Trilogy International Partners Inc.

TRL.HCIK 0001689382 · Every Form 4 filed by insiders at this issuer. See financials →

Annual report (10-K)

Latest 10-K filed Mar 30, 2023. Sentiment + YoY language diff vs prior year. Read sections →

Signal:No prior 10-K

Risk Factors:tone -0.0165

MD&A:tone -0.0204

Sentiment via Loughran-McDonald lexicon · YoY diff via Jaccard similarity + paragraph set difference.

Recent 8-K announcements

Per-item disclosure feed. Item 2.02 is the earnings release.

Mar 28, 2024no items parsed Mar 25, 2024no items parsed

YoY shift: Unscored

Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K.

Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.

Per-snippet highlights

Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.

Risk Factors (Item 1A)

1,981 words

Item 1A.

Risk Factors

This document contains forward-looking statements regarding the Company’s prospects that involve risks and uncertainties. The Company’s actual results could differ materially from the results that may be anticipated by such forward-looking statements discussed elsewhere in this Annual Report. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, as well as those discussed elsewhere in this Annual Report. If any of the following risks occur, the Company’s financial condition or results could be harmed. In that case, the trading price of the Common Shares could decline.

Investment in the Common Shares of the Company is speculative, involves a high degree of risk and limited opportunity for appreciation in the value of the Common Shares, is subject to the following specific risks among others, and should be undertaken only by purchasers whose financial resources are sufficient to enable them to assume such risks. The Common Shares should not be purchased by persons who cannot afford the possibility of the loss of their entire investment. Prospective purchasers should review these risks as well as other matters disclosed elsewhere in this Annual Report with their professional advisors.

The Company has no business or source of income and its only assets consist of cash on hand and certain funds held in escrow.

As a result of the 2degrees Sale and the NuevaTel Transaction, the Company no longer has an operating business or source of income. Accordingly, it will not engage in any future activities except those associated with winding up its affairs. Other than cash on hand of $25.1 million as of December 31, 2022, the Company’s only assets consist of approximately $22 million NZD ($14.1 million based on the exchange rate as of December 31, 2022) from the proceeds of the 2degrees Sale that are being held in escrow as recourse for potential indemnification claims that may arise under the Purchase Agreement. The escrowed proceeds are scheduled to be released in May 2023. Once these funds are released and any claims relating to the escrow are resolved, the Company intends to make a distribution to shareholders of all remaining cash less any funds retained to complete the winding up of the Company. Claims for indemnification could materially reduce the amount of funds available for such distribution. The Company previously distributed approximately $115.8 million to shareholders in the second quarter of 2022.

If the Company does not comply with anti-corruption legislation, the Company may become subject to monetary or criminal penalties.

The Company was and remains subject to compliance with various laws and regulations, including the Canadian Corruption of Foreign Public Officials Act, the United States Foreign Corrupt Practices Act and similar worldwide anti-bribery laws, which generally prohibit companies and their intermediaries from engaging in bribery or making other improper payments to foreign officials for the purpose of obtaining or retaining business or gaining an unfair business advantage. The Company’s employees were and are trained and required to comply with these laws, and the Company is committed to legal compliance and corporate ethics. There is no assurance that the Company’s training and compliance programs will protect it from acts committed by its employees, affiliates or agents. Violations of these laws could result in severe criminal or civil sanctions and financial penalties and other consequences that may have a material adverse effect on the Company.

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If the Company loses any key member of its management team, the windup of the Company could suffer. The Company may have difficulty in obtaining qualified managerial personnel to successfully complete the windup of the Company.

In connection with the 2degrees Sale, the NuevaTel Transaction and the plan of liquidation, the Company terminated substantially all its employees. As of the date of this filing, the Company has 7 employees and if a key member of its management team leaves, the Company’s ability to successfully complete the windup of the Company could be adversely affected.

The Company is treated as a U.S. corporation for U.S. federal income tax purposes and is liable for both U.S. and Canadian income tax.

The Company is treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, the Company is subject to U.S. federal income tax on its worldwide income and this treatment will continue indefinitely. In addition, the Company is subject to Canadian income tax on its worldwide income. Consequently, the Company is liable for both U.S. and Canadian income tax on its worldwide income, which could have a material adverse effect on its financial condition and results of operations. U.S. foreign tax credits, which are generally available to offset U.S. tax liability when both U.S. and Canadian tax is imposed on the same income, may not be available to mitigate the effects of this double tax.

Potentially adverse tax consequences may result from distributions to our shareholders.

In June 2022, the Company distributed approximately $116 million to its shareholders. It is the Company’s position that this distribution, which was made in connection with the plan of liquidation adopted by the Company in June 2022, was a liquidating distribution for U.S. tax purposes and a return of capital for Canadian tax purposes. It is possible, however, that taxing authorities may assert that the distribution was a non-liquidating distribution, and thus possibly treated as a dividend.

If the distribution were treated as a dividend, such amounts received by holders of Common Shares who are residents of Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”) will be subject to U.S. withholding tax. A foreign tax credit under the Tax Act in respect of such U.S. withholding taxes may not be available to such holder.

If the distribution were treated as a dividend, such amounts received by a holder of Common Shares who is a U.S. person or U.S. tax resident generally will not be subject to U.S. withholding tax but, if such recipient is not also a resident in Canada for the purposes of the Tax Act, the dividends will be subject to Canadian withholding tax. The Company is considered to be a U.S. corporation for U.S. federal income tax purposes. As a result, dividends paid by the Company will be characterized as U.S. source income for purposes of the U.S. foreign tax credit rules. Accordingly, U.S. persons and U.S. tax residents generally will not be able to claim a U.S. foreign tax credit for any Canadian tax withheld on the dividends.

If the distribution were treated as a dividend, such amounts received by shareholders who are not Canadian tax residents, U.S. persons or U.S. tax residents will be subject to U.S. withholding tax and will also be subject to Canadian withholding tax. These dividends may not qualify for a reduced rate of U.S. withholding tax under any income tax treaty otherwise applicable to a shareholder of the Company, subject to examination of the relevant treaty.

Public company requirements may strain the Company’s resources.

As a public company, the Company is subject to the reporting requirements of the Securities Act (British Columbia), as amended, as well as the applicable securities laws of the other Canadian provinces, and is subject to certain reporting requirements under the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”) and, in each case, the regulations and rules thereto. The Company is also subject to the ongoing listing requirements of the NEX board of the TSXV. The obligations of operating as a public company require significant expenditures and place additional demands on management as the Company complies with the reporting requirements of a public company. The Company may need to hire additional accounting, financial and legal staff with appropriate public company experience and technical accounting and regulatory knowledge.

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The Company ceased to qualify as an “emerging growth company” under the JOBS Act during the fiscal year ending December 31, 2022 and, consequently, the costs and demands placed upon management may increase.

