Good day, ladies and gentlemen, and welcome to Atlantic Tele-Network Q4 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I’d like to introduce your host for today’s conference Mr. Justin Benincasa. Sir, please begin.

Great, thank you operator. Good morning, everyone, and thank you for joining us on our call today to review our fourth quarter and full-year results. As usual with me here is Michael Prior, ATN’s President and Chief Executive Officer. During this 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 contains 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 further information regarding factors that may affect our future operating results, please refer to our earnings release on our website at atni.com or the 8-K filing provided to the SEC. And with that, I’ll turn the call over to Michael.

Okay. Thank you, Justin. First, I’ll start with some highlights for both the quarter and the year. So, the most important one, I want to start with a headline from the release as we have been pointing to a falloff in U.S. Wireless wholesale revenues and margins for several quarters, and we expected that the combination of seasonality and the accounting for pricing tiers would make the impact most pronounced in the 2015 fourth quarter and it was. And it was largely inline with expectations although still, I will admit a disappointing ending to what was a solid year with a number of key strategic wins. Our results were also negatively impacted by some fairly significant transaction charges, partly related to previously announced transactions and partly related to our review of potential investments in the renewables arena. While such charges are uneven and rarely that high in a given quarter or even a full fiscal year, they are a cost of doing business according to our model of growing both organically and through additional strategic investments and transactions. And I think that model by and large acquitted itself well in 2015. We’ve signed telecom deals that strengthen our position in two existing markets both have the potential to provide healthy and consistent long-term cash flows and to further fund other growth opportunities. And as I noted in our press release, I think the results of those deals and activity on other fronts has brought us to an inflection point in 2016. This year, we need to continue the transition of our wholesale wireless business to a steady long-term alternative network infrastructure model with investment attributes that we think are similar to fiber back haul. We need to close and integrate the pending transactions and positioned those businesses for success. And…

Great, thank you, Michel. The fourth quarter revenues were $82.9 million, down 6% from the same quarter last year. This decrease was predominately driven by the drop in U.S. Wireless wholesale revenue that Michael discussed previously. Consolidated revenues for the full-year reached $355.4 million, up 6% year-on-year, and as noted earlier, we have provided guidance on our expectations for U.S. Wireless business revenues that factor in anticipated volumes and rate adjustments for 2016. While we expect the segment’s quarterly revenue comparisons to be modestly positive in the first quarter of this year, we expect that trend to reverse in the remaining periods. Revenues in Guyana were up this quarter, driven mainly by continued growth in our broadband business, which has had an almost 30% increase in subscribers in 2015 over last year and our renewable energy segment posted a $5.4 million of revenue for the quarter, up from almost nothing last year as we did not closed Ahana acquisition until late December of 2014. Fourth quarter adjusted EBITDA was $25.6 million, representing a 31% margin. For the full year, adjusted EBITDA was $139.8 million, equal to a 39% margin for the year, slightly below last year’s 41.6% margin. As I mentioned last quarter, higher operating expenses in our U.S. Wireless segment, in the second half of the year, were driven by two factors. The predominantly fixed costs associated with the increased number of sites and technologies that we're using to support approximately 90% of the increase in data traffic volume in 2015 versus 2014 in the absence of an expense offset that we also have last year associated with the transition services agreement following the sale of our Alltel business. Operating expenses, this quarter, included $1.1 million of non-cash stock-based compensation expense and that compares to $1 million, although less…

[Operator Instructions] One moment for questions. And our first question comes from the line of Ric Prentiss from Raymond James. Your line is open.

Thanks. Good morning, guys.

Good morning, Ric.

First I want to start on the U.S. wireless business. Obviously a little bit below what were looking for. I appreciate the guidance to help us kind of figure out what the rates are doing. As we think about it, will there still be normal seasonality where the summer months are typically higher on the revenue side? I know you said one key will look better on a year-over-year comp basis, but just trying to think of the seasonality mix.

I think you'll still have a little seasonality in that end of the second quarter into the third quarter or the second quarter into the beginning of the third quarter. It's somewhat mitigated by those price tierings though, so you'll still have some, but maybe not as pronounced as it’s been in past years.

Okay. And then the margins of 50% to 55%, is that kind of what you guys negotiated out on or just – historically roaming obviously had much higher margins, 60%, 70% plus. So, just thinking on the margins.

Yes, I think – Ric, it's Michael. I think that partly you've got to include in that blend retail. So you're right, margins still need to be relatively high because of the capital expense of the business. So, the actual wholesale margins are above that.

Sure, okay, that makes sense. And then speaking of capital intensity, I think, Justin, you mentioned that you would start some 4G LTE in the Islands and the U.S. How many years do you think the process will take to put in LTE in the different markets?

I think in some of the markets it's – in the islands, it's probably a two-year spreads, between part of 2016 and into 2017.

And how about on the U.S.?

I think that's going to be the same.

Okay. And do you feel like you're getting compensated enough? Because when you think about growth, geographic growth, putting in 4G has got an expense as well to it.

