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EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables summarize activity for the liability balances associated with the 2003 Plan, the 2004 Plan and the 2005 Plans for the
years ended December 31, 2003, 2004 and 2005, including changes during the period attributable to costs incurred and charged to expense,
costs paid or otherwise settled and adjustments to the liabilities:
Facility exit and restructuring liabilities due within one year of the balance sheet date are classified as other accounts payable and accrued
liabilities and liabilities due after one year are classified as other long-
term liabilities in the Consolidated Balance Sheets. Of the unpaid balance
as of December 31, 2005, approximately $1.2 million and $2.5 million associated with the 2003 Plan and 2004 Plan, respectively, was
classified as long-term.
5. Goodwill and Purchased Intangible Assets
Goodwill
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 goodwill and other indefinite life intangible assets might be permanently impaired. During the years ended
December 31, 2003, 2004 and 2005, the Company’s tests indicated its goodwill and other indefinite life intangible assets were not impaired.
During the years ended December 31, 2004 and 2005, goodwill decreased $2.0 million and $17.1 million, respectively, due to the
realization of tax benefits associated with net operating loss carryforwards which were acquired in connection with the acquisitions of
OneMain.com, Inc., PeoplePC Inc. (“PeoplePC”) and Cidco Incorporated. During the year ended December 31, 2005, goodwill increased
81
Facility
Balance
Exit
Non
-
Cash
December 31,
Costs
Items
Adjustments
Payments
2003
(in thousands)
Severance and personnel-related costs
$
10,737
$
—
$
483
$
(11,220
)
$
—
Real estate and telecommunications costs, including
non-cancelable leases
18,207
—
(
483
)
(7,832
)
9,892
Abandoned and disposed assets
7,652
(7,652
)
—
—
—
$
36,596
$
(7,652
)
$
—
$
(
19,052
)
$
9,892
Balance
Facility
Balance
December 31,
Exit
Non
-
Cash
Deferred Rent
December 31,
2003
Costs
Items
Reclassification
Adjustments
Payments
2004
(in thousands)
Severance and personnel-related
costs
$
—
$
10,580
$
—
$
—
$
26
$
(10,601
)
$
5
Real estate and telecommunications
costs, including non-cancelable
leases
9,892
11,292
—
1,359
(2,069
)
(12,089
)
8,385
Abandoned and disposed assets
—
8,360
(8,565
)
—
205
—
—
$
9,892
$
30,232
$
(8,565
)
$
1,359
$
(1,838
)
$
(22,690
)
$
8,390
Balance
Balance
December 31,
Costs
December 31,
2004
Incurred
Adjustments
Payments
2005
(in thousands)
Severance and personnel-related costs
$
5
$
1,403
$
—
$
(
1,343
)
$
65
Real estate and telecommunications costs, including non-
cancelable leases
8,385
—
677
(3,468
)
5,594
$
8,390
$
1,403
$
677
$
(4,811
)
$
5,659