10q10k10q10k.net

What changed in ATN International, Inc.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of ATN International, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+499 added−673 removedSource: 10-K (2024-03-15) vs 10-K (2023-03-15)

Top changes in ATN International, Inc.'s 2023 10-K

499 paragraphs added · 673 removed · 377 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

109 edited+45 added−165 removed34 unchanged
Biggest changeIn the first quarter of 2022, we discontinued providing private network services in this segment. ​ 2 Table of Contents The following chart summarizes the operating activities of our principal subsidiaries, the segments in which we reported our revenue and the markets we served during 2022. ​ ​ ​ ​ ​ ​ ​ ​ Segment Services Markets Tradenames International Telecom Mobility Services Bermuda, Guyana, US Virgin Islands One, GTT, Viya ​ ​ Fixed Services Bermuda, Cayman Islands, Guyana, US Virgin Islands One, Logic, GTT, Viya ​ ​ Carrier Services ​ Bermuda, Guyana, US Virgin Islands ​ One, GTT, Viya ​ ​ Managed Services ​ Bermuda, Cayman Islands, US Virgin Islands, Guyana ​ Fireminds, One, Logic, GTT, Viya US Telecom Mobility Services United States (rural markets) Choice, Choice NTUA Wireless ​ ​ Fixed Services ​ United States Alaska Communications, Commnet, Choice, Choice NTUA Wireless, Sacred Wind Communications, Ethos ​ ​ Carrier Services ​ United States ​ Alaska Communications, Commnet, Essextel, Sacred Wind Communications ​ Managed Services United States Alaska Communications, Choice ​ Our principal corporate offices are located at 500 Cummings Center, Suite 2450, Beverly, Massachusetts, 01915.
Biggest changeIn our international markets, we offer fixed services, mobility services, carrier services and managed services to customers in Bermuda, the Cayman Islands, Guyana and the US Virgin Islands. ​ The following chart summarizes the operating activities of our principal subsidiaries, the segments in which we reported our revenue and the markets we served during 2023. 3 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ International Telecom US Telecom Services Markets ​ Tradenames Services Markets ​ Tradenames Mobility Services ​ Bermuda, Guyana, US Virgin Islands ​ One, GTT, Viya Mobility Services United States (rural markets) ​ Choice, Choice NTUA Wireless Fixed Services ​ Bermuda, Cayman Islands, Guyana, US Virgin Islands ​ One, Logic, GTT, Viya Fixed Services ​ United States ​ Alaska Communications, Commnet, Choice, Choice NTUA Wireless, Sacred Wind Communications, Ethos, Deploycom Carrier Services ​ Bermuda, Guyana, US Virgin Islands ​ One, GTT, Viya Carrier Services ​ United States ​ Alaska Communications, Commnet, Essextel, Sacred Wind Communications Managed Services ​ Bermuda, Cayman Islands, US Virgin Islands, Guyana ​ Fireminds, One, Logic, GTT, Viya, Brava Managed Services United States ​ Alaska Communications, Choice ​ Our principal corporate offices are located at 500 Cummings Center, Suite 2450, Beverly, Massachusetts, 01915.
Our focus areas for engagement include skills development, manager performance, and diversity. Anonymous, aggregated results are shared with employees, and the results are used to drive our long-term action plans for how we can seek to continue to improve our work culture.
Our focus areas for engagement include skills development and manager performance. Anonymous, aggregated results are shared with employees, and the results are used to drive our long-term action plans for how we can seek to continue to improve our work culture.
These satellite services are used to provide Internet and WAN backhaul connectivity to our customers. We have deployed, and are working to deploy more, carrier-grade fiber optic networks strategically throughout the western United States to continue to serve governmental, educational, healthcare, business, consumer and tribal customers in Arizona, Nevada, New Mexico and Utah. Competition.
These satellite services are used to provide Internet and WAN backhaul connectivity to our customers. In the western United States, we have deployed, and are working to deploy more, carrier-grade fiber optic networks strategically throughout our markets to continue to serve governmental, educational, healthcare, business, consumer and tribal customers in Arizona, Nevada, New Mexico and Utah.
We are investing in the expansion of our regional fiber and network asset footprint, and in enhanced network reliability and route diversity, in the expectation that our carrier customers will have greater demand for higher capacity, higher reliability and lower latency backhaul to support their own investments in 5G network deployments. Mobility Services Mobility Services.
We are investing in the expansion of our regional fiber and network asset footprint, and in enhanced network reliability and route diversity, in the expectation that our carrier customers will have greater demand for higher capacity, higher reliability and lower latency backhaul to support their own investments in 5G network deployments. Fixed Services Services .
At the holding company level, we employ our executive management team and staff. Approximately 22% of our total employee population are covered by contracts with various unions. Employees represented by unions are located in Alaska and all our international markets except for the Cayman Islands.
At the holding company level, we employ our executive management team and staff. Approximately 24% of our total employee population are covered by contracts with various unions. Employees represented by unions are located in Alaska and all our international markets except for the Cayman Islands.
A smaller minority of customers subscribe to our postpaid plans that allow customers to select a plan with voice minutes, text messaging, a given amount of data and other features that recur on a monthly basis, which services are billed at the end of the service period.
A smaller minority of customers subscribe to our postpaid plans that allow customers to select a plan with voice minutes, text messaging, a given amount of data and other features that recur on a monthly basis, and are billed at the end of the service period.
The Public Utilities Commission of Guyana (or “PUC”) is an independent statutory body with the principal responsibility for regulating telecommunications rates and services in Guyana. The Ministry of Telecommunications, an agency of the Government of Guyana, has formal authority over telecommunications licensing and related issues.
The Public Utilities Commission of Guyana (or “PUC”) is an independent statutory body with the principal responsibility for regulating telecommunications rates and services in Guyana. The Ministry of Telecommunications, of the Government of Guyana, has statutory authority over telecommunications licensing and related issues.
Spectrum Licenses . We provide our wireless services pursuant to various commercial mobile radio services (“CMRS”) licenses issued by the FCC. Some of these licenses are site-based while others cover specified geographic market areas. The specific radio frequencies, the authorized spectrum amounts, and certain of the technical and service rules vary depending on the licensed service.
We provide our wireless services pursuant to various commercial mobile radio services (“CMRS”) licenses issued by the FCC. Some of these licenses are site-based while others cover specified geographic 11 Table of Contents market areas. The specific radio frequencies, the authorized spectrum amounts, and certain of the technical and service rules vary depending on the licensed service.
Our international voice and data networks link with the rest of the world principally through our ownership and investments in six undersea fiber - optic cables in the Caribbean and Atlantic regions. These cables are crucial arteries that supply access to communications services for islands and remote markets like the ones in which we operate.
Our international voice and data networks link with the rest of the world principally through our ownership and investments in undersea fiber - optic cables in the Caribbean and Atlantic regions. These cables are crucial arteries that supply access to communications services for islands and remote markets like the ones in which we operate. Sales and Marketing.
Historically, the most significant competitive challenge we face in our US wholesale wireless business is the extent to which our carrier customers choose not to roam on our networks or elect to build or acquire their own infrastructure in a market in which we operate, reducing or eliminating their need for our roaming services in those markets.
Historically, the most significant competitive challenge we face in our U.S. wholesale wireless business is the extent to which our carrier customers choose not to roam on our networks or elect to build or acquire their own infrastructure in a market in which we operate, reducing or eliminating their need for our roaming services in those markets.
We provide information technology services such as network, application, infrastructure and hosting services to both our business and consumer customers to complement our fixed services in our existing markets. ​ Through December 31, 2022, we had identified two operating segments to manage and review our operations and to facilitate investor presentations of our results.
We provide information technology services such as network, application, infrastructure and hosting services to both our business and consumer customers to complement our fixed services in our existing markets. ​ Through December 31, 2023, we identified two operating segments to manage and review our operations and to facilitate investor presentations of our results.
To complement our phone offerings, we sell a complete range of original equipment manufacturer and after - market accessories that allow our customers to 6 Table of Contents personalize their wireless experience, including phone protection, battery charging solutions and Bluetooth hands - free kits. Competition.
To complement our phone offerings, we sell a complete range of original equipment manufacturer and after - market accessories that allow our customers to personalize their wireless experience, including phone protection, battery charging solutions and Bluetooth hands - free kits. Competition.
We currently have roaming agreements with each of the three US national wireless network carriers (AT&T, T-Mobile, and Verizon Wireless) along with several other wireless service providers. Other than these agreements with the national carriers, our standard roaming agreements are usually terminable within 90 days.
We currently have roaming agreements with each of the three U.S. national wireless network carriers (AT&T, T-Mobile, and Verizon Wireless) along with several other wireless service providers. Other than these agreements with the national carriers, our standard roaming agreements are usually terminable within 90 days.
We regularly utilize performance development tools for our employees, which are focused on driving engagement and high performance through frequent communications throughout the year. Our annual employee engagement survey provides employees with the opportunity to share confidential feedback on what they believe has been working well and where they believe we can improve to better support our employees.
We regularly utilize performance development tools for our employees, which are focused on driving engagement and high performance through frequent communications throughout the year. 10 Table of Contents Our annual employee engagement survey provides employees with the opportunity to share confidential feedback on what they believe has been working well and where they believe we can improve to better support our employees.
Our network is among the most expansive in Alaska and forms the foundation of service to our customers. We operate in a largely two-player terrestrial wireline market and our customers are primarily business customers.
Our network is among the most expansive in Alaska 5 Table of Contents and forms the foundation of service to our customers. We operate in a largely two-player terrestrial wireline market and our customers are primarily business customers.
We celebrate different 11 Table of Contents perspectives and backgrounds because we believe they help us to have a stronger, more creative, and more successful workplace. We are proud to offer benefits to our employees that promote wellness and personal care, a safe work environment and career growth opportunities.
We celebrate different perspectives and backgrounds because we believe they help us to have a stronger, more creative, and more successful workplace. We are proud to offer benefits to our employees that promote wellness and personal care, a safe work environment and career growth opportunities.
In July 2022, we were approved to participate in the Federal Communication Commission’s Secure and Trusted Communications Networks Reimbursement Program (the “Replace and Remove Program”), designed to reimburse providers of communications services for reasonable costs incurred in the required removal, replacement, and disposal of covered communications equipment that have been deemed to pose a national security risk.
In July 2022, we were approved to participate in the Federal Communication Commission’s Secure and Trusted Communications Networks Reimbursement Program (the “Replace and Remove Program”), designed to reimburse providers of advanced communications services for reasonable costs incurred in the required removal, replacement, and disposal of communications equipment and services in their networks that has been deemed to pose a national security risk.
For further information about our financial segments and geographical information about our operating revenues and assets, see Notes 1 and 14 to the Consolidated Financial Statements included in this Report. As of December 31, 2022, we offered the following types of services to our customers: ● Mobility Telecommunications Services .
For further information about our financial segments and geographical information about our operating revenues and assets, see Notes 1 and 14 to the Consolidated Financial Statements included in this Report. As of December 31, 2023, we offered the following types of services to our customers: ● Fixed Telecommunications Services .
ATN Values Description C ommitment Operate for the Long-Term R espect Diversity and Inclusion E xcellence Smart and Determined Work A ccountability Do What You Say T houghtfulness Caring Behavior E mpowerment Leaders at Every Level ATN Workforce Overview As of December 31, 2022, we had approximately 2,400 employees, of whom approximately 1,100 were employed in the United States (including the US Virgin Islands), and approximately 1,300 were employed by our international subsidiaries.
ATN Values Description C ommitment Operate for the Long-Term R espect Diversity of Viewpoint E xcellence Smart and Determined Work A ccountability Do What You Say T houghtfulness Caring Behavior E mpowerment Leaders at Every Level ATN Workforce Overview As of December 31, 2023, we had approximately 2,300 employees, of whom approximately 1,000 were employed in the United States (including the US Virgin Islands), and approximately 1,300 were employed by our international subsidiaries.
(“GTT”), in which we hold an 80% interest, is subject to regulation in Guyana under the provisions of GTT’s License from the Government of Guyana, the Guyana Public Utilities Commission Act of 2016 as amended (or “PUC Law”) and the Guyana Telecommunications Act of 2016 (or “Telecommunications Law”).
Guyana Regulation Our subsidiary, GTT Inc. (“GTT”), in which we hold an 80% interest, is subject to regulation in Guyana under the provisions of GTT’s License from the Government of Guyana, the Guyana Public Utilities Commission Act of 2016 as amended (or “PUC Law”) and the Guyana Telecommunications Act of 2016 (or “Telecommunications Law”).
Our networks are monitored for performance around the clock in redundant monitoring centers to provide a high level of reliability and performance. Our network is extensive within Alaska’s urban areas and connects 9 Table of Contents our largest markets, including Anchorage, Fairbanks and Juneau with each other and the contiguous states as well as many rural areas.
Our networks are monitored for performance continuously in redundant monitoring centers to provide a high level of reliability and performance. Our network is extensive within Alaska’s urban areas and connects our largest markets, including Anchorage, Fairbanks and Juneau with each other and the contiguous states as well as many rural areas.
Revenues from our International 4 Table of Contents Telecom segment were approximately 49% and 57% of our consolidated revenues for fiscal years 2022 and 2021, respectively. Fixed Services High-speed data and related services . We offer high-speed broadband services to both residential and business customers in all our International Telecom markets.
Revenues from our International Telecom segment were approximately 49% of our consolidated revenues for fiscal years 2023 and 2022. 7 Table of Contents Fixed Services High-speed data and related services . We offer high-speed broadband services to both residential and business customers in all our International Telecom markets.
GTT provides domestic fixed (both wireline and wireless) and international voice and data services in Guyana pursuant to licenses from the Government of Guyana granting GTT the right to provide a variety of domestic fixed services (both wireline and wireless) and international voice and data services. These licenses were issued in October 2020.
GTT provides domestic fixed wireline and mobile as well as international voice and data services in Guyana pursuant to licenses from the Government of Guyana granting GTT the right to provide a variety of domestic fixed wireline and mobile and international voice and data services. These licenses were issued in October 2020.
Beginning on November 7, 2022, the results of the Sacred Wind Transaction are included in our US Telecom segment. Revenues from our US Telecom segment were approximately 51% and 43% of our consolidated revenues for fiscal years 2022 and 2021, respectively. Carrier Services Carrier Services. In Alaska, we provide wholesale voice and internet connectivity to carrier customers.
Beginning on November 7, 2022, the results of the Sacred Wind Transaction are included in our US Telecom segment. 4 Table of Contents Revenues from our US Telecom segment were approximately 51% of our consolidated revenues for fiscal years 2023 and 2022. Carrier Services Carrier Services. In Alaska, we provide wholesale voice and internet connectivity to carrier customers.
Our terrestrial fiber network on the North Slope of Alaska allows us to provide broadband solutions to the oil and gas sector and to advance our sales of managed IT services. Rural healthcare, education and business customers are served by a satellite earth station network utilizing a combination of GEO and LEO satellite capacity.
Our terrestrial fiber network on the North Slope of Alaska allows us to provide broadband solutions to the oil and gas sector and to advance our sales of managed IT services. Rural healthcare, education and business customers are served by a satellite earth station network utilizing a combination of Geosynchronous Equatorial Orbit (“GEO”) and low earth orbit (“LEO”) satellite capacity.
Universal Service Support and Contributions In general, all telecommunications providers are obligated to contribute to the Universal Service Fund (“USF”), which is used to promote the availability of qualifying telecommunications and broadband service to individuals and families qualifying for federal assistance, households located in rural and high-cost areas, and to schools, libraries, and rural health care providers.
Universal Service Support and Contributions In general, all telecommunications providers are obligated to contribute to the Universal Service Fund (“USF”), which is used to promote the availability of qualifying telecommunications and broadband service to low-income households, households located in rural and high-cost areas, and to schools, libraries, and rural health care providers.
Video Services Video services systems are regulated by the FCC under the Communications Act. We provide video services in the US Virgin Islands. The FCC regulates our programming selection through local broadcast TV station mandatory carriage obligations, constraints on our retransmission consent negotiations with local broadcast TV stations, and limited regulation of our carriage negotiations with cable programming networks.
We provide video services in the US Virgin Islands. The FCC regulates our programming selection through local broadcast TV station mandatory carriage obligations, constraints on our retransmission consent negotiations with local broadcast TV stations, and limited regulation of our carriage negotiations with cable programming networks.
We are obligated to pay certain annual regulatory fees and assessments to support FCC wireless industry regulation, as well as fees supporting federal universal service programs, number portability, regional database costs, centralized telephone numbering administration, telecommunications relay service for the hearing impaired and application filing fees.
We are obligated to pay certain annual regulatory fees and assessments to support FCC wireless industry regulation, as well as fees supporting federal universal service programs, number portability, regional database costs, centralized telephone numbering administration, telecommunications relay service for people who are deaf or hard of hearing, and application filing fees.
We also actively evaluate potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, and generally look for those that we believe fit our profile of telecommunications businesses and have the potential to complement our “glass and steel” and “first to fiber” approach in markets while generating steady excess cash flows over extended periods of time.
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 are subject to audit by the Universal Service Administration Company with respect to our federal contributions and our receipts of universal service funding. To our knowledge, we comply in all material respects with applicable federal and state USF assessment and support requirements. USF High-Cost Support.
We contribute to the USF and also receive various forms of USF support. We are subject to audit by the Universal Service Administrative Company (“USAC”) with respect to our federal contributions and our receipts of universal service funding. To our knowledge, we comply in all material respects with applicable federal and state USF assessment and support requirements. USF High-Cost Support.
