Alaska Communications Systems 8-K Alaska Communications Reports Strong Fourth Quarter and Year-End 2015 Results

Exhibit 99.1

Alaska Communications Reports Strong Fourth Quarter and Year-End 2015 Results

-Achieved Run-Rate Adjusted EBITDA of $55.4 million, in line with 2015 guidance-

-Posted Total Wireline Revenues of $219.8 million, a 2.2% increase-

-Reported full-year Business and Wholesale Revenue growth of 9.3% -

ANCHORAGE, Alaska--(BUSINESS WIRE)--March 3, 2016--Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) today reported financial results for its fourth quarter and full year ended Dec. 31, 2015.

“Alaska Communications set high goals for 2015. We successfully transitioned out of wireless operations and streamlined the business with a focus on areas of maximum opportunity such as a fiber broadband and IT managed services. Business and Wholesale revenue grew 9.3 percent, ahead of our longer term directional guidance and demonstrating our ability to take share. Achieving all of our planned wireless sale synergies, we delivered on our run-rate Adjusted EBITDA guidance.

“We are entering 2016 with momentum, positioning to become the premier cloud enabler for business. We expect to drive increasingly profitable growth and free cash flow expansion to generate long-term shareholder value,” Anand Vadapalli, president and CEO of Alaska Communications said.

Revenue Highlights: Year over Year Fourth Quarter

• Total service and other, representing Total Wireline revenues excluding any stub period wireless revenues:
  • Revenue increased to $56.6 million from $53.5 million, up 5.8 percent.
  • Total broadband revenue reached $19.4 million from $17.5 million, up 10.4 percent.
• Business and wholesale service:
  • Comprised 56.8 percent of total service and other revenue.
  • Revenue grew to $32.2 million from $27.8 million, up 15.7 percent.
  • Broadband revenues reached $13.4 from $11.1, up 20.8 percent.
• Consumer service:
  • Comprised 17.0 percent of total service and other revenue.
  • Revenue was $9.7 million, down 6.3 percent from $10.3 million.
  • Broadband revenue was $5.9 million, down 7.6 percent from $6.4 million.
• Access and Other:
  • Comprised 26.1 percent of total service and other revenue.
  • Revenue was $14.8 million, down 4.0 percent from $15.4 million.

Financial Highlights: Fourth Quarter and Year ended Dec. 31, 2015

• Adjusted EBITDA of $13.8 million, bringing the fourth quarter annual run-rate to $55.4 million.
• Total operating revenue of $56.6 million, bringing the year to $232.8 million, including total service and other revenues of $219.8 million.
• Net capital expenditures were $8.2 million for the quarter and $32.9 million for the year.
• Net debt at year-end of $161.7 million.
• Cash remained strong at $36.0 million.

Laurie Butcher, Alaska Communications senior vice-president of finance, said, “We accomplished all of our guidance targets for 2015. Business revenue was strong at 9.3 percent growth, while consumer revenue declines reflect industry trends and planned reductions in lower speed connections. During the year, we reduced our debt balances by $244 million dollars, making us one of the lowest levered companies in our industry. In 2016, we are committed to growing revenue, Adjusted EBITDA and free cash flow.”

2016 Guidance:

• Total Service and Other Revenue of approximately $228 million
• Adjusted EBITDA of approximately $59 million
• Capital Expenditures of approximately $35 million
• Free Cash Flow of approximately $5 million

Conference Call
The Company will host a conference call and live webcast on Thursday, March 3, 2016 at 3:00 p.m. Eastern Time to discuss the results. The live webcast will include a slide presentation. Parties in the United States and Canada can access the call at 1-888-466-4440 and enter pass code 857497. All other parties can access the call at 1-719-785-1758.

The live webcast of the conference call will be accessible from the "Events Calendar" section of the Company's website (www.alsk.com). The webcast will be archived for a period of 90 days. A telephonic replay of the conference call will also be available two hours after the call and will run until April 4, 2016 at 6:00 p.m. Eastern Time. To hear the replay, parties in the United States and Canada can call 1-888-203-1112 and enter pass code 5646561. All other parties can call 1-719-457-0820 and enter pass code 5646561.

About Alaska Communications
Alaska Communications (NASDAQ: ALSK) is the leading provider of advanced broadband and IT managed services for businesses and consumers in Alaska. The company operates a highly reliable, advanced statewide data network with the latest technology and the most diverse undersea fiber optic system connecting Alaska to the contiguous U.S. For more information, visit www.alaskacommunications.com or www.alsk.com.

