Good day, ladies and gentlemen, and welcome to the Atlantic Tele-Network's Q4 earnings conference call. [Operator Instructions] As a reminder, today's conference is being recorded. I'd now like to turn the conference over to your host, Mr. Justin Benincasa, Chief Financial Officer. Please go ahead.

Thanks, operator. Good morning, everyone, and thank you for joining us on our call to review fourth quarter and full year 2011 results. With me here is Michael Prior, ATN's President and Chief Executive Officer. And as usual, during the call, I'll be covering the relevant financial information and certain operational data, and Michael will be providing an update on the business. Before I turn the call over to Michael for his comments, I'd just like to point out that this call and our press release contain forward-looking statements concerning our current expectations, objectives and underlying assumptions regarding our future operating results and are subject to risks and uncertainties that could cause actual results to differ materially from those described. Also, in an effort to provide useful information to investors, our comments today include non-GAAP financial measures. For details on those measures and reconciliations to comparable GAAP measures, and for further information regarding the factors that may affect our operating -- future operating results, please refer to our earnings release on our website at atni.com or to the 8-K filing provided to the SEC. And with that, I'd like to turn the call over to Michael for his comments.

Thank you, Justin. Good morning, everyone. We've -- let me, first, give you an overall view of the quarter, and then I'll get into the metrics and other details from operations before turning it back to Justin. So as we said in our press release, we were pleased with our overall results for the fourth quarter and the year. Although much work remains to be done, it was nice to see the growth in consolidated EBITDA over 2011 -- sorry, 2010 that is. And we're glad to have come through in good shape from a challenging year with one large integration project often talked about, the acquired Alltel business complete; and one smaller integration project, the Bermuda merger, off to a strong start. As a result of those projects, we have exited 2011 with better earnings and cash flow potential, and the fourth quarter appears to show the beginning of that potential being realized. Of course, there's further progress to be made and challenges to overcome, but we have a good list of priorities to focus on in 2012. And those are: Stabilization of our U.S. wireless subscriber base; reducing expenses and improving operating efficiency in U.S. wireless; and as always, exploring opportunities for growth, both domestically and internationally. So now let me get into some operating details, first, on U.S. wireless. On the retail side, subscriber metrics improved over a tough third quarter. To start with, postpaid and overall subscriber churn declined significantly. As you could see in the release, postpaid churn for the quarter was 2.55%, down from 2.97% in the third quarter and 3.18% in the fourth quarter of 2010. Blended subscriber churn was also down at 3.25%, it was down from 4.05% for the third quarter and 4.48% a year ago. We believe the decrease in…

Okay. Thanks, Michael. Just jumping right into it. Revenues for the quarter totaled $182.9 million, which was a decrease of $11.8 million or 6% from the same quarter in 2010. This resulted primarily from a decline in our U.S. wireless retail revenues due to subscriber attrition in 2011, which was partially offset by an increase in our wholesale and international wireless revenues. Total wireless revenues for the quarter were $153.9 million or 84% of total revenues, and our U.S. wireless service revenues were $134.4 million or 73% of total revenues. Adjusted EBITDA for the quarter was $40.7 million, up $9.4 million or 30% over the same period last year. Included in this quarter's operating expenses of $172 million was noncash stock-based compensation expense of $617,000, $107,000 of acquisition-related expenses and a noncash $2.4 million goodwill impairment charge on one of our smaller Island Wireless properties. Our U.S. wireless segment accounted for 78% of adjusted EBITDA and 74% of operating expenses. Moving down to net income. Earnings for the quarter were $4.1 million, or $0.27 per share, which included a $0.16 per share charge, representing the goodwill impairment I just mentioned. Our effective tax rate for the quarter was 57% compared to 48% for the year overall. And since the goodwill impairment was in a 0 income tax jurisdiction, there is no tax benefit associated with it, and thus it impacted our effective tax rate by 11% for the quarter and 2% for the year. Turning to the balance sheet. As of December 31, we had cash balances of $48.7 million and total debt outstanding of $282.2 million, which leaves us with a leverage multiple of 1.75x and 1.5x on a net debt basis. This compares to 2.2x and 1.9x, respectively, at the end of 2010. I think it's noteworthy that…

[Operator Instructions] Our first question comes from Ric Prentiss of Raymond James.

