Alaska Communications Systems Reports Strong Second Quarter 2014 Results

  Alaska Communications Systems Reports Strong Second Quarter 2014 Results

  -Total Service and Other Revenue increased $5.7 million or 11.5% year over
                                    year-

      -Broadband Revenue increased $1.8 million or 11.3% year over year-

  -Adjusted EBITDA increased $0.9 million sequentially to $23.8 million, an
                              increase of 3.9%-

Business Wire

ANCHORAGE, Alaska -- August 6, 2014

Alaska Communications Systems Group, Inc. (“ACS,” “the Company”) (NASDAQ:
ALSK) today reported financial results for its second quarter ended June 30,
2014.

“We posted strong results for the quarter, with operating and financial
metrics tracking ahead of our full year guidance.

“Our top line performance is at levels that exceed our industry. This is a
combination of our superior network, focus on customer service, and strong
sales momentum. Additionally, performance in managed services through TekMate
continues to track ahead of our expectations. Our focus on expense management
and margin improvement is reflected in the bottom line, with sequential EBITDA
growth and strong free cash flow performance.

“We have a sound operating plan for the year and are performing very well to
that plan,” said Anand Vadapalli, president and CEO of Alaska Communications.

Financial Highlights: Second Quarter 2014

  *Results from the quarter demonstrate we are performing ahead of plan in
    our key areas of focus:

       *Business and wholesale service revenue of $27.7 million grew $2.3
         million or 9.2% year over year, with broadband revenues growing
         11.3%.
       *Consumer service revenue of $10.4 million grew $0.1 million, or 1.0%
         year over year, with broadband revenues growing 11.4%.
       *Other revenue of $17.3 million grew $3.3 million, or 23.5% year over
         year, benefiting from $2.1 million of revenue reserve releases.
       *Wireless revenue of $19.7 million, declined $0.7 million, or 3.3%,
         year over year. Performance in wireless is stabilizing sequentially,
         with higher connections compared to the first quarter, and wireless
         revenue increasing $0.3 million.

  *Adjusted EBITDA was $23.8 million for the quarter, and stands at $46.8
    million year to date, well ahead of our guidance for the year.
  *Free Cash Flow is within expectations at $2.8 million for the quarter, and
    stands at $11.2 million year to date, well ahead of guidance for the year.
  *Deleveraging continues, with debt balances of $438.9 million at the end of
    the quarter, compared to $456.3 million at December 31, 2013. Debt
    balances have declined $17.3 million since the beginning of the year. Cash
    balances are strong at $27.7 million.

Metric Highlights: Second Quarter 2014 Compared to First Quarter 2014

  *Business broadband connections increased to 19,618 from 19,304 and
    business broadband ARPU increased to $189.54 from $182.96.
  *Consumer broadband connections decreased to 39,022 from 39,468 though
    consumer broadband ARPU increased to $52.51 from $49.46.
  *Wireless subscribers increased to 109,578 from 107,975 and Wireless ARPU
    increased to $52.55 from $52.51.

“Our financial performance for the year has been strong. This is our first
full year following the AWN transaction, and our commitment to shareholders
was to deliver on our financial guidance for the year using free cash flow to
reduce debt. We are tracking well with these objectives.

“Strong Adjusted EBITDA and Free Cash Flow accelerate our deleveraging
strategy because the combination of Adjusted EBITDA performance and lower net
debt improves our leverage ratios over time," said Wayne Graham, ACS chief
financial officer.

2014 Guidance:

Guidance for the following categories is reaffirmed as follows:

  *Revenue of approximately $310 million.
  *Adjusted EBITDA of approximately $90 million.
  *Free cash flow of approximately $20 million.

Guidance for capital expenditures is revised as follows:

  *Capital expenditures of approximately $40 million, revised to between
    $40-$45 million.

Our guidance for capital spending has increased to reflect a two year project,
which commenced in the second half of 2014, to build fiber facilities on
behalf of a customer. The customer is funding the project during the period of
the build and in 2014 cash payments will offset this higher capital spending.
Accordingly, our capital spending guidance has increased but our free cash
flow guidance is unchanged. We anticipate that this multi-year project will be
accretive to free cash flow in 2015.