Non-GAAP Measures
In an effort to provide investors with additional information regarding our financial results, in particular with regards to our liquidity and capital resources, we have disclosed certain non-GAAP financial information such as Adjusted EBITDA, Free Cash Flow and Net Debt, which management utilizes to assess performance and believes provides useful information to investors. The definition of these non-GAAP measures are on Schedules 4 and 5 to this press release. Adjusted EBITDA, and Free Cash Flow are non-GAAP measures and should not be considered a substitute for net cash provided by operating activities and other measures of financial performance recorded in accordance with GAAP. Reconciliations of our non-GAAP measures to our nearest GAAP measures can be found on our website at http://www.alsk.com in the investment data section. Other companies may not calculate non-GAAP measures in the same manner as ACS.

Forward-Looking Statements
This press release includes certain "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's beliefs as well as on a number of assumptions concerning future events made using information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside ACS' control. Such factors include, without limitation, Universal Service Fund changes, adverse economic conditions, the effects of competition in our markets, our relatively small size compared with our competitors, the Company’s ability to compete, manage, integrate, market, maintain, and attract sufficient customers for its products and services, adverse changes in labor matters, including workforce levels, our ability to service our debt and refinance when it comes due, labor negotiations, and benefits costs, our ability to control other operating costs, disruption of our supplier’s provisioning of critical products or services, the impact of natural or man-made disasters, changes in Company's relationships with large customers, unforeseen changes in public policies, regulatory changes, changes in technology and standards, and changes in accounting policies, which could result in an impact on earnings. For further information regarding risks and uncertainties associated with ACS' business, please refer to the Company's SEC filings, including, but not limited to, the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of the Company's SEC filings may be obtained by contacting its investor relations department at (907) 564-7556 or by visiting its investor relations website at www.alsk.com.

										Schedule 1
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED SCHEDULE OF OPERATIONS
(Unaudited, In Thousands Except Per Share Amounts)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
		2015			2014			2015			2014
Operating revenues:
Operating revenues, non-affiliates	$	56,631		$	75,886		$	232,242		$	307,917
Operating revenues, affiliates		-			1,623			575			6,946
Total operating revenues		56,631			77,509			232,817			314,863
Operating expenses:
Cost of services and sales, non-affiliates		26,106			32,580			107,162			123,854
Cost of services and sales, affiliates		-			13,821			4,961			57,116
Selling, general & administrative		17,407			26,472			88,389			101,398
Depreciation and amortization		8,376			6,733			33,867			32,583
Loss (gain) on disposal of assets, net		112			(486	)		(46,252	)		126
Loss on impairment of goodwill		-			5,986			-			5,986
Earnings from equity method investments		-			(6,713	)		(3,056	)		(35,960	)
Total operating expenses		52,001			78,393			185,071			285,103
Operating income (loss)		4,630			(884	)		47,746			29,760
Other income and expense:
Interest expense		(4,088	)		(8,266	)		(19,841	)		(34,410	)
Loss on extinguishment of debt		-			-			(4,878	)		-
Interest income		2			41			58			83
Total other income and expense		(4,086	)		(8,225	)		(24,661	)		(34,327	)
Income (loss) before income tax expense		544			(9,109	)		23,085			(4,567	)
Income tax (expense) benefit		(218	)		3,751			(10,200	)		1,787
Net income (loss)		326			(5,358	)		12,885			(2,780	)
Less net loss attributable to noncontrolling interest		(13	)		-			(69	)		-
Net income (loss) attributable to ACS	$	339		$	(5,358	)	$	12,954		$	(2,780	)
Basic	$	0.01		$	(0.11	)	$	0.26		$	(0.06	)
Diluted	$	0.01		$	(0.11	)	$	0.25		$	(0.06	)
Weighted average shares outstanding:
Basic		50,415			49,540			50,247			49,334
Diluted		51,617			49,540			51,368			49,334

