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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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PAGE
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1
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1
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2
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ITEM 1.
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2
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ITEM 1A.
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6
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ITEM 1B.
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8
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ITEM 2.
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8
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ITEM 3.
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9
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ITEM 4.
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9
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9
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ITEM 5.
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9
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ITEM 6.
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10
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ITEM 7.
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10
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ITEM 7A.
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32
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ITEM 8.
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32
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ITEM 9.
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32
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ITEM 9A.
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32
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ITEM 9B.
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33
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ITEM 9C.
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33 | |
34
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ITEM 10.
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34
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ITEM 11.
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36
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ITEM 12.
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39
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ITEM 13.
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40
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ITEM 14.
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41
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42
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ITEM 15.
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42
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ITEM 16.
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43
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44
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• |
the timing of the liquidation and dissolution of the Company following its adoption of a plan of liquidation on June 10, 2022;
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• |
the amount and timing of the release to the Company of funds held in escrow to secure payment of certain indemnification obligations under the Purchase Agreement (as defined below); the escrow period is scheduled to terminate in May
2023;
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• |
the timing and amount of any distribution to shareholders;
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• |
expenses associated with the Company losing its foreign private issuer status under U.S. federal securities laws;
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• |
the ability of U.S. persons to sell their Common Shares;
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• |
the expectation of the Board of Directors of the Company (the “Board”) that the financial resources available to the Company following the cash distributions to shareholders will be adequate to fund the Company’s outstanding
indemnification obligations (beyond those for which funds have been placed in escrow) and ongoing costs of operating the Company prior to its liquidation and dissolution; and
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• |
the possibility of changes in the securities regulations of Canada and the United States that could affect the ability of investors to trade their Common Shares.
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• |
the amount and timing of the release to the Company of funds held in escrow to secure payment of certain indemnification obligations under the Purchase Agreement; the escrow period is scheduled to terminate in May 2023;
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• |
taxes payable; and
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• |
currency exchange rates.
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• |
the amount and timing of the release to the Company of funds held in escrow to secure payment of certain indemnification obligations under the Purchase Agreement; the escrow period is scheduled to terminate in May 2023;
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• |
risks related to anti-corruption compliance;
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• |
reliance on limited management resources;
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• |
tax related risks;
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• |
risks related to being a publicly traded company, including, but not limited to, compliance and costs associated with the U.S. Sarbanes-Oxley Act of 2002 (to the extent applicable);
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• |
an increase in costs and demands on management resources as a result of the Company ceasing to qualify as an “emerging growth company” on December 31, 2022 under the U.S. Jumpstart Our Business Startups Act of 2012;
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• |
additional expenses in connection with the Company losing its foreign private issuer status under U.S. federal securities laws;
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• |
the determination to not pay dividends;
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• |
risks related to the liquidity of the market for the Common Shares;
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• |
risks related to litigation, including class actions and regulatory matters;
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• |
risks that the market price and trading volume of the Common Shares may materially decrease or experience increased fluctuation;
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• |
foreign exchange rate and associated risks;
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• |
risks related to currency controls and withholding taxes;
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• |
risks related to the impact of new laws and regulations;
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• |
risks associated with the Company’s internal controls over financial reporting; and
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• |
the costs associated with the dissolution of the Company.
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Item 1B. |
Unresolved Staff Comments
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Item 2. |
Properties
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Item 3. |
Legal Proceedings
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Item 4. |
Mine Safety Disclosures
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Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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May 19,
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December 31,
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December 31,
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||||||||||||||||||
2022
|
2021
|
2022
|
2021
|
2020
|
||||||||||||||||
End of period NZD to USD exchange rate
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0.64
|
0.68
|
0.63
|
(1)
|
0.68
|
0.72
|
||||||||||||||
% Change
|
(7
|
%)
|
(7
|
%)
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(5
|
%)
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Year Ended December 31,
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||||||||||||
2022
|
2021
|
2020
|
||||||||||
Average NZD to USD exchange rate
|
0.67
|
(2)
|
0.71
|
0.65
|
||||||||
% Change
|
(5
|
%)
|
9
|
%
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
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||||||||||
End of period CAD to USD exchange rate
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0.74
|
0.79
|
0.79
|
|||||||||
% Change
|
(6
|
%)
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0
|
%
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Average CAD to USD exchange rate
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0.77
|
0.80
|
0.75
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|||||||||
% Change
|
(4
|
%)
|
7
|
%
|
For the Year Ended December 31,
|
% Variance
|
|||||||||||||||||||
2022
|
2021
|
2020
|
2022 vs 2021
|
2021 vs 2020
|
||||||||||||||||
(in millions, unless otherwise noted)
|
||||||||||||||||||||
Service revenues
|
$
|
200.4
|
$
|
540.7
|
$
|
504.0
|
(63
|
%)
|
7
|
%
|
||||||||||
Total revenues
|
$
|
238.5
|
$
|
653.6
|
$
|
610.3
|
(64
|
%)
|
7
|
%
|
||||||||||
Net income (loss)
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$
|
437.0
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$
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(194.4
|
)
|
$
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(79.7
|
)
|
325
|
%
|
(144
|
%)
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||||||||
Net income (loss) margin(1)
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218.1
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%
|
(36.0
|
%)
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(15.8
|
%)
|
254.0 pts
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(20.1) pts
|
||||||||||||
Consolidated Adjusted EBITDA(2)
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$
|
39.4
|
$
|
115.1
|
$
|
107.0
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(66
|
%)
|
8
|
%
|
||||||||||
Consolidated Adjusted EBITDA Margin(2)
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19.7
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%
|
21.3
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%
|
21.2
|
%
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(1.6) pts
|
0.1 pts
|
||||||||||||
Capital expenditures(3)
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$
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32.4
|
$
|
92.8
|
$
|
77.3
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(65
|
%)
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20
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%
|
||||||||||
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||||||||||||||||||||
pts - percentage points
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• |
On May 19, 2022, the 2degrees Sale closed for an aggregate purchase price of $1.315 billion NZD for 100% of the equity interest in 2degrees. For its ownership interest in 2degrees, the Company’s share of the total consideration was $930
million NZD (approximately $601 million based on the exchange rate on the date the consideration was received), net of $33 million NZD ($21 million) of closing adjustments, including transaction advisory fees, along with payments to satisfy
the outstanding 2degrees option pool. Approximately $22 million NZD of the consideration paid by Voyage Digital for the Company’s 2degrees shares is being held in escrow for a maximum period of one year after the sale closing date.
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• |
Promptly following the closing of the 2degrees Sale, the Company repaid its outstanding indebtedness and the outstanding indebtedness of its subsidiary, Trilogy International South Pacific LLC (“TISP”), plus related accrued interest,
totaling approximately $450 million. As a result of these prepayments, the Company had no remaining indebtedness outstanding as of December 31, 2022.
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• |
In the second quarter, the Board declared and paid a distribution to shareholders of $115.8 million, or approximately $1.31 per share (declared as a $150 million CAD distribution), representing a return of capital pursuant to a plan of
liquidation adopted by the Board.
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• |
On May 14, 2022, the NuevaTel Transaction was completed. Proceeds received related to the NuevaTel Transaction were in a nominal amount and the Company recorded a net gain on the transaction of $14.5 million due to the carrying value of
liabilities in excess of assets for the business.
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• |
Total cash was $25.1 million as of December 31, 2022, exclusive of the Company’s share of the purchase price escrow established in connection with the 2degrees Sale of approximately $22 million NZD ($14.1 million based on the exchange
rate as of December 31, 2022).
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For the Year Ended December 31,
|
% Variance
|
|||||||||||||||||||
(in millions)
|
2022
|
2021
|
2020
|
2022 vs 2021
|
2021 vs 2020
|
|||||||||||||||
Revenues:
|
||||||||||||||||||||
Wireless service revenues (1)
|
$
|
154.8
|
$
|
420.3
|
$
|
408.4
|
(63
|
%)
|
3
|
%
|
||||||||||
Fixed broadband service revenues (1)
|
42.5
|
111.5
|
86.6
|
(62
|
%)
|
29
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%
|
|||||||||||||
Equipment sales
|
38.1
|
112.9
|
106.3
|
(66
|
%)
|
6
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%
|
|||||||||||||
Non-subscriber ILD and other revenues
|
3.2
|
8.9
|
9.0
|
(64
|
%)
|
(2
|
%)
|
|||||||||||||
Total revenues
|
$
|
238.5
|
$
|
653.6
|
$
|
610.3
|
(64
|
%)
|
7
|
%
|
For the Year Ended December 31,
|
% Variance
|
|||||||||||||||||||
(in millions)
|
2022
|
2021
|
2020
|
2022 vs 2021
|
2021 vs 2020
|
|||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Cost of service, exclusive of depreciation,
amortization and accretion shown separately
|
$
|
81.0
|
$
|
217.6
|
$
|
202.9
|
(63
|
%)
|
7
|
%
|
||||||||||
Cost of equipment sales
|
39.2
|
120.9
|
115.8
|
(68
|
%)
|
4
|
%
|
|||||||||||||
Sales and marketing
|
30.8
|
88.8
|
80.3
|
(65
|
%)
|
11
|
%
|
|||||||||||||
General and administrative
|
62.3
|
123.9
|
112.3
|
(50
|
%)
|
10
|
%
|
|||||||||||||
Depreciation, amortization and accretion
|
18.4
|
107.2
|
107.0
|
(83
|
%)
|
0
|
%
|
|||||||||||||
Impairment of long-lived assets
|
-
|
113.8
|
-
|
(100
|
%)
|
100
|
%
|
|||||||||||||
(Gain) on sale of operations and loss (gain) on
disposal of assets and sale-leaseback transaction
|
(457.6
|
)
|
1.1
|
(2.5
|
)
|
n/
|
m
|
143
|
%
|
|||||||||||
Total operating expenses
|
$
|
(225.9
|
)
|
$
|
773.4
|
$
|
615.7
|
(129
|
%)
|
26
|
%
|
|||||||||
n/m - not meaningful
|
For the Year Ended December 31,
|
% Variance
|
|||||||||||||||||||
(in millions)
|
2022
|
2021
|
2020
|
2022 vs 2021
|
2021 vs 2020
|
|||||||||||||||
Interest expense
|
$
|
22.9
|
$
|
53.7
|
$
|
46.5
|
(57
|
%)
|
15
|
%
|
||||||||||
Change in fair value of warrant liability
|
(0.105
|
)
|
(0.055
|
)
|
0.049
|
(91
|
%)
|
(212
|
%)
|
|||||||||||
Debt extinguishment, modification and issuance costs
|
8.5
|
7.0
|
-
|
22
|
%
|
100
|
%
|
|||||||||||||
Other, net
|
(15.4
|
)
|
3.3
|
4.6
|
(567
|
%)
|
(28
|
%)
|
For the Year Ended December 31,
|
% Variance
|
|||||||||||||||||||
(in millions)
|
2022
|
2021
|
2020
|
2022 vs 2021
|
2021 vs 2020
|
|||||||||||||||
Income tax expense
|
$
|
(11.5
|
)
|
$
|
(10.5
|
)
|
$
|
(23.1
|
)
|
(9
|
%)
|
54
|
%
|
For the Year Ended December 31,
|
% Variance
|
|||||||||||||||||||
(in millions, unless otherwise noted)
|
2022
|
2021
|
2020
|
2022 vs 2021
|
2021 vs 2020
|
|||||||||||||||
Service revenues
|
$
|
161.0
|
$
|
416.1
|
$
|
357.0
|
(61
|
%)
|
17
|
%
|
||||||||||
Total revenues
|
$
|
199.1
|
$
|
528.6
|
$
|
458.9
|
(62
|
%)
|
15
|
%
|
||||||||||
Segment Adjusted EBITDA
|
$
|
51.5
|
$
|
127.6
|
$
|
111.4
|
(60
|
%)
|
15
|
%
|
||||||||||
Segment Adjusted EBITDA Margin(1)
|
32.0
|
%
|
30.7
|
%
|
31.2
|
%
|
1.3 pts
|
(0.6) pts
|
||||||||||||
Capital expenditures (2)
|
$
|
30.5
|
$
|
81.1
|
$
|
65.1
|
(62
|
%)
|
25
|
%
|
||||||||||
Capital intensity
|
18.9
|
%
|
19.5
|
%
|
18.2
|
%
|
(0.5) pts
|
1.3 pts
|
||||||||||||
pts - percentage points
|
(1)
|
Segment Adjusted EBITDA Margin is calculated as Segment Adjusted EBITDA divided by service revenues.