The Company ceased to be deemed an “emerging growth company” during the fiscal year ending December 31, 2022. As a result, the Company expects the costs and demands placed upon management to increase, as the Company is now required to comply with additional disclosure and accounting requirements. However, as long as the aggregate value of the Common Shares held by non-affiliates remains less than $75 million as of the end of its most recent second fiscal quarter, the Company will qualify as a “smaller reporting company” as well as a “non-accelerated filer” eligible for relief from certain disclosure and reporting requirements. As of the applicable measurement date, June 30, 2022, the Company’s float was substantially less than $75 million. Therefore, the Company is eligible to disclose as a “smaller reporting company”. This will reduce some of the additional expense and management attention necessary to be dedicated to compliance.

Smaller reporting companies are able to provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and have certain other reduced disclosure obligations.

As a result of the Company losing its foreign private issuer status under U.S. federal securities laws, the Company may incur additional expenses associated with compliance with the U.S. securities laws applicable to U.S. domestic issuers.

On June 30, 2022, the Company ceased to be a foreign private issuer. As a foreign private issuer, as defined in Rule 3b-4 under the Exchange Act, the Company was historically exempt from certain of the provisions of the U.S. federal securities laws. For example, the Exchange Act and the Section 16 reporting and “short swing” profit rules do not apply to foreign private issuers. Thus, these rules apply commencing with the beginning of the Company’s 2023 fiscal year and the Company is also, among other things, required to commence reporting on forms required of U.S. companies, such as Forms 10-K, 10-Q and 8-K, rather than the forms previously available to the Company, such as Forms 20-F and 6-K. Compliance with these disclosure requirements may result in increased expenses and require the Company’s management to devote time and resources to comply with new regulatory requirements.

Additionally, the Company’s resale registration of its Common Shares, made on Form F-3 in 2021 while the Company was a foreign private issuer, terminated with the filing of this Annual Report. The termination of the resale registration will not affect the ability of investors who are non-US persons, as defined in the 1933 Act, to continue to sell their Common Shares in 2023 or thereafter. U.S. persons who hold Common Shares will continue to be able to sell their shares after the date hereof pursuant to Regulation S of the 1933 Act so long as such sales are made on a DOSM such as the NEX board of the TSXV, on which the Common Shares are currently listed. Regulation S requires that a U.S. person selling unregistered shares on a DOSM not know that the sale has been pre-arranged with a buyer in the United States. U.S. persons may also sell unregistered Common Shares via a private placement.

The Company will not pay dividends.

Although the Company paid a dividend in the second quarter of each of 2019, 2018 and 2017, it did not do so in 2022, 2021 and 2020. The Company has determined not to make any dividend payments in light of the adoption of a plan of liquidation and the distribution of the remaining proceeds of the 2degrees Sale as described herein.

Liquid Market for Securities

The Common Shares are currently listed on the NEX board of the TSXV. However, there can be no assurance that an active and liquid market for the Common Shares will develop or be maintained, and an investor may find it difficult to resell any securities of the Company.

MD&A (Item 7)

13,299 words

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis (“MD&A”) contains important information about the business of the Company and its performance for the years ended December 31, 2022, 2021 and 2020. This MD&A should be read in conjunction with TIP Inc.’s audited consolidated financial statements for the year ended December 31, 2022, and notes thereto (the “Consolidated Financial Statements”), prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) as issued by the Financial Accounting Standards Board (“FASB”).

All financial results and metrics for the year ended December 31, 2022 included in this MD&A reflect the results from the Bolivia segment from January 1, 2022 through May 14, 2022 and from the New Zealand segment from January 1, 2022 through May 19, 2022.

Historically, the market operations in New Zealand and Bolivia represented the Company’s two reportable segments. Our chief operating decision maker, TIP Inc.’s Chief Executive Officer, assessed performance of the segments and allocated resources primarily based on the financial measures of revenues and Segment Adjusted EBITDA. See Note 19 – Segment Information to the Consolidated Financial Statements for additional information.

Foreign Currency

In New Zealand, the Company generated revenue and incurred costs in NZD. Fluctuations in the value of the NZD relative to the USD increased or decreased the Company’s overall revenue and profitability as stated in USD, which is the Company’s reporting currency. The effect of these fluctuations is referenced in this MD&A as “impact of foreign currency”. The following table sets forth for each period or date indicated the exchange rates in effect at the end of such period, including as of May 19, 2022 which reflects the date of the balance sheet for New Zealand upon closing of the 2degrees Sale, and the average exchange rates for such periods for the NZD, expressed in USD. Additionally, the amount held in escrow from the 2degrees Sale is denominated in NZD and therefore, the exchange rate in effect at December 31, 2022 is provided below:

May 19,

December 31,

End of period NZD to USD exchange rate

% Change

Year Ended December 31,

Average NZD to USD exchange rate

% Change

(1) While the exchange rate in effect at December 31, 2022 was 0.63, 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. Thus, future exposure to fluctuations in the NZD to USD exchange rate for substantially all of the proceeds from the 2degrees Sale held in escrow is mitigated.

(2) For the period from January 1, 2022 through May 19, 2022.

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The following table sets forth for each period indicated the exchange rates in effect at the end of the period and the average exchange rates for such periods, for the CAD, expressed in USD, as quoted by the Bank of Canada:

December 31, 2022

December 31, 2021

December 31, 2020

End of period CAD to USD exchange rate

% Change

Year Ended December 31,

Average CAD to USD exchange rate

% Change

Overall Performance

The table below summarizes the Company’s consolidated key financial metrics for the years ended December 31, 2022, 2021 and 2020:

For the Year Ended December 31,

% Variance

(in millions, unless otherwise noted)

Service revenues

Total revenues

Net income (loss)

Net income (loss) margin (1)

254.0 pts

(20.1) pts

Consolidated Adjusted EBITDA (2)

Consolidated Adjusted EBITDA Margin (2)

(1.6) pts

0.1 pts

Capital expenditures (3)

pts - percentage points

(1) Net income (loss) margin is calculated as Net income (loss) divided by service revenues.

(2) These are non-U.S. GAAP measures and do not have standardized meanings under U.S. GAAP. Therefore, they are unlikely to be comparable to similar measures presented by other companies. For definitions and reconciliation to most directly comparable GAAP financial measures, see “Definitions and Reconciliations of Non-GAAP Measures” in this MD&A.

(3) 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.

Reclassification of Fixed Broadband Service Revenues

In 2021, we replaced “Wireline” with “Fixed broadband” to describe the revenues and subscribers associated with the Company’s fixed broadband products in New Zealand and Bolivia, which were provided using fixed line or wireless technology. As a result, fixed Long Term Evolution (“LTE”) service revenues were reclassified from Wireless service revenues and were included as a component of Fixed broadband service revenues in our Consolidated Statements of Operations and Comprehensive Income (Loss). This reclassification was applied to all periods presented in this MD&A. Fixed LTE service revenues reclassified to Fixed broadband service revenues were $2.1 million, $5.1 million and $3.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. This change had no impact on total revenues or net loss for any period presented.

