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The accompanying notes are an integral part of these consolidated financial statements
F-5
EARTHLINK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2001
2002
2003
(in thousands)
Cash flows from operating activities:
Net loss
$
(341,061
)
$
(148,033
)
$
(62,194
)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization
329,210
217,621
164,244
Loss on disposal of fixed assets
—
1,049
7,798
Loss on equity investments in other companies
10,000
650
202
Write
-
off of intangible assets
11,252
—
—
Deferred compensation
—
—
13
Decrease (increase) in accounts receivable, net
9,801
(7,318
)
17,618
Decrease (increase) in prepaid expenses and other assets
9,953
(518
)
8,533
Increase (decrease) in accounts payable and accrued and other
liabilities
30,766
(30,050
)
(27,599
)
Decrease in deferred revenue
(12,533
)
(14,443
)
(6,887
)
Net cash provided by operating activities
47,388
18,958
101,728
Cash flows from investing activities:
Purchases of property and equipment, net
(69,450
)
(32,533
)
(28,445
)
Proceeds from the sale of fixed assets
—
1,035
542
Investments in marketable securities
Purchases
(192,621
)
(144,641
)
(159,557
)
Sales and maturities
22,626
181,795
154,156
Equity investments in other companies
(2,000
)
—
—
Purchases of businesses, net of cash acquired
(5,853
)
(20,374
)
—
Purchases of subscriber bases
(40,688
)
(21,719
)
(11,867
)
Net cash used in investing activities
(287,986
)
(36,437
)
(45,171
)
Cash flows from financing activities:
Proceeds from sale
-
leaseback transactions
873
—
—
Principal payments under capital lease obligations
(18,980
)
(11,892
)
(3,074
)
Proceeds from stock options and warrants exercised and employee
stock purchase plan purchases
7,988
1,583
4,360
Purchases of treasury stock
—
(
14,176
)
(90,168
)
Net cash used in financing activities
(10,119
)
(24,485
)
(88,882
)
Net decrease in cash and cash equivalents
(250,717
)
(41,964
)
(32,325
)
Cash and cash equivalents, beginning of year
674,746
424,029
382,065
Cash and cash equivalents, end of year
$
424,029
$
382,065
$
349,740
Acquisitions of businesses:
Cash paid and transaction costs, net of cash acquired
$
5,853
$
20,374
$
—