current report
For the nine months ended September 30, 2024, we spent approximately $85.7 million for capital expenditures, net of $71.8 million of capital expenditures that are reimbursable under certain government programs. For the nine months ended September 30, 2023, we spent approximately $126.6 million for capital expenditures, net of $14.3 million of capital expenditures that are reimbursable under certain government programs. The following notes our capital expenditures, by operating segment, for these periods (in thousands):
Current report
*Cash provided by operations.*Cash provided by operating activities was $97.5 million for the nine months ended September 30, 2024 as compared to $89.5 million for the nine months ended September 30, 2023. The increase was primarily related to an increase in net income which, excluding the non-cash goodwill impairment charge and transaction-related charges that were recorded during the nine months ended September 30, 2024, increased by $14.4 million as compared to the nine months ended September 30, 2023.
Current report
2024 Alaska Credit Facility
Current report
On August 29, 2024, Alaska Communications (the “Borrower”) entered into a Credit Agreement (the “2024 Alaska Credit Agreement”) with Bank of America, N.A., as administrative agent, and a syndicate of lenders (the “2024 Alaska Credit Facility”), to provide debt financing in the form of a $300 million, five-year secured term loan facility (the “2024 Alaska Term Facility”) and a $90 million revolving facility (the “2024 Alaska Revolving Facility”).
Current report
The 2024 Alaska Term Facility proceeds were used (a) to refinance Alaska Communications’ outstanding indebtedness under the 2022 Alaska Credit Facility, as defined below, in the amount of approximately $279 million plus accrued and unpaid interest, (b) to pay fees and expenses associated with the completion of this transaction, and (c)for general corporate purposes. As of September 30, 2024, $300.0 million was outstanding under the 2024 Alaska Term Facility.
Current report
Proceeds from the 2024 Alaska Revolving Facility are to be used, subject to certain limitations, (a) to issue letters of credit to replace or backstop existing letters of credit of Alaska Communications and its direct and indirect subsidiaries, and (b) for working capital purposes, capital expenditures and other general corporate purposes. As of September 30, 2024, there were no outstanding borrowings under the 2024 Alaska Revolving Facility and $1.3 million
Current report
of letters of credit were issued. As a result, $88.7 million was available under the 2024 Alaska Revolving Facility as of September 30, 2024.
Current report
In connection the with 2024 Alaska Credit Facility, we incurred $6.9 million of fees and rolled over $2.1 million of fees for the 2022 Alaska Credit Facility to be amortized over the life of the debt. Additionally, we expensed $3.8 million of costs as transaction-related charges and $0.7 million of as a loss on extinguishment of debt included in other expense, within our statement of operations, during the three months ended September 30, 2024.
Current report
The maturity date for the 2024 Alaska Credit Facility is August 29, 2029.
Current report
Amounts outstanding under the 2024 Alaska Credit Facility bear an interest rate of the following:
Current report
Principal payments on the 2024 Alaska Term Facility are due quarterly commencing in the fourth quarter of 2026 in quarterly amounts as follows: from the fourth quarter of 2026 through the third quarter of 2027, $1,875,000; and from the fourth quarter of 2027 through the second quarter of 2029, $3,750,000. The remaining unpaid balance is due on the final maturity date. Payments on any principal amount outstanding under the Incremental Term Loans will be made in installments, on the dates and in the amounts set forth in the applicable amendment for such Incremental Term Loans. The Borrower may prepay all revolving loans under the 2024 Alaska Revolving Facility at any time without premium or penalty (other than any customary SOFR breakage costs), subject to certain notice requirements and balance restrictions.
Current report
The Borrower is required to maintain financial ratios, based on a calculation of EBITDA defined in the 2024 Alaska Credit Agreement, including (a) a maximum Consolidated Net Total Leverage Ratio of 4.75:1.00, stepping down to 4.50:1.00 beginning with the third quarter of 2027, and stepping down to 4.25:1.00 beginning with the third quarter of 2028; and (b) a minimum Consolidated Fixed Charge Coverage Ratio of not less than 1.25:1.00. Customary covenants restricting the incurrence or assumption of debt, granting or assuming liens, declaring dividends and making other restricted payments, making investments, dispositions, engaging in transactions with affiliates, changes to the nature of business, modifying organizational documents and material agreements, entering into sale and leaseback transactions, amending or making prepayments on certain subordinated debt, and entering into mergers and acquisitions.
Current report
The 2024 Alaska Credit Facility is secured by substantially all of the personal property and certain material real property owned by Alaska Communications Systems Holdings, the parent company of Alaska Communications (“Holdings”), the Borrower, and its wholly owned subsidiaries, excluding, among other things, certain federal and state licenses where a pledge is prohibited by applicable law or is permitted only with the consent of a governmental authority that has not been obtained.