2022 Full Year Highlights

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.

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.

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.

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).

Results of Operations

Consolidated Revenues

For the Year Ended December 31,

% Variance

(in millions)

Revenues:

Wireless service revenues (1)

Fixed broadband service revenues (1)

Equipment sales

Non-subscriber ILD and other revenues

Total revenues

(1) Beginning in 2021, we replaced “Wireline” with “Fixed broadband” and reclassified fixed LTE revenues from Wireless service revenues to Fixed broadband service revenues.

Consolidated Wireless Service Revenues

Wireless service revenues declined $265.5 million, or 63%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022. See Note 2 – Sale of Operations to the Consolidated Financial Statements for further information. In addition, prior to the closing of the NuevaTel Transaction, there were declines in both prepaid and postpaid revenues in Bolivia, compared to the same period in 2021, mainly due to lower voice traffic and data usage, as well as declines in the subscriber base.

Wireless service revenues increased $11.9 million, or 3%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. Excluding the impact of foreign currency, wireless service revenues declined $12.0 million, or 3%, compared to the same period in 2020, as a decline in Bolivia more than offset an increase in New Zealand. The decline in Bolivia was due to a decline in both postpaid and prepaid revenues as a result of the COVID-19 pandemic and increased competition in the market which affected the decline in the postpaid and prepaid subscriber base. The decline in Bolivia was partially offset by increased postpaid wireless service revenues in New Zealand driven by the larger postpaid subscriber base, particularly due to business subscriber growth. There was also an increase in prepaid service revenues in New Zealand mainly due to an increase in prepaid ARPU.

Consolidated Fixed Broadband Service Revenues

Fixed broadband service revenues declined $69.0 million, or 62%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.

Fixed broadband service revenues increased $24.9 million, or 29%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. Excluding the impact of foreign currency, fixed broadband service revenues increased $17.4 million, or 19%, compared to the same period in 2020, primarily due to the 17% growth in the fixed broadband subscriber base.

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Consolidated Equipment Sales

Equipment sales declined $74.8 million, or 66%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, due to the closing of the 2degrees Sale in May 2022.

Equipment sales increased $6.6 million, or 6%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. Excluding the impact of foreign currency, equipment sales declined $2.5 million, or 2%, compared to the same period in 2020, as a decline in Bolivia more than offset an increase in New Zealand. The decline in Bolivia was mainly due to a decrease in the number of handsets sold in Bolivia during the period. The increase in New Zealand was primarily driven by the rise in the volume of sales of higher priced devices to new and existing subscribers.

Consolidated Non-subscriber International Long Distance (“ILD”) and Other Revenues

Non-subscriber ILD and other revenues declined $5.7 million, or 64%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.

Non-subscriber ILD and other revenues declined $0.2 million, or 2%, for the year ended December 31, 2021 compared to the year ended December 31, 2020, due to individually insignificant changes in the period.

Consolidated Operating Expenses

Operating expenses represent expenditures incurred by the Company’s operations and its corporate headquarters.

For the Year Ended December 31,

% Variance

(in millions)

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

n/m - not meaningful

Consolidated Cost of Service

Cost of service expense declined $136.6 million, or 63%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The declines were primarily due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022. In addition, prior to the closing of the NuevaTel Transaction, there were declines in interconnection costs in Bolivia as a result of lower voice traffic terminating outside of NuevaTel’s network.

Cost of service expense increased $14.8 million, or 7%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. Excluding the impact of foreign currency, cost of service increased $3.5 million, or 2%, primarily due to increases in New Zealand partially offset by declines in Bolivia. The increase in New Zealand was mainly attributable to an increase in transmission expense associated with the growth of the fixed broadband subscriber base. The decline in Bolivia was primarily due to a decline in interconnection costs as a result of a lower volume of voice traffic terminating outside of NuevaTel’s network.

Consolidated Cost of Equipment Sales

Cost of equipment sales declined $81.7 million, or 68%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to the closing of the 2degrees Sale in May 2022.

Cost of equipment sales increased $5.1 million, or 4%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. Excluding the impact of foreign currency, cost of equipment sales declined $4.6 million, or 4%, in 2021, primarily due to a decline in the number of handsets sold in Bolivia, partially offset by an increase in New Zealand in the volume of sales of higher priced devices in 2021 as compared to 2020.

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Consolidated Sales and Marketing

Sales and marketing declined $58.0 million, or 65%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.

Sales and marketing increased $8.5 million, or 11%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. Excluding the impact of foreign currency, sales and marketing increased $3.8 million, or 4%, primarily due to an increase in commissions expenses in New Zealand partially offset by a decline in salaries and wages in Bolivia.

Consolidated General and Administrative

General and administrative costs declined $61.6 million, or 50%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022. These declines were partially offset by a total of $6.5 million of severance costs recorded at corporate headquarters in the second and third quarters of 2022. The severance costs and other costs associated with the 2degrees Sale and the NuevaTel Transaction included in general and administrative costs were $10.6 million for the year ended December 31, 2022. Due to their nonrecurring nature, such costs were removed from Consolidated Adjusted EBITDA.

General and administrative costs increased $11.6 million, or 10%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. Excluding the impact of foreign currency, general and administrative costs increased $5.9 million, or 5%. Approximately $8.0 million of the increase was due to nonrecurring professional service costs in New Zealand and at corporate headquarters associated with strategic transactions that were under consideration related to the 2degrees business in 2021, including approximately $4.7 million of costs primarily related to the preparation for a planned public listing and equity issuance in New Zealand 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 2degrees Sale, the Company expensed these previously deferred costs of approximately $4.7 million as general and administrative expenses. Due to the nonrecurring nature of these expenses, the total of approximately $8.0 million of these costs incurred during the year ended December 31, 2021 was removed from Adjusted EBITDA. These increases were partially offset by a decline in general and administrative costs in Bolivia, primarily due to a decline in bad debt expense. In addition, there was a decline in expenses in Bolivia attributable to cost controls that were implemented in response to the COVID-19 pandemic.

Consolidated Depreciation, Amortization and Accretion

Depreciation, amortization and accretion declined $88.8 million, or 83% , for the year ended December 31, 2022 compared to the year ended December 31, 2021, due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022. The 2degrees and NuevaTel businesses met the accounting criteria to be classified as held for sale on March 15, 2022 and March 28, 2022, respectively, and, accordingly, recording depreciation and amortization of their long-lived assets ceased on those dates. For additional information, see Note 2 – Sale of Operations to the Consolidated Financial Statements. In addition, prior to the closing of the NuevaTel Transaction, there were declines in Bolivia due to a lower asset base being depreciated in 2022 compared to 2021 as a result of the impairment charge recognized in the third quarter of 2021.