				Schedule 2
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, In Thousands Except Per Share Amounts)
	December 31,			December 31,
Assets		2015			2014
Current assets:
Cash and cash equivalents	$	36,001		$	31,709
Restricted cash		1,824			467
Accounts receivable, net of allowance of $1,693 and $2,338		25,225			30,900
Materials and supplies		4,674			4,321
Prepayments and other current assets		8,068			6,575
Current assets held-for-sale		-			9,565
Total current assets		75,792			83,537
Property, plant and equipment		1,337,098			1,333,134
Less: accumulated depreciation and amortization		(967,776	)		(976,401	)
Property, plant and equipment, net		369,322			356,733
Deferred income taxes		16,660			22,978
Equity method investments		-			252,067
Non-current assets held-for-sale		-			14,664
Other assets		1,827			301
Total assets	$	463,601		$	730,280
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term obligations	$	3,671		$	15,521
Accounts payable, accrued and other current liabilities, non-affiliates		51,275			54,373
Accounts payable, accrued and other current liabilities, affiliates, net *		-			4,853
Advance billings and customer deposits		4,513			4,490
Current liabilities held-for-sale		-			18,728
Total current liabilities		59,459			97,965
Long-term obligations, net of current portion		185,018			413,978
Other long-term liabilities, net of current portion		65,265			24,370
Non-current liabilities held-for-sale		-			2,107
Deferred AWN capacity revenue, net of current portion		-			56,734
Total liabilities		309,742			595,154
Commitments and contingencies
ACS stockholders' equity:
Common stock, $.01 par value; 145,000 authorized		505			497
Additional paid in capital		156,971			154,368
Accumulated deficit		(1,634	)		(14,588	)
Accumulated other comprehensive loss		(3,086	)		(5,151	)
Total ACS stockholders' equity		152,756			135,126
Noncontrolling interest		1,103			-
Total stockholders' equity		153,859			135,126
Total liabilities and stockholders' equity	$	463,601		$	730,280
* Affiliate balances are related to activity with our equity method investment in AWN.
On February 2, 2015 we sold our interest in AWN.

Schedule 3
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, In Thousands)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
		2015			2014			2015			2014
Cash Flows from Operating Activities:
Net income (loss)	$	326		$	(5,358	)	$	12,885		$	(2,780	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		8,376			6,733			33,867			32,583
Gain on wireless sale		-			-			(48,232	)		-
Loss (gain) on the disposal of assets, net		112			(486	)		1,980			126
Loss on impairment of goodwill		-			5,986			-			5,986
Unrealized loss (gain) on ineffective hedge		83			(273	)		(737	)		(273	)
Amortization of debt issuance costs and debt discount		1,052			1,178			4,114			5,104
Amortization of ineffective hedge		-			337			1,970			1,613
Loss on extinguishment of debt		-			-			4,878			-
Amortization of deferred capacity revenue		(697	)		(976	)		(2,859	)		(3,795	)
Stock-based compensation		110			634			2,008			2,511
Deferred income tax expense (benefit)		1,312			(3,755	)		4,883			(2,047	)
Provision for uncollectible accounts		(127	)		387			1,258			3,329
Cash distribution from equity method investments		-			6,713			3,056			35,960
Earnings from equity method investments		-			(6,713	)		(3,056	)		(35,960	)
Other non-cash expense, net		117			113			934			431
Changes in operating assets and liabilities		(3,583	)		6,758			(4,368	)		8,381
Net cash provided by operating activities		7,081			11,278			12,581			51,169
Cash Flows from Investing Activities:
Capital expenditures		(12,698	)		(12,507	)		(50,914	)		(46,423	)
Capitalized interest		(326	)		(728	)		(1,558	)		(2,810	)
Change in unsettled capital expenditures		608			(703	)		3,995			(2,003	)
Cash received in acquisition of business		-			-			-			68
Proceeds on wireless sale		-			-			285,160			-
Proceeds on sale of assets		11			-			3,140			136
Return of capital from equity investment		-			5,787			1,875			14,073
Net change in restricted cash		-			-			(1,357	)		-
Net cash (used) provided by investing activities		(12,405	)		(8,151	)		240,341			(36,959	)
Cash Flows from Financing Activities:
Repayments of long-term debt		(571	)		(397	)		(333,961	)		(24,419	)
Proceeds from the issuance of long-term debt		-			-			90,061			-
Debt issuance costs		(346	)		-			(4,901	)		-
Cash paid for debt extinguishment		-			-			(391	)		-
Cash paid in acquisition of business		-			-			(291	)		(795	)
Cash proceeds from non-controlling interest		-			-			250			-
Payment of withholding taxes on stock-based compensation		(6	)		(7	)		(408	)		(593	)
Excess tax benefit from share-based payments		-			-			733			-
Proceeds from issuance of common stock		144			135			278			267
Net cash used by financing activities		(779	)		(269	)		(248,630	)		(25,540	)
Change in cash and cash equivalents		(6,103	)		2,858			4,292			(11,330	)
Cash and cash equivalents, beginning of period		42,104			28,851			31,709			43,039
Cash and cash equivalents, end of period	$	36,001		$	31,709		$	36,001		$	31,709
Supplemental Cash Flow Data:
Interest paid	$	4,981		$	9,526		$	16,101		$	31,562
Income taxes paid, net	$	994		$	40		$	4,936		$	260