|
(2)
|
Represents purchases of property and equipment excluding purchases of property and equipment acquired through vendor-backed financing and finance lease arrangements. Expenditures
related to the acquisition of spectrum licenses, if any, were not included in capital expenditures amounts.
|
• |
Cost of service declined $88.5 million, or 60%, in 2022 compared to the same period in 2021. Excluding the impact of foreign currency, cost of service declined $80.6 million, or 58%, primarily due to the closing of the 2degrees Sale in
May 2022;
|
• |
Cost of equipment sales declined $79.7 million, or 67%, compared to the same period in 2021. Excluding the impact of foreign currency, cost of equipment sales declined $73.3 million, or 65%, primarily due to the closing of the 2degrees
Sale in May 2022;
|
• |
Sales and marketing declined $40.8 million, or 63%, compared to the same period in 2021. Excluding the impact of foreign currency, sales and marketing declined $37.2 million, or 61%, primarily due to the closing of the 2degrees Sale in
May 2022;
|
• |
General and administrative declined $50.7 million, or 65%, compared to 2021. Excluding the impact of foreign currency, general and administrative declined $46.4 million, or 63%, primarily due to the closing of the 2degrees Sale in May
2022. Approximately $1.0 million of general and administrative costs incurred by 2degrees were associated with the 2degrees Sale. Due to the nonrecurring nature of these expenses, such costs were removed from Segment Adjusted EBITDA; and
|
• |
Depreciation, amortization, and accretion declined $59.8 million, or 81%, compared to the same period in 2021. Excluding the impact of foreign currency, depreciation, amortization, and accretion declined $55.8 million, or 80%, primarily
due to the 2degrees business meeting the accounting criteria to be classified as held for sale on March 15, 2022 and, accordingly, the Company ceased recording depreciation and amortization of 2degrees’ long-lived assets on that date. For
additional information, see Note 2 – Sale of Operations to the Consolidated Financial Statements.
|
• |
Cost of service increased $21.0 million, or 17%, in 2021 compared to the same period in 2020. Excluding the impact of foreign currency, cost of service increased $9.7 million, or 7%, primarily due to an increase in transmission expense
associated with the growth of the fixed broadband subscriber base. In addition, there was an increase in network-related maintenance costs attributable to investments in outsourced infrastructure support surrounding new platforms for 5G
delivery, managed security firewall programs, and disaster recovery. These increases were partially offset by a decline in combined network sharing and national roaming costs due to a network sharing agreement which commenced in the second
quarter of 2020;
|
• |
Cost of equipment sales increased $10.5 million, or 10%, compared to the same period in 2020. Excluding the impact of foreign currency, cost of equipment sales increased $0.9 million, or 1%, primarily due to an increase in the volume of
sales of higher priced devices in 2021 compared to 2020;
|
• |
Sales and marketing increased $11.8 million, or 22%, compared to the same period in 2020. Excluding the impact of foreign currency, sales and marketing increased $7.1 million, or 12%, compared to 2020, primarily due to an increase in
commissions expense of $4.2 million compared to the same period in 2020 primarily associated with higher amortization expense of incremental contract acquisition costs capitalized subsequent to December 31, 2020;
|
• |
General and administrative increased $14.8 million, or 23%, compared to 2020. Excluding the impact of foreign currency, general and administrative increased $9.1 million, or 13%. This increase was due to higher legal, audit and
consulting costs and increases in office rent expense due to the 2degrees corporate headquarters lease beginning in the second quarter of 2021. Approximately $6.0 million was due to nonrecurring professional service costs incurred during
2021 associated with the strategic transactions that were under consideration throughout that year, including approximately $4.0 million of costs primarily related to 2degrees’ preparation for a planned public listing and equity issuance
which were deferred and included within Prepaid expenses and other current assets on the Consolidated Balance Sheet as of September 30, 2021, reflecting the facts and circumstances as of that date. During the fourth quarter of 2021, upon
announcement of the Company’s definitive agreement to sell 100% of its equity in 2degrees, 2degrees recorded these deferred professional service costs of approximately $4.0 million to general and administrative expenses. Due to the
nonrecurring nature of these expenses, the total of approximately $6.0 million of these costs incurred during the year ended December 31, 2021 were removed from Segment Adjusted EBITDA. These increases were partially offset by a decline in
bad debt expense attributable to accounts receivable collection efforts and the improved credit risk of our customer portfolio. In addition, there was a $1.8 million one-time benefit in the first quarter of 2020 associated with 2degrees’
improvement in collections of Equipment Installment Plan (“EIP”) receivables previously sold to the third-party EIP receivables purchaser and a decline in equity-based compensation expense as a result of $1.7 million recorded in the second
quarter of 2020 associated with the extension of the expiration date of certain 2degrees’ service-based share options;
|
• |
Depreciation, amortization, and accretion increased $9.3 million, or 14%, compared to the same period in 2020. Excluding the impact of foreign currency, depreciation, amortization, and accretion increased $3.5 million, or 5%. This
increase was due primarily to an increase in depreciation expense associated with wireless network assets previously placed in service and accelerated depreciation expense on certain existing assets associated with the commencement of 5G
enabled infrastructure construction; and
|
• |
Loss on disposal of assets declined $1.9 million, or 72%, compared to the same period in 2020. Excluding the impact of foreign currency, loss on disposal of assets declined $2.1 million, or 75%. This decline was primarily associated with
disposal and abandonment charges of approximately $1.4 million during the second quarter of 2020 for certain construction in progress due in part to a reassessment of capital expenditures needs as 2degrees undertook cost reduction measures
in response to the COVID-19 pandemic.
|
For the Year Ended December 31,
|
% Variance
|
|||||||||||||||||||
(in millions, unless otherwise noted)
|
2022
|
2021
|
2020
|
2022 vs 2021
|
2021 vs 2020
|
|||||||||||||||
Service revenues
|
$
|
39.3
|
$
|
124.3
|
$
|
146.6
|
(68
|
%)
|
(15
|
%)
|
||||||||||
Total revenues
|
$
|
39.4
|
$
|
124.6
|
$
|
151.0
|
(68
|
%)
|
(17
|
%)
|
||||||||||
Segment Adjusted EBITDA
|
$
|
0.2
|
$
|
(0.1
|
)
|
$
|
6.6
|
390
|
%
|
(101
|
%)
|
|||||||||
Segment Adjusted EBITDA Margin(1)
|
0.5
|
%
|
(0.1
|
%)
|
4.5
|
%
|
0.6 pts
|
(4.6) pts
|
||||||||||||
Capital expenditures(2)
|
$
|
1.9
|
$
|
11.8
|
$
|
12.3
|
(84
|
%)
|
(4
|
%)
|
||||||||||
Capital intensity
|
4.9
|
%
|
9.5
|
%
|
8.4
|
%
|
(4.6) pts
|
1.1 pts
|
||||||||||||
pts - percentage points
|
• |
Cost of service declined $48.0 million, or 68%, in 2022, primarily due to the closing of the NuevaTel Transaction in May 2022. In addition, there were declines in interconnection costs as a result of lower voice traffic terminating
outside of NuevaTel’s network;
|
• |
Sales and marketing declined $17.3 million, or 71%, in 2022, primarily due to the closing of the NuevaTel Transaction in May 2022 as well as a decline in advertising expense;
|
• |
General and administrative costs declined $17.7 million, or 64%, in 2022, primarily due to the closing of the NuevaTel Transaction in May 2022;
|
• |
Depreciation, amortization and accretion declined $29.0 million, or 87%, in 2022, primarily due to the NuevaTel business meeting the accounting criteria to be classified as held for sale on March 28, 2022 and, accordingly, the Company
ceased recording depreciation and amortization of NuevaTel’s long-lived assets on that date. For additional information, see Note 2 – Sale of Operations to the Consolidated Financial Statements. The declines were also attributable to a
lower asset base being depreciated in 2022 compared to 2021 as a result of an impairment charge recognized in the third quarter of 2021; and
|
• |
Impairment of long-lived assets declined $113.8 million, or 100%, in 2022 as a result of the charge recorded in the third quarter of 2021. There was no impairment recorded in the year ended December 31, 2022. See Note 1 – Description of
Business, Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements for additional information.
