Alaska Communications Reports First Quarter 2005 Results; Revenue Increases to $77.4 Million from $75.4 Million in Fourth Quarter 2004; EBITDA Up 23% to $27.6 Million Compared to First Quarter 2004.ANCHORAGE Anchorage (ăng`kərĭj), city (1990 pop. 226,338), Anchorage census div., S central Alaska, a port at the head of Cook Inlet; inc. 1920. , Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States -- Wireless Revenue Up 47% Compared to First Quarter 2004 and Sixth Consecutive Quarter of Record Subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. Growth Alaska Communications Systems This article is about the current telecommunications company. For the historical "Alaska Communications System", see AT&T Alascom. Alaska Communications Systems, (or ACS) is a telecommunications corporation, headquartered in Anchorage, Alaska. Group, Inc. ("ACS (Asynchronous Communications Server) See network access server. ") (Nasdaq:ALSK) today reported financial results for its first quarter ended March 31, 2005. "Execution of ACS' strategic priorities remains on track in 2005," stated Liane li·an·a also li·ane n. Any of various climbing, woody, usually tropical vines. [Alteration of French liane, probably from lier, to bind, from Old French; see liable.] Pelletier Pelletier is the name of several people.
Pelletier added, "We continue to drive profitable revenue growth by increasing retail relationships. In both the business and consumer segments, our wireless and data product lines are most often used to establish new relationships, into which we upsell local and long distance. With those steps, we help make the customer's life easier as we grow ACS' share of wallet Share of Wallet (SOW) is a survey method used in performance management that helps managers understand the amount of business a company gets from specific customers. . The full range of market-facing activities is complemented by an organization-wide emphasis on process improvement. Each to varying degrees, the ten process improvement teams launched at the end of 2004 are focused on streamlining the customer experience, driving cost efficiency and stimulating stim·u·late v. stim·u·lat·ed, stim·u·lat·ing, stim·u·lates v.tr. 1. To rouse to activity or heightened action, as by spurring or goading; excite. See Synonyms at provoke. 2. revenue productivity." "In terms of investing behind the growth, we have found that the market reception of our CDMA-based products coupled with our more efficient build procedures are allowing ACS to complete the deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of our statewide CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. network on an accelerated basis and remain within capex guidance. Finally, the volumes of traffic generated across our various network platforms prompted us to initiate INITIATE. A right which is incomplete. By the birth of a child, the husband becomes tenant by the curtesy initiate, but his estate is not consummate until the death of the wife. 2 Bouv. Inst. n. 1725. the process of exercising ACS' option to assume additional fiber capacity within the state." Financing Transactions During the quarter, ACS issued and sold approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 9.9 million new common shares in a public offering, receiving total net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $76.5 million after payment of underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. discounts and other stock issuance costs. Additionally, a series of debt transactions were completed, including: --Entry into a new $380 million senior secured credit facility, consisting of a $335 million term loan facility and a $45 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility; --Entry into two 5-year interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. : one rate swap fixing $135 million of the new senior secured term loan at 6.13% and a second swap fixing $85 million of the senior secured term loan at 6.50%; --Repayment of the outstanding balance of $198.0 million under the previous senior secured credit facility; --Repurchase of approximately $59.4 million outstanding principal amount of 9.875% senior notes due 2011; and --Repurchase of all of the $147.5 million outstanding principal amount of 9.375% senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes due 2009. As a result, total debt declined by $66.5 million from December December: see month. 31, 2004, to $461.1 million, as of March 31, 2005. In addition, as of the end of first quarter 2005, ACS had fixed rates on 75 percent of its total debt and floating rates on the remaining $115 million generally bearing interest at LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 200 basis points. David Wilson David Wilson may refer to:
conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with our confidence in the continued strength of our cash flows, contributed to the decision in March to increase ACS' quarterly cash dividend to $0.20 per share, an 8 percent increase over the prior dividend rate of $0.185. In addition, we have initiated a dividend reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. and direct stock purchase plan providing a convenient and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. way for investors to purchase ACS common stock." Quarterly Financial Highlights For the first quarter ending March 31, 2005: --Revenues were $77.4 million, which represented a 2.6 percent increase over first quarter 2004 revenues of $75.4 million; --EBITDA increased by 23.5 percent to $27.6 million from $22.4 million for the first quarter of 2004, which was impacted by $3.5 million of restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. ; --Operating income increased 136 percent to $7.3 million compared to the first quarter 2004; and --Net loss increased to $28.2 million from $8.8 million and to a loss of $0.77 per share from $0.30 per share in the prior year. The increase in net loss is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to an increase in interest expense, which rose to $36.0 million from $12.1 million. Interest expense included $26.2 million of non-recurring charges associated with our accretive debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: , comprised of $12.8 million of tender premiums and $13.4 million for the write off of unamortized debt issuance costs and settlement of original issue discounts. Wilson Wilson, city (1990 pop. 36,930), seat of Wilson co., E N.C., in a rich agricultural region; inc. 1849. It is a commercial and industrial center with a large tobacco market. Manufactures include textile goods (especially clothing), metal products, and processed foods. added, "Our effective execution against strategic priorities is evident in our first quarter results. Standout areas of performance include wireless, in which a 47.0 percent increase in revenue paired with an operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. increase of just 20.9 percent drove wireless EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become margins from 31.7 percent to 43.8 percent. In addition, Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and interexchange services recorded year-over-year revenue increases and simultaneous decreases in associated costs." "Cash used in operating activities in the quarter was $5.2 million and uses included a settlement of tender premiums and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. expense of $12.8 million and $7.3 million, respectively. As a result, ACS closed the quarter with a cash balance of $68.2 million. Looking ahead, we are confident that we have the right business model and mix of assets in the right market to sustain and grow cash flow over time." Metric Highlights: First Quarter 2005 Compared to Fourth Quarter 2004 Wilson commented, "Postpaid post·paid adj. With the postage having been paid in advance. postpaid Adverb, adj with the postage prepaid Adj. 1. wireless is the primary driver of growth for ACS, and we continue to deliver compelling results against four key factors that demonstrate the strength of our product offerings and customer loyalty. We are rapidly growing our postpaid subscriber base, which increased by 5.2 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen to 88,200. Postpaid ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. continues to move higher resulting from the depth of our product offering and the advent of CETC CETC CANMET Energy Technology Centre (Canada) CETC Competitive Eligible Telecommunications Carrier (FCC) CETC Connecticut Employment and Training Commission CETC Central European Transport Corridor revenue, increasing 21.1 percent to $53.28 compared to $43.98 in the first quarter of last year. The cost of gross additions remains consistently low at ACS and was less than $200 per subscriber in the first quarter. Lastly, our postpaid churn rate (1) The percentage of customers who cancel their online, cellphone or other subscription service during a certain time period. (2) The percentage of employees who leave the company during a certain time period. See churning. is industry leading coming in at 1.6 percent per month for the latest quarter. "At the end of the first quarter, we performed a review of our subscriber count methodology for prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. wireless and determined that we
would cease to count subscribers whose accounts had been inactive in·ac·tive adj. 1. Not active or tending to be active. 