Schedule 4
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
ADJUSTED EBITDA
(Unaudited, In Thousands)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
		2015			2014			2015			2014
Net income (loss)	$	326		$	(5,358	)	$	12,885		$	(2,780	)
Add (subtract):
Interest expense		4,088			8,266			19,841			34,410
Loss on extinguishment of debt		-			-			4,878			-
Interest income		(2	)		(41	)		(58	)		(83	)
Depreciation and amortization		8,376			6,733			33,867			32,583
Loss on impairment of goodwill		-			5,986			-			5,986
Loss (gain) on disposal of assets, net		112			(486	)		(46,252	)		126
Earnings from equity method investments		-			(6,713	)		(3,056	)		(35,960	)
AWN distributions received/receivable, net		-			12,500			765			50,000
Income tax expense (benefit)		218			(3,751	)		10,200			(1,787	)
Stock-based compensation		110			634			2,008			2,511
Long-term cash incentives		425			470			1,781			2,042
Pension adjustment		(76	)		-			134			-
Gift of services		(388	)		-			(388	)		-
Earthquake related expense		-			-			-			1,228
Net loss attributable to noncontrolling interest		13			-			69			-
Wireless sale transaction-related and wind down costs		643			4,057			13,272			4,297
Adjusted EBITDA	$	13,845		$	22,297		$	49,946		$	92,573
2015 adjusted EBITDA presented on a run rate basis of Q4 times 4							$	55,380
Non-GAAP Measures: In an effort to provide investors with additional information regarding the Company's results as determined by GAAP, the Company also discloses certain non-GAAP information which management utilizes to assess recurring performance and believes provides useful information to investors regarding baseline operating results. The Company has disclosed Adjusted EBITDA as net income before interest, loss on extinguishment of debt, depreciation and amortization, gain or loss on asset purchases or disposals, earnings on equity method investments, gain on the sale of our wireless operations, provisions for taxes, wireless transaction-related costs, loss attributable to noncontrolling interest, stock-based compensation, pension adjustments, earthquake related expenses and expenses under the company’s long term cash incentive plan (“LTCI”). LTCI expenses are considered part of an interim compensation structure to mitigate the dilutive impact of additional share issuances for executive compensation. Distributions from AWN are included in Adjusted EBITDA.

Schedule 5
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
FREE CASH FLOW
(Unaudited, In Thousands)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
		2015			2014			2015			2014
Adjusted EBITDA	$	13,845		$	22,297		$	49,946		$	92,573
Less:
Capital expenditures		(12,698	)		(12,507	)		(39,914	)		(46,423	)
Milestone billings for fiber build project for a carrier customer		4,500			3,960			7,000			5,960
Net capital expenditures		(8,198	)		(8,547	)		(32,914	)		(40,463	)
Purchase of North Slope fiber network
Acquisition price		-			-			(11,000	)		-
Less: 50% due in 2016		-			-			5,500			-
Less: proceeds on sale of fiber to JV partner		-			-			2,650			-
Less: other cash proceeds		-			-			400			-
Net North Slope purchase		-			-			(2,450	)		-
Amortization of GCI/AWN capacity revenue		(520	)		(814	)		(2,169	)		(3,151	)
Earthquake related expense		-			-			-			(1,228	)
Cash interest expense		(4,981	)		(9,526	)		(16,101	)		(31,562	)
Free cash flow	$	146		$	3,410		$	(3,688	)	$	16,169
Non-GAAP Measures: In an effort to provide investors with additional information regarding the Company's results as determined by GAAP, the Company also discloses certain non-GAAP information which management utilizes to assess recurring performance and believes provides useful information to investors regarding baseline operating results. Free cash flow ("FCF") is defined as Adjusted EBITDA, less recurring operating cash requirements which include capital expenditures, net of cash received for a fiber build for carrier customer, less cash interest expense, earthquake related expenses, significant non-cash revenue associated with our interconnection agreement with AWN and GCI, and in Q2 2015 the purchase of the North Slope fiber network. ACS continues to have net operating losses and is not a significant taxpayer on ordinary income. Income taxes paid in 2015 are related to the Wireless retail sale and are not included in free cash flow.

