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EARTHLINK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these consolidated financial statements.
67
Year Ended December 31,
2003
2004
2005
(in thousands)
Cash flows from operating activities:
Net income (loss)
$
(62,194
)
$
111,009
$
142,780
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization
164,244
79,219
47,138
Loss (gain) on disposals and impairments of fixed assets
7,798
10,103
(73
)
Loss (gain) on investments in other companies, net
202
1,420
(2,877
)
Net losses of equity affiliate
—
—
15,608
Stock
-
based compensation expense
13
633
1,542
Deferred income taxes
—
1,969
17,139
Other adjustments
—
—
(
255
)
Decrease (increase) in accounts receivable, net
17,618
4,852
(6,254
)
Decrease in prepaid expenses and other assets
8,533
74
4,630
Decrease in accounts payable and accrued and other liabilities
(27,599
)
(11,746
)
(22,306
)
Decrease in deferred revenue
(6,887
)
(9,381
)
(8,368
)
Net cash provided by operating activities
101,728
188,152
188,704
Cash flows from investing activities:
Purchases of property and equipment
(28,445
)
(29,890
)
(33,879
)
Purchases of subscriber bases
(11,867
)
(2,419
)
(6,690
)
Proceeds from sales of fixed assets
542
733
124
Investments in marketable securities
Purchases
(477,663
)
(540,881
)
(411,006
)
Sales and maturities
542,436
507,222
474,512
Investments in and net advances to HELIO
—
—
(
82,301
)
Amounts paid for sale of net liabilities to HELIO
—
—
(
929
)
Purchase of business, net of cash acquired
—
—
(
9,352
)
Investments in other companies
—
(
3,835
)
—
Distributions received from investments in other companies
—
—
4,440
Net cash provided by (used in) investing activities
25,003
(69,070
)
(65,081
)
Cash flows from financing activities:
Principal payments under capital lease obligations
(3,074
)
(896
)
(28
)
Proceeds from stock options exercised, employee stock purchase
plan purchases and issuances of phantom share units
4,360
17,696
23,352
Purchases of treasury stock
(90,168
)
(125,712
)
(192,563
)
Net cash used in financing activities
(88,882
)
(108,912
)
(169,239
)
Net increase (decrease) in cash and cash equivalents
37,849
10,170
(45,616
)
Cash and cash equivalents, beginning of year
170,891
208,740
218,910
Cash and cash equivalents, end of year
$
208,740
$
218,910
$
173,294
Purchase of business:
Cash paid, net of cash acquired
$
—
$
—
$
9,352
Net liabilities incurred and assumed
—
—
4,203
Intangible assets acquired
$
—
$
—
$
13,555