# ATN International, Inc. (ATNI) FY 2023 MD&A Verbatim Item 7 Management's Discussion and Analysis from ATN International, Inc.'s 10-K for fiscal year 2023. SEC filing source: https://www.sec.gov/Archives/edgar/data/879585/000155837024003375/atni-20231231x10k.htm Accession: 0001558370-24-003375 Filing date: 2024-03-15 Report date: 2023-12-31 Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high Company profile: /company/ATNI/ All MD&A years: /company/ATNI/mda/ Previous year: /company/ATNI/mda/fy2022/ (FY 2022) Next year: /company/ATNI/mda/fy2024/ (FY 2024) ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview 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. We have developed significant operational expertise and resources that we use to augment our capabilities in our local markets. With this support, our operating subsidiaries are able to improve their quality of service with greater economies of scale and expertise than would typically be available in the size markets we operate in. We provide management, technical, financial, regulatory, and marketing services to our operating subsidiaries and typically receive a management fee calculated as a percentage of their revenues, which is eliminated in consolidation. We also actively evaluate investment opportunities and other strategic transactions, both domestic and international, and generally look for those that we believe fit our profile of telecommunications businesses and have the potential to complement our “First-to-Fiber” and “Glass & Steel™” approach in markets while keeping a focus on generating excess operating cash flows over extended periods of time. We use the cash generated from our operations to maintain an appropriate ratio of debt and cash on hand and to re-invest in organic growth, to fund capital expenditures, to return cash to our stockholders through dividends or stock repurchases, and make strategic investments or acquisitions. 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: [[GREPCENT_TABLE]] [["","\u25cf","Mobile Telecommunications Services. We offer mobile communications services over our wireless networks and related equipment (such as handsets) to both business and consumer customers."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","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. For some markets, fixed services also include video services and revenue derived from support under certain government programs."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","Carrier Telecommunication 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."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","Managed Services. 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."]] [[/GREPCENT_TABLE]] ​ Through December 31, 2023, we identified two operating segments to manage and review our operations and to facilitate investor presentations of our results. These operating segments are as follows: ​ [[GREPCENT_TABLE]] [["","\u25cf","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."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","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."]] [[/GREPCENT_TABLE]] 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: ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["International Telecom","US Telecom"],["Services","","Markets","\u200b","Tradenames","Services","","Markets","\u200b","Tradenames"],["Mobility Services","\u200b","Bermuda, Guyana, US Virgin Islands","\u200b","One, GTT, Viya","Mobility Services","","United States (rural markets)","\u200b","Choice, Choice NTUA Wireless"],["Fixed Services","\u200b","Bermuda, Cayman Islands, Guyana, US Virgin Islands","\u200b","One, Logic, GTT, Viya","Fixed Services","\u200b","United States","\u200b","Alaska Communications, Commnet, Choice, Choice NTUA Wireless, Sacred Wind Communications, Ethos, Deploycom"],["Carrier Services","\u200b","Bermuda, Guyana, US Virgin Islands","\u200b","One, GTT, Viya","Carrier Services","\u200b","United States","\u200b","Alaska Communications, Commnet, Essextel, Sacred Wind Communications"],["Managed Services","\u200b","Bermuda, Cayman Islands, US Virgin Islands, Guyana","\u200b","Fireminds, One, Logic, GTT, Viya, Brava","Managed Services","","United States","\u200b","Alaska Communications, Choice"]] [[/GREPCENT_TABLE]] ​ Acquisition of Sacred Wind Enterprises On November 7, 2022, we, via our wholly owned subsidiary Alloy, Inc. (“Alloy”), acquired all of the issued and outstanding stock of Sacred Wind Enterprises, Inc. (“Sacred Wind”), a rural telecommunications provider in New Mexico (the “Sacred Wind Transaction”) for $44.6 million of consideration. The purchase price allocation was finalized during the year ended December 31, 2023. As part of the Sacred Wind Transaction, we transferred consideration of $16.7 million of cash, net of $9.4 million of cash acquired, $14.8 million of redeemable noncontrolling interests, and $3.7 million of contingent consideration. During the year ended December 31, 2023, we received $1.3 million as final settlement of working capital amounts. We funded the acquisition with borrowing under our CoBank Credit Facility and assumed $31.6 million of Sacred Wind debt, to the United States of America administered through the Rural Utilities Service. Upon completion of the Sacred Wind Transaction, the former Sacred Wind shareholders own 6% of the Alloy equity. 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. The contingent consideration is earned based on certain operating metrics of Sacred Wind beginning in 2025 through 2027. During the year ended December 31, 2023, Sacred Wind made substantial progress toward achieving the relevant operating metrics and, as a result, the contingent consideration increased by $4.2 million to $7.9 million. Such increase in the contingent consideration is included in Loss on Disposition of Assets and Contingent Consideration on our Consolidated Income Statement. The fair value of the contingent consideration is calculated using discounted cash flow analysis based on a range of probability weighted outcomes. 34 Table of Contents FirstNet Agreement In July 2019, we entered into a Network Build and Maintenance Agreement with AT&T Mobility, LLC (“AT&T”) that we subsequently amended through December 31, 2023 (the “FirstNet Agreement”). In connection with the FirstNet Agreement, we are building a portion of AT&T’s network for the First Responder Network Authority (“FirstNet”) in or near our current operating areas in the western United States. Pursuant to the FirstNet Agreement and subject to certain limitations contained therein, all cell sites must be completed and accepted within a specified period of time. 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. Revenues from construction are expected to have minimal impact on operating income. We expect to substantially complete the build by the end of 2024 with the remainder to be completed in early 2025. Following acceptance of a cell site, AT&T will own the cell site and we will assign to AT&T any third-party tower lease applicable to such cell site. 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. AT&T will continue to use our wholesale domestic mobility network for roaming services at a fixed rate per site during the construction period until such time as the cell site is transferred to AT&T. Thereafter, revenue from the maintenance, leasing and transport services provided to AT&T is expected to generally offset revenue from wholesale mobility roaming services. 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. Verizon Carrier Managed Services Agreement On May 10, 2023, our subsidiary, Commnet, entered into a  Carrier Managed Services Master Agreement (the “Agreement”) with Cellco Partnership d/b/a Verizon Wireless (“Verizon”), pursuant to which Commnet will provide a variety of network, infrastructure and technical services that will help deliver next generation wireless services to Verizon’s subscribers in Commnet’s current operating area in the western United States. Pursuant to the Agreement and subject to certain limitations contained therein, Commnet will upgrade its wireless service in specific areas and provide services to Verizon for an initial seven year term (the “Commitment Period”).  The Commitment Period will automatically renew for up to two additional three year periods, unless Verizon provides no less than twelve months’ notice on non-renewal prior to the expiration of the then-current term. In connection with the Agreement, Commnet has also agreed to provide Verizon with high capacity transport in its coverage area. Verizon will continue to use Commnet’s wireless communications network for roaming services at a fixed rate per site during the build period until such time as upgrades to the network to meet certain performance service level agreements for both RAN operations and transport are met. Verizon will pay Commnet an aggregate of approximately $200 million for services over the term of the Agreement. The Agreement may be terminated at any time upon the mutual written consent of Commnet and Verizon.  In addition, Verizon may terminate the Agreement upon the occurrence of certain events, including failure to meet certain milestones or completion dates with respect to network coverage, failure to meet certain SLAs with respect to the ongoing services, the declaration of a bankruptcy event by Commnet and breach of any other material terms of the Agreement. Universal Service Fund and Connect America Fund Phase II Programs We recognize revenue from several government funded programs including the USF, a subsidy program managed by the Federal Communications Commission (“FCC”), the Alaska Universal Service Fund (“AUSF”), a similar program 35 Table of Contents managed by the Regulatory Commission of Alaska (the “RCA”), and the Emergency Connectivity Fund (“ECF”), a program to help schools and libraries support remote learning in underserved communities. USF funds are disbursed to telecommunication providers through four programs: the High Cost Program; the Low Income Program (“Lifeline Program”); the Schools and Libraries Program (“E-Rate Program”); and the Rural Health Care Support Program.   