Alaska Communications Systems Reports Strong Third Quarter 2014 Results

-Grew Total Service and Other Revenue 6.7% year over year--Increased Total Broadband Revenue 10.3% year over year--Improved Adjusted EBITDA Margins Sequentially to 31.9%--Increased 2014 Guidance for Revenue and Adjusted EBITDA--Won State of Alaska Five-year Contract for Statewide Broadband Services-

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

“Our emphasis on broadband solutions has delivered another quarter of broadband revenue growth, with continued industry leading top-line performance for the third quarter of 2014. Combined with exceptional operations and cost controls, we have expanded Adjusted EBITDA margins, all while managing our free cash flow to deleverage our balance sheet.

“We have a growing market opportunity with a unique competitive dynamic that is enabling us to gain share in our target markets of business and wholesale services. As a particularly noteworthy example of taking share, after months of in-depth network capabilities and reliability reviews, we are honored the State of Alaska chose Alaska Communications to be its primary broadband provider for its statewide core network. Our experienced team continues to gain market share due to our deep understanding of the needs of Alaskan businesses matched with quality network solutions, packaging of IT Services, and superior attention to customer service.

“The investments we previously made in technology combined with our steady focus on process improvement enable us to improve customer service while we manage our expenses and improve margins.

“We are focused. Our broadband momentum continues. And, we are very excited about serving our community and shareholders for decades to come,” said Anand Vadapalli, president and CEO of Alaska Communications.

Third Quarter 2014 Highlights

Total service and other revenue increased to $53.4 million, up 6.7% year over year.
- Total broadband revenue reached $17.3 million, up 10.3% year over year.
Business and wholesale service:
- Revenue reached $28.0 million, up 11.6% year over year.
- Broadband revenues grew 8.8% year over year.
- Broadband business connections totaled 19,201, increasing 0.6% sequentially.
Consumer service:
- Revenue grew to $10.4 million, increasing 2.1% year over year.
- Broadband revenues grew 13.2% year over year.
- Consumer broadband ARPU grew $1.67 or 3.2% sequentially.

Operational Improvements

Successfully deployed an automated workforce management system to streamline future service delivery and enhance customer experience.
Installed new inventory management structures in retail stores reducing wireless inventory balances by approximately 40%, or $2.5 million.

Third Quarter and Year to Date Consolidated Financial Results for the periods ended September 30, 2014

Adjusted EBITDA was $23.5 million for the quarter and stands at $70.3 million year to date.
Total operating revenue was $78.5 million for the quarter and stands at $237.4 million year to date.
Free Cash Flow was $1.6 million for the quarter and stands at $12.8 million year to date.
Deleveraging continues:
- Debt balances were $434.6 million at the end of the quarter.
- Debt repayments totaled $24.0 million year to date.
- Cash balances remain strong at $28.9 million.

Wayne Graham, ACS chief financial officer, said, “We expect to achieve continued broadband growth, which is reflected in our updated guidance. The incremental economics of adding this revenue to our mix should drive margin improvements going forward. We also remain committed to dedicating free cash flow to deleveraging the balance sheet. All of which is expected to improve value creation to our shareholders.”

2014 Guidance:

The Company updated guidance as follows:

Increased revenue to approximately $315 million from approximately $310 million.
Increased Adjusted EBITDA to approximately $92 million from approximately $90 million.
Confirmed free cash flow of approximately $20 million.
Confirmed the capital expenditures range of approximately $40 to $45 million which includes $4 to $5 million for a fiber build project with a strategic customer.

Conference Call

The Company will host a conference call and live webcast on Thursday, November 6, 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 399324. All other parties can access the call at 1-719-457-2706.

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 December 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 1781788. All other parties can call 1-719-457-0820 and enter pass code 1781788.

