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Atlantic Tele-Network, Inc. Reports Fourth Quarter And Full Year 2011 Results

Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release also contains non-GAAP financial measures. Specifically, ATN has presented Adjusted EBITDA and ARPU measures. Adjusted EBITDA is defined as net income attributable to ATN, Inc. stockholders before interest, taxes, depreciation and amortization, acquisition related charges, impairment of intangible assets, gain on disposition of long-lived assets, other income, bargain purchase gain, net income attributable to non-controlling interests, and equity in earnings of unconsolidated affiliates. ARPU, or monthly average revenue per subscriber/unit, is computed by dividing total retail service revenues per period by the weighted average number of subscribers with service during that period, and then dividing that result by the number of months in the period. The Company believes that the inclusion of these non-GAAP financial measures helps investors to gain a meaningful understanding of the Company's core operating results and enhance comparing such performance with prior periods, without the distortion of the recent increased expenses associated with the Alltel transaction. ATN’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring our core operating performance and comparing such performance to that of prior periods. The non-GAAP financial measures included in this news release are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures used in this news release to the most directly comparable GAAP financial measures are set forth in the text of, and the accompanying tables to, this press release.

1 See Table 5 for reconciliation of Net Income to Adjusted EBITDA.

 

Table 1

ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Balance Sheets
(in Thousands)
 
December 31, December 31,
2011 2010
Assets:
Cash and Cash Equivalents $ 48,735 $ 37,330
Other Current Assets 135,165 116,959
       
Total Current Assets 183,900 154,289
 
Property, Plant and Equipment, net 483,203 463,891
Goodwill and Other Intangible Assets, net 186,871 187,762
Other Assets 19,757 22,254
       
Total Assets $ 873,731 $ 828,196
 
Liabilities and Stockholders’ Equity:
Current Portion of Long Term Debt $ 25,068 $ 12,194
Other Current Liabilities 120,710 126,108
       
Total Current Liabilities 145,778 138,302
 
Long Term Debt, Net of Current Portion 257,146 272,049
Other Liabilities 118,277 88,809
       
Total Liabilities 521,201 499,160
 
Total Atlantic Tele-Network, Inc.’s Stockholders’ Equity 294,266 283,768
Non-Controlling Interests 58,264 45,268
       
Total Equity 352,530 329,036
       
Total Liabilities and Stockholders’ Equity $ 873,731 $ 828,196
 

Table 2

ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Statements of Operations
(in Thousands, Except per Share Data)
       
Three Months Ended Year Ended
December 31, December 31,
2011 2010 (a) 2011 2010 (a)
Revenues:
U.S. Wireless:
Retail $ 85,997 $ 102,795 $ 370,218 $ 293,126
Wholesale 48,378 47,370 201,993 159,807
International Wireless 19,495 13,522 73,003 50,615
Wireline 21,653 19,913 84,957 84,488
Equipment and Other   7,420     11,065     29,025     31,109  
 
Total Revenue 182,943 194,665 759,196 619,145
 
Operating Expenses:
Termination and Access Fees 49,790 51,711 205,526 160,554
Engineering and Operations 21,266 24,347 85,234 71,032
Sales, Marketing and Customer Service 34,089 31,839 136,013 94,661
Equipment Expense 19,396 28,421 73,185 75,335
General and Administrative 17,689 27,055 99,087 88,783
Acquisition-Related Charges 107 (2,121 ) 772 13,760
Depreciation and Amortization 27,242 24,152 104,100 76,736
Impairment of Intangible Assets 2,425 - 2,425 -
Gain on Dispostion of Long-Lived Assets   -     -     (2,397 )   -  
 
Total Operating Expenses   172,004     185,404     703,945     580,861  
 
Operating Income 10,939 9,261 55,251 38,284
 
Other Income (Expense):
Interest Income (Expense), net (4,880 ) (2,878 ) (16,943 ) (9,405 )
Other Income 273 109 1,129 543
Equity in Earnings of Unconsolidated Affiliates 1,545 287 3,029 743
Bargain Purchase Gain, net of taxes of $18,016   -     -     -     27,024  
 
