Safe Harbor Statement

Transcription

1 ANNUAL MEETING - JUNE

2 Safe Harbor Statement 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 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 a guarantee of performance and are subject to a number of risks, uncertainties and other factors, many of which are outside Alaska Communications' control. For further information regarding risks and uncertainties associated with Alaska Communications' business, please refer to the Alaska Communications SEC filings, including, but not limited to, our annual report on Form 10-K, quarterly reports on Form 10-Q filed subsequently, and other filings with the SEC, included under headings such as Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations. 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 Free Cash Flow and Net Debt, which management utilizes to assess performance and believes provides useful information to investors. The definition of these non- GAAP measures are contained in our quarterly earnings press releases. Adjusted EBITDA and Adjusted Free Cash Flow are non-gaap measures and should not be considered a substitute for Net Income, Net Cash Provided (Used) By Operating Activities and other measures of financial performance recorded in accordance with GAAP. Reconciliations of our non-gaap measures to our nearest GAAP measures can be found in our earnings releases or on our website at in the investment data section. Other companies may not calculate non-gaap measures in the same manner as Alaska Communications. We do not provide guidance for Net Income and Net Cash Provided (Used) By Operating Activities. 2

3 Company Overview and Milestones The Juneau and Douglas Telephone Company begins operations Telephone Utilities of the Northland begins operations Alaska Communications is formed by combining 3 RLECs to become first statewide telecom company Acquires the Northstar submarine cable, and builds AKORN, providing Alaska diverse submarine routes to the Lower 48 Acquires Fiber Network from ConocoPhillips to allow entry into Oil & Gas Industry Anchorage Telephone Utility begins operations Alaska Communications completes its initial public offering Launches the Alaska Wireless Network (AWN) joint venture with GCI to better compete in wireless sector Sells its interest in the Alaska Wireless Network to GCI, pays down debt with proceeds, and becomes one of the lowest-leveraged companies in the industry 125+ year operating history, Publicly traded (NASDAQ: ALSK) since 1999 ~600 employees (~25 outside AK), superb technical talent, tenured and seasoned management team Extensive Fiber Network including significant submarine network operations capabilities Superb record of success in Enterprise & Carrier, with emerging Mass Market success Track record of gaining market share based on technology and service differentiation 3

4 ALSK Strategy for Growth ALSK remains focused on executing its strategy through the following: ALSK s Focused Company Strategy Maintaining and developing Enterprise & Carrier strengths Building new avenues of organic growth in Mass Market Leveraging IT and Network technologies to lower costs and improve margins Seeking accretive strategic opportunities to address scale and geographic diversification Foundation of Strong Broadband Growth Supports Continued Performance Outlook for North American data consumption remains robust Total data demand (PB per month) estimated to grow at 20% CAGR from Consumer IP traffic estimated to grow at 20% CAGR from Consumer internet video traffic estimated to grow at 24% CAGR from Business IP traffic estimated to grow at 23% CAGR from Demand drivers impacting ALSK include: Video (primarily Consumer), Gaming (primarily Consumer), Cloud Migration (both Business and Consumer), Virtual & Augmented Reality (both Business and Consumer) Growth in mobile broadband demand will push high-density small cell deployments. North American mobile data demand est. to grow at 34% CAGR from Small cells needed to efficiently deliver content in metro markets total small cells deployed expected to increase by almost 35x in next 10 years Increased fiber density in Access network to provide Gbps speeds to dense small cell deployments Fixed wireless provides 100+Mbps as an access technology and Gbps as a backhaul technology. Central Offices serving as mini-data centers for increased CDN density Continued strength of Broadband growth remains foundation for future performance Sources: Cisco Visual Networking Index: Forecast and Methodology, , ATLANTIC-ACM, SNL Kagan, and FirstNet. 4

5 Extensive Fiber Infrastructure Drives Future Growth Extensive Long Haul Fiber Network Two diverse submarine routes to the Lower 48, with backup/protection access to a third Key fiber assets on Alaska s North Slope supporting the oil and gas industry High Quality Fiber & Broadband Network 100G wavelengths in state backbone with diverse routes Commencing deployment of GPON access nodes in business areas All military bases on fiber Hillsboro OR facility has extensive submarine fiber expertise State of Art Secure ALL IP Network Juniper IP/Advanced Ethernet core statewide 2.0 Certified Ethernet services Widely deployed Metaswitch voice application soft-switch network CyrusOne InternetExchange and Microsoft ExpressRoute partnerships New partnerships enhance security for cloud computing Recent investments in Fixed Wireless and Satellite capabilities extend network capabilities 5

