Exhibit 99.1
Alaska Communications Reports Fourth Quarter and Year-end Results;
Fifth Consecutive Quarter of Record Wireless Growth
ANCHORAGE, Ala.--(BUSINESS WIRE)--Feb. 24, 2005--
Net Cash Provided by Operating Activities Rose to $19.1
Million for the Fourth Quarter
Alaska Communications Systems Group, Inc. ("ACS") (Nasdaq:ALSK)
today reported financial results for its fourth quarter and year-ended
December 31, 2004.
"At the beginning of 2004, we set strategic priorities to shape
ACS into a customer-driven operation, capitalize on the under-served
wireless market with 3G CDMA technology, demonstrate growth and
generate cash," stated Liane Pelletier, ACS president and chief
executive officer. "ACS' execution is evident in our fourth quarter
results, which include a fifth consecutive quarter of record wireless
subscriber growth, an increase in our total retail relationships by
7,800 to 397,000 and strong cash generation with $19.1 million
provided from operating activities."
Pelletier added, "Another goal was to favorably position the
company to avail itself of timely financing opportunities. Having
developed a strong performance track record as the only
statewide-integrated service provider in Alaska that owns local and
long distance, Internet and wireless facilities, this month ACS
substantially completed several capital markets transactions to
provide the company greater financial flexibility and improved cash
flow."
Recent Financing Transactions
In February, ACS issued and sold a total of 8,823,530 shares of
its common stock at a public offering price of $8.50 per share. ACS
received total net proceeds from the sale of such shares, after
underwriting discounts, of approximately $71 million. In addition, ACS
entered into a new $380 million senior secured credit facility,
consisting of a $335 million term loan facility and an undrawn $45
million revolving credit facility. Term loan borrowings under the new
senior credit facility generally bear interest at LIBOR plus 200 basis
points, compared to term loan borrowings under the previous senior
credit facility, which bore interest at an annual rate of LIBOR plus
325 basis points.
ACS repaid its total outstanding balance of $198.0 million under
its previous senior secured credit facility, repurchased approximately
$59.4 million outstanding principal amount of its 9.875% senior notes
due 2011, and repurchased or called for redemption the full $147.5
million outstanding principal amount of its 9.375% senior subordinated
notes due 2009.
David Wilson, ACS senior vice president and chief financial
officer, said, "The recent series of debt and equity transactions we
completed in February 2005 have de-levered our balance sheet and
substantially lowered our borrowing costs. As a result, we look
forward to significantly lower interest expense and increased cash
flow in 2005.
"Also, during the fourth quarter, we initiated a dividend program
and declared our first quarterly dividend of $0.185 per share, which
was paid on January 19, 2005 to stockholders of record at the close of
business on December 31, 2004. Building on the success of this
program, we are considering implementing a dividend reinvestment plan,
which will offer investors the option to reinvest their dividends in
ACS stock. Our dividend program is a key part of our strategy to share
with our stockholders the benefits of the cash flow generating aspects
of our business and to seek to offer investors growth and income."
Quarterly Financial Highlights
For the fourth quarter ending December 31, 2004, revenues were
$75.1 million, which represented a 3.3 percent increase over fourth
quarter 2003 revenues of $72.8 million, adjusted to exclude revenues
from the discontinued State of Alaska contract. Including the State of
Alaska contract revenues, reported revenues for the fourth quarter of
2003 were $77.2 million. Wireless subscribers grew at a record pace
for the fifth consecutive quarter and wireless revenue rose to $15.4
million this quarter compared to $11.7 million a year ago.
Also during the fourth quarter of 2004 compared to the fourth
quarter of 2003:
-- Net loss declined to $7.1 million from $17.2 million and to a
loss of $0.23 per share from $0.58 per share;
-- Adjusted EBITDA increased to $26.2 million from $24.1 million;
and
-- Interest expense declined to $12.2 million from $20.0 million
due to an $8.0 million charge for the early extinguishment of
an interest rate swap in the fourth quarter of 2003.
Wilson added, "Our focus on streamlining business operations is
paying off, as we generated $19.1 million in cash from operating
activities in the fourth quarter, following up on our strong results
of $15.5 million in cash from operating activities in the third
quarter. ACS closed the quarter with a cash balance of $85.9 million,
and we are continuing to mine opportunities to improve cash
generation. Recently, we organized process improvement teams as part
of our strategy to drive cash flow; these teams will help ACS absorb
and fund the growth of our underlying business and will also enhance
the customer experience."