Other Income (Expense), net (3,062 ) (2,482 ) (12,785 ) 18,905
 
Income Before Income Taxes 7,877 6,779 42,466 57,189
Income Taxes   4,494     4,160     20,569     19,607  
 
Net Income 3,383 2,619 21,897 37,582
Net Loss (Income) Attributable to Non-Controlling Interests, net of tax   763     660     (103 )   872  
 
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders $ 4,146   $ 3,279   $ 21,794   $ 38,454  
 
Net Income Per Weighted Average Share Attributable to Atlantic Tele-Network, Inc. Stockholders:
Basic $ 0.27 $ 0.21 $ 1.42 $ 2.51
Diluted $ 0.27 $ 0.21 $ 1.41 $ 2.48
Weighted Average Common Shares Outstanding:
Basic 15,427 15,382 15,396 15,323
Diluted 15,530 15,505 15,495 15,484
 
 
a) Certain reclassifications have been made to prior period amounts to conform to the current presentation
 

Table 3

ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Cash Flow Statement
(in Thousands)
 
Year Ended December 31,
2011 2010
 
Net Income $ 21,897 $ 37,582
Gain on Bargain Purchase, Net of Tax - (27,024 )
Impairment of Intangible Assets 2,425 -
Depreciation and Amortization 104,100 76,736
Change in Working Capital (37,960 ) (4,875 )
Other   42,141     20,383  
 
Net Cash Provided by Operating Activities 132,603 102,802
 
Capital Expenditures (101,401 ) (135,688 )
Acquisitions of Businesses, Net of Cash Acquired - (225,498 )
Cash Acquired in Business Combinations 4,087 (57 )
Other   1,667     4,782  
 
Net Cash Used by Investing Activities (95,647 ) (356,461 )
 
Borrowings Under Credit Facility 137,069 264,000
Principal Repayments of Long Term Debt (146,362 ) (49,568 )
Payment of Debt Issuance Costs (1,037 ) (4,322 )
Dividends Paid on Common Stock (13,703 ) (12,569 )
Distributions to Non-Controlling Interests (2,814 ) (1,870 )
Other   1,296     5,072  
 
Net Cash Used by Financing Activities (25,551 ) 200,743
 
Net Change in Cash and Cash Equivalents 11,405 (52,916 )
 
Cash and Cash Equivalents, Beginning of Period   37,330     90,246  
 
Cash and Cash Equivalents, End of Period $ 48,735   $ 37,330  
 

Table 4

ATLANTIC TELE-NETWORK, INC.
Operating Data for U.S. Retail Wireless Operations
                     
Three Months Ended:   DEC 2010   MAR 2011   JUN 2011   SEP 2011   DEC 2011
  766,556   717,745   674,080   638,839   592,620
Beginning Subscribers
Prepay 216,854 194,795 169,673 145,854 123,157
Postpay 549,702 522,950 504,407 492,985 469,463
 
Gross Additions 51,882 46,680 38,859 30,018 46,757
Prepay 27,136 19,922 13,951 9,784 22,639
Postpay 24,746 26,758 24,908 20,234 24,118
 
Net Additions (48,811) (43,665) (35,241) (46,219) (10,246)
Prepay (22,059) (25,122) (23,819) (22,697) 1,189
Postpay (26,752) (18,543) (11,422) (23,522) (11,435)
 
Ending Subscribers 717,745 674,080 638,839 592,620 582,374
Prepay 194,795 169,673 145,854 123,157 124,346
Postpay 522,950 504,407 492,985 469,463 458,028
 
 
ATLANTIC TELE-NETWORK, INC.
U.S. Retail Wireless Operations Key Performance Indicators
                     
Three Months Ended:   DEC 2010   MAR 2011   JUN 2011   SEP 2011   DEC 2011
         
 
 
Average Subscribers (weighted monthly) 741,228 695,399 655,292 618,862 584,652
 
Monthly Average Revenues per Subscriber/Unit (ARPU)
 

● Subscriber ARPU

$45.88 $47.23 $47.90 $47.51 $48.46
 
● Postpaid Subscriber ARPU $53.71 $53.78 $54.47 $52.68 $54.43
 
Monthly Postpay Subscriber Churn 3.18% 2.93% 2.42% 2.97% 2.55%
 
Monthly Blended Subscriber Churn 4.48% 4.29% 3.73% 4.05% 3.25%
 

Table 5

ATLANTIC TELE-NETWORK, INC.
Reconciliation of Non-GAAP Measures
(In Thousands)
         