We provide a number of broadband internet plans with varying speeds to address different customer needs and price requirements in our various markets. As of December 31, 2022, we had approximately 148,300 broadband customers across our international markets and approximately 74% of those customers had access to high speed services. Voice services.
We provide a number of broadband internet plans with varying speeds to address different customer needs and price requirements in our various markets. As of December 31, 2023, we had approximately 157,000 broadband customers across our international markets and approximately 84% of those customers had access to high-speed networks. Voice services.
The FCC has also adopted guidelines and methods for evaluating human exposure to radiofrequency field emissions from radio equipment. To our knowledge, all of our radio systems on towers that we own or lease comply in all material respects with these requirements, guidelines, and methods. The FCC has adopted requirements for CMRS providers to implement basic 911 and E-911 services.
In addition, the FCC has also adopted guidelines and methods for evaluating human exposure to emissions of radiofrequency radiation from radio equipment. To our knowledge, all of our radio systems on towers that we own or lease comply in all material respects with these requirements, guidelines, and methods.
BUSINESS Overview We provide digital infrastructure and communications services in the United States and internationally, including in the Caribbean region, with a focus on smaller markets, many of which are rural or remote, with a growing demand for infrastructure investments, Through our operating subsidiaries, we primarily provide: (i) carrier and enterprise 1 Table of Contents communications services, such as terrestrial and submarine fiber optic transport, and communications tower facilities; and (ii) fixed and mobile telecommunications connectivity to residential, business and government customers, including a range of high-speed internet and data services, fixed and mobile wireless solutions, and video and voice services.
Through our operating subsidiaries, we primarily provide: (i) fixed and mobile telecommunications connectivity to residential, business and government customers, including a range of high-speed internet and data services, fixed and mobile wireless solutions, and video and voice services; and (ii) carrier communications services, such as communications tower facilities to large business and government customers, and terrestrial and submarine fiber optic transport. ​ 2 Table of Contents About the Company We are a leading provider of digital infrastructure and communications services with a focus on rural and remote markets in the United States, and internationally, including Bermuda and the Caribbean region.
To the 14 Table of Contents extent that we provide interconnected VoIP service, we are subject to a number of these obligations, and, to our knowledge, we comply in all material respects with applicable VoIP requirements. Fixed and Wireless Services Net Neutrality .
To the extent that we provide interconnected VoIP service, we are subject to a number of these obligations, and, to our knowledge, we comply in all material respects with applicable VoIP requirements.
Many of the markets in which we operate are small and remote, and in some cases are subject to government restrictions on granting work visas, all of which makes it difficult to attract and retain talented and qualified managers and staff in those markets.
We rely heavily on local management teams to run our subsidiary operating units. Many of the markets in which we operate are small and remote, and in some cases are subject to government restrictions on granting work visas, all of which makes it difficult to attract and retain talented and qualified managers and staff in those markets.
(“Alaska Communications”), an Alaska based entity that provides fixed services, carrier services and managed services to primarily carrier and business customers in the State of Alaska and beyond using its statewide and interstate telecommunications network.
In July 2021, we completed the acquisition of Alaska Communications Systems Group, Inc. (“Alaska Communications”), an Alaska based entity that provides fixed services, carrier services and managed services to primarily carrier and business customers in the State of Alaska and beyond using its statewide and interstate telecommunications network.
While we continue to provide services pursuant to these roaming agreements, due to demand from our carrier customers, we have shifted our business focus away from traditional roaming and toward a network infrastructure model of carrier services further described below.
While we continue to provide services pursuant to these roaming agreements, responding to changes in the business environment and customer needs, we have shifted our business focus away from traditional roaming and toward a network infrastructure model of carrier services further described below.
By maintaining these relationships and leveraging our comprehensive management experience and operational, technical, and financial expertise, we can assist these local management teams in further improving operations and growing their businesses. ​ ● Disciplined Approach to Capital Allocation Designed for Long-Term Investment.
By maintaining these relationships and leveraging our management experience and operational, technical, and financial expertise with company-wide resources, we can assist these local management teams in further improving operations and growing their businesses. ​ ● Capital Allocation Strategy Designed for Long-Term Investor Return .
In the United States, we offer fixed services, carrier services, and managed services to business customers and consumers in Alaska and the western United States. As of December 31, 2022 we provided mobility services to retail customers in the western United States.
These operating segments are as follows: ​ ● US Telecom . In the United States, we offer fixed services, carrier services, and managed services to business customers and consumers in Alaska and the western United States. As of December 31, 2023 we provided mobility services to retail customers in the western United States. ​ ● International Telecom .
We continuously upgrade our network to provide higher levels of performance, higher bandwidth speeds, increased levels of security and additional value-added services to our customers. We operate significant terrestrial and submarine fiber miles which serve as the backbone of our network as well as now serving over 1,000 buildings with fiber.
We continually upgrade our network to provide higher levels of performance, higher bandwidth speeds, increased levels of security and additional value-added services to our customers. We operate significant terrestrial and submarine fiber miles which serve as the backbone of our network with a focus on reaching enterprise customers.
In the western United States, we are increasingly providing network infrastructure services as part of our expanded carrier services, such as tower leasing and transport facilities to our carrier partners, to supplement our historic revenue base.
In the western United States, we are increasingly providing network infrastructure services as part of our expanded carrier services, such as tower leasing and transport facilities to our carrier partners, to supplement our historic revenue base. By the end of 2023, we have completed 88% of the build of AT&T’s network for the First Responder Network Authority (“FirstNet”).
While these solutions are similarly vulnerable to competitive overbuild, managed carrier services are offered under longer-term agreements providing us with a predictable source of revenue to support our operating costs. Fixed Services Services .
While these solutions are similarly vulnerable to competitive overbuild, managed carrier services are offered under longer-term agreements providing us with a predictable source of revenue to support our operating costs. International Telecom Segment Our International Telecom segment generates mobility services, fixed services, carrier services, and managed services revenues in Bermuda, the Cayman Islands, Guyana and the US Virgin Islands.
(“Sacred Wind”), a rural telecommunications provider in New Mexico (the “Sacred Wind Transaction”). As part of the Sacred Wind Transaction, the Company paid a combination of cash and equity for Sacred Wind, resulting in the Sacred Wind Stockholders becoming minority owners in the combined Commnet and Sacred Wind businesses.
(“Sacred Wind”), a rural telecommunications provider in New Mexico (the “Sacred Wind Transaction”). As part of the Sacred Wind Transaction, we paid a combination of cash and equity for Sacred Wind, resulting in the Sacred Wind stockholders becoming minority owners in the new business formed by combining Sacred Wind with our existing operations in the western United States, Commnet.
US Virgin Islands Regulation Virgin Islands Public Service Commission Our wireline (i.e., voice, broadband internet, and cable video) operations in the US Virgin Islands are subject to the US Virgin Islands Public Utilities Code, pursuant to which the Virgin Islands Public Service Commission (“PSC”) regulates certain telecommunications and cable TV services that Viya provides in the US Virgin Islands.
US Virgin Islands Regulation Our wireline (i.e., voice, broadband internet, and cable video) operations in the US Virgin Islands are subject to the US Virgin Islands Public Utilities Code, pursuant to which the Virgin Islands Public Service Commission (“PSC”) regulates certain telecommunications and cable TV services that Viya provides in the US Virgin Islands. 15 Table of Contents Our video, internet, and wireless companies in the US Virgin Islands also receive tax benefits as qualifying participants in the US Virgin Islands’ Research & Technology Park (“RTPark”) program.
The FCC’s Rural Health Care Universal Service Support Mechanism (“RHC program”) provides funding to help make broadband telecommunications and Internet access services provided by us and other service providers affordable for eligible rural health care providers. It is comprised of two parts.
The FCC’s Rural Health Care Universal Service Support Mechanism (“RHC program”) provides funding to help make broadband telecommunications and Internet access services provided by us and other service providers affordable for eligible rural health care providers. We believe we are in compliance with the current RHC program rules.
Although we cannot predict whether the FCC will further modify its approach to using USF support to subsidize voice and broadband service to low-income consumers, these subsidies do not represent a material amount of our revenue. E-Rate .
Although we believe that we comply with the rules of these subsidy programs, we cannot predict whether the FCC will further modify its approach to using USF support to subsidize voice and broadband service to low-income consumers. E-Rate .
Congress is considering appropriating additional funding to meet the total demand for reimbursement, but we cannot predict whether or, if so, when or how much such additional funding will be allocated. Thus, we cannot predict whether there will be sufficient available funding to reimburse our subsidiaries for all of their replacement costs.
Congress is considering appropriating additional funding to meet the remaining 60% of the demand for reimbursement, but we cannot predict whether or when such additional funding will be allocated, or how much, if any, will be allocated.
We believe that strong local management enhances our close relationship with customers and reduces risk. Our businesses typically have strong local brand identities that help them become leaders in the markets they serve.
Our businesses typically have strong local brand identities that help them become leaders in the markets they serve.
We offer a diverse line of wireless devices and accessories designed to meet both the personal and professional needs of our customers. Our device assortment includes a wide range of smartphones including those featuring the Android™ and iOS™ operating systems in addition to a full line of feature phones, wireless hot spots and various wireless solutions for small businesses.
These devices support a variety of wireless connectivity technologies that are deployed across our various markets. Our device assortment includes a wide range of smartphones including those featuring the Android™ and iOS™ operating systems in addition to a full line of feature phones, wireless hot spots and various wireless solutions for small businesses.
In addition to CMRS licenses, our wireless business relies on common carrier and non-common carrier fixed point-to-point microwave licenses issued by the FCC.
In addition to CMRS licenses, our wireless business relies on common carrier and non-common carrier fixed point-to-point microwave licenses issued by the FCC. Most of our license grants are for a period of ten years and are renewable upon application to the FCC.
With respect to our international long - distance business, we also collect payments from foreign carriers for handling international long - distance calls originating from the foreign carriers’ countries and terminating on our network.
We offer fixed voice services that include local exchange, regional and long distance calling and voice messaging services in Bermuda, Guyana, and the US Virgin Islands. With respect to our international long - distance business, we also collect payments from foreign carriers for handling international long - distance calls originating from the foreign carriers’ countries and terminating on our network.
We believe we compete for wireless retail customers in our international markets based on features, price, technology deployed, network coverage (including through roaming arrangements), quality of service and customer care. We compete against Digicel and Liberty Latin America in the Caribbean region, other smaller local providers, and in some markets, against one or more US national operators.
We believe we compete for wireless retail customers in our international markets based on features, price, technology deployed, network coverage (including through roaming arrangements), quality of service and customer care.
As of December 31, 2022, we had approximately 32,000 video customers across our markets. We have several offerings available to our video customers, including basic and tiered local and cable TV channels grouped into various content categories, such as news, sports and entertainment. Network.
We have several offerings available to our video customers, including basic and tiered local and cable TV channels grouped into various content categories, such as news, sports and entertainment. Network. We offer our broadband services over our fiber-optic, copper and coaxial cable networks in our international markets.
We offer mobile communications services over our wireless networks and related equipment (such as handsets) to both our business and consumer customers. ​ ● Fixed Telecommunications Services . We provide fixed data and voice telecommunications services to business and consumer customers. These services include consumer broadband and high speed data solutions for businesses.
We offer mobile communications services over our wireless networks and related equipment (such as handsets) to both business and consumer customers. ​ ● Managed Services .
We use the cash generated from our operations to re-invest in organic growth in our existing businesses, to make strategic investments in additional businesses, and to return cash to our investors through dividends or stock repurchases.
We use the cash generated from our operations to maintain an appropriate ratio of debt and cash on hand and to re-invest in organic growth, to fund capital expenditures, to return cash to our stockholders through dividends or stock repurchases, and to make strategic investments or acquisitions.
Customers are also able to purchase devices such as modems, routers, home security systems and accessories to enhance their services through these same channels. We bundle data connectivity devices and add-on 5 Table of Contents accessories similar to what is available in most other countries.
Customers are also able to purchase devices, and accessories to enhance their services through these same channels. We offer a full suite of mobile devices and add on accessories similar to what is available in most other countries in the world.
The statutory framework provides OfReg powers in respect of licensing, infrastructure sharing, advertising guidelines, competition issues, and the identification and remedying of significant market power concerns. ​ 22 Table of Contents ​
The statutory framework provides the RA powers in respect of licensing, consumer protections, ex post competition issues, and the identification and remedying of significant market power concerns.
These facilities provide survivable service to and from Alaska, with key monitoring and disaster recovery capabilities for our customers. We also have usage rights on a third undersea fiber network connecting Alaska to the continental United States.
These facilities provide survivable service to and from Alaska, with key monitoring and disaster recovery capabilities for our customers. We also have several ownership rights on other cables connecting Alaska to the continental United States. Our Network Operations Control Center is located in Hillsboro, Oregon and we have collocation facilities located in Portland, Oregon and Seattle, Washington.
The FCC also may deny license applications and, in extreme cases, revoke licenses if it finds that an entity lacks the requisite qualifications to be a licensee. To our knowledge, there are no circumstances that would warrant such a finding by the FCC against us.
While our license renewal applications have been regularly granted by the FCC in the past, there can be no assurance that all of our licenses will be renewed in the future. The FCC also may deny license applications and, in extreme cases, revoke licenses if it finds that an entity lacks the requisite qualifications to be a licensee.
The Communications Act also requires us to offer competing carriers interconnection and non-discriminatory access to certain facilities and services designated as essential for local competition.
The Communications Act and regulations promulgated thereunder require, among other things, that we offer regulated interstate telecommunications common carrier services at just, reasonable, and non-discriminatory rates and terms. The Communications Act also requires us to offer competing carriers interconnection and non-discriminatory access to certain facilities and services designated as essential for local competition.
We believe our breadth of services and local economies of scale provide us with a strong competitive position and the ability to win and retain an economically viable share of those markets.
We believe our breadth of services and regional strategy to strengthen and enhance our business offerings, provide us with a strong competitive position and the ability to win and retain an economically viable share of those markets. Mobility We provide mobile, data, and voice services to retail and business customers in Bermuda, Guyana and in the US Virgin Islands.
For some markets, fixed services also include video services and revenue derived from support under certain government programs. ​ ● Carrier Telecommunication Services . We deliver services to other telecommunications providers such as the leasing of critical network infrastructure such as tower and transport facilities, wholesale roaming, site maintenance and international long-distance services. ​ ● Managed Services .
We deliver services to other telecommunications providers including the leasing of critical network infrastructure such as tower and transport facilities, wholesale roaming and long distance voice services, site maintenance and international long-distance services. ​ ● Mobile Telecommunications Services .
We have built a platform of resources and expertise to support our operating subsidiaries and to improve their quality of service with greater economies of scale and expertise than would typically be available at the operating subsidiary level.
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 offer our fixed services over our fiber-optic, copper and coaxial cable networks in our international markets. All fixed access lines in our network are digitally switched from our switching centers in the US Virgin Islands, Bermuda and Guyana. Our switching centers provide dedicated monitoring of our network to ensure quality and reliable service to our customers.
Our switching centers in these markets enable dedicated monitoring of our network designed to ensure quality and reliable service to our customers. In Bermuda and the US Virgin Islands, we deliver our services via a hybrid fiber coaxial (“HFC”) cable network and via fiber-optic network.
In order to qualify, we are required to maintain certain capital investments over the first five years of the agreement, pay monthly management fees of 0.4% of tenant company revenue, make annual charitable contributions to the University of the Virgin Islands, purchase products and services locally when feasible and provide in-kind services to RTPark. Guyana Regulation Our subsidiary, GTT Inc.
These benefits resulted in tax exemptions of approximately $2.9 million during the year ended December 31, 2023. In order to qualify, we are required to pay monthly management fees of 0.4% of tenant company revenue, make annual charitable contributions to the University of the Virgin Islands, purchase products and services locally when feasible and provide in-kind services to RTPark.
The durability of these businesses generates steady excess cash flows over extended periods of time that we then utilize to re-invest in organic growth in our existing businesses, make strategic investments in additional businesses, and return cash to our investors through dividends or stock repurchases .
When evaluating investment opportunities, we seek out infrastructure-based services that result in steady, long-term cash flows. The durability of these businesses generates steady operating cash flows over extended periods of time that we seek to re-invest in our existing businesses, reduce our debt levels, and return to our investors through dividends or stock repurchases .
The EBBP provided eligible low-income consumers and students with a monthly subsidy for the purchase of broadband Internet access service from service providers that elected to participate in the program, which we did.
The FCC’s Lifeline support mechanism provides a subsidy to eligible low-income consumers against the cost of voice services, as well as broadband in CAF II locations and beginning January 1, 2022, the FCC established the Affordable Connectivity Program (“ACP”), which provides eligible low-income consumers and students with a monthly subsidy for the purchase of broadband Internet access service from service providers that elected to participate in the program, which we did.
Our sales channels are strategically located throughout our service areas manned by trained, branded, and supported sales and service representatives. Competition. We compete with a limited number of other providers, including Digicel and Liberty Latin America in select markets, with respect to various services.
We compete with a limited number of other providers, including Digicel, Liberty Latin America, and individual newer entrants in select markets, with respect to various services.
In Bermuda and the US Virgin Islands, we deliver our services via a hybrid fiber coaxial (“HFC”) cable network and via fiber-optic network. In the Cayman Islands and Guyana, we also provide fixed services via fiber-optic network, DSL and FWA. These networks give us expanded Internet access coverage within our International Telecom segment.
In the Cayman Islands and Guyana, we also provide fixed services via fiber-optic network, DSL and FWA. These networks give us expanded internet access coverage within our International Telecom segment. We make efforts to construct our network with materials and routes redundancies that can withstand the climate of the regions, such as high winds.