Current report
The 2024 Alaska Credit Agreement contains usual and customary affirmative and negative covenants of the parties for credit facilities of this type or as otherwise deemed appropriate by the administrative agent, subject to customary exceptions and materiality standards. The 2024 Alaska Credit Agreement also contains certain customary covenants and events of default, as well as, in the event of an occurrence of an “Event of Default,” customary remedies for the lenders, including the acceleration of any amounts outstanding under the 2024 Alaska Credit Facility. Holdings and its wholly owned subsidiaries are guarantors of the Borrower’s obligations under the 2024 Alaska Credit Agreement. The Company is not a guarantor under the 2024 Alaska Credit Agreement, and the lenders have no recourse against the Company in the event of an occurrence of an “Event of Default.” Additionally, the 2024 Alaska Credit Agreement includes certain customary conditions that must be met for the Borrower to borrow under the 2024 Alaska Credit Agreement from time to time.
Current report
2022 Alaska Credit Facility
Current report
On August 29, 2024, all outstanding amounts under the 2022 Alaska Credit Facility were repaid in full using the proceeds received upon the completion of the 2024 Alaska Credit Facility.
Current report
Alaska Interest Rate Swap Agreements
Showing the first 40 of 41 passages. Open the source sections for the rest.
Removed paragraphs (20)
Previous report
Operating expenses within our US Telecom segment decreased $9.9 million, or 10.2%, to $87.0 million from $96.9 million for the three months ended June 30, 2024 and 2023, respectively, as a result of certain cost savings initiatives that were implemented in previous periods.
Previous report
Fixed revenue decreased by $3.1 million, or 2.6%, to $114.7 million from $117.8 million for the three months ended June 30, 2024 and 2023, respectively. Of this net decrease of $3.1 million, revenue from business customers decreased by $3.2 million, partially offset by an increase in revenue from consumer customers of $0.1 million. The increase in Fixed revenue, within our segments, consisted of the following:
Previous report
Carrier Services revenue decreased by $1.8 million, or 5.1%, to $33.7 million from $35.5 million for the three months ended June 30, 2024 and 2023, respectively. The decrease, within our segments, consisted of the following:
Previous report
We incurred a nominal amount of transaction-related charges during the three months ended June 30, 2024 and $0.4 million during the three months ended June 30, 2023.
Previous report
**Income taxes.**Our effective tax rate for the three months ended June 30, 2024 and 2023 was 1.8% and 88.5% respectively.
Previous report
Operating expenses within our International Telecom segment decreased by $9.7 million, or 6.3%, to $144.3 million from $154.0 million for the six months ended June 30, 2024 and 2023, respectively. The net decrease was the result of a $15.8 million gain on the disposition of long-lived assets, primarily real estate, and certain cost savings initiatives that commenced in previous periods partially offset by an increase in other operating expenses to support this segment’s revenue growth.
Previous report
Operating expenses within our US Telecom segment decreased $16.3 million, or 8.3%, to $180.2 million from $196.5 million for the six months ended June 30, 2024 and 2023, respectively, as a result of certain cost savings initiatives that commenced in previous periods.
Previous report
Within our International Telecom segment, Managed Services revenue increased $0.6 million, or 25.0%, to $3.0 million from $2.4 million for the six months ended June 30, 2024 and 2023, respectively, as a result of our continued efforts to sell Managed Services solutions across all of our international markets.
Previous report
Within our US Telecom segment, Managed Services revenue increased $0.8 million, or 15.1%, to $6.1 million from $5.3 million for the six months ended June 30, 2024 and 2023, respectively, as a result of our continued efforts to sell Managed Services solutions to all of our US markets.
Previous report
**Restructuring expenses.**In order to reduce costs to improve our cost structures and profitability, we incurred certain reduction in force costs totaling $1.2 million within our International Telecom segment during the six months ended June 30, 2024.
Previous report
During the six months ended June 30, 2023, we recorded a loss on the disposition of long-lived assets of $0.3 million within our US Telecom segment.
Previous report
Other income (expense). For the six months ended June 30, 2024, other income (expense) was $0.4 million of expense primarily related to certain employee benefit plans and by losses on foreign currency transactions.
Previous report
Income taxes. Our effective tax rate for the six months ended June 30, 2024 and 2023 was 35.0% and 43.0%, respectively.