2. a. Not functioning or operating; out of use: inactive machinery. b. for six months. While this resulted in a 2,300 reduction in our prepaid base, it had no impact on previously reported revenue, net income or cash flows." ACS recorded the following for the first quarter 2005 compared to the fourth quarter 2004: --Increased the total number of retail customer relationships across all product lines by approximately 2,600 to over 398,800 total. --Recorded a sixth consecutive quarter of record subscriber growth by adding approximately 1,600 wireless subscribers, bringing the total to approximately 102,300. Churn churn: see butter. , inclusive of inclusive of prep. Taking into consideration or account; including. a 2,300 reduction in prepaid subscribers, averaged 2.4 percent per month. --Recorded wireless average revenue per unit (ARPU) of $48.65, inclusive of CETC revenue of $3.37, compared to $45.17. --Increased digital subscriber lines See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary ) 9.7 percent to over 27,100 as a result of increased emphasis on marketing activities. --Increased long distance subscribers almost 1,500 to 48,500 customers, a 3.2 percent increase, principally as a result of a focused selling effort and the bundling bundling, courtship custom, thought to have originated in Holland and the British Isles. It was extended to America, particularly to New England, and most widely practiced in the years prior to the Revolution of 1776. of the long distance product with other ACS services. --Recorded over 289,100 total local network access lines, which reflects a 510 line reduction due to a reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of revenue generating trunk A communications channel between two points. It generally refers to a high-bandwidth, fiber-optic line between telephone switching centers (central offices). Telephone "trunks" handle thousands of simultaneous voice and data signals, whereas telephone "lines" are the wires from the lines used to service cellular carriers rather than end user lines. Net of this reclassification, access lines decreased by approximately 5,800 lines, or 2.0 percent, which is reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of industry trends. Business Outlook For the year 2005, ACS reiterates its previous outlook: Revenue for the full year is expected to be in the range from $310 million to $320 million and EBITDA to be in the range from $108 million to $112 million. Net cash interest expense is expected to decline to approximately $31 million, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma for the first quarter debt restructuring being in place from January January: see month. 1, 2005. ACS expects capital expenditures for 2005 to range from $65 million to $70 million, comprised of maintenance capital expenditures of approximately $35 million and pre-funded growth capital expenditures of between $30 million and $35 million. Conference Call The company will host a conference call and live webcast today at 5:00 p.m. Eastern Time to discuss first quarter results. For parties in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , call 800-218-0204 to access the earnings call. International parties can access the call at 303-262-2075. The live webcast of the conference call is accessible from the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " 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 Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , May 6, 2005 midnight Eastern time. To hear the replay, parties in the United States and Canada should call 800-405-2236 and enter pass code 11028616. International parties should call 303-590-3000 and enter pass code 11028616. 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 its 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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 year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. net cash provided by operating activities at this time. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Statements about future results and other expectations constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against 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 Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. , 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 spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. in the company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004 and other filings with the SEC, including under headings such as "Risk factors" and "Management's discussion and analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial 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. Tables Follow
Schedule 1
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in Thousands, Except per Share Amounts)
Three Months Ended
March 31,
--------------------
2005 2004
----------- --------
Operating revenues:
Local telephone $51,565 $55,832
Wireless 17,056 11,601
Internet 5,061 4,613
Interexchange 3,726 3,409
----------- --------
Total operating revenues 77,408 75,455
Operating expenses:
Local telephone 30,523 32,574
Wireless 9,582 7,928
Internet 5,237 7,506
Interexchange 4,400 5,016
Depreciation and amortization 20,413 19,106
Loss (gain) on disposal of assets, net (68) 227
----------- --------
Total operating expenses 70,087 72,357
Operating income 7,321 3,098
Other income and expense:
Interest expense (35,970) (12,052)
Interest income 494 242
Equity in income of investments 4 4
Other (49) (61)
----------- --------
Total other income (expense) (35,521) (11,867)
----------- --------
Loss before income taxes (28,200) (8,769)
Income tax benefit (expense) - -
----------- --------
Net loss $(28,200) $(8,769)
=========== ========
Loss per share - basic and diluted:
Net loss $(0.77) $(0.30)
=========== ========
Weighted average shares outstanding:
Basic 36,730 29,333
=========== ========
Diluted 36,730 29,333
=========== ========
Schedule 2
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, In Thousands Except Per Share Amounts)
March 31, December 31,
Assets 2005 2004
----------- ------------
Current assets:
Cash and cash equivalents $63,466 $85,860
Restricted cash 4,690 4,690
Accounts receivable-trade, net of
allowance of $4,895 and $4,869 38,440 39,413
Materials and supplies 7,056 6,623
Prepayments and other current assets 4,419 3,724
----------- ------------
Total current assets 118,071 140,310
Property, plant and equipment 1,068,740 1,061,767
Less: Accumulated depreciation and
amortization 668,596 649,455
----------- ------------
Property, plant and equipment, net 400,144 412,312
Goodwill 38,403 38,403
Intangible Assets 21,826 21,871
Debt issuance costs 14,294 15,482
Deferred charges and other assets 9,337 8,749
---------- ------------
Total assets $602,075 $637,127
========== ============
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current portion of long-term obligations $393 $2,298
Accounts payable-affiliate 2,686 3,973
Accounts payable, accrued and other
current liabilities 48,862 53,843
Advance billings and customer deposits 8,893 8,948
---------- ------------
Total current liabilities 60,834 69,062
Long-term obligations, net of current portion 457,321 523,591
Other deferred credits and long-term
liabilities 74,784 77,916
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, 45,167 and
35,245 shares issued and 40,617 and
30,695 outstanding, respectively 452 352
Treasury stock, 4,549 shares at cost (18,443) (18,443)
Paid in capital in excess of par value 350,493 287,966
Accumulated deficit (321,292) (298,786)
Accumulated other comprehensive loss (2,074) (4,531)
---------- ------------
Total stockholders' equity (deficit) 9,136 (33,442)
---------- ------------
Total liabilities and stockholders' equity $602,075 $637,127
========== ============
Schedule 3
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in Thousands)
Three Months Ended
March 31,
2005 2004
--------- --------
Cash Flows from Operating Activities:
Net loss $(28,200) $(8,769)
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss (gain) on disposal of assets and asset
impairments (68) 227
Depreciation and amortization 20,413 19,106
Amortization of debt issuance costs,
warrants and original issue discount 13,807 928
Other deferred credits (4,082) (2,285)
Changes in components of working capital:
Accounts receivable and other current
assets (155) 4,964
Accounts payable and other current
liabilities (8,784) (8,658)
Deferred charges and other assets 1,869 206
--------- --------
Net cash (used) provided by operating activities $(5,200) $5,719
Cash Flows from Investing Activities:
Construction & capital expenditures (7,182) (10,356)
--------- --------
Net cash used by investing activities (7,182) (10,356)
Cash Flows from Financing Activities:
Repayments of long-term debt (405,157) (828)
Proceeds from the issuance of long-term debt,
net of discounts 335,000 -
Debt issuance costs (10,637) -
Payment of stock dividend (5,679) -
Purchase of treasury stock - (63)
Issuance of common stock 84,278 9
Stock issuance costs (7,817) -
--------- --------
Net cash used by financing activities (10,012) (882)
Decrease in cash (22,394) (5,519)
Cash, Beginning of period 85,860 97,798
--------- --------
Cash, End of period $63,466 $92,279
========= ========
Supplemental Cash Flow Data:
Interest paid $30,915 $11,876
========= ========
Income taxes paid, net of refund $- $1,120
========= ========
Supplemental Noncash Transactions:
Interest rate swap marked to market $2,457 $-
========= ========
Dividend declared, but not paid $(8,140) $-
========= ========
Schedule 4
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF LOCAL TELEPHONE REVENUES
(Unaudited, in Thousands)
Three Months Ended
March 31,
==================
2005 2004
========= ========
Local telephone revenues:
Local network service $22,218 $22,753
Network access revenue 23,350 27,695
Deregulated and other 5,997 5,384
--------- --------
Local telephone revenues $51,565 $55,832
========= ========
Schedule 5
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF EBITDA CALCULATION
(Unaudited, in Thousands)
Three Months Ended
March 31,
=================
2005 2004
======== ========
Net loss $(28,200) $(8,769)
Add (subtract):
Interest expense 35,970 12,052
Interest income (494) (242)
Depreciation and amortization 20,413 19,106
(Gain) loss on disposal of assets and asset
impairment charges, net (68) 227
-------- --------
EBITDA $27,621 $22,374
======== ========
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. The Company has disclosed its net
gain before interest expense, provisions for taxes,
depreciation expense, amortization expense (EBITDA) because
the Company believes it is an important indicator as it
provides information about our ability to service debt, pay
dividends and fund capital expenditures. EBITDA is not a
GAAP measure and should not be considered a substitute for
net income and loss and other measures of financial
performance recorded in accordance with GAAP.
