Earthlink 2003 Annual Report Download - page 54

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5. Goodwill and Intangible Assets
The following table presents the components of the Company's acquired definite life intangible assets and goodwill and other indefinite life
intangible assets included in the accompanying Consolidated Balance Sheets as of December 31, 2002 and 2003.
During the year ended December 31, 2003, goodwill decreased $2.2 million as a result of adjustments to the preliminarily estimated
amounts of liabilities assumed and identifiable assets acquired, primarily related to accrued liabilities recorded in connection with acquisitions
for which actual costs were less than original estimates.
Pursuant to SFAS No. 142, the Company performs an impairment test annually during the fourth quarter of its fiscal year or when events
and circumstances indicate the goodwill and other indefinite life intangible assets might be permanently impaired. During the years ended
December 31, 2002 and 2003, the
F-19
Company's test indicated its goodwill and other indefinite life intangible assets were not impaired. The Company wrote-off approximately
$288.6 million in fully amortized definite life intangible assets during the year ended December 31, 2002.
Acquisition-related amortization in the Consolidated Statements of Operations for the years ended December 31, 2001, 2002 and 2003
was $217.5 million, $110.9 million and $84.3 million, respectively. For the year ended December 31 2001, amortization of goodwill and other
indefinite life intangible assets amounted to $42.3 million. If EarthLink had adopted SFAS No. 142 as of January 1, 2001 and discontinued
amortization of goodwill and other indefinite life intangible assets, the Company's net loss and net loss per share on a pro forma basis would
have been as follows:
Facility
Exit
Costs
Non-Cash
Items
Payments
Balance
December 31,
2002
Payments
Balance
December 31,
2003
(in thousands)
Phoenix contact center facility exit costs:
Severance and personnel related costs $
1,724
$ — $ (
1,428
) $
296
$
(296
) $ —
Real estate and telecommunications contract termination costs
486
— (
486
) — — —
Write-off abandoned and disposed assets
1,282
(1,282
) — — — —
$
3,492
$
(1,282
)
$
(1,914
)
$
296
$
(296
)
$
—
Facility
Exit
Costs
Non-Cash
Items
Payments
Adjustments
Balance
December 31,
2003
(in thousands)
Facility exit costs associated with the Contact Center Plan:
Severance and personnel related costs $
10,737
$ — $ (
11,220
) $
483
$ —
Real estate and telecommunications contract termination costs, including
non
-
cancelable leases
18,207
—
(
7,832
)
(483
)
9,892
Write-off abandoned and disposed assets
7,652
(7,652
) — — —
$
36,596
$
(7,652
) $
(19,052
) $ — $
9,892
As of December 31, 2002
As of December 31, 2003
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
(in thousands)
Acquired subscriber bases
$
326,298
$
(207,944
)
$
118,354
$
330,510
$
(292,246
)
$
38,264
Goodwill and other indefinite life intangible assets
$
120,382
$
118,231