FCC Replace and Remove Program In November 2019, the FCC adopted a rule prohibiting the use of USF support to purchase or obtain any equipment or services produced or provided by certain companies determined to pose an unacceptable risk to US national security.
Historically, E-rate has primarily supported services that connect eligible school buildings. To our knowledge, we comply with applicable E-Rate requirements. FCC Replace and Remove Program The FCC prohibits the use of USF support to purchase or obtain any equipment or services produced or provided by certain companies determined to pose an unacceptable risk to US national security.
These fees are subject to change periodically by the FCC and the manner in which carriers may 13 Table of Contents recoup these fees from customers is subject to various restrictions. To our knowledge, we comply in all material respects with applicable FCC regulatory fee and assessment requirements.
These fees are subject to periodic change by the FCC and the manner in which carriers may recoup these fees from customers is subject to various restrictions.
We developed the values listed below to reflect both our current culture and the values that we strive to embody to attract and maintain key talent. We endeavor to implement these values every day through employee engagement events, regular communication on company goals and milestones, and foster a fun and diverse workplace.
We endeavor to implement these values every day through employee engagement events, regular communication on company goals and milestones, and foster a connected and empowered workplace.
A failure to meet or maintain compliance with the Communications Act and/or the FCC’s rules may subject us to fines, forfeitures, penalties, or other sanctions. To our knowledge, we comply in all material respects with applicable FCC technical and reporting requirements.
Public Interest and Safety Obligations . The Communications Act and the FCC’s rules impose additional requirements upon wireless service providers. A failure to meet or maintain compliance with the Communications Act and/or the FCC’s rules may subject us to fines, forfeitures, penalties, or other sanctions.
We offer a full suite of mobile devices and add on accessories similar to what is available in most other countries in the world. Our sales channels are strategically located throughout our service areas manned by trained, branded, and supported sales and service representatives. Handsets and Accessories.
Our sales channels are strategically located throughout our service areas manned by trained, branded, and supported sales and service representatives. Handsets and Accessories. We offer a diverse line of wireless devices and accessories designed to meet both the personal and professional needs of our customers.
As of the end of 2022, we believe we have a good relationship with our unions. Commitment to Local Management, Diversity and Inclusion We seek engaged managers who have strong values, integrity, knowledge of our market and business model, and have respect for differing viewpoints.
Commitment to Local Management and Diversity of Viewpoint We seek engaged managers who have strong values, integrity, knowledge of our market and business model, and have respect for differing viewpoints. We strive to create a diverse working environment that creates a greater understanding of our differences and makes us a stronger company.
Under certain circumstances, federal law also requires telecommunications carriers to provide law enforcement agencies with capacity and technical capabilities to support lawful wiretaps pursuant to the Communications Assistance for Law Enforcement Act (“CALEA”). Federal law also requires compliance with wiretap related record keeping and personnel related obligations.
We are required to provide law enforcement agencies with capacity and technical capabilities to support lawful wiretaps pursuant to the Communications Assistance for Law Enforcement Act.
Our ability to offer full-service solutions across multiple LEC service areas and very remote sites back to mobile telephone switching offices continues to be market differentiator and a driver for our success. In the western United States, we are continuing to expand our capacity offerings with a focus on enhancing our owned and leased transport facilities.
Our ability to offer full-service solutions across multiple LEC service areas and very remote sites back to mobile telephone switching offices continues to be market differentiator and a driver for our success. 6 Table of Contents Our fixed services in the United States also face additional competitive pressure from the continued development and commercialization of LEO satellite technologies with the capacity for providing high-quality data services to our customers.
Human Capital Resources People and Culture We know that our employees are one of our most valuable assets to realize our mission to digitally empower people and communities so they can connect with the world and prosper. We do this through meeting the everyday connectivity needs of rural and historically underserved communities.
We compete against Digicel and Liberty Latin America in the Caribbean region, other smaller local providers, and in some markets, against one or more US national operators. ​ 9 Table of Contents Human Capital Resources People and Culture We know that our employees are our most valuable assets to realize our mission to digitally empower people and communities so they can connect with the world and prosper.
In the western United States, we provide fixed services to business customers such as schools, libraries, mine operators and state and local governments as well as residential customers. As of December 31, 2022, we pass roughly 442,000 premises with broadband connectivity of some kind in our U.S. Telecom segment. Network.
In the western United States, we provide fiber and fixed wireless services to business customers such as schools, libraries, mine operators and state and local governments as well as residential customers. Through our Sacred Wind acquisition, our focus in the western United States is to continue to build-out our residential and commercial broadband services. Network.
Our annual, quarterly, periodic and current reports, proxy statements and other public filings are also available free of charge on the EDGAR Database on the SEC's Internet website at www.sec.gov. Strategy Our mission is to digitally empower people and communities so that they can connect with the world and prosper.
Our annual, quarterly, periodic and current reports, proxy statements and other public filings are also available free of charge on the EDGAR Database on the SEC's Internet website at www.sec.gov. US Telecom Segment Our US Telecom segment generates fixed services, carrier services, mobility services, and managed services revenues in Alaska and parts of the western United States.

… 239 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

70 edited+24 added−65 removed44 unchanged
Biggest changeIn addition, we will face increased competition securing construction crews and equipment with the increased number of construction projects across the United States spurred on by these government awards. ​ ● In Bermuda, the regulator has declared our telecommunications company “dominant” in certain sectors, which may negatively impact our ability to compete in the market, though we are disputing the process and authority. ​ ● Increased competition, whether from new entrants or increased capital investment by our competitors in their existing networks, will make it more difficult for us to attract and retain customers in our small markets, which could result in lower revenue and cash flow from operating activities. ​ 27 Table of Contents We may have difficulty funding multiple opportunities across our businesses.
Biggest changeIncreased competition, whether from new entrants or increased capital investment by our competitors in their existing networks, will make it more difficult for us to attract and retain customers in our small markets, which could result in lower revenue and cash flow from operating activities.
Major business initiatives are underway with respect to improvement in mobile and other retail sales in all markets, digitization of internal processes to allow for quicker response time to customer requirements, modernization of existing internal processes in select markets and revising the strategy of some of our US Telecom businesses to develop additional revenue streams, including the substantial construction and support undertakings of the FirstNet project and Replace and Remove program.
Major business initiatives are underway with respect to improvement in mobile and other retail sales in all markets, digitization of internal processes to allow for quicker response time to customer requirements, modernization of existing internal processes in select markets and revising the strategy of some of our US Telecom businesses to develop additional revenue streams, including the substantial construction and support undertakings of the FirstNet project and the Replace and Remove program.
As a result, he has the ability to exert significant influence over all matters presented to our stockholders for approval, including election and removal of our directors and change of control transactions. His interests may not always coincide with the interests of other holders of our Common Stock.
As a result, he has the ability to exert significant influence over all matters presented to our stockholders for approval, including the election and removal of our directors and change of control transactions. His interests may not always coincide with the interests of other holders of our Common Stock.
In all of our markets, the local union may not provide consent when needed to execute upon strategic new initiatives or cost saving measures, it may require additional wages, benefits or other consideration be paid in return for its consent, or it may call for a work stoppage against our operating companies.
In all of our markets, the local union may not provide consent when needed to execute upon strategic new initiatives or cost saving measures, it may require additional wages, benefits or that other consideration be paid in return for its consent, or it may call for a work stoppage against our operating companies.
The supply and price of crude oil can be volatile and influenced by a myriad of factors beyond our control, including foreign actors (like OPEC), worldwide supply and demand, war, economic sanctions, natural disasters and other events, the move by many governments, businesses, and institutions towards “de-carbonization” and political conditions.
The supply and price of crude oil can be volatile and influenced by a myriad of factors beyond our control, including foreign actors (like OPEC), worldwide supply and demand, war, economic sanctions, natural disasters, the move by many governments, businesses, and institutions towards “de-carbonization” and other political conditions.
On November 5, 2019 and January 22, 2021 Alaska Communications received additional letters from the FCC Enforcement Bureau requesting additional information, to which it responded. To date, Alaska Communications has been working with the FCC’s Enforcement to provide it the information it is seeking and has engaged in discussions with respect to the investigation.
On November 5, 2019 and January 22, 2021 Alaska Communications received additional letters from the FCC Enforcement Bureau requesting additional information, to which it responded. To date, Alaska Communications has been working with the FCC Enforcement Bureau to provide it the information it is seeking, and has engaged in discussions with respect to the investigation.
Furthermore, we believe that there is, and will continue to be, strong competition for qualified personnel in the communications industry and in our markets, and we cannot be certain that we will be able to attract and retain the personnel necessary for the development of our business.
We believe that there is, and will continue to be, strong competition for qualified personnel in the communications industry and in our markets and we cannot be certain that we will be able to attract and retain the personnel necessary for the development of our business.
Much of our underlying physical infrastructure (particularly in Guyana and Alaska), including buildings, fleet vehicles and related systems and equipment, has been in service for an extended period of time.
In addition, much of our underlying physical infrastructure (particularly in Guyana and Alaska), including buildings, fleet vehicles and related systems and equipment, has been in service for an extended period of time.
We are highly dependent on our information technology (“IT”) systems for the operation of our network, our facilities, delivery of services to our customers and the compilation of our financial results. Failure of these IT systems, through cyberattacks, breaches of security, equipment failures, human error or otherwise, may cause disruptions to our operations.
We are highly dependent on our information technology (“IT”) systems for the operation of our network, our facilities, delivery of services to our customers and the compilation of our financial results. Failure of these IT systems, through cyberattacks, breaches of security, human error or otherwise, may cause disruptions to our operations.
The illiquidity of our investments may make it difficult for us to quickly 34 Table of Contents obtain cash equal to the value at which we record our investments if the need arises to satisfy the repurchase of such investments from our other equity investors in the event such company desires, or in the case of our Alaska Transaction and Sacred Wind Transaction, may be required to repurchase such securities pursuant to contractual arrangements.
The illiquidity of our investments may make it difficult for us to quickly obtain cash equal to the value at which we record our investments if the need arises to satisfy the repurchase of such investments from our other equity investors in the event such company desires, or in the case of our Alaska Transaction and Sacred Wind Transaction, may be required to repurchase such securities pursuant to contractual arrangements.
These include restrictions on our ability to do the following: ​ ● incur additional debt; ​ ● create liens or negative pledges with respect to our assets; 32 Table of Contents ​ ● pay dividends or distributions on, or redeem or repurchase, our capital stock; ​ ● make investments, loans or advances or other forms of payments; ​ ● issue, sell or allow distributions on capital stock of specified subsidiaries; ​ ● enter into transactions with affiliates; or ​ ● merge, consolidate or sell our assets.
These include restrictions on our ability to do the following: ● incur additional debt; ● create liens or negative pledges with respect to our assets; ● pay dividends or distributions on, or redeem or repurchase, our capital stock; ● make investments, loans or advances or other forms of payments; ● issue, sell or allow distributions on capital stock of specified subsidiaries; ● enter into transactions with affiliates; or ● merge, consolidate or sell our assets.
As labor demands in certain key markets exceed the supply of eligible workers, however, we may increasingly need to rely on remote workers to fill open positions. We rely heavily on local management to run our operating units.
Nonetheless, as labor demands in certain key markets exceed the supply of eligible workers, we may increasingly need to rely on remote workers to fill open positions. We rely heavily on local management to run our operating units.
Congress is considering appropriating additional funding to meet the total demand for reimbursement, but we cannot predict whether or when such additional funding will be allocated, or how much. Thus, we cannot predict whether there will be sufficient available funding to reimburse our subsidiaries for all of their costs in this context.
Congress is considering appropriating additional funding to meet the total demand for reimbursement, but we cannot predict whether or when such additional funding will be allocated, or how much, if any, will be allocated. Thus, we cannot predict whether there will be sufficient available funding to reimburse our subsidiaries for all of their approved costs in this context.
We cannot be sure that these types of events will not have an impact in the future or that we can procure insurance coverage against these types of severe weather and geological events under reasonable business terms and conditions, or that any insurance coverage we are able to maintain will adequately compensate us for all damage and economic losses resulting from natural catastrophes.
We cannot be sure that these types of events will not have an impact in the future or that we can procure insurance coverage against these types of severe weather and geological events under reasonable business terms and conditions, or that any insurance coverage we are able to maintain will fully fund the replacement of assets and adequately compensate us for all damage and economic losses resulting from natural catastrophes.
Investment agreements for both our majority and minority held subsidiaries often contain investor rights and obligations, such as rights of first refusal, co-sale, and "drag along" provisions related to liquidity events and transfers that may force us to sell or exit our holdings at times or on terms that are not optimal or limit our ability to sell or exit our holdings when we would like to.
Investment agreements for both our majority and minority held subsidiaries often contain investor rights and obligations, such as rights of first refusal, co-sale, and “drag along” provisions related to liquidity events and transfers that may force us to sell or exit our holdings at times or on terms that are not optimal or limit our ability to sell or exit our holdings when we would like to.
If any of the above circumstances arise, it could result in impairments to such investments, and could have a material adverse impact on our earnings, cash flow and financial condition. ​ ​ ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If any of the above circumstances arise, it could result in impairments to such investments, and could have a material adverse impact on our earnings, cash flow and financial condition. ​ ITEM 1B. UNRESOLVED STAFF COMMENTS None. 25 Table of Contents
This could result in a substantial unexpected contribution requirement 33 Table of Contents and making such a contribution could have a material adverse effect on Alaska Communications’ cash position and other financial results. These sources of potential liability are difficult to predict.
This could result in a substantial unexpected contribution requirement and making such a contribution could have a material adverse effect on Alaska Communications’ cash position and other financial results. These sources of potential liability are difficult to predict.
Failure to provide these services or to upgrade to new technologies on a timely basis and at an acceptable cost, or to secure any necessary regulatory approvals to roll out such new technologies on a timely basis all could have a material adverse effect on our ability to compete with carriers in our markets.
Failure to provide these services or to upgrade to new technologies on a timely basis and at an acceptable cost, or to secure any necessary regulatory approvals 20 Table of Contents to roll out such new technologies on a timely basis all could have a material adverse effect on our ability to compete with carriers in our markets.
The shift to remote work, precipitated by the COVID-19 pandemic, seems to have exacerbated that competition and may continue to impact the labor pool and labor costs in many of our markets. While our shift to remote work was successful, we have found that it creates added challenges and costs with respect to employee engagement and productivity.
The shift to remote work, precipitated by the COVID-19 pandemic, seems to have exacerbated that competition and may continue to impact the labor pool and labor costs in many of our markets. We have found that remote work creates added challenges and costs with respect to employee engagement and productivity.
We may not be able to adequately fund the maintenance and replacement of this infrastructure on a basis timely enough to avoid material outages, or be able to locate replacement parts or spares to repair existing equipment due to its age.
We may not be able to adequately fund the maintenance and replacement of this infrastructure on a basis timely enough to avoid material outages, or accurately predict equipment failure rates, or be able to locate replacement parts or spares to repair existing equipment due to its age.
Low trading volume of our stock may limit our stockholders’ ability to sell shares and/or result in lower sale prices. For the three months prior to March 15, 2023, the average daily trading volume of our Common Stock was approximately 44,000 shares.
Low trading volume of our stock may limit our stockholders’ ability to sell shares and/or result in lower sale prices. For the three months prior to March 15, 2024, the average daily trading volume of our Common Stock was approximately 94,000 shares.
Alaska Communications participates in the Universal Service Administration Company’s (“USAC”) Rural Health Care universal service fund (“USF”) program and received inquiries and requests for information from USAC, which administers the program, in connection with both current funding requests and, beginning with a letter dated June 2, 2017 from USAC’s auditors, prior period support payments.
Alaska Communications participates in the Universal Service Administrative Company’s (“USAC”) Rural Health Care universal service fund (“USF”) program and received inquiries and requests for information from USAC, which 21 Table of Contents administers the program, in connection with both current funding requests and, beginning with a letter dated June 2, 2017 from USAC’s auditors, prior period support payments.
Inclement weather, changes in meteorological conditions and other natural disasters may materially disrupt our operations. Many of the areas in which we operate have experienced severe weather conditions including hurricanes, tornadoes, blizzards, fires, damaging storms, floods and earthquakes.
Inclement weather, changes in meteorological conditions and other natural disasters may materially disrupt our operations. Many of the areas in which we operate have experienced severe weather conditions including hurricanes, tornadoes, blizzards, fires, damaging storms, floods and earthquakes. Such events may materially disrupt and adversely affect our business operations.
Prior, Jr., our founder and the father of our Chairman and Chief Executive Officer, together with related entities, affiliates and family members (including our Chairman and Chief Executive Officer), beneficially owns approximately 27% of our outstanding Common Stock.
Prior, Jr., our founder and the father of our Executive Chairman, together with related entities, affiliates and family members (including our Executive Chairman), beneficially owns approximately 33% of our outstanding Common Stock.
The collective bargaining agreement (“CBA”) between Alaska Communications and the IBEW, which is effective through December 31, 2023, governs the terms and conditions of employment for all IBEW represented employees working for Alaska Communications and has significant economic impacts on it as the CBA relates to wage and benefit costs and work rules.
The collective bargaining agreement (“CBA”) between Alaska Communications and the IBEW, which was extended through mid-2025, governs the terms and conditions of employment for all IBEW represented employees working for Alaska Communications and has significant economic impacts on it as the CBA relates to wage and benefit costs and work rules.
Our inability to operate our network, facilities and back-office systems as a result of such events, even for a limited period of time, may result in significant expenses and impact the timely and accurate delivery of our services or other information.