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 Schedules 4 and 5 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, Universal Service Fund changes, AWN’s financial and operational performance and the competitiveness of the wholesale plans it offers, adverse economic conditions, adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing, and the effects of competition in our markets, the Company’s ability to compete, 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 customers, unforeseen changes in public policies, and changes in accounting policies, which could result in an impact on earnings. 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 Nine Months Ended September 30, September 30, 2014 2013 2014 2013 Operating revenues: Operating revenues, non-affiliates $ 76,683 $ 82,427 $ 232,031 $ 271,122 Operating revenues, affiliates * 1,782 1,414 5,323 1,535 Total operating revenues 78,465 83,841 237,354 272,657 Operating expenses: Cost of services and sales, non-affiliates 31,416 33,078 91,274 105,412 Cost of services and sales, affiliates * 13,534 11,642 43,295 11,959 Selling, general & administrative 25,017 29,274 74,926 83,717 Depreciation and amortization 8,585 9,209 25,850 33,291 (Gain) loss on disposal of assets, net (199 ) (210,558 ) 612 (209,932 ) Earnings from equity method investments (11,556 ) (8,082 ) (29,247 ) (8,061 ) Total operating expenses 66,797 (135,437 ) 206,710 16,386 Operating income 11,668 219,278 30,644 256,271 Other income and (expense): Interest expense (8,615 ) (9,785 ) (26,144 ) (29,970 ) Loss on extinguishment of debt - (2,094 ) - (2,370 ) Interest income 28 19 42 37 Other - - - (13 ) Total other income and (expense) (8,587 ) (11,860 ) (26,102 ) (32,316 ) Income before income tax expense 3,081 207,418 4,542 223,955 Income tax expense (1,203 ) (85,421 ) (1,964 ) (60,796 ) Net income $ 1,878 $ 121,997 $ 2,578 $ 163,159 Net income per share: Net income applicable to common shares $ 1,878 $ 121,997 $ 2,578 $ 163,159 Tax-effected expense attributable to convertible notes - 1,485 - 4,409 Net income assuming dilution $ 1,878 $ 123,482 $ 2,578 $ 167,568 Basic $ 0.04 $ 2.59 $ 0.05 $ 3.50 Diluted $ 0.04 $ 2.08 $ 0.05 $ 2.85 Weighted average shares outstanding: Basic 49,498 47,159 49,265 46,592 Diluted 50,155 59,359 49,730 58,816 * 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) September 30, December 31, Assets 2014 2013 Current assets: Cash and cash equivalents $ 28,851 $ 43,039 Restricted cash 467 467 Accounts receivable-trade, non-affiliates, net 38,116 34,066 Materials and supplies 9,591 10,131 Prepayments and other current assets 8,003 7,300 Deferred income taxes 6,694 7,144 Total current assets 91,722 102,147 Property, plant and equipment 1,357,660 1,344,949 Less: accumulated depreciation and amortization (994,358 ) (992,936 ) Property, plant and equipment, net 363,302 352,013 Goodwill 5,986 4,650 Debt issuance costs 5,017 6,929 Deferred income taxes 11,606 14,107 Equity method investments 257,853 266,972 Other assets 349 502 Total assets $ 735,835 $ 747,320 Liabilities and Stockholders' Equity (Deficit) Current liabilities: Current portion of long-term obligations $ 11,846 $ 14,256 Accounts payable, accrued and other current liabilities, non-affiliates 53,457 55,475 Accounts payable, accrued and other current liabilities, affiliates, net * 22,905 14,309 Advance billings and customer deposits 8,501 9,104 Total current liabilities 96,709 93,144 Long-term obligations, net of current portion 422,796 442,001 Other long-term liabilities 17,736 16,947 Deferred AWN capacity revenue, net of current portion 57,548 59,965 Total liabilities 594,789 612,057 Commitments and contingencies Stockholders' equity (deficit): Common stock, $.01 par value; 145,000 authorized 495 487 Additional paid in capital 153,608 152,193 Accumulated deficit (9,230 ) (11,808 ) Accumulated other comprehensive loss (3,827 ) (5,609 ) Total stockholders' equity (deficit) 141,046 135,263 Total liabilities and stockholders' equity (deficit) $ 735,835 $ 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 Nine Months Ended September 30, September 30, 2014 2013 2014 2013 Cash Flows from Operating Activities: Net income $ 1,878 $ 121,997 $ 2,578 $ 163,159 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,585 9,209 25,850 33,291 Gain on sale/contribution of asset to AWN - (210,873 ) - (210,873 ) (Gain) loss on the disposal of assets (199 ) 315 612 941 Gain on ineffective hedge adjustment - 231 - (785 ) Amortization of debt issuance costs and debt discount 1,260 2,714 3,926 5,754 Amortization of ineffective hedge 362 1,082 1,276 1,948 Amortization of deferred AWN capacity revenue (647 ) (738 ) (2,337 ) (738 ) Stock-based compensation 684 550 1,877 2,268 Deferred income tax expense (benefit) 961 84,823 1,708 60,198 Provision for uncollectible accounts 1,467 366 2,942 805 Earnings from equity method investments (11,556 ) (8,082 ) (29,247 ) (8,061 ) Cash distribution from equity method investments 11,556 5,389 29,247 5,389 Other non-cash (income) expense, net (226 ) (20 ) (384 ) 216 Changes in operating assets and liabilities 4,918 7,161 1,048 6,096 Net cash provided by operating activities 19,043 14,124 39,096 59,608 Cash Flows from Investing Activities: Capital expenditures (16,042 ) (13,717 ) (33,916 ) (27,314 ) Capitalized interest (720 ) (421 ) (2,082 ) (1,291 ) Change in unsettled capital expenditures 3,114 553 (1,300 ) (3,276 ) Proceeds on sale of assets 136 2,812 136 4,747 Proceeds on sale/contribution of asset to AWN - 100,000 - 100,000 Return of capital from equity investment 944 - 8,286 - Non-cash acquisition, cash received - - 68 - Net change in short-term investments - 525 - 2,037 Change in unsettled acquisition costs - (3,345 ) - (3,345 ) Net change in restricted accounts - 3,345 - 3,393 Net cash (used) provided by investing activities (12,568 ) 89,752 (28,808 ) 74,951 Cash Flows from Financing Activities: Repayments of long-term debt (5,280 ) (67,001 ) (24,022 ) (97,382 ) Debt issuance costs - (25 ) - (206 ) Payment of withholding taxes on stock-based compensation (3 ) (2 ) (586 ) (632 ) Proceeds from issuance of common stock - 2 132 117

