ATN INTERNATIONAL, INC. FORM 10-K (Annual Report) Filed 03/01/17 for the Period Ending 12/31/16 Address 500 CUMMINGS CENTER BEVERLY, MA 01915 Telephone 9786191300 CIK 0000879585 Symbol ATNI SIC Code 4813 - Telephone Communications, Except Radiotelephone Industry Integrated Telecommunications Services Sector Telecommunication Services Fiscal Year 12/31 http://www.edgar-online.com © Copyright 2017, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10‑K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2016 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001‑‑12593 ATN INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 47‑‑0728886 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 500 Cummings Center Beverly, Massachusetts 01915 (Address of principal executive offices) (Zip Code) (978) 619‑‑1300 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of each exchange on which registered Common Stock, par value $.01 per share The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None (Title of each class) Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S‑T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b‑2 of the Exchange Act (Check one): Large accelerated filer ☒ Accelerated filer ☐ Non‑accelerated filer ☐ Smaller reporting company ☐ (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ☐ No ☒ The aggregate market value of Common Stock held by non‑affiliates of the registrant as of June 30, 2016, was approximately $ 841 million based on the closing price of the registrant’s Common Stock as reported on the NASDAQ Global Select Market. As of March 1, 2017, the registrant had 16,144,061 outstanding shares of Common Stock, $.01 par value. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement for the 2017 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10‑K. Table of Contents TABLE OF CONTENTS Page Special Note Regarding Forward Looking Statements 1 PART I Item 1. Business 2 Overview 2 Strategy 3 Our Services 5 Wireless Services 5 Wireline Services 8 Renewable Energy Services 10 Employees 15 Regulation 15 U.S. Federal Regulation 15 U.S. State Regulation 21 Guyana Regulation 22 Caribbean and Bermuda Regulation 23 Available Information 26 Item 1A. Risk Factors 27 Other Risks Related to Our Businesses 35 Risks Related to Our Capital Structure 40 Item 1B. Unresolved Staff Comments 41 Item 2. Properties 42 Item 3. Legal Proceedings 42 Item 4. Mine Safety Disclosures 43 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 44 Item 6. Selected Financial Data 47 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 50 Overview 50 Results of Operations : Years Ended December 31, 2016 and 2015 56 65 Regulatory and Tax Issues 71 Liquidity and Capital Resources 71 Recent Accounting Pronouncements 77 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 80 Item 8. Financial Statements and Supplementary Data 80 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 80 Item 9A. Controls and Procedures 80 Evaluation of Disclosure Controls and Procedures 80 Management’s Report on Internal Control over Financial Reporting 81 Changes in Internal Control over Financial Reporting 81 Item 9B. Other Information 81 PART III Item 10. Directors, Executive Officers and Corporate Governance 82 Item 11. Executive Compensation 85 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters \ 85 Item 13. Certain Relationships and Related Transactions, and Director Independence 85 Item 14. Principal Accountant Fees and Services 85 PART IV Item 15. Exhibits and Financial Statement Schedules 86 Item 16. Form 10-K Summary 86 Signatures 87 Index to Consolidated Financial Statements F‑1 Index to Exhibits EX‑1 Table of Contents SPECIAL NOTE REGARDING FORWARD‑LOOKING STATEMENT S This Annual Report on Form 10‑K (this “Report”) contains statements about future events and expectations, or forward‑looking statements, all of which are inherently uncertain. We have based those forward‑looking statements on our current expectations and projections about future results. When we use words such as “anticipates,” “intends,” “plans,” “believes,” “estimates,” “expects,” or similar expressions, we do so to identify forward‑looking statements. These forward- looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events or results. Actual future events and results could differ materially from the events and results indicated in these statements as a result of many factors, including, among others, (1) our ability to operate our newly acquired businesses in Bermuda and the U.S. Virgin Islands and integrate these operations into our existing operations; (2) the general performance of our operations, including operating margins, revenues, and the future growth and retention of our major customers and subscriber base and consumer demand for solar power; (3) government regulation of our businesses, which may impact our FCC and other telecommunications licenses or our renewables business; (4) economic, political and other risks facing our operations; (5) our ability to maintain favorable roaming arrangements; (6) our ability to efficiently and cost-effectively upgrade our networks and information technology (“IT”) platforms to address rapid and significant technological changes in the telecommunications industry; (7) the loss of or an inability to recruit skilled personnel in our various jurisdictions, including key members of management; (8) our ability to find investment or acquisition or disposition opportunities that fit our strategic goals for the Company; (9) increased competition; (10) our ability to operate and expand our renewable energy business; (11) our reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure; (12) the adequacy and expansion capabilities of our network capacity and customer service system to support our customer growth; (13) the occurrence of weather events and natural catastrophes; (14) our continued access to capital and credit markets; (15) the risk of currency fluctuation for those markets in which we operate; (16) our ability to realize the value that we believe exists in our businesses and (17) our ability to satisfy other conditions needed to complete the pending sale of our Northeast U.S. Wireline business. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. These assumptions could be proven inaccurate. These forward‑looking statements may be found under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors” and “Business,” as well as in this Report generally. You should keep in mind that any forward‑looking statement made by us in this Report or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. In any event, these and other important factors may cause actual results to differ materially from those indicated by our forward‑looking statements, including those set forth in Item 1A of this Report under the caption “Risk Factors.” We have no duty to, and do not intend to, update or revise the forward‑looking statements made by us in this Report after the date of this Report, except as may be required by law. In this Report the words “ATN,” “the Company,” “we,” “our,” “ours” and “us” refer to ATN International, Inc. and its subsidiaries. This Report contains trademarks, service marks and trade names that are the property of ATN International, Inc., and its subsidiaries or licensed from others.