Previous report
We recorded an income tax benefit of $5.8 million in relation to a pretax loss of $13.5 million for the six months ended June 30, 2023. The effective tax rate for the six months ended June 30, 2023 was primarily impacted by the following items (i) the mix of income generated among the jurisdictions in which we operate, (ii) net expense related to valuation allowances placed on certain deferred tax assets that are not expected to be realizable based on the weight of positive and negative evidence and (iii) discrete items including a $4.0 million benefit from the reversal of an unrecognized tax position due to a statute of limitations expiration, and a $1.3 million expense for interest on unrecognized tax positions.
Previous report
For the six months ended June 30, 2024 and 2023, we spent approximately $108.0 million and $96.4 million, respectively, on capital expenditures relating to our telecommunications networks and business support systems of which $46.2 million and $7.0 million, respectively, are reimbursable under various government programs. The following notes our capital expenditures, by operating segment, for these periods (in thousands):
Previous report
*Cash provided by operations.*Cash provided by operating activities was $58.4 million for the six months ended June 30, 2024 as compared to $60.3 million for the six months ended June 30, 2023. The decrease of $1.9 million was primarily related to an increase in net income of $11.1 million offset by an increase in gain on the sale of certain assets within our International Telecom segment of $16.7 million and a change in working capital.
Previous report
Alaska Credit Facility
Previous report
As of June 30, 2024, Alaska Communications had drawn $49.5 million on the Alaska Revolving Facility and had $25.5 million available to draw. The Alaska Term Loan balance was $225.7 million and principal payments commenced in the fourth quarter of 2023. Both facilities mature on July 22, 2026.
Previous report
Alaska Communications capitalized $7.3 million of fees associated with the Alaska Credit Facility which are being amortized over the life of the debt and $3.1 million were unamortized as of June 30, 2024.
Previous report
GTT Credit Facilities
Reworded paragraphs (96)
Previous wording
Item 2. MANAGEMENT’S****DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current wording
**Item 2. MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS **
Previous wording
We have developed significant operational expertise and resources that we use to augment our capabilities in our local markets. With this support, our operating subsidiaries are able to improve their quality of service with greater economies of scale and expertise than would typically be available in the size markets we operate in. We provide management, technical, financial, regulatory, and marketing services to our operating subsidiaries and typically receive a management fee calculated as a percentage of their revenues, which is eliminated in consolidation. We also actively evaluate investment opportunities and other strategic transactions, both domestic and international, and generally look for those that we believe fit our profile of telecommunications businesses and have the potential to complement our “First-to-Fiber” and “Glass & Steel™” approach in markets while keeping a focus on generating excess operating cash flows over extended periods of time. We use the cash generated from our operations to maintain an appropriate ratio of debt and cash on hand and to fund growth and to fund capital expenditures, to return cash to our stockholders through dividends or stock repurchases, and make strategic investments or acquisitions.
Current wording
We have developed significant operational expertise and resources that we use to augment our capabilities in our local markets. With this support, our operating subsidiaries are able to improve their quality of service with greater economies of scale and expertise than would typically be available in the size markets we operate in. We provide management, technical, financial, regulatory, and marketing services to our operating subsidiaries and typically receive a management fee calculated as a percentage of their revenues, which is eliminated in consolidation. We also actively evaluate investment opportunities and other strategic transactions, both domestic and international, and generally look for those that we believe fit our profile of telecommunications businesses and have the potential to complement our “First-to-Fiber” and “Glass & Steel™” approach in markets while keeping a focus on generating excess operating cash flows over extended periods of time. We use the cash generated from our operations to maintain an appropriate ratio of debt and cash on hand to fund growth, capital expenditures, return cash to our stockholders through dividends or stock repurchases, and make strategic investments or acquisitions.
Previous wording
For further information about our financial segments and geographical information about our operating revenues and assets, see Notes 1 and 12 to the Consolidated Financial Statements included in this Report.
Current wording
For further information about our financial segments and geographical information about our operating revenues and assets, see Notes 1 and 13 to the Consolidated Financial Statements included in this Report.
Previous wording
In July 2019, we entered into a Network Build and Maintenance Agreement with AT&T Mobility, LLC (“AT&T”) that we subsequently amended through December 31, 2023 (the “FirstNet Agreement”). In connection with the FirstNet Agreement, we are building a portion of AT&T’s network for the First Responder Network Authority (“FirstNet”) in or near our current operating areas in the western United States. Pursuant to the FirstNet Agreement and subject to certain limitations contained therein, all cell sites must be completed and accepted within a specified period of time. Since the inception of the project through June 30, 2024, we have recorded $75.6 million in construction revenue and expect to record approximately $8.0 million in additional construction revenue and related costs as sites are completed. We expect to substantially complete the build by the end of 2024 with the remainder to be completed in early 2025. Revenues from construction are expected to have minimal impact on operating income.