Net cash used by financing activities

(5,283 ) (67,026 ) (24,476 ) (98,103 ) Change in cash and cash equivalents 1,192 36,850 (14,188 ) 36,456 Cash and cash equivalents, beginning of period 27,659 16,445 43,039 16,839 Cash and cash equivalents, end of period $ 28,851 $ 53,295 $ 28,851 $ 53,295 Supplemental Cash Flow Data: Interest paid $ 6,008 $ 6,818 $ 22,036 $ 25,201 Cash paid on extinguishment of hedging instrument $ - $ 4,073 $ - $ 4,073 Income tax paid $ 206 $ - $ 220 $ - Supplemental Non-cash Transactions: Property acquired under capital leases $ 346 $ (19 ) $ 390 $ (17 ) Additions to ARO asset $ 17 $ 43 $ 306 $ 180 Exchange of debt with common stock $ - $ 6,000 $ - $ 6,000

Non-cash acquisition purchase price, net of cash received

$ - $ - $ 1,850 $ -

Schedule 4

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. ADJUSTED EBITDA (Unaudited, In Thousands) Three Months Ended Nine Months Ended September 30, September 30, 2014 2013 2014 2013 Net income $ 1,878 $ 121,997 $ 2,578 $ 163,159 Add (subtract): Interest expense 8,615 9,785 26,144 29,970 Loss on extinguishment of debt - 2,094 - 2,370 Interest income (28 ) (19 ) (42 ) (37 ) Depreciation and amortization 8,585 9,209 25,850 33,291 Loss on sale of short-term investments - - - 13 (Gain) loss on disposal of assets (199 ) 315 612 941 (Earnings) loss from equity method investment in TekMate - (18 ) (12 ) 3 Earnings from equity method investment in AWN (11,556 ) (8,064 ) (29,235 ) (8,064 ) Gain on sale/contribution of asset to AWN - (210,873 ) - (210,873 ) AWN distributions received 12,500 5,389 37,500 5,389 AWN distributions received for the prior period (4,167 ) - (4,167 ) - AWN distributions receivable within 12 days 4,167 4,167 4,167 4,167 Income tax expense 1,203 85,421 1,964 60,796 Stock-based compensation 684 550 1,877 2,268 Long-term cash incentives 587 152 1,572 482 Earthquake related expense 1,228 - 1,228 -

AWN transaction-related costs

28 4,702 240 5,974 Adjusted EBITDA $ 23,525 $ 24,807 $ 70,276 $ 89,849 Revenue 78,465 83,841 237,354 272,657 CETC Revenue (4,720 ) (5,139 ) (14,581 ) (16,093 ) Net Revenue $ 73,745 $ 78,702 $ 222,773 $ 256,564 Adjusted EBITDA Margin 31.9 % 31.5 % 31.5 % 35.0 %

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 recurring performance and believes provides useful information to investors regarding baseline operating results. 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 or other assets, loss on sale of short-term investments, gain or loss on asset purchases or disposals, earnings on equity method investments, provisions for taxes, transaction-related costs, stock-based compensation, and expenses under the company’s long term cash incentive plan (“LTCI”) including adjustments to TekMate purchase price based upon achieving earn out targets. 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 and Schedule 9 to these press release financials provides additional AWN related financial information. Additionally, in July 2014 an undersea cable serving Juneau, Alaska was impacted by a service disruption associated with an earthquake. The costs associated with restoration and repair of this facility is excluded from Adjusted EBITDA. Due to the AWN structure, ACS receives certain high cost revenues ("CETC") which are reported in operating revenue, non-affiliates, and remits an equal amount to AWN as a component of our consideration for wholesale wireless services, which is reported in Cost of services and sales, affiliated. From a financial reporting perspective CETC grosses up our revenue and expense and has no impact on Adjusted EBITDA, but impacts our core margins. We therefore report Adjusted EBITDA Margin to exclude this impact.