Depreciation, amortization and accretion was flat for the year ended December 31, 2021 compared to the year ended December 31, 2020. Excluding the impact of foreign currency, depreciation, amortization and accretion declined $5.5 million, or 5%, as a decline in Bolivia was partially offset by an increase in New Zealand. The decline in Bolivia was primarily due to a lower net asset base being depreciated including the impact of the long-lived asset impairment charge recorded in 2021. The increase in New Zealand was mainly related to wireless network assets previously placed in service and accelerated depreciation expense on certain existing assets associated with the onset of 5G enabled infrastructure construction.

Consolidated Impairment of Long-Lived Assets

Impairment of long-lived assets of $113.8 million for the year ended December 31, 2021 related to the impairment charge recorded in Bolivia. There were no impairment charges recognized for 2022.

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Consolidated (Gain) on Sale of Operations and Loss (Gain) on Disposal of Assets and Sale-Leaseback Transaction

(Gain) on sale of operations and loss on disposal of assets increased for the year ended December 31, 2022 compared to the year ended December 31, 2021, due to a $443.3 million gain recognized in connection with the 2degrees Sale and a $14.5 million gain recognized in connection with the NuevaTel Transaction in May 2022. For additional information, see Note 2 – Sale of Operations to the Consolidated Financial Statements.

Loss on disposal of assets and sale-leaseback transaction increased $3.6 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to gains recognized upon the final closing of the tower sale-leaseback transaction in the third quarter of 2020, partially offset by disposal and abandonment charges of approximately $1.4 million recorded 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.

Consolidated Other Expenses (Income)

For the Year Ended December 31,

% Variance

(in millions)

Interest expense

Change in fair value of warrant liability

Debt extinguishment, modification and issuance costs

Other, net

Consolidated Interest Expense

Interest expense declined $30.8 million, or 57%, for the year ended December 31, 2022 compared to the same period in 2021, primarily related to the prepayment of the outstanding indebtedness of the 8.875% senior secured notes issued by TISP and TISP Finance, Inc. due in 2023 (the “TISP 8.875% Notes”) and the 10.0% senior secured notes due 2022 issued by TISP (the “TISP 10.0% Notes”) in May 2022. See Note 8 – Debt to the Consolidated Financial Statements for further information.

Interest expense increased $7.2 million, or 15%, for the year ended December 31, 2021 compared to the same period in 2020, primarily related to the issuance of the TISP 10.0% Notes in October 2020.

Consolidated Change in Fair Value of Warrant Liability

The change in fair value of the warrant liability resulted in income of $0.1 million for year ended December 31, 2022, due to the warrants expiring on February 7, 2022. The change in fair value of the warrant liability increased income by $0.1 million for the year ended December 31, 2021, compared to same period in 2020, due to changes in the trading price of the warrants. See Note 11 – Equity to the Consolidated Financial Statements for further information.

Consolidated Debt Extinguishment, Modification and Issuance Costs

Debt extinguishment, modification and issuance costs increased $1.5 million, or 22%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily due to an $8.5 million write-off of deferred finance cost and discounts on the TISP 8.875% Notes and the TISP 10.0% Notes as a result of the prepayment of the outstanding balances in May 2022. The increase in 2022 was partially offset by costs associated with the consummation in June 2021 of the exchange of Trilogy LLC’s 8.875% senior secured notes due in 2022 (the “Trilogy LLC 2022 Notes”) for the TISP 8.875% Notes due in 2023. See Note 8 – Debt to the Consolidated Financial Statements for further information.

Debt extinguishment, modification and issuance costs increased $7.0 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. The increase was due to the consummation in June 2021 of the exchange of the Trilogy LLC 2022 Notes for the TISP 8.875% Notes due in 2023.

Consolidated Other, Net

Other, net income increased $18.7 million, or 567%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase for the year ended December 31, 2022 was primarily due to a gain of $16.6 million recognized in connection with the change in value of the forward exchange contract that the Company entered into in March 2022 to mitigate exposure to fluctuations in the NZD to USD exchange rate for a portion of the proceeds we received from the 2degrees Sale. The gain recognized reflected the differential between the contract price and the foreign exchange rate as of the settlement date under this forward exchange contract. See Note 9 – Derivative Financial Instruments to the Consolidated Financial Statements for further information.

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Other, net expense declined $1.3 million, or 28%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. This decline was driven by changes in the fair value of interest rate swaps in New Zealand of $7.3 million and other individually immaterial changes. These changes were partially offset by a $10.7 million increase relating to the change in the fair value of a derivative instrument relating to an increase in the principal amount of the TISP 8.875% Notes in the fourth quarter of 2021.

Consolidated Income Taxes

For the Year Ended December 31,

% Variance

(in millions)

Income tax expense

Income Tax (Expense) Benefit

Income tax expense increased $0.9 million, or 9%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to the benefit recorded in 2021 for the impact of NuevaTel’s losses on the Company’s deferred tax liability with respect to NuevaTel’s unrepatriated earnings. This increase is offset by a decrease in pre-tax profits in New Zealand in 2022 due to the closing of 2degrees Sale in May 2022.

Income tax expense declined $12.6 million, or 54%, for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to the valuation allowance recorded against the Company’s deferred tax assets in Bolivia in 2020.

Business Segment Analysis

The Company historically had two reporting segments (New Zealand (2degrees) and Bolivia (NuevaTel)) that provided a variety of wireless voice and data communications services, including local, international long distance and roaming services. Services were provided to subscribers on both a postpaid and prepaid basis. In Bolivia, fixed public telephony services were also offered via wireless backhaul connections. In New Zealand, fixed broadband communications services were offered since May 2015. In Bolivia, fixed LTE services, or fixed broadband services, were offered since late 2019.

During the second quarter of 2022, the Company completed the sale of its operations in New Zealand and Bolivia, which represented substantially all of the operating activities of the business. The disposals and comparative historical periods are not presented as discontinued operations since the associated activities represented substantially all of the Company’s net productive assets, business activities and results of operations. Accordingly, they do not meet the definition of a component of an entity that would qualify for discontinued operations presentation because they are not clearly distinguishable from the rest of the entity. Since presentation of discontinued operations is not applicable, the presentation of segment information for New Zealand and Bolivia has been retained.

New Zealand (2degrees)

2degrees launched commercial service in 2009. As described above and as further discussed in Note 2 – Sale of Operations to the Consolidated Financial Statements, in December 2021, the Company entered into the 2degrees Sale to sell its 73.2% indirect equity interest in 2degrees to Voyage Digital. On May 19, 2022, the 2degrees Sale closed for an aggregate purchase price of $1.315 billion NZD.

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New Zealand - Operating Results

For the Year Ended December 31,

% Variance

(in millions, unless otherwise noted)

Service revenues

Total revenues

Segment Adjusted EBITDA

Segment Adjusted EBITDA Margin (1)

1.3 pts

(0.6) pts

Capital expenditures (2)

Capital intensity

(0.5) pts

1.3 pts

pts - percentage points

Segment Adjusted EBITDA Margin is calculated as Segment Adjusted EBITDA divided by service revenues.

