Alaska Communications Systems Reports Second Quarter 2006 Results.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 -- 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. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ALSK): --Revenue Increased 4.7% to $85.1 Million Compared to Second Quarter 2005 --Wireless Revenue Rose 26.2% to $26.9 Million --Cash Provided by Operating Activities Reached $22.7 Million and Grew 11.6% --EBITDA of $30.1 Million Grew 3.8% over Second Quarter 2005 --Retail Relationships Expanded to More than 432,600 Alaska Communications Systems Group, Inc. ("ACS (Asynchronous Communications Server) See network access server. ") (NASDAQ:ALSK) today reported financial results for its second quarter and six months ended June June: see month. 30, 2006. "We are proud of our second quarter financial performance and strategic accomplishments," said 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. additions. At the same time, we continued to convert TDMA (Time Division Multiple Access) A satellite and cellular phone technology that interleaves multiple digital signals onto a single high-speed channel. For cellular, TDMA triples the capacity of the original analog method (FDMA). subscribers to 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. , with 85 percent of our retail subscribers now on CDMA, and continued building our CDMA 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 footprints. These accomplishments were achieved with lower headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. this year than last." "Additionally, year over year achievements are significant. Retail access line losses have stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. at 3 percent, DSL subscriber growth topped 35 percent, long distance customers grew 19 percent and ACS wireless customers grew by 15 percent. As ACS total revenues grew by almost 5 percent, ACS wireless revenues grew by 26 percent. The contribution to total revenue from wireless now stands at 32 percent, up from 26 percent a year ago. Profitable ACS wireless growth continues even as the Alaskan wireless market has become more promotional and competitive. In the face of that increased competition, ACS remains focused on delivering superior product quality. ACS has been 'drive testing' its wireless services alongside those of its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. and has been sharing specific results of the tests in advertising. The Anchorage results, for example, show that ACS users experience approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 65 percent fewer dropped calls Dropped call is the common term for a wireless mobile phone call that is terminated unexpectedly as a result of technical reasons. Areas where users experience a large number of dropped calls are commonly referred to as dead zones. and approximately 73 percent fewer blocked calls than do those of the competition. These are meaningful service attributes for our customers and for those of our roaming The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. partners, who visit the state with CDMA devices and enjoy quality mobile voice and data connections," commented Pelletier. "Enabled in large part by our Process Improvement efforts, we have effectively funded profitable revenue growth, and we have posted strong 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 and cash flow," concluded Pelletier. Financial Highlights: Second Quarter 2006 Compared to Second Quarter 2005 --Revenues were $85.1 million, a 4.7 percent increase over second quarter 2005 revenues of $81.2 million. --Operating income increased 48.9 percent to $12.2 million compared to the second quarter 2005 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $8.2 million. --The company posted net income of $13.5 million, or $0.32 per share, inclusive of inclusive of prep. Taking into consideration or account; including. non-recurring gains of $6.7 million from the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of Rural Telephone Bank (RTB RTB Return(ed) to Base RTB Reasons to Believe (website) RTB Reasons to Believe (Pasadena, CA) RTB Right to Buy (UK home buying) ) class C stock that settled in April and $2.0 million from the Crest terrestrial Dealing with the earth. See terrestrial link. asset purchase. The net loss for the second quarter 2005 was $312,000, or a net loss of $0.01 per share. --Net cash provided by operating activities increased to $22.7 million, or 11.6 percent, compared to $20.3 million of net cash in the same period a year ago. --EBITDA was $30.1 million, an increase of 3.8 percent, compared to $29.0 million for the year ago period. David Wilson David Wilson may refer to:
adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen to $35.6 million, providing adequate liquidity to complete our pre-funded capital expenditure program this year." Metric Highlights: Second Quarter 2006 Compared to First Quarter 2006 --Increased the total number of retail customer relationships across all product lines by approximately 7,600, or 1.8 percent, to more than 432,600. --Increased wireless post-paid Adv. 1. post-paid - having the postage paid by the sender; "I will send it post-paid" post-free post-paid adj → porte pagado post-paid adj (Brit subscribers by 4.1 percent, or almost 4,600. Net of prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. and wholesale wireless reductions, the
company added over 4,700 wireless subscribers, bringing the total number
