_________________________________________________
____________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-19551
Atlantic Tele-Network, Inc.
(exact name of issuer as specified in its charter)
Delaware 47-072886
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Chase Financial Center
P.O. Box 1730
St. Croix, U.S. Virgin Islands 00821
(809) 777-8000
Indicate by check mark whether the
registrant (1) has filed all reports
required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934
during the preceding 12 months (or for such
shorter period that the registrant was
required to file such reports), and (2) has
been subject to such filing requirements
for the past 90 days. Yes X No
As of March 31, 1996, the registrant had
outstanding 12,272,500 shares of its common
stock ($.01 par value).
___________________________________________
<PAGE>
<TABLE>
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Columnar Amounts in Thousands)
<CAPTION>
December 31, March 31,
1995 1996
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $18,822 $25,073
Accounts receivable, net 63,353 57,044
Materials and supplies 8,656 8,753
Prepayments and other current assets 5,781 7,662
Total current assets 96,612 98,532
Fixed assets:
Property, plant and equipment 286,856 297,594
Less accumulated depreciation (101,729) (105,427)
Franchise rights and cost in excess of
underlying book value, less
accumulated amortization of $9,769,000 and 41,533 41,182
$10,120,000
Net fixed assets 226,660 233,349
Property costs recoverable from future revenues 20,000 21,469
Uncollected authorized rate increases 4,339 3,937
Other assets 16,263 16,926
$363,874 $374,213
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable 6,969 10,944
Accounts payable 19,568 22,694
Accrued taxes 6,177 9,556
Advance payments and deposits 2,719 2,682
Other current liabilities 8,815 11,629
Current portion of long-term debt 17,872 13,643
Total current liabilities 62,120 71,148
Deferred income taxes and tax credits 28,188 27,927
Long-term debt, excluding current portion 120,297 118,339
Pension and other long-term liabilities 9,457 9,209
Minority interest 12,856 13,448
Contingencies and commitments (Note C)
Stockholders' equity:
Preferred stock, par value $.01 per share; - -
10,000,000 shares authorized;
none issued and outstanding
Common stock, par value $.01 per share;
20,000,000 shares authorized;
12,272,500 shares issued and outstanding 123 123
Paid-in capital 81,852 81,852
Retained earnings 48,981 52,167
Total stockholders' equity 130,956 134,142
$363,874 $374,213
</TABLE>
See notes to consolidated condensed financial statements.
2
<PAGE>
<TABLE>
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Columnar Amounts in Thousands, Except Per Share Data)
<CAPTION>
Unaudited
Three Months
Ended
March 31,
1995 1996
<S> <C> <C>
Telephone Operations:
Revenues:
Local exchange service $6,132 $6,311
Access charges 3,532 3,364
International long-distance revenues 23,262 35,241
Universal Service Fund 3,087 2,802
Billing and other revenues 1,101 1,029
Directory advertising 712 649
Total revenues 37,826 49,396
Expenses:
Plant specific operations 3,199 3,717
Plant nonspecific operations 5,173 4,923
Customer operations 1,450 1,594
Corporate operations 3,224 2,921
International long-distance expenses 12,215 22,305
Taxes other than income 770 916
Total expenses 26,031 36,376
Income from telephone operations 11,795 13,020
Other Operations:
Revenues:
Cellular services 1,204 1,638
Product sales and rentals 1,149 1,286
Total revenues 2,353 2,924
Expenses of other operations 1,757 2,074
Income from other operations 596 850
Non-operating Revenues and Expenses:
Interest expense (3,213) (2,868)
Interest income 206 142
Other revenues and expenses (2,356) (4,442)
Non-operating revenues and expenses, net (5,363) (7,168)
Income before income taxes and minority interest 7,028 6,702
Income taxes 2,885 2,924
Income before minority interest 4,143 3,778
Minority interest (457) (592)
Net Income $3,686 $3,186
Net income per share $.30 $.26
Weighted average shares outstanding 12,273 12,273
</TABLE>
See notes to consolidated condensed financial statements.