We also recognize revenue from the Connect America Fund Phase II program (“CAF II”) which offers subsidies to carriers to expand broadband coverage in designated areas. 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. 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. 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. In April of 2023, the FCC issued an order extending the high cost support in the US Virgin Islands at the current $5.5 million per year received from July 2023 through December 31, 2025.  In connection with this order, the FCC requires that we maintain our current footprint for voice and broadband services in the US Virgin Islands. 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”). During the years ended December 31, 2023 and 2022, we recorded $2.4 million and $2.0 million of revenue from the RDOF program, respectively. Construction Grants We have also been awarded construction grants to build network connectivity for eligible communities. The funding of these grants, used to reimburse us for our construction costs, is generally distributed upon completion of a project. Completion deadlines begin in 2024 and once these projects are constructed, we are obligated to provide service to the participants. We expect to meet all requirements associated with these grants, with the exception of grants we have transferred to third parties, as described below.  A roll forward of our grant awards is below (in thousands). ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b"],["\u200b","Amount"],["Grants awarded, December 31, 2022","$","80,197"],["New grants","\u200b","34,526"],["Construction complete","\u200b","(8,305)"],["Transferred grants","\u200b","(6,269)"],["Grants awarded, December 31, 2023","$","100,149"]] [[/GREPCENT_TABLE]] ​ During the year ended December 31, 2023, we disbursed capital expenditures of $17.4 million under these programs and received reimbursement of $14.6 million.  These cash flows are classified as investing activities in our statement of cash flows. In addition, we partner with tribal governments to obtain grants under various government grant programs including, but not limited to, the Tribal Broadband Connectivity Program ("TBCP") and the Rural Development Broadband ReConnect Program (“ReConnect”).  These programs are administered by United States government agencies 36 Table of Contents to deploy broadband connectivity in certain underserved areas.  We were identified as a sub recipient of grants under these programs totaling $192.6 million as of December 31, 2023. Replace and Remove Program On July 15, 2022, we were notified that we were an approved participant 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 or services, that have been deemed to pose a national security risk, from their networks. Pursuant to the Replace and Remove Program, we were allocated up to approximately $207 million in reimbursement amounts to cover documented and approved costs to remove and securely destroy all prohibited communications equipment and services in our U.S. networks and replace such equipment. The Replace and Remove Program requires that we complete the project no later than one year from submitting our initial reimbursement request, or by July 2024. At this time, we anticipate that we will be able to meet the deadlines and requirements of the program. We have incurred capital expenditures of $17.5 million related to this project, of which $15.7 million were incurred in 2023. At December 31, 2023, $31.8 million of capital expenditures were accrued and we have a receivable of $47.3 million, including operation costs and capital expenditures, which is expected to be reimbursed within the next twelve months. During the year ended December 31, 2023 we have received $17.1 million of reimbursement under the program, of which $4.3 million was classified as operating cash inflows and $12.8 million was classified as investing cash inflows in our statement of cash flows. Discussion of Results of Operations for the fiscal year ended December 31, 2022 compared to December 31, 2021 A discussion regarding our results of operations for the fiscal year ended December 31, 2022 compared to 2021 can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 16, 2023, which is available on the SEC’s website at www.sec.gov and our Investor Relations website at https://.ir.atni.com under the “Financials & Filings” section. ​ 37 Table of Contents Selected Segment Financial Information ​ The following represents selected segment information for the years ended December 31, 2023 and 2022 (in thousands): [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["For the Year Ended December 31, 2023"],["\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["\u200b","\u200b","International","\u200b","US","\u200b","Corporate and","\u200b","\u200b","\u200b"],["\u200b","\u200b","Telecom","\u200b","Telecom","\u200b","Other (1)","\u200b","Consolidated"],["Revenue","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Communication Services","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Mobility - Business","\u200b","$","16,333","\u200b","$","527","\u200b","$","\u2014","\u200b","$","16,860"],["Mobility - Consumer","\u200b","\u200b","92,153","\u200b","\u200b","3,510","\u200b","\u200b","\u2014","\u200b","\u200b","95,663"],["Total Mobility","\u200b","\u200b","108,486","\u200b","\u200b","4,037","\u200b","\u200b","\u2014","\u200b","\u200b","112,523"],["Fixed - Business","\u200b","\u200b","71,215","\u200b","\u200b","143,322","\u200b","\u200b","\u2014","\u200b","\u200b","214,537"],["Fixed - Consumer","\u200b","\u200b","167,953","\u200b","\u200b","90,283","\u200b","\u200b","\u2014","\u200b","\u200b","258,236"],["Total Fixed","\u200b","","239,168","\u200b","","233,605","\u200b","","\u2014","\u200b","","472,773"],["Carrier Services","\u200b","\u200b","14,686","\u200b","\u200b","128,195","\u200b","\u200b","\u2014","\u200b","\u200b","142,881"],["Other","\u200b","","3,066","\u200b","","3,839","\u200b","","\u2014","\u200b","","6,905"],["Total Communication Services Revenue","\u200b","\u200b","365,406","\u200b","\u200b","369,676","\u200b","\u200b","\u2014","\u200b","\u200b","735,082"],["Construction","\u200b","\u200b","\u2014","\u200b","\u200b","10,629","\u200b","\u200b","\u2014","\u200b","\u200b","10,629"],["Other","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Managed Services","\u200b","\u200b","5,327","\u200b","\u200b","11,178","\u200b","\u200b","\u2014","\u200b","\u200b","16,505"],["Total Other Revenue","\u200b","\u200b","5,327","\u200b","\u200b","11,178","\u200b","\u200b","\u2014","\u200b","\u200b","16,505"],["Total Revenue","\u200b","\u200b","370,733","\u200b","\u200b","391,483","\u200b","\u200b","\u2014","\u200b","\u200b","762,216"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating income (loss)","\u200b","","53,420","\u200b","","(5,522)","\u200b","","(34,723)","\u200b","","13,175"]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["For the Year Ended December 31, 2022"],["\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["\u200b","\u200b","International","\u200b","US","\u200b","Corporate and","\u200b","\u200b","\u200b"],["\u200b","\u200b","Telecom","\u200b","Telecom","\u200b","Other (1)","\u200b","Consolidated"],["Revenue","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Communication Services","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Mobility - Business","\u200b","$","14,830","\u200b","$","1,228","\u200b","$","\u2014","\u200b","$","16,058"],["Mobility - Consumer","\u200b","\u200b","87,601","\u200b","\u200b","6,359","\u200b","\u200b","\u2014","\u200b","\u200b","93,960"],["Total Mobility","\u200b","\u200b","102,431","\u200b","\u200b","7,587","\u200b","\u200b","\u2014","\u200b","\u200b","110,018"],["Fixed - Business","\u200b","\u200b","69,903","\u200b","\u200b","126,735","\u200b","\u200b","\u2014","\u200b","\u200b","196,638"],["Fixed - Consumer","\u200b","\u200b","163,408","\u200b","\u200b","78,338","\u200b","\u200b","\u2014","\u200b","\u200b","241,746"],["Total Fixed","\u200b","","233,311","\u200b","","205,073","\u200b","","\u2014","\u200b","","438,384"],["Carrier Services","\u200b","\u200b","13,459","\u200b","\u200b","128,864","\u200b","\u200b","\u2014","\u200b","\u200b","142,323"],["Other","\u200b","","1,450","\u200b","","46","\u200b","","\u2014","\u200b","","1,496"],["Total Communication Services Revenue","\u200b","\u200b","350,651","\u200b","\u200b","341,570","\u200b","\u200b","\u2014","\u200b","\u200b","692,221"],["Construction","\u200b","\u200b","\u2014","\u200b","\u200b","15,762","\u200b","\u200b","\u2014","\u200b","\u200b","15,762"],["Other","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Managed Services","\u200b","\u200b","4,930","\u200b","\u200b","12,832","\u200b","\u200b","\u2014","\u200b","\u200b","17,762"],["Total Other Revenue","\u200b","\u200b","4,930","\u200b","\u200b","12,832","\u200b","\u200b","\u2014","\u200b","\u200b","17,762"],["Total Revenue","\u200b","\u200b","355,581","\u200b","\u200b","370,164","\u200b","\u200b","\u2014","\u200b","\u200b","725,745"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating income (loss)","\u200b","","52,011","\u200b","\u200b","(5,655)","\u200b","\u200b","(38,414)","\u200b","\u200b","7,942"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(1)","Reconciling items refer to corporate overhead costs and consolidating adjustments."]] [[/GREPCENT_TABLE]] 38 Table of Contents A comparison of our segment results for the years ended December 31, 2023 and 2022 is as follows: International Telecom. Revenues within our International Telecom segment increased $15.1 million, or 4.2%, to $370.7 million from $355.6 million for the years ended December 31, 2023 and 2022, respectively, as a result of network upgrades and expansions as well as improved customer care and marketing strategies which led to an increase in mobile and fixed subscribers including an increase in the number of homes passed by high-speed data solutions which allowed us to migrate many legacy copper customers to more durable fiber services.  In addition, we recognized growth in Carrier Services revenue as a result of increased roaming revenues due to an increase in international travel in some of our markets.  