Current wording
In July 2019, we entered into a Network Build and Maintenance Agreement with AT&T Mobility, LLC (“AT&T”) that we subsequently amended through December 31, 2023 (the “FirstNet Agreement”). In connection with the FirstNet Agreement, we are building a portion of AT&T’s network for the First Responder Network Authority (“FirstNet”) in or near our current operating areas in the western United States. Pursuant to the FirstNet Agreement and subject to certain limitations contained therein, all cell sites must be completed and accepted within a specified period of time. Since the inception of the project through September 30, 2024, we have recorded $75.8 million in construction revenue and expect to record approximately $7.5 million in additional construction revenue and related costs as sites are completed. We expect to substantially complete the build by the end of 2025 with the remainder to be completed in 2026. Revenues from construction are expected to have minimal impact on operating income.
Previous wording
We were awarded approximately $22.7 million over 10 years to provide broadband and voice coverage to over 10,000 households in the United States (not including Alaska) under the 2020 Rural Digital Opportunity Fund Phase I Auction (“RDOF”). During the six months ended June 30, 2024, we entered into agreements to transfer $13.0 million of RDOF obligations. The transfer applications are pending regulatory approval.
Current wording
We were awarded approximately $22.7 million over 10 years to provide broadband and voice coverage to over 10,000 households in the United States (not including Alaska) under the 2020 Rural Digital Opportunity Fund Phase I Auction (“RDOF”). During the nine months ended September 30, 2024, we entered into agreements to transfer $13.0 million of RDOF obligations. The transfer applications are pending regulatory approval.
Previous wording
During the three months ended June 30, 2024, we disbursed capital expenditures of $3.6 million under these programs and received reimbursement of $2.3 million. These cash flows are classified as investing activities in our statement of cash flows.
Current wording
During the three months ended September 30, 2024, we disbursed capital expenditures of $4.7 million under these programs and received reimbursement of $4.1 million. These cash flows are classified as investing activities in our statement of cash flows.
Previous wording
to deploy broadband connectivity in certain underserved areas. We were identified as a sub recipient of grants under these programs totaling $192.6 million as of June 30, 2024. Through June 30, 2024, we have received $11.3 million of funding under these programs and spent $11.4 million on construction obligations. These amounts are recorded as operating cash flows in the company’s statement of cash flows.
Current wording
to deploy broadband connectivity in certain underserved areas. We were identified as a sub recipient of grants under these programs totaling $192.6 million as of September 30, 2024. Through September 30, 2024, we have received $15.9 million of funding under these programs and spent $16.1 million on construction obligations. These amounts are recorded as operating cash flows in the company’s statement of cash flows.
Previous wording
We have incurred total expenditures of $112.0 million related to this project, of which $47.7 million were incurred in 2024. Of these total expenditures, $87.4 million were classified as capital.
Current wording
We have incurred total expenditures of $139.9 million related to this project, of which $75.6 million were incurred in 2024. Of these total expenditures, $115.8 million were classified as capital.
Previous wording
At June 30, 2024, $27.3 million of capital expenditures were accrued and unpaid. We expect to be reimbursed, within the next twelve months, for all amounts spent to date. During the six months ended June 30, 2024 we have received $52.1 million of reimbursement under the program, of which $10.7 million was classified as operating cash inflows and $41.4 million was classified as investing cash inflows in our statement of cash flows.
Current wording
At September 30, 2024, $31.1 million of capital expenditures were accrued and unpaid. We expect to be reimbursed, within the next twelve months, for all amounts spent to date. During the nine months ended September 30, 2024 we have received $87.2 million of reimbursement under the program, of which $18.7 million was classified as operating cash inflows and $68.5 million was classified as investing cash inflows in our statement of cash flows.
Previous wording
International Telecom. Revenues within our International Telecom segment increased $6.0 million, or 3.3%, to $188.4 million from $182.4 million for the six months ended June 30, 2024 and 2023, respectively, primarily as a result of an increase in Fixed Revenues which increased $4.9 million, or 4.1%, to $123.5 million from $118.6 million for the six months ended June 30, 2024 and 2023, respectively. This increase in Fixed Revenues was primarily the result of network upgrades and expansions as well as improved customer care and marketing strategies which led to an increase in both business and consumer subscribers. In addition, an increase in the number of homes passed by high-speed data solutions allowed us to migrate legacy copper customers to more durable fiber services.
