-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%-
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, non-affiliates $
78,803 $ 97,699 $ 155,348 $ 188,695
Operating revenues, affiliates*
1,755 58
3,541 121
Total operating revenues
80,558
97,757 158,889
188,816 Operating expenses: Cost
of services and sales, non-affiliates 29,800 37,015 59,858 72,334
Cost of services and sales,
affiliates*
15,001 189 29,761 317 Selling, general & administrative 25,314
27,646 49,909 54,443 Depreciation and amortization 8,475 11,450
17,265 24,082 Loss on disposal of assets, net 410 585 811 626
(Earnings) loss from equity method investments
(9,168 ) 21
(17,691 ) 21
Total operating expenses
69,832
76,906 139,913
151,823 Operating income
10,726 20,851 18,976 36,993 Other income and (expense):
Interest expense (8,672 ) (10,156 ) (17,529 ) (20,185 ) Loss on
extinguishment of debt - (276 ) - (276 ) Interest income 6 8 14 18
Other
- (13
) - (13
) Total other income and (expense)
(8,666 ) (10,437
)
(17,515 )
(20,456 ) Income before income tax
benefit (expense) 2,060 10,414 1,461 16,537 Income tax
benefit (expense)
(975 )
27,280 (761 )
24,625 Net income
$
1,085 $ 37,694
$ 700 $
41,162 Net income per share: Net income
applicable to common shares $ 1,085 $ 37,694 $ 700 $ 41,162
Tax-effected expense attributable to convertible notes
- 1,465
- 2,924 Net income
assuming dilution
$ 1,085
$ 39,159 $
700 $ 44,086
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, non-affiliates,
net 38,513 34,066 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 amortization
(1,004,245 )
(992,936 ) 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 obligations $
8,265 $ 14,256 Accounts payable, accrued and other current
liabilities, non-affiliates 50,031 55,475
Accounts payable, accrued and other
current liabilities, affiliates, net*
21,628 14,309 Advance billings and customer deposits
8,970 9,104 Total
current liabilities 88,894 93,144 Long-term obligations, net
of current portion 430,653 442,001 Other long-term liabilities
16,324 16,947 Deferred AWN capacity revenue, net of current portion
58,362 59,965
Total liabilities
594,233
612,057 Commitments and contingencies
Stockholders' equity (deficit): Common stock, $.01 par
value; 145,000 authorized 495 487 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' equity (deficit)
$ 732,150
$ 747,320
* 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 amortization 8,475 11,450 17,265 24,082 Loss on
the disposal of assets 410 585 811 626 Gain on ineffective hedge
adjustment - (596 ) - (1,016 ) Amortization of debt issuance costs
and debt discount 1,268 1,614 2,666 3,040 Amortization of
ineffective hedge 307 436 914 866 Amortization of deferred AWN
capacity revenue (849 ) - (1,690 ) - Stock-based compensation 540
499 1,193 1,718 Deferred income tax expense (benefit) 974 (27,280 )
747 (24,625 ) Provision for uncollectible accounts 910 171 1,475
439 Cash distribution from equity method investments 9,168 - 17,691
- (Earnings) loss from equity method investments (9,168 ) 21
(17,691 ) 21 Other non-cash (income) expense, net (155 ) 196 (158 )
236 Changes in operating assets and liabilities
(6,738 ) (4,874
) (3,870 )
(1,065 ) Net cash provided by operating
activities
6,227
19,916 20,053
45,484 Cash Flows from Investing
Activities: Capital expenditures (10,710 ) (7,629 ) (17,874 )
(13,597 ) Capitalized interest (624 ) (387 ) (1,362 ) (870 ) Change
in unsettled capital expenditures 2,772 (678 ) (4,414 ) (3,829 )
Proceeds on sale of assets - - - 1,935 AWN excess distribution -
1,512 - 1,512 Return of capital from equity investment 3,332 -
7,342 - Non-cash acquisition, cash received - - 68 - Net change in
short-term investments - 1,512 - 1,512 Net change in restricted
accounts
- 49
- 48 Net cash
used by investing activities
(5,230
) (5,621 )
(16,240 ) (13,289
) Cash Flows from Financing Activities:
Repayments of long-term debt (5,388 ) (15,366 ) (18,742 ) (30,381 )
Debt issuance costs - (181 ) - (181 ) Payment of withholding taxes
on stock-based compensation (2 ) - (583 ) (630 ) Proceeds from
issuance of common stock
132
115 132
115 Net cash used by financing activities
(5,258 )
(15,432 ) (19,193
) (31,077 )
Change in cash and cash equivalents (4,261 ) (1,137 ) (15,380 )
1,118 Cash and cash equivalents, beginning of period
31,920 19,094
43,039 16,839
Cash and cash equivalents, end of period
$
27,659 $ 17,957
$ 27,659 $
17,957 Supplemental Cash Flow Data:
Interest paid $ 9,466 $ 11,219 $ 16,028 $ 18,383 Income tax paid $
1 $ - $ 14 $ - Supplemental Non-cash Transactions: Property
acquired under capital leases $ - $ - $ 44 $ 2 Additions to ARO
asset $ 75 $ 107 $ 289 $ 137 Non-cash acquisition purchase price,
net of cash received $ - $ - $ 1,850 $ -
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 debt - 276 - 276 Interest income (6 ) (8