|
• |
Cost of service declined $6.2 million, or 8%, in 2021, primarily due to a decrease in interconnection costs as a result of lower voice traffic terminating outside of NuevaTel’s network. Additionally, NuevaTel implemented workforce
reductions in the fourth quarter of 2020 with related cost reductions continuing through 2021. Transaction fees were also impacted by the decline in revenue and subscribers in 2021 compared to 2020;
|
• |
Cost of equipment sales declined $5.5 million, or 69%, in 2021, mainly due to a decline in the number of handsets sold during the period;
|
• |
Sales and marketing declined $3.3 million, or 12%, in 2021, primarily due to cost control measures, including a decrease in salaries and wages as a result of workforce reductions which occurred during the fourth quarter of 2020. These
declines were partially offset by an increase in advertising expense;
|
• |
General and administrative costs declined $6.1 million, or 18%, in 2021, primarily due to lower bad debt expense as a result of societal restrictions related to the COVID-19 pandemic which impacted collections in the periods in 2020. The
decline was also attributable to a decrease in salaries and wages and outsourcing costs associated with continued cost controls implemented in response to the COVID-19 pandemic;
|
• |
Depreciation, amortization and accretion declined $8.6 million, or 21%, in 2021, primarily due to a lower asset base during the year being depreciated as a result of the impairment charge recognized in the third quarter of 2021;
|
• |
Impairment of long-lived assets was $113.8 million for the year ended December 31, 2021 as a result of the charge recorded in the third quarter of 2021. There was no impairment recorded in the year ended December 31, 2020. See Note 1 –
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements for additional information; and
|
• |
Loss on disposal of assets and sale-leaseback transaction increased $5.5 million, or 107%, in 2021, primarily due to the timing of the gains recognized in connection with the closings of the tower sale-leaseback transaction in 2020.
|
Consolidated Income Statement Data
|
||||||||||||
For the Year Ended December 31,
|
||||||||||||
(in millions, except per share amounts)
|
2022
|
2021
|
2020
|
|||||||||
Service revenues
|
$
|
200.4
|
$
|
540.7
|
$
|
504.0
|
||||||
Equipment sales
|
38.1
|
112.9
|
106.3
|
|||||||||
Total revenues
|
238.5
|
653.6
|
610.3
|
|||||||||
Operating expenses
|
225.9
|
(773.4
|
)
|
(615.7
|
)
|
|||||||
Operating income (loss)
|
464.4
|
(119.9
|
)
|
(5.4
|
)
|
|||||||
Interest expense
|
(22.9
|
)
|
(53.7
|
)
|
(46.5
|
)
|
||||||
Change in fair value of warrant liability
|
0.1
|
0.1
|
-
|
|||||||||
Debt extinguishment, modification and issuance costs
|
(8.5
|
)
|
(7.0
|
)
|
-
|
|||||||
Other, net
|
15.4
|
(3.3
|
)
|
(4.6
|
)
|
|||||||
Income (loss) before income taxes
|
448.5
|
(183.8
|
)
|
(56.6
|
)
|
|||||||
Income tax expense
|
(11.5
|
)
|
(10.5
|
)
|
(23.1
|
)
|
||||||
Net income (loss)
|
437.0
|
(194.4
|
)
|
(79.7
|
)
|
|||||||
Net (income) loss attributable to noncontrolling interests
|
(3.6
|
)
|
49.7
|
31.9
|
||||||||
Net income (loss) attributable to TIP Inc.
|
$
|
433.5
|
$
|
(144.7
|
)
|
$
|
(47.8
|
)
|
||||
Net income (loss) attributable to TIP Inc. per share:
|
||||||||||||
Basic
|
$
|
4.93
|
$
|
(2.15
|
)
|
$
|
(0.83
|
)
|
||||
Diluted
|
$
|
4.90
|
$
|
(2.15
|
)
|
$
|
(0.83
|
)
|
Consolidated Balance Sheet Data
|
|||||||||
As of December 31,
|
As of December 31,
|
||||||||
(in millions, except as noted)
|
2022
|
2021
|
Change includes:
|
||||||
Cash, cash equivalents and restricted cash
|
$
|
25.1
|
$
|
55.0
|
Decline is primarily due to $421.5 million of payments of debt and EIP receivables financing obligation, net of proceeds, $115.8 million of return of capital distributions to shareholders, and $32.4 million
of purchases of property and equipment. These declines were largely offset by $552.2 million of proceeds from the sale of operations, inclusive of proceeds from forward exchange contract, net of $51.1 million of cash sold. For additional
information on the sale of operations, see Note 2 – Sale of Operations to the Consolidated Financial Statements.
|
||||
% Change
|
(54
|
%)
|
|||||||
Other current assets
|
15.6
|
145.8
|
Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022. Approximately $14.1 million of the balance as of December 31, 2022 represents the consideration from the 2degrees
Sale held in escrow.
|
||||||
% Change
|
(89
|
%)
|
|||||||
Property, equipment and intangibles, net
|
-
|
368.5
|
Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.
|
||||||
% Change
|
(100
|
%)
|
|||||||
Other non-current assets
|
-
|
234.6
|
Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.
|
||||||
% Change
|
(100
|
%)
|
|||||||
Total assets
|
$
|
40.6
|
$
|
803.9
|
As of December 31,
|
As of December 31,
|
||||||||
(in millions, except as noted)
|
2022
|
2021
|
Change includes:
|
||||||
Current portion of long-term
debt and financing lease
liabilities
|
$
|
-
|
$
|
31.6
|
Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.
|
||||
% Change
|
(100
|
%)
|
|||||||
All other current liabilities
|
7.2
|
194.0
|
Decline is primarily due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022, partially offset by the $5.1 million balance of accrued severance costs as of December 31, 2022 at
corporate headquarters.
|
||||||
% Change
|
(96
|
%)
|
|||||||
Long-term debt and financing lease liabilities
|
-
|
631.7
|
Decline is due to the prepayment of the TISP 8.875% Notes and the TISP 10.0% Notes and the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.
|
||||||
% Change
|
(100
|
%)
|
|||||||
All other non-current liabilities
|
-
|
192.6
|
Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.
|
||||||
% Change
|
(100
|
%)
|
|||||||
Total shareholders’ equity (deficit)
|
33.5
|
(246.0
|
)
|
Increase in shareholders’ equity is mainly due to net income for the year ended December 31, 2022, partially offset by the return of capital to shareholders, the change in noncontrolling interests and the
impact of foreign currency translation adjustments.
|
|||||
% Change
|
114
|
%
|
|||||||
Total liabilities and
shareholders’ equity (deficit)
|
$
|
40.6
|
$
|
803.9
|
For the Year Ended December 31,
|
||||||||||||||||||||||||||||||||
2022
|
2021
|
|||||||||||||||||||||||||||||||
(in millions, except per share amounts)
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
||||||||||||||||||||||||
Service revenues
|
$
|
-
|
$
|
-
|
$
|
69.2
|
$
|
131.2
|
$
|
133.8
|
$
|
134.4
|
$
|
134.2
|
$
|
138.2
|
||||||||||||||||
Equipment sales
|
-
|
-
|
14.0
|
24.1
|
35.3
|
23.1
|
23.4
|
31.1
|
||||||||||||||||||||||||
Total revenues
|
-
|
-
|
83.2
|
155.4
|
169.1
|
157.5
|
157.6
|
169.3
|
||||||||||||||||||||||||
Operating expenses
|
(1.9
|
)
|
(3.4
|
)
|
380.3
|
(149.1
|
)
|
(170.7
|
)
|
(275.0
|
)
|
(161.6
|
)
|
(166.1
|
)
|
|||||||||||||||||
Operating (loss) income
|
(1.9
|
)
|
(3.4
|
)
|
463.5
|
6.2
|
(1.6
|
)
|
(117.5
|
)
|
(4.1
|
)
|
3.3
|
|||||||||||||||||||
Interest expense
|
-
|
-
|
(8.6
|
)
|
(14.3
|
)
|
(13.8
|
)
|
(13.4
|
)
|
(13.2
|
)
|
(13.3
|
)
|
||||||||||||||||||
Change in fair value of warrant liability
|
-
|
-
|
-
|
0.1
|
(0.1
|
)
|
-
|
0.1
|
0.1
|
|||||||||||||||||||||||
Debt extinguishment, modification and issuance costs
|
-
|
-
|
(8.5
|
)
|
-
|
-
|
-
|
(7.0
|
)
|
-
|
||||||||||||||||||||||
Other, net
|
1.8
|
(2.0
|
)
|
30.2
|
(14.6
|
)
|
(7.7
|
)
|
2.2
|
0.4
|
1.8
|
|||||||||||||||||||||
(Loss) income before income taxes
|
(0.1
|
)
|
(5.4
|
)
|
476.6
|
(22.6
|
)
|
(23.2
|
)
|
(128.7
|
)
|
(23.8
|
)
|
(8.2
|
)
|
|||||||||||||||||
Income tax (expense) benefit
|
(0.1
|
)
|
-
|
(5.2
|
)
|
(6.2
|
)
|
(5.3
|
)
|
1.0
|
(2.7
|
)
|
(3.6
|
)
|
||||||||||||||||||
Net (loss) income
|
(0.2
|
)
|
(5.4
|
)
|
471.5
|
(28.8
|
)
|
(28.5
|
)
|
(127.7
|
)
|
(26.5
|
)
|
(11.7
|
)
|
|||||||||||||||||
Net (income) loss attributable to noncontrolling interests
|
-
|
-
|
(2.5
|
)
|
(1.1
|
)
|
0.3
|
37.1
|
9.3
|
3.0
|
||||||||||||||||||||||
Net (loss) income attributable to TIP Inc.
