Earthlink 2003 Annual Report Download - page 56

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F-21
7. Property and Equipment
Property and equipment is recorded at cost and consists of the following at December 31, 2002 and 2003:
During the year ended December 31, 2003, the Company wrote-down and retired abandoned and disposed property and equipment
associated with the Contact Center Plan with an aggregate net book value of $8.2 million. The retired property and equipment associated with
the Contact Center Plan, primarily leasehold improvements and office equipment, had a cost basis of $18.3 million and accumulated
depreciation of $10.1 million. During the year ended December 31, 2003, the Company reduced the carrying value of the OmniSky platform by
$2.4 million, which had a cost basis of approximately $6.0 million, and retired the asset.
Property under capital leases, primarily data communications equipment, aggregated $22.9 million and $3.1 million at December 31, 2002
and 2003, respectively. Included in accumulated depreciation are amounts related to property under capital lease of $18.1 million and
$1.9 million at December 31, 2002 and 2003, respectively. Depreciation expense charged to operations, which includes depreciation expense
associated with property under capital leases, was $112.1 million, $106.7 million and $79.9 million for the years ended December 31, 2001,
2002 and 2003, respectively.
8. Other Accounts Payable and Accrued Liabilities
Other accounts payable and accrued liabilities consist of the following at December 31, 2002 and 2003:
12 months or longer
U.S. corporate notes $
22,566
$
(12
) $
34
$
22,588
$
23,334
$ — $
11
$
23,345
Government agency notes — — — —
20,250
—
6
20,256
Asset
-
backed securities
1,804
(2
)
4
1,806
5,453
(17
)
—
5,436
$
24,370
$
(14
) $
38
$
24,394
$
49,037
$
(17
) $
17
$
49,037
Total
U.S. corporate notes $
109,993
$
(27
) $
448
$
110,414
$
90,653
$
(42
) $
11
$
90,622
Government agency notes
1,502
(12
) —
1,490
23,350
—
6
23,356
Asset
-
backed securities
21,346
(2
)
124
21,468
24,239
(92
)
—
24,147
$
132,841
$
(41
) $
572
$
133,372
$
138,242
$
(134
) $
17
$
138,125
As of December 31,
2002
2003
(in thousands)
Data center and network equipment
$
214,583
$
232,508
Office and other equipment
208,784
206,366
Land and buildings
13,518
13,536
Leasehold improvements
90,421
80,372
Construction in progress
202
11
527,508
532,793
Less accumulated depreciation
(358,631
)
(423,983
)
$
168,877
$
108,810
As of December 31,
2002
2003
(in thousands)
Accrued communications costs
$
59,832
$
29,696
Accrued advertising
28,871
16,250
Accrued taxes
15,595
16,397
Accrued bounties
9,416
8,087
Liabilities associated with non
-
cancelable operating leases
6,056
8,577