A couple of questions, if I could. First, obviously, nice to have the business through the transition period for the full quarter. When you look at the margins in the fourth quarter, nice margins. Historically, fourth quarter would be a lower margins season because of the big holiday selling season. As you look into 2012, what are your thoughts on the U.S. Wireless margins, given what you achieved in the fourth quarter?

I think that you're absolutely right that the fourth quarter on the retail side, definitely, hits margins a bit. With our business, it's interesting because you do have to take into account that the wholesale side of the U.S. Wireless business tends to increase margins, particularly in the third quarter. But I think overall, we think that the U.S. wireless margins should go up from the fourth quarter a little bit, not dramatically because of that combination of circumstances.

And so the thoughts of getting into that kind of mid-20s margin is still very much achievable, it sounds like?

Yes, yes. I think -- we look at the whole U.S. Wireless segment, and our third quarter is always our seasonally high. It will be a bit north of that, and fourth quarter will be a little south of that, so...

Okay. Second question is on your CapEx guidance. You mentioned the U.S. Wireless side be 50 to 65. A lot of discussion on LTE from a lot of different carriers. Even the other day, when Telus reported, they mentioned that they're not going to launch LTE commercially in '12, but it sure signaled that they were probably spending some LTE money in '12 to be ready for commercial launch in '13. What are your thoughts on LTE? How much you think it will cost to upgrade your network, with an overlay I assume on it?

Yes, I think that we haven't made any definitive decision or announcement to launch LTE at a particular time. But as we've talked about before, we're certainly looking at it very closely. I really think, every carrier is. And so we're no different than -- in Telus in that respect. And I look at their numbers and their broad thoughts and on the costs and that are consistent with what we're seeing, so -- and the other thing to keep in mind is that we -- if we don't go LTE by a certain timeframe, you could have not a big disparity in cost just because of the cost is continuing to add data capacity and some other related costs. So we don't see it as a huge, huge onetime event in capital spending when we do go that direction. And we think if likely, we will.

But there's nothing explicitly in the 2012 guidance for it?

Yes, no, there -- we definitely have a placeholder in there for it. As Michael said, it's either you have to do data capacity expansion in the network or start moving in that direction, but there's definitely a placeholder in that guidance for us for moving in that direction.

I guess, not explicit, but implicit kind of in there.

Right. I think what we’re saying is that the numbers wouldn't be so big as to swing it. And so we don't -- we haven't committed to go LTE, so we don't have a definite cost. So there's always room for some change. But we're not seeing a pricing or the cost really drive us out of that range of guidance we've given.

And as far as an outer region strategy for LTE, is that important? Are you already working on it?

It's very important. I think it's very important, because there's a couple of reasons that do LTE. Some -- probably, the primary reason for a lot of carriers, including ourselves, is capacity management. Having a more efficient use of your spectrum and your network. But you, obviously, have the marketing side as well. And if you are going to offer LTE devices, it's a lot more attractive if your customers have the ability to use them out of territory. So every -- it's a long way of saying, all of the regional carriers that I am aware of, we're all looking at what's our national plan, how do we go about that.

And what options are looking attractive or being considered?

Well, I think there's been a -- I think we're considering all options you can imagine probably you've read. I don't want to tilt towards anyone at this time. But there is a number of possibilities out there that are being talked about. And you also have the potential, which is less attractive -- but you have the potential to not necessarily roam in a 4G situation. You have the drop down potential. And if you look at what the experience is for a lot of carriers, even the very biggest, that's often your experience.

Our next question comes from Barry McCarver of Stephens.

Nice improvement in those wireless operating metrics. So I guess, going back to -- the prepaid gross adds in the fourth quarter were up very strong. Can we talk about a little bit more detail on the value plans that you implemented there to help on that front?