|
$
|
(0.2
|
)
|
$
|
(5.4
|
)
|
$
|
468.9
|
$
|
(29.8
|
)
|
$
|
(28.2
|
)
|
$
|
(90.6
|
)
|
$
|
(17.2
|
)
|
$
|
(8.7
|
)
|
|||||||||
Net (loss) income attributable to TIP Inc. per share:
|
||||||||||||||||||||||||||||||||
Basic
|
$
|
-
|
$
|
(0.06
|
)
|
$
|
5.36
|
$
|
(0.34
|
)
|
$
|
(0.33
|
)
|
$
|
(1.37
|
)
|
$
|
(0.29
|
)
|
$
|
(0.15
|
)
|
||||||||||
Diluted
|
$
|
-
|
$
|
(0.06
|
)
|
$
|
5.31
|
$
|
(0.34
|
)
|
$
|
(0.33
|
)
|
$
|
(1.37
|
)
|
$
|
(0.29
|
)
|
$
|
(0.15
|
)
|
➢ |
Cash and cash equivalents totaled $25.1 million as of December 31, 2022, exclusive of our share of the purchase price escrow established in connection with the 2degrees Sale.
|
➢ |
In the fourth quarter of 2022, the Company entered into forward exchange contracts to sell an aggregate of $20 million NZD and buy an aggregate of $12.3 million USD on June 30, 2023. These contracts were entered into in order to mitigate
exposure to fluctuations in the NZD to USD exchange rate in respect of substantially all of the $22 million NZD of proceeds from the 2degrees Sale held in escrow.
|
• |
Lower prepaid subscribers due to a shift in focus to postpaid sales;
|
• |
Higher usage of wireless data due to the migration from 3G to 4G LTE in Bolivia;
|
• |
Increased competition and changes in the market leading to larger data bundles offered for prices which impacted data ARPU;
|
• |
Stable postpaid churn in New Zealand, which the Company believes was a reflection of the Company’s heightened focus on high-value subscribers, bundled service offerings, and the Company’s enhanced subscriber service efforts;
|
• |
Decreasing voice revenue as rate plans increasingly incorporated more monthly minutes and calling features, such as long distance;
|
• |
Lower roaming revenue due to mobility restrictions associated with the COVID-19 pandemic;
|
• |
Varying handset subsidies as more consumers shifted toward smartphones with the latest technologies;
|
• |
Varying handset costs related to advancement of technologies and reduced supplier rebates or discounts on highly-sought devices;
|
• |
Seasonal promotions which were typically more significant in periods closer to year-end;
|
• |
Subscribers activating and suspending service to take advantage of promotions by the Company or its competitors;
|
• |
Higher voice and data costs related to the increasing number of subscribers, or, alternatively, a decline in costs associated with a decline in voice usage;
|
• |
Higher costs associated with the retention of high-value subscribers; and
|
• |
Decline in gross subscriber additions due to decreased commercial activity resulting from COVID-related societal restrictions and economic contraction.
|
• |
Higher internet subscription fees as subscribers increasingly upgraded to higher-tier speed plans, including those with unlimited usage;
|
• |
Subscribers bundling their service plans at a discount;
|
• |
Fluctuations in retail broadband pricing and operating costs influenced by government-regulated copper wire services pricing and changing consumer and competitive demands;
|
• |
Availability of fiber services in a particular area or general network coverage; and
|
• |
Individuals swapping technologies as fiber became available in their connection area.
|
For the Year Ended December 31,
|
% Variance
|
|||||||||||||||||||
(in millions)
|
2022
|
2021
|
2020
|
2022 vs 2021
|
2021 vs 2020
|
|||||||||||||||
Net cash (used in) provided by
|
||||||||||||||||||||
Operating activities
|
$
|
(8.6
|
)
|
$
|
48.7
|
$
|
40.9
|
(118
|
%)
|
19
|
%
|
|||||||||
Investing activities
|
519.1
|
(93.8
|
)
|
(86.4
|
)
|
653
|
%
|
(9
|
%)
|
|||||||||||
Financing activities
|
(537.3
|
)
|
(0.5
|
)
|
67.8
|
n/
|
m
|
(101
|
%)
|
|||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
$
|
(26.8
|
)
|
$
|
(45.6
|
)
|
$
|
22.3
|
41
|
%
|
(304
|
%)
|
||||||||
n/m - not meaningful
|
For the Year Ended December 31,
|
||||||||||||
(in millions)
|
2022
|
2021
|
2020
|
|||||||||
Net income (loss)
|
$
|
437.0
|
$
|
(194.4
|
)
|
$
|
(79.7
|
)
|
||||
Interest expense
|
22.9
|
53.7
|
46.5
|
|||||||||
Depreciation, amortization and accretion
|
18.4
|
107.2
|
107.0
|
|||||||||
Debt extinguishment, modification and issuance costs
|
8.5
|
7.0
|
-
|
|||||||||
Change in fair value of warrant liability
|
(0.1
|
)
|
(0.1
|
)
|
-
|
|||||||
Income tax expense
|
11.5
|
10.5
|
23.1
|
|||||||||
Other, net
|
(15.4
|
)
|
3.3
|
4.6
|
||||||||
Equity-based compensation
|
3.6
|
3.4
|
5.6
|
|||||||||
Impairment of long-lived assets
|
-
|
113.8
|
-
|
|||||||||
(Gain) on sale of operations and loss (gain) on disposal of assets and sale-leaseback transaction
|
(457.6
|
)
|
1.1
|
(2.5
|
)
|
|||||||
Transaction and other nonrecurring costs(1)
|
10.6
|
9.4
|
2.4
|
|||||||||
Consolidated Adjusted EBITDA(2)
|
$
|
39.4
|
$
|
115.1
|
$
|
107.0
|
||||||
Net income (loss) margin (Net income (loss) divided by service revenues)
|
218.1
|
%
|
(36.0
|
%)
|
(15.8
|
%)
|
||||||
Consolidated Adjusted EBITDA Margin
|
19.7
|
%
|
21.3
|
%
|
21.2
|
%
|
||||||
(Consolidated Adjusted EBITDA divided by service revenues)
|
Equipment Subsidy
|
||||||||||||
For the Year Ended December 31,
|
||||||||||||
(in millions)
|
2022
|
2021
|
2020
|
|||||||||
Cost of equipment sales
|
$
|
39.2
|
$
|
120.9
|
$
|
115.8
|
||||||
Less: Equipment sales
|
(38.1
|
)
|
(112.9
|
)
|
(106.3
|
)
|
||||||
Equipment Subsidy
|
$
|
1.1
|
$
|
8.0
|
$
|
9.5
|
||||||
• |
Monthly average revenues per wireless user (“ARPU”) is calculated by dividing average monthly wireless service revenues during the relevant period by the
average number of wireless subscribers during such period.
|
• |
Wireless data revenues (“data revenues”) is a component of wireless service revenues that includes the use of web
navigation, multimedia messaging service and value-added services by subscribers over the wireless network through their devices.
|
• |
Wireless service revenues (“wireless service revenues”) is a component of total revenues that excludes fixed broadband revenues, equipment sales and
non-subscriber international long distance revenues; it captures wireless performance and is the basis for the blended wireless ARPU calculations.
|
• |
Wireless data average revenue per wireless user (“data ARPU”) is calculated by dividing monthly data revenues during
the relevant period by the average number of wireless subscribers during the period.
|
• |
Service revenues (“service revenues”) is a component of total revenues that excludes equipment sales.
|
• |
Churn (“churn”) is the rate at which existing subscribers cancel their services, or are suspended from accessing the network, or have no revenue generating
event within the most recent 90 days, expressed as a percentage. Subscribers that subsequently have their service restored within a certain period of time are presented net of disconnections which may result in a negative churn percentage
in certain periods. Churn is calculated by dividing the number of subscribers disconnected by the average subscriber base. It is a measure of monthly subscriber turnover.
|
• |
Capital intensity (“capital intensity”) represents purchases of property and equipment divided by total service revenues. The Company’s capital expenditures
do not include expenditures on spectrum licenses. Capital intensity allows the Company to compare the level of the Company’s additions to property and equipment to those of other companies within the same industry.
|
• |
maintaining records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets and consolidated entities;
|
• |
providing reasonable assurance that transactions are recorded as necessary to permit the preparation of the Consolidated Financial Statements in accordance with U.S. GAAP and that receipts and expenditures by the Company and its
subsidiaries are being made only in accordance with the authorization of the Company’s management and Directors; and
|
• |
providing reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of Company assets that could have a material effect on the Consolidated Financial Statements.
|
Item 9B. |
Other Information
|
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
|
Item 10. |
Directors, Executive Officers and Corporate Governance
|
Name, Age, State or Province
and Country of Residence
|
Present Principal Occupation
|
Director Since
|
Bradley J. Horwitz, 67(2)
Washington, U.S.
|
Director and Chief Executive Officer of the Company
|
February 7, 2017
|
Mark Kroloff, 66(1)
Alaska, U.S.
|
Managing Partner, First Alaskan Capital Partners
|
February 7, 2017
|
John W. Stanton, 67(2)
Washington, U.S.
|
Director of the Company
|
February 7, 2017
|
(1) |
Chair of the Audit Committee of the Company (the “Audit Committee”)
|
(2) |
Member of the Audit Committee
|
Name, Age and Residence
|
Present Principal Occupation
|
Bradley J. Horwitz, 67
Washington, U.S.
|
Chief Executive Officer of the Company
|
Erik Mickels, 46
Washington, U.S.
|
Senior Vice President and Chief Financial Officer of the Company
|
Scott Morris, 70
Washington, U.S.
