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Table of Contents EARTHLINK HOLDINGS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
3. Earnings per Share
The following table sets forth the computation for basic and diluted net income per share for the years ended December 31, 2012, 2013 and
2014:
Approximately 3.5 million
stock options and restricted stock units were excluded from the calculation of diluted earnings per share during the
year ended December 31, 2012 because their effect would have been anti
-
dilutive. The Company has not included the effect of Common Stock
Equivalents in the calculation of diluted earnings per share for the years ended December 31, 2013 and 2014
because such inclusion would have
an anti-dilutive effect due to the Company's net loss. As of December 31, 2013 and 2014 , the Company had 9.5 million and 8.3 million
stock
options and restricted stock units outstanding, respectively, which were excluded from the determination of dilutive earnings per share. Anti-
dilutive securities could be dilutive in future periods.
4. Acquisition
On July 1, 2013, the Company acquired substantially all of the assets of CenterBeam, Inc. ("CenterBeam"), a privately-
held information
technology managed service provider delivering cloud computing and hosted IT services to mid-
sized businesses. The fair value of consideration
transferred was $23.5 million , which included $16.8 million of cash and $6.7 million
for the assumption and repayment of debt and other
obligations. The acquisition was accounted for as a business combination. The assets acquired and liabilities assumed of CenterBeam were
recognized at their acquisition date fair values. In allocating the purchase price based on estimated fair values, the Company recorded
approximately $16.7 million of goodwill, $6.4 million of identifiable intangible assets, $0.8 million of property and equipment and
$0.4 million
of net other liabilities. Substantially all of the goodwill is expected to be deductible for income tax purposes. The Company has included the
financial results of CenterBeam in its consolidated financial statements from the date of acquisition. Pro forma financial information for
CenterBeam has not been presented, as the effects were not material to the Company's consolidated financial statements.
68
Year Ended December 31,
2012
2013
2014
(in thousands, except per share data)
Numerator
Income (loss) from continuing operations
9,938
$
(536,866
)
$
(72,371
)
Loss from discontinued operations, net of tax
(2,418
)
(1,961
)
(381
)
Net income (loss)
7,520
$
(538,827
)
$
(72,752
)
Denominator
Basic weighted average common shares outstanding
105,221
102,599
102,313
Dilutive effect of Common Stock Equivalents
762
—
—
Diluted weighted average common shares outstanding
105,983
102,599
102,313
Basic net income (loss) per share
Continuing operations
0.09
$
(5.23
)
$
(0.71
)
Discontinued operations
(0.02
)
(0.02
)
—
Basic net income (loss) per share
0.07
$
(5.25
)
$
(0.71
)
Diluted net income (loss) per share
Continuing operations
0.09
$
(5.23
)
$
(0.71
)
Discontinued operations
(0.02
)
(0.02
)
—
Diluted net income (loss) per share
0.07
$
(5.25
)
$
(0.71
)