On July 25, 2014, our undersea cable serving Juneau, Alaska was damaged by
debris generated by an earthquake. The cost to repair this facility, while
leasing alternative capacity, is expected to be approximately $2 million. The
costs from this unusual event will be excluded from the above guidance
considerations.

Conference Call

The Company will host a conference call and live webcast on Thursday, August
7, 2014 at 5:00 p.m. Eastern Time to discuss the results. The live webcast
will include a slide presentation. Parties in the United States and Canada can
access the call at 1-888-471-3830 and enter pass code 269043. All other
parties can access the call at 1-719-325-2219.

The live webcast of the conference call will be accessible from the "Events
Calendar" 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 two hours after the call and will run until September
8, 2014 at 4:00 p.m. Eastern Time. To hear the replay, parties in the United
States and Canada can call 1-888-203-1112 and enter pass code 3635655. All
other parties can call 1-719-457-0820 and enter pass code 3635655.

About Alaska Communications

Alaska Communications (NASDAQ: ALSK) is a leading provider of advanced
broadband and managed service solutions for businesses and consumers in
Alaska. The Company operates a highly reliable, advanced statewide data and
voice network with the latest technology and the most diverse undersea fiber
optic system connecting Alaska to the contiguous United States. For more
information, visit http://www.alaskacommunications.com or http://www.alsk.com.

Non-GAAP Measures

In an effort to provide investors with additional information regarding our
financial results, in particular with regards to our liquidity and capital
resources, we have disclosed certain non-GAAP financial information such as
Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow, which management
utilizes to assess performance and believes provides useful information to
investors. The definition of these non-GAAP measures are on Schedule 4 to this
press release. Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow are
non-GAAP measures 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. Other companies may not calculate non-GAAP
measures in the same manner as ACS.

Forward-Looking Statements

This press release includes certain "forward-looking statements," as that term
is defined in the Private Securities Litigation Reform Act 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 include, without
limitation, Verizon’s retail entry into the Alaska market, Universal Service
Fund changes, AWN’s financial and operational performance and the
competitiveness of the wholesale plans it offers, adverse national economic
conditions, adverse conditions in the credit markets impacting the cost,
including interest rates, and/or availability of financing, adverse local
economic conditions, including an unexpected downturn in the Alaskan oil and
gas or tourism markets, changes in capital expenditures, the effects of
competition in our markets, the entry of one or more additional
facilities-based carriers into the Alaska market, the Company’s ability to
complete, manage, integrate, market, maintain, and attract sufficient
customers to the products and services it may derive, adverse changes in labor
matters, including workforce levels, labor negotiations, and benefits costs,
disruption of our supplier’s provisioning of critical products or services,
the impact of natural or man-made disasters, changes in Company's
relationships with large carrier or enterprise customers, unforeseen changes
in public policies, changes in accounting policies, including the Company’s
application of regulatory accounting rules, which could result in an impact on
earnings, or disruptive technological developments in the telecommunications
industry. 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 "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
our annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of
the Company's SEC filings may be obtained by contacting its investor relations
department at (907) 564-7556 or by visiting its investor relations website at
www.alsk.com.

Schedule 1

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED SCHEDULE OF OPERATIONS
(Unaudited, In Thousands Except Per Share Amounts)

                  Three Months Ended           Six Months Ended
                    June 30,                       June 30,
                    2014         2013            2014          2013
                                                                   
Operating
revenues:
Operating
revenues,           $ 78,803       $ 97,699        $ 155,348       $ 188,695
non-affiliates
Operating
revenues,            1,755        58            3,541         121     
affiliates*
Total operating      80,558       97,757        158,889       188,816 
revenues
                                                                   
Operating
expenses:
Cost of
services and          29,800         37,015          59,858          72,334
sales,
non-affiliates
Cost of
services and          15,001         189             29,761          317
sales,
affiliates*
Selling,
general &             25,314         27,646          49,909          54,443
administrative
Depreciation
and                   8,475          11,450          17,265          24,082
amortization
Loss on
disposal of           410            585             811             626
assets, net
(Earnings) loss
from equity          (9,168 )      21            (17,691 )      21      
method
investments
Total operating      69,832       76,906        139,913       151,823 
expenses
                                                                   
