1089511--3/9/2009--ALASKA_COMMUNICATIONS_SYSTEMS_GROUP

related topics

{capital, credit, financial}

{debt, indebtedness, cash}

{cost, contract, operation}

{cost, operation, labor}

{system, service, information}

{customer, product, revenue}

{stock, price, share}

{product, market, service}

{personnel, key, retain}

Risks Relating to Our Debt and the Credit Markets Our substantial debt could adversely affect our financial health, financing options and liquidity position. The downturn in the economy and the volatility in the capital markets could limit our ability to access capital or could increase our costs of capital. Financial covenants in our debt instruments limit our operating flexibility. We require a significant amount of cash to service our debt, pay dividends, fund our growth projects, and meet other liquidity needs. The call options we purchased and the warrants we sold contemporaneously with the sale of our convertible notes may affect the trading price of our common stock and the value of the convertible notes. Exercise of the outstanding warrants could dilute the ownership interests of our existing stockholders. Risks related to our Business We may not successfully complete construction and integration of our AKORN and Northstar fiber facilities that connect Alaska to the Lower 48, and even if we do, we may be unable to operate the combined networks profitably. Increased supply of interstate and international long-haul fiber in Alaska could adversely impact prices for bandwidth, which could in turn, adversely affect our projected and actual sales, margins and profitability of our fiber facility. We provide services to our customers over access lines and if we continue to lose access lines our revenues, earnings and cash flow from operations may decrease. Revenues from access charges may be reduced or lost. We may not continue to receive as much Universal Service Fund support as we have in the past. We derive a significant portion of our wireless revenue from roaming charges. This revenue may fluctuate or decline in the future as a result of general economic, contractual, and competitive factors. We have substantial liabilities and cash requirements associated with pension and deferred compensation plans. If we do not adapt to technological changes in the telecommunications industry, we could lose customers or market share. New governmental regulations may impose obligations on us to upgrade our existing technology or adopt new technology that may require additional capital and we may not be able to comply timely with these new regulations. Union disputes, employee strikes and other labor-related disruptions may adversely affect our operations. The inability to maintain labor costs at competitive levels could harm our financial performance. We depend on key members of our senior management team. We rely on a limited number of key suppliers and vendors for timely supply of equipment and services for our network infrastructure and customer support services. If these suppliers or vendors experience problems or favor our competitors, we could fail to obtain the equipment and services we require to operate our business successfully. A failure of our network could cause significant delays or interruptions of service, which could cause us to lose customers. A failure of enhanced emergency calling services associated with our network may harm our business.

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1089511--3/9/2009--ALASKA_COMMUNICATIONS_SYSTEMS_GROUP_INC