|
Senior Vice President, General Counsel and Corporate Secretary of the Company
|
Name and
principal
position
|
Year
|
Salary(1)
(US$)
|
Bonus(2)
(US$)
|
Stock
awards(3)
(US$)
|
Nonequity
incentive
plan
compensation
(US$)(4)
|
All other
compensation
(US$)(5)
|
Total
(US$)
|
|
Bradley J. Horwitz Chief Executive Officer(6)
|
2022
|
$400,000
|
$300,000
|
Nil
|
Nil
|
$22,347
|
$722,347
|
|
2021
|
$400,000
|
$351,414
|
$336,750
|
Nil
|
$20,735
|
$1,108,899
|
||
Erik Mickels Senior Vice President and Chief Financial Officer(7)
|
2022
|
$480,000
|
$288,000
|
Nil
|
$256,000
|
$22,399
|
$1,046,399
|
|
2021
|
$480,000
|
$337,357
|
$677,763
|
$128,000
|
$23,037
|
$1,646,157
|
||
Scott Morris Senior Vice President, General Counsel and Corporate Secretary(8)
|
2022
|
$400,000
|
$240,000
|
Nil
|
$213,333
|
$34,547
|
$887,880
|
|
2021
|
$400,000
|
$281,131
|
$564,802
|
$106,667
|
$32,135
|
$1,384,735
|
||
Tomas Perez Chief Executive Officer of NuevaTel(9)
|
2022
|
$248,484
|
$319,837
|
Nil
|
Nil
|
$550,089
|
$1,118,410
|
|
2021
|
$405,634
|
$300,000
|
$258,175
|
Nil
|
$342,183
|
$1,305,992
|
(1) |
All dollar amounts in the Executive Summary Compensation Table and footnotes thereto are reflected in U.S. dollars.
|
(2) |
Amounts reflect the annual cash bonuses that were earned by the NEOs for 2022 and 2021, although payment of each bonus was made in the year following the period for which the bonus was earned.
|
(3) |
Share-based awards represent the fair value of restricted share units (“RSUs”) granted in the year under the restricted share unit plan (the “RSU Plan”). The fair value of the RSUs is based on the closing market price of the Common
Shares on the effective date of grant multiplied by the number of RSUs grants. Accordingly, this value does not reflect the current value of any share-based award.
|
(4) |
Mr. Mickels and Mr. Morris participated in a retention benefit program that entitled each of them to their respective annual salary and target bonus, split equally into a cash award that vested ratably over three years between January 1,
2021 and January 1, 2024. Due to a change in control in 2022, the remaining cash award was fully vested in 2022.
|
(5) |
All other compensation includes amounts representing each NEO’s estimated health insurance, 401(k) matching benefits and health care savings account contributions. In the case of Mr. Perez, the compensation includes $423,119 in 2022
related to a severance payment Mr. Perez received from NuevaTel upon his resignation with good reason in connection with the NuevaTel Transaction. All other compensation for Mr. Perez also includes certain tax equalization benefits.
|
(6) |
Stock awards value reflects a grant of 300,000 units to Mr. Horwitz in 2021.
|
(7) |
Stock awards value reflects a grant of 603,797 units to Mr. Mickels in 2021.
|
(8) |
Stock awards value reflects a grant of 503,164 units to Mr. Morris in 2021.
|
(9) |
Stock awards value reflects a grant of 230,000 units to Mr. Perez in 2021.
|
Name
|
Fees earned or
paid in cash
(US$)
|
Stock awards
(US$)(1)
|
Total
Compensation
(US$)
|
Mr. Mark Kroloff
|
$140,000
|
Nil
|
$140,000
|
Mr. Nadir Mohamed(2)
|
$165,000
|
Nil
|
$165,000
|
Mr. Alan Horn(2)
|
$140,000
|
Nil
|
$140,000
|
Mr. Reza Satchu(2)
|
$100,000
|
Nil
|
$100,000
|
(1) |
In 2022, immediately before the closing of the 2degrees Sale, the Company settled all outstanding DSUs issued to Directors under its DSU Plan. In connection with the settlement of all outstanding DSUs, 489,762 Common Shares were issued
in 2022.
|
(2) |
Concurrently with the Company’s delisting from the Toronto Stock Exchange on December 23, 2022, Mr. Mohamed, Mr. Horn and Mr. Satchu resigned from the Board.
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Name
|
Number and Type of
Securities
|
Type of
Ownership(1)
|
Percentage of
Class(2)
|
|||
John W. Stanton
|
16,908,563
Common Shares(3)
|
Beneficial
|
19.08%
|
|||
Bradley J. Horwitz
|
4,419,246
Common Shares
|
Registered and Beneficial
|
4.99%
|
|||
Mark Kroloff
|
611,227
Common Shares(4)
|
Beneficial
|
0.69%
|
|||
Erik Mickels
|
829,908
Common Shares
|
Beneficial
|
0.94%
|
|||
Scott Morris
|
1,070,656
Common Shares(5)
|
Beneficial
|
1.21%
|
(1) |
Registered shares are shares shown on the Company’s share register as being owned by the named Director or NEO directly in his name.
|
(2) |
Based on 88,627,593 Common Shares outstanding at March 30, 2023.
|
(3) |
16,908,563 Common Shares are beneficially controlled or directed, directly or indirectly by John W. Stanton through SG Enterprises II, LLC, an entity owned and controlled by John W. Stanton and Theresa E. Gillespie.
|
(4) |
189,515 Common Shares are held by Mark Kroloff. 226,506 Common Shares are beneficially owned by Mr. Kroloff through FACP Investment Trilogy II, LLC, 168,884 Common Shares are beneficially owned by Mr. Kroloff through FACP Trilogy
Investment LLC, and 26,322 Common Shares are beneficially owned by Mr. Kroloff through FACP TINZ LLC.
|
(5) |
930,656 Common Shares are held by Scott Morris. 80,000 Common Shares are beneficially owned by Mr. Morris through Abigail Morris, 30,000 Common Shares are beneficially owned by Mr. Morris as Trustee of the Devon Morris Irrevocable Trust
and 30,000 Common Shares are beneficially owned by Mr. Morris as Trustee of the Lily M. Morris Irrevocable Trust. Mr. Morris disclaims beneficial ownership of the Common Shares owned by Abigail Morris.
|
Name
|
Number and Type
of Securities
|
Type of Ownership
|
Percentage of
Class(1)
|
|||
SG Enterprises II, LLC(2)
|
16,908,563
Common Shares
|
Registered
|
19.08%
|
|||
Anson Funds Management LP(3)
|
9,453,250
Common Shares
|
Beneficial
|
10.67%
|
|||
Alignvest Management Corporation(4)
|
8,214,622
Common Shares
|
Registered
|
9.27%
|
(1) |
Based on 88,627,593 Common Shares outstanding at March 30, 2023.
|
(2) |
SG Enterprises II, LLC's address is 155 108th Avenue NE, Suite 400, Bellevue, WA 98004.
|
(3) |
Anson Funds Management LP, a Texas limited partnership (“AFM”), is a registered Investment Advisor under the U.S. securities laws. According to the Statement on Schedule 13G/A filed by AFM on April 8, 2022 with the SEC, AFM, Anson
Management GP LLC, Mr. Bruce R. Winson, Anson Advisors Inc., Mr. Amin Nathoo and Mr. Moez Kassam are the beneficial owners of the shares of Common Shares held by AFM. Anson Funds Management LP reports its principal address as 1600 Dallas
Parkway, Suite 800, Dallas, TX 75248.
|
(4) |
Alignvest’s holdings reflect the holdings of Alignvest and two affiliated investment funds, Alignvest Partners Master Fund LP and Alignvest AQX LP. Alignvest Management Corporation reports its business address as 1027 Yonge Street, Suite
200, Toronto, Ontario, Canada, M4W 2K9.
|
Item 13. |
Certain Relationships and Related Transactions, and Director Independence
|
Amounts in thousands US$
|
2022
|
2021
|
||||||
Audit Fees(1)
|
$
|
1,010
|
$
|
1,985
|
||||
Audit-Related Fees
|
$
|
-
|
$
|
-
|
||||
Tax Fees
|
$
|
-
|
$
|
-
|
||||
All Other Fees(2)
|
$
|
-
|
$
|
48
|
(1) |
Fees for audit services include fees associated with the annual audit, including the reviews of the Company’s quarterly reports, statutory audits required internationally, comfort letters, other assurance procedures, and review of
documents publicly filed.
|
(2) |
All other fees consist of fees for services, other than those that meet the criteria above and include fees related to operational audit services.
|
a) |
The following documents are filed as part of this report:
|
1. |
Financial Statements
|
Report of Independent Registered Public Accounting Firm (PCAOB ID Number )
|
F-1
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
2. |
Financial Statement Schedules
|
3. |
Exhibits
|
b) |
Exhibits
|
1.1
|
|
1.2
|
|
1.3
|
Articles of Arrangement with attached Plan of Arrangement, incorporated by reference to Exhibit 99.2
|
1.4
|
|
4.1
|
|
4.2
|
Agreement for Sale and Purchase of Shares in Two Degrees Group Limited, incorporated by reference to
|
8.1
|
|
11.1
|
Code of Business Conduct and Ethics, incorporated by reference to Exhibit 99.3 to the Company’s Form
|
11.2
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)**
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document**
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document**
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document**
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document**
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document**
|
104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)** |
Item 16. |
Form 10-K Summary
|
TRILOGY INTERNATIONAL PARTNERS INC.