Operating             10,726         20,851          18,976          36,993
income
                                                                   
Other income
and (expense):
Interest              (8,672 )       (10,156 )       (17,529 )       (20,185 )
expense
Loss on
extinguishment        -              (276    )       -               (276    )
of debt
Interest income       6              8               14              18
Other                -            (13     )      -             (13     )
Total other
income and           (8,666 )      (10,437 )     (17,515 )      (20,456 )
(expense)
                                                                   
Income before
income tax            2,060          10,414          1,461           16,537
benefit
(expense)
                                                                   
Income tax
benefit              (975   )      27,280        (761    )      24,625  
(expense)
                                                                   
Net income          $ 1,085       $ 37,694       $ 700          $ 41,162  
                                                                   
Net income per
share:
Net income
applicable to       $ 1,085        $ 37,694        $ 700           $ 41,162
common shares
Tax-effected
expense
attributable to      -            1,465         -             2,924   
convertible
notes
Net income
assuming            $ 1,085       $ 39,159       $ 700          $ 44,086  
dilution
                                                                   
Basic               $ 0.02        $ 0.81         $ 0.01         $ 0.89    
Diluted             $ 0.02        $ 0.67         $ 0.01         $ 0.76    
                                                                   
Weighted
average shares
outstanding:
Basic                49,377       46,550        49,146        46,304  
Diluted              49,910       58,547        49,649        58,371  

* Affiliate balances are related to activity with our equity method investees
TekMate and AWN. The remaining interest in TekMate was purchased on January
31, 2014 at which time it became a wholly owned subsidiary.


Schedule 2

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, In Thousands Except Per Share Amounts)

                                          June 30,         December 31,
Assets                                        2014               2013
                                                                 
Current assets:
Cash and cash equivalents                     $ 27,659           $ 43,039
Restricted cash                                 467                467
Accounts receivable-trade,                      38,513             34,066
non-affiliates, net
Materials and supplies                          12,449             10,131
Prepayments and other current assets            7,972              7,300
Deferred income taxes                          7,198            7,144     
Total current assets                            94,258             102,147
                                                                 
Property, plant and equipment                   1,358,974          1,344,949
Less: accumulated depreciation and             (1,004,245 )      (992,936  )
amortization
Property, plant and equipment, net              354,729            352,013
                                                                 
Goodwill                                        5,892              4,650
Debt issuance costs                             5,619              6,929
Deferred income taxes                           12,460             14,107
Equity method investments                       258,798            266,972
Other assets                                   394              502       
Total assets                                  $ 732,150         $ 747,320   
                                                                 
Liabilities and Stockholders' Equity
(Deficit)
Current liabilities:
Current portion of long-term                  $ 8,265            $ 14,256
obligations
Accounts payable, accrued and other             50,031             55,475
current liabilities, non-affiliates
Accounts payable, accrued and other             21,628             14,309
current liabilities, affiliates, net*
Advance billings and customer                  8,970            9,104     
deposits
Total current liabilities                       88,894             93,144
                                                                 
Long-term obligations, net of current           430,653            442,001
portion
Other long-term liabilities                     16,324             16,947
Deferred AWN capacity revenue, net of          58,362           59,965    
current portion
Total liabilities                              594,233          612,057   
                                                                 
Commitments and contingencies
                                                                 
Stockholders' equity (deficit):
Common stock, $.01 par value; 145,000           495                487
authorized
Additional paid in capital                      152,927            152,193
Accumulated deficit                             (11,108    )       (11,808   )
Accumulated other comprehensive loss           (4,397     )      (5,609    )
Total stockholders' equity (deficit)            137,917            135,263
                                                                 
Total liabilities and stockholders'           $ 732,150         $ 747,320   
equity (deficit)

* Affiliate balances are related to activity with our equity method investees
TekMate and AWN. The remaining interest in TekMate was purchased on January
31, 2014 at which time it became a wholly owned subsidiary.