Current wording
International Telecom. Revenues within our International Telecom segment increased $0.4 million, or 0.4%, to $94.3 million from $93.9 million for the three months ended September 30, 2024 and 2023, respectively, primarily as a result of an increase in Fixed revenues of $1.8 million, or 3.0%, to $61.8 million from $60.0 million for the three months ended September 30, 2024 and 2023, respectively. This increase in Fixed revenues was primarily the result of network upgrades and expansions which led to an increase in the number of homes passed by high-speed data solutions which allowed us to migrate legacy copper customers to more durable and higher revenue generating fiber services. Partially offsetting the increase in Fixed revenues were decreases in both Mobility revenues, as a result of a decrease in subscribers, and Carrier Services revenues, primarily related to the amendment to certain carrier contracts.
Previous wording
As a result, our International Telecom segment’s operating income increased $17.8 million, or 121.9%, to $32.4 million from $14.6 million for the three months ended June 30, 2024 and 2023, respectively.
Current wording
As a result, our International Telecom segment’s operating income increased $0.1 million, to $12.9 million, from $12.8 million for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
US Telecom. Revenue within our US Telecom segment decreased by $6.6 million, or 7.0%, to $87.9 million from $94.5 million for the three months ended June 30, 2024 and 2023, respectively, primarily as a result of the conclusion of the Emergency Connectivity Fund during the second quarter of 2024.
Current wording
US Telecom. Revenue within our US Telecom segment decreased by $13.0 million, or 13.4%, to $84.2 million from $97.2 million for the three months ended September 30, 2024 and 2023, respectively, primarily as a result of the conclusion of the Emergency Connectivity Fund during the second quarter of 2024.
Previous wording
As a result of the above, our US Telecom segment’s operating income (loss) increased by $3.3 million to income of $0.9 million from a loss of $2.4 million for the three months ended June 30, 2024 and 2023, respectively.
Current wording
As a result of the above, our US Telecom segment’s operating income (loss) decreased by $47.3 million to a loss of $44.3 million from income of $3.0 million for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
Mobility revenue decreased by $0.2 million, or 0.7%, to $27.6 million for the three months ended June 30, 2024 from $27.8 million for the three months ended June 30, 2023. Mobility revenue from consumer customers decreased by $1.6 million partially offset by an increase in Mobility revenue from business customers of $1.4 million.
Current wording
Mobility revenue decreased by $1.2 million, or 4.2%, to $27.5 million for the three months ended September 30, 2024 from $28.7 million for the three months ended September 30, 2023. Mobility revenue from consumer customers decreased by $2.4 million partially offset by an increase in Mobility revenue from business customers of $1.2 million.
Previous wording
Mobility revenue within our International Telecom segment may increase as a result of continued network upgrades and our marketing efforts to increase the number of our subscribers, data usage, and to convert our current subscriber base to higher margin prepaid and postpaid plans. However, we believe that increased competition and regulatory changes within our international markets may limit that revenue growth. We expect that Mobility revenue within our US Telecom segment will decrease over time as we put more emphasis on other revenue sources within that segment.
Current wording
Mobility revenue within our International Telecom may decrease as a result of increased competition and regulatory changes partially offset by our continued network upgrades, marketing efforts and conversion of our current subscriber base to higher margin prepaid and postpaid plans. We expect that Mobility revenue within our US Telecom segment will decrease over time as we put more emphasis on other revenue sources within that segment.
Previous wording
**Fixed Revenue.**Fixed revenue is primarily generated by broadband, voice, and video service revenues provided to retail and business customers over our wireline networks. Fixed revenue within our US Telecom segment also includes awards from the Connect America Fund Phase II program and, through early April 2024, the Emergency Connectivity Fund program in the western United States and Alaska, as well as revenue from the Alaska Universal Service Fund. Within our International Telecom segment, Fixed revenue also includes funding under the FCC’s High Cost Program in the US Virgin Islands.
Current wording
**Fixed Revenue.**Fixed revenue is primarily generated by broadband, voice, and video service revenues provided to retail and business customers over our wireline networks. Fixed revenue within our US Telecom segment also includes awards from the Connect America Fund Phase II program, the Enhanced Alternative Connect America Cost Model program, and the Alaska Universal Service Fund. In addition, and through early April 2024, Fixed revenue within the US Telecom segment also included revenue from the Emergency Connectivity Fund (ECF) and Affordable Care Program (ACP). Within our International Telecom segment, Fixed revenue includes funding under the FCC’s High Cost Program in the US Virgin Islands.
Previous wording
Within our US Telecom segment, we expect Fixed revenue to decrease in the short term as a result of the impact of the expiration of the Emergency Connectivity Fund. Over time, we expect these decreases to be partially offset by increases in other business revenue in Alaska and our western United States operations, as we further deploy fiber and fiber-fed broadband access to both consumers and businesses.
