ALASKA COMMUNICATIONS SYSTEMS GROUP INC (Form: 10-Q, Received: 08/10/2020 15:57:09)

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Exhibit 10.2

This document constitutes part of a
prospectus covering securities that
we have registered under the
Securities Act of 1933

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.

2,100,000 shares of Common Stock, par value $0.01 per share
Issuable under the Alaska Communications Systems Group, Inc. Amended and Restated 2012 Employee Stock Purchase Plan

This Prospectus relates to 2,100,000 shares of common stock (“Common Stock”) of Alaska Communications Systems Group, Inc. (the “Company”) reserved for issuance from time to time in connection with the Alaska Communications Systems Group, Inc. Amended and Restated 2012 Employee Stock Purchase Plan (the “Plan”).

The Plan generally provides for the grant to and the automatic exercise by eligible employees of options to purchase shares of Common Stock through payroll deductions during consecutive six-month offering periods. The Company holds payroll deductions as general corporate assets, and will not hold such payroll deductions in a trust or other fund. The outstanding Common Stock of the Company is listed on the Nasdaq Global Select Market under the ticker symbol “ALSK.”

The main features of the Plan are summarized in this Prospectus. However, if there are any inconsistencies between this Prospectus and the Plan or the terms of any option, the Plan and the terms of the option will always control.

_______________

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities

commission has approved or disapproved these securities, or determined if this Prospectus

is truthful or complete. Any representation to the contrary is a criminal offense.

_______________

Individuals should rely only on the information contained in this document or that the Company has referred to them. The Company has not authorized anyone to provide information that is different. The Company is offering to sell, and seeking offers to buy, shares of Common Stock only in jurisdictions which permit offers and sales. The information contained in this Prospectus is accurate only as of the date of this Prospectus.

Copies of the Plan and additional information about the Plan can be obtained without charge upon written or oral request to: Alaska Communications Systems Group, Inc., 600 Telephone Avenue, Anchorage, Alaska 99503, telephone number (907) 297-3000.

THE DATE OF THIS PROSPECTUS IS JULY 17, 2020.

TABLE OF CONTENTS

	Page
AVAILABLE INFORMATION	1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	2
SUMMARY OF THE PLAN	3
FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE PLAN	9

AVAILABLE INFORMATION

The Company is subject to the reporting and information requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance therewith files periodic reports, proxy statements and other information with the SEC. Periodic reports, proxy statements and other information filed by the Company in accordance with the Exchange Act can be inspected and copied at the SEC’s public reference room in Washington, D.C. , and copies of which can be obtained from the SEC upon payment of prescribed fees. Electronic reports, proxy statements and other information filed through the SEC’s Electronic Data Gathering, Analysis and Retrieval system are publicly available through the SEC’s web site (http://www.sec.gov). The Company’s Common Stock is listed on the Nasdaq Global Select Market under the ticker symbol “ALSK.” Additional updating information with respect to the Company’s Common Stock may be provided in the future to participants by means of appendices to this Prospectus or delivery of other documents.

The Company has filed with the SEC one or more Registration Statement on Form S-8 (including all amendments thereto, the “Registration Statement”) with respect to the securities offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information about the Company and the securities offered hereby, reference is made to the Registration Statement and the exhibits thereto, which may be examined without charge at the SEC’s public reference room in Washington, D.C. 20549, and copies of which may be obtained from the SEC upon payment of the prescribed fees.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, which we have filed with the SEC, are incorporated by reference in this Prospectus:

●	Our annual report on Form 10-K for the year ended December 31, 2019, filed on March 16, 2020, which contains our audited financial statements for the latest fiscal year for which such statements have been filed;

●	Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 11, 2020;

●

All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by our annual report on Form 10-K referenced above (excluding any documents or portions thereof that are furnished under Item 2.02 or Item 7.01 of a current report on Form 8-K, and any exhibits included with such Items); and

●	The description of our Common Stock contained in our registration statement on Form 8-A (Registration No. 000-28167), filed by us with the SEC under Section 12(b) of the Exchange Act, on November 17, 1999, including any amendments or reports filed for the purpose of updating such description.

In addition, the Company deems all documents subsequently filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act to be incorporated by reference in this Prospectus after the date of this Prospectus and prior to the filing of a post-effective amendment which indicates that the Company has sold all securities offered or which deregisters all securities then remaining unsold (except as to any portion of a document or current report furnished under current Items 2.02 or 7.01 of Form 8-K that is not deemed filed under such provisions). The Company deems all such documents to be a part of this Prospectus from the respective dates of filing such documents.

The Company further deems any statement contained in a document incorporated or deemed to be incorporated by reference into this Prospectus to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this Prospectus modifies or supersedes such statement. The Company will not deem any such statement so modified or superseded to constitute a part of this Prospectus except as so modified or superseded.

The Company will provide copies of all documents which it has incorporated into this Prospectus by reference (not including the exhibits to such information, unless such exhibits are specifically incorporated by reference in such information) without charge to each person, including any beneficial owner, to whom the Company has delivered this Prospectus, upon a written or oral request. The Company will also provide copies of this Prospectus, as amended or supplemented from time to time, any other documents (or parts of documents) that constitute part of the Prospectus under Section 10(a) of the Securities Act of 1933, as amended (the “Securities Act”), or which Rule 428(b) under the Securities Act requires the Company to deliver, and its Annual Report to Stockholders, without charge to each such person, including upon written or oral request. Such persons should direct all requests to:

Alaska Communications Systems Group, Inc.

600 Telephone Avenue

Anchorage, Alaska 99503

Tel: (907) 297-3000

SUMMARY OF THE PLAN

The purpose of the Plan is to assist eligible employees in acquiring a stock ownership interest in the Company, to help eligible employees provide for their future security and to encourage them to remain in the employment of the Company and its designated subsidiaries.

The Plan generally provides for the grant and the automatic exercise of options to purchase shares of Common Stock through payroll deductions during successive six-month offering periods (unless the plan administrator changes the duration of future offering periods). The Plan is intended to qualify as an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).

The Employee Retirement Income Security Act of 1974 does not govern the Plan. In addition, the Plan does not qualify under Section 401(a) of the Code.

Because this is a summary, it does not contain all the information that may be important to participants. To the extent any provision of this summary is inconsistent with the terms of the Plan, the Plan will prevail. Participants may obtain a copy of the Plan and additional information about the Plan, without charge, by written or oral request to the Company:

Alaska Communications Systems Group, Inc.