3
<PAGE>
<TABLE>
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Columnar Amounts in Thousands)
<CAPTION
(Unaudited)
Three Months
Ended March 31,
1995 1996
<S> <C> <C>
Net cash flows provided by operating activities $5,509 $20,670
Cash flows from investing activities:
Capital expenditures (3,037) (12,207)
Net cash used in investing activities (3,037) (12,207)
Cash flows from financing activities:
Repayment of long-term debt (3,083) (6,187)
Net borrowings (repayments) on notes 895 3,975
Net cash flows prov. (used) by fin. activities (2,188) (2,212)
Net increase in cash 284 6,251
Cash, Beginning of Period 17,515 18,822
Cash, End of Period $17,799 $25,073
Supplemental cash flow information:
Interest paid $3,258 $2,796
Income taxes paid $464 $416
Depreciation and Amortization Expense $4,739 $4,525
</TABLE>
See notes to consolidated condensed financial statements.
4
<PAGE>
Atlantic Tele-Network, Inc.and Subsidiaries
Notes to the Consolidated Condensed
Financial Statements
Three Months Ended March 31, 1995 and 1996
(Columnar amounts in Thousands)
A. GENERAL
SIGNIFICANT ACCOUNTING POLICIES
The consolidated balance sheet of Atlantic Tele-Network, Inc. and
subsidiaries (the "Company") at December 31, 1995 has been taken from
audited financial statements at that date. All other consolidated
condensed financial statements contained herein have been prepared by
the Company and are unaudited. The consolidated condensed financial
statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
The unaudited interim consolidated condensed financial statements
furnished herein reflect all adjustments, which are, in the opinion of
management, necessary to fairly present the financial results for the
interim periods presented. The results for the three ended March 31,
1995 and 1996 are not necessarily indicative of the operating results
for the full year not yet completed.
B. PROPERTY COSTS RECOVERABLE FROM FUTURE REVENUES
On September 15, 1995, Hurricane Marilyn struck the Virgin Islands
causing extensive damage to the outside telephone plant of Vitelco.
None of the damage was covered by insurance. Vitelco's estimate of the
historical cost of the facilities damaged or destroyed by Hurricane
Marilyn is approximately $27 million with associated accumulated
depreciation of approximately $9 million. These costs have been removed
from the property accounts and along with certain excess maintenance
costs and costs of removal which are estimated at $3.5 million as of
March 31, 1996 have been classified as property costs recoverable from
future revenues because the Company anticipates that future revenue in
an amount at least equal to the capitalized cost will result from
inclusion of these costs in allowable costs for rate making purposes.
Due to uncertainties in this estimation process, it is reasonably
possible that estimated costs of damaged or destroyed property as well
as excess maintenance costs and costs of removal will be revised in the
near term. The Company has received approval from the Federal
Communications Commission to include the interstate portion of these
costs in its rate base and amortize them over a five year period.
However, the treatment by the Public Services Commission for the
intrastate telecommunications plant has not yet been determined. In
order to minimize the intrastate rate increases which might be required
to enable Vitelco to recover these costs, on May 6, 1996, Vitelco
applied to the Industrial Development Commission of the Virgin Islands
for a 5-year exemption from 90% of Virgin Islands income taxes and 100%
of Virgin Islands gross receipts and certain other taxes. This
application is still pending, and its ultimate outcome cannot be
determined by management at this time.
5
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Notes to the Consolidated Condensed
Financial Statements
Three Months Ended March 31, 1995 and 1996
(Columnar Amounts in Thousands)
C. CONTINGENCIES AND COMMITMENTS
The Company presently has no insurance coverage for its outside plant
for damages caused by wind storms. The Company is exploring alternatives
to enable it to insure this risk in whole or in part, but believes that
such insurance for outside plant is currently not available at
reasonable rates.