Yes, I think in terms of the wholesale business, I think 4G – back when we did earlier technology upgrades on the data side, you saw, at least in the short-term, a bit of a surge. And I don't think we expect that with LTE just because if you think about the way I described it in my comments, really where the business is going as you're really selling a coverage map and you have to manage the capital expense along with the operational expense and make sure it makes sense for us to provide that service. And I think it still does.

Okay. And then on the solar side, I think you’ve mentioned distributable generated solar. Is this an international – I guess you've looked at it too. Can you just update us as far as kind of what you're looking as far as what renewable energy segments you might be in and going into?

Yes, we're still focused, Ric, predominantly on looking at opportunities that are in what – distributed generation they call it or focused on the commercial industrial space. And that really means that by and large the customer base is a large enterprise, which could be a governmental unit or it could be a private enterprise. So there's some utility mix in there and of course the utilities always enter into it. But in terms of the really large scale solar farms that really characterize what the utility market is, we haven't looked seriously at that and we also haven't looked seriously at the residential side, so the small scale. We feel like at our size and also for most of these markets and in terms of the returns we're looking for, the C&I space is the most attractive.

Okay.

And that's true both domestically and internationally by the way.

Okay. Any specific markets internationally or regions?

No, I don't want to – I mean we've looked at many. As always, just as when we looked into telecom, we look at the attributes of the market and we also look at who we can partner with to make sure we have the proper market knowledge to manage risk.

Okay, thanks guys.

Thank you. Our next question comes from the line of Barry McCarver from Stephens. Your line is open.

Hi, good morning guys, and thanks for taking my questions.

Good morning, Barry.

Good morning. Just a follow-up on the renewable energy. You talked about the charge in the quarter that dropped the operating income to the loss. Am I to understand is that kind of more of a one-time event? Do you expect that to be back in the black the next quarter?

Yes, I mean, the loss in that segment was generated by those charges. And they are one-time in nature, unless we continue to do deals. So it's not a recurring charge.

Right, okay. So we should see that margin kind of go back to where it was in maybe the previous couple of quarters?

I think the way to think about it is adjusting for charges. That should be consistent. So I don't want to predict in any one quarter what the charges might be because we're going to continue to look at new investment opportunities. And we've obviously said we're in the midst of that now.

Okay, that’s helpful. And then just on the international wireless, you mentioned the upgrades there in the sector. You have taken some market share. I guess if we think about your movement in CapEx on that side of the business, is that more to drive revenue? Is it more to drive cost saves in the business? Just give us a little color around that segment, please.

Yes, I think the truth of the business for most operators these days is that what I would call maintenance CapEx has probably gone up, right, because you are upgrading your business to provide more and more capacity and speed and coverage on the data side. And depending on where the market is, in the more mature markets you're really not getting anywhere like the old days revenue response to that. So some of it is to maintain your current revenue streams, and that's being more the case in the more mature markets. And in less mature markets, Guyana’s an example; we're still waiting for the government to release Spectrum to us and other players to do more advanced mobile broadband. And I think in that case, you'd expect some revenue benefit. So, certainly data revenues will go up a lot. There may be some bleeding away in voice through replacement technologies, over the top and that kind of thing. But I think there that it feels like there's more growth potential. And then the market share of course always that's to some extent some of the capital expense is related to taking market share, but I would put it more to just the totality of the customer experience and marketing and being smart about selling to the base.

Okay, that’s helpful. And then just one follow-up on the U.S. wireless business, to make sure I understand kind of your discussion around RN revenues and margins, is it fair to characterize kind of the seasonality is probably having a little bit of an effect on revenue from quarter-to-quarter and then less of an effect on EBITDA? Is that a fair way to think about it?

I'm not sure, yes; you can say that because of – you kind of have a – in essence with that business have a fairly predictable fixed cost structure. So as revenue's going to move up and down [indiscernible]…

Yes, and I think the real point there on the seasonality, Barry, and this may be – you may fully understand this, but just to be clear, is that you may – we still would have some seasonality this year as we have in previous years. Adjustments, they may be a little more muted, but it's still the point we're trying to do with the – we’ll look to the year if the comparisons outside the first quarter should all be down, right.

Right. I mean if you get to that guided number.

Right.

Right, okay, very good. Thanks guys.

Yes, thanks.

Thank you. [Operator Instructions] Hamed Khorsand from BWS Financial. Your line is open.

Hi, good morning.

Good morning, Hamed.

Could you start with talking about the CapEx program for 2016? Outside just the LTE, what's your intention as far as the growth? As far as the Commnet business is concerned in 2016 geographically? And then how much attention can you give it, given that you're going through two different acquisitions as we speak?

Let me answer the last part first. I don't think it's hard to give it plenty of attention because our structure is very portfolio-ized. And so, I think each business has the resources it needs to execute its plan. So, I don't think there's any readymade excuse there. And I think in terms of the coverage expansion, there's not much coverage expansion in that number at all. I mean it's really small, so most of it is technological upgrades, adding capacity. But we continue to have discussions about areas coverage expansion, we just right now wouldn't want to predict it and if it's not in the numbers today, it's unlikely to have a significant impact on 2016 at any rate.