Operating expenses within our International Telecom segment increased by $13.7 million, or 4.5%, to $317.3 million from $303.6 million for the years ended December 31, 2023 and 2022, respectively.  The increase was primarily the result of increases in retail and marketing program costs as well as certain professional and regulatory costs to support the expansion of our mobile and broadband customer bases. 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.  Revenue within our US Telecom segment increased by $21.3 million, or 5.8%, to $391.5 million from $370.2 million for the years ended December 31, 2023 and 2022, respectively.  Increases in revenue from the impact of the Sacred Wind Transaction and from business customers within our Alaska subsidiary were partially offset by reductions in construction revenue related to the FirstNet Transaction, in roaming revenue due to the restructuring of certain carrier contracts in our western United States operations, and in our wholesale long-distance service revenues. Operating expenses within our US Telecom segment increased $21.1 million, or 5.6%, to $397.0 million from $375.9 million for the years ended December 31, 2023 and 2022, respectively, as a result of increases in expenses being incurred as a result of the impact of the Sacred Wind Transaction and to support the increased revenues within our Alaska operations partially offset by the decrease in FirstNet construction costs as fewer sites were completed in 2023 as compared to 2022 as well as a reduction in costs related to our wholesale long-distance business due to its decrease in revenues.  As a result of the above, our US Telecom segment’s operating loss decreased by $0.2 million, or 3.5%, to a loss of $5.5 million from a loss of $5.7 million for the years ended December 31, 2023 and 2022, respectively. 39 Table of Contents The following represents a year over year discussion and analysis of our results of operations for the years ended December 31, 2023 and 2022 (in thousands): [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended","\u200b","Amount of","\u200b","Percent"],["\u200b","\u200b","December 31,","\u200b","Increase","\u200b","Increase"],["\u200b","\u200b","2023","\u200b","2022","\u200b","(Decrease)","\u200b","(Decrease)"],["\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["REVENUE:","\u200b","\u200b","","","\u200b","","","\u200b","","","","\u200b"],["Communication services","\u200b","$","735,082","\u200b","$","692,221","\u200b","$","42,861","","6.2","%"],["Construction","\u200b","\u200b","10,629","\u200b","\u200b","15,762","\u200b","\u200b","(5,133)","","(32.6)","\u200b"],["Other","\u200b","","16,505","\u200b","","17,762","\u200b","","(1,257)","","(7.1)","\u200b"],["Total revenue","\u200b","\u200b","762,216","\u200b","\u200b","725,745","\u200b","\u200b","36,471","","5.0","\u200b"],["OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated):","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cost of communication services and other","\u200b","\u200b","319,723","\u200b","\u200b","312,895","\u200b","\u200b","6,828","","2.2","\u200b"],["Cost of construction revenue","\u200b","\u200b","10,345","\u200b","\u200b","15,763","\u200b","\u200b","(5,418)","\u200b","(34.4)","\u200b"],["Selling, general and administrative","\u200b","\u200b","242,697","\u200b","\u200b","224,400","\u200b","\u200b","18,297","","8.2","\u200b"],["Stock-based compensation","\u200b","\u200b","8,535","\u200b","\u200b","7,405","\u200b","\u200b","1,130","\u200b","15.3","\u200b"],["Transaction-related charges","\u200b","\u200b","551","\u200b","\u200b","4,798","\u200b","\u200b","(4,247)","","(88.5)","\u200b"],["Restructuring charges","\u200b","\u200b","11,228","\u200b","\u200b","\u2014","\u200b","\u200b","11,228","\u200b","100.0","\u200b"],["Depreciation and amortization","\u200b","\u200b","141,627","\u200b","\u200b","135,137","\u200b","\u200b","6,490","","4.8","\u200b"],["Amortization of intangibles from acquisitions","\u200b","\u200b","12,636","\u200b","\u200b","13,016","\u200b","\u200b","(380)","","(2.9)","\u200b"],["Loss on disposition of long-lived assets","\u200b","\u200b","1,699","\u200b","\u200b","4,389","\u200b","\u200b","(2,690)","","(61.3)","\u200b"],["Total operating expenses","\u200b","\u200b","749,041","\u200b","\u200b","717,803","\u200b","\u200b","31,238","","4.4","\u200b"],["Income (loss) from operations","\u200b","\u200b","13,175","\u200b","\u200b","7,942","\u200b","\u200b","5,233","","65.9","\u200b"],["OTHER INCOME (EXPENSE):","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Interest income","\u200b","\u200b","476","\u200b","\u200b","174","\u200b","\u200b","302","","173.6","\u200b"],["Interest expense","\u200b","\u200b","(42,686)","\u200b","\u200b","(20,417)","\u200b","\u200b","(22,269)","","109.1","\u200b"],["Other income","\u200b","\u200b","1,496","\u200b","\u200b","4,245","\u200b","\u200b","(2,749)","","(64.8)","\u200b"],["Other expense, net","\u200b","\u200b","(40,714)","\u200b","\u200b","(15,998)","\u200b","\u200b","(24,716)","","154.5","\u200b"],["INCOME (LOSS) BEFORE INCOME TAXES","\u200b","","(27,539)","\u200b","","(8,056)","\u200b","","(19,483)","","241.8","\u200b"],["Income tax benefit","\u200b","","(8,785)","\u200b","","(473)","\u200b","","(8,312)","","1,757.3","\u200b"],["NET INCOME (LOSS)","\u200b","","(18,754)","\u200b","","(7,583)","\u200b","","(11,171)","","147.3","\u200b"],["Net (income) loss attributable to noncontrolling interests, net of tax:","\u200b","","4,216","\u200b","","1,938","\u200b","","2,278","","117.5","\u200b"],["NET INCOME (LOSS) ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS","\u200b","$","(14,538)","\u200b","$","(5,645)","\u200b","$","(8,893)","","157.5","%"]] [[/GREPCENT_TABLE]] ​ Communications services revenue Mobility Revenue. Our Mobility revenue consists of retail revenue generated within both our International Telecom and US Telecom segments by providing retail mobile voice and data services over our wireless networks as well as through the sale and repair services of related equipment, such as handsets and other accessories, to our retail subscribers. 40 Table of Contents Mobility revenue increased by $2.5 million, or 2.3%, to $112.5 million for the year ended December 31, 2023 from $110.0 million for the year ended December 31, 2022. Of this increase, Mobility revenue from consumer customers and business customers increased by $1.7 million and $0.8 million, respectively. The increase in Mobility revenue, within our segments, consisted of the following: [[GREPCENT_TABLE]] [["","\u25cf","International Telecom. Within our International Telecom segment, Mobility revenue increased by $6.1 million, or 6.0%, to $108.5 million for the year ended December 31, 2023 from $102.4 million for the year ended December 31, 2022. 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."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","US Telecom. 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. Substantially all of the decrease related to a decrease in revenue from consumers within our retail operations due to a decrease in subscribers as we continue to put more emphasis on other revenue sources within this segment."]] [[/GREPCENT_TABLE]] Mobility revenue within our International Telecom segment may increase as a result of continued network upgrades and our marketing efforts to increase the number of our subscribers. However, increased competition within our international markets may limit that revenue growth. We expect that Mobility revenue within our US Telecom segment will decrease over time as we put more emphasis on other revenue sources within that segment. Fixed Revenue. Fixed revenue is primarily generated by broadband, voice, and video service revenues provided to retail and business customers over our wireline networks. Fixed revenue within our US Telecom segment also includes awards from the Connect America Fund Phase II program in the western United States and Alaska, as well as revenue from the Alaska Universal Service Fund. Within our International Telecom segment, Fixed revenue also includes funding under the FCC’s High Cost Program in the US Virgin Islands. 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: [[GREPCENT_TABLE]] [["","\u25cf","International Telecom. Within our International Telecom segment, Fixed revenue increased by $5.9 million, or 2.5%, to $239.2 million from $233.3 million for the years ended December 31, 2023 and 2022, respectively. Of this increase, $4.6 million and $1.3 million related to increases in revenue from consumer and business customers, respectively. This increase was a result of network upgrades and expansions as well as improved customer care and marketing strategies which led to an increase in subscribers and the number of homes passed by high-speed data solutions which allowed us to migrate many legacy copper customers to more durable fiber services. \u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","US Telecom. Fixed revenue within our US Telecom segment increased by $28.5 million, or 13.9%, to $233.6 million from $205.1 million for the years ended December 31, 2023 and 2022, respectively. Of this increase, $11.9 million and $16.6 million related to increases in revenue from consumer and business customers, respectively. This increase was primarily related to the impact of the Sacred Wind Transaction and an increase in revenue from business customers in Alaska."]] [[/GREPCENT_TABLE]] Fixed revenue within our International Telecom segment may continue to increase as we continue to deploy our fiber and fiber-fed data solutions. 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. However, such increases may be offset by a decrease in demand for our services due to subscribers using alternative methods to receive video and audio content. Within our US Telecom segment, Fixed revenue may decrease as the COVID-19 related Emergency Connectivity Fund programs cease. These decreases are expected to be partially offset by increases in other enterprise revenue in Alaska and our western United States operations, including the impact of the Sacred Wind Transaction, as we further deploy fiber and fiber-fed broadband access to both consumers and businesses. Carrier Services Revenue. Carrier Services revenue is generated by both our International Telecom and US Telecom segments. Within our International Telecom segment, Carrier Services revenue includes international long-distance services, roaming revenues generated by other carriers’ customers roaming into our retail markets, transport services and access services provided to other telecommunications carriers. 