600 Telephone Avenue

Anchorage, Alaska 99503

Tel: (907) 297-3000

Securities Subject to the Plan

Under the terms of the Plan, the maximum aggregate number of authorized shares of Common Stock for issuance under the Plan is 2,100,000 shares of Common Stock. The Board of Directors of the Company (the “Board”) or a committee of the Board appointed to administer the Plan (the “Committee”) will proportionately adjust:

●	the aggregate number of shares of Common Stock subject to the Plan;

●	the number of shares of Common Stock subject to outstanding options; and

●	the price per share of outstanding options;

if there is any increase or decrease in the number of issued shares of Common Stock as a result of any dividend or other distribution, reorganization, merger, consolidation, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other increase or decrease in such shares of Common Stock affected without receipt of consideration by us as a result of which the Board or the Committee determines the foregoing adjustments are appropriate. The number of shares of Common Stock available for issuance under the Plan was reduced by the number of shares of Common Stock issued under the Company’s 1999 Employee Stock Purchase Plan (the “Prior Plan”) in respect of the offering period in effect on the date the Board originally adopted the Plan in 2012.

The Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the open market or otherwise.

We will use proceeds from the sale of the shares of Common Stock pursuant to the exercise of options under the Plan for general corporate purposes.

Grant of Options; Offering Periods

The Plan grants to eligible employees nontransferable options to purchase shares of Common Stock. Options are granted on the first trading day (i.e., a day on which the stock exchange or national market system on which the Common Stock is listed is open for trading) of each offering period (the “enrollment date”). Such options are automatically exercised on the last trading day that is also a Company business day of each offering period (“exercise date”). The first day of each offering period is either January 1 or July 1 of each year, unless otherwise determined by the plan administrator.

Eligibility to Participate

You will be eligible to participate in any offering period if, on the first day of the period, you are one of our employees or our designated subsidiaries’ employees,

●

who does not, immediately after the option is granted, own stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or a parent or subsidiary of the Company (stock that you may purchase under options or that we attribute to you under Section 424(d) of the Code will be counted for this purpose);

●	whose customary employment is for more than 20 hours per week; and

●	whose customary employment is for more than 5 months in any calendar year.

We cannot grant an option that would permit your rights to purchase stock under all employee stock purchase plans maintained by the Company and its affiliates, and which are intended to qualify under Section 423 of the Code, to accrue at a rate which exceeds twenty five thousand dollars ($25,000) of fair market value of Common Stock (as of the time the options are granted) for each calendar year in which your option is outstanding at any time.

Election to Participate

You may enroll in the Plan by submitting the prescribed enrollment form to us no later than the filing deadline communicated to employees for the applicable offering period, or, if there is no specific deadline communicated to employees, then no later than the 15^th day of the month (or if such day is not a business day for the Company or the applicable subsidiary, on the immediately preceding business day) before the enrollment date.

Your authorization will enroll you in the Plan for each successive offering period until you:

●	submit a new authorization;

●	withdraw from participation in the Plan; or

●	become ineligible to participate in the Plan.

Your election to participate in the Plan must specify the whole percentage of your compensation, not less than one percent (1%), nor more than fifteen percent (15%), that you desire to use for the purchase of shares of Common Stock under the Plan.

Payroll Deductions

Throughout the offering period we will reduce your cash compensation on an after-tax basis through payroll deductions. The payroll deductions will be used to purchase shares of Common Stock at the end of each offering period. The payroll deduction will equal a specified whole percentage of your compensation, not less than one percent (1%), nor more than fifteen percent (15%), payable on each payday. For purposes of the Plan, your compensation means your full base salary, including shift differential, and overtime paid to you by the Company or a designated subsidiary. “Compensation” does not include

●	cash incentives, bonuses or commissions;

●	any amounts contributed by the Company or a designated subsidiary to any pension plan;

●	any automobile or relocation allowances (or reimbursement of any such expenses);

●	any amounts paid as a starting bonus or finder’s fee;

●	equity compensation (including performance stock, performance stock units, restricted stock, restricted stock units or other equity awards) and any amounts realized from the exercise of any stock options or other equity incentive awards;

●	any amounts paid by the Company or a designated subsidiary for other fringe benefits, such as health and welfare, hospitalization and group life insurance benefits, or perquisites, or paid in lieu of such benefits; or

●	other similar forms of extraordinary compensation, as determined by the plan administrator.

You may change your payroll deduction percentage by submitting the prescribed percentage change form to us not later than the 15^th day (or if such day is not a business day for the Company or the applicable subsidiary, on the immediately preceding business day) of the last month of the offering period. You may decrease your payroll deduction percentage only once during an offering period. Such change in rate shall be effective not later than the first full payroll period following 10 business days after the Company’s stock plan administration department receives the new subscription agreement (or such shorter or longer period as may be determined by the plan administrator, in its sole discretion).

We may discontinue your payroll deductions during an offering period to the extent we determine that your payroll deductions during such offering period would result in purchases of Common Stock in excess of the limitations described under “Eligibility to Participate” above and “Purchase Price” below. Payroll deductions will recommence on the first day of the next offering period, subject to the limitations described above.

We will hold your payroll deductions throughout the offering period as general unsecured corporate assets. We will credit this amount in an account established under the Plan for you. At the end of each offering period, your option to purchase shares of Common Stock under the Plan will be exercised automatically. We will use the amount in your account to pay the exercise price of your option and determine the number of shares of Common Stock issuable to you for that period.

We will not credit any interest on payroll deductions credited to your account under the Plan.

Purchase Price

Currently, the number of shares that an individual may purchase shall not exceed 10,000 shares of Common Stock for any offering period.

The per share purchase price for our Common Stock for any offering period will equal the lesser of:

●	eighty-five percent (85%) of the fair market value of a share of Common Stock on the first trading day of the offering period in which you are participating, or

●	eighty-five percent (85%) of the fair market value of a share of Common Stock on the exercise date with respect to the offering period in which you are participating.