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.

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Service revenues declined $255.0 million, or 61%, compared to 2021. Excluding the impact of foreign currency, service revenues declined $232.5 million, or 59%, compared to the same period in 2021. This decline was primarily due to the closing of the 2degrees Sale in May 2022. For additional information, see Note 2 – Sale of Operations to the Consolidated Financial Statements.

Total revenues declined $329.6 million, or 62%, compared to 2021. Excluding the impact of foreign currency, total revenues declined $300.9 million, or 60%, compared to the same period in 2021, attributable to the declines in service revenues mentioned above. In addition, equipment sales declined $74.5 million, or 66%, compared to the same period in 2021. Excluding the impact of foreign currency, equipment sales declined $68.4 million, or 64%, primarily due to the closing of the 2degrees Sale in May 2022.

For the year ended December 31, 2022 compared to 2021, operating expenses declined $319.7 million, or 66% ($293.5 million, or 64%, excluding the impact of foreign currency), primarily due to the following:

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.

Segment Adjusted EBITDA declined $76.1 million, or 60%, compared to 2021. Excluding the impact of foreign currency, Segment Adjusted EBITDA declined $69.2 million, or 57%, compared to 2021, primarily as a result of the closing of the 2degrees Sale in May 2022.

Capital expenditures declined $50.6 million, or 62%, compared to 2021. Excluding the impact of foreign currency, capital expenditures declined $46.2 million, or 60%, compared to 2021, due to the closing of the 2degrees Sale in May 2022.

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Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Service revenues increased $59.1 million, or 17%, compared to 2020. Excluding the impact of foreign currency, service revenues increased $27.1 million, or 7%, compared to 2020. This increase was primarily due to growth in fixed broadband revenues driven by the larger fixed broadband subscriber base and increases in residential fixed broadband ARPU. There was also an increase in postpaid wireless service revenues driven by the larger postpaid subscriber base, due mainly to growth in business subscribers. In addition, there was an increase in prepaid wireless service revenues compared to the same period in 2020, driven by an increase in prepaid ARPU.

Total revenues increased $69.8 million, or 15%, compared to 2020. Excluding the impact of foreign currency, total revenues increased $28.7 million, or 6%, compared to 2020. This increase was attributable to the increase in service revenues mentioned above. Equipment sales increased $10.7 million, or 10%, compared to the same periods in 2020. Excluding the impact of foreign currency, equipment sales increased $1.6 million, or 1%, primarily driven by the rise in the volume of sales of higher priced devices in 2021 compared to 2020.

For the year ended December 31, 2021 compared to 2020, operating expenses increased $65.5 million, or 16% ($28.1 million, or 6%, excluding the impact of foreign currency), primarily due to the following:

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;

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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.

Segment Adjusted EBITDA increased $16.2 million, or 15%, compared to 2020. Excluding the impact of foreign currency, Segment Adjusted EBITDA increased $6.2 million, or 5%, compared to 2020. This increase in Segment Adjusted EBITDA was primarily the result of the increase in fixed broadband revenues and postpaid wireless revenues discussed above partially offset by an increase in cost of service and sales and marketing.

Capital expenditures were $81.1 million in 2021, an increase of $16.0 million, or 25%, compared to 2020. Excluding the impact of foreign currency, capital expenditures increased $10.2 million, or 14%, compared to 2020, primarily attributable to 5G network investments.

Bolivia (NuevaTel)

The Trilogy LLC founders launched NuevaTel in 2000 while they served in senior management roles with Western Wireless. Trilogy LLC subsequently acquired a majority interest in the business in 2006. On March 28, 2022, the Company entered into the NuevaTel Transaction to transfer its 71.5% indirect equity interest in NuevaTel and, on May 14, 2022, the NuevaTel Transaction closed.

Bolivia - Operating Results

For the Year Ended December 31,

% Variance

(in millions, unless otherwise noted)

Service revenues

Total revenues

Segment Adjusted EBITDA

Segment Adjusted EBITDA Margin (1)

0.6 pts

(4.6) pts

Capital expenditures (2)

Capital intensity

(4.6) pts

1.1 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.

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Service revenues declined $85.0 million, or 68%, in 2022 compared to 2021, primarily due to the closing of the NuevaTel Transaction in May 2022. See Note 2 – Sale of Operations to the Consolidated Financial Statements for further information. There were also declines in both prepaid and postpaid revenues mainly due to lower voice traffic and data usage, as well as declines in the subscriber base.

Total revenues declined $85.3 million, or 68%, in 2022 compared to 2021, primarily due to the decline in service revenues discussed above.

For the year ended December 31, 2022, operating expenses declined $228.3 million, or 84%, compared to the same period in 2021, primarily due to the following:

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;

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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.

Segment Adjusted EBITDA increased $0.3 million, or 390%, in 2022 compared to 2021, as Segment Adjusted EBITDA was negative in 2021. This increase was primarily due to the declines in cost of service, general and administrative costs and sales and marketing described above partially offset by the decrease in service revenues.

Capital expenditures declined $9.8 million, or 84%, to $1.9 million, in 2022 compared to 2021, mainly due to the closing of the NuevaTel Transaction in May 2022 along with timing of spending in 2021.

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Service revenues declined $22.3 million, or 15%, in 2021 compared to 2020, primarily due to a decline in postpaid revenues of $15.8 million, or 23%. The decline in postpaid revenues was due to a 15% decline in the subscriber base primarily as a result of the impact of the COVID-19 pandemic and effects of increased competition in the market. Prepaid revenues declined $7.8 million, or 12%, in 2021 compared to 2020, primarily due to a 13% decline in the prepaid wireless subscriber base. The decline in prepaid revenues was also attributable to a decline in voice revenues due to lower voice traffic as a result of subscribers shifting from voice usage to data-based voice applications, which was accelerated by the impact of the COVID-19 pandemic.

Total revenues declined $26.4 million, or 17%, in 2021 compared to 2020, primarily due to the decline in service revenues discussed above. Equipment sales, which also contributed to the decline in total revenues, declined $4.1 million, or 93%, due to the decline in the number of handsets sold during the period.

For the year ended December 31, 2021, operating expenses increased $89.7 million, or 49%, compared to the same period in 2020, primarily due to the following:

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;

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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.

Segment Adjusted EBITDA declined $6.7 million, or 101%, in 2021 compared to 2020, primarily due to the decrease in both postpaid and prepaid service revenues, partially offset by the declines in cost of service, general and administrative costs and sales and marketing described above.

Capital expenditures declined $0.5 million, or 4%, to $11.8 million, in 2021 compared to 2020, mainly due to the timing of spending and as a result of NuevaTel’s continuing efforts to preserve cash resources. Capital expenditures of $11.8 million in 2021 were primarily related to investment in the LTE network, including additional 4G LTE sites.