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. The increase, within our segments, consisted of the following: [[GREPCENT_TABLE]] [["","\u25cf","International Telecom. Within our International Telecom segment, Carrier Services revenue increased by $1.2 million, or 8.9%, to $14.7 million, from $13.5 million for the years ended December 31, 2023 and 2022, respectively, primarily as a result of an increase in international travel that resulted in an increase in roaming revenues."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","US Telecom. Carrier Services revenue within our US Telecom segment decreased by $0.7 million, or 0.5%, to $128.2 million from $128.9 million, for the years ended December 31, 2023 and 2022, respectively. This decrease reflects a decline in revenue from our wholesale long-distance voice services business partially offset by an increase in these revenues from our Alaska operations and the impact of the Sacred Wind Transaction."]] [[/GREPCENT_TABLE]] Within our International Telecom segment, Carrier Services revenue may continue to increase if international travel continues to increase. Such increases, however, may be partially offset by a decrease within our international long distance business in Guyana as consumers seek to use alternative technology services to place long-distance calls. Within our US Telecom segment, Carrier Services revenue may decrease as a result of recent carrier service management contracts. Other Communications Services Revenue. Other Communications Services revenue includes miscellaneous services that the operations within our International Telecom segment provide to retail subscribers and project-related revenue generated within our US Telecom segment. Other Communications Services revenue increased to $6.9 million from $1.5 million for the years ended December 31, 2023 and 2022, respectively, primarily as a result of $3.7 million of non-recurring project-related fiber deployment engineering services revenue being recognized within our US Telecom segment during the year ended December 31, 2023. We expect that other communications services revenue will decline to previously reported levels as the project-related fiber deployment engineering services revenue, reported during the year ended December 31, 2023, is not expected to continue subsequent to the completion of that project. Construction Revenue Construction revenue represents revenue generated within our US Telecom segment for the construction of network cell sites related to the FirstNet Agreement. 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. We expect to substantially complete the build by the end of 2024 with the remainder to be completed in early 2025. Other Revenue Managed Services Revenue. Managed Services revenue is generated within both our International and US Telecom segments and includes network, application, infrastructure, and hosting services. Managed Services revenue decreased by $1.3 million, or 7.3%, to $16.5 million from $17.8 million for the years ended December 31, 2023 and 2022, respectively. The net decrease, within our segments, consisted of the following: International 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. Within our US Telecom segment, Managed Services revenue decreased $1.6 million, or 12.5%, to $11.2 million from $12.8 million for the years ended December 31, 2023 and 2022, respectively. 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. Cost of communication services and other are charges that we incur for voice and data transport circuits (in particular, the circuits between our Mobility sites and our switches), internet capacity, video programming costs, access fees we pay to terminate our calls, telecommunication spectrum fees and direct costs associated within our managed services businesses. These costs also include expenses associated with developing, operating, upgrading and supporting our telecommunications networks, including the salaries and benefits paid to employees directly involved in the development and operation of those businesses, as well as credit loss allowances and the cost of handsets and customer resale equipment incurred by our retail businesses. 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: [[GREPCENT_TABLE]] [["","\u25cf","International Telecom. 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. This increase was to support this segment\u2019s revenue growth and the result of increased regulatory costs in certain international markets partially offset by decreases in credit loss allowances and in equipment expenses."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","US Telecom. Cost of communication services and other within our US Telecom segment increased by $5.5 million, or 3.2%, to $178.8 million from $173.3 million for the years ended December 31, 2023 and 2022, respectively. Such increase was primarily related to an increase in direct costs in Alaska to support revenue growth and the impact of the Sacred Wind Transaction. These increases were partially offset by reductions in our wholesale long-distance voice services business as a result of decreases in that operation\u2019s revenues."]] [[/GREPCENT_TABLE]] Cost of communication services in both our International and US Telecom segments may increase in connection with our expected increase in fixed revenue and as a result of continued inflationary pressure. 43 Table of Contents Cost of construction revenue. Cost of construction revenue includes the expenses incurred in connection with the construction of and the delivery to AT&T of cell sites in accordance with our FirstNet Agreement. During the years ended December 31, 2023 and 2022, cost of construction revenue decreased to $10.3 million from $15.8 million as a result of a decrease in the number of sites completed during 2023 as compared to 2022. We expect to substantially complete the build by the end of 2024 with the remainder to be completed in early 2025. 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. Selling, general and administrative expenses also include salaries, benefits and related costs for general corporate functions including executive management, finance and administration, legal and regulatory, facilities, information technology and human resources as well as internal costs associated with our performance of due-diligence and integration related costs associated with acquisition activities. Selling, general and administrative expenses increased by $18.3 million, or 8.2%, to $242.7 million from $224.4 million for the years ended December 31, 2023 and 2022, respectively. The net increase in selling, general and administrative expenses, within our segments, consisted of the following: [[GREPCENT_TABLE]] [["","\u25cf","International Telecom. Within our International Telecom segment, our selling, general and administrative expenses increased by $9.1 million, or 8.8%, to $113.0 million from $103.9 million for the years ended December 31, 2023 and 2022, respectively. 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. \u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","US Telecom. Selling, general and administrative expenses increased within our US Telecom segment by $6.7 million, or 7.0%, to $102.4 million from $95.7 million, for the years ended December 31, 2023 and 2022, respectively. This increase was primarily related to expenses to support the operations from the Sacred Wind Transaction and an increase in sales and marketing efforts and administrative costs in our Alaska operations which helped drive the increase in that operation\u2019s revenues. \u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Corporate Overhead. Selling, general and administrative expenses within our corporate overhead increased by $2.5 million, or 10.1%, to $27.3 million from $24.8 million, for the years ended December 31, 2023 and 2022, respectively, primarily related to the support needed for our recent acquisitions, our expanded operations and for information technology security related costs."]] [[/GREPCENT_TABLE]] Selling, general and administrative expenses may increase in our international telecom segment to support our expanded operations. Within the US Telecom segment, we expect an increase in these costs as a result of the Sacred Wind Transaction, our commitments under the Cares Act funding received in previous years and other network expansions in Alaska and the southwest US. 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. Stock-based compensation represents a non-cash expense related to the amortization of grants of equity awards to employees and directors. Stock-based compensation for the years ended December 31, 2023 and 2022 was $8.5 million and $7.4 million, respectively. Transaction-related charges.  Transaction-related charges include the external costs, such as legal, tax, accounting and consulting fees directly associated with acquisition and disposition-related activities, which are expensed as incurred. Transaction-related charges also include certain internal personnel costs incurred as a result of the completion of an acquisition or disposition. Transaction-related charges do not include employee salary and travel-related expenses, incurred in connection with acquisitions or dispositions or any integration-related costs. 44 Table of Contents We incurred $0.6 million of transaction-related charges during the year ended December 31, 2023. During the year ended December 31, 2022, we incurred $4.8 million of transaction-related charges primarily related to the Sacred Wind Transaction. Restructuring expenses. In order to reduce costs to optimal levels needed to support our operations going forward, we incurred certain network termination and reduction in force costs totaling $7.7 million and $3.5 million within our International Telecom segment and US Telecom segment, respectively, during the year ended December 31, 2023.  