Description of Company and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 |
Accounting Policies [Abstract] | ' |
Description of Company and Summary of Significant Accounting Policies | ' |
1 | DESCRIPTION OF COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Alaska Communications Systems Group, Inc. (“we”, “our”, “us”, the “Company” and “ACS”), a Delaware corporation, through its operating subsidiaries, provides integrated telecommunication and information technology (“IT”) services to business, wholesale and consumer customers in the State of Alaska and beyond using its broadband telecommunications network. |
The accompanying unaudited condensed consolidated financial statements represent the consolidated financial position, comprehensive income and cash flows of Alaska Communications Systems Group, Inc. and the following wholly owned subsidiaries: |
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• Alaska Communications Systems Holdings, Inc. (“ACS Holdings”) | | • Crest Communications Corporation (“Crest”) |
| • WCI Cable, Inc. |
• ACS of Alaska, LLC (“ACSAK”) | | • WCIC Hillsboro, LLC |
• ACS of the Northland, LLC (“ACSN”) | | • Alaska Northstar Communications, LLC |
• ACS of Fairbanks, LLC (“ACSF”) | | • WCI Lightpoint, LLC |
• ACS of Anchorage, LLC (“ACSA”) | | • Worldnet Communications, Inc. |
• ACS Wireless, Inc. (“ACSW”) | | • Alaska Fiber Star, LLC |
• ACS Long Distance, LLC (“ACSLD”) | | • TekMate, LLC |
• ACS Internet, LLC (“ACSI”) | | |
• ACS Messaging, Inc. (“ACSM”) | | |
• ACS Cable Systems, LLC (“ACSC”) | | |
In addition to these wholly owned subsidiaries, the Company has a one-third interest in The Alaska Wireless Network, LLC (“AWN”) which is represented in the Company’s condensed consolidated financial statements as an equity method investment. On August 31, 2010, the Company acquired a 49% interest in TekMate, LLC (“TekMate”), a leading managed information technology services firm in Alaska. On January 31, 2014, the Company purchased the remaining 51% interest in TekMate. Prior to that date TekMate was represented in the Company’s condensed consolidated financial statements as an equity method investment. Subsequent to that date, TekMate has been recorded as a wholly owned subsidiary. |
Basis of Presentation |
The accompanying unaudited condensed consolidated financial statements and footnotes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Certain information and footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”). The Company believes the disclosures made are adequate to make the information presented not misleading. |
In the opinion of management, the unaudited condensed consolidated financial statements contain all normal, recurring adjustments necessary to present fairly the consolidated financial position, comprehensive income and cash flows for all periods presented. The comprehensive income for the three and nine months ended September 30, 2014, are not necessarily indicative of comprehensive income which might be expected for the entire year or any other interim periods. The balance sheet at December 31, 2013 has been derived from the audited financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements. Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations, balance sheet amounts, or cash flows. |
Use of Estimates |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and the accompanying notes, including estimates of probable losses and expenses. Actual results could differ materially from those estimates. |
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Wireless Handset Financing |
In the second quarter of 2014, the Company began providing the option for customers to finance the purchase of their wireless handsets under the “Buy it. Bring it. Finance it.™” program. This program allows customers to finance wireless handsets over a 24 month period. The Company records revenue equal to the present value of the payments at the time of sale and imputes interest each month of the financing term. The discount rate used to impute interest approximates the Company’s weighted average cost of debt. If a customer disconnects service they are billed the full remaining balance owed on the contract term. |
Recently Issued Accounting Pronouncements |
On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued its new revenue recognition guidance in Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606)” which is effective for annual reporting periods beginning after December 15, 2016. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606, Revenue from Contracts with Customers. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its on-going financial reporting. |