Schedule 5

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. FREE CASH FLOW (Unaudited, In Thousands) Three Months Ended Nine Months Ended September 30, September 30, 2014 2013 2014 2013 Adjusted EBITDA $ 23,525 $ 24,807 $ 70,276 $ 89,849 Less: Capital spending Incurred capital expenditures (16,042 ) (13,717 ) (33,916 ) (27,314 ) Milestone billings for fiber build project for a carrier customer 2,000 - 2,000 - AWN transaction-related capital costs, net change - - - (41 ) Net capital spending (14,042 ) (13,717 ) (31,916 ) (27,355 ) Amortization of AWN capacity revenue (647 ) (738 ) (2,337 ) (738 ) Earthquake related expense (1,228 ) - (1,228 ) - Cash interest expense (6,008 ) (6,818 ) (22,036 ) (25,201 ) Free cash flow $ 1,600 $ 3,534 $ 12,759 $ 36,555

NonGAAP Measures:

Schedule 6

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. REVENUE GROWTH (Unaudited, In Thousands) Three Months Ended Nine Months Ended September 30, September 30, Service revenue: 2014 2013 2014 2013 Business and wholesale customers Voice $ 5,666 $ 5,790 $ 16,948 $ 17,303 Broadband 10,962 10,080 32,658 29,509 IT Services 1,007 - 2,540 - Other 1,800 1,926 5,256 5,969 Wholesale 8,544 7,267 24,723 22,319 Business and wholesale service revenue 27,979 25,063 82,125 75,100 Consumer customers Voice 3,686 4,147 11,399 12,819 Broadband 6,336 5,596 18,441 16,443 Other 409 478 1,191 1,275 Consumer service revenue 10,431 10,221 31,031 30,537 Total service revenue 38,410 35,284 113,156 105,637 Growth in service revenue 8.9 % 7.1 % Growth in broadband service revenue 10.3 % 11.2 % Other revenue: Equipment sales 1,310 516 3,421 1,451 Access 8,771 9,273 26,732 28,056 High cost support 4,922 4,984 18,271 13,558 Total service and other revenue 53,413 50,057 161,580 148,702 Growth in service and other revenue 6.7 % 8.7 % Growth excluding equipment sales 5.2 % 7.4 % Wireless revenue: Business and consumer service revenue 16,413 17,673 50,598 53,607 Equipment sales 2,059 1,255 4,178 3,785 Other 1,213 1,441 4,010 3,591 AWN related: Foreign roaming - 5,594 - 40,029 Wireless backhaul - 1,944 70 6,112 CETC 4,720 5,139 14,581 16,093 Amortization of deferred AWN capacity revenue 647 738 2,337 738 Total AWN related 5,367 13,415 16,988 62,972 Total wireless & AWN related revenue 25,052 33,784 75,774 123,955 Total revenue $ 78,465 $ 83,841 $ 237,354 $ 272,657

Schedule 7

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. KEY OPERATING STATISTICS (Unaudited) Three Months Ended September 30, June 30, September 30, 2014 2014 2013 Voice: Consumer access lines 45,177 46,740 50,722 Business access lines 79,563 80,172 80,071 Voice ARPU consumer $ 26.73 $ 26.95 $ 26.81 Voice ARPU business $ 23.65 $ 23.63 $ 24.04 Broadband: Consumer connections 38,257 39,022 38,117 Business connections (2) 19,201 19,077 18,700 ARPU consumer $ 54.18 $ 52.51 $ 48.63 ARPU business (1) (2) $ 190.60 $ 194.96 $ 180.15 Wireless: Postpaid connections 79,963 83,468 86,423 Lifeline connections 7,637 7,447 9,077 Prepaid connections 21,463 18,663 16,614 Total 109,063 109,578 112,114 Retail wireless ARPU $ 50.10 $ 52.55 $ 52.08 Churn: Voice connections 1.5 % 1.9 % 1.4 % Broadband connections (2) 2.6 % 2.4 % 2.3 % Wireless connections 2.9 % 2.4 % 3.2 % (1) Business broadband ARPU was restated to reflect the movement of IT services revenue into a separate category. (2)

How we calculate broadband connections has changed to exclude certain internal use circuits. Historical amounts have been restated to reflect appropriate comparisons period over period.

