Alaska Communications Reports Fourth Quarter and Year-end Results; Fifth Consecutive Quarter of Record Wireless Growth.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. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- Net Cash Provided by Operating Activities Rose to $19.1 Million for the Fourth Quarter E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]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 fourth quarter and year-ended December December: see month. 31, 2004. E[acute accent]"At the beginning of 2004, we set strategic priorities to shape ACS into a customer-driven operation, capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the under-served wireless market with 3G 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. technology, demonstrate growth and generate cash," 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.
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, 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." E[acute accent]Pelletier added, "Another goal was to favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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 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 that owns local and long distance, 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 wireless facilities, this month ACS substantially completed several capital markets transactions to provide the company greater financial flexibility and improved cash flow." E[acute accent]Recent Financing Transactions E[acute accent]In February February: see month. , 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 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). from the sale of such shares, after 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, of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $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 un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely $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. Term loan borrowings under the new senior credit facility generally bear interest at LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (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. E[acute accent]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 liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. the full $147.5 million outstanding principal amount of its 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. E[acute accent]David Wilson David Wilson may refer to:
v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. our first quarterly dividend of $0.185 per share, which was paid on January January: see month. 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 Dividend Reinvestment Plan (DRP) Plan which provides for automatic reinvestment of shareholder dividends in more shares of a company's stock, often without commissions. Some plans provide for the purchase of additional shares at a discount to market price. , which will offer investors the option to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. 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." E[acute accent]Quarterly Financial Highlights E[acute accent]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 dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: 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. E[acute accent]Also during the fourth quarter of 2004 compared to the fourth quarter of 2003: E[acute accent]--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; E[acute accent]--Adjusted 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 increased to $26.2 million from $24.1 million; and E[acute accent]--Interest expense declined to $12.2 million from $20.0 million due to an $8.0 million charge for the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of an interest rate swap 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. in the fourth quarter of 2003. E[acute accent]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 focus on streamlining business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets 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 absorb To offset sell orders or a new security offering with buy orders. and fund the growth of our underlying business and will also enhance the customer experience." E[acute accent]Fourth Quarter 2004 Metric Highlights E[acute accent]--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. E[acute accent]--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 churn: see butter. remained low at 1.7 percent per month. E[acute accent]--Recorded wireless average revenue per unit (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. ) of $45.42 compared to the seasonally stronger third quarter wireless ARPU of $47.43. E[acute accent]--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 ) 9.4 percent to over 24,700 compared to the third quarter of 2004 as a result of consumer and business 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. programs. E[acute accent]--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. E[acute accent]--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 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. E[acute accent]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 conjunction, in astronomy 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 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 (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. remains consistently low and came in at 1.7 percent per month for the latest quarter." E[acute accent]Annual Financial Review E[acute accent]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 inclusive of prep. Taking into consideration or account; including. a gain on the disposal of assets of $112.6 million and contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). and asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. 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. E[acute accent]Business Outlook E[acute accent]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. E[acute accent]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 To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. 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. E[acute accent]Conference Call E[acute accent]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 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. 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 800-219-6110 to access the earnings call. International parties can access the call at 303-262-2131. E[acute accent]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 Monday Monday: see week. , 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. E[acute accent]About Alaska Communications Systems E[acute accent]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. E[acute accent]Forward Looking EBITDA Guidance E[acute accent]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 net cash provided by operating activities at this time. E[acute accent]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 E[acute accent]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, 2003 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.
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.
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion