Earthlink 2014 Annual Report Download - page 94

Table of Contents EARTHLINK HOLDINGS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
As of December 31, 2013 and 2014, the Company had alternative minimum tax credits of approximately $15.0 million
. These credits do not
have an expiration date. As of December 31, 2014, the Company had capital loss carryforwards of approximately $1.5 million
which will expire
as of December 31, 2018 if unused.
Uncertain tax positions.
The Company has identified its federal tax return and its state tax returns in Alabama, Georgia, California,
Massachusetts ,
New York, North Carolina, Pennsylvania and Texas as material tax jurisdictions for purposes of calculating its uncertain tax
positions. Periods extending back to 1997 are still subject to examination for all material jurisdictions. The Company believes that its income tax
filing positions and deductions through the period ended December 31, 2014 will not result in a material adverse effect on the Company’
s
financial condition, results of operations or cash flow. The Company’
s policy for recording interest and penalties associated with uncertain tax
positions is to record such items as a component of income tax expense. As of December 31, 2013 and 2014 , $0.5 million and $0.2 million
,
respectively, of interest and $0.8 million and $0.1 million of penalties, respectively, had been accrued.
A reconciliation of changes in the amount of unrecognized tax benefits for the years ended December 31, 2012, 2013 and 2014 is as follows:
During the year ended December 31, 2012, $0.4 million
of uncertain tax positions resulting from the acquisition of One Communications were
recorded through acquisition accounting.
As of December 31, 2014, it is reasonably possible that approximately $0.2 million
of the total uncertain tax positions recorded will reverse
within the next twelve months, primarily due to the expiration of statutes of limitation in various jurisdictions. Of the total uncertain tax positions
recorded on the balance sheet, $0.4 million would impact the effective tax rate once settled.
15. Commitments and Contingencies
Leases
The Company leases certain of its facilities under various non-
cancelable operating leases. The facility leases generally require the Company to
pay operating costs, including property taxes, insurance and maintenance, and generally contain annual escalation provisions as well as renewal
options. Total rent expense (including operating expenses) during the years ended December 31, 2012, 2013 and 2014
for all operating leases,
excluding rent and operating expenses associated with facilities exited as part of the Company's restructuring plans, was $25.1 million ,
$26.2
million and $24.8 million , respectively.
Minimum lease commitments (including estimated operating expenses) under non-cancelable leases as of December 31, 2014 are as follows:
84
Year Ended December 31,
2012 2013 2014
(in thousands)
Balance as of January 1
$
24,560
$
23,400
$
21,628
Additions for tax positions of prior years
19
63
—
Adjustments to tax positions under purchase accounting
399
—
—
Reductions as a result of lapses in applicable statute of limitations
(1,578
)
(1,835
)
(4,423
)
Balance as of December 31
$
23,400
$
21,628
$
17,205
Year Ending December 31, (in thousands)
2015
$
32,434
2016
28,308
2017
25,838
2018
21,123
2019
16,731
Thereafter
26,432
Total minimum lease payments, including estimated operating expenses
150,866
Less aggregate contracted sublease income
(10,353
)
$
140,513