We will determine the fair market value of a share of Common Stock, as of any given date, as follows:

●

If our Common Stock is listed on any established stock exchange or national market system, then its fair market value shall be the closing sales price for a share of Common Stock as quoted on such exchange or system for such date (or the closing bid, if no sales were reported) or, if there is no closing sales price for a share of Common Stock on such date, then it will be the closing sales price (or the closing bid, if no sales were reported) for a share of Common Stock on the last trading date immediately prior to such date during which a bid or sale occurred, in each case, as reported in The Wall Street Journal or such other source as the plan administrator deems reliable;

●

If our Common Stock is not listed on an established stock exchange or national market system, but is regularly quoted by a recognized securities dealer, then its fair market value shall be the mean of the closing bid and asked prices for the Common Stock on such date, or if no closing bid and asked prices were reported for such date, the date immediately prior to such date during which closing bid and asked prices were quoted for the Common Stock, in each case, as reported in The Wall Street Journal or such other source as the plan administrator deems reliable; or

●	If our Common Stock is neither listed on an established stock exchange or a national market system nor regularly quoted by a recognized securities dealer, its fair market value shall be established by the plan administrator in good faith.

Exercise of Options

Your option will be automatically exercised on the exercise date (i.e., last trading day that is also a Company business day of each offering period). The maximum number of whole and any fractional shares (rounded to the nearest hundredth) of Common Stock subject to the option shall be purchased for you with the accumulated payroll deductions in your account. Unused accumulated payroll deductions in excess of $1.00 will be refunded to you; amounts less than $1.00 will be rounded down to zero.

As promptly as practicable after each exercise date on which a purchase of shares occurs, the Company may arrange for the deposit, into your account with any broker designated by the Company to administer the Plan, of the number of shares purchased upon exercise of your option.

If options may be exercised in an amount which exceeds the total number of shares of Common Stock remaining available under the Plan on the applicable enrollment date, or the number of shares available for such purchase under the Plan on such exercise date, the plan administrator may, in its sole discretion, (x) provide that the Company will make a pro rata allocation of the shares of Common Stock available for purchase on the enrollment date or exercise date, as applicable, in as uniform a manner as shall be practicable and as it will determine in its sole discretion to be equitable among all participants, and continue all offering periods then in effect, or (y) provide that the Company shall make a pro rata allocation of the shares available for purchase on the enrollment date or exercise date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants, and terminate any or all offering periods then in effect.

We will not pay any interest on any unapplied payroll deductions.

Withdrawal from Participation

You can avoid the automatic exercise of your option if you submitted the prescribed withdrawal form to us not later than the 15^th day (or if such day is not a business day for the Company or the applicable subsidiary, on the immediately preceding business day) of the last month of the offering period. All of your payroll deductions credited to your account during the offering period will be paid to you as soon as reasonably practicable after receipt of notice of withdrawal and your option for the offering period will be automatically terminated and no further payroll deductions for the purchase of shares will be made for such offering period or thereafter. We will not pay any interest on any payroll deductions. You will need to submit a new enrollment form if you wish to resume participation in the Plan as described under “Election to Participate” above.

Cessation of Participation

If you cease to be an eligible employee for any reason, provided that such event is not later than the 15^th day (or if such day is not a business day for the Company or the applicable subsidiary, on the immediately preceding business day) of the last month of the offering period, you will be deemed to have elected to withdraw from the Plan and the payroll deductions credited to your account during the offering period will be paid to you or, in the case of your death, to the person or persons entitled thereto pursuant to the terms of the Plan, as soon as reasonably practicable and your option for the offering period will be automatically terminated. If you cease to be an eligible employee later than the 15^th day (or if such day is not a business day for the Company or the applicable subsidiary, on the immediately preceding business day) of the last month of the offering period, for any reason, you will be deemed to have elected to withdraw from the Plan effective immediately after the exercise date and no further payroll deductions will be withheld from compensation paid after such exercise date.

Effect of Leaves of Absences on Participation

For purposes of the Plan, the employment relationship shall be treated as continuing intact in the event you are on sick leave or other leave of absence approved by the Company or a designated subsidiary and meeting the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds 90 days and your right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91^st day of such leave; provided, however, that this 90 day leave limitation shall not apply to you if you work a supervisor-approved, regular work schedule, of five or more months in each calendar year.

Administration of the Plan

The Plan will be administered by the Board unless and until the Board delegates administration to a committee. The Committee will consist of at least two members of our Board of Directors, each of whom is a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act. We will pay all costs of administering the Plan. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Each member of the Committee shall serve for a term commencing on a date specified by the Board and continuing until the member dies or resigns or is removed from office by the Board.

It shall be the duty of the plan administrator to conduct the general administration of the Plan in accordance with the provisions of the Plan. The plan administrator shall have the power to interpret the Plan and the terms of the options and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules.

No member of the Board will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan and the options, and all members of the Board will be fully protected by the Company in respect to any such action, determination or interpretation. The Board may at any time exercise the duties of the Committee under the Plan.

The plan administrator may designate an agent to assist in the administration of the Plan. This agent may establish and maintain individual accounts for each of the participants in the Plan.

Inquiries regarding administration of the Plan may be directed to the Company at the address and telephone number under “Summary of the Plan” above.

Rights as a Stockholder

You will not have any rights as a stockholder as to the shares of Common Stock covered by an option until we have issued and delivered such shares to you or your account following the exercise of your option. We generally will not adjust for most dividends or distributions or other rights for shares of Common Stock if the record date is prior to the date of such issuance.

All eligible employees will have equal rights and privileges under the Plan so that the Plan qualifies as an “employee stock purchase plan” under Section 423 of the Code. Any provision of the Plan that is inconsistent with the equal rights and privileges requirement of Section 423 of the Code will automatically be reformed to comply with such requirement.

Reports

Individual bookkeeping accounts shall be maintained for each participant in the Plan. Statements of account shall be given to participating employees at least annually, which statements shall set forth the amounts of payroll deductions utilized for purchases within the reporting period, the purchase price, the number of shares purchased and the remaining cash balance, if any.

Options Not Transferable

You cannot assign or transfer any option granted under the Plan, except by will or the laws of descent and distribution. During your lifetime, only you may exercise the option. Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw funds from an offering period in accordance with the terms of the Plan.

Notice of Disposition of Shares

Each participant shall give prompt notice to the Company of any disposition or other transfer of any shares of Common Stock purchased upon exercise of an option under the Plan. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness, or other consideration, by the participant in such disposition or other transfer.