Our inability to operate our network, facilities and back-office systems as a result of such events, even for a limited period of time, may result in significant expenses and impact the timely and accurate delivery of our services or other information. There has been an increase in ransomware attacks in recent years.
Given the complexity of pension-related matters we may not, in every instance, be in full compliance with applicable requirements. Other Risks Our founder is our largest stockholder and could exert significant influence over us. Cornelius B.
Although we believe that we are in compliance with the requirements of the AEPF, given the complexity of pension-related matters described above we may not, in every instance, be in full compliance with applicable requirements. ​ 24 Table of Contents Other Risks Our founder is our largest stockholder and could exert significant influence over us. Cornelius B.
If we are not successful in receiving the amount of funds that is necessary to remove equipment from restricted vendors or are unable to complete the removal and replacement in the time frame specified in any final rules, or have underestimated the cost of replacement, it could adversely impact our ability to operate, maintain or expand our domestic network infrastructure.
If we are not successful in receiving the amount of funds that is necessary to remove, replace, and dispose of equipment from restricted vendors or are unable to complete the removal, replacement, and disposal within the required timeframes, or have underestimated the cost of replacement, it could adversely impact our ability to operate, maintain or expand our domestic network infrastructure.
If the FCC were to add a new company to that list that has provided a significant amount of equipment to our subsidiaries, we cannot predict how our business will be impacted or what sort of adverse consequences may result.
For example, if the FCC were to add a new company to the Covered List of foreign companies whose telecommunications equipment are subject to usage restrictions that has provided a significant amount of equipment to our subsidiaries, we cannot predict how our business will be impacted or what sort of adverse consequences may result.
With respect to cyber security there has been an increase in ransomware attacks in recent years. Telecommunications providers, including vendors to providers, are increasingly being targeted by cyber criminals. These attacks are not always seeking data about their own business, but access to the data of market participants in potentially more lucrative industries.
Telecommunications providers, including vendors to providers, are increasingly being targeted by cyber criminals. These attacks are not always seeking data about their own business, but access to the data of market participants in potentially more lucrative industries.
As new laws and regulations are issued or discontinued, we may be required to materially modify our business plans or operations. We cannot be certain that we can do so in a cost-effective or timely manner.
We are subject to US federal, state, and local regulations and foreign government regulations, all of which are subject to change. As new laws and regulations are issued or discontinued, we may be required to materially modify our business plans or operations. We cannot be certain that we can do so in a cost-effective or timely manner.
There can be no assurance that we will be able to successfully prevent a material security breach stemming from future cyberattacks or avoid major outages caused by other factors.
There can 16 Table of Contents be no assurance that we will be able to successfully prevent a material security breach stemming from future cyberattacks or avoid major outages caused by such an attack or breach.
In addition, we are increasingly focused on winning or obtaining government awards and funding (including the Remove and Replace program) to both enable our expanded carrier service initiative and grow the footprint of our network.
We are increasingly focused on winning or obtaining government awards and funding. In the western United States, we are using government awards to both enable our expanded carrier service initiative and grow the footprint of our network.
Because demand for program support exceeded available funding, the FCC was required by statute to implement a prioritization scheme and allocate funding on an equal but prorated basis. Accordingly, per its rules, the FCC developed a pro-rata allocation factor of approximately 40% of the funds requested for reimbursement, including with respect to our subsidiaries.
Because demand for program support exceeded available funding, the FCC was required by statute to implement a prioritization scheme and allocate funding on an equal but prorated basis. Accordingly, per its rules, the FCC developed a pro-rata allocation factor of approximately 40%. See US Federal Regulation – FCC Replace and Remove Program.
Labor costs are a significant component of Alaska Communications’ expenses and, as of December 31, 2022, approximately 54% of its workforce is represented by the International Brotherhood of Electrical Workers (“IBEW”).
Labor costs are a significant component of Alaska Communications’ expenses and, as 23 Table of Contents of December 31, 2023, nearly 60% of its workforce is represented by the International Brotherhood of Electrical Workers (“IBEW”).
Similar audits and investigations of other companies have resulted in the FCC recouping certain previously awarded support funds, which could have a material adverse effect on our business, financial position, results of operations, and liquidity. Any adverse outcome with respect to the FCC Enforcement Bureau’s inquiry may have an adverse impact our business, financial condition, results of operations, or liquidity.
Similar audits and investigations of other companies have resulted in the FCC recouping certain previously awarded support funds, which could have a material adverse effect on our business, financial position, results of operations, and liquidity.
The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, supply shortages, increased costs of labor, components, manufacturing and shipping, as well as weakening exchange rates and other similar effects. In response to recent inflationary pressure, the U.S.
The existence of inflation 22 Table of Contents in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, supply shortages, increased costs of labor, components, manufacturing and shipping, as well as weakening exchange rates and other similar effects. Increased interest rates and additional debt have resulted in increased interest expenses.
If we are unable to restore service on a timely and cost-effective basis, it could harm our reputation and have a material adverse effect on our business, financial condition or results of operations through continued loss of revenue and customer attrition to our competitors. 24 Table of Contents Our inability to recruit and retain experienced management and technical personnel could adversely affect our results of operations and our ability to maintain effective internal controls.
If we are unable to restore service on a timely and cost-effective basis, it could harm our reputation and have a material adverse effect on our business, financial condition or results of operations through continued loss of revenue and customer attrition to our competitors.
Our inability to provide a competitive retail device lineup or to acquire network technology on a cost effective basis could materially impact our ability to attract new customers and retain existing customers. 23 Table of Contents A large portion of our equipment is sourced, directly or indirectly, from outside the United States, and major changes in tax policy or trade relations, such as the disallowance of tax deductions for imported products or the imposition of additional tariffs or duties on imported products, could also adversely affect our business, results of operations, effective income tax rate, liquidity and net income.
A large portion of our equipment is sourced, directly or indirectly, from outside the United States, and major changes in tax policy or trade relations, such as the disallowance of tax deductions for imported products or the imposition of additional tariffs or duties on imported products, could also adversely affect our business, results of operations, effective income tax rate, liquidity and net income.
The interpretation and implementation of the various 30 Table of Contents provisions of the Communications Act and the FCC rules implementing the Communications Act continue to be heavily debated and may have a material adverse effect on our business.
The interpretation and implementation of the various provisions of the Communications Act and the FCC rules implementing the Communications Act continue to be heavily debated and may have a material adverse effect on our business. FCC regulatory activity has increased in 2023 and 2024, particularly in connection with broadband.
Additional risks and uncertainties not presently known to us or that we currently believe are immaterial also may materially adversely affect our business, financial condition and/or results of operations. Operational Risks We are reliant on government funding to comply with the FCC’s “Replace and Remove” program.
Additional risks and uncertainties not presently known to us or that we currently believe are immaterial also may materially adversely affect our business, financial condition and/or results of operations. Operational Risks Cybersecurity breaches could have an adverse effect on our business.
Our operations and performance depend on worldwide economic conditions. These conditions have been adversely impacted by continued global economic concerns over rising inflation rates, supply chain disruptions, a potential recession, outbreak of war in Ukraine and other monetary and financial uncertainties.
These conditions have been adversely impacted by continued global economic concerns over inflation, supply chain disruptions, a potential recession, outbreak of war and other monetary and financial uncertainties. Continued inflation may adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure.
On July 18, 2022, the FCC announced that the total amount of approved costs for which reimbursement was sought by all applicants was approximately $5.6 billion, far in excess of the $1.9 billion appropriated by Congress.
In July 2022, the FCC approved our eligible subsidiaries’ participation in the program but also announced that the total amount of approved costs for which reimbursement was sought by all applicants was far in excess of the amount appropriated by Congress.
Failure to comply with these regulatory requirements may have an adverse effect on our licenses or operations and could result in sanctions, fines or other penalties. Economic Risks General economic factors, such as inflation and a potential economic downturn, domestically and internationally, may adversely affect our business, financial condition and results of operations.
Failure to comply with these regulatory requirements may have an adverse effect on our licenses or operations and could result in sanctions, fines or other penalties. Economic Risks Availability and cost of capital.
Major hurricanes have also passed directly over Bermuda and Cayman several times in the past decade, causing damage to our network and to the island’s infrastructure. Guyana and Cayman have each suffered from severe rains and flooding in the past as well.
Major hurricanes have hit the US Virgin Islands, Bermuda, and Cayman several times in the past decade, causing damage to our network and to the infrastructure on the islands. Guyana and Cayman have each suffered from severe rains and flooding in the past as well. In Alaska, our operations face earthquake, volcanic, fire and winter storm risk.
If we are unable to obtain the requisite amount of financing, we may have to forgo opportunities to strategically grow our business. Rapid and significant technological changes in the telecommunications industry may adversely affect us.
If we are unable to obtain the requisite amount of financing, we may have to forgo opportunities to strategically grow our business. Regulatory Risks Regulatory changes may impose restrictions that adversely affect us or cause us to incur significant unplanned costs in modifying our business plans or operations.
For instance, in 2020, the Government of Guyana formally implemented telecommunications legislation that introduces material changes to many features of Guyana’s existing telecommunications regulatory regime that impact our operations, administrative reporting and services.
For instance, in 2020, the Government of Guyana formally implemented telecommunications legislation that introduces material changes to many features of Guyana’s existing telecommunications regulatory regime that impact our operations, administrative reporting and services. There can be no assurance that these regulations will be effectively or uniformly administered and Guyana remains a high-risk environment due to economic, political, and judicial uncertainty.
For example, among other things: ● a decrease in tourism could negatively affect revenues and growth opportunities from operations in the islands and in a number of areas covered by US rural and wholesale wireless operations that serve tourist destinations; and ​ ● an increase in credit losses on trade receivables, or the amounts that we have to write-off of our accounts receivable, could result from our inability to collect subscription fees from our subscribers. ​ In 2022, we saw a return to tourism in some of our tourism-dependent markets over 2021, but on an aggregate basis tourist activity in the markets we operate remains below pre-pandemic levels.
Overall economic impacts from a sustained lower price of crude oil, on Alaska on the one hand, and from projected revenue from sales of oil, for Guyana on the other hand, if maintained over time, will impact our growth in the future; ● a decrease in tourism could negatively affect revenues and growth opportunities from operations in the islands and in a number of areas covered by US rural and wholesale wireless operations that serve tourist destinations; and ● an increase in credit losses on trade receivables, or the amounts that we have to write-off of our accounts receivable, could result from our inability to collect subscription fees from our subscribers.
Further, the leadership of the FCC changed in January 2021, and the FCC may pursue new and different regulatory priorities under the current leadership. Our international operations are subject to similar regulations, the interpretation and implementation of which are also often debated, and which may have a material adverse effect on our business.
We cannot predict how increased regulatory activity at the FCC will impact our businesses. Our international operations are subject to similar regulations, the interpretation and implementation of which are also often debated, and which may have a material adverse effect on our business.
If we fail to comply with these requirements, we may be subject to fines or potentially be asked to show cause as to why our licenses to provide service should not be revoked. The loss of certain licenses could adversely affect our ability to provide wireless and broadband services.
If we fail to comply with these requirements, we may be subject to fines or potentially be asked to show cause as to why our licenses to provide service should not be revoked. The Rural Health Care program in Alaska is being audited by USAC, and we may be subject to forfeiture or fine.
With acquisitions made in the last two years, we have substantially decreased our cash reserves and increased our leverage on a consolidated basis.
With our strategy of increased and focused capital expenditures across our business, and the acquisitions of Alaska Communications and Sacred Wind, over the last three years we have substantially decreased our cash reserves and increased our leverage on a consolidated basis.
Any shortfall in available funding could have an adverse impact on our ability to replace covered equipment in satisfaction of our regulatory obligations. In addition, companies that were awarded a funding allocation are not guaranteed to receive that funding.
Any shortfall in available funding could have an adverse impact on our ability to replace, remove, and dispose of covered equipment in satisfaction of our regulatory obligations, on our cash flows, or on our results of operations.
The FCC’s governmental restrictions on the procurement of equipment from certain Chinese vendors will result in a costly network replacement build in our western United States operations that, if not offset by government support, could adversely affect our results of operations.
We are reliant on government funding to execute on the FCC’s Replace and Remove program. The FCC’s governmental restrictions on the procurement of equipment from certain vendors has resulted in a costly network replacement build in our western United States operations that is funded in part by the FCC’s Replace and Remove Program.
Like other companies globally, we continued to face major supply chain disruptions across our business in 2022, which led to increased costs and delays. We depend on a limited number of suppliers for equipment and services relating to our network infrastructure, mobile handset lineup, and our back-office IT systems infrastructure.
Like other companies globally, we continued to face major supply chain disruptions across our business in early 2023, which led to increased costs and delays.
If these suppliers experience interruptions or other problems delivering equipment to us on a timely basis, our subscriber or revenue growth and operating results could suffer significantly. In addition, our retail wireless businesses depend on access to compelling handset devices at reasonable prices on the primary and secondary markets.
In addition, our retail wireless businesses depend on access to compelling handset devices at reasonable prices on the primary and secondary markets.
Our four largest markets all have some unionized labor pools, and the addition of Alaska Communications brings even more of an operating challenge than we have in other markets given the remote location of operations and the extent of the unionized workforce.
Alaska Communications presents a particular operating challenge that differs from those that we have in other markets given the remote location of operations and the extent of the unionized workforce.
Historically, we have funded our capital expenditures and transactional matters from a combination of cash on hand, cash from operations, and limited incurrence of debt. As discussed above, our US Telecom segment is in the midst of a business transformation and may need significant funding as we seek to grow our fiber network and capacity.
We may have difficulty funding multiple opportunities across our businesses . Historically, we have funded our capital expenditures and transactional matters from a combination of cash on hand, cash from operations, and limited incurrence of debt.
In addition, these creditors may be able to terminate any commitments they had made to provide us with further funds. Labor costs and the terms of collective bargaining agreements can negatively impact our ability to remain competitive, which could cause our financial performance to suffer.
Labor costs and the terms of collective bargaining agreements can negatively impact our ability to remain competitive, which could cause our financial performance to suffer. Our four largest markets all have some unionized labor pools.
If Alaska Communications fails to meet its obligations under the CAF II order, or requires substantial additional capital expenditures in order to meet the obligations under the timeline required, its revenue, results of operations and liquidity may be materially adversely impacted. 29 Table of Contents Changes in USF funding could have an adverse impact on our financial condition or results of operations in the US Virgin Islands.
For example, under the USF, if we fail to meet our buildout and service obligations, or if we require substantial additional capital expenditures in order to meet the obligations under the timeline required, or if the relevant government agencies reduce funding availability, our revenue, results of operations, and liquidity may be materially adversely impacted.
Given the current labor economy, it may become increasingly difficult to find the right people to fill management roles. We do not currently maintain “key person” life insurance on any of our key employees and none of the executives at our parent company have executed employment agreements requiring a specified time period of service.
We do not currently maintain “key person” life insurance on any of our key employees and none of the executives at our parent company have executed employment agreements requiring a specified time period of service. 18 Table of Contents We are increasingly reliant on government funding which brings compliance obligations and a risk that a change in federal or state funding could materially and adversely impact the financial position and results of operations of certain of our subsidiaries.
Execution on multiple simultaneous and transformational initiatives will require in depth management attention in multiple jurisdictions to capitalize on growth in the US Virgin Islands, economic growth in Guyana, the ongoing shift in business focus in US Telecom and the integration of both Alaska Communications and our newly acquired New Mexico-based subsidiary, Sacred Wind. 28 Table of Contents ​ Regulatory Risks The Rural Health Care program in Alaska is being audited by USAC, and we may be subject to forfeiture or fine.
Execution on multiple simultaneous and transformational initiatives will require in-depth management attention in multiple jurisdictions to capitalize on growth in the US Virgin Islands, economic growth in Guyana, and the ongoing shift in business focus in US Telecom. Rapid and significant technological changes in the telecommunications industry may adversely affect us.
Any such transactions may be accomplished through the payment of cash, issuance of shares of our capital stock or incurrence of additional debt, or a combination thereof. How and when we deploy our balance sheet capacity will figure prominently in our longer-term growth prospects and stockholder returns.
Our ability to support multiple organic and inorganic growth opportunities may be limited by our liquidity resources. How and when we deploy our balance sheet capacity will figure prominently in our longer-term growth prospects and stockholder returns.
These types of events can also cause major disruption and harm to the communities and markets we serve, compounded by the fact that many of our service areas have limited emergency responses assets and may be difficult to reach in an emergency situation, which can have a material adverse effect on our business.
This risk to our company is heightened by the fact that many of our service areas have limited emergency response assets and may be difficult to reach in an emergency situation which may delay service restoration in a critical time following a natural disaster or other disruptive event.
There can be no assurance that these regulations will be effectively implemented, or that they will be administered in a fair and transparent manner and Guyana remains a high-risk environment due to economic, political and judicial uncertainty. Our interpretations of our obligations in the United States and our international jurisdictions may differ from those of regulatory authorities.
Our interpretations of our obligations in the United States and our international jurisdictions may differ from those of regulatory authorities.
The Alaska and Guyanese economies, in turn, depend heavily on the strength of the natural resource industries, particularly oil production and prices of crude oil.
Slower economic activity, increased unemployment, concerns about inflation, decreased consumer confidence and other adverse business conditions could have an impact on our businesses. For example, among other things: ● the economies of Alaska and Guyana depend heavily on the strength of the natural resource industries, particularly oil production and prices of crude oil.
Any outage caused by faults in our aging equipment or unaddressed maintenance costs could negatively impact our operations, including the provision of service to its customers and could result in adverse effects to our financial condition. We may have difficulty securing video services content from third parties desirable to our customers on terms and conditions favorable to us.