Selected Financial Information

The following tables set forth our summary consolidated financial data for the periods ended and as of the dates indicated below.

The summary consolidated financial data is derived from the Consolidated Financial Statements for each of the periods indicated in the following tables.

Differences between amounts set forth in the following tables and corresponding amounts in the Consolidated Financial Statements and related notes which accompany this MD&A are a result of rounding. Amounts for subtotals, totals and percentage variances presented in the following tables may not sum or calculate using the numbers as they appear in the tables as a result of rounding.

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Selected annual financial information

The following table shows selected consolidated financial information of the Company for the years ended December 31, 2022, 2021 and 2020, prepared in accordance with U.S. GAAP. The Company discusses the factors that caused results to vary over the past three years throughout this MD&A.

Consolidated Income Statement Data

For the Year Ended December 31,

(in millions, except per share amounts)

Service revenues

Equipment sales

Total revenues

Operating expenses

Operating income (loss)

Interest expense

Change in fair value of warrant liability

Debt extinguishment, modification and issuance costs

Other, net

Income (loss) before income taxes

Income tax expense

Net income (loss)

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to TIP Inc.

Net income (loss) attributable to TIP Inc. per share:

Basic

Diluted

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Selected balance sheet information

The table below shows selected consolidated financial information for the Company’s financial position as of December 31, 2022 and 2021. The table below provides information related to the cause of the changes in financial position by financial statement line item for the period compared.

Consolidated Balance Sheet Data

As of December 31,

(in millions, except as noted)

Change includes:

Cash, cash equivalents and restricted cash

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

Other current assets

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

Property, equipment and intangibles, net

Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.

% Change

Other non-current assets

Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.

% Change

Total assets

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As of December 31,

(in millions, except as noted)

Change includes:

Current portion of long-term

debt and financing lease

liabilities

Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.

% Change

All other current liabilities

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

Long-term debt and financing lease liabilities

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

All other non-current liabilities

Decline is due to the closing of the 2degrees Sale and the NuevaTel Transaction in May 2022.

% Change

Total shareholders’ equity (deficit)

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

Total liabilities and

shareholders’ equity (deficit)

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Selected quarterly financial information

The following table shows selected quarterly financial information prepared in accordance with U.S. GAAP:

For the Year Ended December 31,

(in millions, except per share amounts)

Service revenues

Equipment sales

Total revenues

Operating expenses

Operating (loss) income

Interest expense

Change in fair value of warrant liability

Debt extinguishment, modification and issuance costs

Other, net

(Loss) income before income taxes

Income tax (expense) benefit

Net (loss) income

Net (income) loss attributable to noncontrolling interests

Net (loss) income attributable to TIP Inc.

Net (loss) income attributable to TIP Inc. per share:

Basic

Diluted

Q4 2022 Recap

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.

Quarterly Trends and Seasonality

The Company’s operating results varied from quarter to quarter because of changes in general economic conditions and seasonal fluctuations, among other things, in each of the Company’s operations and business segments. Different products and subscribers had unique seasonal and behavioral features. Accordingly, one quarter’s results were not predictive of future performance.

Fluctuations in net income from quarter to quarter resulted from events that were unique or that occurred irregularly, such as losses on the refinance of debt, foreign exchange gains or losses, changes in the fair value of warrant liability and derivative instruments, impairment or sale of assets and operations, changes in income taxes, and impact of the COVID-19 pandemic.

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New Zealand and Bolivia

Prior to the closing of the 2degrees Sale and the NuevaTel Transaction trends in New Zealand’s and Bolivia’s service revenues and overall operating performance were affected by:

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.

Trends in New Zealand’s service revenues and operating performance that were unique to its fixed broadband business included:

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.

Liquidity and Capital Resources Measures

As of December 31, 2022, the Company had $25.1 million in cash and cash equivalents, exclusive of our share of the purchase price escrow established in connection with the 2degrees Sale in mid-May 2022. The $25.1 million in cash and cash equivalents includes $7.3 million CAD for future distributions and ongoing costs denominated in that currency. As of December 31, 2021, the Company had $55.0 million in cash, cash equivalents and restricted cash, of which $36.8 million was held by 2degrees, $17.5 million was held by NuevaTel, and $0.7 million was held at corporate and others.

On May 19, 2022, the 2degrees Sale closed for an equity purchase price for 100% of 2degrees of $1.315 billion NZD, based on an implied enterprise value of $1.7 billion NZD inclusive of lease liabilities. 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) for closing adjustments, including transaction advisory fees, along with payments to satisfy the outstanding 2degrees option pool. The Company received $587 million ($908 million NZD) of the consideration in May 2022. Approximately $22 million NZD of the consideration paid by Voyage Digital for the Company’s 2degrees shares is being held in escrow as recourse for potential indemnification claims that may arise under the Purchase Agreement. The amount in escrow represents a consideration receivable and is included in Sale proceeds held in escrow within current assets in the Company’s Consolidated Balance Sheet as it is currently considered to be probable that the amount will be received in full upon completion of the escrow period. The escrowed proceeds are scheduled to be released in May 2023. The amount of escrow proceeds that will ultimately be received will depend upon whether any indemnification obligations arise under the Purchase Agreement, and the receivable will be monitored for potential impairment over time as facts and circumstances evolve.

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In connection with the closing of the 2degrees Sale, in the second quarter of 2022, the Company settled its forward exchange contract related to a portion of the sale proceeds. The forward exchange contract was settled at a gain of $16.6 million and the related cash proceeds were included in investing activities in the Consolidated Statement of Cash Flows. See Note 9 – Derivative Financial Instruments to the Consolidated Financial Statements for additional information.

Upon closing of the 2degrees Sale, the Company also used a portion of the proceeds to prepay approximately $450 million in aggregate outstanding indebtedness and accrued interest under the TISP 8.875% Notes, the TISP 10.0% Notes and the Company’s 13.5% bridge loans due 2023 (the “Bridge Loans”). As a result of these prepayments, the Company had no remaining indebtedness outstanding as of December 31, 2022. See Note 8 – Debt to the Consolidated Financial Statements for additional information on the prepayments of debt.

The remaining amount of proceeds received by the Company from the 2degrees Sale, after prepayment of debt obligations and payment of certain corporate working capital obligations accrued through the date of the transaction, was converted to USD and CAD in the amounts expected to be used for distributions to shareholders and corporate use. These amounts were used to fund the initial shareholder distribution made in June 2022 in the aggregate amount of $150 million CAD ($116 million) and to provide a cash reserve. The Company’s cash reserve also includes its share of the escrow balance in the amount of $22 million NZD retained from the proceeds of the 2degrees Sale. In connection with the Company’s plan of liquidation adopted on June 10, 2022, the cash reserve will be utilized for costs related to the eventual dissolution of the Company, including costs related to continued financial reporting, and headquarters costs through mid-year 2023 along with payment of the $7.1 million balance of Other current liabilities and accrued expenses as of December 31, 2022 as presented in the Company’s Consolidated Balance Sheet (including $5.1 million of remaining expected severance payments to be made in connection with the Company’s wind-down process). The cash reserve will also be utilized for the payment of indemnification claims, if any, that may arise from the transaction but are not funded by the warranty insurance policy purchased in connection with the 2degrees Sale or by the aforementioned purchase price escrow. Furthermore, based on the Company’s current estimates, the Company expects to make a distribution in mid-2023 in a range of $15 million to $20 million. However, as previously disclosed, the amount and timing of future shareholder distributions is subject to certain factors, including 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), fluctuations in foreign currency exchange rates and costs associated with the dissolution of the Company.