of wireless subscribers to almost 123,900.--Recorded average wireless monthly post-paid churn churn: see butter. of 1.6 percent compared to 1.9 percent in the prior quarter. Overall average wireless monthly churn was 1.7 percent compared to 2.4 percent. --Recorded wireless average revenue per user (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 $56.51, down from $57.30, inclusive 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 of $9.32 and $8.93, respectively. ARPU for the quarter was adversely impacted by an $800,000 increase in reserves, following a refinement in estimates for a customer segment based on collection history. --Eighty-five percent of ACS retail subscribers are on the CDMA network, up from 77 percent at first quarter 2006. --The ACS CDMA wireless network now covers 78 percent of the Alaskan population, approaching the 80 percent-plus population coverage target. --Increased DSL by 4.7 percent, or 1,800 lines, to almost 40,000 lines. --Increased long distance subscribers by over 2,000 to over 60,500 customers. --Recorded over 197,000 retail local access lines, reflecting a retail access line decrease of approximately 380 lines, inclusive of the turn-down of 240 internal use lines. 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 turn-down of internal use lines, retail access decline was 0.1 percent. --Recorded approximately 262,700 total local access lines. Total access lines decreased by 2,700, substantially all of which were wholesale and UNE lines. Six Months Financial Review For the six months ended June 30, 2006, total revenues were $167.7 million, which represented a 5.7 percent increase over revenues of $158.6 million for the same period last year. Net income for the six months ended June 30, 2006, was $5.1 million, or $0.12 per share, compared to a net loss of $28.8 million, or $0.74 per share, in the same period in 2005. Net cash provided by operating activities for the first half of 2006 was $37.9 million, as compared to $15.1 million in the same period in 2005. EBITDA for the six months ended June 30, 2006 was $58.4 million, an increase of 3.1 percent from $56.7 million in the same period last year. 2006 Business Outlook Reaffirming guidance for the full-year 2006, revenues are expected to be in the range of $335 million to $345 million, and EBITDA is expected to be in the range of $112 million to $116 million, exclusive of stock-based compensation. For the year 2006, net cash interest expense is expected to be approximately $28 million. ACS has also reaffirmed 2006 capital expenditure guidance to be approximately $58 million, comprised of maintenance capital expenditures of approximately $37 million and pre-funded growth capital expenditures, DSL footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. expansion and process improvement initiatives of approximately $21 million, with investment for both categories back loaded to the second half of the year. Conference Call The company will host a conference call and live webcast today at 5:00 p.m. Eastern Time to discuss the second 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 866-250-2351 to access the earnings call. International parties can access the call at 303-262-2050. Additionally, ACS will offer a live webcast of the conference call, 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 on the ACS website. A telephonic replay of the conference call will also be available two hours after the call and will run until Monday Monday: see week. , July July: see month. 31, 2006 at midnight ET. To hear the replay, parties in the United States and Canada should call 800-405-2236 and enter pass code 11065532. International parties should call 303-590-3000 and enter pass code 11065532. About Alaska Communications Systems ACS is the leading integrated communications provider in Alaska, offering local telephone service, wireless, long distance, data, and 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 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 ending December December: see month. 31, 2006. 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. 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. We have included in this press release certain "forward-looking statements," as that term is defined in 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 forward-looking statements are based on management's beliefs as well as on a number of assumptions concerning future events made using information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside ACS' control. Such factors are, without limitation, rapid technological developments and changes in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry; ongoing deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. and increased competition; changes in our revenue from Universal Service Funds; regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. limitations on our ability to change our pricing for communications services; changes in accounting policies or practices; our ability to bundle To sell hardware and software as a combined product or to combine several software packages for sale as a single unit. Contrast with unbundle. See bundled software and bundling. our products and services; changes in the demand for our products and services; changes in general industry and market conditions; changes in interest rates or other general national, regional or local economic conditions; governmental and public policy changes; our ability to generate sufficient earnings and cash flows to continue to make dividend payments to our stockholders; the continued availability of financing necessary to support our future business; and the success of any future acquisitions. For further information regarding risks and uncertainties associated with ACS' business, please refer to the company's SEC filings, including, but not limited to, the sections entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "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" on our annual report on 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, 2005 and on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2006. Copies of our SEC filings may be obtained by contacting our investor relations department at (907) 564-7556 or by visiting our investor relations website at http://www.alsk.com. All information in this release is as of July 27, 2006. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.