Any network outage could negatively impact our operations, including the provision of service to our customers, and could result in adverse effects to our financial condition and reputation. These outages could also lead to significant negative publicity.
It is unknown what the long-term economic effects of these negative impacts on the tourism industry will be, but our business operations and revenue may certainly be adversely impacted as a result. The long-term impact, if any, that these events might have on us and our business, is uncertain.
The long-term impact, if any, that these events might have on us and our business is uncertain. Our debt instruments include restrictive and financial covenants that limit our operating flexibility.
Our industry faces rapid and significant changes in technology that directly impact our business, including the following: ● migration to new-generation services such as “5G” network technology; ​ ● introduction of new telecom delivery platforms such as next generation satellite services; ​ ● development of data and broadband capabilities and rapidly expanding demand for those capabilities; ​ ● increased reliance on third-party cloud storage providers for data storage; and ​ ● consolidation among service providers within the industry For us to keep pace with these technological changes and remain competitive, at a minimum we must continue to make significant capital expenditures to add to our networks’ capacity, coverage and technical capability.
Given the high capital investments we have already made in the new fiber offerings, this competition may adversely impact our anticipated return on investment. For us to keep pace with these technological changes and remain competitive, at a minimum we must continue to make capital expenditures to add to our networks’ capacity, coverage and technical capability.
The increase in geopolitical tensions, such as the war in Ukraine, only heightens the risk of supply chain shortages and delays, especially with respect to sourcing equipment from Europe. Cyber security breaches, other outages due to failures of network or information technology systems, and outages due to human error, could have an adverse effect on our business.
The increase in geopolitical tensions only heightens the risk of supply chain shortages and delays, especially with respect to sourcing equipment from Europe or the Middle East. Strategic Risks Increased competition may adversely affect growth, require increased capital expenditures, result in the loss of existing customers and decrease our revenues.
Rising inflation may adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure.
General economic factors, such as inflation and a potential economic downturn, domestically and internationally, may adversely affect our business, financial condition and results of operations. Our operations and performance depend on worldwide economic conditions.
Removed
The FCC has established a Supply Chain Reimbursement Program to provide such support, for which several of our operating subsidiaries submitted applications for funding allocations.
Added
Companies that were awarded funding must complete the removal, replacement, and disposal of Covered List equipment and services in their networks within a year of their initial funding disbursements. All of our participating subsidiaries one-year project completion deadlines are in 2024.
Removed
Among the other factors that may also cause interruptions in service or reduced capacity for our customers include power loss, increasing reliance on cloud-storage providers (which may themselves be subject to cyberattack or breach), capacity limitations, software defects and breaches of security by computer viruses, break-ins or otherwise.
Added
However, delays due to factors such as supply-chain issues, delayed approval of reimbursement requests, the underfunding of the program, and other external circumstances could prevent our subsidiaries from meeting these timelines. Under the FCC’s rules, program participants can seek extensions of their deadlines, or the FCC can grant a blanket extension for all participants.
Removed
Such events may materially disrupt and adversely affect our business operations, such as the impacts of the hurricanes in the US Virgin Islands in 2017, which we assessed caused damage and losses to our fixed and mobile networks of approximately $100 million in operating losses and network rebuilding costs prior to insurance and any other recovery assistance.
Added
Because of the prevalence of Chinese vendor equipment in our US network, we believe meeting this time based requirement will be difficult without additional time to complete, especially if the FCC is unable to lessen or eliminate the shortfall in reimbursement funding.
Removed
With the addition of business operations in Alaska, our company operations now face increased earthquake, volcanic, fire and winter storm risk.
Added
We cannot predict whether and to what extent the fund administrator will approve our subsidiaries’ requests for the specific reimbursement of costs, whether we will obtain additional necessary extensions, or whether we can complete our participation in the program within the timelines set by the FCC. 17 Table of Contents Finally, there is a risk that the FCC may continue to enumerate requirements or change stated rules.
Removed
If our executive officers and the officers of our operating units are not able to execute on our business plan, this could adversely affect our business, financial condition and results of operations.
Added
These types of events can also cause major disruption and harm to the communities and markets we serve and where our employees live.

… 79 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−1 removed2 unchanged
Biggest changeOur offices and technical operations are in the following locations: ​ ​ ​ ​ ​ ​ ​ ​ International Telecom ​ US Telecom ​ Georgetown, Guyana Little Rock, AR Bermuda Castle Rock, CO US Virgin Islands Atlanta, GA Cayman Islands ​ Anchorage, AK ​ ​ ​ Albuquerque, NM ​ ​ Within our communications operations, we globally own approximately 350 towers, lease an additional approximate 370 towers and have 6 switch locations within rented locations.
Biggest changeAs of December 31, 2023, we operated seven retail stores in our US Telecom segment and twenty retail stores in our International Telecom segment. 27 Table of Contents Our offices and technical operations are in the following locations: ​ ​ ​ ​ ​ ​ ​ ​ International Telecom ​ US Telecom ​ Georgetown, Guyana Little Rock, AR Bermuda Castle Rock, CO US Virgin Islands Atlanta, GA Cayman Islands ​ Anchorage, AK ​ ​ ​ Albuquerque, NM ​ ​ Within our communications operations, we globally own approximately 390 towers, lease an additional approximate 385 towers and have 6 switch locations within rented locations.
Worldwide, we utilize the following approximate square footage of space for our operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ International ​ ​ ​ Corporate Type of space ​ Telecom ​ US Telecom ​ and Other Office 332,000 ​ 220,000 ​ 47,000 Retail stores 42,000 ​ 2,000 ​ — Technical operations 2,024,000 ​ 298,000 ​ — All of the above locations are leased except for the office and technical space within our International Telecom segment, which we own.
Worldwide, we utilize the following approximate square footage of space for our operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ International ​ ​ ​ Corporate Type of space ​ Telecom ​ US Telecom ​ and Other Office 329,000 ​ 220,000 ​ 47,000 Retail stores 48,000 ​ 30,000 ​ — Technical operations 2,023,000 ​ 297,000 ​ — All of the above locations are leased except for certain of the office and technical spaces within our International Telecom segment, which we own.
Removed
As of December 31, 2022, we operated six retail stores in our US Telecom segment and twenty one retail stores in our International Telecom segment.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

9 edited+2 added−5 removed8 unchanged
Biggest changeWe believe that, except for the items discussed below, for which we are currently unable to predict the final outcome, the disposition of matters currently pending will not have a material adverse effect on our financial position or results of operations. 35 Table of Contents Beginning in 2006, the National Frequency Management Unit (now the Telecommunications Agency, or the “NFMU/TA”) and GTT have been engaged in discussions regarding the amount of and methodology for calculation of spectrum fees payable by GTT in Guyana.
Biggest changeWe believe that, except for the items discussed below, for which we are currently unable to predict the final outcome, the disposition of matters currently pending will not have a material adverse effect on our financial position or results of operations.
At this time, we cannot predict the contents or timing of the final USAC audit report, the outcome of the audit or the impact on the our business, financial condition, results of operations, or liquidity.
At this time, we cannot predict the contents or timing of the final USAC audit report, the outcome of the audit or the impact on our business, financial condition, results of operations, or liquidity.
We are engaged in discussions with the FCC’s Enforcement Bureau and will continue to work constructively to provide it the information it is seeking. Any 36 Table of Contents adverse outcome with respect to the FCC Enforcement Bureau’s inquiry may have an adverse impact our business, financial condition, results of operations, or liquidity.
We are engaged in discussions with the FCC’s Enforcement Bureau and will continue to work constructively to provide it the information it is seeking. Any adverse outcome with respect to the FCC Enforcement Bureau’s inquiry may have an adverse impact our business, financial condition, results of operations, or liquidity.
With respect to all of the foregoing matters, we believe that some adverse outcome is probable and have accordingly accrued $14.7 million as of December 31, 2022 for these and other potential liabilities arising in various claims, legal actions and regulatory proceedings arising in the ordinary course of business.
With respect to all of the foregoing matters, we believe that some adverse outcome is probable and have accordingly accrued $16.3 million as of December 31, 2023 for these and other potential liabilities arising in various claims, legal actions and regulatory proceedings arising in the ordinary course of business.
In December 2022, GTT settled this matter with TTEC. In February 2020, our subsidiary, Alaska Communications, received a draft audit report from USAC in connection with USAC’s inquiry into Alaska Communications’ funding requests under the Rural Health Care Support Program for certain customers for the time period of July 2012 through June 2017.
In February 2020, our subsidiary, Alaska Communications, received a draft audit report from USAC in connection with USAC’s inquiry into Alaska Communications’ funding requests under the Rural Health Care Support Program for certain customers for the time period of July 2012 through June 2017.
These suits, filed in 2010 and 2012, have been consolidated with Digicel’s constitutional challenge described above, however, we cannot accurately predict at this time when the consolidated suit will reach a court of final determination.
These suits, filed in 2010 and 2012, have been consolidated, however, we cannot accurately predict at this time when the consolidated suit will reach a court of final determination.
USAC’s auditors are expected to issue a final audit report incorporating Alaska Communications’ responses that will be sent to USAC’s Rural Health Care Division to review and determine if corrective action would be appropriate. In the event that we disagree with USAC’s final audit report, we can appeal that decision to USAC’s Rural Health Care Division and/or the FCC.
USAC’s auditors are expected to issue a final audit report incorporating Alaska Communications’ responses that will be sent to USAC’s Rural Health Care Division to review and determine if corrective action would be appropriate.
GTT is also involved in several legal claims regarding its tax filings with the Guyana Revenue Authority (the “GRA”) dating back to 1991 regarding the deductibility of intercompany advisory fees as well as other tax assessments.
GTT is also involved in several legal claims regarding its tax filings with the Guyana Revenue Authority (the “GRA”) dating back to 1991 regarding the deductibility of intercompany advisory fees as well as other tax assessments. GTT’s position has been upheld by various High Court rulings with respect to all outstanding matters.
Since that time, GTT has made payments of undisputed spectrum fees as amounts invoiced by the NFMU/TA. There have been limited further discussions on the subject of a revised spectrum fee methodology with the Telecommunications Agency and GTT awaits the determination of such fees.
There have been limited further discussions on the subject of a revised spectrum fee methodology with the Telecommunications Agency and GTT awaits the determination of such fees.
Removed
On May 8, 2009, a GTT competitor, Digicel, filed a lawsuit in Guyana challenging the legality of GTT’s exclusive license rights under Guyana’s constitution and GTT intervened in the suit in order to oppose Digicel’s claims. The case remains pending.
Added
Beginning in 2006, the National Frequency Management Unit (now the Telecommunications Agency, or the “NFMU/TA”) and GTT have been engaged in discussions regarding the amount of and methodology for calculation of spectrum fees payable by GTT in Guyana. Since that time, GTT has made payments of undisputed spectrum fees as amounts invoiced by the NFMU/TA.
Removed
We believe that any legal challenge to GTT’s exclusive license rights granted in 1990 is without merit and we continue to defend vigorously against such legal challenge.
Added
In the event that we disagree with USAC’s final audit report, we can appeal that decision to USAC’s Rural Health Care Division and/or the 28 Table of Contents FCC.
Removed
GTT’s position has been upheld by various High Court rulings made in its favor including most recently in December 2021, when an assessment relating to 2010-2016 was quashed and declared to have no legal effect.
Removed
GTT has maintained that it has no unpaid corporation tax due to the GRA and that any liability GTT might be found to have with respect to the disputed tax assessments, as alleged by the GRA in the aggregate amount of $32 million net of interest, would be offset in part by the amounts necessary to ensure that GTT’s return on investment was no less than 15% per annum for the relevant periods.
Removed
On May 20, 2021, we were served with a notice of application for enforcement of a foreign judgment with respect to a matter brought by the Trinidad & Tobago Electric Commission (“TTEC”) in the High Court of Justice in the Republic of Trinidad and Tobago in August 2013 against GTT and other defendants, alleging breach of contract due to GTT’s failure to pay TTEC in connection with amounts alleged to be owed as reimbursement for cable repair costs.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

9 edited+0 added−3 removed3 unchanged
Biggest changeBetween 2008 and 2013, Mr. Martin served as Vice President of Engineering Operations and Quality with Siemens Enterprise Communications and Enterasys Networks, delivering voice and data networking hardware and software solutions to global enterprises. Mr. Martin holds a Bachelor of Science, Mechanical Engineering from the University of Maine, is a published author and featured industry speaker.
Biggest changeMartin served as Senior Vice President and Chief Quality Officer with Extreme Networks, a global leader in software-driven networking solutions for Enterprise and Service Provider customers. Between 2008 and 2013, he served as Vice President of Engineering Operations and Quality with Siemens Enterprise Communications and Enterasys Networks, delivering voice and data networking hardware and software solutions to global enterprises. Mr.
Mabey received a B.A. degree from the University of Notre Dame and a J.D. degree from the University of Texas School of Law. Justin Leon is our Senior Vice President of Corporate Development. He joined the Company in 2015 and brings over fifteen years of investing experience to the team.
Mabey received a B.A. degree from the University of Notre Dame and a J.D. degree from the University of Texas School of Law. Justin Leon is our Senior Vice President of Corporate Development. Mr. Leon joined the Company in 2015 and brings over fifteen years of investing experience to the team. Prior to joining ATN, Mr.
Justin started his career at Stonebridge Associates, a boutique investment bank in Boston advising clients in 38 Table of Contents technology, medical device, and consumer products verticals. Justin earned a degree in corporate finance from Bentley College and an MBA from the Tuck School of Business at Dartmouth. ​ PART II
Leon started his career at Stonebridge Associates, a boutique investment bank in Boston advising clients in technology, medical device, and consumer products verticals. Mr. Leon earned a degree in corporate finance from Bentley College and an M.B.A from the Tuck School of Business at Dartmouth. 30 Table of Contents PART II
Prior to joining ATN, Justin worked in Corporate Strategy & Development for Nuance Communications, a publicly traded software company focused on speech recognition and machine learning where he executed over $1 billion in acquisitions in the healthcare, mobile, and enterprise software verticals.
Leon worked in Corporate Strategy & Development for Nuance Communications, a publicly traded software company focused on speech recognition and machine learning where he executed over $1 billion in acquisitions in the healthcare, mobile, and enterprise software verticals. Mr.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. ​ 37 Table of Contents ​ INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth information regarding our executive officers as of March 15, 2023: ​ ​ ​ ​ ​ ​ Name Age Position Michael T. Prior 58 Chairman, President, Chief Executive Officer, and Director Justin D.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. ​ 29 Table of Contents ​ INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth information regarding our executive officers as of March 15, 2024: ​ ​ ​ ​ ​ ​ Name Age Position Brad W. Martin 48 Chief Executive Officer and Director Justin D.
Prior to that, he was Vice President and Corporate Controller at American Radio Systems Corporation and held accounting and finance positions at American Cablesystems Corporation. Mr. Benincasa holds an M.B.A. degree from Bentley University and a B.A. degree from the University of Massachusetts. Brad Martin is our Chief Operating Officer.
Prior to that, he was Vice President and Corporate Controller at American Radio Systems Corporation and held accounting and finance positions at American Cablesystems Corporation. Mr. Benincasa holds an M.B.A. degree from Bentley University and a B.A. degree from the University of Massachusetts. Mr. Benincasa intends to retire on or around March 17, 2024.
Prior to joining us in 2018, he previously served as Chief Operating Officer for Senet Inc., a leading “low power wide area” network (LPWAN) operator and global service provider. From 2013 through 2015, Mr. Martin served as Senior Vice President and Chief Quality Officer with Extreme Networks, a global leader in software-driven networking solutions for Enterprise and Service Provider customers.
Martin served as our Chief Operating Officer from 2018 to 2023. Prior to joining us in 2018, he served as Chief Operating Officer for Senet Inc., a leading “low power wide area network” (LPWAN) operator and global service provider. From 2013 through 2015, Mr.
Prior was named Entrepreneur of the Year for the New England Region by Ernst & Young LLP and One of America’s Best CEOs by DeMarche Associates, Inc. Justin D. Benincasa is our Chief Financial Officer. Prior to joining us in May 2006, Mr. Benincasa was a Principal at Windover Development, LLC since 2004.
Martin holds a Bachelor of Science, Mechanical Engineering from the University of Maine, is a published author and featured industry speaker. Justin D. Benincasa is our Chief Financial Officer. Prior to joining us in May 2006, Mr. Benincasa was a Principal at Windover Development, LLC since 2004.
Benincasa 60 Chief Financial Officer Brad Martin 47 Chief Operating Officer Mary Mabey 41 Senior Vice President, General Counsel and Secretary Justin Leon ​ 37 ​ Senior Vice President, Corporate Development ​ Executive Officers Michael T.
Benincasa 61 Chief Financial Officer Mary Mabey 42 Senior Vice President, General Counsel and Secretary Justin Leon ​ 38 ​ Senior Vice President, Corporate Development ​ Executive Officers Brad W. Martin is our Chief Executive Officer and a member of our Board of Directors. Prior to being named our CEO and Director in 2024, Mr.
Removed
Prior is the Chairman of the Board of Directors and has been our President and Chief Executive Officer since December 2005 and an officer of the Company since June 2003. He was elected to the Board in May 2008. Previous to joining the Company, Mr.
Removed
Prior was a partner with Q Advisors LLC, a Denver based investment banking and financial advisory firm focused on the technology and telecommunications sectors. Mr. Prior began his career as a corporate attorney with Cleary Gottlieb Steen & Hamilton LLP in London and New York.