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 for substantially all of the proceeds from the 2degrees Sale held in escrow.

The Company expects that it will be required to comply with Canadian and U.S. public company reporting obligations through the six year indemnification period following the closing of the 2degrees Sale. During the period in which the Company continues to report publicly, we will be responsible for maintaining appropriate processes and controls around financial reporting. However, given the significantly reduced risk profile of the Company following the 2degrees Sale and NuevaTel Transaction, we have reduced the cost structure of our corporate function, with a significant portion of the workforce having ceased employment with the Company in September 2022, and we have retained only a limited number of resources to ensure compliance with ongoing regulatory and audit requirements. The Company has also negotiated with service providers to ensure a significant reduction in costs going forward. It is also the Company’s expectation that following the escrow release in May 2023, the Company will endeavor to further adjust its cost structure commensurate with the risk profile of the Company.

Accordingly, management believes that our working capital will be adequate to meet the Company’s requirements for the next twelve months following the date of this MD&A. With the sale of our operations, the Company no longer has material cash requirements to fund capital expenditures or significant contractual obligations.

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Selected cash flows information

The following table summarizes the Consolidated Statement of Cash Flows for the periods indicated:

For the Year Ended December 31,

% Variance

(in millions)

Net cash (used in) provided by

Operating activities

Investing activities

Financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash

n/m - not meaningful

Cash flow (used in) provided by operating activities

Cash flow used in operating activities increased $57.3 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily due to the sales of the Company’s operating entities, 2degrees and NuevaTel, in May 2022.

Cash flow provided by operating activities increased $7.8 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. This change reflects various offsetting changes in working capital in 2021 compared to 2020, including, among other changes, lease incentives received in the third quarter of 2021, partially offset by $7.0 million of fees paid to third parties in connection with the exchange in June 2021 of the Trilogy LLC 2022 Notes and a $6.2 million increase in interest paid, net of capitalized interest, primarily due to an increase in interest expense related to the issuance of the TISP 10.0% Notes during the fourth quarter of 2020. See Note 8 – Debt to the Consolidated Financial Statements for further information.

Cash flow provided by (used in) investing activities

Cash flow provided by investing activities increased $612.9 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to the $552.2 million proceeds from the sales of operations, inclusive of proceeds from forward exchange contract of $16.6 million, net of cash sold of $51.1 million, see Note 2 – Sale of Operations to the Consolidated Financial Statements for further information. The increase was also due to a $60.4 million decrease in capital expenditures.

Cash flow used in investing activities increased $7.4 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, due to a $15.5 million increase in capital expenditures and aggregate payments of $6.7 million for spectrum licenses in 2021, including renewal of 2degrees’ 1800 and 2100 MHz spectrum holdings, and the receipt in 2020 of $5.8 million in cash proceeds from the fourth and final closing of the NuevaTel tower sale-leaseback transaction. These changes were partially offset by $10.0 million of purchases of short-term investments in 2020 and related $10.0 million in maturities and sales of short-term investments in 2021.

Cash flow used in financing activities

Cash flow used in financing activities increased $536.8 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily driven by a $396.3 million increase in payment of debt, net of proceeds, and a $115.8 million return of capital distribution to shareholders. The increase was also due to a $32.6 million reduction in proceeds from the EIP receivable financing obligation.

Cash flow used in financing activities increased $68.3 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. This change was primarily due to a $76.8 million reduction in proceeds from debt, net of payments, including proceeds in 2020 from the issuance of $50 million of senior secured notes by TISP and proceeds of $35.1 million from the New Zealand 2023 Senior Facilities Agreement. These changes were partially offset by a $6.0 million decline in dividends paid to noncontrolling interests in 2021 compared to 2020.

Contractual obligations

As a result of the sale of operations in the second quarter of 2022, the Company no longer has any significant contractual obligations as of December 31, 2022.

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Effect of inflation

The Company’s management believes inflation has not had a material effect on its financial condition or results of operations in recent years.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that would have a material effect on the financial statements as of December 31, 2022.

Critical Accounting Estimates

The preparation of the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. The estimates, discussed below, are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. The Company generally bases its judgments on its historical experience and on various other assumptions that the Company believes are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying values of assets and liabilities that are not readily apparent from other sources. See Note 1 – Description of Business, Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements for additional information.

Revenue Recognition

Prior to the sale of our operations, the Company derived its revenues primarily from wireless services, fixed broadband services and equipment sales. Of these, we considered the most critical of our revenue recognition policies to be those related to contracts with more than one product or service (or performance obligation). Determining whether products and services were considered distinct performance obligations that should have been accounted for separately versus together required significant judgment.

Judgement was required to determine the stand-alone price for each product or service (or performance obligation). In instances where the stand-alone price was not directly observable, such as when we did not sell the product or service separately, we determined the stand-alone price using information that may have included market conditions and other observable inputs.

When we capitalized permissible contract costs (costs to obtain or fulfill a contract), we made judgments in determining the anticipated period of benefit, or amortization period. For example, when we paid commissions to sales personnel and agents, we applied judgement in estimating the useful life of the asset, including assumptions about the likelihood of customer renewals which was generally based on historical experience and market conditions.

Our products were generally sold with a right of return, and we provided other credits or incentives in some circumstances, which were accounted for as variable consideration when determining the amount of revenue to recognize. Returns and credits were estimated at contract inception and updated at the end of each reporting period if additional information became available. Changes to our estimated variable consideration were not material for the periods presented.

Income Taxes

The Company accounts for income taxes pursuant to the asset and liability method of Accounting Standards Codification (“ASC”) 740 “Income Taxes” (“ASC 740”), which require us to recognize current tax liabilities or receivables for the amount of taxes we estimate are payable or refundable for the current year, and deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.

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The Company follows the provisions of ASC 740 to record uncertain tax positions under the use of the two-step process. We review and adjust our liability for unrecognized tax benefits based on our best judgment given the facts, circumstances and information available at each reporting date. To the extent that the final outcome of these tax positions is different than the amounts recorded, such differences may impact income tax expense and actual tax payments. We recognize any interest and penalties accrued related to unrecognized tax benefits in income tax expense. Actual tax payments may materially differ from estimated liabilities as a result of changes in tax laws as well as unanticipated transactions impacting related income tax balances.