Okay. And then have you seen, as far as your attempts to look for other acquisition targets in the renewable space, any decline in pricing, given where energy prices are? Or difficulty in trying to find any early in the process – the opportunities?

I don't think for the most part, Hamed, the energy pricing on the oil-gas side hasn't really – doesn't have a very quick correlation to anything in the renewable energy. So take the U.S. and a lot of other mature economies, really you're comparing it to the cost of adding incremental power generation, nuclear or coal or in some cases natural gas, but it's the timing of getting those things done is very slow. So I for the most part haven't seen a big impact. And now if you move to some emerging markets and smaller markets, it can have an impact because a lot of those places rely on, especially the small markets, on diesel and other similar fuels to power – to generate power and so that has an impact. So I would say the bigger impact and you have to almost go market-by-market, but in the subsidized markets, the bigger impact is that the cost of capital and the predictions on subsidies and so what the [indiscernible] do. So in the U.S., for example, they extended the investment tax credit and that basically increases pricing because there are people who can get the tax benefit, makes the asset prices go up. And their markets have other subsidies that can affect it. Beyond that in emerging markets, a lot of it though is really you look at what is the cost of adding incremental power generation, as I said before; and in most cases, in a lot of those markets, renewables, and particularly solar, compares quite favorably.

Okay. And Guyana, what's the split between smartphones and just regular phones as far as the cellular service is concerned?

We don't really focus in on it, Hamed. There is a surprising amount of smartphones out in the market because of – despite the demographic and despite the 2G universe they're on. People obviously can use it with over Wi-Fi and the like. But we haven't really focused on that as a statistic because it's not as relevant until we are able to build 3G or 4G technology.

Okay. Do you think the smartphones over Wi-Fi could be also hurting as far as people bypassing the domestic network as far as calls go?

Oh I think there's any number of ways for people to use, whether it's texting instead of calling or other technologies that allow you to do voice calling over a broadband network. I mean the way – so there's no doubt that that has some impact. I don't know that it's in and of itself been large.

Okay, great. Thank you.

You’re welcome.

Thank you. Our next question comes from the line of Ric Prentiss from Raymond James. Your line is open.

Thanks. Hi, guys. I wanted to hit a couple of follow-up questions since it looks like we're done with the other ones. Justin, you mentioned the tax rate. Any thoughts of what kind of a normal effective tax rate should be, given the existing operations? And does it change when you have the two deals come in?

Yes, that's a good question, Ric. In looking at it, if you just take existing operations, right, and you get down to maybe the low 30s, right. And but you put in a Bermuda acquisition, that could have some impact on it and you put it. So there are a couple of moving targets. If you just took existing businesses today, we're down in the low 30s, so that's where we got today. We kind of picked up like 10 percentage points this year with the IslandCom loss, but it's kind of hard to predict where that could go on the Bermuda side. But USDI won't have that much of an impact on it. It would be more just what is the size of the income once we get the Bermuda transaction done of Bermuda income.

Okay. And then Michael, you were talking about capital intensity a little bit. The two deals are not in your CapEx guidance. What kind of capital intensity does the KeyTech and the Innovative bring to you guys? Is it in the teens? Is it in the 20s? Just trying to think that if we were to put those deals into our model, what would we kind of think capital intensity should be if they're different?

I think they'll average out very similar with cost plays elsewhere, but they'll have their differences in timing. It won't – because the networks are smaller, the market is smaller; you're going to see more in some years and lower in others. It's going to be more of a swing than you'd see over the breadth of a U.S. national carrier or even large regional carrier. But we think in Bermuda, for example, there's work to be done to upgrade the wireline network with more fiber, and so that when we undertake that, that'll increase it and then there would be a falloff following. It's hard, Ric, until we can outline specific plans to give it to you in any one period, but you wouldn't – I won't see an outlier either way.

Okay. And then in the U.S. you mentioned LTE. What about Spectrum? Are you guys – have you filed to go into the broadcast incentive auction? What are your – I know you probably can't say much about it other than are you in it or out?

I think we can say we're in.

Okay. And then a technical question for Justin. Obviously, you're going to be going from five segments to three segments in 2016. When should we expect to get a kind of the recast quarterly numbers for 2015, so we can just get the models all built up once we do the year-end closeout here?

Yes, we've talked about that internally and I think what we'll do on that is provide that – we'll provide it prior to the first quarter earnings release. And what we'll do is we'll probably – we'll put it up on our website and file an 8-K that just recaps the couple of years there that'll be in the historical. So we'll get that out in advance of the quarter.

Okay, cool…

And I think we file our 10-K on Monday, I believe. Right guys? Yes, we file the 10-K on Monday and then that'll be kind of the next action item.

Right, okay. Close out the current year, current format reporting and then move onto the next step.

Exactly.

Okay, cool. That just helps some of those kinds of housekeeping stuff. Thanks.

Thank you. [Operator Instructions]

Any further questions, operator? I am showing no further questions. I'd like to turn it back over to management for any closing remarks.

No closing remarks. Thank you, everyone, and we'll see you shortly at the end of the first quarter.

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