Removed
He received a B.A. degree from Vassar College and a J.D. degree summa cum laude from Brooklyn Law School. Mr. Prior currently serves on the Board of Directors of the Competitive Carriers Association. In 2008, Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+2 added−0 removed0 unchanged
Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock, $.01 par value, is listed on the Nasdaq Global Select Market under the symbol “ATNI.” The number of holders of record of Common Stock as of March 15, 2023 was 81. ​ Issuer Purchases of Equity Securities in the Fourth Quarter of 2022 ​ On September 19, 2016, our Board of Directors authorized the repurchase of up to $50.0 million of our Common Stock from time to time on the open market or in privately negotiated transactions (the “2016 Repurchase Plan”).
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock, $.01 par value, is listed on the Nasdaq Global Select Market under the symbol “ATNI.” The number of holders of record of Common Stock as of March 15, 2024 was 80.
The following table reflects the repurchases by the Company of its Common Stock during the quarter ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (d) ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ ​ ​ Number (or ​ ​ ​ ​ ​ ​ ​ (c) ​ Approximate ​ ​ ​ ​ (b) ​ Total Number of ​ Dollar Value) of ​ ​ (a) ​ Average ​ Shares Purchased ​ Shares that May ​ ​ Total Number ​ Price ​ as Part of Publicly ​ be Purchased ​ ​ of Shares ​ Paid per ​ Announced Plans ​ Under the Plans or Period ​ Purchased ​ Share ​ or Programs ​ Programs October 1, 2022 — October 31, 2022 — ​ $ — ​ — ​ $ 19,451,514 November 1, 2022 — November 30, 2022 — ​ ​ — ​ — ​ ​ 19,451,514 December 1, 2022 — December 31, 2022 — ​ ​ — ​ — ​ ​ 19,451,514 ​ 39 Table of Contents Stock Performance Graph The graph below matches ATN International’s cumulative 5-Year total shareholder return on Common Stock with the cumulative total returns of the Russell 2000 index, the S&P Smallcap 600 index, and the Nasdaq Telecommunications index.
The following table reflects the repurchases by the Company of its Common Stock during the quarter ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (d) ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ ​ ​ Number (or ​ ​ ​ ​ ​ ​ ​ (c) ​ Approximate ​ ​ ​ ​ (b) ​ Total Number of ​ Dollar Value) of ​ ​ (a) ​ Average ​ Shares Purchased ​ Shares that May ​ ​ Total Number ​ Price ​ as Part of Publicly ​ be Purchased ​ ​ of Shares ​ Paid per ​ Announced Plans ​ Under the Plans or Period ​ Purchased ​ Share ​ or Programs ​ Programs October 1, 2023 — October 31, 2023 100,659 ​ $ 32.98 ​ — ​ $ 4,451,527 November 1, 2023 — November 30, 2023 — ​ ​ — ​ — ​ ​ 4,451,527 December 1, 2023 — December 31, 2023 — ​ ​ — ​ — ​ ​ 25,000,000 ​ 31 Table of Contents Stock Performance Graph The graph below matches ATN International's cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the Russell 2000 index, the S&P SmallCap 600 index, the Nasdaq.
The graph tracks the performance of a $100 investment in our Common Stock and in each index (with the reinvestment of all dividends) from 12/31/2017 to 12/31/2022. ​ 12/17 12/18 12/19 12/20 12/21 12/22 ATN International 100.00 130.85 102.54 78.32 76.06 87.73 Russell 2000 100.00 88.99 111.70 134.00 153.85 122.41 S&P Smallcap 600 100.00 91.52 112.37 125.05 158.59 133.06 NASDAQ Telecommunications 100.00 77.39 91.90 101.16 103.32 75.55 ​ The stock price performance included in this graph is not necessarily indicative of future stock price performance ​ ​ 40 Table of Contents
Telecommunications index, and the Nasdaq Small Cap Telecommunications Services index. The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2018 to 12/31/2023. The stock price performance included in this graph is not necessarily indicative of future stock price performance ​ ​ 32 Table of Contents
Added
Issuer Purchases of Equity Securities in the Fourth Quarter of 2023 On December 14, 2023, the Company’s Board of Directors authorized the repurchase of up to $25.0 million of its Common Stock, from time to time, on the open market or in privately negotiated transactions (the “2023 Repurchase Plan”).
Added
The 2023 Repurchase Plan replaced the previously approved 2016 Repurchase Plan and, as of December 31, 2023, had all $25.0 million available to repurchase the Company’s Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

173 edited+49 added−57 removed56 unchanged
Biggest changeDiscussion of Results of Operations for the fiscal year ended December 31, 2021 compared to December 31, 2020 A discussion regarding our results of operations for the fiscal year ended December 31, 2021 compared to 2020 can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 16, 2022, which is available on the SEC’s website at www.sec.gov and our Investor Relations website at https://.ir.atni.com under the “Financials & Filings” section. ​ 46 Table of Contents Selected Segment Financial Information ​ The following represents selected segment information for the years ended December 31, 2022 and 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ International ​ US ​ Renewable ​ Corporate and ​ ​ ​ ​ ​ Telecom ​ Telecom ​ Energy ​ Other (1) ​ Consolidated Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Communication Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mobility - Business ​ $ 14,830 ​ $ 1,228 ​ $ — ​ $ — ​ $ 16,058 Mobility - Consumer ​ ​ 87,601 ​ ​ 6,359 ​ ​ — ​ ​ — ​ ​ 93,960 Total Mobility ​ ​ 102,431 ​ ​ 7,587 ​ ​ — ​ ​ — ​ ​ 110,018 Fixed - Business ​ ​ 69,903 ​ ​ 126,735 ​ ​ — ​ ​ — ​ ​ 196,638 Fixed - Consumer ​ ​ 163,408 ​ ​ 78,338 ​ ​ — ​ ​ — ​ ​ 241,746 Total Fixed ​ 233,311 ​ 205,073 ​ — ​ — ​ 438,384 Carrier Services ​ ​ 13,459 ​ ​ 128,864 ​ ​ — ​ ​ — ​ ​ 142,323 Other ​ 1,450 ​ 46 ​ — ​ — ​ 1,496 Total Communication Services Revenue ​ ​ 350,651 ​ ​ 341,570 ​ ​ — ​ ​ — ​ ​ 692,221 Construction ​ ​ — ​ ​ 15,762 ​ ​ — ​ ​ — ​ ​ 15,762 Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Managed Services ​ ​ 4,930 ​ ​ 12,832 ​ ​ — ​ ​ — ​ ​ 17,762 Total Other Revenue ​ ​ 4,930 ​ ​ 12,832 ​ ​ — ​ ​ — ​ ​ 17,762 Total Revenue ​ ​ 355,581 ​ ​ 370,164 ​ ​ — ​ ​ — ​ ​ 725,745 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ 52,011 ​ (5,655) ​ (801) ​ (37,613) ​ 7,942 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ International ​ US ​ Renewable ​ Corporate and ​ ​ ​ ​ ​ Telecom ​ Telecom ​ Energy ​ Other (1) ​ Consolidated Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Communication Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mobility - Business ​ $ 6,983 ​ $ 1,402 ​ $ — ​ $ — ​ $ 8,385 Mobility - Consumer ​ ​ 86,384 ​ ​ 7,532 ​ ​ — ​ ​ — ​ ​ 93,916 Total Mobility ​ ​ 93,367 ​ ​ 8,934 ​ ​ — ​ ​ — ​ ​ 102,301 Fixed - Business ​ ​ 67,458 ​ ​ 53,283 ​ ​ — ​ ​ — ​ ​ 120,741 Fixed - Consumer ​ ​ 166,005 ​ ​ 41,897 ​ ​ — ​ ​ — ​ ​ 207,902 Total Fixed ​ 233,463 ​ 95,180 ​ — ​ — ​ 328,643 Carrier Services ​ ​ 9,937 ​ ​ 107,793 ​ ​ — ​ ​ — ​ ​ 117,730 Other ​ 946 ​ — ​ — ​ — ​ 946 Total Communication Services Revenue ​ ​ 337,713 ​ ​ 211,907 ​ ​ — ​ ​ — ​ ​ 549,620 Construction ​ ​ — ​ ​ 35,889 ​ ​ — ​ ​ — ​ ​ 35,889 Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Renewable Energy ​ ​ — ​ ​ — ​ ​ 417 ​ ​ — ​ ​ 417 Managed Services ​ ​ 5,146 ​ ​ 11,635 ​ ​ — ​ ​ — ​ ​ 16,781 Total Other Revenue ​ ​ 5,146 ​ ​ 11,635 ​ ​ 417 ​ ​ — ​ ​ 17,198 Total Revenue ​ ​ 342,859 ​ ​ 259,431 ​ ​ 417 ​ ​ — ​ ​ 602,707 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ 33,899 ​ ​ (14,016) ​ ​ (2,459) ​ ​ (32,450) ​ ​ (15,026) ​ 47 Table of Contents (1) Reconciling items refer to corporate overhead costs and consolidating adjustments.
Biggest changeDiscussion of Results of Operations for the fiscal year ended December 31, 2022 compared to December 31, 2021 A discussion regarding our results of operations for the fiscal year ended December 31, 2022 compared to 2021 can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 16, 2023, which is available on the SEC’s website at www.sec.gov and our Investor Relations website at https://.ir.atni.com under the “Financials & Filings” section. ​ 37 Table of Contents Selected Segment Financial Information ​ The following represents selected segment information for the years ended December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ International ​ US ​ Corporate and ​ ​ ​ ​ ​ Telecom ​ Telecom ​ Other (1) ​ Consolidated Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Communication Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mobility - Business ​ $ 16,333 ​ $ 527 ​ $ — ​ $ 16,860 Mobility - Consumer ​ ​ 92,153 ​ ​ 3,510 ​ ​ — ​ ​ 95,663 Total Mobility ​ ​ 108,486 ​ ​ 4,037 ​ ​ — ​ ​ 112,523 Fixed - Business ​ ​ 71,215 ​ ​ 143,322 ​ ​ — ​ ​ 214,537 Fixed - Consumer ​ ​ 167,953 ​ ​ 90,283 ​ ​ — ​ ​ 258,236 Total Fixed ​ 239,168 ​ 233,605 ​ — ​ 472,773 Carrier Services ​ ​ 14,686 ​ ​ 128,195 ​ ​ — ​ ​ 142,881 Other ​ 3,066 ​ 3,839 ​ — ​ 6,905 Total Communication Services Revenue ​ ​ 365,406 ​ ​ 369,676 ​ ​ — ​ ​ 735,082 Construction ​ ​ — ​ ​ 10,629 ​ ​ — ​ ​ 10,629 Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Managed Services ​ ​ 5,327 ​ ​ 11,178 ​ ​ — ​ ​ 16,505 Total Other Revenue ​ ​ 5,327 ​ ​ 11,178 ​ ​ — ​ ​ 16,505 Total Revenue ​ ​ 370,733 ​ ​ 391,483 ​ ​ — ​ ​ 762,216 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ 53,420 ​ (5,522) ​ (34,723) ​ 13,175 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ International ​ US ​ Corporate and ​ ​ ​ ​ ​ Telecom ​ Telecom ​ Other (1) ​ Consolidated Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Communication Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mobility - Business ​ $ 14,830 ​ $ 1,228 ​ $ — ​ $ 16,058 Mobility - Consumer ​ ​ 87,601 ​ ​ 6,359 ​ ​ — ​ ​ 93,960 Total Mobility ​ ​ 102,431 ​ ​ 7,587 ​ ​ — ​ ​ 110,018 Fixed - Business ​ ​ 69,903 ​ ​ 126,735 ​ ​ — ​ ​ 196,638 Fixed - Consumer ​ ​ 163,408 ​ ​ 78,338 ​ ​ — ​ ​ 241,746 Total Fixed ​ 233,311 ​ 205,073 ​ — ​ 438,384 Carrier Services ​ ​ 13,459 ​ ​ 128,864 ​ ​ — ​ ​ 142,323 Other ​ 1,450 ​ 46 ​ — ​ 1,496 Total Communication Services Revenue ​ ​ 350,651 ​ ​ 341,570 ​ ​ — ​ ​ 692,221 Construction ​ ​ — ​ ​ 15,762 ​ ​ — ​ ​ 15,762 Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Managed Services ​ ​ 4,930 ​ ​ 12,832 ​ ​ — ​ ​ 17,762 Total Other Revenue ​ ​ 4,930 ​ ​ 12,832 ​ ​ — ​ ​ 17,762 Total Revenue ​ ​ 355,581 ​ ​ 370,164 ​ ​ — ​ ​ 725,745 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ 52,011 ​ ​ (5,655) ​ ​ (38,414) ​ ​ 7,942 (1) Reconciling items refer to corporate overhead costs and consolidating adjustments. 38 Table of Contents A comparison of our segment results for the years ended December 31, 2023 and 2022 is as follows: International Telecom.
We expect that Mobility revenue within our US Telecom segment will decrease over time as we put more emphasis on other revenue sources . Fixed Revenue. Fixed revenue is primarily generated by broadband, voice, and video service revenues provided to retail and business customers over our wireline networks.
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. Fixed Revenue . Fixed revenue is primarily generated by broadband, voice, and video service revenues provided to retail and business customers over our wireline networks.
Selling, general and administrative expenses include salaries and benefits we pay to sales personnel, customer service expenses and the costs associated with the development and implementation of our promotional and marketing campaigns.
Selling, general and administrative expenses. Selling, general and administrative expenses include salaries and benefits we pay to sales personnel, customer service expenses and the costs associated with the development and implementation of our promotional and marketing campaigns.
On December 23, 2022, Alaska Communications entered into a First Amendment Agreement (the “ACS Amendment’). The ACS Amendment amends the Alaska Credit Facility to increase its Revolving Credit Commitment from $35.0 million to $75.0 million and Term Loan Commitment from $210 million to $230 million.
On December 23, 2022, Alaska Communications entered into a First Amendment Agreement (the “ACS Amendment”). The ACS Amendment amends the Alaska Credit Facility to increase its Revolving Credit Commitment from $35.0 million to $75.0 million and Term Loan Commitment from $210.0 million to $230.0 million.
RUS 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. The Sacred Wind Term Debt is secured by substantially all assets and an underlying mortgage to the United States of America.
RUS 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. The Sacred Wind Term Debt is secured by substantially all assets of Sacred Wind and an underlying mortgage to the United States of America.
For the year ended December 31, 2022, other income (expenses) was $4.3 million of income primarily related to $5.7 million of gains from our noncontrolling investments partially offset by $0.9 million of increased expenses associated with certain employee benefit plans and $0.9 million of losses on foreign currency transactions.
For the year ended December 31, 2022, other income (expenses) was $4.3 million of income primarily related to $5.7 million of gains from our noncontrolling investments partially offset by $0.9 million of increased expenses associated with certain employee benefit plans and $0.9 million of losses on foreign currency transactions . Income taxes.
The equity is classified as redeemable noncontrolling interests in our financial statements because the holders have an option, beginning in 2026, to put the equity interest to a subsidiary of the Company at the then fair market value. The redeemable noncontrolling interests do not have preference relative to other equity units and participate in gains and losses in Alloy.
This equity is classified as redeemable noncontrolling interests in our financial statements because the holders have an option, beginning in 2026, to put the equity interest to a subsidiary of the Company at the then fair market value. The redeemable noncontrolling interests do not have preference relative to other equity units and participate in gains and losses of Alloy.
We offer mobile communications services over our wireless networks and related equipment(such as handsets) to both our business and consumer subscribers. ​ ● Fixed Telecommunications Services . We provide fixed data and voice telecommunications services to business and consumer customers. These services include consumer broadband and high speed data solutions for businesses.
We offer mobile communications services over our wireless networks and related equipment (such as handsets) to both business and consumer customers. ​ ● Fixed Telecommunications Services . We provide fixed data and voice telecommunications services to business and consumer customers. These services include consumer broadband and high-speed data solutions for businesses.
The debt is secured by certain assets of our Viya subsidiaries and is guaranteed by us. We paid a fee of $0.9 million in 2016 to lock the interest rate at 4% per annum over the term of the Viya Debt.
The debt is secured by certain assets of the Viya subsidiaries and is guaranteed by us. We paid a fee of $0.9 million in 2016 to lock the interest rate at 4% per annum over the term of the Viya Debt.
In addition to the above changes, the amendment replaced the calculation of interest from an applicable margin applied to LIBOR with the same applicable margin applied to the Secured Overnight Financing Rate (“SOFR”) plus a 10-basis point adjustment.
In addition to the above changes, the ACS Amendment replaced the calculation of interest from an applicable margin applied to LIBOR with the same applicable margin applied to the Secured Overnight Financing Rate (“SOFR”) plus a 10-basis point adjustment.
We are a recipient under the Connect America Fund Phase II program which will offer subsidies to us in order to expand our broadband coverage in designated areas.
Connect America Fund II (CAF II). We are a recipient under the Connect America Fund Phase II program which will offer subsidies to us in order to expand our broadband coverage in designated areas.
Our effective tax rate for the year ended December 31, 2022 was primarily impacted by the following items: (i) a $4.1 million net increase of unrecognized tax positions, (ii) a $2.1 million net increase for permanently non-deductible expenses, (iii) a $2.1 million net increase related to valuation allowances placed on certain deferred tax assets and (iv) the mix of income generated among the jurisdictions in we operate along with the exclusion of losses in jurisdictions where valuation allowances have been established for deferred tax assets as required by ASC 740-270-30-36(a).