Schedule 6
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
REVENUE GROWTH
(Unaudited, In Thousands)
	Three Months Ended					Twelve Months Ended
	December 31,					December 31,
Service revenue:		2015			2014		2015			2014
Business and wholesale customers
Voice	$	5,425		$	5,551	$	21,969		$	22,499
Broadband		13,438			11,125		50,007			43,783
Managed IT services		1,069			952		3,316			3,492
Other		2,381			1,848		8,089			7,104
Wholesale		9,860			8,320		36,792			33,043
Business and wholesale service revenue		32,173			27,796		120,173			109,921
Consumer customers
Voice		3,273			3,533		13,530			14,932
Broadband		5,914			6,400		25,050			24,841
Other		468			372		1,341			1,563
Consumer service revenue		9,655			10,305		39,921			41,336
Total service revenue		41,828			38,101		160,094			151,257
Growth in service revenue		9.8	%				5.8	%
Growth in broadband service revenue		10.4	%				9.4	%
Other revenue:
Equipment sales and installations		1,715			1,900		6,382			5,321
Access		8,167			8,591		33,644			35,323
High cost support		4,921			4,921		19,682			23,192
Total service and other revenue		56,631			53,513		219,802			215,093
Growth in service and other revenue		5.8	%				2.2	%
Growth excluding equipment sales		6.4	%				1.7	%
Wireless and AWN related revenue:
Service revenue, equipment sales and other		-			18,198		6,300			77,054
Transition services		-			-		4,769			-
CETC		-			4,984		1,654			19,565
Amortization of deferred AWN capacity revenue		-			814		292			3,151
Total wireless & AWN related revenue		-			23,996		13,015			99,770
Total revenue	$	56,631		$	77,509	$	232,817		$	314,863
Adjusted for prior year access reserve releases:
Total service and other revenue		56,631			53,513		219,802			215,093
Prior year access reserve releases		-			-		-			(3,502	)
Adjusted total service and other revenue		56,631			53,513		219,802			211,591
Growth in service and other revenue		5.8	%				3.9	%

Schedule 7
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
(Unaudited)
	Three Months Ended
	December 31,		September 30,		December 31,
	2015		2015		2014
Voice:
Consumer access lines		37,683		39,016		43,773
Business access lines		76,598		78,164		79,168
Voice ARPU consumer	$	28.45	$	29.09	$	26.48
Voice ARPU business	$	23.37	$	23.66	$	23.31
Broadband:
Consumer connections		33,275		33,488		37,412
Business connections (1)		18,824		19,125		18,798
ARPU consumer	$	58.63	$	59.16	$	55.91
ARPU business (1)	$	235.81	$	218.54	$	197.11

(1) How we calculate broadband connections has changed to exclude certain internal use circuits. Historical amounts have been restated to reflect appropriate comparisons period over period.

Schedule 8
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
Long Term Debt and Net Debt
(Unaudited, In Thousands)
	December 31,			December 31,
	2015			2014
2015 senior secured credit facilities due 2018	$	89,750		$	-
Debt issuance costs - 2015 senior secured credit facilities due 2018		(3,406	)		-
2010 senior credit facility term loan due 2016		-			322,700
Debt discount - 2010 senior credit facility term loan due 2016		-			(1,014	)
Debt issuance costs - 2010 senior credit facility term loan due 2016		-			(2,810	)
6.25% convertible notes due 2018		104,000			114,000
Debt discount - 6.25% convertible notes due 2018		(4,641	)		(7,242	)
Debt issuance costs - 6.25% convertible notes due 2018		(1,010	)		(1,659	)
Capital leases and other long-term obligations		3,996			5,524
Total debt		188,689			429,499
Less current portion		(3,671	)		(15,521	)
Long-term obligations, net of current portion	$	185,018		$	413,978
Total debt	$	188,689		$	429,499
Plus debt discounts and debt issuance costs		9,057			12,725
Gross debt		197,746			442,224
Cash and cash equivalents		(36,001	)		(31,709	)
Net debt	$	161,745		$	410,515
Adjusted EBITDA*	$	55,380		$	92,573
Net debt	$	161,745		$	410,515
Net leverage^		2.9			4.4
* 2015 adjusted EBITDA is presented on a run rate basis of Q4 times 4.
^The leverage ratio calculation methodology specified in our credit agreement differs in certain elements from the methodology above; please refer to the Liquidity and Capital Resource section of Item 7 of the most recent 10K for details on calculations pursuant to the credit agreement.

CONTACT:
Alaska Communications Systems Group, Inc.
Investor Contact:
Tiffany Dunn, 907-297-3103
Manager, Board and Investor Relations
investors@acsalaska.com
or
Media Contact:
Hannah Blankenship, 907-564-1326
Associate Manager, Corporate Communications
Hannah.Blankenship@acsalaska.com