Current wording
Within our US Telecom segment, we expect Fixed revenue to decrease in the short term as a result of the impact of the expiration of the Emergency Connectivity Fund and Affordable Care Program. Over time, we expect these decreases to be partially offset by increases in other business revenue in Alaska and our western United States operations as we further deploy fiber and fiber-fed broadband access to both consumers and businesses.
Previous wording
**Other Communications Services Revenue.**Other Communications Services revenue includes miscellaneous services that the operations within our International Telecom segment provide to retail subscribers and project-related revenue generated within both our International and US Telecom segments. Other Communications Services revenue increased by $0.9 million to $1.4 million from $0.5 million for the three months ended June 30, 2024 and 2023, respectively, primarily as a result of non-recurring project-related revenue being recognized within both our International Telecom and US Telecom segments, respectively, during the three months ended June 30, 2024.
Current wording
**Other Communications Services Revenue.**Other Communications Services revenue includes miscellaneous services that the operations within our International Telecom segment provide to retail subscribers and project-related revenue generated within both our International and US Telecom segments. Other Communications Services revenue decreased by $0.4 million, or 22.2%, to $1.4 million from $1.8 million for the three months ended September 30, 2024
Previous wording
Construction revenue represents revenue generated within our US Telecom segment for the construction of network cell sites related to the FirstNet Agreement. During the three months ended June 30, 2024 and 2023, Construction revenue decreased to $0.8 million from $1.0 million, respectively, as a result of a decrease in the number of sites completed during 2024 as compared to 2023. We expect to substantially complete the build by the end of 2024 with the remainder to be completed in early 2025.
Current wording
Construction revenue represents revenue generated within our US Telecom segment for the construction of network cell sites related to the FirstNet Agreement. During the three months ended September 30, 2024 and 2023, Construction revenue decreased to $0.2 million from $2.0 million, respectively, as a result of a decrease in the number of sites completed during 2024 as compared to 2023. We expect to substantially complete the build by the end of 2025 with the remainder to be completed in 2026.
Previous wording
**Managed Services Revenue.**Managed Services revenue is generated within both our International and US Telecom segments and includes network, application, infrastructure, and hosting services. Managed Services revenue increased $1.3 million, or 34.2%, to $5.1 million from $3.8 million during the three months ended June 30, 2024 and 2023, respectively. The net increase in Managed Services revenue, within our segments, consisted of the following:
Current wording
**Managed Services Revenue.**Managed Services revenue is generated within both our International and US Telecom segments and includes network, application, infrastructure, and hosting services. Managed Services revenue decreased $0.6 million, or 13.6%, to $3.8 million from $4.4 million during the three months ended September 30, 2024 and 2023, respectively. The net decrease in Managed Services revenue, within our segments, consisted of the following:
Previous wording
Cost of communication services and other decreased by $1.6 million, or 2.1%, to $76.1 million from $77.7 million for the three months ended June 30, 2024 and 2023, respectively. The net decrease in cost of communication services and other, within our segments, consisted of the following:
Current wording
Cost of communication services and other decreased by $1.4 million, or 1.7%, to $79.0 million from $80.4 million for the three months ended September 30, 2024 and 2023, respectively. The net decrease in cost of communication services and other, within our segments, consisted of the following:
Previous wording
Cost of communication services in both our International and US Telecom segments may continue to decrease as a result of the ongoing cost reduction initiatives that commenced in previous periods but may be partially offset by future inflationary pressure.
Current wording
Cost of communication services in both our International and US Telecom segments may decrease as a result of the ongoing cost reduction initiatives that commenced in previous periods but may be partially offset by future inflationary pressure.
Previous wording
Cost of construction revenue. Cost of construction revenue includes the expenses incurred in connection with the construction of and the delivery to AT&T of cell sites in accordance with our FirstNet Agreement. During the three months ended June 30, 2024 and 2023, cost of construction revenue decreased to $0.8 million from $1.0 million as a result of a decrease in the number of sites completed during 2024 as compared to 2023. We expect to substantially complete the build by the end of 2024 with the remainder to be completed in early 2025.
Current wording
Cost of construction revenue. Cost of construction revenue includes the expenses incurred in connection with the construction of and the delivery to AT&T of cell sites in accordance with our FirstNet Agreement. During the three months ended September 30, 2024 and 2023, cost of construction revenue decreased to $0.2 million from $2.0 million as a result of a decrease in the number of sites completed during 2024 as compared to 2023. We expect to substantially complete the build by the end of 2025 with the remainder to be completed in 2026.