Sales of Shares

The Company has filed a Registration Statement with the SEC to register the shares of Common Stock issuable under the Plan. If the Registration Statement ceases to be effective, you may not be able to exercise your options or freely sell the shares you purchase unless an exemption from registration is available under federal and state securities laws. Exemptions from registration are very limited and might be unavailable.

Sales of shares purchased under the Plan are also subject to compliance with our insider trading policy that prohibits buying or selling Company securities while you are aware of material, nonpublic information. Certain individuals who are considered “affiliates” for purposes of Rule 144 of the Securities Act must resell any shares acquired in compliance with the applicable requirements of Rule 144.

Dissolution, Liquidation or Merger of the Company

If there is a dissolution or liquidation of the Company, the offering period then in progress will be shortened by setting a new exercise date and will terminate immediately prior to the consummation of such dissolution or liquidation, unless provided otherwise by the plan administrator. The new exercise date will be before the date of the Company’s proposed dissolution or liquidation and the plan administrator will notify each participant in writing, at least 10 business days prior to the new exercise date, that the exercise date for the participant’s option has been changed to the new exercise date and that the participant’s option will be exercised automatically on the new exercise date, unless the participant has withdrawn from the offering period pursuant to the terms of the Plan.

If there is a proposed sale of all or substantially all of the assets of the Company, a proposed merger of the Company with or into another corporation, each outstanding option under an ongoing offering period shall be assumed or an equivalent option substituted by the successor corporation or acquirer or a parent or subsidiary of the successor corporation or acquirer. If the successor corporation or acquirer refuses to assume or substitute for the outstanding options under an ongoing offering period, the offering period will be shortened by setting a new exercise date. The new exercise date will be before the date of the proposed transaction. The Company will notify each participant in writing, at least 10 business days prior to the new exercise date, that the exercise date for the offering period has been changed to the new exercise date and that the purchase shall automatically occur on the new exercise date, unless the participant has withdrawn from the offering period pursuant to the terms of the Plan. The new exercise date may be set and may occur regardless of whether a proposed sale or merger is actually consummated and we and our affiliates will have no liability to any participant in the Plan in connection with the establishment of a new exercise date.

Effectiveness, Amendment and Termination of the Plan

The Board may amend or terminate the Plan at any time. However, a Plan amendment will be subject to stockholder approval to the extent required by applicable laws, regulations or rules.

The Board may terminate the Plan at any time, provided no such termination may affect any then outstanding options under the Plan. Except as indicated above, the Board may also modify the Plan from time to time. The Board may terminate an offering period if the Board determines that such termination is in the best interests of the Company and its stockholders, in which case the payroll deductions credited to each participant’s account will be paid to them as soon as reasonably practicable following the termination of the offering period.

The Plan will remain in effect until December 31, 2030, unless sooner terminated by the Board pursuant to the terms of the Plan.

FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE PLAN

The Plan is intended to qualify as an “employee stock purchase plan” as defined in Section 423 of the Code. The following is a general summary under current law of the material United States federal income tax consequences to participants in the Plan. This summary deals with the general tax principles that apply and is provided only for general information. Some kinds of taxes, such as foreign taxes and state and local income taxes, are not discussed. Tax laws are complex and subject to change and may vary depending on individual circumstances and from locality to locality. This summary does not discuss all aspects of income taxation that may be relevant to participants in light of their personal investment circumstances. This summarized tax information is not tax advice.

Grant of Option; Exercise of Option

You will not recognize taxable income on the date we grant an option to you under the Plan (i.e., the first trading day of the offering period), nor will you recognize taxable income on the date you exercise the option and purchase shares of Common Stock (i.e., the last trading day of each offering period).

Sale of Common Stock after the Holding Period

If you do not dispose of the shares of Common Stock you purchase upon exercise of your option under the Plan, within two (2) years after the date on which we granted the option, or within one (1) year after the date on which you purchase the shares (the “Holding Period”), or if you die while owning the shares, you will be taxed in the year in which you dispose of the shares of Common Stock, or the year closing with your death, whichever applies, as follows:

●	You will recognize ordinary income on an amount equal to the lesser of:

—

the excess, if any, of the fair market value of the shares of Common Stock on the date on which you disposed of such shares or the date on which you died, as applicable, over the amount paid for the shares, or

—

the excess of the fair market value of the shares of Common Stock on the date we granted the option, over the purchase price, determined assuming that the option was exercised on the date granted; and

●	You will recognize as capital gain any further gain realized by you when you dispose of the shares of Common Stock (after increasing the tax basis in these shares by the amount of ordinary income realized as described above).

Sale of Common Stock during the Holding Period

If you dispose of your shares of Common Stock purchased upon exercise of your option before the Holding Period expires, you will be taxed in the year in which you dispose of such shares:

●	You will recognize ordinary income, reportable for the year of the disposition of such shares of Common Stock, to the extent of the excess of the fair market value of such shares on the date on which you exercised the option, over the purchase price for such shares; and

●	You will recognize as capital gain any further gain realized by you when you dispose of the shares of Common Stock (after increasing the tax basis in these shares by the amount of ordinary income realized as described above).

If you dispose of the shares of Common Stock before the Holding Period expires and the amount realized is less than the fair market value of our Common Stock at the time of exercise, you will be taxed in the year in which you dispose of such shares, as follows:

●	You will recognize ordinary income to the extent of the excess of the fair market value of such shares of Common Stock on the date on which you exercised the option, over the purchase price for such shares; and

●	You will recognize a capital loss to the extent the fair market value of such shares of Common Stock on the exercise date exceeds the amount realized on the sale.

Our Deduction

We (or any subsidiary of ours that employs you) are entitled to a tax deduction only to the extent that you recognize ordinary income because you dispose of the Common Stock before the Holding Period expires.

Other Tax Consequences

We recommend that you consult your personal tax advisors with respect to the federal, foreign (if applicable), state and local tax aspects of option grants, option exercises and any subsequent dispositions of Common Stock acquired under the Plan.