Our effective tax rate for the year ended December 31, 2022 was primarily impacted by the following items: (i) a $4.1 million net increase of unrecognized tax positions, (ii) a $2.1 million net increase for permanently non-deductible expenses, (iii) a $2.1 million net increase related to valuation allowances placed on certain deferred tax assets and (iv) the mix of income generated among the jurisdictions in we operate along with the exclusion of losses in jurisdictions where valuation allowances have been established for deferred tax assets as required by ASC 740-270-30-36(a), primarily in the US Virgin Islands.
If the cell site is located on a communications tower we own, AT&T will pay us pursuant to a separate lease agreement for an initial term of eight years. In addition to building the network, we will provide ongoing equipment and site maintenance and high-capacity transport to and from these cell sites for an initial term ending in 2029.
If the cell site is located on a communications tower we own, AT&T will pay us pursuant to a separate lease agreement for an initial term of eight years. In addition to building the network, we will provide ongoing equipment and site maintenance and high-capacity transport to and from these cell sites for an initial term ending in 2031.
Our 2019 CoBank Credit Facility contains customary representations, warranties and covenants, including covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. In addition, the 2019 CoBank Credit Facility contains a financial covenant that imposes a maximum ratio of indebtedness to EBITDA.
Our 2023 CoBank Credit Facility contains customary representations, warranties and covenants, including covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. In addition, the 2023 CoBank Credit Facility contains a financial covenant that imposes a maximum ratio of indebtedness to EBITDA.
In 2018, the FCC initiated a proceeding to replace the High Cost Program support received by Viya in the US Virgin Islands with a new Connect USVI Fund. On November 16, 2020, the FCC announced that Viya was not the recipient of the Connect USVI Fund award and authorized funding to be issued to the new awardee in June 2021.
In 2018, the FCC initiated a proceeding to replace the High Cost Program support received by Viya in the US Virgin Islands with a new Connect USVI Fund. On November 16, 2020, the FCC announced that Viya was not the recipient of the Connect USVI Fund award and authorized funding to be issued to the new awardee in September 2021.
Regulatory and Tax Issues We are involved in a number of regulatory and tax proceedings. A material and adverse outcome in one or more of these proceedings could have a material adverse impact on our financial condition and future operations. For discussion of ongoing proceedings, see Note 11 to the Consolidated Financial Statements in this Report.
Regulatory and Tax Issues We are involved in a number of regulatory and tax proceedings. A material and adverse outcome in one or more of these proceedings could have a material adverse impact on our financial condition and future operations. For discussion of ongoing proceedings, see Note 13 to the Consolidated Financial Statements in this Report .
The base rate is equal to the higher of (i) 1.00% plus the higher of (x) LIBOR for an interest period of one month and (y) LIBOR for an interest period of one week; (ii) the Federal Funds Effective Rate (as defined in the 2019 CoBank Credit Facility) plus 0.50% per annum; and (iii) the Prime Rate (as defined in the 2019 CoBank Credit Facility).
The base rate was equal to the higher of (i) 1.00% plus the higher of (x) LIBOR for an interest period of one month and (y) LIBOR for an interest period of one week; (ii) the Federal Funds Effective Rate (as defined in the 2019 CoBank Credit Facility) plus 0.50% per annum; and (iii) the Prime Rate (as defined in the 2019 CoBank Credit Facility).
We believe our current cash, cash equivalents, short term investments 56 Table of Contents and availability under our current credit facilities will be sufficient to meet our cash needs for at least the next twelve months for working capital needs and capital expenditures. Total liquidity.
We believe our current cash, cash equivalents, short term investments and availability under our current credit facilities will be sufficient to meet our cash needs for at least the next twelve months for working capital needs and capital expenditures. 47 Table of Contents Total liquidity.
The maturity date for each loan will be set by CoBank and will match the weighted average maturity of the certain receivables financed. Interest on the loans accrues at a fixed annual interest rate to be quoted by CoBank.
The maturity date for each loan will be set by CoBank and will match the weighted average maturity of the certain receivables financed. Interest on the loans accrue at a fixed annual interest rate to be quoted by CoBank.
If the value of these assets was impaired by some factor, 65 Table of Contents such as an adverse change in the subsidiary’s operating market, we may be required to record an impairment charge. We test the impairment of our telecommunications licenses annually or more frequently if events or changes in circumstances indicate that such assets might be impaired.
If the value of these assets was impaired by some factor, such as an adverse change in the subsidiary’s operating market, we may be required to record an impairment charge. We test the impairment of our telecommunications licenses annually or more frequently if events or changes in circumstances indicate that such assets might be impaired.
We are not expecting any commitments under the CAFII program after 2025. Rural Digital Opportunity Fund Phase I Auction (RDOF). We participated in the RDOF auction and expect to receive funding to provide broadband and voice coverage to over 10,000 households in the United States (not including Alaska) under this program.
We are not expecting any commitments under the CAF II program after 2025. Rural Digital Opportunity Fund Phase I Auction (RDOF). We participated in the RDOF auction and expect to receive funding to provide broadband and voice coverage to over 10,000 households in the United States (not including Alaska) under this program.
If the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit, an impairment charge is recorded equal to the excess, but not more than the total amount of goodwill allocated to the reporting unit. We assess the recoverability of the value of our telecommunications licenses using either a market or income approach.
If the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit, an impairment charge is recorded equal to the excess, but not more than the total amount of goodwill allocated to the reporting unit. 57 Table of Contents We assess the recoverability of the value of our telecommunications licenses using either a market or income approach.
We provide information technology services such as network, application, infrastructure and hosting services to both our business and consumer customers to complement our fixed Services in our existing markets. ​ Through December 31, 2022, we have identified two operating segments to manage and review our operations and to facilitate investor presentations of our results.
We provide information technology services such as network, application, infrastructure and hosting services to both our business and consumer customers to complement our fixed services in our existing markets. ​ Through December 31, 2023, we identified two operating segments to manage and review our operations and to facilitate investor presentations of our results.
We expect to fund our 2023 capital expenditures primarily from our current cash balances, cash generated from operations and our existing credit facilities including the Receivables Credit Facility. Long-term Debt.
We expect to fund our 2024 capital expenditures primarily from our current cash balances, cash generated from operations and our existing credit facilities including the Receivables Credit Facility. Long-term Debt.
Swingline loans bear interest at the base rate plus the applicable margin for base rate loans.
Swingline loans will bear interest at the base rate plus the applicable margin for base rate loans.
We are currently receiving revenue from the FirstNet Transaction and expect overall operating income contributions from the FirstNet Transaction to have a relatively steady impact going forward.
We are currently receiving revenue from the FirstNet Agreement and expect overall operating income contributions from the FirstNet Agreement to have a relatively steady impact going forward.
We expect that Managed Services revenue may increase in both our US and International Telecom segments as a result of our continued effort to sell certain Managed Services solutions to both our consumer and business customers in all of our markets. Operating expenses Cost of communication services and other.
Managed Services revenue may increase in both our US and International Telecom segments as a result of our continued effort to sell certain Managed Services solutions to both our consumer and business customers in all of our markets. Operating expenses Cost of communication services and other.
Accordingly, we could record additional provisions or benefits for US federal, state, and foreign tax matters in future periods as new information becomes available. Net income attributable to noncontrolling interests, net of tax.
Accordingly, we could record additional provisions or benefits for US federal, state, and foreign tax matters in future periods as new information becomes available. 46 Table of Contents Net income attributable to noncontrolling interests, net of tax.
Our ability to raise funds in the capital markets depends on, among other things, general economic conditions, the conditions of the telecommunications industry, our financial performance, the state of the 62 Table of Contents capital markets and our compliance with SEC requirements for the offering of securities.
Our ability to raise funds in the capital markets depends on, among other things, general economic conditions, the conditions of the telecommunications industry, our financial performance, the state of the capital markets and our compliance with SEC requirements for the offering of securities.
RDOF (“Rural Digital Opportunities Fund”) We expect to receive approximately $20.1 million over 10 years to provide broadband and voice coverage to over 10,000 households in the United States (not including Alaska) under the 2020 Rural Digital Opportunity Fund Phase I Auction (“RDOF”).
RDOF (“Rural Digital Opportunities Fund”) We expect to receive 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”).
In connection with this program, we are expecting to spend $12.5 million in capital expenditures during the year ended December 31, 2023 (which is included in our capital expenditure estimates for the US Telecom segment above) and then an additional $11.3 million during the years ended December 31, 2024 and 2025 in order to meet our build-out obligations under this program.
In connection with this program, we are expecting to spend $12.5 million in capital expenditures during the year ended December 31, 2024 (which is included in our capital expenditure estimates for the US Telecom segment above) and then an additional $27.5 million during the year ended December 31, 2025 in order to meet our build-out obligations under this program.
During the years ended December 31, 2022 and 2021, we recorded $0.9 million in losses on foreign currency transactions. We will continue to assess the impact of our exposure to the Guyana Dollar. Inflation Several of our markets have experienced an increase in operating costs, some of which we believe, is attributable to inflation.
During the years ended December 31, 2023 and 2022, we recorded $1.4 million and $0.9 million in losses on foreign currency transactions, respectively. We will continue to assess the impact of our exposure to the Guyana Dollar. Inflation Several of our markets have experienced an increase in operating costs, some of which we believe, is attributable to inflation.
In the United States, we offer fixed services, carrier services, and managed services to business and consumer customers in Alaska and the western United States.
In the United States, we offer fixed services, carrier services, and managed services to business customers and consumers in Alaska and the western United States.
The key factors affecting our internally generated funds are demand for our services, competition, regulatory developments, economic conditions in the markets where we operate our businesses and industry trends within the telecommunications industry. Restrictions under Credit Facility.
The key factors affecting our internally generated funds are demand for our services, competition, regulatory developments, economic conditions in the markets where we operate our businesses and industry trends within the telecommunications industry. 54 Table of Contents Restrictions under Credit Facility.
The applicable margin is determined based on the Total Net Leverage Ratio (as defined in the 2019 CoBank Credit Facility). Under the terms of the 2019 CoBank Credit Facility, we must also pay a commitment fee ranging from 0.150% to 0.375% of the average daily unused portion of the 2019 CoBank Credit Facility over each calendar quarter.
The applicable margin was determined based on the Total Net Leverage Ratio (as defined in the 2019 CoBank Credit Facility). Under the terms of the 2019 CoBank Credit Facility, we also paid a commitment fee ranging from 0.150% to 0.375% of the average daily unused portion of the 2019 CoBank Credit Facility over each calendar quarter.
The fee was recorded as a reduction to the Viya Debt carrying amount and is being amortized over the life of the loan. As of December 31, 2022, $60.0 million of the Viya Debt remained outstanding and $0.3 million of the rate lock fee was unamortized.
The fee was recorded as a reduction to the Viya Debt carrying amount and is being amortized over the life of the loan. As of December 31, 2023, $60.0 million of the Viya Debt remained outstanding and $0.2 million of the rate lock fee was unamortized.
As of December 31, 2022, we were in compliance with all of the financial covenants of the 2019 CoBank Credit Facility. Capital markets.
As of December 31, 2023, we were in compliance with all of the financial covenants of the 2023 CoBank Credit Facility. Capital markets.
The 2019 CoBank Credit Facility contains customary representations, warranties and covenants, including a financial covenant that imposes a maximum ratio of indebtedness to EBITDA as well as covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes.
The 2023 CoBank Credit Agreement contains a financial covenant (as further defined in the 2023 CoBank Credit Agreement) that imposes a maximum ratio of indebtedness to EBITDA, as well as customary representations, warranties and covenants, including covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes.
As of December 31, 2022 we provided mobility services to retail customers in the western United States ​ The following chart summarizes the operating activities of our principal subsidiaries, the segments in which we report our revenue and the markets we served as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ Segment Services Markets Tradenames International Telecom Mobility Services Bermuda, Guyana, US Virgin Islands One, GTT, Viya ​ ​ Fixed Services Bermuda, Cayman Islands, Guyana, US Virgin Islands One, Logic, GTT, Viya ​ ​ Carrier Services ​ Bermuda, Guyana, US Virgin Islands ​ One, GTT, Viya ​ ​ Managed Services ​ Bermuda, Cayman Islands, US Virgin Islands, Guyana ​ Fireminds, One, Logic, GTT, Viya US Telecom Mobility Services United States (rural markets) Choice, Choice NTUA Wireless ​ ​ Fixed Services ​ United States Alaska Communications, Commnet, Choice, Choice NTUA Wireless, Sacred Wind Communications, Ethos ​ ​ Carrier Services ​ United States ​ Alaska Communications, Commnet, Essextel, Sacred Wind Communications ​ Managed Services United States Alaska Communications, Choice ​ ​ Acquisition of Sacred Wind Enterprises On November 7, 2022, we, via our newly formed wholly owned subsidiary Alloy, Inc.
As of December 31, 2023 we provided mobility services to retail customers in the western United States. 33 Table of Contents The following chart summarizes the operating activities of our principal subsidiaries, the segments in which we reported our revenue and the markets we served during 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ International Telecom US Telecom Services Markets ​ Tradenames Services Markets ​ Tradenames Mobility Services ​ Bermuda, Guyana, US Virgin Islands ​ One, GTT, Viya Mobility Services United States (rural markets) ​ Choice, Choice NTUA Wireless Fixed Services ​ Bermuda, Cayman Islands, Guyana, US Virgin Islands ​ One, Logic, GTT, Viya Fixed Services ​ United States ​ Alaska Communications, Commnet, Choice, Choice NTUA Wireless, Sacred Wind Communications, Ethos, Deploycom Carrier Services ​ Bermuda, Guyana, US Virgin Islands ​ One, GTT, Viya Carrier Services ​ United States ​ Alaska Communications, Commnet, Essextel, Sacred Wind Communications Managed Services ​ Bermuda, Cayman Islands, US Virgin Islands, Guyana ​ Fireminds, One, Logic, GTT, Viya, Brava Managed Services United States ​ Alaska Communications, Choice ​ Acquisition of Sacred Wind Enterprises On November 7, 2022, we, via our wholly owned subsidiary Alloy, Inc.
We believe that some adverse outcome is probable and have accordingly accrued $14.7 million as of December 31, 2022 for these matters. Recent Accounting Pronouncements See Note 2 to the Consolidated Financial Statements included in this Report.
We believe that some adverse outcome is probable and have accordingly accrued $16.3 million as of December 31, 2023 for these matters. Recent Accounting Pronouncements See Note 2 to the Consolidated Financial Statements included in this Report.
On May 5, 2022, RTFC agreed to amend the Net Leverage Ratio to 7.0 to 1.0 through the maturity date of July 1, 2026. We were in compliance with the Net Leverage Ratio as of December 31, 2022.
On May 5, 2022, RTFC agreed to amend the Net Leverage Ratio to 7.0 to 1.0 through the maturity date of July 1, 2026. The Ratio is tested annually, and we were in compliance with the Net Leverage Ratio as of December 31, 2023.
For further information about our financial segments and geographical information about our operating revenues and assets, see Notes 1 and 14 to the Consolidated Financial Statements included in this Report. As of December 31, 2022, we offer the following types of services to our customers: ● Mobility Telecommunications Services .
For further information about our financial segments and geographical information about our operating revenues and assets, see Notes 1 and 14 to the Consolidated Financial Statements included in this Report. As of December 31, 2023, we offered the following types of services to our customers: ● Mobile Telecommunications Services .
Within our International Telecom segment, net income attributable to noncontrolling interests, net of tax decreased by $0.9 million, or 12.0%, to an allocation of $6.6 million of income from an allocation of $7.5 million of income for the years ended December 31, 2022 and 2021, respectively, primarily as a result of reduced profitability at certain less than wholly owned subsidiaries partially offset by an increase in our ownership and profitability in other international markets. ​ ● US Telecom .
Within our International Telecom segment, net income attributable to noncontrolling interests, net of tax increased by $0.5 million, or 7.6%, to an allocation of $7.1 million of income from an allocation of $6.6 million of income for the years ended December 31, 2023 and 2022, respectively, primarily as a result of increased profitability at certain less than wholly owned subsidiaries partially offset by an increase in our ownership in certain international markets. ​ ● US Telecom .
For the year ended December 31, 2023, such investments are expected to total approximately $160 million to $170 million, net of reimbursable amounts, and will primarily relate to network expansion and upgrades which are expected to further drive subscriber and revenue growth in future periods.
For the year ended December 31, 2024, such investments are expected to total approximately $110 million to $120 million, net of reimbursable amounts, and will primarily relate to network expansion and upgrades which are expected to further drive subscriber and revenue growth in future periods.
The agreements also contain a financial covenant which Sacred Wind Enterprises was not in compliance with as of December 31, 2021. Sacred Wind Enterprises submitted a corrective action plan to comply with the financial covenant 61 Table of Contents as of December 31, 2025. On May 5, 2022, Sacred Wind Enterprise’s corrective action plan was accepted by the RUS.
The agreements also contain a financial covenant which Sacred Wind was not in compliance with as of December 31, 2021. Sacred Wind submitted a corrective action plan to comply with the financial covenant as of December 31, 2025. On May 5, 2022, Sacred Wind’s corrective action plan was accepted by the RUS.
These two operating segments are as follows: ​ ● International Telecom. . In our international markets, we offer fixed services, mobility services, carrier services and managed services to customers in Bermuda, the Cayman Islands, Guyana and the US Virgin Islands. 41 Table of Contents ​ ● US Telecom.
These operating segments are as follows: ​ ● International Telecom . In our international markets, we offer fixed services, mobility services, carrier services and managed services to customers in Bermuda, the Cayman Islands, Guyana and the US Virgin Islands. ​ ● US Telecom .
Within our US Telecom segment, Carrier Services revenue includes services provided under the FirstNet Transaction, wholesale roaming revenues, the provision of network switching services, tower lease revenue and other services provided to other carriers. Carrier Services revenue increased by $24.6 million, or 20.9%, to $142.3 million from $117.7 million for the years ended December 31, 2022 and 2021, respectively.