On October 11, 1995, the Guyana Public Utilities Commission ("PUC")
issued an order that rejected the request of GT&T for substantial
increases in all telephone rates and temporarily reduced rates for
outbound long-distance calls to 87 countries. The order reduces these
rates by 10%, and during off-peak hours, by an additional 50% of the
reduced rate. In most cases, the existing rates are already less than
GT&T's payment obligations to foreign carriers. The rate reduction was
implemented by GT&T effective October 22, 1995. The order also calls
for GT&T to deposit 15% of gross revenues into an escrow account that
would be earmarked for capital expenditures for a new telecommunications
expansion plan in Guyana to be developed by the PUC. The Company is
unable to determine whether the escrow payments will be a pretax charge
to GT&T's income or an increase in GT&T's rate base. GT&T has filed an
appeal from the PUC order to the High Court in Guyana. On December 1,
1995, the High Court issued an order which effectively provides a stay
on the requirement of depositing 15% of gross revenues into the escrow
account. This matter is still pending before the courts and its
ultimate outcome cannot be determined by management at this time.
Upon the acquisition of GT&T in January 1991, GT&T entered into an
agreement with the government of Guyana to expand significantly GT&T's
existing facilities and telecommunications operations and to improve
service within a three-year period pursuant to an expansion and service
improvement plan (the Plan). At GT&T's request and with the consent of
the government of Guyana, the Plan was modified in certain respects and
the date for completion of the Plan was extended first to August 28,
1994 and then to February 28, 1995. The government of Guyana has to
date not accepted a request made by the Company and GT&T in December
1994 to modify certain other aspects of the Plan. The government has
referred to the PUC the failure of GT&T to complete the Plan by February
28, 1995. However, hearings on this subject before the PUC are
currently stayed pending GT&T's appeal from the PUC's October 11, 1995
order discussed above. Failure to timely fulfill the terms of the Plan
could result in monetary penalties, cancellation of the License, or
other action by the PUC or the government which could have a material
adverse affect on the Company's business and prospects.
6
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Notes to Consolidated Condensed
Financial Statements
Three Months Ended March 31, 1995 and 1996
(Columnar Amounts in Thousands)
D. LITIGATION SETTLEMENT
On February 7, 1996, the two principal shareholders and Co-Chief
Executive Officers of the Company entered into a Global Settlement
Agreement and Release pursuant to which they agreed to settle all then
pending litigation between them concerning the management of ATN and
related matters. As part of the settlement, the Company agreed to
indemnify the officers over a period of time for a portion
(approximately $2,800,000 in the aggregate) of the fees and expenses
incurred by them in connection with the management dispute and related
litigation. The company has accrued $2.8 million for this
indemnification obligation in the first quarter of 1996. In addition,
and as contemplated by the settlement, the Board of Directors of the
Company has determined to explore possible means of enhancing
stockholder value for ATN, including a possible business combination
involving ATN.
7
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Management Discussion and Analysis of Financial
Conditions and Results of Operations
Introduction
The Company's revenues and income from continuing operations are derived
principally from the operations of its telephone subsidiaries, Vitelco
and GT&T. Vitelco derives most of its revenues from local telephone and
long-distance access services. GT&T derives almost all of its revenues
from international telephone services. Other operations in the
Company's Consolidated Statements of Operations include: VitelCellular,
which provides cellular telephone service in the U.S. Virgin Islands;
and Vitelcom, which supplies customer premises equipment in the U.S.
Virgin Islands.
The principal components of operating expenses for the Company's
telephone operations are plant specific operations expenses, plant non-
specific operations expenses, customer operations expenses, corporate
operations expenses, long-distance expenses and taxes other than income
taxes. These categories are consistent with FCC accounting practices.