Previous wording
Selling, general and administrative expenses decreased $4.2 million, or 6.8%, to $57.7 million from $61.9 million for the three months ended June 30, 2024 and 2023, respectively. The changes in selling, general and administrative expenses, within our segments, consisted of the following:
Current wording
Selling, general and administrative expenses decreased $7.2 million, or 11.8%, to $53.6 million from $60.8 million for the three months ended September 30, 2024 and 2023, respectively. The changes in selling, general and administrative expenses, within our segments, consisted of the following:
Previous wording
Selling, general and administrative expenses in both our International and US Telecom segments, as well as our Corporate Overhead, may decrease as a result of the ongoing cost reduction initiatives that commenced in previous periods but may be partially offset by future inflationary pressure.
Current wording
Selling, general and administrative expenses in both our International and US Telecom segments, as well as our Corporate Overhead, may continue to decrease as a result of the ongoing cost reduction initiatives that commenced in previous periods but may be partially offset by future inflationary pressure.
Previous wording
Stock-based compensation for the three months ended June 30, 2024 and 2023 was $2.8 million and $2.7 million, respectively.
Current wording
Stock-based compensation for the three months ended September 30, 2024 and 2023 was $1.8 million and $2.0 million, respectively.
Previous wording
Transaction-related charges. Transaction-related charges include the external costs, such as legal, tax, accounting and consulting fees directly associated with acquisition and disposition-related activities, which are expensed as incurred. Transaction-related charges also include certain internal personnel costs incurred as a result of the completion of an acquisition or disposition. Transaction-related charges do not include employee salary and travel-related expenses, incurred in connection with acquisitions or dispositions or any integration-related costs.
Current wording
Transaction-related charges. Transaction-related charges include the external costs, such as legal, tax, accounting and consulting fees directly associated with acquisition and disposition-related activities and certain financing activities, and are expensed as incurred. Transaction-related charges do not include employee salary and travel-related expenses incurred in connection with acquisitions or dispositions or any integration-related costs.
Previous wording
** **In connection with our repositioning of our legacy wholesale roaming operations in our US Telecom segment, we recorded a $3.3 million restructuring charge during the six months ended June 30, 2023 primarily related to the decommissioning of certain cell sites.
Current wording
** **In connection with our repositioning of our legacy wholesale roaming operations in our US Telecom segment, we recorded a $4.6 million restructuring charge during the nine months ended September 30, 2023 primarily related to the decommissioning of certain cell sites.
Previous wording
Depreciation and amortization expenses decreased by $0.6 million, or 1.7%, to $35.6 million from $36.2 million for the three months ended June 30, 2024 and 2023, respectively. The net decrease in depreciation and amortization expenses, within our segments, consisted primarily of the following:
Current wording
Depreciation and amortization expenses increased by $2.9 million, or 8.4%, to $37.3 million from $34.4 million for the three months ended September 30, 2024 and 2023, respectively. The net increase in depreciation and amortization expenses, within our segments, consisted primarily of the following:
Previous wording
Amortization of intangibles from acquisitions decreased by $1.2 million to $1.9 million from $3.1 million for the three months ended June 30, 2024 and 2023, respectively, as a result of certain intangible assets becoming fully amortized in recent periods.
Current wording
Amortization of intangibles from acquisitions decreased by $1.1 million to $2.0 million from $3.1 million for the three months ended September 30, 2024 and 2023, respectively, as a result of certain intangible assets becoming fully amortized in recent periods.
Previous wording
We expect that amortization of intangibles from acquisitions will decrease as such costs continue to amortize.
Current wording
We expect that amortization of intangibles from acquisitions will decrease in future periods as such costs continue to amortize.
Previous wording
Gain (loss) on disposition of assets. During the three months ended June 30, 2024, we recorded a gain on the disposition of assets of $15.9 million primarily relating to the sale of real estate in our International Telecom segment.
Current wording
Gain (loss) on disposition of assets and transfers. During the three months ended September 30, 2024, we recorded a loss on the disposition and transfer of assets of $1.5 million primarily relating to the disposal of certain assets within our US Telecom segment.
Previous wording
Interest income. Interest income represents interest earned on our cash, cash equivalents, restricted cash and short-term investment balances. Interest income was $0.1 million and a nominal amount for the three months ended June 30, 2024 and 2023, respectively.
Current wording
Interest income. Interest income represents interest earned on our cash, cash equivalents, restricted cash and short-term investment balances. Interest income was $0.2 million and a nominal amount for the three months ended September 30, 2024 and 2023, respectively. Such increase was the result of increased cash, cash equivalents and restricted cash balances.