Within our US Telecom segment, Carrier Services revenue includes services provided under the FirstNet Transaction, wholesale roaming revenues, the provision of network switching services, tower lease revenue and other services provided to other carriers. Carrier Services revenue increased by $0.6 million, or 0.4%, to $142.9 million from $142.3 million for the years ended December 31, 2023 and 2022, respectively.
For 2023, we expect capital expenditures to be approximately $160 million to $170 million (net of reimbursable amounts), and will primarily relate to network expansion and upgrades which are expected to further drive subscriber and revenue growth in future periods.
For 2024, we expect capital expenditures to be approximately $110 million to $120 million (net of reimbursable amounts), and will primarily relate to network expansion and upgrades which are expected to further drive subscriber and revenue growth in future periods.
One Communications Debt We had an outstanding loan from HSBC Bank Bermuda Limited (the “One Communications Debt”) which matured and was repaid in full on December 22, 2022. This loan bore interest at the one-month LIBOR plus a margin ranging between 2.5% to 2.75% per annum paid quarterly. Factors Affecting Sources of Liquidity Internally generated funds.
One Communications Debt One Communications had an outstanding loan from HSBC Bank Bermuda Limited (the “One Communications Debt”) which matured and was repaid in full on December 22, 2022. This loan bore interest at the one-month LIBOR plus a margin ranging between 2.5% to 2.75% per annum paid quarterly.
We recorded $2.0 million of revenue from the RDOF program during the year ended December 31, 2022. ​ 44 Table of Contents Construction Grants We have also been awarded construction grants to build network connectivity for eligible communities. The funding of these grants, used to reimburse us for our construction costs, is generally distributed upon completion of a project.
During the years ended December 31, 2023 and 2022, we recorded $2.4 million and $2.0 million of revenue from the RDOF program, respectively. Construction Grants We have also been awarded construction grants to build network connectivity for eligible communities. The funding of these grants, used to reimburse us for our construction costs, is generally distributed upon completion of a project.
Under CAF II, our US Telecom segment will receive an aggregate of $27.4 million annually through December 2025 and an aggregate of $7.7 million annually from January 2026 through July 2028. Both the USF and CAFII programs are subject to certain operational and reporting compliance requirements. We believe we are in compliance with these requirements as of December 31, 2022.
Under CAF II, our US Telecom segment will receive an aggregate of $27.7 million annually through December 2025 and an aggregate of $8.0 million annually from January 2026 through July 2028. All of the programs are subject to certain operational and reporting compliance requirements. We believe we are in compliance with these requirements as of December 31, 2023.
Managed Services revenue in our International Telecom segment decreased $0.2 million to $4.9 million, or 3.9%, from $5.1 million for the years ended December 31, 2022 and 2021, respectively. US Telecom .
Managed Services revenue in our International Telecom segment increased $0.4 million to $5.3 million, or 8.2%, from $4.9 million for the years ended December 31, 2023 and 2022, respectively. US Telecom .
We expect that total construction revenue related to FirstNet will approximate $80 million to $85 million. Since inception of the project through December 31, 2022, we have recorded $62.6 million in construction revenue, including $15.8 million during 2022. In 2023, we expect to record additional construction revenue and related costs, as sites are completed.
We expect that total construction revenue related to FirstNet will approximate $80 million to $85 million. Since the inception of the project through December 31, 2023, we have recorded $73.2 million in construction revenue, including $10.6 million during 2023. In 2024, we expect to record additional construction revenue and related costs as sites are completed.
From time to time, we may raise capital ahead of any definitive use of proceeds to allow us to move more quickly and opportunistically if an attractive investment materializes. Cash used in investing activities. Cash used in investing activities was $167.2 million and $426.6 million for the years ended December 31, 2022 and 2021, respectively.
From time to time, we may raise capital ahead of any definitive use of proceeds to allow us to move more quickly and opportunistically if an attractive investment materializes. Cash used in investing activities. Cash used in investing activities decreased by $2.1 million to $165.1 million from $167.2 million for the years ended December 31, 2023 and 2022, respectively.
We also actively evaluate potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, and generally look for those that we believe fit our profile of telecommunications businesses and have the potential to complement our “glass and steel” and “first to fiber” approach in markets while generating steady excess cash flows over extended periods of time.
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.
The receivables to be financed and sold under the Receivables Credit Facility, which provide the loan security, relate to the obligations of AT&T under the FirstNet Agreement. On December 23, 2022, CoBank amended the Receivables Credit Facility and extended the delayed draw period to December 31, 2023.
The receivables to be financed and sold under the Receivables Credit Facility, which provide the loan security, relate to the obligations of AT&T under the FirstNet Agreement. 52 Table of Contents On December 19, 2023, CoBank amended the Receivables Credit Facility and extended the delayed draw period to December 31, 2024.
As a result, our International Telecom segment’s operating income increased $18.1 million, or 53.4%, to $52.0 million from $33.9 million for the years ended December 31, 2022 and 2021, respectively. US Telecom .
As a result, our International Telecom segment’s operating income increased $1.4 million, or 2.7%, to $53.4 million from $52.0 million for the years ended December 31, 2023 and 2022, respectively. US Telecom .
Within our International Telecom segment, cost of communication services and other increased by $3.3 million, or 2.4%, to $140.1 million from $136.8 million, for the years ended December 31, 2022 and 2021, respectively.
Within our International Telecom segment, cost of communication services and other increased by $1.7 million, or 1.2%, to $141.8 million from $140.1 million, for the years ended December 31, 2023 and 2022, respectively.
Our effective tax rate for the years ended December 31, 2022 and 2021 was 5.9% and 8.3%, respectively.
Our effective tax rate for the years ended December 31, 2023 and 2022 was 31.9% and 5.9%, respectively.
The impairment test consists of a comparison of the fair value of telecommunications licenses with their carrying amount on a license by license basis. We performed our annual impairment assessment of our goodwill and indefinite-lived intangible assets (telecommunications licenses) for the years ended December 31, 2022 and 2021.
The impairment test consists of a comparison of the fair value of telecommunications licenses with their carrying amount on a license by license basis. We performed our annual impairment assessment of our goodwill and indefinite-lived intangible assets (telecommunications licenses) for the years ended December 31, 2023 and 2022 and no impairment was recognized during either year. Contingencies.
The net increase in depreciation and amortization expenses, within our segments, consisted primarily of the following: ● International Telecom . Depreciation and amortization expenses increased within our International Telecom segment by $2.7 million, or 5.0%, to $56.6 million from $53.9 million, for the years ended December 31, 2022 and 2021, respectively.
The net increase in depreciation and amortization expenses, within our segments, consisted primarily of the following: ● International Telecom . Depreciation and amortization expenses increased within our International Telecom segment by $0.8 million, or 1.4%, to $57.4 million from $56.6 million, for the years ended December 31, 2022 and 2021, respectively.
On a per diluted share basis, net income (loss) was a loss of $0.67 per diluted share for the year ended December 31, 2022 as compared to a loss of $1.52 per diluted share for the year ended December 31, 2021. Such per share amounts were negatively impacted by accrued preferred dividends of $4.9 million and $2.0 million.
On a per diluted share basis, net loss was $1.25 per diluted share for the year ended December 31, 2023 as compared to $0.67 per diluted share for the year ended December 31, 2022. Such per share amounts were negatively impacted by accrued preferred dividends of $4.9 million for both years.
Such decreases, however, may be offset as a result of an increase in demand for broadband and other data services from consumers, businesses and government, driven by such trends as the popularity of video and audio streaming, demand for cloud services and smart home, business and city solutions as well as macro-economic and population growth in places like the Cayman Islands and Guyana.
As a result, we may experience an increase in demand for broadband and other data services from consumers, businesses and government driven by such trends as the popularity of video and audio 41 Table of Contents streaming, demand for cloud services and smart home, business and city solutions as well as macro-economic and population growth in the Cayman Islands and Guyana.
Depreciation and amortization expenses represent the depreciation and amortization charges we record on our property and equipment. Depreciation and amortization expenses increased by $32.4 million, or 31.5%, to $135.1 million from $102.7 million for the years ended December 31, 2022 and 2021, respectively.
Depreciation and amortization expenses represent the depreciation and amortization charges we record on our property and equipment. Depreciation and amortization expenses increased by $6.5 million, or 4.8%, to $141.6 million from $135.1 million for the years ended December 31, 2023 and 2022, respectively.
We capitalized $0.8 million in fees associated with the Receivables Credit Facility which are being amortized over the life of the debt and $0.6 million were unamortized as of December 31, 2022.
Commnet Wireless capitalized $0.8 million in fees associated with the Receivables Credit Facility which are being amortized over the life of the debt and $0.5 million were unamortized as of December 31, 2023.
For the year ended December 31, 2022, our Board of Directors declared $11.3 million of dividends to our stockholders which includes a $0.21 per share dividend declared on December 19, 2022 and paid on January 6, 2023. The $0.21 per share dividend declared on December 19, 2022 represents an increase from the $0.17 per share dividend declared in previous quarters.
For the year ended December 31, 2023, our Board of Directors declared $13.6 million of dividends to our stockholders which includes a $0.24 per share dividend declared on December 14, 2023 and paid on January 5, 2024. The $0.24 per share dividend declared on December 14, 2023 represents an increase from the $0.21 per share dividend declared in previous quarters.
We capitalized $7.3 million of fees associated with the Alaska Credit Facility which are being amortized over the life of the debt and $5.4 million were unamortized as of December 31, 2022.
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 $3.9 million were unamortized as of December 31, 2023.
We have declared quarterly dividends since the fourth quarter of 1998. Stock Repurchase Plan. On September 19, 2016, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock from time to time on the open market or in privately negotiated transactions (the “2016 Repurchase Plan”).
We have declared quarterly dividends since the fourth quarter of 1998. Stock Repurchase Plan. On December 14, 2023, our Board of Directors authorized the repurchase of up to $25.0 million of our common stock, from time to time, on the open market or in privately negotiated transactions (the “2023 Repurchase Plan”).
This increase was incurred within all of our international markets primarily as a result of an increase in our sales and marketing capabilities to support the expansion of our subscriber base. ​ ● US Telecom .
This increase was incurred within all of our international markets primarily as a result of an increase in our sales and marketing costs needed to support the expansion of our subscriber base, as well as increases in professional and regulatory fees . ​ ● US Telecom .
As of December 31, 2022, we had approximately $59.7 million in cash, cash equivalents, and restricted cash. Of this amount, $19.4 million was held by our foreign subsidiaries and is indefinitely invested outside the United States. In addition, we had approximately $421.9 million of debt, net of unamortized deferred financing costs, as of December 31, 2022.
As of December 31, 2023, we had approximately $62.2 million in cash, cash equivalents, and restricted cash. Of this amount, $21.9 million was held by our foreign subsidiaries and is indefinitely invested outside the United States. In addition, we had approximately $516.9 million of debt, net of unamortized deferred financing costs, as of December 31, 2023.
The 2019 CoBank Credit Facility matures on April 10, 2024. 58 Table of Contents Amounts borrowed under the 2019 CoBank Credit Facility bear interest at a rate equal to, at our option, either (i) the London Interbank Offered Rate (“LIBOR”) plus an applicable margin ranging between 1.25% to 2.25% or (ii) a base rate plus an applicable margin ranging from 0.25% to 1.25%.
Amounts borrowed under the 2019 CoBank Credit Facility bore interest at a rate equal to, at our option, either (i) the London Interbank Offered Rate (“LIBOR”) plus an applicable margin ranging between 1.25% to 2.25% or (ii) a base rate plus an applicable margin ranging from 0.25% to 1.25%.
Pursuant to the terms of the program and effective in July 2021, Viya’s annual USF support was reduced from $16.4 million to $10.9 million. In July 2022, this support was reduced again to $5.5 million for the annual period through June 2023. As the program currently stands, Viya will not receive High Cost Program support subsequent to June 2023.
Pursuant to the terms of the program and effective in July 2021, Viya’s annual USF support was reduced from $16.4 million to $10.9 million. In July 2022, this support was reduced again to $5.5 million for the annual period through June 2023.
As of December 31, 2022, we had $7.5 million outstanding and no available borrowings under the Alaska Term Facility. FirstNet Receivables Credit Facility On March 26, 2020, Commnet Finance, a wholly owned subsidiary of Commnet Wireless, entered into a receivables credit facility with us, Commnet Wireless, and CoBank, ACB (the “Receivables Credit Facility”).
As of December 31, 2023, Alaska Communications Systems Holdings had $6.0 million outstanding and no available borrowings under the Alaska Term Facility. FirstNet Receivables Credit Facility On March 26, 2020, Commnet Finance, a wholly owned subsidiary of Commnet Wireless, entered into a receivables credit facility with the Company, Commnet Wireless, and CoBank, ACB (the “Receivables Credit Facility”).
During the years ended December 31, 2022 and 2021, Construction revenue decreased to $15.8 million from $35.9 million, respectively, as a result of a decrease in the number of sites completed during 2022 as compared to 2021.
During the years ended December 31, 2023 and 2022, Construction 42 Table of Contents revenue decreased to $10.6 million from $15.8 million, respectively, as a result of a decrease in the number of sites completed during 2023 as compared to 2022.
Cost of communication services and other increased by $63.6 million, or 25.5%, to $312.9 million from $249.3 million for the years ended December 31, 2022 and 2021, respectively. The net increase in cost of communication services and other, within our segments, consisted of the following: ● International Telecom.
Cost of communication services and other increased by $6.8 million, or 2.2%, to $319.7 million from $312.9 million for the years ended December 31, 2023 and 2022, respectively. The net increase in cost of communication services and other, within our segments, consisted of the following : ● International Telecom.
Interest on the Alaska Term Facility accrues at a fixed rate of 4.0% and is payable commencing on 60 Table of Contents December 31, 2022. Scheduled quarterly payments of principal commence on March 31, 2023. The Alaska Term Facility matures on June 30, 2024. The Alaska Term Facility contains events of default customary for facilities of this type.
Interest on the Alaska Term Facility accrues at a fixed rate of 4.0% scheduled quarterly payments of principal commenced on March 31, 2023. The Alaska Term Facility matures on June 30, 2024. The Alaska Term Facility contains events of default customary for facilities of this type.
Mobility revenue increased in each of our markets as total revenue from business customers increased $7.8 million with the remaining $1.2 million of increase being attributable to consumer customers. These increases were the result of improved retail and marketing strategies which led to an increase in subscribers and a $4.1 million increase in equipment sales. ​ ● US Telecom .
Mobility revenue increased in each of our markets as total revenue from business customers increased $1.5 million with the remaining $4.6 million of the increase being attributable to consumer customers as a result of improved marketing strategies which led to an increase in subscribers. ​ ● US Telecom.
Fixed revenue increased by $109.8 million, or 33.4%, to $438.4 million from $328.6 million for the years ended December 31, 2022 and 2021, respectively. Of this increase, $75.9 million and $33.9 million relate to increases in revenue from business and consumer customers, respectively. The increase in Fixed revenue, within our segments, consisted of the following: ● International Telecom .
Fixed revenue increased by $34.4 million, or 7.8%, to $472.8 million from $438.4 million for the years ended December 31, 2023 and 2022, respectively. Of this increase, $17.9 million and $16.5 million relate to increases in revenue from business and consumer customers, respectively. The increase in Fixed revenue, within our segments, consisted of the following : ● International Telecom .
Mobility revenue within our US Telecom segment decreased by $1.3 million, or 14.6%, to $7.6 million from $8.9 million for the years ended December 31, 2022 and 2021, respectively.
Mobility revenue within our US Telecom segment decreased by $3.6 million, or 47.4%, to $4.0 million from $7.6 million for the years ended December 31, 2023 and 2022, respectively.
Our Corporate Overhead segment may also experience an increase in these expenses to support our expanding 53 Table of Contents operations. In addition, we expect our selling, general, and administrative expenses may increase as a result of continued inflationary pressure, issues facing the global supply chain and geopolitical uncertainty. Transaction-related charges.
Our Corporate Overhead segment may also experience an increase in these expenses to support our recent acquisitions and expanding operations. In addition, selling, general, and administrative expenses may increase as a result of continued inflationary pressure, issues facing the global supply chain and geopolitical uncertainty . Stock-based compensation.

… 199 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed5 unchanged
Biggest changeWe believe that a 100-basis-point change in the interest rates on our variable rate debt would result in a $3.3 million change in our annual interest expense. We may have additional exposure to fluctuations in interest rates if we again borrow amounts under our revolver loans within our credit facilities. ​ 66 Table of Contents ITEM 8.
Biggest changeWe believe that a 100-basis-point change in the interest rates on our variable rate debt would result in a $1.8 million change in our annual interest expense. We may have additional exposure to fluctuations in interest rates if we again borrow amounts under our revolver loans within our credit facilities. ​ 58 Table of Contents ITEM 8.
Actuarial gains and losses are reported as a component of other comprehensive income and amortized through other income in subsequent periods. Interest Rate Sensitivity. As of December 31, 2022, we had $329.0 million of variable rate debt outstanding, which is subject to fluctuations in interest rates. Our interest expense may be affected by changes in interest rates.
Actuarial gains and losses are reported as a component of other comprehensive income and amortized through other income in subsequent periods. Interest Rate Sensitivity. As of December 31, 2023, we had $180.9 million of variable rate debt outstanding, which is subject to fluctuations in interest rates. Our interest expense may be affected by changes in interest rates.

Other ATNI 10-K year-over-year comparisons