Schedule 1
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in Thousands, Except per Share Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Operating revenues:
Local telephone $ 47,486 $ 50,341 $ 95,761 $101,906
Wireless 26,946 21,354 51,454 38,410
Internet 6,089 5,508 12,075 10,569
Interexchange 4,550 4,022 8,423 7,748
--------- --------- --------- ---------
Total operating revenues 85,071 81,225 167,713 158,633
Operating expenses:
Local telephone 31,519 30,841 63,628 61,652
Wireless 14,931 11,990 28,745 22,020
Internet 6,696 5,590 14,588 10,839
Interexchange 3,322 3,929 5,426 7,911
Depreciation and
amortization 16,034 20,692 33,131 41,105
Loss (gain) on disposal of
assets, net 383 - 1,105 (68)
--------- --------- --------- ---------
Total operating expenses 72,885 73,042 146,623 143,459
Operating income 12,186 8,183 21,090 15,174
Other income and expense:
Interest expense (7,643) (8,865) (15,617) (18,631)
Loss on extinguishment of
debt - - (9,650) (26,204)
Interest income 402 412 794 906
Other 8,561 (42) 8,517 (87)
--------- --------- --------- ---------
Total other income
(expense) 1,320 (8,495) (15,956) (44,016)
--------- --------- --------- ---------
Net profit (loss) $ 13,506 $ (312) $ 5,134 $(28,842)
========= ========= ========= =========
Profit (loss) per share:
Basic $ 0.32 $ (0.01) $ 0.12 $ (0.74)
========= ========= ========= =========
Diluted $ 0.31 $ (0.01) $ 0.12 $ (0.74)
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 41,989 40,896 41,891 38,824
--------- --------- --------- ---------
Diluted 44,189 40,896 43,919 38,824
--------- --------- --------- ---------
Schedule 2
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, In Thousands Except Per Share Amounts)
June 30, December 31,
Assets 2006 2005
------------- -------------
Current assets:
Cash and cash equivalents $ 32,123 $ 28,877
Restricted cash 3,450 4,415
Short-term investments - 10,525
Accounts receivable-trade, net of
allowance of $6,742 and $6,206 38,289 41,080
Materials and supplies 10,318 7,885
Prepayments and other current assets 4,347 3,445
------------- -------------
Total current assets 88,527 96,227
Property, plant and equipment 1,128,700 1,116,780
Less: accumulated depreciation and
amortization 742,442 718,750
------------- -------------
Property, plant and equipment, net 386,258 398,030
Goodwill 38,403 38,403
Intangible Assets 21,604 21,688
Debt issuance costs 10,395 11,733
Deferred charges and other assets 20,059 10,332
------------- -------------
Total assets $ 565,246 $ 576,413
============= =============
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current portion of long-term obligations $ 1,003 $ 683
Accounts payable-affiliate 2,963 2,844
Accounts payable, accrued and other
current liabilities 51,007 54,920
Advance billings and customer deposits 9,735 9,712
------------- -------------
Total current liabilities 64,708 68,159
Long-term obligations, net of current
portion 437,538 444,895
Other deferred credits and long-term
liabilities 80,411 82,223
------------- -------------
Total liabilities 582,657 595,277
------------- -------------
Stockholders' equity (deficit):
Common stock, $.01 par value; 145,000
shares authorized, 46,625 and 46,230
shares issued and 42,076 and 41,681
shares outstanding, respectively 466 462
Treasury stock, 4,549 shares at cost (18,443) (18,443)
Paid in capital in excess of par value 319,088 333,522
Accumulated deficit (329,593) (334,727)
Accumulated other comprehensive income 11,071 322
------------- -------------
Total stockholders' equity (deficit) (17,411) (18,864)
------------- -------------
Commitments and contingencies
Total liabilities and stockholders' equity
(deficit) $ 565,246 $ 576,413
============= =============
Schedule 3
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- --------------------
2006 2005 2006 2005
--------- --------- --------- ----------
Cash Flows from Operating
Activities:
Net profit (loss) $ 13,506 $ (312) $ 5,134 $ (28,842)
Adjustments to reconcile
net income to net cash
provided (used) by
operating activities:
Depreciation and
amortization 16,034 20,692 33,131 41,105
Loss (gain) on disposal
of assets, net 383 - 1,105 (68)
Gain on sale of long-term
investments (6,685) - (6,685) -
Amortization of debt
issuance costs and
original issue discount 479 670 4,213 14,477
Stock based compensation 1,647 209 3,223 539