Depreciation and amortization expenses.  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.  The net increase in depreciation and amortization expenses, within our segments, consisted primarily of the following: [[GREPCENT_TABLE]] [["","\u25cf","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. Increases were incurred in all of our international markets as a result of recent capital expenditures used to expand and upgrade our network operations."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","US Telecom. Depreciation and amortization expenses increased within our US Telecom segment by $6.6 million, or 8.8%, to $81.6 million from $75.0 million, for the years ended December 31, 2023 and 2022, respectively, primarily as a result of the Sacred Wind Transaction and the depreciation expense recorded on recent capital expenditures. \u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Corporate Overhead. Depreciation and amortization expenses decreased within our corporate overhead by $0.9 million, or 25.7%, to $2.6 million from $3.5 million, for the years ended December 31, 2023 and 2022, respectively, primarily as a result of certain assets becoming fully depreciated in recent periods."]] [[/GREPCENT_TABLE]] We expect depreciation and amortization expense to increase within our International Telecom and US Telecom segments as we acquire tangible assets to expand or upgrade our telecommunications networks. Amortization of intangibles from acquisitions. Amortization of intangibles from acquisitions include the amortization of customer relationships and trade names related to our completed acquisitions. Amortization of intangibles from acquisitions decreased by $0.4 million to $12.6 million from $13.0 million for the years ended December 31, 2023 and 2022, respectively. We expect that amortization of intangibles from acquisitions will decrease as such costs continue to amortize. (Gain) loss on disposition of assets and contingent consideration. During the year ended December 31, 2023, we recorded a net loss on the disposition of long-lived assets of $1.7 million representing a $4.3 million loss in our US Telecom segment primarily relating to the recognition of contingent consideration related to the Sacred Wind Transaction partially offset by a $2.6 million gain pertaining to a settlement of the Vibrant Transaction. During the year ended December 31, 2022, we recorded a loss on the disposition of long-lived assets of $4.4 million. Of this amount, $2.5 million was incurred in our US Telecom segment relating to the disposal of certain assets while $1.2 million was incurred in our International Telecom segment as a result of the disposal of certain assets. The remaining $0.7 million pertains to a settlement of the Vibrant Transaction within our Renewable Energy segment. 45 Table of Contents Interest income. Interest income represents interest earned on our cash, cash equivalents, restricted cash and short-term investment balances. Interest income was $0.5 million and $0.2 million for the years ended December 31, 2023 and 2022, respectively. Interest expense.   We incur interest expense on the 2023 CoBank Credit Facility, the Alaska Credit and Term Facilities, the Viya Debt and the Receivables Credit Facility. Interest expense for the year ended December 31, 2023 also includes a full year of interest expense on the Sacred Wind Term Debt and the new GTT Credit Facilities (each as defined below). Previously, we also incurred interest expense on the One Communications Debt, which matured on December 22, 2022. In addition, interest expense includes commitment fees, letter of credit fees and the amortization of debt issuance costs. Interest expense increased to $42.7 million from $20.4 million for the years ended December 31, 2023 and 2022, respectively, as additional interest expense was incurred as a result an increase in borrowings under our credit facilities, an increase in interest rates on all floating-rate borrowings under those facilities and the inclusion of Sacred Wind Term Debt for a full year in 2023 and the GTT Credit Facilities, which were new in 2023. Interest expense may increase in future periods as a result of increases in interest rates and future borrowings. Other income (expenses).   For the year ended December 31, 2023, other income (expenses) was $1.5 million of income primarily related to $2.8 million of gains from our noncontrolling investments partially offset by $1.4 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. Our effective tax rate for the years ended December 31, 2023 and 2022 was 31.9% and 5.9%, respectively. Our effective tax rate for the year ended December 31, 2023 was primarily impacted by the following items: (i) a $2.8 million net increase of unrecognized tax positions, (ii) a $2.5 million net increase related to valuation allowances placed on certain deferred tax assets and (iii) the mix of income generated among the jurisdictions in which 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. 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. Our effective tax rate is based upon estimated income before provision for income taxes for the year, composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for potential tax consequences, benefits and/or resolutions of tax contingencies. Our consolidated tax rate will continue to be impacted by any transactional or one-time items in the future and the mix of income in any given year generated among the jurisdictions in which we operate. While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from our accrued positions as a result of uncertain and complex application of tax law and regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgment by management. Accordingly, 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.  Net income attributable to noncontrolling interests, net of tax reflected an allocation of $4.2 million and $1.9 million of losses generated by our less than wholly owned subsidiaries for the years ended December 31, 2023 and 2022, respectively. Changes in net income attributable to noncontrolling interests, net of tax, within our segments, consisted of the following: [[GREPCENT_TABLE]] [["","\u25cf","International 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."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","US Telecom. Within our US Telecom segment, net income attributable to noncontrolling interests, net of tax increased by $2.7 million, or 31.4%, to an allocation of losses of $11.3 million from an allocation of losses of $8.6 million for the years ended December 31, 2023 and 2022, respectively, as a result of increased losses at our less than wholly owned subsidiaries within this segment."]] [[/GREPCENT_TABLE]] Net loss attributable to ATN International, Inc. stockholders.  Net loss attributable to ATN International, Inc. stockholders was $14.5 million for the year ended December 31, 2023 as compared to $5.6 million for the year ended December 31, 2022. 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. 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.  Tax Reform The Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was signed into law on December 22, 2017, has resulted in significant changes to the US corporate income tax system and the US Virgin Islands mirror code which replaces “United States” with “US Virgin Islands” throughout the Internal Revenue Code. The Tax Act transitions international taxation from a worldwide system to a modified territorial system and includes two base erosion prevention measures on non-US earnings, which has the effect of subjecting certain earnings of our foreign subsidiaries to US taxation as global intangible low taxed income (“GILTI”), eliminates the deduction of certain payments made to related foreign corporations, and imposes a minimum tax if greater than regular tax under the base-erosion and anti-abuse tax (“BEAT”). These changes became effective beginning in 2018 but did not have an impact on us in the initial or following years. We do not expect we will be subject to BEAT and therefore have not included any tax impacts of BEAT in our consolidated financial statements for the quarter ended December 31, 2023. Liquidity and Capital Resources  Historically, we have met our operational liquidity needs and have funded our capital expenditures and acquisitions through a combination of cash-on-hand, internally generated funds, proceeds from dispositions, borrowings under our credit facilities and seller financings. 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.  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. How and when we deploy our balance sheet capacity, including the availability under our various credit facilities (as further described below), will figure prominently in our longer-term growth prospects and stockholder returns. Uses of Cash Acquisitions and investments.  We have historically funded our acquisitions with a combination of cash-on-hand, borrowings under our credit facilities as well as equity investor and seller financings.  Sacred Wind Transaction. On November 7, 2022, we assumed $31.6 million of debt in connection with the Sacred Wind Transaction. See Acquisition of Sacred Wind Enterprises. Alaska Transaction. On July 22, 2021, Alaska Communications entered into a new debt financing in connection with the Alaska Transaction. See Acquisition of Alaska Communications System Group, Inc. We continue to explore opportunities to expand our telecommunications business or acquire new businesses in the United States, the Caribbean and elsewhere. Such acquisitions may require external financing. While there can be no assurance as to whether, when or on what terms we will be able to acquire any such businesses or make such investments, such acquisitions may be completed through the issuance of shares of our capital stock, payment of cash or incurrence of additional debt. 