Plant specific operations expenses relate to support and maintenance of
telephone plant and equipment and include vehicle expense, land and
building expense, central office switching expense and cable and wire
expense. Plant non-specific operations expenses consist of depreciation
charges for telephone plant and equipment and expenses related to
telephone plant and network administration, engineering, power,
materials and supplies, provisioning and plant network testing.
Customer operations expenses relate to marketing, providing operator
services for call completion and directory assistance, and establishing
and servicing customer accounts. Corporate operations expenses include
Vitelco's and GT&T's expenses for executive management and
administration, corporate planning, accounting and finance, external
relations, personnel, labor relations, data processing, legal services,
procurement and general insurance. International long-distance expenses
consist principally of charges from international carriers for outbound
international calls from Guyana and payments to audiotext providers from
whom GT&T derives international audiotext traffic. Taxes other than
income taxes include gross receipts taxes, property taxes, and other
miscellaneous taxes.
RESULTS OF OPERATIONS
Three Months ended March 31, 1995 and 1996
Revenues from telephone operations for the period ended March 31, 1996
were $49.4 million as compared to $37.8 million for the corresponding
period of the prior year, an increase of $11.6 million (30%). The
increases were due to a $12.7 million increase in audiotext traffic
revenues at GT&T for the three months ended March 31, 1996. Audiotext
traffic increased 13.9 million minutes for the three months ended March
31, 1996 over the corresponding period of the previous year. GT&T's
audiotext traffic increased sharply in the first eight months of 1995
hitting a peak of 11.7 million minutes for the month of August. Since
then audiotext traffic has held relatively steady at about 10 million
minutes per month. Audiotext is a highly competitive business, and GT&T
may experience significant increases or decreases in the volume and
profit margins of its audiotext traffic during the remainder of 1996.
8
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Management Discussion and Analysis of Financial
Conditions and Results of Operations
Vitelco's telephone operations revenues decreased $757,000 for the three
months ended March 31, 1996, principally as a result of Hurricane
Marilyn which put approximately 37,800 of Vitelco's approximately 60,000
access lines out of service on September 15, 1995. At March 31, 1996
Vitelco had 45,940 lines in service.
Consolidated telephone operating expenses increased $10.3 million (39%)
for the three months ended March 31, 1996. This increase was due
principally to increased audiotext and outbound traffic expenses at GT&T
of $10.1 million, due to increased traffic volume. In addition, plant
specific expenses increased as a result of increased plant in service,
although certain expenses at Vitelco were reduced in the first quarter
of 1996 as Vitelco's work force was shifted from maintenance activities
to repairing the damage caused by Hurricane Marilyn
Overall, income from telephone operations increased $1.2 million (10%)
for the three months ended March 31, 1996. The increase occurred
principally because of increased audiotext traffic at GT&T. These
revenue increases at GT&T were partially offset by increased
international long distance, plant, and other operating expenses. This
resulted in an increase in GT&T's contribution to income from telephone
operations of $1.6 million (22%) for the three months ended March 31,
1996. This was offset by an approximately $426,000 decrease in the
contribution to income from telephone operations at Vitelco discussed
above.
Income from continuing operations before minority interest decreased
$326,000 for the three months ended March 31, 1996. The significant
factors that contributed to this for the three months ended March 31,
1996 were:
(i) the $1.2 million increase in income from telephone
operations discussed above;
(ii) a $254,000 increase in income from other operations as a
result of cellular operations;
(iii) a $281,000 net decrease in net interest expense due to
reduced debt;
(iv) a $2.1 million increase in other revenues and expenses. This
was principally due to a non-recurring charge of $2.8 million
in the first three months of 1996 for the companies
obligation to reimburse its two Co-Chief Executive Officers
for certain litigation expenses in connection with a
management dispute settled in February 1996.
The Company's effective tax rate for the three months ended March 31,
1996 was 43.6% as compared to 41.1% for the corresponding period of the
prior year. The increase is due principally to the proportionally higher
earnings of GT&T.