Other deferred credits (617) 666 (3,534) (3,416)
Changes in components of
working capital:
Accounts receivable and
other current assets (4,959) (3,733) (544) (3,888)
Accounts payable and
other current
liabilities 2,310 881 1,772 (7,903)
Deferred charges and
other assets 570 1,244 44 3,113
--------- --------- --------- ----------
Net cash provided by
operating activities $ 22,668 $ 20,317 $ 37,859 $ 15,117
Cash Flows from Investing
Activities:
Construction and capital
expenditures (11,203) (22,783) (26,937) (29,965)
Purchase of short-term
investments (12,425) (16,795) (19,925) (67,745)
Proceeds from the sale of
short-term investments 14,425 28,200 30,450 83,000
Sale of long-term
investments 7,663 - 7,663 -
Placement of funds in
restricted account - (300) - (300)
Release of funds from
escrow 965 445 965 445
--------- --------- --------- ----------
Net cash used by investing
activities (575) (11,233) (7,784) (14,565)
Cash Flows from Financing
Activities:
Payments of long-term
debt (193) (173) (61,463) (405,330)
Proceeds from the
issuance of long-term
debt - - 52,900 335,000
Debt issuance costs - - (1,349) (10,637)
Payment of dividend on
common stock (9,020) (8,123) (17,356) (13,802)
Issuance of common stock 564 3,928 439 88,206
Stock issuance costs - - - (7,817)
--------- --------- --------- ----------
Net cash used by financing
activities (8,649) (4,368) (26,829) (14,380)
Increase/(decrease) in cash
and cash equivalents 13,444 4,716 3,246 (13,828)
Cash and cash equivalents,
beginning of period 18,679 32,116 28,877 50,660
--------- --------- --------- ----------
Cash and cash equivalents,
end of period $ 32,123 $ 36,832 $ 32,123 $ 36,832
========= ========= ========= ==========
Supplemental Cash Flow Data:
Interest paid $ 6,961 $ 5,237 $ 16,953 $ 21,539
(Increase)/decrease in
accounts payable for
construction and capital
expenditures (1,040) - 6,279 -
Supplemental Noncash
Transactions:
Interest rate swap $ (5,100) $ 4,631 $(10,749) $ 2,175
Dividend declared, but not
paid (28) (163) (9,060) (8,303)
Stock funding of pension
plan - 599 - 599
Schedule 4
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF LOCAL TELEPHONE REVENUES
(Unaudited, in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Local telephone revenue:
Local network service $ 20,159 $ 21,512 $ 40,056 $ 43,730
Network access 22,093 22,798 46,119 46,148
Deregulated and other 5,234 6,031 9,586 12,028
--------- --------- --------- ---------
Total local telephone revenue $ 47,486 $ 50,341 $ 95,761 $101,906
========= ========= ========= =========
Schedule 5
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
SCHEDULE OF EBITDA CALCULATION
(Unaudited, in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Net cash provided (used) by
operating activities $ 22,668 $ 20,317 $ 37,859 $ 15,117
Adjustments to reconcile net
income to net cash
(provided) used by
operating activities:
Depreciation and
amortization (16,034) (20,692) (33,131) (41,105)
Gain (loss) on disposal
of assets, net (383) - (1,105) 68
Gain on sale of long-term
investments 6,685 - 6,685 -
Amortization of debt
issuance costs and
original issue discount (479) (670) (4,213) (14,477)
Stock based compensation (1,647) (209) (3,223) (539)
Other deferred credits 617 (666) 3,534 3,416
Changes in components of
working capital:
Accounts receivable and
other current assets 4,959 3,733 544 3,888
Accounts payable and
other current
liabilities (2,310) (881) (1,772) 7,903
Deferred charges and
other assets (570) (1,244) (44) (3,113)
--------- --------- --------- ---------
Net profit (loss) $ 13,506 $ (312) $ 5,134 $(28,842)
Add (subtract):
Interest expense 7,643 8,865 15,617 18,631
Loss on extinguishment of
debt - - 9,650 26,204
Interest income (402) (412) (794) (906)
Depreciation and
amortization 16,034 20,692 33,131 41,105
(Gain) loss on disposal
of assets, net 383 - 1,105 (68)
Gain on Crest asset
purchase (1,979) - (1,979) -
Gain on sale of long-term
investment (6,685) - (6,685) -
Stock based compensation 1,647 209 3,223 539
--------- --------- --------- ---------
EBITDA $ 30,147 $ 29,042 $ 58,402 $ 56,663
========= ========= ========= =========
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 of intangibles and stock
based compensation 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 cash
provided by operating activities and other measures of
financial performance recorded in accordance with GAAP.