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. This year over year decrease was impacted by increases in cash receipts of $29.0 million from government grants for capital projects and a $19.4 million reduction of cash used in relation to the Sacred Wind Transaction. This decrease was also impacted by cash receipts during the year ended December 31, 2022 for the sale of strategic investments, the Vibrant Transaction and the sale of certain assets of $15.7 million, $1.8 million and $1.1 million, respectively, which did not occur during the year ended December 31, 2023. For 2023, our capital expenditures increased by $28.1 million as compared to 2022. However, $25.0 million of the $28.1 million increase relates to an increase in capital expenditures that will be reimbursed as a part of certain government programs. Cash provided by financing activities. Cash provided by financing activities increased by $12.5 million to $55.9 million from $43.4 million for the years ended December 31, 2023 and 2022, respectively. This increase was primarily related to the increase in borrowings, net of repayments, under our credit facilities of $29.5 million partially offset by the increases in cash used for the repurchase of our common stock, payments made for debt issuance costs and dividends paid to our stockholders of $14.4 million, $3.0 million and $2.5 million, respectively. Working Capital.  Historically, we have internally funded our working capital needs. Pursuant to the FirstNet Agreement, AT&T has the option to repay construction costs, with interest, over an eight-year period. To fund the working capital needs created by AT&T’s option to extend its payment terms, we completed the Receivables Credit Facility, as discussed below, on March 26, 2020. ​ 48 Table of Contents For the years ended December 31, 2023 and 2022, we spent approximately $196.2 million and $168.0 million, respectively, on capital expenditures relating to our telecommunications networks and business support systems of which $32.9 million and $7.9 million, respectively, are reimbursable under various government programs. The following notes our capital expenditures, by operating segment, for these periods (in thousands): [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Capital Expenditures"],["\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b"],["\u200b","\u200b","\u200b","International","\u200b","\u200b","US","\u200b","\u200b","Corporate and","\u200b","\u200b","\u200b"],["Year ended December 31,","\u200b","\u200b","Telecom","\u200b","\u200b","Telecom","\u200b","\u200b","Other (1)","\u200b","\u200b","Consolidated"],["2023","\u200b","$","76,379","\u200b","$","119,789","\u200b","$","\u2014","\u200b","$","196,168"],["2022","\u200b","\u200b","70,385","\u200b","\u200b","96,589","\u200b","\u200b","1,045","\u200b","\u200b","168,019"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(1)","Corporate and other items refer to corporate overhead costs and consolidating adjustments."]] [[/GREPCENT_TABLE]] We are continuing to invest in our telecommunication networks along with our operating and business support systems in many of our markets.  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. See Liquidity and Capital Resources- Material Cash Obligations and Sources below for a discussion of our future cash commitments related to the RDOF program. Income taxes. We have historically used cash-on-hand to make payments for income taxes. Our policy is to allocate capital where we believe we will get the best returns and to date has been to indefinitely reinvest the undistributed earnings of our foreign subsidiaries. As we continue to reinvest our remaining foreign earnings, no additional provision for income taxes has been made on accumulated earnings of foreign subsidiaries. Dividends.   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 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”). 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 shares of our common stock. During the years ended December 31, 2023 and 2022 (and prior to the effectiveness of the 2023 Repurchase Plan), we repurchased $15.0 million and $0.9 million of our common stock. Sources of Cash Cash provided by operations.  Cash provided by operating activities was $111.6 million for the year ended December 31, 2023 as compared to $102.9 million for the year ended December 31, 2022.  The increase of $8.7 million was primarily related to an $18.3 million decrease in the change in operating assets and liabilities, primarily related to our FirstNet Agreement and our Replace and Remove Program, partially offset by a decrease in net income of $7.7 million.   2023 CoBank Credit Facility On July 13, 2023, we, along with certain of our subsidiaries as guarantors, entered into a new Credit Agreement with CoBank, ACB and a syndicate of other lenders (as may be amended from time to time, the “2023 CoBank Credit Facility”). 49 Table of Contents The 2023 CoBank Credit Facility provides for a five-year $170 million revolving credit facility (the “2023 CoBank Revolving Loan”) and a six-year $130 million term loan facility (the “2023 CoBank Term Loan”). We may use (i) up to $25 million under the 2023 CoBank Credit Facility for letters of credit, and (ii) up to $20 million under a swingline sub-facility. Upon the closing of the 2023 CoBank Credit Facility, we drew all of the 2023 CoBank Term Loan and approximately $13.6 million of the 2023 CoBank Revolving Loan. These borrowings were used to repay $139.5 million of debt outstanding under the 2019 CoBank Credit Facility at close. The 2023 CoBank Term Loan must be repaid in quarterly principal payments in the amounts set forth below, with the outstanding principal balance maturing on July 13, 2029. The 2023 CoBank Revolving Loan may be repaid at any time on or prior to its maturity on July 13, 2028. All amounts outstanding under the 2023 CoBank Credit Facility will be due and payable upon the earlier of the maturity date or the acceleration of the loans and commitments upon an event of default. ​ [[GREPCENT_TABLE]] [["\u200b","\u200b"],["2023 CoBank Term Loan Quarterly Payment Dates","2023 CoBank Term Loan Quarterly Repayments"],["December 31, 2023 \u2013 June 30, 2025","$812,500 (2.5% per annum)"],["December 31, 2025 \u2013 June 30, 2026","$1,625,000 (5% per annum)"],["December 31, 2026 \u2013 June 30, 2029","$2,437,500 (7.5% per annum)"]] [[/GREPCENT_TABLE]] Amounts borrowed under the 2023 CoBank Credit Facility bear interest at a rate equal to, at our option, either (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York (SOFR) plus an applicable margin ranging between 2.00% to 3.75% for the 2023 CoBank Term Loan or 1.75% to 3.50% for Revolving Loans or (ii) a base rate plus an applicable margin ranging from 1.00% to 2.75% for the Term Loan or 0.75% to 2.50% for the 2023 CoBank Revolving Loans.  Swingline loans will bear interest at the base rate plus the applicable margin for base rate loans.  The base rate is equal to the higher of (i) 1.00% plus the one-month SOFR rate (ii) the federal funds effective rate (as defined in the 2023 CoBank Credit Agreement) plus 0.50% per annum; and (iii) the prime rate (as defined in the 2023 CoBank Credit Agreement). The applicable margin is determined based on the ratio (as further defined in the 2023 CoBank Credit Agreement) of our indebtedness to EBITDA. Under the terms of the 2023 CoBank Credit Agreement, we must also pay a fee ranging from 0.25% to 0.50% on the average daily unused portion of the 2023 CoBank Credit Facility over each calendar quarter. 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. The Total Net Leverage Ratio is measured each fiscal quarter and is required to be less than or equal to 3.25 to 1.0.  The 2023 CoBank Credit Agreement provides for events of default customary for credit facilities of this type, including but not limited to non-payment, defaults on other debt, misrepresentation, breach of covenants, representations and warranties, insolvency and bankruptcy. We capitalized $4.2 million of fees associated with the 2023 CoBank Credit Facility which are being amortized over the life of the debt and $3.8 million were unamortized as of December 31, 2023. We had $129.2 million outstanding under the 2023 CoBank Term Loan as of December 31, 2023. Under the 2023 CoBank Revolving Loan, we had $33.6 million outstanding and $136.4 million of availability as of December 31, 2023. We were in compliance with all financial covenants as of December 31, 2023. In October 2023, we entered a two year, forward starting 1-month floating to fixed SOFR interest rate swap agreement. The swap was effective November 13, 2023 in a non-amortizing notional amount of $50.0 million, has a fixed SOFR rate of 4.896% and matures on November 13, 2025. 50 Table of Contents 2019 CoBank Credit Facility On April 10, 2019, we entered into a credit facility, with CoBank, ACB and a syndicate of other lenders (as amended, the “2019 CoBank Credit Facility”). The 2019 CoBank Credit Facility provided for a $200 million revolving credit facility that included (i) up to $75 million for standby or trade letters of credit and (ii) up to $10 million under a swingline sub-facility. In connection with the execution of the 2023 CoBank Credit Facility, as defined above, outstanding borrowings under the 2019 CoBank Credit Facility were repaid in full. 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%. Swingline loans bore interest at the base rate plus the applicable margin for base rate loans. 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). 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. Letter of Credit Facility On November 14, 2022, we entered into a General Agreement of Indemnity to issue performance Standby Letters of Credit on behalf of us and our subsidiaries. As of December 31, 2023, $31.6 million of Standby Letters of Credit had been issued under this agreement. Alaska Credit Facility On July 22, 2021, Alaska Communications entered into a Credit Agreement (the “Alaska Credit Facility”) with Fifth Third Bank, National Association, as Administrative Agent, and a syndicate of lenders to provide a $35.0 million revolving facility (the “Alaska Revolving Facility”) and a $210.0 million initial term loan facility (the “Alaska Term Loan”). 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. As a part of the transaction, the Term Loan commitment was fully funded as the outstanding Revolving Credit Commitment balance was transferred. As of December 31, 2023, Alaska Communications had drawn $35.0 million on its Revolving Credit Commitment and had $40.0 million available to draw. The Term Loan balance was $228.6 million and principal payments commenced in the fourth quarter of 2023. Both facilities mature on July 22, 2026. 