Yes. I mean, I think we think that our plans, both prepaid and postpaid now -- very good in comparison to the competition. There -- on the prepaid side, there probably are some even deeper value plans out there from some of the MVNOs, in particular, but it really closed the gap significantly for us. And it's been well received. I mean, we really weren't playing very strongly in prepaid for our pre-transition time period. And so that was one of the things we wanted to get back after. And I think the other thing that's probably significant is unlike many other carriers, and indeed what Alltel has done in the past, our best-value plans for prepaid and postpaid are very closely aligned, and so it's -- we've really designed it so that somebody coming in who can't really qualify or -- for postpaid has a very easy path into prepaid that is easy to compare on an apples-to-apples basis, easy for the salesperson to help them with and vice versa on the postpaid side -- sorry, on the prepaid side, going the other direction. So if they want to kind of sell off and buy up a little more features and ability and a cheaper handset, there's an easy path into postpaid.

And I think you mentioned that the value plans for the postpaid side were implemented a little bit later in 4Q, and you were a little earlier on the prepaid. If that's right, now that we're a couple of months into 2012, do you have any idea kind of what the result is? Are you seeing that nice improvement on the postpaid as well, like you did last quarter on pre?

Yes. I mean, we don't tend to count it too much about the third quarter. But what -- but I think, at least what I can say is that it is definitely a lag in postpaid to get people to understand. And I'm not -- we're not ready to declare that, that's arrived. I think, we -- I'll just repeat, I think we have a very strong offering. We haven't yet seen it resonate to the level we think it should. And we're hopeful to change -- that we can change that going forward.

Okay. Okay, that's helpful. And then just lastly -- and I think at the end of your prepared comments you talked about looking again at growth opportunities, both domestically and internationally, and then, Justin talked about the low leverage on the balance sheet. Would the Alltel transition complete an integration there? Are you back in acquisition mode?

I think we're in acquisition mode in the sense that we're -- we actively look at opportunities as people follow us. While that could mean we don't do anything for a long time, though, if things -- if nothing meets our criteria. There are -- I will say, it does seem that like there's a lot going on in our industry right now, both bad and good, and there's some dislocation. It feels fairly dynamic in one sense. And I think that often can present opportunity on the M&A side. On the flip side, it is -- the world has been consolidating in our space for a while, which means the overall number of opportunities is down.

Our next question comes from Chris King of Stifel, Nicolaus.

Just wanted to follow up with -- get your broad sense on the current M&A environment. We've, obviously, had a couple of transactions, at least rumored here, over the last, really, couple of weeks or so and several related to smaller niche-type players, which you guys have historically, at least, had some interest in. So just was wondering if I could get your take on kind of the general M&A environment that's out there right now, whether you've seen a change over the last 3 to 6 months or so in terms of activity picking up and how you guys view that going forward?

I think it's obvious that the activity is picking up. I agree with that, Chris. It does seem that way. I think there's a couple of things going on. I wouldn't want to comment on any one transaction, because we don't really have any insight to motives on any side. But it looks like there's a continued -- because of the rapid, rapid growth in demand for mobile data, that caused a lot of carriers to rethink their future plans, and that sometimes leads you to strategic solution. Sometimes it's partnerships, sometimes it's acquisitions, sometimes it's sales. But I think -- I'm not saying anything that you probably don't all know, but that seems to be what's driving it. And I think it does help that the economy has kind of moved on to another stage, and there's a little more -- the capital markets are a little more open. People are willing to be a little more aggressive. But I would say, it's probably the former reason that's driving more of it, particularly in the U.S. So just to repeat what I said earlier, in response to Barry McCarver's question is I think that we like activity and a dynamic market, because that tends to create opportunity. Doesn't always, but we like that situation better than the very quiet situation we had before.

Our next question comes from Hamed Khorsand of BWS Financial.

First off, I wanted to ask you guys. Is the Guyana wireless profitable? I mean, the subscription levels are now at the lowest in more than 2 years?

We don't separate that out, but we think that business is healthier than it's been in 2 years. I would say the revenue has been growing. It's really -- remember, that is an almost completely prepaid market. And the -- as I alluded to in the comments, the subscriber -- most of that subscriber change was effective. We had, for years, allowed customers to use GPRS data virtually free. And it really was very little cost to us. It was almost a marketing expense. And the demand for data is no different there than anywhere else. We moved up the data capacities, and the devices that we're selling. We launched BlackBerry, then we needed to change our -- the way we are treating data when we went to more of the smart phone world in that market. So I think it's very important there to follow the revenue line a lot more closely than the subscriber line.