The minority interest in earnings consists primarily of the Guyana
government's 20% interest in GT&T.
Regulatory Considerations
On October 11, 1995 the Guyana PUC issued an order which temporarily
reduced GT&T's rates for outbound international calls and required GT&T
to deposit 15% of its gross revenues into an escrow account that would
9
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Management Discussion and Analysis of Financial
Conditions and Results of Operations
be earmarked for capital expenditures for a new telecommunications
expansion plan in Guyana. The temporary rate changes ordered by the PUC
have been put into effect, although GT&T has obtained a court order
staying the escrow payment obligations. If these rate changes were to
continue in effect through all of 1996, they would result in a reduction
of approximately $3 million in the Company's consolidated net income
based on GT&T's current traffic patterns. The rate changes may also
cause a shift of some profitable inbound international traffic to
unprofitable outbound international traffic. However, the Company is
unable to estimate the extent to which such a shift in traffic would
occur. If the PUC's escrow payment order had been in effect for all of
1995, it would have required payments of approximately $20 million. The
Company is unable to determine whether the escrow payments would be a
pretax charge to GT&T's income or an increase in GT&T's rate base.
Upon the acquisition of GT&T in January 1991, GT&T entered into an
agreement with the government of Guyana to expand significantly GT&T's
existing facilities and telecommunications operations and to improve
service within a three-year period pursuant to an expansion and service
improvement plan (the "Plan"). At GT&T's request and with the consent
of the government of Guyana, the Plan was modified in certain respects
and the date for completion of the Plan was extended first to August 28,
1994 and then to February 28, 1995. The government of Guyana has to
date not accepted a request made by the Company and GT&T in December
1994 to modify certain other aspects of the Plan. The government has
referred to the PUC the failure of GT&T to complete the Expansion Plan
by February 28, 1995. However hearings on this subject before the PUC
are currently stayed pending GT&T's appeal from the PUC's October 11,
1995 order discussed above. Failure to timely fulfill the terms of the
Expansion Plan could result in monetary penalties, cancellation of the
License, or other action by the PUC or the government which could have a
material adverse affect on the Company's business and prospects.
Liquidity and Capital Resources
The Company depends upon funds received from subsidiaries to meet its
capital needs, including servicing existing debt and its ongoing program
of seeking to acquire telecommunications licenses and businesses. The
major source of funds for the Company has been advisory fees received
from GT&T, and interest income from advances to subsidiaries of the
Company.
Other potential sources of funds to the Company are from repayment of
loans to subsidiaries or dividends from GT&T or ATN - VI. However, the
RTFC Loan limits the payment of dividends by ATN - VI unless ATN - VI
meets certain financial ratios (which were not met at March 31, 1996).
Consequently ATN - VI was restricted from paying dividends at that date.
At March 31, 1996, the Company also holds a note of ATN - VI in the
amount of approximately $23 million which may be repaid by ATN - VI in
whole or in part without regard to the limit on the payment of dividends
by ATN - VI.
ATN - VI's ability to obtain funds to repay its note is dependent upon
dividends from Vitelco, and Vitelco is subject to restrictions on
payment of dividends under its loan agreement with the Rural Utility
Service ("RUS") and its 1989 and 1991 Settlement Agreements with the
PSC. Under Vitelco's Settlement Agreements with the Public Service
Commission (PSC), which are currently more restrictive than the RUS
10
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Management Discussion and Analysis of Financial
Conditions and Results of Operations
Loans, dividends by Vitelco are generally limited to 60% of its net
income, although additional amounts are permitted to be paid for the
sole purpose of servicing ATN - VI's debt to RTFC. At March 31, 1996,
Vitelco was restricted from paying any dividends and had approximately
$9.3 million of the cash reflected on the Company's Consolidated Balance
Sheet at that date.
