EARNINGS PER SHARE AND REDEEMABLE NONCONTROLLING INTERESTS

9 Months Ended

Sep. 30, 2021

EARNINGS PER SHARE AND REDEEMABLE NONCONTROLLING INTERESTS

EARNINGS PER SHARE AND REDEEMABLE NONCONTROLLING INTERESTS

12. EARNINGS PER SHARE AND REDEEMABLE NONCONTROLLING INTERESTS

Earnings Per Share

The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Numerator:
Net Income	$	(4,475)	$	6,191	$	3,089	$	16,931
Net (income) loss attributable to noncontrolling interests		1,856		(3,530)		(986)		(10,538)
Net income (loss) attributable to ATN International, Inc. stockholders- Basic		(2,619)		2,661		2,103		6,393
Less: Accrued preferred dividend		846		—		846		—
Net income (loss) attributable to ATN International, Inc. stockholders- Diluted		(3,465)		2,661		1,257		6,393
Denominator:
Weighted-average shares outstanding- Basic		15,860		15,962		15,891		15,946
Effective of dilutive securities:
Stock options, restricted stock units and performance stock units		—		49		10		44
Weighted-average shares outstanding- Diluted		15,860		16,011		15,901		15,990

For each of the three and nine months ended September 30, 2021 and 2020, the calculations of basic and diluted weighted average shares of common stock outstanding do not include 5,000 shares relating to stock options as the effects of those options were anti-dilutive.

Redeemable Noncontrolling Interests

In connection with the Alaska Transaction, the Company has accounted for the Freedom 3 Investment as redeemable noncontrolling interests in its consolidated financial statements. The redeemable noncontrolling interests consists of $22.6 million of redeemable common units and $48.3 million of redeemable preferred units. The common units contain a put option allowing the holder to sell the common units to a subsidiary of the Company at the then fair market value. The put option begins at the earlier of a future initial public offering of the Alaska Communications operations or July 2028. The fair value of the common units remained at $22.6 million at September 30, 2021, unchanged from the value at July 22, 2021. The redeemable preferred equity carries a 9% preferred dividend which compounds quarterly. The preferred units contain a put option allowing the holder to sell the preferred units to a subsidiary of the Company at the unpaid issue price plus unpaid dividends. The put option begins at the earlier of a future initial public offering of the Alaska Communications operations or July 2028. Lastly, the Company issued warrants in the Alaska Communications operations allowing the holders to purchase an additional 3% of the common units at a fixed price. The value of the warrants was $0.6 million at September 30, 2021, unchanged from July 22, 2021. The unpaid preferred dividend was $0.8 million at September 30, 2021.

For the three months ended September 30, 2021, the Company allocated losses of $5.1 million to the redeemable common units representing their proportionate share of operating losses. Additionally, the fair value of the redeemable common units increased by $5.1 million during the three months ended September 30, 2021.

The following table provides a rollforward of the activity related to the Company’s redeemable noncontrolling interests for the three and nine months ended September 30, 2021:

	Redeemable Preferred Units		Redeemable Common Units		Total Redeemable Noncontrolling Interests
Beginning balance	$	—	$	—	$	—
Issuance of 48,334 preferred units		48,334		—		48,334
Issuance of 23,199 common units		—		22,640		22,640
Accrued preferred dividend		846		—		846
Allocated net loss		—		(5,083)		(5,083)
Change in fair value		—		5,083		5,083
Balance, September 30, 2021	$	49,180	$	22,640	$	71,820