All right. And then, how much of an impact did the smartphone subsidiaries have an operating numbers this year in the U.S. Wireless?

Yes. With smartphones -- you subsidize more in the smartphones, so it's definitely going to impact margins, so -- but I don't have specifics as to how much that did to margins, but it definitely does have an impact.

Yes. As smartphone -- we're like every other carrier. As the smartphones, as a percentage of new sales, continue to be at a high level, that definitely impacts margins.

Okay. And the last thing I wanted to touch on was, what is your expectation for the roaming business this year, given the increase in base stations? And then the other part was, would the revenue increase mean a higher EBITDA margin?

Well, I'll take the first one, Justin. There's a -- I don't think we think there's anything driven by number of base stations in the 2012 roaming. I think that the dynamics there will really be more about to what level data traffic in particular goes, what happens to voice at the same time. And then we always have some overbuild risk in all of our roaming areas and to what extent that occurs. So it's -- I don't think the factors have changed. And then, certainly, we don't see it as a growth year for that wholesale revenue.

Our next question comes from Anil Gupta of Imperial Capital.

So I'm just wanted to see what kind of insight you're having into your consumers. Obviously, the improvement in the subscriber loss is very encouraging. Wanted to see what sort of impact you feel that the economy is having? Or do you think that the overall improvement in subscriber losses is mostly by these revised pricing plans? And then, any sort of trend or any sort of commentary you can provide on what you're seeing so far in one quarter, just in terms of your markets and kind of the economies there?

Sure. I think that while the economy is better, I don't think we believe that, really, any of that movement was related to macroeconomic changes. The areas we're in were pretty hard hit by the recession. We're talking about very rural areas, for the most part. Small towns, there's always exceptions, there are always some towns and communities that are doing better and some that are worse. But I don't think anybody feels like it's rocking and rolling now. And I think those areas tend to trail a lot of the metro areas in rebounding. So for that reason -- and then the last thing I'd say is, if you think about where our offerings went, we're really chasing value-conscious customers. And that's what we think we tapped into. So if anything, it might be a sign that people are still really hurting, in terms of the plans they've chosen.

Okay. And then in terms of the current handset lineup, just what's like your percentage of handset options that are currently smartphones? And are you seeing any sort of major trends in what people are picking up? So I think, historically, you've usually disclosed the percent of new sales that were smartphones. And sorry, if I missed that earlier.

Yes, I mean, I think the percent of new sales is kind of consistent with what we said in the past quarters. It's -- we're roughly in the upgrades and in the adds of 50%. So the...

And I think we ended the year at 36% of the base mark.

Right. So we're still moving upward there.

But in answer to your question in the lineup, I think we have a very competitive lineup. We do not have the lineup of the top couple of carriers, but we tend to get almost every device they have or very similar devices within a quarter or two. And so I think what we feel, other than we don't carry the iPhone, as we've talked about before. But other than that, I think we have a very competitive lineup. And I think what happens is people often, we have found, come in for a lower and kind of entry-level smartphone and still solid device and then. And that sort of advertisement tends to draw them in, but they often buy up when they come in and they look at all the -- and will get a much more advanced Android device, for example.

[Operator Instructions] Our next question comes from Ric Prentiss of Raymond James.

I wanted to ask couple of follow-ups now everyone else was through. First, is there any exposure to the USF access reform that's been going on at the FCC in the state level, either on the U.S. Wireless side. Any of the stuff going on at sovereign? I'm just trying to think of what might happen there?

Yes, we have some exposure, but it's very small. Our high-cost USF, which is what is being affected by this, I think there's a 20% a year phase-out from your end-of-year 2011 levels. And so that part, we certainly share with everybody else some impact. But again, for us, it wasn't -- it's not very big. We had about $1.3 million in total USF revenues in the quarter. And so it's not as significant. And then there's a chance that the mobility fund, broadband connector, whatever it is called, will be more enticing to us than it seems right now. Right now, we're skeptical as to its value, and we think what it probably means is we will not be going into some of the more remote areas that we used to do and some of the more rural areas, and we'll have to be careful there. But in terms of downside from where we are, there's not a big impact.

And when you look at the CapEx for 2012, it looks like the non-U.S. has got a pretty good chunk in it. Any particular large projects or a little more focus on maybe where you are spending that money? And what kind of returns you expect to get?

Yes, probably the biggest chunk of that is in Guyana, and there's several initiatives down there in terms of data upgrades on their networks and fiber or stuff like that. But they're all pretty good returns. I will say, I'm watching that real careful, and they all make a lot of sense. And we feel good about what's going on down there in terms of data growth, broadband subs, et cetera.

And I would add, we don't -- we're very cautious about how far forward we commit. So if -- we try to be able to look at these things quarterly and if we see something change in the regulatory environment or the consumer environment that changes our assumptions, we try to make an adjustment very quickly.

The other thing, too, I should point out, is that in that number, there's about $15 million of stimulus projects that we talked about in the past. In some of those, we thought we'd have more complete in this year that have kind of moved -- or in '11 that are moving into '12. But that's also a big piece of it.

That's what I kind of wondered -- I thought Guyana would have some, but the stimulus, I thought, would have a little bit more. And what's the reimbursement kind of flow to that? And how you book it?

You book it. It's a net. I mean, it's pretty fast. We don't actually -- if we're organizing, doing what we're supposed to do, they reimburse us, they actually pay. We're not out of pocket and then get reimbursed, which is the good news. And then you really just book it as a net CapEx.

So the $700 million is a net number.

Yes, it's a net number. That's our piece.

Okay. And then you'd expect there should be some revenue coming from building out $15 million of net CapEx?

There is. It probably moves more. We're building a lot in the year, so we'll see some sort of latter half of the year, but probably, more significantly into '13.

And then, Ric, the returns on that continue to look pretty good. I mean, you're not -- I don't want to use the term [ boffel ], but I will just, just because that wouldn't have qualified for stimulus. But there's -- but it's solid return. It is like all those fiber capacity, wholesale capacity, which is largely what it is businesses and that it ramps over time, part of the value in the return is you get obvious, great margin expansion, as revenue ramps. And it feels like a very secure, a very stable revenue. So it's a combination of those 2 things.

And one of the other areas of future spending might be spectrum, lot of options going on, a lot of discussions swirling around. And what are your thoughts about your current spectrum position and what might be attractive, either to buy spectrum or to work wholesale with somebody?

Yes. It's interesting. There's a lot of -- as you say, there's a lot going there, both bad and good. I would say, from a carrier's perspective, more bad than good. But the government is making a lot of noises about trying to help there in various ways. And we are in a pretty good position in most areas with the spectrum we have because of the fact that we're in such rural areas and such low population density. So while our spectrum, which is a minimum of 25 megahertz, is -- might be very thin holding in a suburban urban environment, in our areas it's a pretty good amount of spectrum. That said, it's -- at some level of cost, more spectrum will reduce other capital costs, operating costs and improve customer experience. So we're always on the lookout for it, both in territory and sometimes, out of territory, particularly if it's adjacent. The only -- the problem is, some of the spectrum on the market still suffers from a question as to what will -- will the band be supported, heavily supported? So what goes in the devices? What the big equipment manufacturers are rolling out first and supporting really drives a lot of decisions and for smaller carriers like ourselves, we have to look to larger carriers and what they're doing and either partner with them or follow them.

So is there a thought that -- any spectrum activity by you guys in '12, or is it more a '13, '14 event?

I think we'll continue to be opportunistic about spectrum, Rick. So there doesn't feel like vast amounts out there in 2012. I think that probably will require government action. But there might be some smaller opportunities where the price is reasonable for what our need is.

I'm showing no further questions at this time. And I'd like to turn the conference back over to management for any closing remarks.

Thank you, everybody, and we'll talk to you again in another quarter. Take care.

Ladies and gentleman, this does conclude today's conference. You may all disconnect and have a wonderful day.