|
|
Date: March 30, 2023
|
By: /s/ Erik Mickels
|
Title: Senior Vice President and
|
|
Chief Financial Officer
|
Signature
|
Title
|
Date
|
|||
/s/ Bradley J. Horwitz
|
Director and Chief Executive Officer
|
March 30, 2023
|
|||
/s/ Erik Mickels
|
Senior Vice President and Chief Financial Officer
|
March 30, 2023
|
|||
/s/ John W. Stanton
|
Director
|
March 30, 2023
|
|||
/s/ Mark Kroloff
|
Director
|
March 30, 2023
|
|
Years Ended December 31,
|
|||||||
|
2022
|
2021
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Restricted cash
|
|
|
||||||
Accounts receivable, net
|
|
|
||||||
Equipment Installment Plan (“EIP”) receivables, net
|
|
|
||||||
Inventory
|
|
|
||||||
Sale proceeds held in escrow |
|
|||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Operating lease right-of-use assets, net
|
|
|
||||||
License costs and other intangible assets, net
|
|
|
||||||
Goodwill
|
|
|
||||||
Long-term EIP receivables
|
|
|
||||||
Deferred income taxes
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Construction accounts payable
|
|
|
||||||
Current portion of debt and financing lease liabilities
|
|
|
||||||
Customer deposits and unearned revenue
|
|
|
||||||
Short-term operating lease liabilities
|
|
|
||||||
Other current liabilities and accrued expenses
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term debt and financing lease liabilities
|
|
|
||||||
Deferred income taxes
|
|
|
||||||
Non-current operating lease liabilities
|
|
|
||||||
Other non-current liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity (deficit):
|
||||||||
Common shares,
|
|
|
||||||
Accumulated earnings (deficit)
|
|
(
|
)
|
|||||
Accumulated other comprehensive income
|
|
|
||||||
Total Trilogy International Partners Inc. shareholders’ equity (deficit)
|
|
(
|
)
|
|||||
Noncontrolling interests
|
|
|
||||||
Total shareholders’ equity (deficit)
|
|
(
|
)
|
|||||
Total liabilities and shareholders’ equity (deficit)
|
$
|
|
$
|
|
On behalf of the Board:
|
||
/s/ Mark Kroloff
|
|
|
Mark Kroloff
|
|
|
Director
|
|
Years Ended December 31,
|
|||||||||||
|
2022
|
2021
|
2020
|
|||||||||
Revenues
|
||||||||||||
Wireless service revenues
|
$
|
|
$
|
|
$
|
|
||||||
Fixed broadband service revenues
|
|
|
|
|||||||||
Equipment sales
|
|
|
|
|||||||||
Non-subscriber international long distance and other revenues
|
|
|
|
|||||||||
Total revenues
|
|
|
|
|||||||||
Operating expenses
|
||||||||||||
Cost of service, exclusive of depreciation, amortization and accretion shown separately
|
|
|
|
|||||||||
Cost of equipment sales
|
|
|
|
|||||||||
Sales and marketing
|
|
|
|
|||||||||
General and administrative
|
|
|
|
|||||||||
Depreciation, amortization and accretion
|
|
|
|
|||||||||
Impairment of long-lived assets
|
|
|
|
|||||||||
(Gain) on sale of operations and loss (gain) on disposal of assets and sale-leaseback transaction
|
(
|
)
|
|
(
|
)
|
|||||||
Total operating expenses
|
(
|
)
|
|
|
||||||||
Operating income (loss)
|
|
(
|
)
|
(
|
)
|
|||||||
Other (expenses) income
|
||||||||||||
Interest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Change in fair value of warrant liability
|
|
|
(
|
)
|
||||||||
Debt extinguishment, modification and issuance costs
|
(
|
)
|
(
|
)
|
|
|||||||
Other, net
|
|
(
|
)
|
(
|
)
|
|||||||
Total other expenses, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income (loss) before income taxes
|
|
(
|
)
|
(
|
)
|
|||||||
Income tax expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net income (loss)
|
|
(
|
)
|
(
|
)
|
|||||||
Less: Net (income) loss attributable to noncontrolling interests
|
(
|
)
|
|
|
||||||||
Net income (loss) attributable to Trilogy International Partners Inc.
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Comprehensive income (loss)
|
||||||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Other comprehensive income (loss):
|
||||||||||||
Foreign currency translation adjustments
|
(
|
)
|
(
|
)
|
|
|||||||
Net (loss) gain on short-term investments
|
|
(
|
)
|
|
||||||||
Other comprehensive (loss) income
|
(
|
)
|
(
|
)
|
|
|||||||
Comprehensive income (loss)
|
|
(
|
)
|
(
|
)
|
|||||||
Comprehensive (income) loss attributable to noncontrolling interests
|
(
|
)
|
|
|
||||||||
Comprehensive income (loss) attributable to Trilogy International Partners Inc.
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Net income (loss) attributable to Trilogy International Partners Inc. per share:
|
||||||||||||
Basic (see Note 15 - Earnings per Share)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Diluted (see Note 15 - Earnings per Share)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Weighted average common shares:
|
||||||||||||
Basic
|
|
|
|
|||||||||
Diluted
|
|
|
|
|
Accumulated
|
|||||||||||||||||||||||||||
|
Common Shares
|
Additional
|
Accumulated |
Other
|
Total
|
|||||||||||||||||||||||
|
Paid-In
|
(Deficit)
|
Comprehensive
|
Noncontrolling
|
Shareholders’
|
|||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Interests
|
(Deficit) Equity
|
|||||||||||||||||||||
Balance, December 31, 2019
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||||||||||
Cumulative effect of accounting changes
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Dividends declared and paid
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Equity-based compensation
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Net loss
|
-
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Other comprehensive income
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Issuance of shares related to RSUs and other
|
|
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Balance, December 31, 2020
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||
Dividends declared and paid
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Equity-based compensation
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Net loss
|
-
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Other comprehensive loss
|
-
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Redemption of Class C Units, issuance of shares related to RSUs and other
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Balance, December 31, 2021
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||
Equity-based compensation
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Other comprehensive loss
|
-
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Forfeiture of shares
|
( |
) | ||||||||||||||||||||||||||
Return of capital, net of distribution repaid
|
- | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
Issuance of shares related to RSUs, change in noncontrolling interests and other
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||
Balance, December 31, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Years Ended December 31,
|
|||||||||||
|
2022
|
2021
|
2020
|
|||||||||
Operating activities:
|
||||||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by
|
||||||||||||
operating activities:
|
||||||||||||
Provision for doubtful accounts
|
|
|
|
|||||||||
Depreciation, amortization and accretion
|
|
|
|
|||||||||
Equity-based compensation
|
|
|
|
|||||||||
Impairment of long-lived assets
|
|
|
|
|||||||||
(Gain) on sale of operations and loss (gain) on disposal of assets
|
(
|
)
|
|
(
|
)
|
|||||||
Non-cash right-of-use asset lease expense
|
|
|
|
|||||||||
Non-cash interest expense and debt derivative instrument charge
|
|
|
|
|||||||||
Settlement of cash flow hedges
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Change in fair value of warrant liability
|
(
|
)
|
(
|
)
|
|
|||||||
Debt extinguishment costs
|
||||||||||||
Non-cash (gain) loss from change in fair value on cash flow hedges
|
(
|
)
|
(
|
)
|
|
|||||||
(Gain) on forward exchange contracts and unrealized (gain) loss on foreign exchange transactions
|
(
|
)
|
(
|
)
|
|
|||||||
Deferred income taxes
|
|
|
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
EIP receivables
|
|
|
(
|
)
|
||||||||
Inventory
|
(
|
)
|
|
|
||||||||
Prepaid expenses and other current assets
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Other assets
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Accounts payable
|
(
|
)
|
|
(
|
)
|
|||||||
Operating lease liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Other current liabilities and accrued expenses
|
|
(
|
)
|
(
|
)
|
|||||||
Customer deposits and unearned revenue
|
(
|
)
|
(
|
)
|
|
|||||||
Net cash (used in) provided by operating activities
|
(
|
)
|
|
|
||||||||
Investing activities:
|
||||||||||||
Proceeds from the sale of operations, inclusive of proceeds from forward exchange contract of $
|
||||||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of short-term investments
|
( |
) | ( |
) | ||||||||
Maturities and sales of short-term investments
|
|
|
|
|||||||||
Purchase of spectrum licenses and other additions to license costs
|
|
(
|
)
|
|
||||||||
Proceeds from sale-leaseback transaction
|
|
|
|
|||||||||
Other, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net cash provided by (used in) investing activities
|
|
(
|
)
|
(
|
)
|
|||||||
Financing activities:
|
||||||||||||
Payments of debt, including sale-leaseback and EIP receivables financing obligations
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Return of capital, net of distribution repaid
|
( |
) | ||||||||||
Proceeds from debt
|
|
|
|
|||||||||
Proceeds from EIP receivables financing obligation
|
|
|
|
|||||||||
Dividends to noncontrolling interests
|
|
(
|
)
|
(
|
)
|
|||||||
Debt issuance and modification costs
|
|
(
|
)
|
(
|
)
|
|||||||
Other, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net cash (used in) provided by financing activities
|
(
|
)
|
(
|
)
|
|
|||||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(
|
)
|
(
|
)
|
|
|||||||
Cash, cash equivalents and restricted cash, beginning of period
|
|
|
|
|||||||||
Effect of exchange rate changes
|
(
|
)
|
(
|
)
|
|
|||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
|
$
|
|
$
|
|
2022
|
2021
|
|||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Restricted cash
|
|
|
||||||
Total cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
•
|
Identification of the contract, or contracts, with a customer;
|
•
|
Identification of the performance obligations in each contract;
|
•
|
Determination of the transaction price;
|
•
|
Allocation of the transaction price to the performance obligations in each contract; and
|
•
|
Recognition of revenue when, or as, we satisfy a performance obligation.
|
•
|
The assessment of legally enforceable rights and obligations involved judgment and impacted our determination of
contractual term, transaction price and related disclosures;
|
•
|
Our products were generally sold with a right of return, which was accounted for as variable consideration when
estimating the amount of revenue to recognize. Expected device returns were estimated based on historical experience;
|
•
|
Identifying distinct performance obligations within our service plans;
|
•
|
For contracts that involved more than one product or service (or multiple performance obligations), determining the
standalone selling price for each product or service (or performance obligation);
|
•
|
Determining costs that we incurred to obtain or fulfill a contract; and
|
•
|
For capitalized contract costs, determining the amortization period as well as assessing the indicators of
impairment.
|
As of May 19, 2022
|
||||
Current assets:
|
||||
Cash, cash equivalents and restricted cash
|
$
|
|
||
Accounts receivable, net
|
|
|||
EIP receivables, net
|
|
|||
Inventory
|
|
|||
Prepaid expenses and other current assets
|
|
|||
Total current assets
|
|
|||
|
||||
Property and equipment, net
|
|
|||
Operating lease right-of-use assets, net
|
|
|||
License costs, goodwill and other intangible assets, net
|
|
|||
Long-term EIP receivables
|
|
|||
Deferred income taxes
|
|
|||
Other assets
|
|
|||
Total assets
|
$
|
|
||
Current liabilities:
|
||||
Accounts payable
|
$
|
|
||
Construction accounts payable
|
|
|||
Current portion of debt and financing lease liabilities
|
|
|||
Customer deposits and unearned revenue
|
|
|||
Short-term operating lease liabilities
|
|
|||
Other current liabilities and accrued expenses
|
|
|||
Total current liabilities
|
|
|||
Long-term debt and financing lease liabilities
|
|
|||
Non-current operating lease liabilities
|
|
|||
Other non-current liabilities
|
|
|||
Total liabilities
|
$
|
|
||
Net assets sold
|
$
|
|
||
Net consideration
|
$
|
|
||
Less: Net assets sold
|
(
|
)
|
||
Carrying amount of noncontrolling interests
|
|
|||
Accumulated other comprehensive loss attributable to TIP Inc.
