Good day, ladies and gentlemen, and welcome to the Atlantic Tele-Network Fourth Quarter and Full Year 2012 Conference Call and Webcast. [Operator Instructions] I would now like to introduce your host for today's conference, Mr. Justin Benincasa, Chief Financial Officer. Mr. Benincasa, please begin.

Great. Thank you, Janine. Good morning, everyone. And thank you for joining us on our call to review our fourth quarter and full year 2012 results. With me here is Michael Prior, ATN's President and Chief Executive Officer. During the call, I'll be covering the relevant financial information and certain operational data, and Michael will be providing an update on the business. Before I turn the call over to Michael for his comments, I'd like to point out that this call and our press release contain forward-looking statements concerning our current expectations, objectives and underlying assumptions regarding our future operating results and are subject to risks and uncertainties that could cause actual results to differ materially from those described. Also, in an effort to provide useful information to investors, our comments today include non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures and for the further information regarding these factors that may affect our future operating results, please refer to our earnings release in our website at atni.com or to the 8-K filing provided to the SEC. So with that, I'll turn the call over to Michael.

Right. Thank you, Justin. Good morning, everybody. Before I get into the details, I'll comment first on the overall results for the quarter and the year. The results and trends for the fourth quarter are fairly consistent with what we saw for the year, particularly the prior 2 to 3 quarters, strong operating cash flows and profitability improvements over the comparable period of 2011. These improvements were not unexpected, having seen them in the past few quarters, but we're glad to see them nonetheless. Driving the improvements this quarter were the same primary factors: elimination of duplicate expenses and cost reductions in U.S. wireless; revenue growth in a number of island markets; and margin improvements in Bermuda, following the integration of the 2 businesses in that market. While we are pleased by these improvements, our U.S. wireless operation continue to experience revenue declines due to erosion of our postpaid subscriber base. So with that, let me just turn to some specifics, starting with U.S. wireless. First, I just wanted to mention that despite the strategic realities, as we see them in the recent agreement to sell that unit, we -- I wanted to mention that we're proud of a lot of what our team at Alltel has achieved. We were able to stabilize the overall subscriber base through steady gains in the prepaid market. And we were also able to dramatically improve the post conversion customer experience overall. So with that, let me get into some of the usual details. For the quarter, we had nearly 40,000 prepaid subscriber gross additions and approximately 9,500 prepaid net adds, both of which were down from the third quarter, but up significantly over the prior year. Postpaid gross additions came in just shy of 30,000 for the quarter, resulting in a decline in…

Okay. Thank you, Michael. Revenues for the quarter totaled $184.4 million, a slight increase over the same quarter in 2011, but down 2% sequentially, as the third quarter is typically our highest revenue quarter due to the seasonality of our U.S. wholesale roaming business. As Michael noted, U.S. retail wireless revenues declined year-over-year in the third quarter, primarily as a result of the postpaid subscriber attrition over the last 12 months. However, we did see a slight sequential upturn in revenues, as the overall base has grown in 2012. Total wireless revenues for the quarter were $153.1 million or 83% of total revenues, and our U.S. wireless service revenues were $131.8 million or 71% of total revenues. Adjusted EBITDA was $47 million, up $6.3 million, or 15% over the same quarter last year, and the adjusted EBITDA margin was 26%. Included in this quarter's operating expenses of $155.8 million was a noncash stock-based compensation expense of $800,000. The quarter also included an $11.6 million gain on the previous announced sale of spectrum and related assets in our U.S. wholesale wireless business. That transaction closed late in the fourth quarter. And for 2012, has generated revenues at an annual rate of approximately $15 million. Also in the quarter, we recorded a $3.4 million noncash impairment charge in the Island Wireless segment. Our U.S. wireless segment accounted for 79% of adjusted EBITDA and interest expense for the fourth quarter declined by $1.9 million over the same period last year as a result of our amended credit facility pricing and our continued deleveraging. Now looking at net income. Earnings for the quarter were $13.1 million or $0.84 per share compared to $4.1 million or $0.27 per share reported in the fourth quarter of last year. Our effective tax rate for the quarter was…

[Operator Instructions] And our first question will come from Barry McCarver of Stephens Inc.