Schedule 6
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
Allocation of Stock Based Compensation between Segments
(Unaudited, in Thousands)
Three Months Ended Three Months Ended
June 30, 2006 June 30, 2005
---------------------------- ----------------------------
As As
reported Stock reported Stock
on Based on Based
Schedule Compen- Schedule Compen-
1 sation Adjusted 1 sation Adjusted
--------- -------- --------- --------- -------- ---------
Operating
expenses:
Local
telephone 31,519 (1,416) 30,103 30,841 (182) 30,659
Wireless 14,931 (158) 14,773 11,990 (19) 11,971
Internet 6,696 (63) 6,633 5,590 (7) 5,583
Inter-
exchange 3,322 (10) 3,312 3,929 (1) 3,928
Depreci-
ation and
amorti-
zation 16,034 - 16,034 20,692 - 20,692
Loss on
disposal
of assets,
net 383 - 383 - - -
--------- -------- --------- --------- -------- ---------
Total
operating
expenses $ 72,885 $(1,647) $ 71,238 $ 73,042 $ (209) $ 72,833
========= ======== ========= ========= ======== =========
Six Months Ended Six Months Ended
June 30, 2006 June 30, 2005
---------------------------- ----------------------------
As As
reported Stock reported Stock
on Based on Based
Schedule Compen- Schedule Compen-
1 sation Adjusted 1 sation Adjusted
--------- -------- --------- --------- -------- ---------
Operating
expenses:
Local
telephone 63,628 (2,774) 60,854 61,652 (470) 61,182
Wireless 28,745 (308) 28,437 22,020 (48) 21,972
Internet 14,588 (122) 14,466 10,839 (19) 10,820
Inter-
exchange 5,426 (19) 5,407 7,911 (2) 7,909
Depreci-
ation and
amorti-
zation 33,131 - 33,131 41,105 - 41,105
(Gain) loss
on
disposal
of assets,
net 1,105 - 1,105 (68) - (68)
--------- -------- --------- --------- -------- ---------
Total
operating
expenses $146,623 $(3,223) $143,400 $143,459 $ (539) $142,920
========= ======== ========= ========= ======== =========
The balances reported on Schedule 1 - Statement of Operations, include
the company's adoption of FAS 123R Accounting for Stock-Based
Compensation. This schedule shows the company's operating performance
prior to that expense being recorded to allow analysis of the
operating segments without these noncash charges. Prior year
comparison numbers have also been adjusted for a reclassification of
costs from Interexchange to Wireless to better reflect underlying
product profitability.