6 For Home For Business Key Services IT Services Data Networking Provides support and management of IT systems, including 24x7 proactive network monitoring Offers customized managed communications solutions to businesses with data security or network optimization needs Private and secure connections to the cloud offered over an advanced fiber based Ethernet network First and only carrier in Alaska with Carrier Ethernet 2.0 Certified Services 2012 Revenue Mix 17% 36% 47% Internet Connectivity Provides internet connectivity to small to mid-sized businesses and offers up to 200 Mbps with a dedicated line Consumer Business/Wholesale Regulatory/Other Business Internet provides reliable, high-speed Internet with no data caps and no overage charges Voice Communications Unlimited Internet Secure hosted voice over internet solutions State of art SIP trunking services provide IP voice leveraging onpremise IP PBX implementations High-speed Unlimited Internet service without data caps or addon fees for residential customers Provides a dedicated line with individual connections, to ensure reliability 2017 Revenue Mix 22% 17% 61% Home Voice Provides voice to residential customers Lifeline program provides access to services for only $1.00 a month to qualified Alaskans Consumer Business/Wholesale Regulatory/Other 6

7 Competitive Landscape COMPETITIVE POSITIONING COMPETITIVE ADVANTAGES Strong competitive position within Alaskan market. Reputable track record in a competitive market Owns 2 of the 4 submarine cables connecting Alaska to the Lower 48 states. Expansive and established fiber network focused on Enterprise & Carrier segment, now also supporting Mass Market segment On-site and cloud data storage solutions. Comprehensive service offering designed as a one-stop shop for Enterprise IT needs. Submarine cables follow diverse routes. BUSINESS & WHOLESALE GROWTH COMPARISON (Y/Y) Only major provider with an uncapped data offering. Secure connectivity and data storage through exclusive partnerships with CyrusOne and Microsoft. Outstanding customer service. Highly trained and certified technical professionals supported by a seasoned management team Culture of advancing technology as the first among competitors to deploy Ethernet MPLS, VoIP, and more. Technology and Service provide differentiation Growth driven by share gain in broadband and increased wallet share of business IT spend 7

8 Diverse Customer Verticals CARRIER / FED OIL & GAS STATE / LOCAL HEALTHCARE / EDUCATION SMB STRATEGIC COMMERCIAL Kodiak Area Native Assoc. 8

9 Growing Roster of Partners & Innovative Managed Services Select Partnerships Next Generation Products Managed Security: Watchguard IT: Gold Partner Communications: Avaya: Silver Partner IT Infrastructure: Microsoft: Gold Partner, Small Mid-Market Solutions, Data Center Silver Partner Barracuda: Storage MSP Partner Cloud: Microsoft: Silver Partner, Small Mid-Market Cloud Solutions, Azure ExpressRoute Partner CyrusOne: IX (Internet Exchange) Connection First SIP product implementation in Alaska: All major metro markets in Alaska Based on QoS Enabled, Secure, MEF Certified IP Network Hosted Voice over Internet: All major metro markets in Alaska Upgraded to High Definition Voice With Unified Communications for Collaboration Managed Networks: Proactive management of Enterprise Class networks Customer Portal capabilities Partnerships with blue-chip companies and access to the latest products allows Alaska to deliver best-in-class customer experiences 9

10 Growth Drivers Growth Drivers & Differentiation Enterprise & Carrier Value Proposition Grow with the market Technology leadership Customer Service Solution Orientation Take Share Mass Market Value Proposition Expand wallet share Speed & Reliability Convenience & Instancy Value 10

11 Historical Financials WIRELINE REVENUE ADJUSTED EBITDA $201 $199 $215 $220 $227 $227 Sale of Wireless operations TOTAL NET DEBT / LEVERAGE WIRELINE CAPEX 1 Sale of Wireless operations excludes the $5.3mm ConocoPhillips fiber purchase 11

12 Looking Ahead Alaska Economy Overall improvement Strengthening Oil and Gas industry Increasing service demand from businesses Enterprise & Carrier Solid sales funnel and results support future growth Turning up customers in the Arctic markets, including large school district wins Capturing 5G network growth with small cell backhaul services Federal opportunities are significant Mitigating Rural Health Care impacts Mass Market Fiber-fed WiFi and Fixed Wireless creating market opportunity and performance CAF II planning and implementation underway and performing to plan Technology Capabilities Fiber expansion in Arctic markets deployed metro fiber in Nome and Utqiaġvik (Barrow) Fiber-fed WiFi / Fixed Wireless deployments well underway Expanding Satellite deployment Strengthening online capabilities Enterprise & Carrier will drive growth with Mass Market providing additional impetus Sources: Cisco Visual Networking Index: Forecast and Methodology, , ATLANTIC-ACM, SNL Kagan, and FirstNet. 12

13 Business Plan Drives Shareholder Value Operating Performance Enterprise & Carrier and Mass Market segmentation focus drives top-line growth and Adj. EBITDA/FCF performance Technology Innovation Investments in advanced hybrid fiber / fixed-wireless network combined with IT systems drives scalable operating model Strategic Actions Explore strategic actions to drive scale and diversification 13