Fourth Quarter 2004 Metric Highlights
-- Increased total number of retail customer relationships across
all product lines by approximately 7,800 to over 397,000
total, a doubling of net addition growth rate compared to the
third quarter of 2004.
-- Added over 5,100 wireless subscribers, growing 5.4 percent
compared to the third quarter of 2004 and bringing the total
to over 100,600 wireless subscribers. Churn remained low at
1.7 percent per month.
-- Recorded wireless average revenue per unit (ARPU) of $45.42
compared to the seasonally stronger third quarter wireless
ARPU of $47.43.
-- Increased digital subscriber lines (DSL) 9.4 percent to over
24,700 compared to the third quarter of 2004 as a result of
consumer and business bundling programs.
-- Increased long distance subscribers over 2,700 to 47,050
customers, a 6.1 percent increase compared to the third
quarter of 2004, principally as a result of a focused selling
effort and the bundling of the long distance product with
other ACS services.
-- Recorded over 295,000 access lines representing a decrease of
approximately 6,300 lines, or 2.1 percent, compared to the
third quarter of 2004, which is in line with company
expectations and reflective of industry trends.
Wilson commented, "Wireless continues to be a key driver of growth
for ACS. Supporting the momentum and economics of the business are
four key factors where we are delivering compelling results and that
demonstrate both the strength of our product offerings and customer
loyalty. We are rapidly growing the absolute number of wireless
subscribers, and we recorded our fifth consecutive quarter of record
growth in subscribers. Wireless ARPU, allowing for normal seasonal
factors, is moving higher in conjunction with the depth of our product
offerings and was up 14.7 percent to $45.42 compared to the fourth
quarter of last year. The cost of gross additions is consistently low
for ACS and was less than $200 per subscriber in the fourth quarter,
or a 50 percent cost advantage over market leaders in the lower 48
states. Lastly, our industry-leading churn rate remains consistently
low and came in at 1.7 percent per month for the latest quarter."
Annual Financial Review
For the year ending December 31, 2004, total revenues were $302.7
million, which represented a 3.6 percent increase over 2003 adjusted
revenues of $292.3 million. Including the State of Alaska contract and
directory business revenues, reported revenues for 2003 were $323.8
million. Net loss for the year 2004 was $39.3 million, or $1.33 per
share, as compared to a net loss of $6.6 million, or $0.22 per share
in 2003. Net loss for 2003 was inclusive of a gain on the disposal of
assets of $112.6 million and contract termination and asset impairment
charges of $54.9 million. Adjusted EBITDA for the year 2004 was $97.4
million, an increase of 4.8 percent from $92.9 million in 2003. Net
cash provided by operating activities for 2004 increased 15 percent to
$57.8 million, as compared to $50.4 million in 2003.
Business Outlook
For the year 2005, ACS reiterates its previous outlook: Revenue
for the full year is expected to be in the range of $310 million to
$320 million and EBITDA to be in the range of $108 million to $112
million.
Management provided more details. Net cash interest expense is
expected to decline to approximately $31 million, primarily as a
result of recent debt and equity transactions. ACS expects capital
expenditures for 2005 to range from $65 million to $70 million,
comprised of maintenance capital expenditure of approximately $35
million and pre-funded growth capex of between $30 million and $35
million. As a result of recent capital markets transactions, ACS
expects to incur charges totaling approximately $26 million in the
first quarter of 2005, comprised of tender premiums of $13 million and
unamortized debt issuance costs and original issue discounts of $13
million.
Conference Call
The company will host a conference call and live webcast today at
5:00 p.m. Eastern Time to discuss fourth quarter results and year-end
results. For parties in the United States and Canada, call
800-219-6110 to access the earnings call. International parties can
access the call at 303-262-2131.
The live webcast of the conference call is accessible from the
"Investor Relations" 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 2 hours after the
call and will run until Monday, February 28, 2005 at 9:00 p.m.,
Pacific Time. To hear the replay, parties in the United States and
Canada should call 800-405-2236 and enter pass code 11023480.
International parties should call 303-590-3000 and enter pass code
11023480.
About Alaska Communications Systems
ACS is the leading integrated communications provider in Alaska,
offering local telephone service, wireless, long distance, data, and
Internet services to business and residential customers throughout
Alaska. More information can be found on the company's website at
www.acsalaska.com or at our investor site at www.alsk.com.