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. 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.  The Alaska Credit Facility also provides for incremental facilities up to an aggregate principal amount of the greater of $70.0 million and Alaska Communications’ trailing twelve-month Consolidated EBITDA (as defined in the Alaska Credit Facility). 51 Table of Contents The key terms and conditions of the Alaska Credit Facility include the following: [[GREPCENT_TABLE]] [["","\u25cf","Amounts outstanding bear an interest rate of the forward-looking SOFR rate with a one-month interest period, plus the SOFR Spread Adjustment of 10 basis points, plus a margin ranging from 3.00% to 4.00% based on Alaska Communications\u2019 Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) or an alternate base rate may be selected at a margin that is 1% lower than the counterpart SOFR margin;"]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","Principal repayments are due quarterly and commenced in the fourth quarter of 2023 in quarterly amounts as follows: from the fourth quarter of 2023 through the third quarter of 2024, $1.4 million; and from the fourth quarter of 2024 through the third quarter of 2026, $2.9 million. The remaining unpaid balance is due on the final maturity date;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Alaska Communications is required to maintain financial ratios as defined in the Alaska Credit Facility, including (a) a maximum Consolidated Net Total Leverage Ratio of 4.00 to 1, stepping down to 3.75 to 1 beginning with the second quarter of 2024; and (b) a minimum Consolidated Fixed Charge Coverage Ratio of not less than 1.25 to 1; and"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","The Alaska Credit Facility is non-recourse to us and is secured by substantially all of the personal property and certain material real property owned by Alaska Communications."]] [[/GREPCENT_TABLE]] Alaska Communication’s interest rate swap, which had been designated as a cash flow hedge with an interest rate of 1.6735%, expired on June 30, 2022. In November 2023, Alaska Communications entered two forward starting 1-month floating to fixed SOFR interest rate swap agreements. The total non-amortizing notional amount of the agreements is $200.0 million, with fixed SOFR rates of 4.8695% and 4.8980% and both agreements mature on June 30, 2025.   Alaska Term Facility On June 15, 2022, Alaska Communications Systems Holdings, the parent company of Alaska Communications, entered into a secured lending arrangement with Bristol Bay Industrial, LLC (the “Alaska Term Facility”). The Alaska Term Facility provides for a secured delayed draw term loan in an aggregate principal amount of up to $7.5 million and the proceeds may be used to pay certain invoices from a contractor for work performed in connection with a fiber build. 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. 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”).  The Receivables Credit Facility provides for a senior secured delayed draw term loan in an aggregate principal amount of up to $75.0 million and the proceeds may be used to acquire certain receivables from Commnet Wireless.  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. 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.     The Receivables Credit Facility contains customary events of termination, representations and warranties, affirmative and negative covenants and events of default customary for facilities of this type. As of December 31, 2023, Commnet Wireless had $46.5 million outstanding, of which $7.1 million was current, and $15.0 million of availability under the Receivables Credit Facility. 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.  GTT Credit Facilities On October 12, 2022, GTT received approval from Republic Bank (Guyana) Limited for a $2.9 million term facility and a $5.7 million overdraft facility (the “GTT Credit Facilities”) subject to the approval from the Minister of Finance at the Bank of Guyana, which was received on March 31, 2023. The GTT Credit Facilities are secured by real estate assets and carry a fixed interest rate of 7.5% which will be reviewed by the bank from time to time and subject to change at the bank’s discretion. The term facility is repayable over five years in equal monthly installments of principal and interest, commencing one month after funds are advanced. The overdraft facility will expire on October 31, 2024. As of December 31, 2023, $4.5 million was outstanding under the overdraft facility and there were no outstanding amounts under the term facility. Sacred Wind Term Debt In connection with the Sacred Wind acquisition completed on November 7, 2022, we assumed $31.6 million of term debt (the “Sacred Wind Term Debt”) with the United States of America acting through the Administrator of the Rural Utilities Service (“RUS”). The loan agreements are dated as of October 23, 2006 and March 17, 2016. 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. These mortgage notes are to be repaid in equal monthly installments covering principal and interest beginning after date of issue and expiring by 2035. The Sacred Wind Term Debt contains certain restrictions on the declaration or payment of dividends, redemption of capital stock or investment in affiliated companies without the consent by the RUS noteholders. 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. As of December 31, 2023, we were in compliance with that corrective action plan. As of December 31, 2023, $28.2 million was outstanding under the Sacred Wind Term Debt. Of that amount, $3.4 million was current and $24.8 million was long term. 53 Table of Contents The mortgage notes carry fixed interest rates ranging from 0.88% to 5.0%. Viya Debt We, and certain of our subsidiaries, have entered into a $60.0 million loan agreement (the “Viya Debt”) with Rural Telephone Finance Cooperative (“RTFC”). The Viya Debt agreement contains customary representations, warranties, and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and a financial covenant that limits the maximum ratio of indebtedness to annual operating cash flow to 3.5 to 1.0 (the “Net Leverage Ratio”). This covenant is tested on an annual basis at the end of each fiscal year. Interest is paid quarterly at a fixed rate of 4.0% per annum and principal repayment is not required until maturity on July 1, 2026. Prepayment of the Viya Debt may be subject to a fee under certain circumstances. The debt is secured by certain assets of the 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 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 $0.2 million of the rate lock fee was unamortized. On May 5, 2022, RTFC agreed to amend the Net Leverage Ratio to 7.0 to 1.0 through the maturity date of July 1, 2026. The Ratio is tested annually, and we were in compliance with the Net Leverage Ratio as of December 31, 2023. One Communications Debt One Communications had an outstanding loan from HSBC Bank Bermuda Limited (the “One Communications Debt”) which matured and was repaid in full on December 22, 2022. This loan bore interest at the one-month LIBOR plus a margin ranging between 2.5% to 2.75% per annum paid quarterly. Debt Maturity The table below summarizes the annual maturities of our debt instruments (amounts in thousands). [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","Customer"],["\u200b","US","\u200b","International","\u200b","Corporate and","\u200b","Total","Receivable"],["\u200b","Telecom","\u200b","Telecom","\u200b","Other","\u200b","Debt","Credit Facility"],["2024","$","16,538","\u200b","$","4,502","\u200b","$","3,250","\u200b","$","24,290","$","7,110"],["2025","\u200b","14,969","\u200b","\u200b","\u2014","\u200b","\u200b","4,875","\u200b","\u200b","19,844","\u200b","7,428"],["2026","\u200b","248,469","\u200b","\u200b","60,000","\u200b","\u200b","8,125","\u200b","\u200b","316,594","\u200b","7,761"],["2027","\u200b","3,723","\u200b","\u200b","\u2014","\u200b","\u200b","9,750","\u200b","\u200b","13,473","\u200b","8,111"],["2028","\u200b","3,858","\u200b","\u200b","\u2014","\u200b","\u200b","136,807","\u200b","\u200b","140,665","\u200b","8,478"],["Thereafter","\u200b","10,191","\u200b","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u200b","10,191","\u200b","7,650"],["Total","\u200b","297,748","\u200b","\u200b","64,502","\u200b","\u200b","162,807","\u200b","\u200b","525,057","\u200b","46,538"],["Debt Discounts","\u200b","(4,142)","\u200b","\u200b","(247)","\u200b","\u200b","(3,798)","\u200b","\u200b","(8,187)","\u200b","(485)"],["Book Value","$","293,606","\u200b","$","64,255","\u200b","$","159,009","\u200b","$","516,870","$","46,053"]] [[/GREPCENT_TABLE]] Factors Affecting Sources of Liquidity Internally generated funds. 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.  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. As of December 31, 2023, we were in compliance with all of the financial covenants of the 2023 CoBank Credit Facility.  Capital markets.  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. In August 2022, we filed a new “universal” shelf registration statement with the SEC, to register potential future offerings of up to $300.0 million of our securities. Foreign Currency We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies, primarily the Guyana Dollar, to US Dollars at the appropriate rates as of the balance sheet date. Changes in the carrying value of these assets and liabilities attributable to fluctuations in rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income on our balance sheet. Income statement accounts are translated using the monthly average exchange rates during the year. Monetary assets and liabilities denominated in a currency that is different from a reporting entity’s functional currency must first be remeasured from the applicable currency to the legal entity’s functional currency. The effect of this remeasurement process is reported in other income within our income statement. 