                                             
Reconciliation of Net Income to Adjusted EBITDA for the Three Months Ended December 31, 2010 and 2011
 

 

 

Three Months Ended December 31, 2010

U.S Wireless

International Integrated Telephony

U.S. Wireline

Island Wireless

Reconciling Items

Total
               
 
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders $ 3,279
Net Income Attributable to Non-Controlling Interests, net of tax (660 )
Income Taxes 4,160
Equity in Earnings of Unconsolidated Affiliates (287 )
Other Income (109 )
Interest Expense, net   2,878  
Operating Income (Loss) $ 9,280 $ 5,600 $ (178 ) $ (2,700 ) $ (2,741 ) $ 9,261
Depreciation and Amortization 17,052 4,378 764 1,808 150 24,152
Acquisition-Related Charges   -     -     -       -       (2,121 )     (2,121 )
Adjusted EBITDA $ 26,332 $ 9,978 $ 586 $ (892 ) $ (4,712 ) $ 31,292
                                             
 

 

 

Three Months Ended December 31, 2011

U.S Wireless

International Integrated Telephony

U.S. Wireline

Island Wireless

Reconciling Items

Total
               
 
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders $ 4,146
Net Loss Attributable to Non-Controlling Interests, net of tax (763 )
Income Taxes 4,494
Equity in Earnings of Unconsolidated Affiliates (1,545 )
Other Income (273 )
Interest Expense, net   4,880  
Operating Income (Loss) $ 12,888 $ 7,078 $ 355 $ (2,440 ) $ (6,942 ) $ 10,939
Depreciation and Amortization 18,918 4,448 808 2,829 239 27,242
Impairment of Intangible Assets - - 2,425 - 2,425
Acquisition-Related Charges   -     -     -       -       108       108  
Adjusted EBITDA $ 31,806 $ 11,526 $ 1,163 $ 2,814 $ (6,595 ) $ 40,714
                                             
 
 
                                             
Reconciliation of Net Income to Adjusted EBITDA for the Years Ended December 31, 2010 and 2011
 

 

 

Year Ended December 31, 2010

U.S Wireless

International Integrated Telephony

U.S. Wireline

Island Wireless

Reconciling Items

Total
               
 
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders $ 38,454
Net Income Attributable to Non-Controlling Interests, net of tax (872 )
Income Taxes 19,607
Equity in Earnings of Unconsolidated Affiliates (743 )
Other Income (543 )
Bargain Purchase Gain, net of taxes of $18,016 (27,024 )
Interest Expense, net   9,405  
Operating Income (Loss) $ 48,261 $ 27,371 $ (288 ) $ (6,410 ) $ (30,650 ) $ 38,284
Depreciation and Amortization 50,662 17,480 2,936 5,271 387 76,736
Acquisition-Related Charges   -     -     -       -       13,760       13,760  
Adjusted EBITDA $ 98,923 $ 44,851 $ 2,648 $ (1,139 ) $ (16,503 ) $ 128,780
                                             
 

 

 

Year Ended December 31, 2011

U.S Wireless

International Integrated Telephony

U.S. Wireline

Island Wireless

Reconciling Items

Total
             
 
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders $ 21,794
Net Loss Attributable to Non-Controlling Interests, net of tax 103
Income Taxes 20,569
Equity in Earnings of Unconsolidated Affiliates (3,029 )
Other Income (1,129 )
Interest Expense, net   16,943  
Operating Income (Loss) $ 56,664 $ 26,734 $ 255 $ (10,153 ) $ (18,249 ) $ 55,251
Depreciation and Amortization 72,106 18,058 3,182 9,855 899 104,100
Impairment of Intangible Assets - - 2,425 - 2,425
Gain on Dispostion of Long-Lived Assets (2,397 ) (2,397 )
Acquisition-Related Charges   -     -     -       -       772       772  
Adjusted EBITDA $ 126,373 $ 44,792 $ 3,437 $ 2,127 $ (16,578 ) $ 160,151




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