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Table of Contents
EARTHLINK HOLDINGS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
3. 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 deductible for income tax purposes. The Company 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.
4. Property and Equipment
The Company's property and equipment consisted of the following as of December 31, 2014 and 2015 :
December 31, 2014
December 31, 2015
(in thousands)
Communications and fiber optic networks
$ 595,050
$ 619,699
Computer equipment and software
251,107
278,139
Land and buildings
42,379
42,477
Leasehold improvements
29,336
29,407
Office and other equipment
14,521
15,688
Work in progress
15,693
13,786
Property and equipment, gross
948,086
999,196
Less accumulated depreciation
(543,373)
(626,692)
Property and equipment, net
$ 404,713
$ 372,504
Depreciation expense, which includes amortization of property under capital leases, was $116.7 million , $123.7 million and $122.2 million for the years ended
December 31, 2013, 2014 and 2015 , respectively.
During the year ended December 31, 2015, the Company wrote-off, retired or impaired property and equipment that had a cost basis of $38.8 million and
accumulated depreciation of $36.9 million .
72