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. If inflation continues or worsens, it could negatively impact our Company by increasing our operating expenses. Inflation may lead to cost increases in multiple areas across our business, for example, rises in the prices of raw materials and manufactured goods, increased energy rates, as well as increased wage pressures and other expenses related to our employees. In particular, where we have agreed to undertake infrastructure build-outs on a fixed budget for our carrier customers or by accepting government grants, inflation may result in build costs that exceed our original budget given the long delays experienced in procuring equipment and materials due to global supply chain delays. To the extent that we are unable to pass on these costs through increased prices, revised budget estimates, or offset them in other ways, they may impact our financial condition and cash flows. Material Cash Obligations and Sources Capital Expenditures. We are continuing to invest in our telecommunication networks along with our operating and business support systems in many of our markets.  Such investments include the upgrade and expansion of both our mobility and fixed telecommunications networks as well as our service delivery platforms. 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. 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. To service our previously described debt facilities, we will be required to make future minimum principal repayments (not including interest, commitment fees or letter of credit fees) of $24.3 million in 2024 55 Table of Contents and then $19.8 million, $316.6 million, $13.5 million, and $140.7 million during 2025 through 2028, respectively, and then $10.2 million in subsequent years. Lease Commitments. We have operating and financing leases for towers, land, corporate offices, retail facilities, and data transport capacity. In order to comply with our lease agreements, we will be required to pay $20.1 million in 2024 and then $17.5 million, $12.4 million, $9.8 million and $8.3 million during 2025 through 2028, respectively, and then $82.8 million in subsequent years. FirstNet Agreement. In connection with the FirstNet Agreement, we are building a portion of AT&T’s network for the First Responder Network Authority (“FirstNet”) in or near our current operating area in the western United States. We expect to incur construction costs of approximately $10.1 million, primarily during 2024 with the remainder in 2025, in order to complete the network build portion of that agreement. Following acceptance of the cell sites, AT&T will own the sites and we will assign to AT&T any third-party tower lease applicable to such cell site.  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.  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. 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. 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.  We anticipate spending approximately $2.0 million in capital expenditures during the year ended December 31, 2024 under this program. Citizens Broadband Radio Service Auction (CBRS).  We participated in CBRS auction for Priority Access Licenses (PALs) in the 3.5 GHz spectrum band. These PALs are licensed on a county-by-county basis and are awarded for a 10-year renewable term. In connection with the awarded licenses, we will have to achieve certain CBRS spectrum build-out obligations. We currently expect to comply with all applicable requirements related to these licenses but cannot currently estimate the cost of building our network in the covered areas.  If we do not comply with such requirements in a certain area within that 10-year timeframe, our PAL for that area will be forfeited. 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 distributed upon completion of a project. As of December 31, 2023, $100 million of such construction obligations remain with completion deadlines beginning in 2024. Once these projects are constructed, we are obligated to provide service to the participants. Software licensing, maintenance and other business support systems. We have committed to agreements with vendors to provide us with software licensing and maintenance services as well as other business support systems. These agreements expire primarily during the year ended December 31, 2024 and will require us to pay approximately $37.2 million in 2024, and then $6.2 million, $4.4 million, $2.1 million, and $0.9 million during 2025 through 2028, , respectively and then $15.3 million thereafter. Circuits and other transport costs. We expect to pay $40.1 million, $23.2 million, $15.5 million, $7.1 million and $4.6 million during the years ended December 31, 2024, 2025, 2026, 2027 and 2028, respectively, for circuit and other telecommunication transport costs. Thereafter, we are obligated to pay an additional $8.3 million for such services. 56 Table of Contents Sources of Cash. In addition to future internally generated funds, as of December 31, 2023, we have $136.4 million, $15.0 million and $40.0 million available to us under the CoBank Credit Facility, the Receivables Credit Facility and the Alaska Revolving Facility, respectively, and may be able to raise funds in the capital markets by filing a “universal” shelf registration statement with the SEC. Critical Accounting Estimates We have based our discussion and analysis of our financial condition and results of operations on our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We base our estimates on our operating experience and on various conditions existing in the market and we believe them to be reasonable under the circumstances. Our estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. We have identified the critical accounting estimates that we believe require significant judgment in the preparation of our Consolidated Financial Statements. We consider these accounting estimates to be critical because changes in the assumptions or estimates we have selected have the potential of materially impacting our financial statements. Revenue Recognition. In determining the appropriate amount of revenue to recognize for a particular transaction, we apply the criteria established by the authoritative guidance for revenue recognition and defer those items that do not meet the recognition criteria. As a result of the cutoff times of our billing cycles, we are often required to estimate the amount of revenues earned but not billed from the end of each billing cycle to the end of each reporting period. These estimates are based primarily on rate plans in effect and historical evidence with each customer or carrier. Adjustments affecting revenue can and occasionally do occur in periods subsequent to the period when the services were provided, billed and recorded as revenue, however, historically, these adjustments have not been material. We apply our judgment when assessing the ultimate realization of receivables, including assessing the probability of collection and the current credit- worthiness of customers. We establish an allowance for credit losses on trade receivables sufficient to cover probable and reasonably estimable losses. Our estimate of the allowance for credit losses on trade receivables considers collection experience, aging of the accounts receivable, the credit quality of the customer and, where necessary, other macro-economic factors. Goodwill and Long-Lived Intangible Assets. In accordance with the authoritative guidance regarding the accounting for impairments or disposals of long-lived assets and the authoritative guidance for the accounting for goodwill and other intangible assets, we evaluate the carrying value of our long-lived assets, including property and equipment, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss exists when estimated undiscounted cash flows attributable to non-current assets subject to depreciation and amortization and discounted cash flows for intangible assets not subject to amortization are less than their carrying amount. For long lived assets other than goodwill, if an asset is deemed to be impaired, the amount of the impairment loss recognized represents the excess of the asset’s carrying value as compared to its estimated fair value, based on management’s assumptions and projections. Our estimates of the future cash flows attributable to our long-lived assets and the fair value of our businesses involve significant uncertainty. Those estimates are based on management’s assumptions of future results, growth trends and industry conditions. If those estimates are not met, we could have additional impairment charges in the future, and the amounts may be material. We also assess the carrying value of goodwill and indefinite-lived intangible assets on an annual basis or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The carrying value of each reporting unit, including goodwill assigned to that reporting unit, is compared to its fair value. 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 believe that our telecommunications licenses generally have an indefinite life based on historical ability to renew such licenses, that such renewals may be obtained indefinitely and at little cost, and that the related technology used is not expected to be replaced in the foreseeable future. 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. 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. We are subject to proceedings, lawsuits, tax audits and other claims related to lawsuits and other legal and regulatory proceedings that arise in the ordinary course of business as further described in Note 13 to the Consolidated Financial Statements included in this Report. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as the potential ranges of probable losses. A determination of the amount of loss accruals required, if any, for these contingencies is made after careful analysis of each individual issue. We consult with legal counsel and other experts where necessary in connection with our assessment of any contingency. The required accrual for any such contingency may change materially in the future due to new developments or changes in each matter.  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.