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,
                   2014          2013            2014          2013
Cash Flows
from Operating
Activities:
Net income         $ 1,085         $ 37,694        $ 700           $ 41,162
Adjustments to
reconcile net
income to net
cash provided
by operating
activities:
Depreciation
and                  8,475           11,450          17,265          24,082
amortization
Loss on the
disposal of          410             585             811             626
assets
Gain on
ineffective          -               (596    )       -               (1,016  )
hedge
adjustment
Amortization
of debt
issuance costs       1,268           1,614           2,666           3,040
and debt
discount
Amortization
of ineffective       307             436             914             866
hedge
Amortization
of deferred          (849    )       -               (1,690  )       -
AWN capacity
revenue
Stock-based          540             499             1,193           1,718
compensation
Deferred
income tax           974             (27,280 )       747             (24,625 )
expense
(benefit)
Provision for
uncollectible        910             171             1,475           439
accounts
Cash
distribution
from equity          9,168           -               17,691          -
method
investments
(Earnings)
loss from            (9,168  )       21              (17,691 )       21
equity method
investments
Other non-cash
(income)             (155    )       196             (158    )       236
expense, net
Changes in
operating           (6,738  )      (4,874  )      (3,870  )      (1,065  )
assets and
liabilities
Net cash
provided by         6,227         19,916        20,053        45,484  
operating
activities
                                                                   
Cash Flows
from Investing
Activities:
Capital              (10,710 )       (7,629  )       (17,874 )       (13,597 )
expenditures
Capitalized          (624    )       (387    )       (1,362  )       (870    )
interest
Change in
unsettled            2,772           (678    )       (4,414  )       (3,829  )
capital
expenditures
Proceeds on          -               -               -               1,935
sale of assets
AWN excess           -               1,512           -               1,512
distribution
Return of
capital from         3,332           -               7,342           -
equity
investment
Non-cash
acquisition,         -               -               68              -
cash received
Net change in
short-term           -               1,512           -               1,512
investments
Net change in
restricted          -             49            -             48      
accounts
Net cash used
by investing        (5,230  )      (5,621  )      (16,240 )      (13,289 )
activities
                                                                   
Cash Flows
from Financing
Activities:
Repayments of        (5,388  )       (15,366 )       (18,742 )       (30,381 )
long-term debt
Debt issuance        -               (181    )       -               (181    )
costs
Payment of
withholding
taxes on             (2      )       -               (583    )       (630    )
stock-based
compensation
Proceeds from
issuance of         132           115           132           115     
common stock
Net cash used
by financing        (5,258  )      (15,432 )      (19,193 )      (31,077 )
activities
                                                                   
Change in cash
and cash             (4,261  )       (1,137  )       (15,380 )       1,118
equivalents
                                                                   
Cash and cash
equivalents,        31,920        19,094        43,039        16,839  
beginning of
period
                                                                   
Cash and cash
equivalents,       $ 27,659       $ 17,957       $ 27,659       $ 17,957  
end of period
                                                                   
Supplemental
Cash Flow
Data:
Interest paid      $ 9,466         $ 11,219        $ 16,028        $ 18,383
Income tax         $ 1             $ -             $ 14            $ -
paid
                                                                   
Supplemental
Non-cash
Transactions:
Property
acquired under     $ -             $ -             $ 44            $ 2
capital leases
Additions to       $ 75            $ 107           $ 289           $ 137
ARO asset
Non-cash
acquisition
purchase           $ -             $ -             $ 1,850         $ -
price, net of
cash received
                                                                             
                                                                             

Schedule 4

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
ADJUSTED EBITDA AND FREE CASH FLOW
(Unaudited, In Thousands)

                      Three Months Ended            Six Months Ended
                        June 30,                        June 30,
                        2014          2013            2014          2013
                                                                        