Forward Looking EBITDA Guidance
This press release includes management's estimate of EBITDA for
the year ended December 31, 2005. Management believes the most
directly comparable GAAP measure would be "Net cash provided by
operating activities." Due to the difficulty in forecasting and
quantifying the amounts that would be required to be included in this
comparable GAAP measure, the Company is not providing an estimate of
year-end net cash provided by operating activities at this time.
Safe Harbor Statement
Statements about future results and other expectations constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based
on current expectations and the current economic environment. The
company cautions that these statements are not guarantees of future
performance. Actual results may differ materially from those expressed
or implied in the forward-looking statements. A number of factors in
addition to those discussed herein could cause actual results to
differ materially from expectations. The company's financial planning
is affected by business and economic conditions and changes in
customer order patterns. Any projections are inherently subject to
significant economic and competitive uncertainties and contingencies,
many of which are beyond the control of ACS. Important assumptions and
other important factors, including risk factors, which could cause
actual results to differ materially from those in the forward-looking
statements, are specified in the company's Form 10-K for the year
ended December 31, 2003 and other filings with the SEC, including
under headings such as "Risk factors" and "Management's discussion and
analysis of financial condition and results of operations." The
company undertakes no obligation to update forward-looking statements,
whether as a result of new information, future events, or otherwise.
Schedule 1
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Twelve Months Ended
December 31, 2004 and 2003
(Unaudited, in Thousands, Except per Share Amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
2004 2003 2004 2003
-------- --------- --------- ---------
Operating revenues:
Local telephone $50,961 $52,614 $211,187 $215,686
Wireless 15,428 11,680 56,694 46,548
Directory - - - 11,631
Internet 5,160 8,610 20,173 33,026
Interexchange 3,576 4,333 14,653 16,956
-------- --------- --------- ---------
Total operating revenues 75,125 77,237 302,707 323,847
Operating expenses:
Local telephone 30,862 31,786 127,918 116,653
Wireless 10,689 9,268 37,918 31,064
Directory - - - 5,249
Internet 4,535 9,694 25,739 45,523
Interexchange 4,262 7,656 19,773 25,542
Contract termination and
asset impairment charges - 319 - 54,858
Depreciation and amortization 20,701 15,450 78,387 82,185
Loss (gain) on disposal of
assets, net 29 (115) 2,854 (112,622)
-------- --------- --------- ---------
Goodwill impairment loss - - - -
-------- --------- --------- ---------
Total operating expenses 71,078 74,058 292,589 248,452
Operating income 4,047 3,179 10,118 75,395
Other income and expense:
Interest expense (12,234) (19,992) (51,288) (71,470)
Interest income and other 903 713 1,657 (9,408)
-------- --------- --------- ---------
Total other income
(expense) (11,331) (19,279) (49,631) (80,878)
-------- --------- --------- ---------
Loss before income taxes and
discontinued operations (7,284) (16,100) (39,513) (5,483)
Income tax benefit (expense) 219 (1,095) 219 (1,095)
-------- --------- --------- ---------
Loss from continuing operations (7,065) (17,195) (39,294) (6,578)
Loss from discontinued
operations - - - (52)
-------- --------- --------- ---------
Cumulative effect of change in
accounting principle, net of
tax - - - -
-------- --------- --------- ---------
Net loss $(7,065) $(17,195) $(39,294) $(6,630)
======== ========= ========= =========
Loss per share - basic and
diluted:
Loss from continuing
operations $(0.23) $(0.58) $(1.33) $(0.22)
Loss from discontinued
operations - - - (0.00)
Net loss $(0.23) $(0.58) $(1.33) $(0.22)
======== ========= ========= =========
Weighted average shares
outstanding:
Basic 30,105 29,429 29,592 29,980
======== ========= ========= =========
Diluted 30,105 29,429 29,592 29,980
======== ========= ========= =========
Schedule 2
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, In Thousands Except Per Share Amounts)
Dec. 31, Dec. 31,
Assets 2004 2003
---------- ----------
Current assets:
Cash and cash equivalents $85,860 $97,798
Restricted cash 4,690 3,635
Accounts receivable-trade, net of allowance of
$4,869 and $4,865 39,413 41,718
Materials and supplies 6,623 10,099
Prepayments and other current assets 3,724 5,850
---------- ----------
Total current assets 140,310 159,100
Property, plant and equipment 1,061,767 1,041,904
Less: Accumulated depreciation and amortization 649,455 603,760
---------- ----------
Property, plant and equipment, net 412,312 438,144
Goodwill 38,403 38,403
Intangible Assets 21,871 22,055
Debt issuance costs 15,482 18,939
Deferred charges and other assets 8,749 8,750
---------- ----------
Total assets $637,127 $685,391
========== ==========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current portion of long-term obligations $2,298 $1,982
Accounts payable-affiliate 3,973 5,082
Accounts payable, accrued and other current
liabilities 53,843 47,303
Income taxes payable - 1,095
Advance billings and customer deposits 8,948 8,766
---------- ----------
Total current liabilities 69,062 64,228
Long-term obligations, net of current portion 523,591 548,238
Other deferred credits and long-term liabilities 77,916 71,065
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, no par, 5,000 authorized, no
shares issued and outstanding - -
Common stock, $.01 par value; 145,000 shares
authorized, 35,245 and 33,611 shares issued
and 30,695 and 29,343 outstanding, respectively 352 336
Common stock, $.01 par value; 0 and 267 shares
subject to mandatory redemption - (1,198)
Treasury stock, 4,549 and 4,268 shares,
respectively, at cost (18,443) (17,118)
Paid in capital in excess of par value 287,966 278,181
Accumulated deficit (298,786) (253,798)
Accumulated other comprehensive loss (4,531) (4,543)
---------- ----------
Total stockholders' equity (deficit) (33,442) 1,860
---------- ----------
Total liabilities and stockholders' equity $637,127 $685,391
========== ==========
Schedule 3
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Years ended December 31, 2004 and 2003
(Unaudited, in Thousands)
2004 2003
-------- ---------
Net cash provided by operating activities $57,827 $50,411
Cash Flows from Investing Activities:
Construction & capital expenditures, net of
capitalized interest (51,422) (48,566)
Net proceeds from sale of business - 155,269
Placement of funds in restricted account (1,055) (3,725)
Release of funds from escrow - 3,539
-------- ---------
Net cash used by investing activities (52,477) 106,517
Cash Flows from Financing Activities:
Proceeds from the issuance of long-term debt, net
of discounts - 375,970
Debt issuance costs - (14,000)
Repayments of long-term debt (26,962) (434,102)
Purchase of treasury stock (127) (5,830)
Issuance of common stock 9,801 267
-------- ---------
Net cash provided (used) by financing
activities (17,288) (77,695)
Increase (decrease) in cash (11,938) 79,233
Cash, Beginning of period 97,798 18,565
-------- ---------
Cash, End of period $85,860 $97,798
======== =========
Supplemental Cash Flow Data:
Interest paid, net of capitalized interest $45,470 $51,372
======== =========
Income taxes paid, net of refund $876 $-
======== =========
Supplemental Noncash Transactions:
Interest rate swap marked to market $- $(14,152)
======== =========
Property acquired under a mortgage $- $2,340
======== =========
Minimum pension liability adjustment $(12) $(191)
======== =========
Dividend declared, but not paid $(5,694) $-
======== =========
Schedule 4
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF ADJUSTED REVENUES
For the Three Months Ended March 31, 2001 and 2000
(Unaudited, in Thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Total operating revenues $75,125 $77,237 $302,707 $323,847
Adjustment for termination of
the State of Alaska TPA
contract - (4,479) - (19,927)
Adjustment for sale of the
Company's Directory
business - Directory revenues - - - (11,631)
--------- --------- --------- ---------
Total adjusted operating
revenues $75,125 $72,758 $302,707 $292,289
========= ========= ========= =========
Note: In an effort to provide investors with additional information
regarding the Company's results as determined by generally accepted
accounting principles (GAAP), the Company also discloses certain non-
GAAP information which management utilizes to assess performance.
Within this press release, the Company has disclosed its total
operating revenues adjusted to exclude the impact of disposed of
operations and the termination of the State of Alaska
Telecommunications Partnering Agreement (TPA) as the Company believes
that such data will facilitate more useful period-to-period
comparisons of the Company's ongoing operations.