I guess, first off, as it relates to the CapEx, I think we could probably back into this number. But can you break out CapEx you're expecting in 2013 that would be related specifically to the assets that are going to be sold? And then my second question is in terms of that $20 million to $25 million you expect to invest towards the wholesale business, can you give us an idea of the timing of those projects and when we might be seeing revenue generation begin?

Yes, I'll take the first part of that. The sale CapEx, if you will, is probably in the $20 million range.

And on the timing of the wholesale, I think the timing would be middle to late year, most of it -- most of the significant capital. It's possible that could accelerate. And the revenue from that should follow more or less a quarter later in terms of significance. And keep in mind, Barry, of course, that we also have the sale of the Midwest market impacting that number from this quarter on.

Right, okay. So probably -- I mean, is it fair to say any significant revenue from the new projects in 2013, does that mostly fall to next year?

I think it could be significant by the end of the year. So I don't -- it's too hard to say at this point whether it'd be adequate to fill in the gap from the sale. But I think it could start to be significant by the end of the year.

Okay. And then my second line of questioning. Just around the churn in the U.S. wireless business. You commented again in the press release that a higher number of contracts come out for renewal could see a little volatility in churn in 1Q. We saw a little bit at this quarter, not anything too out of the control. Just in general, given the pending sale of the assets, does that feel like that's going to a challenge over the course of next 2 or 3 quarters? And as it relates to that, are you seeing any unusual advertising activities by the other large carrier in the market, as I'm sure they know that this is -- that this transaction is coming down?

Yes, it's possible. On the latter point, it's possible, but I'm not personally aware of that at the moment. So just -- I'm not sure. But I don't -- I'm not aware of any unusual activity yet. I think, if you look at the history of these deals it's impossible to say that there isn't some effect. I think we have a lot of hard-charging, talented people, and I think they're pretty professional and will remain focused. And I think these markets are important to the buyer. So I think they -- we want to show what we can do. So I think there's some factors both ways. But it's a little more complex, a little more challenging certainly.

[Operator Instructions] The next question is from Mr. Ric Prentiss of Raymond James.

A couple of questions. First on the Midwest markets that you sold. Can you walk us through what the timeline was from the announcement, I think it was July, through when you turned it into the regulators, and then how quick it got out of the regulatory approval process?

I don't know off the top of my head the answer to that, Ric. And I'm just looking at Justin...

No, no.

I don't think he does. I think it was 3 months or so. It might have been a little longer. But I -- the -- I don't think the regulatory process was complicated there. So I think the difference between announcement and close was mainly are there more operational details, transfers and tower and paperwork and that kind of thing. So I think that was much more the driver both on the buyer and our side, the seller, than the regulatory process.

And so you can probably see where I'm headed with this. So as you think through the Alltel sale, what are your thoughts? Is it a 6-month, is it 9 to 12 months? Obviously, a lot more complicated transaction given these were assets that Verizon then divested previously, that AT&T didn't buy. Kind of what's your thoughts on the timeline for the Alltel transaction?

Well, if I could predict Washington, I would be well sought-after person. But so I think -- I don't think one is really a proxy for the other, Ric. It's a very different transaction, much larger subscribers are involved, more spectrum is involved. And so I just think it's different. And so I'll stick with what we said earlier, which is we kind of think it's a third quarter -- could be later than that, kind of second half of the year or a late part of the year event. It just takes time.

Sure. Yes. So I mean, probably best case, 6 months most likely, maybe 9-plus months? Is that a fair assessment?

Yes, that's a fair range.

Okay. And then looking at the spending of the $20 million, $25 million in the remaining wholesale markets, as for new base stations, what about deploying LTE? Every conference call so far on U.S. wireless, a lot of focus on LTE, a lot of focus on the customer seemingly demanding more smartphones and 4G becoming in there. What are your thoughts on 4G LTE and the remaining then Commnet markets?

Well, from a wholesale standpoint, part of what we're doing this year is we're upgrading a lot of areas that were 2G still to 3G. We do look at 4G, but I think in the areas where there's not significant subscribers, which it -- it defines these roam-only things, relatively remote areas. I think it trails in technologies by quite a bit, right? So it's not a terrible experience for people who are in -- transiting through remote areas to get a 3G experience. And so for us, we will build 4G as soon as our customers want us to pretty much. But I don't see that happening very soon.