Net income              $ 1,085         $ 37,694        $ 700           $ 41,162
Add (subtract):
Interest expense          8,672           10,156          17,529          20,185
Loss on
extinguishment of         -               276             -               276
debt
Interest income           (6      )       (8      )       (14     )       (18     )
Depreciation and          8,475           11,450          17,265          24,082
amortization
Loss on sale of
short-term                -               13              -               13
investments
Loss on disposal of       410             585             811             626
assets
Loss (earnings)
from equity method        -               21              (12     )       21
investment in
TekMate
Earnings from
equity method             (9,168  )       -               (17,679 )       -
investment in AWN
AWN distributions         12,500          -               25,000          -
received
AWN distributions
received for the          (4,167  )       -               (4,167  )       -
prior period
AWN distributions
receivable within         4,167           -               4,167           -
12 days
Income tax expense        975             (27,280 )       761             (24,625 )
(benefit)
Stock-based               540             499             1,193           1,718
compensation
Long-term cash            301             161             985             330
incentives
AWN
transaction-related      40            427           212           1,272   
costs
                                                                        
Adjusted EBITDA         $ 23,824       $ 33,994       $ 46,751       $ 65,042  
                                                                        
Less:
Incurred capital          (10,710 )       (7,629  )       (17,874 )       (13,597 )
expenditures
Amortization of
deferred AWN              (849    )       -               (1,690  )       -
capacity revenue
AWN
transaction-related       -               14              -               (41     )
capital costs, net
change
Cash interest            (9,466  )      (11,219 )      (16,028 )      (18,383 )
expense
Free cash flow          $ 2,799        $ 15,160       $ 11,159       $ 33,021  
                                                                        
Revenue                 $ 80,558       $ 97,757       $ 158,889      $ 188,816 
                                                                        
Adjusted EBITDA           29.6    %       34.8    %       29.4    %       34.4    %
Margin
                                                                                  

NonGAAP Measures:

In an effort to provide investors with additional information regarding the
Company's results as determined by 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 Adjusted EBITDA as net income before interest, loss
on extinguishment of debt, depreciation and amortization, loss on the
impairment of equity investments, loss on sale of short-term investments, gain
or loss on asset purchases or disposals, earnings on equity method
investments, gains and distributions related to AWN, provisions for taxes, AWN
transaction-related costs, stock-based compensation, and expenses under the
company’s long term cash incentive plan (“LTCI”).LTCI expenses are considered
part of an interim compensation structure to mitigate the dilutive impact of
additional share issuances for executive compensation.Distributions from AWN
are included in Adjusted EBITDA.

Adjusted EBITDA Margin, is defined as Adjusted EBITDA divided by Operating
Revenues.

Free cash flow is defined as Adjusted EBITDA, less capital expenditures that
create an obligation to pay (“incurred capital expenditures”), less
amortization of deferred AWN capacity revenue (a non cash revenue item), less
AWN transaction-related capital costs, less cash interest expense.

Adjusted EBITDA, Adjusted EBITDA Margin and Free cash flow are non-GAAP
measures 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. Other companies may not calculate Non-GAAP measures in
the same manner as ACS.


Schedule 5

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
REVENUE GROWTH
(Unaudited, In Thousands)

                       Three Months Ended        Six Months Ended
                         June 30,                    June 30,
Service revenue:         2014         2013         2014          2013
Business and
wholesale customers
Voice                    $ 5,671        $ 5,790      $ 11,282        $ 11,513
Broadband                  11,085         9,962        21,696          19,429
IT Services                945            -            1,533           -
Other                      1,775          2,187        3,456           4,043
Wholesale                 8,266        7,461       16,179        15,052
Business and
wholesale service         27,742       25,400      54,146        50,037
revenue
                                                                     
Consumer customers
Voice                      3,837          4,353        7,713           8,672
Broadband                  6,244          5,605        12,105          10,847
Other                     359          383         782           797
Consumer service           10,440         10,341       20,600          20,316
revenue
                                                                     
Total service             38,182       35,741      74,746        70,353
revenue
Growth in service          6.8    %                    6.2     %
revenue
Growth in broadband        11.3   %                    11.6    %
service revenue
                                                                     
Other revenue:
Equipment sales            1,274          343          2,111           935
Access                     8,968          9,268        17,961          18,783
High cost support         7,075        4,412       13,349        8,574
Total service and         55,499       49,764      108,167       98,645
other revenue
Growth in service          11.5   %                    9.7     %
and other revenue
Growth excluding           9.7    %                    8.5     %
equipment sales
                                                                     