Schedule 8

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. Long Term Debt (Unaudited, In Thousands) September 30, December 31, September 30, 2014 2013 2013 2010 senior credit facility term loan due 2016 $ 322,700 $ 345,900 $ 347,725 Debt discount - 2010 senior credit facility term loan due 2016 (1,155 ) (1,687 ) (1,838 ) 6.25% convertible notes due 2018 114,000 114,000 114,000 Debt discount - 6.25% convertible notes due 2018 (7,731 ) (9,213 ) (9,666 ) Capital leases and other long-term obligations 6,828 7,257 7,426 434,642 456,257 457,647 Less current portion (11,846 ) (14,256 ) (12,865 ) Long-term obligations, net of current portion $ 422,796 $ 442,001 $ 444,782 Maturities

2014 (October 1 - December 31) $ 286 2015 (January 1 - December 31) 15,422 2016 (January 1 - December 31) 308,792 2017 (January 1 - December 31) 510 2018 (January 1 - December 31) 114,292 2019 (January 1 - December 31) 283 Thereafter 3,943 $ 443,528

Schedule 9

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. Summary AWN information (Unaudited, In Thousands) Alaska Wireless Network, LLC Stand Alone Selected Operating Results Q1 - 2014 Q2 - 2014 Q3 - 2014 YTD - 2014 Operating revenues $ 63,037 $ 64,665 $ 70,424 $ 198,126 Operating expenses: Cost of services and sales 19,119 18,880 18,049 56,048 Selling, general & administrative 5,954 5,898 5,337 17,189 Depreciation and amortization 10,995 10,644 11,097 32,736 Total operating expenses 36,068 35,422 34,483 105,973 Operating income 26,969 29,243 35,941 92,153 Other income and (expense) (92 ) (88 ) (94 ) (274 ) Net income 26,877 29,155 35,847 91,879 Plus: Depreciation Expense 10,995 10,644 11,097 32,736 Other, net 1,706 1,631 1,420 4,757 Minus: Capital Spending 3,639 7,110 21,141 31,890 Management Fee to GCI 1,438 1,372 1,089 3,899 Adjusted Free Cash Flow $ 34,501 $ 32,948 $ 26,134 $ 93,583 Distributions paid to ACS: 12,500 12,500 12,500 37,500 Distributions to ACS as a proportion of FCF: 36.2 % 37.9 % 47.8 % 40.1 % 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: Q1 - 2014 Q2 - 2014 Q3 - 2014 YTD - 2014 Wireless business and consumer service revenue $ 17,056 $ 17,129 $ 16,413 $ 50,598 AWN wholesale charges * $ 11,905 $ 12,750 $ 11,210 $ 35,865 Handset subsidy support * (2,664 ) (3,095 ) (2,256 ) (8,015 ) Equipment subsidy 3,127 3,358 1,875 8,360 Other * 235 830 (141 ) 924 Total $ 12,603 $ 13,843 $ 10,688 $ 37,134 Wholesale Margin $ 4,453 $ 3,286 $ 5,725 $ 13,464 27 % * 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 Q3 - 2014 YTD - 2014 AWN net income $ 26,877 $ 29,155 $ 35,847 $ 91,879 Adjusted for step-up in GCI assets (1,345 ) (1,650 ) (1,180 ) (4,175 ) AWN stepped-up earnings $ 25,532 $ 27,505 $ 34,667 $ 87,704 ACS ownership percentage of AWN 33.33 % 33.33 % 33.33 % 33.33 % "Adjusted for step-up"(B) reflects the step up in 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 $ 11,556 $ 29,235 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 Q3 - 2014 YTD - 2014 Cash distributions received during the quarter $ 12,500 $ 12,500 $ 12,500 $ 37,500

Less:

Distributions received during the quarter related to the previous period

(4,167 ) (4,167 ) (4,167 ) (4,167 ) Plus: Distributions received within 14 business days of quarter-end 4,167 4,167 4,167 4,167 Amortization of deferred AWN capacity revenue 841 849 647 2,337 Equals AWN impact to Adjusted EBITDA $ 13,341 $ 13,349 $ 13,147 $ 39,837

Less:

Amortization of deferred AWN capacity revenue 841 849 647 2,337 Equals AWN impact to Free Cash Flow $ 12,500 $ 12,500 $ 12,500 $ 37,500 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 Systems Group, Inc.Tiffany DunnManager, Board and Investor Relations907-297-3103investors@acsalaska.com

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