Delaware	52-2126573
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	ALSK	The Nasdaq Stock Market LLC

		Page Number
PART I.	Financial Information

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets (Unaudited) As of June 30, 2020 and December 31, 2019	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) For the Three and Six Months Ended June 30, 2020 and 2019	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) For the Three and Six Months Ended June 30, 2020 and 2019	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2020 and 2019	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51

Item 4.	Controls and Procedures	51

PART II.	Other Information

Item 1.	Legal Proceedings	51

Item 1A.	Risk Factors	51

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

Item 3.	Defaults Upon Senior Securities	52

0Item 4.	Mine Safety Disclosures	52

Item 5.	Other Information	52

Item 6.	Exhibits	53

Signatures		54

	June 30,			December 31,
	2020			2019
Assets
Current assets:
Cash and cash equivalents	$	44,379		$	26,662
Restricted cash		1,628			1,631
Short-term investments		134			134
Accounts receivable, net of allowance of $4,117 and $4,627		27,989			34,354
Materials and supplies		8,056			8,900
Prepayments and other current assets		13,591			9,617
Total current assets		95,777			81,298

Property, plant and equipment		1,436,987			1,424,904
Less: accumulated depreciation and amortization		(1,055,336	)		(1,042,546	)
Property, plant and equipment, net		381,651			382,358

Operating lease right of use assets		88,232			80,991
Other assets		10,191			12,598
Total assets	$	575,851		$	557,245

*Liabilities and Stockholders' Equity*
Current liabilities:
Current portion of long-term obligations	$	9,059		$	8,906
Accounts payable, accrued and other current liabilities		43,929			39,108
Advance billings and customer deposits		3,639			3,761
Operating lease liabilities - current		10,065			2,795
Total current liabilities		66,692			54,570

Long-term obligations, net of current portion		163,589			167,476
Deferred income taxes		5,497			4,403
Operating lease liabilities - noncurrent		79,117			78,767
Other long-term liabilities, net of current portion		89,268			78,520
Total liabilities		404,163			383,736
Commitments and contingencies
Alaska Communications stockholders' equity:
Common stock, $.01 par value; 145,000 authorized; 54,822 issued and 53,823 outstanding at June 30, 2020; 54,085 issued and 53,085 outstanding at December 31, 2019		548			541
Treasury stock, 1,000 shares at cost		(1,812	)		(1,812	)
Additional paid in capital		162,240			161,844
Retained earnings		15,342			15,367
Accumulated other comprehensive loss		(5,434	)		(3,277	)
Total Alaska Communications stockholders' equity		170,884			172,663
Noncontrolling interest		804			846
Total stockholders' equity		171,688			173,509
Total liabilities and stockholders' equity	$	575,851		$	557,245

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019


Operating revenues	$	59,456		$	57,395		$	117,722		$	114,304

Operating expenses:
Cost of services and sales (excluding depreciation and amortization)		27,134			26,356			54,248			51,983
Selling, general and administrative		16,225			18,718			31,619			35,374
Depreciation and amortization		10,033			9,200			19,873			17,879
Loss (gain) on disposal of assets, net		14			(95	)		100			(97	)
Total operating expenses		53,406			54,179			105,840			105,139

Operating income		6,050			3,216			11,882			9,165

Other income and (expense):
Interest expense		(2,739	)		(3,096	)		(5,698	)		(6,152	)
Loss on extinguishment of debt		-			(31	)		-			(2,830	)
Interest income		68			95			143			170
Other income (expense), net		33			(122	)		414			-
Total other income and (expense)		(2,638	)		(3,154	)		(5,141	)		(8,812	)

Income before income tax expense		3,412			62			6,741			353

Income tax expense		(996	)		(46	)		(1,956	)		(144	)

Net income		2,416			16			4,785			209

Less net loss attributable to noncontrolling interest		(24	)		(19	)		(42	)		(53	)

Net income attributable to Alaska Communications		2,440			35			4,827			262

Other comprehensive (loss) income:
Minimum pension liability adjustment		69			19			137			39
Income tax effect		(19	)		(5	)		(38	)		(11	)
Amortization of defined benefit plan loss		(33	)		122			(66	)		243
Income tax effect		9			(35	)		18			(69	)
Interest rate swap marked to fair value		(598	)		47			(3,476	)		34
Income tax effect		170			(14	)		988			(10	)
Reclassification to interest expense		391			(224	)		391			(451	)
Income tax effect		(111	)		64			(111	)		128
Total other comprehensive loss		(122	)		(26	)		(2,157	)		(97	)

Total comprehensive income attributable to Alaska Communications		2,318			9			2,670			165

Net loss attributable to noncontrolling interest		(24	)		(19	)		(42	)		(53	)
Total other comprehensive income attributable to noncontrolling interest		-			-			-			-
Total comprehensive loss attributable to noncontrolling interest		(24	)		(19	)		(42	)		(53	)

Total comprehensive income (loss)	$	2,294		$	(10	)	$	2,628		$	112

Net income per share attributable to Alaska Communications:
Basic	$	0.05		$	0.00		$	0.09		$	0.00
Diluted	$	0.04		$	0.00		$	0.09		$	0.00

Weighted average shares outstanding:
Basic		53,976			53,799			53,799			53,591
Diluted		54,342			54,569			54,295			54,599

•	Alaska Communications Systems Holdings, Inc. ("ACS Holdings")	•	Crest Communications Corporation
•	ACS of Alaska, LLC (“ACSAK”)	•	WCI Cable, Inc.
•	ACS of the Northland, LLC (“ACSN”)	•	WCIC Hillsboro, LLC
•	ACS of Fairbanks, LLC (“ACSF”)	•	Alaska Northstar Communications, LLC
•	ACS of Anchorage, LLC (“ACSA”)	•	WCI LightPoint, LLC
•	ACS Wireless, Inc. ("ACSW")	•	WorldNet Communications, Inc.
•	ACS Long Distance, LLC	•	Alaska Fiber Star, LLC
•	Alaska Communications Internet, LLC (“ACSI”)	•	TekMate, LLC
•	ACS Messaging, Inc.
•	ACS Cable Systems, LLC (“ACSC”)

	June 30, 2020						June 30, 2020
	Accounted for Under ASC 606		Accounted for Under Other Guidance		Total Revenue		Accounted for Under ASC 606		Accounted for Under Other Guidance		Total Revenue
Business and Wholesale Revenue
Business broadband	$	15,994	$	-	$	15,994	$	31,347	$	-	$	31,347
Business voice and other		6,802		-		6,802		13,659		-		13,659
Managed IT services		1,300		-		1,300		2,527		-		2,527
Equipment sales and installations		1,192		-		1,192		2,606		-		2,606
Wholesale broadband		11,123		-		11,123		21,376		-		21,376
Wholesale voice and other		1,344		-		1,344		2,632		-		2,632
Operating leases and other deferred revenue		-		2,269		2,269		-		4,660		4,660