Wireless revenue:
Business and
consumer service           17,129         18,030       34,185          35,934
revenue
Equipment sales            1,115          1,282        2,119           2,530
Other                      1,450          1,049        2,797           2,150
                                                                     
AWN related:
Foreign roaming            -              19,409       -               34,435
Wireless backhaul          -              2,193        70              4,168
CETC                       4,516          6,030        9,861           10,954
Amortization of
deferred AWN              849          -           1,690         -
capacity revenue
Total AWN related         5,365        27,632      11,621        49,557
Total wireless & AWN      25,059       47,993      50,722        90,171
related revenue
                                                                     
Total revenue            $ 80,558      $ 97,757     $ 158,889      $ 188,816
                                                                       
                                                                       

Schedule 6

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
(Unaudited)

                       Three Months Ended
                         June 30,           March 31,          June 30,
                         2014                 2014                 2013
                                                                   
Voice:
Consumer access            46,740               48,165               52,438
lines
Business access            80,172               79,841               80,517
lines
                                                                   
Voice ARPU consumer      $ 26.95              $ 26.51              $ 27.25
Voice ARPU business      $ 23.63              $ 23.43              $ 23.93
                                                                   
Broadband: (1)
Consumer connections       39,022               39,468               37,611
Business connections       19,618               19,304               19,104
                                                                   
ARPU consumer            $ 52.51              $ 49.46              $ 49.21
ARPU business (2)        $ 189.54             $ 182.96             $ 174.87
                                                                   
Wireless:
Postpaid connections       83,468               86,238               88,876
Lifeline connections       7,447                6,510                9,859
Prepaid connections       18,663            15,227            15,684  
Total                     109,578           107,975           114,419 
                                                                   
Retail wireless ARPU     $ 52.55              $ 52.51              $ 52.68
                                                                   
Churn:
                                                                   
Voice connections          1.9     %            1.0     %            1.3     %
(3)
Broadband                  2.4     %            1.9     %            2.0     %
connections (1) (3)
Wireless connections       2.4     %            3.0     %            2.4     %
                                                                   
                                                                   
Wireless equipment         (263    ) ^(4)       (463    ) ^(4)       (3,463  )
subsidy
                                                                             

^(1)  Consumer and business broadband connections, ARPU, and churn have been
       restated to exclude dial up lines.
^(2)   Business broadband ARPU was restated to reflect the movement of IT
       Services revenue into a separate category.
^(3)   Voice and broadband churn have been restated to exclude wholesale
       lines.
^(4)   For the quarters ending June 30, 2014 and March 31, 2014, respectively,
       these amounts are net of AWN subsidy reimbursement.
       
       

Schedule 7

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
Long Term Debt
(Unaudited, In Thousands)

                                June 30,      December 31,   June 30,
                                  2014            2013             2013
2010 senior credit facility       $ 327,700       $  345,900       $ 414,550
term loan due 2016
Debt discount - 2010 senior
credit facility term loan due       (1,315  )        (1,687  )       (2,358  )
2016
6.25% convertible notes due         114,000          114,000         120,000
2018
Debt discount - 6.25%               (8,229  )        (9,213  )       (10,650 )
convertible notes due 2018
Capital leases and other           6,762          7,257         4,810   
long-term obligations
                                    438,918          456,257         526,352
Less current portion               (8,265  )       (14,256 )      (11,302 )
Long-term obligations, net of     $ 430,653      $  442,001      $ 515,050 
current portion
                                                                   
                                                                   

Maturities

2014 (July 1 - December 31)      $ 565
2015 (January 1 - December 31)       15,417
2016 (January 1 - December 31)       313,788
2017 (January 1 - December 31)       506
2018 (January 1 - December 31)       114,287
2019 (January 1 - December 31)       278
Thereafter                          3,621
                                   $ 448,462
                                     
                                     

Schedule 8

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
Summary AWN information
(Unaudited, In Thousands)

Alaska Wireless Network, LLC
Stand Alone Selected Operating Results

                          Q1 - 2014    Q2 - 2014    YTD - 2014   
Operating revenues          $ 63,037       $ 64,665       $ 127,702
                                                                          