Previous wording
Interest expense. We incur interest expense on the 2023 CoBank Credit Facility, the Alaska Credit and Term Facilities, the FirstNet Receivables Credit Facility, the GTT Credit Facilities, the Sacred Wind Term Debt and the Viya Debt. In addition, interest expense includes commitment fees, letter of credit fees and the amortization of debt issuance costs.
Current wording
Interest expense. We incur interest expense on the 2023 CoBank Credit Facility, the 2022 and 2024 Alaska Credit Facilities, the FirstNet Receivables Credit Facility, the GTT Credit Facilities, the Sacred Wind Term Debt and the Viya Debt. In addition, interest expense includes commitment fees, letter of credit fees and the amortization of debt issuance costs.
Previous wording
Interest expense increased to $12.3 million from $10.4 million for the three months ended June 30, 2024 and 2023, respectively, as additional interest expense was incurred as a result of an increase in borrowings under our credit facilities and a year-over-year increase in the term SOFR rate on all floating-rate borrowings under those facilities.
Current wording
Interest expense increased to $12.7 million from $11.4 million for the three months ended September 30, 2024 and 2023, respectively, as additional interest expense was incurred as a result of an increase in borrowings under our credit facilities.
Previous wording
For the three months ended June 30, 2023, other income (expense) was $2.2 million of income primarily related to gains from our noncontrolling investments.
Current wording
For the three months ended September 30, 2023, other income (expense) was $0.2 million of income primarily related to gains from our noncontrolling investments.
Previous wording
Net income (loss) attributable to noncontrolling interests, net of tax. Net income (loss) attributable to noncontrolling interests, net of tax reflected an allocation of $0.7 million of income and $2.6 million of losses generated by our less than wholly owned subsidiaries for the six months ended June 30, 2024 and 2023, respectively. Changes in net income (loss) attributable to noncontrolling interests, net of tax, within our segments, consisted of the following:
Current wording
Net income (loss) attributable to noncontrolling interests, net of tax. Net income (loss) attributable to noncontrolling interests, net of tax reflected an allocation of $6.8 million and $0.1 million of losses generated by our less than wholly owned subsidiaries for the three months ended September 30, 2024 and 2023, respectively. Changes in net income (loss) attributable to noncontrolling interests, net of tax, within our segments, consisted of the following:
Previous wording
**Net income (loss) attributable to ATN International, Inc. stockholders.**Net income (loss) attributable to ATN International, Inc. stockholders was $9.0 million of income for the three months ended June 30, 2024 as compared to $0.8 million of income for the three months ended June 30, 2023.
Current wording
**Net loss attributable to ATN International, Inc. stockholders.**Net loss attributable to ATN International, Inc. stockholders was $32.7 million for the three months ended September 30, 2024, as compared to $3.6 million for the three months ended September 30, 2023.
Previous wording
On a per diluted share basis, net income was $0.50 per diluted share for the three months ended June 30, 2024 as compared to a loss of $0.03 per diluted share for the three months ended June 30, 2023. Such per share amounts were negatively impacted by accrued preferred dividends of $1.4 million and $1.3 million for the three months ended June 30, 2024 and 2023, respectively.
Current wording
On a per diluted share basis, net loss per share was $2.26 per share for the three months ended September 30, 2024, as compared to $0.31 per share for the three months ended September 30, 2023. Such per share amounts were negatively impacted by accrued preferred dividends of $1.4 million and $1.3 million for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
The following represents selected segment information for the six months ended June 30, 2024 and 2023 (in thousands):
Current wording
The following represents selected segment information for the nine months ended September 30, 2024 and 2023 (in thousands):
Showing the first 40 of 96 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
and 2023, respectively, primarily as a result of non-recurring project-related revenue being recognized within both our International Telecom and US Telecom segments, during the three months ended September 30, 2024.
Current report — wording carried from elsewhere
Other income (expense). For the three months ended September 30, 2024, other income (expense) was $0.6 million of expense primarily related to a loss on the extinguishment of the 2022 Alaska Credit Facility, as discussed below.
Current report — wording carried from elsewhere
on the weight of positive and negative evidence and (iii) discrete items including a $0.8 million expense associated with sale of a partnership interest , and a $0.8 million expense for interest on unrecognized tax positions.
Current report — wording carried from elsewhere
financing activities was partially offset by a decrease in cash used to repurchase our common stock (including shares repurchased from employees and directors to satisfy certain tax withholding obligations) of $1.2 million.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
provides financial assistance in the form of loans under the Rural Electrification Act of 1936 to furnish or improve telecommunications and/or broadband services in rural areas.
Previous report — wording carried elsewhere
2024 and 2023, we recorded $0.5 million and $0.6 million, respectively, in losses on foreign currency transactions. We will continue to assess the impact of our exposure to the Guyana Dollar.