Schedule 7
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
Investment in Construction and Capital Expenditures
(Unaudited, in Thousands)
Three Months Six Months Twelve Months
Ended Ended Ended
June 30, June 30, December 31,
2006 2006 2005
------------- ------------- ---------------
Construction and capital
expenditures 11,203 26,937 58,422
Increase/(decrease) in
accounts payable for
construction and capital
expenditures 1,040 (6,279) 5,975
------------- ------------- ---------------
Investment in construction
and capital $ 12,243 $ 20,658 $ 64,397
============= ============= ===============
Growth 6,650 10,716 26,735
Maintenance 5,593 9,942 35,044
Investment funded by
excess 2005 cash - - 2,618
------------- ------------- ---------------
Investment in construction
and capital $ 12,243 $ 20,658 $ 64,397
============= ============= ===============
Schedule 8A
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
(Unaudited)
June 30, March 31, June 30,
2006 2006 2005
--------- --------- ---------
Local telephone:
Retail access lines 197,031 197,415 203,224
Resale access lines 12,504 13,030 15,109
UNE loop lines 46,482 48,231 59,271
UNE platform lines 6,749 6,805 6,454
--------- --------- ---------
Total local telephone access lines 262,766 265,481 284,058
========= ========= =========
Average local telephone access lines
for the quarter 264,124 268,183 286,021
Average monthly local telephone
revenue per line for the quarter $ 59.93 $ 60.00 $ 58.67
Quarterly growth rate in local
telephone access lines -1.0% -2.0% -1.4%
Wireless:
Covered population 533,930 527,509 508,628
Post-paid wireless subscribers 115,770 111,178 95,145
Average post-paid wireless
subscribers 113,474 109,161 91,660
Quarterly growth rate -- post-paid
wireless subscribers 4.1% 3.8% 7.9%
Activations for the quarter 10,412 10,654 12,089
Deactivations for the quarter 5,820 6,620 5,118
Average monthly churn for the
quarter 1.6% 1.9% 1.7%
Average monthly revenue per
subscriber for the quarter(a) $ 58.85 $ 60.36 $ 60.19
Prepaid wireless subscribers 4,540 4,103 7,280
Resale wireless subscribers 3,582 3,859 5,296
Total wireless subscribers 123,892 119,140 107,721
Average subscribers for the quarter 121,516 118,339 105,000
Quarterly growth rate 4.0% 1.4% 5.3%
Activations for the quarter 11,441 10,714 12,912
Deactivations for the quarter 6,689 9,111 7,470
Average monthly churn for the
quarter 1.7% 2.4% 2.2%
Penetration 23.2% 22.6% 21.2%
Quarterly minutes of use (000's) 198,821 152,220 128,063
Average monthly revenue per
subscriber for the quarter(a) $ 56.51 $ 57.30 $ 55.55
Long Distance:
Long distance subscribers 60,556 58,552 50,701
Quarterly minutes of use (000's) 53,905 47,737 41,297
Average subscribers for the quarter 59,554 57,435 49,622
Average monthly revenue per subscriber
for the quarter $ 25.47 $ 22.48 $ 27.02
Internet:
DSL subscribers 39,982 38,179 29,502
Dial-up subscribers 14,738 15,846 20,915
--------- --------- ---------
Total Internet subscribers 54,720 54,025 50,417
========= ========= =========
Average subscribers for the quarter 54,373 53,635 49,758
Average monthly DSL & dial-up revenue
per subscriber for the quarter $ 29.09 $ 29.23 $ 30.38
(a) Wireless ARPU has been restated to exclude late fees and early
termination charges and to allocate competitive eligible
telecommunications carrier (CETC) revenue only to postpaid and
wholesale subscribers. CETC added $7.63 to postpaid wireless ARPU
in the second quarter of 2005 and $9.33 and $9.66 in the first and
second quarter of 2006. CETC added $7.31 to total wireless ARPU in
the second quarter of 2005 and $8.93 and $9.32 in the first and
second quarter of 2006.
Schedule 8B
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
(Unaudited)
June 30, March 31,
2006 2006 Net Movement
----------- ------------ ------------
Local telephone retail access
lines 197,031 197,415 (384)
Add back: internal lines
disconnected 240
------------
(144)
Post-paid wireless
subscribers 115,770 111,178
Prepaid wireless subscribers 4,540 4,103
----------- ------------
120,310 115,281 5,029
----------- ------------
Long distance subscribers 60,556 58,552 2,004
DSL and dial up subscribers 54,720 54,025 695
----------- ------------ ------------
Total retail relationships 432,617 425,273 7,584 (a)
=========== ============ ============
(a) Net movement in total retail relationships inclusive of a 240
adjustment for disconnected internal use lines.
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