The calculation of "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 "Indenture EBITDA"
allows for adjustments that meet the criteria of being "non-
cash", "extraordinary" or otherwise "non recurring" in
nature.
Schedule 6A
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
(Unaudited)
March December March
31, 31, 31,
2005 2004 2004
======== ======== ========
Local telephone:
Retail access lines(a) 204,458 207,395 213,784
Wholesale access lines 15,897 16,590 20,068
UNE loop lines 62,263 64,589 69,624
UNE platform lines 6,551 6,365 5,178
-------- -------- --------
Total local telephone access lines 289,169 294,939 308,654
======== ======== ========
Average local telephone access lines
for the quarter 292,054 298,073 309,805
Average local telephone revenue per
line for the quarter $58.85 $56.99 $60.07
Quarterly growth rate in local
telephone access lines -2.0% -2.1% -0.7%
Wireless
Covered population 482,251 482,251 480,422
Post paid cellular subscribers 88,174 83,828 72,998
Average post paid cellular
subscribers 86,001 81,478 72,191
Quarterly growth rate - post paid
cellular subscribers 5.2% 5.9% 2.3%
Activations for the quarter 8,653 9,393 4,029
Deactivations for the quarter 4,307 4,692 2,414
Average monthly churn for the
quarter 1.6% 1.8% 1.1%
Average monthly revenue per
subscriber for the quarter(c) $53.28 $50.34 $43.98
Prepaid cellular subscribers 8,560 10,404 8,393
Wholesale cellular subscribers 5,545 6,425 6,600
Total cellular subscribers 102,279 100,657 87,991
Average subscribers for the
quarter 101,468 98,093 87,504
Quarterly growth rate 1.6% 5.4% 1.1%
Activations for the quarter 9,382 10,642 5,561
Deactivations for the quarter 7,760 5,514 4,587
Average monthly churn for the
quarter 2.4% 1.7% 1.7%
Penetration 21.2% 20.9% 18.3%
Quarterly minutes of use (000's)(b) 92,907 90,483 72,156
Average monthly revenue per
subscriber for the quarter(c) $48.65 $45.17 $40.30
Long Distance:
Long distance subscribers 48,542 47,050 42,053
Quarterly minutes of use (000's) 36,557 34,779 32,139
Average subscribers for the quarter 47,796 45,692 42,610
Average monthly revenue per subscriber
for the quarter $25.99 $26.09 $26.67
Internet:
DSL subscribers 27,115 24,711 19,433
Dial-Up and other service subscribers 21,984 22,842 26,257
-------- -------- --------
Total Internet subscribers 49,099 47,553 45,690
======== ======== ========
Average subscribers for the quarter 48,326 46,924 45,876
Average monthly DSL & dial up revenue
per subscriber for the quarter(d) $30.55 $28.86 $28.06
(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, space and power, 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. In addition, ACS has been granted competitive
eligible telecommunications carrier status (CETC) in the first Q
of 2005 which added $3.37 to cellular ARPU.
(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 6B
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
(Unaudited)
March 31, December 31, Net
2005 2004 Movement
========= ============= ==========
Local telephone retail access lines 204,458 207,395 (2,937)
Wireless subscribers 102,279 100,657
Less adjustment for resellers (5,545) (6,425)
--------- -------------
96,734 94,232 2,502
========= =============
Long distance subscribers 48,542 47,050 1,492
DSL and dial up subscribers 49,099 47,553 1,546
--------- ------------- ----------
Total 398,833 396,230 2,603
========= ============= ==========
Schedule 7
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF FREE CASHFLOWS
(Unaudited, in Thousands)
Three Months Ended
March 31,
==================
2005 2004
========= ========
Net cash (used) provided by operating activities $(5,200) $5,719
Total construction and capital expenditures (7,182) (10,356)
--------- --------
Free Cashflow (12,382) (4,637)
CDMA Growth 597 2,050
--------- --------
Adjusted free cashflow $(11,785) $(2,587)
========= ========
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. 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, 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.
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