So you think about spending on upgrade from 2G to 3G, how much more is it to buy something that has both 3G and 4G? Look at Sprint's Vision project and T-Mobile kind of upgrading their network. What's the extra cost involved in doing it once? And what's the extra cost if you say, well, let's delay it a couple of years, putting in the extra capacity or the extra capabilities of 4G?

Yes, it depends. I mean, we run multiple technologies there. And where we can, we are building up flexibility in the path to 4G to make it cheaper. But part of what we do in those areas is we try to keep the cost as low as we can for -- so we can keep the pricing as low as we can. And these are very rural areas with small volumes. So we don't do as much anticipatory spending as you would do in other areas. And then, lastly, you have to take into account spectrum to go to 4G. And certainly, if they 4G while being 2G and 3G really -- spectrum availability and cost might be a bigger factor than capital equipment.

The next question is from Hamed Khorsand of BWS Financial.

Just I wanted to figure out, what drove the decision this year to put so much effort into the roaming business compared to prior years? Because I mean prior years it sounded like you were just letting it roll off.

It's entirely customer-driven. It's that simple. So if our customers want us to increase technologies or increase coverage, we will build it. There's not a lot of build it and they will come in that business for us. So that's really it. I think the carriers need to have a 3G experience for their customer in some of these areas and they need to have better coverage in certain areas where this has kind of come together, happened to come together this year.

All right. And has there been any improvement at all as far as the data rates go?

Improvement?

In wholesale. Yes.

Improvement from whose -- with whose perspective?

From your perspective. I mean, from generating increased revenue.

Oh, data volume.

Yes.

Okay, data volumes. Our data volumes, you're talking about in the wholesale business?

Yes.

Okay. So in the Western areas in the sort of legacy roam-only areas, the data growth has not been nearly as much as you've seen elsewhere because we've had the slower speed technology in a lot of areas. So 2G in some and 3G in some. As we add 3G, in particular, I think you'll see that grow. But it's also -- it's going to probably always trail a bit because of the remote nature of these places. There's not a lot of residential areas with people sitting around on data. So it's just a different factor. And in the Alltel areas, we have seen data volume grow, as we've talked about in our comments, to kind of offset the voice decline and the overbilled activity.

But Hamed, just to kind of go back to your question on the rate. I mean, as volumes go up, the pressure on rate has to go down.

No, I understand. I'm just trying to figure out ROI here. As far as you're putting in $25 million, what kind of return are you expecting to get from this?

I -- we don't -- we're expecting reasonable returns. I wouldn't say spectacular, but I think the equity returns are reasonable returns above our cost of capital.

Okay. And the last topic I want to bring up is your balance sheet. You guys have pretty good cash at this quarter, and you've been talking about acquisitions. Are you going to hold off this sale to AT&T so you have a lot more cash or are you going to start looking to -- for smaller acquisitions now with the cash you have?

I think we're always looking. And there is -- certainly, there's a different prospect list or potential at least post-close. But no, I think we have a fair amount of capacity on our balance sheet today. So we are out there looking for new investment opportunities.

[Operator Instructions] The next question is from Sergey Dluzhevskiy of Gabelli & Company.

Given potential significant proceeds from the Alltel transaction, could you talk a little bit about your M&A philosophy, the primary criteria that you have in the variant [ph] acquisitions? I guess cable and the wireless communications has been divesting, some of its operations around the world and they have a meaningful presence in the Vegas islands and the Caribbean and Panama. So would those type of businesses be of interest to you post AT&T transaction close?

Yes. I -- so let me go first in the overall philosophy. And as with any company, we're not going to comment on specific, very specific opportunities. But we've invested in the rural United States primarily. We have invested in the Caribbean. So geographically, those are areas we feel comfortable with. So we're more likely to look at prospects in those areas than elsewhere. But if we think about philosophy, I mean, we are very cash-flow driven. We will start with the VCF [ph] and end with one when we evaluate prospects, and to the normal review of that and returns, and then we look at the competitive environment critically. We're a smaller player in telecom. So we look at what the competitive environment is and is it reasonable for infrastructure-based business. So we're very sensitive to that. So that's our overall philosophy. And we're -- we've done a lot more in wireless. We like a lot of the fundamentals of wireless, but -- there's things we like in wireline. We've been looking at fiber and other broadband plays, and we're certainly interested in that as well.

