Earthlink 2003 Annual Report Download - page 41

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In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position of EarthLink, Inc. at December 31, 2002 and 2003, and the consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States.
As discussed in Note 2 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets in 2002, and Statement of Financial Accounting Standards No. 146, Accounting for Costs
Associated with Exit or Disposal Activities in 2003.
/s/ Ernst & Young LLP
Atlanta, Georgia
January 26, 2004
F-2
EARTHLINK, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
December 31,
2002
2003
ASSETS
Current assets:
Cash and cash equivalents $
382,065
$
349,740
Investments in marketable securities
108,978
89,088
Accounts receivable, net of allowance of $4,958 and $5,885 at December 31, 2002 and 2003,
respectively
53,496
35,585
Prepaid expenses
16,836
12,934
Other current assets
22,846
13,230
Total current assets
584,221
500,577
Long
-
term investments in marketable securities
24,394
49,037
Other long-term assets
7,325
12,101
Property and equipment, net
168,877
108,810
Subscriber bases, net
118,354
38,264
Goodwill and other indefinite life intangible assets
120,382
118,231
Total assets $
1,023,553
$
827,020
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $
46,610
$
49,882
Accrued payroll and related expenses
28,335
31,965
Other accounts payable and accrued liabilities
162,537
115,484
Current portion of capital lease obligations
3,369
884
Deferred revenue
77,066
69,002
Total current liabilities
317,917
267,217
Deferred revenue, net of current portion
4,649
6,375
Long-term portion of capital lease obligations
619
30
Other long-term liabilities
8,068
9,735
Total liabilities
331,253
283,357
Commitments and contingencies (See Note 14)
Stockholders' equity:
Convertible preferred stock, $0.01 par value, 100,000 shares authorized, 17,979 and 0 shares issued and outstanding at
December 31, 2002 and 2003, respectively, aggregate value upon involuntary liquidation of $326,223 at December 31, 2002
180
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