|
(
|
)
|
||
Gain on sale of 2degrees operation
|
$
|
|
As of May 14, 2022
|
||||
Current assets:
|
||||
Cash, cash equivalents and restricted cash
|
$
|
|
||
Accounts receivable and EIP receivables, net
|
|
|||
Inventory
|
|
|||
Prepaid expenses and other current assets
|
|
|||
Total current assets
|
|
|||
Property and equipment, net
|
|
|||
Operating lease right-of-use assets, net
|
|
|||
License costs and other intangible assets, net
|
|
|||
Other assets
|
|
|||
Total assets
|
$
|
|
||
Current liabilities:
|
||||
Accounts payable
|
$
|
|
||
Construction accounts payable
|
|
|||
Current portion of debt and financing lease liabilities
|
|
|||
Customer deposits and unearned revenue
|
|
|||
Short-term operating lease liabilities
|
|
|||
Other current liabilities and accrued expenses
|
|
|||
Total current liabilities
|
|
|||
Long-term debt and financing lease liabilities
|
|
|||
Non-current operating lease liabilities
|
|
|||
Other non-current liabilities
|
|
|||
Total liabilities
|
$
|
|
||
Net liabilities sold
|
$
|
(
|
)
|
|
Net consideration
|
$
|
|
||
Add: Net liabilities sold
|
|
|||
Carrying amount of noncontrolling interests
|
(
|
)
|
||
Gain on sale of NuevaTel operation
|
$
|
|
|
As of December 31, 2022
|
As of December 31, 2021
|
||||||
|
||||||||
Land, buildings and improvements
|
$
|
|
$
|
|
||||
Wireless communication systems
|
|
|
||||||
Furniture, equipment, vehicles and software
|
|
|
||||||
Construction in progress
|
|
|
||||||
|
|
|
||||||
Less: accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Property and equipment, net
|
$
|
|
$
|
|
Years Ended December 31,
|
||||||||
2022
|
2021
|
|||||||
Beginning balance
|
$
|
|
$
|
|
||||
Revisions in estimated cash flows
|
|
(
|
)
|
|||||
Additional accruals
|
|
|
||||||
Foreign currency translation
|
(
|
)
|
(
|
)
|
||||
Accretion
|
|
|
||||||
Disposals
|
|
(
|
)
|
|||||
Sale of operations |
( |
) | ||||||
Ending balance
|
$
|
|
$
|
|
December 31, 2022
|
December 31, 2021
|
|||||||
Beginning balance
|
$
|
|
$
|
|
||||
Foreign currency adjustment
|
(
|
)
|
(
|
)
|
||||
Sale of operations |
( |
) | ||||||
Balance at the end of the year
|
$
|
|
$
|
|
As of December 31, 2021
|
|||||||||||||
Estimated Useful
Lives
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net
|
||||||||||
License costs
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Subscriber relationships
|
|
|
(
|
)
|
|
||||||||
Other
|
|
|
(
|
)
|
|
||||||||
Total
|
$
|
|
$
|
(
|
)
|
$
|
|
As of December 31, 2021
|
||||
EIP receivables, gross
|
$
|
|
||
Unamortized imputed discount
|
(
|
)
|
||
EIP receivables, net of unamortized imputed discount
|
$
|
|
||
Allowance for doubtful accounts
|
(
|
)
|
||
EIP receivables, net
|
$
|
|
Classified on the balance sheet as:
|
As of December 31, 2021
|
|||
EIP receivables, net
|
$
|
|
||
Long-term EIP receivables
|
|
|||
EIP receivables, net
|
$
|
|
As of December 31, 2021
|
||||
Prime
|
$
|
|
||
Subprime
|
|
|||
Total EIP receivables, gross
|
$
|
|
December 31, 2022
|
December 31, 2021
|
|||||||
Beginning balance of EIP receivables, net
|
$
|
|
$
|
|
||||
Additions
|
|
|
||||||
Billings and payments
|
(
|
)
|
(
|
)
|
||||
Sales of EIP receivables
|
(
|
)
|
(
|
)
|
||||
Foreign currency translation
|
(
|
)
|
(
|
)
|
||||
Change in allowance for doubtful accounts and imputed discount
|
|
|
||||||
Sale of operations |
( |
) | ||||||
Total EIP receivables, net
|
$
|
|
$
|
|
December 31, 2022
|
December 31, 2021
|
|||||||
EIP receivables derecognized
|
$
|
|
$
|
|
||||
Cash proceeds
|
(
|
)
|
(
|
)
|
||||
Reversal of unamortized imputed discount
|
(
|
)
|
(
|
)
|
||||
Reversal of allowance for doubtful accounts
|
(
|
)
|
(
|
)
|
||||
Pre-tax gain on sales of EIP receivables
|
$
|
(
|
)
|
$
|
(
|
)
|
As of December 31, 2022
|
As of December 31, 2021
|
|||||||
Payroll, severance and other employee benefits
|
$
|
|
$
|
|
||||
Value-added tax and other business taxes
|
|
|
||||||
Dealer commissions and subsidies
|
|
|
||||||
Income and withholding taxes
|
|
|
||||||
Handset purchases
|
|
|
||||||
Other
|
|
|
||||||
Other current liabilities and accrued expenses
|
$
|
|
$
|
|
•
|
Level 1 – Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
|
•
|
Level 3 – Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to
value the asset or liability.
|
Fair Value Measurement as of December 31,
2022
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Forward exchange contracts
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value Measurement as of December 31,
2021
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Interest rate swaps
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
Forward exchange contracts
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Warrant liability
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
|
|
|
||||||||||||
Options instruments classified as liability
|
|
|
|
|
||||||||||||
Total liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
As of December 31, 2021
|
||||
Carrying amount, excluding unamortized discount and deferred financing costs
|
$
|
|
||
Fair value
|
$
|
|
As of December 31, 2021
|
||||
TISP
|
$ |
|
||
TISP
|
|
|||
New Zealand 2023 Senior Facilities Agreement | ||||
New Zealand EIP Receivables Financing Obligation
|
|
|||
Bolivian Bond Debt
|
|
|||
Bolivian 2023 Bank Loan
|
|
|||
Bolivian Tower Transaction Financing Obligation
|
|
|||
Bolivian 2022 Bank Loan
|
|
|||
Other
|
|
|||
|
||||
Less: deferred financing costs
|
(
|
)
|
||
Less: unamortized discount
|
(
|
)
|
||
Total debt and financing lease liabilities
|
|
|||
Less: current portion of debt and financing lease liabilities
|
(
|
)
|
||
Total long-term debt and financing lease liabilities
|
$
|
|
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Interest paid, net of capitalized interest
|
$
|
|
$
|
|
$
|
|
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Non-cash gain (loss) from change in fair value recorded in Other, net
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
Net cash settlement
|
$
|
|
$
|
|
$
|
|
RSUs
|
||||
Outstanding at December 31, 2021
|
|
|||
Vested
|
(
|
)
|
||
Outstanding at December 31, 2022
|
|
Total
|
Cumulative
Foreign
Currency
Translation
Adjustment
|
Unrealized
Gains and
Losses on
Derivatives and
Short-term
Investments
|
||||||||||
December 31, 2020
|
$
|
|
$
|
|
$
|
|
||||||
Other comprehensive loss
|
(
|
)
|
(
|
)
|
|
|||||||
Unrealized net loss related to short-term investments
|
(
|
)
|
|
(
|
)
|
|||||||
Net current period other comprehensive loss
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
December 31, 2021
|
$
|
|
$
|
|
$
|
|
||||||
Other comprehensive loss
|
(
|
)
|
(
|
)
|
|
|||||||
Net current period other comprehensive loss
|
(
|
)
|
(
|
)
|
|
|||||||
December 31, 2022
|
$
|
|
$
|
|
$
|
|
As of December 31, 2021
|
||||
2degrees
|
$
|
|
||
NuevaTel
|
(
|
)
|
||
Salamanca Solutions International LLC
|
(
|
)
|
||
Noncontrolling interests
|
$
|
|
Year Ended December 31, 2022
|
||||||||||||||||
New Zealand
|
Bolivia
|
Other
|
Total
|
|||||||||||||
Postpaid wireless service revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Prepaid wireless service revenues
|
|
|
|
|
||||||||||||
Fixed broadband service revenues(1)
|
|
|
|
|
||||||||||||
Equipment sales
|
|
|
|
|
||||||||||||
Other wireless service and other revenues(1)
|
|
|
|
|
||||||||||||
Total revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
Year Ended December 31, 2021
|
||||||||||||||||
New Zealand
|
Bolivia
|
Other
|
Total
|
|||||||||||||
Postpaid wireless service revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Prepaid wireless service revenues
|
|
|
|
|
||||||||||||
Fixed broadband service revenues(1)
|
|
|
|
|
||||||||||||
Equipment sales
|
|
|
|
|
||||||||||||
Other wireless service and other revenues(1)
|
|
|
|
|
||||||||||||
Total revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
Year Ended December 31, 2020
|
||||||||||||||||
New Zealand
|
Bolivia
|
Other
|
Total
|
|||||||||||||
Postpaid wireless service revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Prepaid wireless service revenues
|
|
|
|
|
||||||||||||
Fixed broadband service revenues(1)
|
|
|
|
|
||||||||||||
Equipment sales
|
|
|
|
|
||||||||||||
Other wireless service and other revenues(1)
|
|
|
|
|
||||||||||||
Total revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
|
Contract Assets
|
||||||||
2022
|
2021
|
|||||||
Balance at January 1
|
$
|
|
$
|
|
||||
Increase resulting from new contracts
|
|
|
||||||
Contract assets reclassified to a receivable or collected in cash
|
(
|
)
|
(
|
)
|
||||
Foreign currency translation
|
(
|
)
|
(
|
)
|
||||
Sale of operations |
( |
) | ||||||
Balance at December 31
|
$
|
|
$
|
|
Deferred Revenue
|
||||||||
2022
|
2021
|
|||||||
Balance at January 1
|
$
|
|
$
|
|
||||
Net increase in deferred revenue
|
|
|
||||||
Revenue recognized related to the balance existing at January 1
|
(
|
)
|
(
|
)
|
||||
Foreign currency translation
|
(
|
)
|
(
|
)
|
||||
Sale of operations |
( |
) | ||||||
Balance at December 31
|
$
|
|
$
|
|
Contract Costs
|
||||||||
2022
|
2021
|
|||||||
Balance at January 1
|
$
|
|
$
|
|
||||
Incremental costs of obtaining and contract fulfillment costs
|
|
|
||||||
Amortization and impairment included in operating costs
|
(
|
)
|
(
|
)
|
||||
Foreign currency translation
|
(
|
)
|
(
|
)
|
||||
Sale of operations |
( |
) | ||||||
Balance at December 31
|
$
|
|
$
|
|
Years Ended December 31,
|
||||||||||||
(in thousands, except per share amounts)
|
2022
|
2021
|
2020
|
|||||||||
Basic EPS:
|
||||||||||||
Numerator:
|
||||||||||||
Net income (loss) attributable to TIP Inc.