Schedule 5
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF LOCAL TELEPHONE REVENUES
For the Three Months and Twelve Months Ended
December 31, 2004 and 2003
(Unaudited, in Thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Local telephone revenues:
Local network service $22,697 $22,686 $91,669 $96,656
Network access revenue 22,174 23,808 97,536 97,759
Deregulated and other 6,090 6,120 21,982 21,271
--------- --------- --------- ---------
Local telephone revenues $50,961 $52,614 $211,187 $215,686
========= ========= ========= =========
Schedule 6
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF EBITDA CALCULATION
For the Three Months and Year Ended December 31, 2004 and 2003
(Unaudited, in Thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
2004 2003 2004 2003
-------- --------- --------- ---------
Net cash provided (used) by
operating activities $19,093 $(59) $57,827 $50,411
Adjustments to reconcile net
income to net cash provided
by operating activities:
Loss on discontinued
operations - - - (52)
Loss (gain) on disposal of
assets and asset
impairments (29) 115 (2,854) 48,863
Depreciation and
amortization (20,701) (15,450) (78,387) (82,185)
Amortization of debt
issuance costs, warrants
and original issue
discount (1,085) (935) (6,088) (17,048)
Non-cash stock compensation
expense - (900) (900)
Other non-cash expenses (12) (4,118) (12) (4,118)
Other deferred credits (1,478) 100 (3,048) (1,643)
Changes in components of
working capital:
Accounts receivable and
other current assets (2,811) 1,604 (7,907) (7,451)
Accounts payable and
other current
liabilities 404 1,932 1,176 6,380
Deferred charges and
other assets (446) 515 (1) 1,072
Net cash used in
discontinued operations - 1 - 41
-------- --------- --------- ---------
Net income (loss) $(7,065) $(17,195) $(39,294) $(6,630)
Add (subtract):
Interest expense 12,234 19,992 51,288 71,470
Income tax (benefit)
expense (219) 1,095 (219) 1,095
Depreciation and
amortization 20,701 15,450 78,387 82,185
(Gain) loss on disposal of
assets and asset
impairment charges, net 29 (115) 2,854 (112,622)
Gain on foreign exchange - - - (4,261)
Goodwill impairment loss - - - -
Impairment charges related
to SOA - - - 63,759
Stock based compensation - 900 - 900
Non-cash pension expense 150 238 699 238
Non-cash litigation
reserves - 3,880 (300) 3,880
-------- --------- --------- ---------
EBITDA 25,830 24,245 93,415 100,014
Adjustment for discontinued
operations - - - 52
Adjustment for the
termination of airplane
lease - - 2,854 -
Adjustment for Neptune
capped commitment - - 750 -
Adjustment for sale of the
Company's directory
business - Directory
EBITDA - (164) - (7,165)
IDS transaction costs 375 - 375 -
-------- --------- --------- ---------
Adjusted EBITDA $26,205 $24,081 $97,394 $92,901
======== ========= ========= =========
Note: In an effort to provide investors with additional information
regarding the Company's results as determined by generally accepted
accounting principles (GAAP), the Company also discloses certain non-
GAAP information which management utilizes to assess performance and
believes provides useful information to investors. Within this press
release, the Company has disclosed its net gain before interest
expense, provisions for taxes, depreciation expense, amortization
expense and other non-cash charges inclusive of non cash pension
expense and a non cash release of litigation reserves following legal
settlement (EBITDA) because the Company believes it is an important
indicator because it provides information about our ability to service
debt, pay dividends and fund capital expenditures. The calculation of
"Adjusted EBITDA" as presented in this press release differs from the
calculation of, and therefore is not directly comparable to,
"Indenture EBITDA" as presented in ACS' prospectus supplement, dated
January 26, 2005, primarily because the calculation of "Adjusted
EBITDA" only includes adjustments that meet the criteria of being "non
recurring" under Regulation G. To further assist the reader in
understanding operations, EBITDA has also been adjusted to exclude the
impact of discontinued and disposed of operations (Adjusted EBITDA) as
the Company believes that such data will facilitate more useful
period-to-period comparisons of the Company's ongoing operations.
EBITDA and Adjusted EBITDA are not GAAP measures and should not be
considered a substitute for net income and loss and other measures of
financial performance recorded in accordance with GAAP.