Total Business and Wholesale Revenue		37,755		2,269		40,024		74,147		4,660		78,807

Consumer Revenue
Broadband		6,796		-		6,796		13,488		-		13,488
Voice and other		2,380		-		2,380		4,829		-		4,829

Total Consumer Revenue		9,176		-		9,176		18,317		-		18,317

Regulatory Revenue
Access ⁽¹⁾		4,572		-		4,572		9,263		-		9,263
Access ⁽²⁾		-		761		761		-		1,488		1,488
High-cost support		-		4,923		4,923		-		9,847		9,847

Total Regulatory Revenue		4,572		5,684		10,256		9,263		11,335		20,598

Total Revenue	$	51,503	$	7,953	$	59,456	$	101,727	$	15,995	$	117,722

	Three Months Ended						Six Months Ended
	June 30, 2019						June 30, 2019
	Accounted for Under ASC 606		Accounted for Under Other Guidance		Total Revenue		Accounted for Under ASC 606		Accounted for Under Other Guidance		Total Revenue
Business and Wholesale Revenue
Business broadband	$	15,378	$	-	$	15,378	$	30,586	$	-	$	30,586
Business voice and other		6,953		-		6,953		13,657		-		13,657
Managed IT services		1,517		-		1,517		3,176		-		3,176
Equipment sales and installations		1,008		-		1,008		1,888		-		1,888
Wholesale broadband		8,720		-		8,720		17,271		-		17,271
Wholesale voice and other		1,392		-		1,392		2,818		-		2,818
Operating leases and other deferred revenue		-		2,070		2,070		-		4,137		4,137

Total Business and Wholesale Revenue		34,968		2,070		37,038		69,396		4,137		73,533

Consumer Revenue
Broadband		6,694		-		6,694		13,162		-		13,162
Voice and other		2,647		-		2,647		5,380		-		5,380

Total Consumer Revenue		9,341		-		9,341		18,542		-		18,542

Regulatory Revenue
Access ⁽¹⁾		4,919		-		4,919		10,035		-		10,035
Access ⁽²⁾		-		1,174		1,174		-		2,347		2,347
High-cost support		-		4,923		4,923		-		9,847		9,847

Total Regulatory Revenue		4,919		6,097		11,016		10,035		12,194		22,229

Total Revenue	$	49,228	$	8,167	$	57,395	$	97,973	$	16,331	$	114,304

	2020

Balance at January 1	$	7,242
Contract additions		1,508
Amortization		(1,836	)
Balance at June 30	$	6,914

	2020

Balance at January 1	$	3,903
Contract additions		354
Revenue recognized		(789	)
Balance at June 30	$	3,468

	2020		2019
Cash	$	270	$	270
Property, plant and equipment, net of accumulated depreciation of $457 and $408	$	1,684	$	1,733

	June 30, 2020								December 31, 2019
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Other long-term liabilities:
Interest rate swaps	$	3,373	$	-	$	3,373	$	-	$	288	$	-	$	288	$	-

		Notional		Fair
	Balance Sheet Location	Amount		Value
At June 30, 2020:
Interest rate swaps	Other long-term liabilities	$	131,625	$	3,373

At December 31, 2019:
Interest rate swaps	Other assets	$	133,313	$	288

	2020			2019
Retail customers	$	20,467		$	22,101
Wholesale carriers		7,266			13,157
Other		4,373			3,723
		32,106			38,981
Less: allowance for doubtful accounts		(4,117	)		(4,627	)
Accounts receivable, net	$	27,989		$	34,354

	2020
Balance at January 1	$	4,627
Provision (recovery) for uncollectible accounts		(394	)
Charged to other accounts		-
Deductions		(116	)
Asset at June 30	$	4,117

	2020		2019
Income tax receivable	$	4,659	$	2,510
Prepaid expense		3,737		3,528
Other		5,195		3,579
Total prepayments and other current assets	$	13,591	$	9,617

	2020		2019
Accounts payable - trade	$	16,221	$	14,918
Accrued payroll, benefits, and related liabilities		11,633		12,193
Deferred capacity and other revenue		9,920		7,311
Other		6,155		4,686
Total accounts payable, accrued and other current liabilities	$	43,929	$	39,108

	2020		2019
Advance billings	$	3,608	$	3,730
Customer deposits		31		31
Total advance billings and customer deposits	$	3,639	$	3,761

	2020			2019
2019 senior secured credit facility due 2024	$	173,396		$	177,750
Debt discount		(1,863	)		(2,234	)
Debt issuance costs		(1,590	)		(1,863	)
Finance leases and other long-term obligations		2,705			2,729
Total long-term obligations		172,648			176,382
Less current portion		(9,059	)		(8,906	)
Long-term obligations, net of current portion	$	163,589		$	167,476

2020 (July 1 - December 31)	$	4,529
2021 (January 1 - December 31)		9,067
2022 (January 1 - December 31)		11,333
2023 (January 1 - December 31)		15,851
2024 (January 1 - December 31)		133,018
Thereafter		2,303
Total maturities of long-term obligations	$	176,101

	2020		2019
Other deferred IRU capacity revenue, net of current portion	$	44,489	$	34,440
Deferred GCI capacity revenue, net of current portion		28,003		29,036
Other deferred revenue, net of current portion		4,378		4,825
Other		12,398		10,219
Total other long-term liabilities	$	89,268	$	78,520

	2020			2019

Operating leases:
Right of use assets	$	88,232		$	80,991

Liabilities - current	$	10,065		$	2,795
Liabilities - noncurrent		79,117			78,767
Total liabilities	$	89,182		$	81,562

Finance leases:
Property, plant and equipment	$	5,800		$	5,800
Accumulated depreciation and amortization		(3,793	)		(3,699	)
Property, plant and equipment, net	$	2,007		$	2,101

Current portion of long-term obligations	$	59		$	53
Long-term obligations, net of current portion		2,646			2,676
Total finance lease liabilities	$	2,705		$	2,729

	Operating			Financing
	Leases			Leases

Year 1	$	14,733		$	322
Year 2		7,622			331
Year 3		7,492			340
Year 4		7,172			350
Year 5		7,148			360
Thereafter		157,105			3,293
Total lease payments		201,272			4,996
Less imputed interest		(113,159	)		(2,291	)
Total present value of lease obligations		88,113			2,705
Present value of current obligations		(8,996	)		(59	)
Present value of long-term obligations	$	79,117		$	2,646

