Presentation Transcript

1. Investor Presentation November 2011
2. Forward Looking Statements and Non-GAAP Financial Information This presentation may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are or may be forward-looking statements. Forward-looking statements can generally be identified by the use of words that include phrases such as “believe,” “expect,” “anticipate,” “plan,” “foresee,” “likely,” “will,” or other similar words and phrases. Actual future events and results could differ materially from the events and results indicated in these statements as a result of many factors, including, those set forth in Item 1A "Risk Factors" of ATN's Annual Report on Form 10-K for the year ended December 31, 2010, which is on file with the SEC, and our other public reports. ATN undertakes no obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors that may affect such forward-looking statements. This presentation includes certain non-GAAP financial measures.  The most directly comparable GAAP measures and reconciliations to those GAAP measures are provided at the end of this presentation.
3. Atlantic Tele-Network, Inc. (ATN) Through Our Operating Subsidiaries We Provide Telecom Services in Niche Domestic & International Markets. U.S. Wireless U.S. Wireline 3 Major Revenue Categories International Integrated Telephony Island Wireless
4. ATN Investment Principles Opportunistic Value – Based Disciplined Long-Term View High Insider Ownership Aligned with Shareholders Prudent Balance of Growth with Dividends
5. A Track Record of Superior Returns Return on Equity* - 5 Yr Average 15.9% Return on Assets* - 5 Yr Average 9.2% Book Value – 5 Yr CAGR 11% * Source: Reuters
6. Our Business Strategy HARVEST INVEST ENHANCE Disciplined investing with primary focus on entry point Hire and engage local management teams Compete effectively through tailored service offerings and superior customer care Re-invest cash flows in most promising opportunities
7. Our Mix of Businesses Early Stage High Growth Mature High Free Cash Flow Guyana (Data) Commnet Alltel Sovernet Bermuda Guyana (Voice) U.S. Virgin Islands ION Turks & Caicos Aruba
8. Our Advanced Wireless, Wireline, Terrestrial and Submarine Fiber Optic Networks New England New York Bermuda Caribbean Islands Southwest Midwest U.S. Retail Wireless Wholesale only Wireless Guyana Wireline Integrated Telephony Limited Wholesale Presence
9. Revenue EBITDA US Wireless- Overview Retail Wireless voice and data “Alltel” brand name Southeast and Midwest Wireless voice and data National, regional, local and select international wireless carriers Facilities based service in Southwest and Midwest markets Wholesale % of 3Q2011 % of 3Q2011
10. Alltel - Overview Signed June 2009 – Closed April 2010 – Transitioned July 2011 Purchase price + 2010/11 transition capex: $200 Million + ~$85 Million = $285 Million +/- 600,000 subscribers and #2 market share position in most markets at transition completion Transition phase completed. Optimization phase commenced. Geographic Footprint Rural markets across Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho Markets like: Liberty, GA Washington, IL Hickory, NC Marrow, OH
11. Wholesale Only Wireless Limited Wholesale Presence Wholesale Wireless - Overview Roaming business works in partnership with national and regional wireless operators to offer reliable coverage to undeserved markets in North America in a variety of technical environments Manages wireless networks in 14 states across the U.S. Strong relationships and reputation with national carriers/customers Higher operations margins but increased risk Geographic Footprint Operating Statistics Operates a total of ± 1600 Base Stations of which ± 770 are “roam only” Technology: 2G, 3G, CDMA & UMTS Retail Wireless
12. Revenue Int’l Integrated Telephony (GT&T) - Overview Full service telecom company in Guyana Wireless, wireline, and international ATN owned & operated since 1991 ~650 employees Invested more than ~$300mm USD in Guyanese telecom infrastructure ±750,000 PoPs, Low ARPUs One wireless competitor EBITDA Operating Statistics 150,000 landlines Approx. 300,000 wireless subscribers (97% on pre-paid plans) Technology: GSM/EDGE Undersea fiber network and extensive terrestrial fiber backbone % of 3Q2011
13. Island Wireless - Overview Provide wireless voice and data services to retail and business customers, branded as: in Bermuda in Turks and Caicos in U.S. Virgin Islands in Aruba Revenue EBITDA Subscribers (000’s) % of 3Q2011
14. Bermuda Digital Communication (BDC) - Overview Provides wireless voice & data service to retail & business customers in Bermuda Largest wireless provider in Bermuda Operates brand Merged with M3 Wireless Ltd., a leading retail wireless provider in May 2011 Ownership 58% pre merger, 42% post merger Doubled Subscriber Base ± 65,000 PoPs, High ARPU Revenue Operating Statistics 34,000 subscribers Approx. 85% postpaid Technology: UMTS, CDMA/EVDO % of 3Q2011
15. Sovernet / ION Footprint U.S. Wireline Segment - Overview Sovernet Leading competitive integrated voice and broadband services provider in VT & Western NH ~53,000 business and 6,000 residential access line equivalents in billing ~3,200 business accounts and 1,300 residential accounts ION Revenue Sovernet's subsidiary, ION, acquired in August 2008, provides fiber-based wholesale transport services in New York State More than 2,200 fiber miles, servicing over 60 communities in upstate New York. Partnered with 12 RLECs Rural Fiber loops December 2009, received federal broadband stimulus grant of $30 million ($6 million match) to augment existing fiber network with 800 miles of additional fiber-optic middle-mile broadband network. EBITDA % of 3Q2011
16. Financial Overview
17. YoY Financial Summary CAGR 38% CAGR 16% (*) AdjustedEBITDA is defined as Operating Income Before Depreciation and Amortization and is adjusted for Acquisition Charges, as well as for long-lived asset impairment and disposal gains/losses.  Adjusted EBITDA is a non-GAAP financial measure.  A reconciliation to the most comparable GAAP measure is provided at the end of this presentation.
18. YoY Financial Summary Book Value CAGR 8% Dividends CAGR 11%
19. Third Quarter 2011 Financial Summary Down (5%) QTR-over-QTR Up 78% QTR-over-QTR Up 38% QTR-over-QTR Adjusted EBITDA is defined as Operating Income Before Depreciation and Amortization and is adjusted for Acquisition Charges.  Adjusted EBITDA is a non-GAAP financial measure.  A reconciliation to the most comparable GAAP measure is provided at the end of this presentation.
20. Free Cash Flow & Capital Expenditures 2011 Cap-Ex Projected $95- $105 million $65 - $70million of 2011 to be allocated to U.S. Wireless Approx. $85 million (2010/11) in the retail standup, OSS, BSS & Network Migration (*) Free Cash Flow is defined as EBITDA minus Capital Expenditures.  EBITDA and Free Cash Flow are non-GAAP financial measures.  A reconciliation to the most comparable GAAP measure is provided at the end of this presentation.
21. ATN Moving Forward Invest in and operate telecom services businesses in the U.S. & Caribbean/South America Focus on businesses with lower competitive risks Number of competing networks Ability to be at least strong #2 in segment and geographic area Let the opportunity drive, not a “pure play” theory Look at out-of-favor smaller markets with potential for driving returns Undervalued entry point Opportunity to rapidly improve value
22. Questions
23. Reconciliation of Non-GAAP Measures * Midpoint of Guidance