Schedule 7A
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
(Unaudited)
Dec. 31, Sept. 30, Dec. 31,
--------- --------- ---------
2004 2004 2003
--------- --------- ---------
Local telephone:
Retail access lines (a) 207,905 209,442 218,058
Wholesale access lines 16,590 17,500 19,159
UNE loop lines 64,589 68,524 68,916
UNE platform lines 6,365 6,251 5,333
--------- --------- ---------
Total local telephone access lines 295,449 301,717 311,466
========= ========= =========
Average local telephone access lines
for the quarter 298,583 304,512 312,333
Average local telephone revenue per
line for the quarter $56.18 $56.10 $56.15
Quarterly growth rate in local
telephone access lines -2.1% -1.8% -0.6%
Wireless
Covered population 482,251 480,422 480,422
Ending subscribers 100,657 95,529 87,017
Average subscribers for the quarter 98,093 93,306 85,505
Quarterly growth rate 5.4% 4.9% 3.6%
Activations for the quarter 10,642 9,219 6,865
Deactivations for the quarter 5,514 4,773 3,841
Average monthly churn for the quarter 1.7% 1.7% 1.4%
Penetration 20.9% 19.9% 18.1%
Quarterly minutes of use (000's) (b) 90,483 93,100 69,117
Average revenue per subscriber for the
quarter (c) $45.42 $47.43 $39.59
Long Distance:
Long distance subscribers 47,050 44,334 43,166
Quarterly minutes of use (000's) 34,779 36,614 35,795
Average subscribers for the quarter 45,692 43,494 43,333
Average revenue per subscriber for the
quarter $26.09 $29.72 $33.33
Internet:
DSL subscribers 24,711 22,596 17,784
Dial-Up and other service subscribers 22,842 23,699 28,277
--------- --------- ---------
Total Internet subscribers 47,553 46,295 46,061
========= ========= =========
Average subscribers for the quarter 46,924 45,739 45,706
Average DSL & dial up revenue per
subscriber for the quarter (d) $28.86 $28.98 $29.83
(a) Prior period retail access lines impacted by change in line count
methodology.
(b) Wireless MOU have been restated to include prepaid airtime
certificates.
(c) Wireless ARPU has been restated to better reflect ongoing revenue
derived from ACS's wireless customers. The restated ARPU excludes
equipment sales, foreign roaming (non-ACS customers roaming on
ACS's network) and access termination revenue. Previously,
wireless ARPU was based on all wireless revenues, including those
that were not derived from ACS's customer base.
(d) Internet ARPU has been restated to include only DSL and dial-up
revenues. Previously, internet ARPU included all internet
revenues; however, the customer base included only DSL and dial-
up subscribers. The restated ARPU provides consistency between
revenues and customer counts.
Schedule 7B
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
(Unaudited)
Dec. 31, Sept. 30, Net
2004 2004 Movement
--------- --------- -----------
Local telephone retail access lines 207,905 209,442 (1,537)
Wireless subscribers 100,657 95,529
Less adjustment for resellers (6,425) (6,655)
--------- ---------
94,232 88,874 5,358
--------- ---------
Long distance subscribers 47,050 44,334 2,716
DSL and dial up subscribers 47,553 46,295 1,258
--------- --------- -----------
396,740 388,945 7,795
========= ========= ===========
Schedule 8
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF FREE CASHFLOWS
(Unaudited, in Thousands)
Three Twelve
Months Months
Ended Ended
Dec. 31, Dec. 31,
---------- ----------
2004 2004
---------- ----------
Net cash provided by operating activities $19,093 $57,827
Total construction and capital expenditures (13,338) (51,422)
---------- ----------
Free Cashflow 5,755 6,405
CDMA Growth & Neptune optical fiber capacity(e) 1,918 16,021
---------- ----------
Adjusted free cashflow $7,673 $22,426
========== ==========
(e) CDMA Growth & Neptune optical fiber capacity is inclusive of a
$1.3 million capital investment to support wireless number
portability.
Note: In an effort to provide investors with additional information
regarding the Company's results as determined by generally accepted
accounting principles (GAAP), the Company also discloses certain non-
GAAP information which management utilizes to assess performance and
believes provides useful information to investors. Within this press
release, the Company has disclosed net cashflow provided by operations
net of total construction and capital expenditures (free cashflow) and
free cashflow adjusted for growth capital investments in CDMA wireless
technology and Neptune optical fiber capacity, which the Company plans
to fund from existing cash reserves (Adjusted free cashflow). The
Company believes it is an important indicator because it provides
information about our ability to service debt and pay dividends. Free
cashflow and adjusted free cashflow are not GAAP measures and should
not be considered a substitute for increase (decrease) in cash and
other measures of financial performance recorded in accordance with
GAAP.
CONTACT: Alaska Communications Systems
Mary Ann Pease, 907-297-3000
mpease@acsalaska.com
or
Lippert/Heilshorn & Associates
Kirsten Chapman, 415-433-3777 (ACS Investors)
David Barnard, CFA, 415-433-3777 (ACS Investors)
david@lhai-sf.com