The RTFC Loan and RUS Loan agreements also require, among other things,
maintenance of minimum debt service and times interest earned coverage
and restrictions on issuance of additional long-term debt. As of March
31, 1996, the Company was in compliance with all covenants contained in
its long-term debt agreements.
Vitelco estimates that approximately $45 million has been or will be
required to repair the damage to its telephone plant caused by Hurricane
Marilyn. Vitelco had cash balances of $21.4 million as of September 1,
1995 and was able to finance its restoration activities through March
1996 from its cash balances and cash flows from operating activities.
Vitelco has drawn down $5 million available to it under an existing line
of credit with RTFC and has received an additional $15 million line of
credit from RTFC. Vitelco has applied to the RUS for $35.1 million of
long-term financing. Vitelco's $5 million borrowing from RTFC is
required to be repaid within 12 months of the date of drawdown.
Vitelco's new $15 million line of credit will mature on March 31, 1997,
at which date, if long-term loan funds from RUS have not yet been made
available to Vitelco, Vitelco will have the option of rolling the
outstanding amount borrowed under that line of credit into a 15-year
term loan from RTFC having terms substantially similar to those
contained in Vitelco's existing long-term loan from RTFC.
GT&T is not subject to any contractual restrictions on payment of
dividends. However, the capital needs of GT&T's Expansion Plan, the
working capital required for GT&T's rapid growth in audiotext traffic in
1995 and GT&T's own debt service obligations have precluded GT&T from
paying any significant funds to the Company other than the advisory fees
mentioned above. Because the Company pays fees owing to audiotext
traffic providers on a more rapid schedule than it collects on its
audiotext traffic, the Company has had to invest increasing amounts in
the working capital related to its audiotext traffic during the period
that this traffic was growing at a rapid rate. The rate of growth in
the required working capital for this traffic decreased shortly after
August, 1995 when the volume of audio text traffic peaked and then
leveled off. As a result of the reduced need by GT&T's audio text
business for increasing amounts of working capital, GT&T has been
contributing significantly to the Company's liquidity.
If and when the Company settles outstanding issues with the Guyana
Government and the PUC with regard to GT&T's Expansion Plan and its
rates for service, GT&T may require additional external financing to
enable GT&T to further expand its telecommunications facilities. If
that portion of the PUC's October 11, 1995 order which requires GT&T to
make escrow payments equal to 15% of its revenues comes into effect,
GT&T will most likely require external financing to enable it to make
such payments, and there can be no assurance that the Company will be
able to obtain any such financing.
The Company's short term bank credit facility, under which the Company
has $5.5 million of loans outstanding, expired on October 1, 1994. The
bank has orally agreed to renew this facility until October 1, 1996 and
to waive the prohibition on borrowing under the facility during the
first thirty days of the renewal period. The Company also had
11
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Management Discussion and Analysis of Financial
Conditions and Results of Operations
outstanding at March 31, 1996 a demand loan of $444,444 from Cornelius
B. Prior, Jr. one its Co-Chief Executive Officers which is being repaid
at the rate of $55,555 per month. In the first quarter of 1996 The
Company paid in full a $4 million Note and paid Mr. Prior $512,179 in
partial payment of his demand loan.
The continued expansion of GT&T's network is dependent upon the ability
of GT&T to purchase equipment with U.S. dollars. A portion of GT&T's
taxes in Guyana may be payable in U.S. dollars or other hard currencies.
The Company anticipates that GT&T's foreign currency earnings will
enable GT&T to service its debt and pay its hard currency tax
obligations. There are no Guyana legal restrictions on the conversion
of Guyana's currency into U.S. dollars or on the expatriation of foreign
currency from Guyana.
Impact of Devaluation and Inflation
Although the majority of GT&T's revenues and expenditures are transacted
in U.S. dollars or other hard currencies, the results of operations
nevertheless may be affected by changes in the value of the Guyana
dollar. From February 1991 until early 1994, the Guyana dollar remained
relatively stable at the rate of approximately 125 to the U.S. dollar.
