15.	EARNINGS PER SHARE

Earnings per share is based on the weighted average number of shares of common stock and dilutive potential common share equivalents outstanding. Basic earnings per share assumes

dilution and is computed by dividing net income or loss available to Alaska Communications by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of the Company.

The Company’s

6.25%

Notes were convertible by the holder beginning

February 1, 2018

at an initial conversion rate of

97.2668

shares of common stock per

one thousand

dollars principal amount of the

6.25%

Notes. This is equivalent to an initial conversion price of approximately

$10.28

per share of common stock. Given that the Company’s current share price was well below

$10.28,

the Company did

not

anticipate that there would be a conversion of the

6.25%

Notes into equity and determined that it had the intent and ability to settle the principal and interest payments on its

6.25%

Notes in cash. The Company settled the Tender Offer to purchase it’s outstanding

6.25%

Notes for cash on

April 17, 2017.

May 1, 2018,

the Company repurchased the outstanding balance of the

6.25%

Notes. See Note

“

Long-Term Obligations

.” Accordingly,

321

shares related to the

6.25%

Notes were excluded from the calculation of diluted earnings per share for the year ended

December 31, 2018.

The following table sets forth the computation of basic and diluted earnings per share for the years ended

December 31, 2019

and

2018:

	2019		2018
Net income attributable to Alaska Communications	$	4,928	$	9,080
Tax-effected interest expense attributable to convertible notes		NA		NA
Net income attributable to Alaska Communications assuming dilution	$	4,928	$	9,080

Weighted average common shares outstanding:
Basic shares		53,379		53,042
Effect of stock-based compensation		898		798
Effect of 6.25% convertible notes		NA		NA
Diluted shares		54,277		53,840

Income per share attributable to Alaska Communications:
Basic	$	0.09	$	0.17
Diluted	$	0.09	$	0.17