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Denominator:
|
||||||||||||
Basic weighted average Common Shares outstanding
|
|
|
|
|||||||||
Net income (loss) per share:
|
||||||||||||
Basic
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Diluted EPS:
|
||||||||||||
Numerator:
|
||||||||||||
Net income (loss) attributable to TIP Inc.
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Denominator:
|
||||||||||||
Basic weighted average Common Shares outstanding
|
|
|
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Unvested weighted average RSUs
|
|
|
|
|||||||||
Diluted weighted average Common Shares outstanding
|
|
|
|
|||||||||
Net income (loss) per share:
|
||||||||||||
Diluted
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Class C Units
|
|
|
|
|||||||||
Warrants
|
|
|
|
|||||||||
Forfeitable Founders Shares
|
|
|
|
|||||||||
Unvested RSUs
|
|
|
|
|||||||||
Unvested Class C Units
|
|
|
|
|||||||||
Weighted average Common Shares excluded from calculation of diluted net income (loss) per share
|
|
|
|
Years Ended December 31, | ||||||||||||
Classification
|
2022
|
2021
|
2020 |
|||||||||
Operating lease cost:(1)
|
||||||||||||
|
Cost of service |
$
|
|
$
|
|
$ | ||||||
|
Sales and marketing
|
|
|
|||||||||
|
General and administrative
|
|
|
|||||||||
$
|
|
$
|
|
$ | ||||||||
Financing lease cost:
|
||||||||||||
Amortization of ROU assets
|
Depreciation, amortization and accretion
|
|
|
|||||||||
Interest on lease liabilities
|
Interest expense
|
|
|
|||||||||
Total net lease cost
|
$
|
|
$
|
|
$ |
(1)
|
|
Classification
|
As of December 31,
2021
|
||||
Assets
|
|||||
Operating
|
|
$
|
|
||
Financing
|
|
|
|||
Total lease assets
|
$
|
|
|||
Liabilities
|
|||||
Current liabilities
|
|||||
Operating
|
|
$
|
|
||
Financing
|
|
|
|||
Long-term liabilities
|
|||||
Operating
|
|
|
|||
Financing
|
|
|
|||
Total lease liabilities
|
$
|
|
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020 |
||||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
||||||||||||
Operating cash flows for operating leases(1)
|
$
|
|
$
|
|
$ | |||||||
Operating cash flows for finance leases
|
$
|
|
$
|
|
$ | |||||||
Financing cash flows for finance leases
|
$
|
|
$
|
|
$ | |||||||
Supplemental lease cash flow disclosures
|
||||||||||||
Operating lease ROU assets obtained in exchange for new operating lease liabilities
|
$
|
|
$
|
|
$ |
(1) |
|
As of December 31,
2021
|
||||
Weighted-average remaining lease term (years)
|
||||
Operating leases
|
|
|||
Finance leases
|
|
|||
Weighted-average discount rate
|
||||
Operating leases
|
|
%
|
||
Finance leases
|
|
%
|
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Canada
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
United States
|
|
(
|
)
|
(
|
)
|
|||||||
Foreign
|
|
(
|
)
|
(
|
)
|
|||||||
Income (loss) before income taxes
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Current:
|
||||||||||||
Canada
|
$
|
|
$
|
|
$
|
|
||||||
United States
|
|
|
|
|||||||||
Foreign
|
|
|
|
|||||||||
|
|
|
||||||||||
Deferred:
|
||||||||||||
Canada
|
$
|
|
$
|
|
$
|
|
||||||
United States
|
|
|
|
|||||||||
Foreign
|
|
|
|
|||||||||
|
|
|
||||||||||
Total income tax expense
|
$
|
|
$
|
|
$
|
|
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Income tax expense (benefit) at Canadian federal rate
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Earnings attributable to non-tax paying entities
|
|
|
|
|||||||||
Foreign rate differential
|
(
|
)
|
|
|
||||||||
Change in valuation allowance
|
|
|
|
|||||||||
Effect of redemption of all outstanding Class C Units
|
|
|
|
|||||||||
Recognition of outside basis difference
|
( |
) | ||||||||||
Foreign withholding tax incurred
|
|
|
|
|||||||||
Withholding taxes on unrepatriated foreign earnings
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Inflation adjustment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Permanent adjustments
|
|
|
|
|||||||||
Other - net
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
December 31, 2021
|
|||||||
Intangible assets
|
$
|
|
$
|
|
||||
Fixed assets
|
|
|
||||||
Bad debt allowance
|
|
|
||||||
NOL, foreign tax credit and capital loss carryforwards
|
|
|
||||||
Accrued liabilities
|
|
|
||||||
Excess business interest expense
|
|
|
||||||
Equity-based compensation
|
|
|
||||||
Tower sale financing obligation
|
|
|
||||||
Operating lease liability
|
|
|
||||||
Other
|
|
|
||||||
Subtotal
|
$
|
|
$
|
|
||||
Less: valuation allowance
|
( |
) |
(
|
)
|
||||
Total net deferred tax assets
|
$ |
$
|
|
|||||
Contract asset
|
$
|
|
$
|
(
|
)
|
|||
Right-of-use asset
|
|
(
|
)
|
|||||
Withholding taxes on unrepatriated foreign earnings
|
|
(
|
)
|
|||||
Total deferred tax liabilities
|
$
|
|
$
|
(
|
)
|
|||
Net deferred tax asset
|
$
|
|
$
|
|
||||
Classified on the balance sheet as:
|
||||||||
Deferred tax asset
|
$
|
|
$
|
|
||||
Deferred tax liability
|
$
|
|
$
|
(
|
)
|
|||
$
|
|
$
|
|
New Zealand
|
- | |||
United States
|
|
- |
||
Canada
|
- |
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Income and withholding tax paid
|
$
|
|
$
|
|
$
|
|
Years Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Revenues
|
||||||||||||
New Zealand
|
$
|
|
$
|
|
$
|
|
||||||
Bolivia
|
|
|
|
|||||||||
Unallocated Corporate & Eliminations
|
|
|
|
|||||||||
Total revenues
|
$
|
|
$
|
|
$
|
|
||||||
Segment Adjusted EBITDA
|
||||||||||||
New Zealand
|
$
|
|
$
|
|
$
|
|
||||||
Bolivia
|
|
(
|
)
|
|
||||||||
Equity-based compensation
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Transaction and other nonrecurring costs
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Depreciation, amortization and accretion
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Impairment of long-lived assets
|
|
(
|
)
|
|
||||||||
Gain on sale of operations and (loss) gain on disposal of assets and sale-leaseback transaction
|
|
(
|
)
|
|
||||||||
Interest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Change in fair value of warrant liability
|
|
|
(
|
)
|
||||||||
Debt extinguishment, modification and issuance costs
|
(
|
)
|
(
|
)
|
|
|||||||
Other, net
|
|
(
|
)
|
(
|
)
|
|||||||
Unallocated Corporate & Eliminations
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income (loss) before income taxes
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Years Ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Depreciation, amortization and accretion
|
||||||||||||
New Zealand
|
$
|
|
$
|
|
$
|
|
||||||
Bolivia
|
|
|
|
|||||||||
Unallocated Corporate & Eliminations
|
|
|
|
|||||||||
Total depreciation, amortization and accretion
|
$
|
|
$
|
|
$
|
|
||||||
Capital expenditures
|
||||||||||||
New Zealand
|
$
|
|
$
|
|
$
|
|
||||||
Bolivia
|
|
|
|
|||||||||
Unallocated Corporate & Eliminations
|
|
|
|
|||||||||
Total capital expenditures
|
$
|
|
$
|
|
$
|
|
Total assets
|
||||||||
New Zealand
|
$
|
|
$
|
|
||||
Bolivia
|
|
|
||||||
Unallocated Corporate & Eliminations
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
New Zealand
|
Bolivia
|
Unallocated
Corporate &
Eliminations
|
Total
|
|||||||||||||
Year ended December 31, 2022
|
||||||||||||||||
Wireless service revenues (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Fixed broadband service revenues (1)
|
|
|
|
|
||||||||||||
Equipment sales
|
|
|
|
|
||||||||||||
Non-subscriber ILD and other revenues
|
|
|
|
|
||||||||||||
Total revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Year ended December 31, 2021
|
||||||||||||||||
Wireless service revenues (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Fixed broadband service revenues (1)
|
|
|
|
|
||||||||||||
Equipment sales
|
|
|
|
|
||||||||||||
Non-subscriber ILD and other revenues
|
|
|
|
|
||||||||||||
Total revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Year ended December 31, 2020
|
||||||||||||||||
Wireless service revenues (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Fixed broadband service revenues (1)
|
|
|
|
|
||||||||||||
Equipment sales
|
|
|
|
|
||||||||||||
Non-subscriber ILD and other revenues
|
|
|
|
|
||||||||||||
Total revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
|