Earthlink 2005 Annual Report Download - page 84

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EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes unrealized gains and losses on the Company’s investments in marketable securities based primarily on
quoted market prices as of December 31, 2004 and 2005:
The Company believes its gross unrealized losses are temporary because management has the intent and ability to hold these investments
until maturity, at which time the Company would expect to receive the amortized cost basis of the investment based on the underlying
contractual arrangement.
As of December 31, 2005, the Company’s long-term investments in marketable securities, which exclude asset-backed, auction rate
securities, have contractual maturity dates of up to five years from December 31, 2005.
Investments in Other Companies
As of December 31, 2004 and 2005, minority investments in other companies were $4.1 million and $1.4 million, respectively, and are
included in other long-term assets in the Consolidated Balance Sheets. Minority investments in other companies as of December 31, 2004 and
2005 included $2.6 million and $1.0 million, respectively, of investments carried at cost, and $1.5 million and $0.4 million, respectively, of
investments recorded at fair value. As of December 31, 2004, gross unrealized gains were $1.0 million and there were no gross unrealized
losses. As of December 31, 2005, gross unrealized losses were $0.1 million and there were no gross unrealized gains.
During the year ended December 31, 2005, the Company received $4.4 million in cash distributions from EVG. In applying the cost
method, EarthLink recorded $0.6 million as a return of EarthLink’s investment based on the carrying value of the investment, and the gain of
$3.8 million was included in gain (loss) on investments in other companies, net, in the Consolidated Statement of Operations for the year ended
December 31, 2005.
83
As of December 31, 2004
As of December 31, 2005
Gross
Gross
Estimated
Gross
Gross
Estimated
Amortized
Unrealized
Unrealized
Fair
Amortized
Unrealized
Unrealized
Fair
Cost
Losses
Gains
Value
Cost
Losses
Gains
Value
(in thousands)
Short-term
Government agency notes
$
104,493
$
(522
)
$
—
$
103,971
$
101,226
$
(376
)
$
—
$
100,850
Asset-backed (including auction rate)
securities
115,179
(30
)
—
115,149
85,107
—
—
85,107
Corporate notes
34,548
(96
)
—
34,452
12,445
(24
)
3
12,424
Commercial paper
—
—
—
—
9,487
(23
)
—
9,464
$
254,220
$
(648
)
$
—
$
253,572
$
208,265
$
(423
)
$
3
$
207,845
Long-term
Government agency notes
$
45,901
$
(182
)
$
—
$
45,719
$
20,110
$
(133
)
$
—
$
19,977
Asset
-
backed securities
2,270
(13
)
—
2,257
4,951
(13
)
—
4,938
Corporate notes
10,509
—
3
10,512
16,069
(15
)
11
16,065
$
58,680
$
(195
)
$
3
$
58,488
$
41,130
$
(161
)
$
11
$
40,980
Total
Government agency notes
$
150,394
$
(704
)
$
—
$
149,690
$
121,336
$
(509
)
$
—
$
120,827
Asset-backed (including auction rate)
securities
117,449
(43
)
—
117,406
90,058
(13
)
—
90,045
Corporate notes
45,057
(96
)
3
44,964
28,514
(39
)
14
28,489
Commercial paper
—
—
—
—
9,487
(23
)
—
9,464
$
312,900
$
(843
)
$
3
$
312,060
$
249,395
$
(584
)
$
14
$
248,825