In 1994, however, the Guyana dollar has declined in value to the current
rate of approximately 142 to the U.S. dollar, and it has remained
relatively stable at approximately that rate since 1994.
The effect of inflation on the Company's financial results of telephone
operations in the U.S. Virgin Islands has not been significant in recent
years. The effect of inflation on the cost of providing telephone
service in the U.S. Virgin Islands has generally been offset (without
any increase in local subscribers' rates) by increased revenues
resulting from growth in the number of subscribers and from regulatory
cost recovery practices in determining access revenues.
12
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Part II - Other Information
Item 1. Legal Proceedings
Pursuant to a Global Settlement Agreement and Release, dated February 7,
1996, (i) all claims and counterclaims asserted in the case entitled
Atlantic Tele-Network, Inc., et al. v. Jeffrey J. Prosser, et al, then
pending in the Court of Chancery of the State of Delaware in and for New
Castle County, have been dismissed with prejudice, (ii) all claims and
counterclaims asserted in the case entitled Cornelius B. Prior, Jr. v.
Jeffrey J. Prosser, et al, then pending in the Court of Chancery of the
State of Delaware in and for New Castle County, have been dismissed with
prejudice, (iii) all claims and counterclaim asserted in the case
entitled Atlantic Tele-Network, Inc., et al. v. Cornelius B. Prior, Jr.,
et al, then pending in the Territorial Court of the Virgin Islands,
Division of St. Croix, have been dismissed with prejudice and (iv) all
claims asserted in the case entitled Edwin C. Crouch, et al. v.
Cornelius B. Prior, Jr., et al., then pending in the District Court of
the Virgin Islands, Division of St. Croix, have been dismissed with
prejudice. For further information with regard to these cases and the
terms of the settlement, see the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 and the Registrant's Current Report
on Form 8-K dated February 16, 1996.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
On February 7, 1996, Cornelius B. Prior, Jr. and Jeffrey J. Prosser, who
at that date held in the aggregate approximately 60% of the outstanding
shares of common stock of the Registrant, executed and delivered to the
Company irrevocable written consents to the adoption of an amendment to
the Registrant's certificate of incorporation. For further information
with regard to this matter, see the Information Statement filed by the
Registrant on April 24, 1996 with the Securities and Exchange Commission
pursuant to Section 14(c) of the Securities Exchange Act of 1934.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
Current Report on Form 8-K, dated February 16, 1996 relating to the
Global Settlement Agreement
13
<PAGE>
Atlantic Tele-Network, Inc. and Subsidiaries
Signatures
Pursuant to the Securities Act of 1934, the registrant has caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.
Atlantic Tele-Network, Inc.
Date: May 14, 1996 /s/ Craig A. Knock
Craig A. Knock
Chief Financial Officer and Vice-President
signing both in his capacity as Vice-
President on behalf of the Registrant and as
Chief Financial Officer of the Registrant
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ACCOMPANYING FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
****(COLUMNAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)****
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 25,073
<SECURITIES> 0
<RECEIVABLES> 57,044
<ALLOWANCES> 0
<INVENTORY> 8,753
<CURRENT-ASSETS> 98,532
<PP&E> 338,776
<DEPRECIATION> 105,427
<TOTAL-ASSETS> 374,213
<CURRENT-LIABILITIES> 71,148
<BONDS> 118,339
0
0
<COMMON> 123
<OTHER-SE> 134,019
<TOTAL-LIABILITY-AND-EQUITY> 374,213
<SALES> 52,320
<TOTAL-REVENUES> 52,320
<CGS> 38,450
<TOTAL-COSTS> 38,450
<OTHER-EXPENSES> 4,442
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,868
<INCOME-PRETAX> 6,702
<INCOME-TAX> 2,924
<INCOME-CONTINUING> 3,186
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,186
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