) (14 ) (18 ) Depreciation and amortization 8,475 11,450 17,265
24,082 Loss on sale of short-term investments - 13 - 13 Loss on
disposal of assets 410 585 811 626 Loss (earnings) from equity
method investment in TekMate - 21 (12 ) 21 Earnings from equity
method investment in AWN (9,168 ) - (17,679 ) - AWN distributions
received 12,500 - 25,000 - AWN distributions received for the prior
period (4,167 ) - (4,167 ) - AWN distributions receivable within 12
days 4,167 - 4,167 - Income tax expense (benefit) 975 (27,280 ) 761
(24,625 ) Stock-based compensation 540 499 1,193 1,718 Long-term
cash incentives 301 161 985 330 AWN transaction-related costs
40 427
212 1,272
Adjusted EBITDA
$ 23,824
$ 33,994 $
46,751 $ 65,042
Less: Incurred capital expenditures (10,710 ) (7,629
) (17,874 ) (13,597 ) Amortization of deferred AWN capacity revenue
(849 ) - (1,690 ) - AWN transaction-related capital costs, net
change - 14 - (41 ) Cash interest expense
(9,466 ) (11,219
) (16,028 )
(18,383 ) Free cash flow
$
2,799 $ 15,160
$ 11,159 $
33,021 Revenue
$
80,558 $ 97,757
$ 158,889 $
188,816 Adjusted EBITDA Margin 29.6 %
34.8 % 29.4 % 34.4 %
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 revenue
27,742 25,400
54,146 50,037
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 revenue 10,440 10,341 20,600
20,316
Total service revenue
38,182 35,741
74,746
70,353 Growth in service revenue 6.8 % 6.2 %
Growth in broadband service revenue 11.3 % 11.6 %
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 other revenue
55,499 49,764
108,167 98,645 Growth in
service and other revenue 11.5 % 9.7 % Growth excluding equipment
sales 9.7 % 8.5 %
Wireless revenue: Business and
consumer service revenue 17,129 18,030 34,185 35,934 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 capacity revenue
849 -
1,690 - Total AWN
related 5,365
27,632 11,621
49,557 Total wireless & AWN
related revenue 25,059
47,993 50,722
90,171 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 lines
46,740 48,165 52,438 Business access lines 80,172 79,841 80,517
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 (3) 1.9 % 1.0 %
1.3 % Broadband connections (1) (3) 2.4 % 1.9 % 2.0 % Wireless
connections 2.4 % 3.0 % 2.4 %
Wireless equipment
subsidy (263 )
(4)
(463 )
(4)
(3,463 )
(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 term loan due
2016 $ 327,700 $ 345,900 $ 414,550 Debt discount - 2010 senior
credit facility term loan due 2016 (1,315 ) (1,687 ) (2,358 ) 6.25%
convertible notes due 2018 114,000 114,000 120,000 Debt discount -
6.25% convertible notes due 2018 (8,229 ) (9,213 ) (10,650 )
Capital leases and other long-term obligations
6,762 7,257
4,810 438,918 456,257 526,352 Less current
portion
(8,265 )
(14,256 ) (11,302
) Long-term obligations, net of current portion
$ 430,653 $
442,001 $ 515,050
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 sales
19,119 18,880 37,999 Selling, general & administrative 5,954
5,898 11,852 Depreciation and amortization 10,995
10,644 21,639 Total operating
expenses 36,068 35,422 71,490 Operating income 26,969 29,243
56,212 Other income and (expense)
(92
) (88 )
(180 ) Net income 26,877 29,155
56,032
A Plus: Depreciation Expense 10,995 10,644
21,639 Other, net 1,706 1,631 3,337 Minus: Capital Spending 3,639
7,110 10,749 Management Fee to GCI
1,438
1,372 2,810
Adjusted Free Cash Flow
$ 34,501
$ 32,948 $
67,449 Distributions paid to ACS: 12,500
12,500 25,000 Distributions to ACS as a proportion of FCF:
36.2 % 37.9 % 37.1 % 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 revenue $ 17,056 $ 17,129 $ 34,185
AWN wholesale charges*
$ 11,905 $ 12,750 $ 24,655
Handset subsidy support*
(2,664 ) (3,095 ) (5,759 ) 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 GCI assets
(1,345 ) (1,650
) (2,995 ) B
AWN stepped-up earnings $ 25,532 $ 27,505 $ 53,037
C
ACS ownership percentage of AWN 33.33 % 33.33 % 33.33 %
D
"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 method
investment in AWN
$ 8,511
$ 9,168 $
17,679 C * D 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 quarter $ 12,500 $ 12,500 $ 25,000
Less:
Distributions received during the quarter
related to the previous period
(4,167 ) (4,167 ) (4,167 )
Plus:
Distributions received within 14 business
days of quarter-end
4,167 4,167 4,167 Amortization of deferred AWN capacity revenue
841 849
1,690 Equals AWN impact to Adjusted
EBITDA
$ 13,341 $
13,349 $ 26,690
Less: Amortization of deferred AWN capacity revenue
841 849
1,690 Equals AWN impact to Free Cash
Flow
$ 12,500 $
12,500 $ 25,000
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.
Alaska Communications Investors:Tiffany Dunn,
907-564-3314Manager Investor Relationsinvestors@acsalaska.com
Alaska Communications Sy... (NASDAQ:ALSK)
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From Mar 2024 to Apr 2024
Alaska Communications Sy... (NASDAQ:ALSK)
Historical Stock Chart
From Apr 2023 to Apr 2024