Earthlink 2014 Annual Report Download - page 36

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Table of Contents
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31
(1)
On December 8, 2010, we acquired ITC^DeltaCom, Inc., a provider of integrated communications services to customers in the
southeastern U.S. On April 1, 2011, we acquired One Communications Corp, a privately-
held integrated telecommunications solutions
provider serving customers in the northeast, mid-
Atlantic and upper midwest sections of the United States. The results of operations of
ITC^DeltaCom and One Communications have been included in our consolidated financial statements since the acquisition date. The
comparison of selected financial data is affected by these acquisitions and, to a lesser extent, by other smaller acquisitions completed
during the year ended December 31, 2011, including STS Telecom, Inc., Logical Solutions and Business Vitals, LLC, among others,
and our CenterBeam, Inc. transaction completed during the year ended December 31, 2013.
(2) Operating costs and expenses for the years ended December 31, 2013 and 2014 include non-
cash impairment charges of $255.6 million
and $14.3 million , respectively, related to goodwill and long-
lived assets. During 2013, we performed an interim goodwill impairment
test following a sustained decrease in our stock price and market capitalization which resulted in an impairment charge in our Business
Services reporting unit. During 2014, we recorded impairment for certain work in progress and software licenses not expected to be
used.
(3)
Operating costs and expenses for the years ended December 31, 2010, 2011, 2012, 2013 and 2014 include restructuring, acquisition and
integration-related costs of $22.4 million, $32.1 million, $18.2 million , $40.0 million and $20.1 million , respectively.
(4)
During the year ended December 31, 2013, we recorded an income tax provision of approximately $266.3 million to record a valuation
allowance for deferred tax assets. These deferred tax assets related primarily to net operating loss carryforwards which we determined
we would not "more-likely-than-not" be able to utilize.
(5)
The operating results of our telecom systems business acquired as part of ITC^DeltaCom have been separately presented as
discontinued operations for all periods presented. On August 2, 2013, we sold our telecom systems business. The telecom systems
results of operations were previously included in our Business Services segment.
(6)
Includes the carrying amount of ITC^DeltaCom's 10.5% senior secured notes due on April 1, 2016, EarthLink's 8.875% Senior Notes
due 2019, EarthLink's 7.375% Senior Secured Notes due June 1, 2020 and EarthLink's convertible senior notes due November 15,
2026. In December 2010, we assumed the ITC^DeltaCom Notes in our acquisition of ITC^DeltaCom. In May 2011, we issued
$300.0 million aggregate principal amount of 8.875% Senior Notes due May 15, 2019. In November 2011, we redeemed our
convertible senior notes. In December 2012, we redeemed $32.5 million aggregate principal amount of the ITC^DeltaCom Notes and in
May 2013, we redeemed the remaining $292.3 million aggregate principal amount of the ITC^DeltaCom Notes. Also in May 2013, we
issued $300.0 million aggregate principal amount of 7.375% Senior Secured Notes due June 1, 2020.