alaska communications investor presentation

8/7/2019 Alaska Communications Investor Presentation

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1 | Alaska Communications - March 2011

Alaska Communications


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Forward-Looking Statements

We have included in this presentation 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. You are cautioned not to put undue reliance on such forward-looking statements, which are not aguarantee of performance and are subject to a number of risks, uncertainties and other factors, many of which

are outside ACS' control.

For further information regarding risks and uncertainties associated with ACS' business, please refer to the

company's SEC filings, including, but not limited to, our annual report on Form 10-K for the fiscal year endedDecember 31, 2010, quarterly reports on Form 10-Q filed subsequently, and other filings with the SEC, included

under headings such as Risk factors and Managements discussion and analysis of financial condition and

results of operations.

Non-GAAP Financial Measures

This presentation includes managements estimate of EBITDA for the year ending December 31, 2011.

Management believes the most directly comparable GAAP measure would be Net cash provided by operating

activities. Due to the difficulty in forecasting and quantifying the amounts that would be required to be included in

this comparable GAAP measure, however, the company is not providing an estimate of 2011 net cash provided

by operating activities at this time.

ACS Safe Harbor Statement


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Alaska Communication Systems (ACS):

A smart choice

1.) The right strategic choice:

2.) Proven competitive advantage:

3.) Profitable execution:

4.) Excellent shareholder return:

Mobile Data and CloudEnablement

Differentiated network assets- a

track record of investment andperformance

Disciplined team- an organizationthat delivers

Rewarded with high dividendpayout policy


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Journey of Transformation:Revenue Growth and Shift

ACS Revenue 2004: ~$285M (1) ACS Revenue 2010: ~$342M

Wireless 19%

Enterprise 6%Traditional Wireline 75%

Wireless 41%

Enterprise 14%

Traditional Wireline 45%

(1) Revenues eliminate intracompany transactions following the companys move to price cap regulation.


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Wireline and Wireless Network: Built for Data

Wireless coverage 85% POPs - 75% EVDO Rev A

75% in local footprint

Premier L48/Canada Roaming

Agreements Ample 3G/4G Spectrum

Wireline data network Transformed Local Assets

The ONLY Statewide MPLS

and Metro Ethernet network

>90% coverage in towns >5K

Peering points (Seattle & Portland)

Long Haul Fiber AK, WA and OR

Redundant Submarine cables

Manage 1/3 of trans-Pacific cable traffic(Ex. TATA, Southern Cross, TPE)


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Wireless: 3G Data and Voice Across North America

Vertically integrated:

75% towers in ACS LEC footprint 2 ACS owned submarine fibers to

peering points in OR and WA

Outside AK coverage:

3G data and voice roaming withbest carriers in Lower 49 and

Canada

Ample spectrum:

3G: 35 MHz 4G: 20 MHz

AK coverage:

85% POPs 75% EVDO Rev A

ACS peering points in Seattle and Portland
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ACS Wireless Revenue ($M)

Wireless: Growth through Data

Upside potential from data

Largest 3G AK network

First Android device in Q1 2010

5 Androids during 2010

HTC Hero, Desire, Wildfire; MOTMilestone; LG Axis

Post paid data-centric device penetration ~doubled

35% in Q4 2010

18% in Q4 2009

Increase in data centric device sales

60% of sales in Q4 2010

24% of sales in Q4 2009

Post paid data ARPU up 53%

$13.16 in Q4 2010 $8.62 in Q4 2009

Lots of headroom

Total wireless data revenue up 81% y-o-y

Alaska exempt from CETC cap

Positioned for an early roll out of 4G

($ in millions)

(1) Service revenue equals total wireless revenue less device, roaming and CETC revenues

ACS Data as % of Service Revenue (1)



Enterprise: Standards-Based Technology:Pairs with L48

Only Metro Ethernet / MPLS in AK:

In towns over 5,000:

92% Metro Ethernet coverage 96% MPLS coverage

2 ACS cables connect Alaska and Pac NW: Diverse routes OR landings Diverse fiber to Portland and Seattle Peer for MPLS and IP

ACS manages 1/3 all t rans-Pacific cables

Data hosting centers:

Anchorage AK Hillsboro OR

Account Executives: Alaska Oregon Washington, D.C.

Managed services:

WAN

LAN through partnership with Managed IT firmACS peering points in Seattle and Portland
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Enterprise: Growth through Data

($ in millions)

Enterprise Revenue ($M) Entered the market in April 2009 with:

2 undersea fibers to Pac NW

Statewide Metro Ethernet and MPLS

Data hosting centers in AK and OR

89% of revenue from data

Limits exposure to price compression andtraffic reductions in long haul carrier voice

Invested 49% in Alaska IT pro services firm

Accelerating revenue growth

Q4 2010 revenue up 17% vs. Q4 2009 and9% vs. Q3 2010



Enabling Cloud Services for Business

The only statewide Metro Ethernet and MPLS network

The largest 3G data wireless network

The only redundant 24/7 NOCC in AK and OR

Geographically Diverse fiber network connecting AK to L48

Redundant Data Hosting Centers in AK and OR

Integrators

IT and Unified Communications providers

Telecommunications Leaders

855 Skilled Alaskan Professionals

Client Account Managers in AK, DC,OR and KS

Certified Engineers

PMI Certified PMPs

CONNECTHOST

MANAGE

People

Assets

Partnerships

Connect MPLS/Metro Ethernet Wireless & Mobile

Broadband Dedicated Internet Access

Private Line Unified Communications Video Conferencing

Host Hosted Space

Hosted Storage Hosted Platform Hosted Applications

Manage Network Management

IT Management(ConstantlyOn IT) Fleet Management
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Traditional Wireline: Leveraged by Growth Segments

($ in millions)

Traditional Wireline Revenue ($M) Enables vertical integration

Backhaul for Wireless towers

Last mile for Enterprise locations

Delivers operating performance

Owners economics

End-end quality management

Maximum flexibility

157K retail lines majority business Consumer lines have over 50% DSL

penetration

Less than 10% of 2010 total companyrevenue is from legacy consumer voice



Capital: Invested for Data

Maintenance capex accommodatesnetwork migration (e.g. EVDO Rev A)

Growth capex targets unique highROI projects (e.g., entry into CDMA

Wireless, entry investments forEnterprise)

2011 growth capex targets towerbackhaul to support the launch of 4GWireless and connectivity sales toother wireless carriers

($ in millions)

Capital Expenditures ($M)

(1) 2011 guidance



Total Margin Management:

Efficiency and Transformation

Headcount Process Improvement programs drive

efficiencies and improve customer service Revenue up 20% and EBITDA up 22%

since 2004

Headcount down ~20%

Workforce aligned with shift in revenue Industry leading wireless EBITDA margins

45% in 2010

Expanding wireline EBITDA margins

32% in 2010 vs. 29% in 2009



Shareholders Rewarded with High Dividend Payout Policy

Current yield of 8.5%

Minimal working capital needed

Significant tax shield (beyond 2015)

Long term payout ratio target of 70-75%

70% at guidance

2011 Distributable Cash Flow ($M) (1)

($ in millions)

($ in millions)

(1) 2011 guidance



Alaska Communication Systems (ACS):

A smart choice

1.) The right strategic choice:

2.) Proven competitive advantage:

3.) Profitable execution:

4.) Excellent shareholder return:

Mobile Data and CloudEnablement

Differentiated network assets- atrack record of investment andperformance

Disciplined team- an organizationthat delivers

Rewarded with high dividendpayout policy

alaska communications investor presentation

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