The income tax effect of the financial statement gains realized from the 2degrees Sale and NuevaTel Transaction were entirely offset by the reversal of the deductible outside basis difference attributable to the Company’s investments in 2degrees and NuevaTel. Given that the deferred tax assets were historically offset with a full valuation allowance, there was no net income tax impact. Proceeds received in the transactions did not exceed the Company’s tax basis in its investments in 2degrees and NuevaTel, resulting in no current tax payable. As of December 31, 2022, the Company’s deferred tax assets principally consisted of capital and operating loss carryforwards, which are significant, offset by a full valuation allowance.

Recent Accounting Pronouncements

The effects of recently issued accounting standards are discussed in Note 1 – Description of Business, Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements.

Changes in Accounting Policies Including Initial Adoption

Other than the adoption of new accounting standards, as discussed in the Notes to the Consolidated Financial Statements, there have been no changes in the Company’s accounting policies.

Financial Instruments and Other Instruments

The Company considers the management of financial risks to be an important part of its overall corporate risk management policy. The Company uses derivative financial instruments to manage existing exposures, irrespective of whether such relationships are formally documented as hedges in accordance with hedge accounting requirements. This is further described in the Consolidated Financial Statements. See Note 9 – Derivative Financial Instruments to the Consolidated Financial Statements.

Definitions and Reconciliations of Non-GAAP Measures

The Company reports certain non-U.S. GAAP measures that are used to evaluate the performance of the Company and to manage its capital structure. Non-U.S. GAAP measures do not have any standardized meaning under U.S. GAAP and therefore may not be comparable to similar measures presented by other issuers. Securities regulations require such measures to be clearly defined and reconciled with their most directly comparable U.S. GAAP measure.

Consolidated Adjusted EBITDA and Adjusted EBITDA Margin

Consolidated Adjusted EBITDA (“Adjusted EBITDA”) represents Net income (loss) (the most directly comparable U.S. GAAP measure) excluding amounts for: income tax expense; interest expense; depreciation, amortization and accretion; equity-based compensation (recorded as a component of General and administrative expense); (gain) on sale of operations and loss (gain) on disposal of assets and sale-leaseback transaction; and all other non-operating income and expenses. Net income (loss) margin is calculated as Net income (loss) divided by service revenues. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by service revenues. Adjusted EBITDA and Adjusted EBITDA Margin are common measures of operating performance in the telecommunications industry. The Company’s management believes Adjusted EBITDA and Adjusted EBITDA Margin are helpful measures because they allow management to evaluate the Company’s performance by removing from its operating results items that do not relate to core operating performance. The Company’s management believes that certain investors and analysts use Adjusted EBITDA to value companies in the telecommunications industry. The Company’s management believes that certain investors and analysts also use Adjusted EBITDA and Adjusted EBITDA Margin to evaluate the performance of the Company’s business. Adjusted EBITDA and Adjusted EBITDA Margin have no directly comparable U.S. GAAP measure. The following table provides a reconciliation of Adjusted EBITDA to the most comparable financial measure reported under U.S. GAAP, Net income (loss).

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Consolidated Adjusted EBITDA

For the Year Ended December 31,

(in millions)

Net income (loss)

Interest expense

Depreciation, amortization and accretion

Debt extinguishment, modification and issuance costs

Change in fair value of warrant liability

Income tax expense

Other, net

Equity-based compensation

Impairment of long-lived assets

(Gain) on sale of operations and loss (gain) on disposal of assets and sale-leaseback transaction

Transaction and other nonrecurring costs (1)

Consolidated Adjusted EBITDA (2)

Net income (loss) margin (Net income (loss) divided by service revenues)

Consolidated Adjusted EBITDA Margin

(Consolidated Adjusted EBITDA divided by service revenues)

(1) 2022 includes $7.1 million costs recorded at corporate headquarters of which $6.5 million are related to severance costs. 2022 also includes $2.1 million of costs incurred in connection with the 2degrees Sale and $1.3 million of costs related to the NuevaTel Transaction for the year ended December 31, 2022. See Note 2 - Sale of Operations to the Consolidated Financial Statements for further information. 2021 includes $6.4 million of costs related to the Company's preparation for a planned public listing and equity issuance in New Zealand. 2021 also includes $1.7 million of costs in connection with the 2degrees Sale. 2020 includes $1.6 million of workforce reduction restructuring costs in response to the impact of the COVID-19 pandemic.

(2) In July 2013, Trilogy LLC sold to Salamanca Holding Company (“SHC”), a Delaware limited liability company, 80% of its interest in its wholly owned subsidiary, Salamanca Solutions International LLC (“SSI”). Although Trilogy LLC held a 20% equity interest in SSI, due to the fact that NuevaTel was SSI’s primary customer, Trilogy LLC was considered SSI’s primary beneficiary and, as such, the Company consolidated 100% of SSI’s net (losses) income. In April 2022, the Company surrendered its 20% ownership interest in SSI. Prior to the Company's surrender of its SSI ownership interest, the impact on the Company's consolidated results of the 80% that Trilogy LLC did not own decreased Adjusted EBITDA by $0.1 million for each of the years ended December 31, 2022, 2021 and 2020.

Consolidated Equipment Subsidy

Equipment subsidy (“ Equipment Subsidy ”) is the cost of devices in excess of the revenue generated from equipment sales and is calculated by subtracting Cost of equipment sales from Equipment sales. Management used Equipment Subsidy on a consolidated level to evaluate the net loss that was incurred in connection with the sale of equipment or devices in order to acquire and retain subscribers. Equipment Subsidy included devices acquired and sold for fixed broadband subscribers. Consolidated Equipment Subsidy is used in computing Equipment subsidy per gross addition. A reconciliation of Equipment Subsidy to Equipment sales and Cost of equipment sales, both U.S. GAAP measures, is presented below:

Equipment Subsidy

For the Year Ended December 31,

(in millions)

Cost of equipment sales

Less: Equipment sales

Equipment Subsidy

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Key Industry Performance Measures – Definitions

The following measures are industry metrics that management historically found useful in assessing the operating performance of the Company, and are often used in the wireless telecommunications industry, but do not have a standardized meaning under U.S. GAAP:

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.

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Morris Scott K	Officer	1
Nathoo Amin	10% Owner	1
Sg Enterprises, II LLC	10% Owner	1

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Mar 28, 2024	Stanton John W Director · 10% Owner	JOther	71,719,030	-	-
Mar 28, 2024	Sg Enterprises, II LLC 10% Owner	JOther	71,719,030	-	-
Mar 28, 2024	Morris Scott K Senior VP, Gen Counsel & Sec	DDisposition	930,656	-	-
Mar 28, 2024	Horwitz Bradley J Chief Executive Officer · Director	DDisposition	4,419,246	-	-
Mar 28, 2024	Davies Andrew M Director	DDisposition	29,315	-	-

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Trilogy International Partners Inc.

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