	2020			2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	133		$	136
Operating cash flows from operating leases		3,784			3,914
Financing cash flows from finance leases		24			18
Right-of-use assets obtained in exchange for new operating lease liabilities		151			243
Weighted-average remaining lease term (in years):
Finance leases		13			14
Operating leases		27			30
Weighted-average discount rate:
Finance leases		9.8	%		9.8	%
Operating leases		6.9	%		6.9	%

Year 1	$	1,444
Year 2		792
Year 3		461
Year 4		457
Year 5		406
Thereafter		2,586
Total future undiscounted lease payments	$	6,146

	Defined
	Benefit
	Pension			Interest
	Plan			Rate Swaps			Total
Balance at December 31, 2019	$	(3,070	)	$	(207	)	$	(3,277	)
Other comprehensive income (loss) before reclassifications		99			(2,488	)		(2,389	)
Reclassifications from accumulated comprehensive loss to net income		(48	)		280			232
Net other comprehensive income (loss)		51			(2,208	)		(2,157	)
Balance at June 30, 2020	$	(3,019	)	$	(2,415	)	$	(5,434	)

				Weighted
				Average
				Grant Date
	*Number*			*Fair*
	*of Units*			*Value*
Nonvested at December 31, 2019		792		$	1.74
Granted		501			2.59
Vested		(406	)		1.79
Canceled or expired		-			-
Nonvested at June 30, 2020		887		$	2.20

Valuation (grant) date	June 17, 2020
Number of units granted		135
Fair market value of the Company's Common Stock	$	2.61
Risk-free interest rate		0.23	%
Expected dividend yield		0	%
Expected volatility		40.71	%
Simulation period (in years)		3

Estimated fair value per award:
Vesting Tranche 1	$	1.19
Vesting Tranche 2	$	1.28
Vesting Tranche 3	$	1.32

	2020		2019
Supplemental Non-cash Transactions:
Capital expenditures incurred but not paid at June 30	$	5,285	$	4,488
Dividends payable at June 30, 2020	$	32	$	-
Additions to ARO asset	$	83	$	25
Unsettled share repurchases	$	-	$	56

	•	A major public health issue, such as an epidemic or pandemic, could adversely affect global, national and state economies, the operations and financial stability of our customers and vendors, and our operations, financial performance and liquidity
	•	our ability to continue to develop and fund attractive, integrated products and services to evolving industry standards, and meet the pressure from competition to offer these services at lower prices
	•	unforeseen challenges when entering new markets and our ability to recognize and react to actions, products or services of competitors that threaten our competitive advantage in the marketplace
	•	our size, because we are a smaller sized competitor in the markets we serve and we compete against large competitors with substantially greater resources
	•	governmental and public policy changes and audits and investigations, including on-going changes in our revenues, or obligations for current and prior periods related to these programs, resulting from regulatory actions affecting on-going support for state programs such as Essential Network Support, and federal programs such as the rural health care universal service support mechanism, including ascertainment of the “urban rate” and “rural rate” used to determine federal support payments for services we provide to our rural health care customers for current and prior periods, some of which are currently under audit or subject to an inquiry
	•	our ability to comply with the regulatory requirements to contribute to the Universal Service Fund and receive support payments from that fund
	•	our ability to obtain and appropriately allocate resources to support our growth objectives
	•	our ability to maintain successful arrangements with our represented employees
	•	our ability to keep pace with rapid technological developments and changing standards in the telecommunications industry, including on-going capital expenditures needed to upgrade our network to industry competitive speeds, particularly in light of expected 5G deployments by mobile wireless carriers
	•	our ability to maintain our cost structure as a focused broadband and managed IT services company, which could impact both cash flow from operating activities and our overall financial condition
	•	disruptions or failures in the physical infrastructure or operating systems that support our businesses and customers, or cyber-attacks or security breaches of the physical infrastructure, operating systems or devices that our customers use to access our products and services; due to the COVID-19 pandemic, many of our employees are temporarily working remotely, which may pose additional data security risks
	•	our ability to adequately invest in the maintenance and upgrade of our networks and other information technology systems

	•	the Alaskan economy, which has been impacted by continued low crude oil prices which are creating a significant impact on both the level of spending by the State of Alaska and the level of investment in resource development projects by natural resource exploration and development companies in Alaska, together with the ongoing cuts to the state of Alaska budget and resulting spending reductions, all of which may impact the economy in the markets we serve and impact our future financial performance
	•	our ability to invest sufficiently in our underlying physical infrastructure, including buildings, fleet and related equipment
	•	the ability to attract, recruit, retain and develop our workforce, and implement succession planning necessary for achieving our business plan
	•	structural declines for voice and other legacy services within the telecommunications industry
	•	the success or failure of any future acquisitions or other major transactions
	•	the actions of activist stockholders, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price
	•	unanticipated damage to one or more of our undersea fiber optic cables resulting from construction or digging mishaps, fishing boats or other reasons
	•	a maintenance or other failure of our network or data centers
	•	a failure of information technology systems
	•	a third-party claim that the Company is infringing upon their intellectual property, resulting in litigation or licensing expenses, or the loss of our ability to sell or support certain products
	•	unanticipated costs required to fund our post-retirement benefit plans, or contingent liabilities associated with our participation in a multi-employer pension plan
	•	geologic or other natural disturbances relevant to the location of our operations
	•	our ability to meet the terms of our financing agreements and to draw down additional funds under the facility to meet our liquidity needs
	•	the cost and availability of future financing, at the terms, and subject to the conditions necessary, to support our business and pursue growth opportunities; our debt could also have negative consequences for our business; for example, it could increase our vulnerability to general adverse economic and industry conditions, or limit our flexibility in planning for, or reacting to, changes in our business and the telecommunications industry; in addition, our ability to borrow funds in the future will depend in part on the satisfaction of the covenants in our credit facilities; if we are unable to satisfy the financial covenants contained in those agreements, or are unable to generate cash sufficient to make required debt payments, the lenders and other parties to those arrangements could accelerate the maturity of some or all of our outstanding indebtedness
	•	our success in providing broadband solutions to the North Slope and western Alaska
	•	the success of the Company’s expansion into managed IT services, including the execution of those services for customers
	•	our internal control over financial reporting may not be effective, which could cause our financial reporting to be unreliable
	•	the matters described under Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2019 and this Quarterly Report on Form 10-Q.