Operating expenses:
        Cost of
        services and          19,119         18,880         37,999
        sales
        Selling,
        general &             5,954          5,898          11,852
        administrative
        Depreciation
        and                  10,995       10,644       21,639  
        amortization

Total operating               36,068         35,422         71,490
expenses
                            
Operating income              26,969         29,243         56,212
                                                                          
Other income and             (92    )      (88    )      (180    )
(expense)

Net income                    26,877         29,155         56,032        A
                            
Plus:   Depreciation          10,995         10,644         21,639
        Expense
        Other, net            1,706          1,631          3,337
Minus:  Capital               3,639          7,110          10,749
        Spending
        Management Fee       1,438        1,372        2,810   
        to GCI
Adjusted Free Cash Flow     $ 34,501      $ 32,948      $ 67,449  

Distributions paid to         12,500         12,500         25,000
ACS:
                            
Distributions to ACS as       36.2   %       37.9   %       37.1    %
a proportion of FCF:

The above information reflects summary unaudited financial performance of AWN,
which Alaska Communication owns a 33.3% ownership interest. Certain additional
summary information is included in our Form 10-Q and 10-K filings.


Wholesale Margin Contribution from AWN:
                            Q1 - 2014      Q2 - 2014      YTD - 2014
Wireless business and
consumer service            $ 17,056       $ 17,129       $ 34,185
revenue
                                                                          
AWN wholesale charges*      $ 11,905       $ 12,750       $ 24,655
Handset subsidy               (2,664 )       (3,095 )       (5,759  )
support*
Equipment subsidy             3,127          3,358          6,485
Other*                       235          830          1,065   
Total                       $ 12,603       $ 13,843       $ 26,446

Wholesale Margin            $ 4,453        $ 3,286        $ 7,739         23 %
                            
* Balances are included under the caption Cost of services and sales,
affiliates on the consolidated statement of operations. Excluded from the
balances above is CETC, for which we pay an equivalent amount to AWN.


Key AWN Results included in the ACS Consolidated Income Statement:
                            Q1 - 2014      Q2 - 2014      YTD - 2014
AWN net income              $ 26,877       $ 29,155       $ 56,032        A
Adjusted for step-up in      (1,345 )      (1,650 )      (2,995  )     B
GCI assets
AWN stepped-up earnings     $ 25,532       $ 27,505       $ 53,037        C

ACS ownership                 33.33  %       33.33  %       33.33   %     D
percentage of AWN

"Adjusted for step-up"(B) reflects the step up on basis on the GCI contributed
assets to AWN and associated higher depreciation expense that ACS is required
to incorporate in its consolidated financial statements.

Earnings on equity                                                        C *
method investment in        $ 8,511       $ 9,168       $ 17,679       D
AWN

AWN's stepped up net income is used to calculate the equity in earnings at
ACS' 1/3 ownership percentage.


Key AWN Results Included in the ACS Non GAAP financial measures:
                            Q1 - 2014      Q2 - 2014      YTD - 2014
Cash distributions
received during the         $ 12,500       $ 12,500       $ 25,000
quarter
        Distributions
        received during
Less:   the quarter           (4,167 )       (4,167 )       (4,167  )
        related to the
        previous period
        Distributions
        received within
Plus:   14 business           4,167          4,167          4,167
        days of
        quarter-end
        Amortization of
        deferred AWN         841          849          1,690   
        capacity
        revenue
Equals  AWN impact to       $ 13,341      $ 13,349      $ 26,690  
        Adjusted EBITDA

        Amortization of
Less:   deferred AWN         841          849          1,690   
        capacity
        revenue
Equals  AWN impact to       $ 12,500      $ 12,500      $ 25,000  
        Free Cash Flow

In our non-GAAP reporting of Adjusted EBITDA, ACS is using our Senior Credit
Agreement definition, as amended, for the AWN distribution, which is
distributions received or eligible to be received within 14 business days.

Contact:

Alaska Communications Investors:
Tiffany Dunn, 907-564-3314
Manager Investor Relations
investors@acsalaska.com
 
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