Right. Could you talk a little bit about the megahertz-POP number for AT&T transaction. I think there was a question on the last call, and I was wondering do you have the exact number in terms of megahertz-POPs?

No, I don't have that number handy right now, sorry.

The next question is a follow-up from Ric Prentiss of Raymond James.

A follow-up on the M&A philosophy. We've seen some other operators in Latin America move into Europe, looking at valuations there or looking at landline opportunities there. As you guys look around the regions of the world, obviously, U.S. and Caribbean -- rural U.S. and Caribbean have been very interesting to you. But if you kind of handicap the other regions in the world, is there anything else that makes sense from a standpoint of going afield?

Yes. I think if you went to some place like Europe, for example, or Latin America or Africa, Asia is even farther afield, I think it would require something fairly big and partners, including operating partners or our management team that we had a lot of comfort and confidence in. So we wouldn't do it lightly in any of those areas because we're not that familiar with them. But we would consider it. As to Europe -- and Europe is interesting, it's got a strong rule of law going for it, which is a risky phase in emerging markets. The negative is there's a lot of competition from big players and there's a fair amount of regulatory uncertainty in terms of spectrum policy and other policies there. So it's not for the faint of heart. I know that -- I think it's América Móvil you're referring to, Carlos Slim going into Europe. And I think that's interesting. But he operates at a very different scale than us. And so I think there's -- it's a lot easier done for that entity than us.

Makes sense. You also, obviously, mentioned spectrum, back to my earlier question. As far you got enough for 2G, 3G, 4G may be tight, as you think about your balance sheet and potential spending, where does spectrum fall on the list and also maybe from a timing standpoint?

Yes. I think spectrum has some interest to us. The trick, you got to be careful, it has to be spectrum. You don't want to win an auction against people who can put it to use with great synergies immediately because you're probably paying more than you should. So you have to be selective as a company our size and look for where we really can marry it with an opportunity -- operating opportunity we see or use it to build strategically over time in operating opportunities. So we've certainly -- certainly, spectrum is on our radar screen with those kind of parameters.

Makes sense. And the final question I got for you guys is on LTE again. When you think about your history, you've been able to build those multiple technologies in areas where it doesn't make sense for other people to build a standalone. As we look at 4G, it seems like LTE is a unifying technology. What are your thoughts as far as the overbuild threat in an LTE environment or network sharing? Or is it some -- that you could still bring a competitive advantage in the 4G world in those type of markets?

Yes, I -- that's good question, Ric. I think that's down the line a ways, but it's a fair question. I think that it is -- it provides, in many areas, opportunity. Because it provides opportunity for us to provide an even more cost-effective shared infrastructure solution. There may be some areas where there is existing technologies from other players. And I guess, to some extent, that could provide a threat with convergence. But I think we've delivered -- we deliver well for our customers there. We are very responsive and we're trusted. We've been doing it for a long time. And so I think we have some decent competitive advantages even in those areas. But we -- what we have to do always is as those costs come down and we're -- we have to pass along that to customers and continue to make it attractive to them as really an outsourced solution.

And I guess, a side question I should throw in there is any opportunities with the whole first net public safety project moving forward?

I think it's too soon to tell. I think if there is some interest, we're certainly aware of it. We're -- we operate in a lot of pretty broad geographic area that we might be able to help in some of those a smaller communities, help provide a solution. So we're interested in it. I don't think there's anything specific at this point.

I am showing no further questions in the queue. I would like to turn the conference back to management for any further remarks.

We have no further remarks. Thank you, everybody, and we'll see you some time in this next couple of months when we roll out the first quarter. Appreciate it. Take care.

Ladies and gentlemen, thank you for participating in today's program. This does conclude the conference, and you may all disconnect. Everyone, have a great day.