Source	Description	2019 Revenue		As a % of Regulatory Revenue			As a % of Total Revenue
Access Charges
	Interstate and intrastate switched access are services based primarily on originating and terminating access minutes from other carriers. Special access is primarily access to dedicated circuits sold to wholesale customers, substantially all of which is generated from interstate services. Cellular access is the transport of local network services between switches for cellular companies based on individually negotiated contracts. Access revenue has declined at an average of approximately 9% annually over the past three years.	$	3,903		8.8	%		1.7	%
Total Access Charges		$	3,903		8.8	%		1.7	%

Surcharges
Pass-Through	We assess our customers for surcharges, typically on a monthly basis, as required by various state and federal regulatory agencies, and remit these surcharges to these agencies. These pass-through surcharges include Federal Universal Access and State Universal Access. These surcharges vary from year to year, and are primarily recognized as revenue, and the subsequent remittance to the state or federal agency as a cost of sale and service. The rates imposed by the regulators continue to increase. However, because the charges are only assessed on a portion of our services, and that portion continues to decline, we expect these revenue streams to decline over time as the revenue base declines.	$	5,268		12.0	%		2.3	%

Other	Other non-pass-through surcharges are collected from our customers as authorized by the regulatory body. The amount charged is based on the type of line: single line business, multi-line business, consumer or lifeline. The rates are established based on federal or state orders. These charges are recorded as revenue and do not have a direct associated cost. Rather, they represent a revenue recovery mechanism established by the FCC or the Regulatory Commission of Alaska.	$	10,771		24.4	%		4.6	%
Total Surcharges		$	16,039		36.4	%		6.9	%

Federal and State Support
CAF II	In 2016, the FCC released the CAF Phase II order specific to Alaska Communications which transitioned from CAF Phase I frozen support to CAF Phase II. Funding under the new program generally requires the Company to provide broadband service to unserved locations throughout the designated coverage area by the end of a specified build-out period, and meet interim milestone build-out obligations. CAF II revenues are expected to be relatively stable through 2026.	$	19,694		44.7	%		8.5	%

COLR and CCL	The Company was designated by the State of Alaska as a Carrier of Last Resort ("COLR") in five of the six study areas. In addition to COLR, the Company received Carrier Common Line ("CCL") support. We did not receive COLR or CCL funding for the ACS of Anchorage study area. As a COLR we were required to provide services essential for retail and carrier-to-carrier telecommunication throughout the applicable coverage area. Effective in 2019, the COLR and CCL funding mechanisms were eliminated and replaced with the ENS funding mechanism. Funding levels under ENS are approximately half of those under the prior mechanisms.	$	4,474		10.1	%		1.9	%

Total Federal and State Support		$	24,168		54.8	%		10.4	%

Total Regulatory Revenue		$	44,110					19.0	%

Total Revenue		$	231,694

(in thousands)	2020			2019			Change			% Change
Revenue
Business and wholesale revenue
Business broadband	$	16,258		$	15,437		$	821			5.3	%
Business voice and other		7,180			7,241			(61	)		-0.8	%
Managed IT services		1,300			1,517			(217	)		-14.3	%
Equipment sales and installations		1,192			1,008			184			18.3	%
Wholesale broadband		12,750			10,443			2,307			22.1	%
Wholesale voice and other		1,344			1,392			(48	)		-3.4	%
Total business and wholesale revenue		40,024			37,038			2,986			8.1	%

Consumer revenue
Broadband		6,796			6,694			102			1.5	%
Voice and other		2,380			2,647			(267	)		-10.1	%
Total consumer revenue		9,176			9,341			(165	)		-1.8	%

Total business, wholesale and consumer revenue		49,200			46,379			2,821			6.1	%
Growth in broadband revenue		9.9	%

Regulatory revenue
Access		5,333			6,093			(760	)		-12.5	%
High cost support		4,923			4,923			-			0.0	%
Total regulatory revenue		10,256			11,016			(760	)		-6.9	%

Total revenue	$	59,456		$	57,395		$	2,061			3.6	%

Operating expenses:
Cost of services and sales (excluding depreciation and amortization)		27,134			26,356			778			3.0	%
Selling, general and administrative		16,225			18,718			(2,493	)		-13.3	%
Depreciation and amortization		10,033			9,200			833			9.1	%
Loss (gain) on disposal of assets, net		14			(95	)		109			NM
Total operating expenses		53,406			54,179			(773	)		-1.4	%

Operating income		6,050			3,216			2,834			88.1	%

Other income and (expense):
Interest expense		(2,739	)		(3,096	)		357			-11.5	%
Loss on extinguishment of debt		-			(31	)		31			NM
Interest income		68			95			(27	)		-28.4	%
Other income, net		33			(122	)		155			NM
Total other income and (expense)		(2,638	)		(3,154	)		516			-16.4	%

Income before income tax expense		3,412			62			3,350			NM

Income tax expense		(996	)		(46	)		(950	)		NM

Net income		2,416			16			2,400			NM
Less net loss attributable to noncontrolling interest		(24	)		(19	)		(5	)		26.3	%
Net income attributable to Alaska Communications	$	2,440		$	35		$	2,405			NM

Period	Ratio

January 15, 2019 through March 30, 2020	3.50	to	1.00
March 31, 2020 through September 29, 2020	3.35	to	1.00
September 30, 2020 through June 29, 2021	3.25	to	1.00
June 30, 2021 through June 29, 2022	3.00	to	1.00

Exhibit Number	Exhibit Description	Location

4.1	Description of Alaska Communications Systems Group, Inc.’s Securities	Filed herewith

10.1	Alaska Communications Systems Group, Inc. 2020 Non-Employee Director Compensation and Reimbursement Policy	Filed herewith

10.2	Alaska Communications Systems Group, Inc. Amended and Restated 2012 Employee Stock Purchase Plan	Filed herewith

31.1	Certification of William Bishop, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

31.2	Certification of Laurie Butcher, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

32.1	Certification of William Bishop, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith

32.2	Certification of Laurie Butcher, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith

101.INS	Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)	Filed herewith

101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith

104	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101)	Filed herewith

*	Indicates a management contract or compensatory plan or arrangement.