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Table of Contents
EARTHLINK HOLDINGS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Segment Results
The following table presents segment results under the Company’s new reportable segment structure and a reconciliation to consolidated loss from continuing
operations before income taxes for the year ended December 31, 2015 :
Year Ended
December 31, 2015
Enterprise/Mid-Market
Revenues $ 444,968
Cost of revenues (excluding depreciation and amortization) 221,347
Gross margin 223,621
Small Business
Revenues 297,039
Cost of revenues (excluding depreciation and amortization) 139,440
Gross margin 157,599
Carrier/Transport
Revenues 135,905
Cost of revenues (excluding depreciation and amortization) 61,979
Gross margin 73,926
Consumer Services
Revenues 219,340
Cost of revenues (excluding depreciation and amortization) 77,862
Gross margin 141,478
Consolidated
Revenues 1,097,252
Cost of revenues (excluding depreciation and amortization) 500,628
Gross margin 596,624
Selling, general and administrative expenses 368,763
Depreciation and amortization 188,315
Restructuring, acquisition and integration-related costs 19,320
Interest expense and other, net 50,972
Loss on extinguishment of debt 9,734
Loss from continuing operations before income taxes $ (40,480)
The Company evaluates performance of its new segment structure based on segment gross margin. Segment gross margin includes revenues from external
customers and related cost of revenues. Costs excluded from segment gross margin include selling, general and administrative expenses, depreciation and
amortization, impairment of goodwill and intangible assets, restructuring, acquisition and integration-related costs, and interest expense and other, net, as they are
not considered in the measurement of segment performance. Management continues to evaluate the segmentation of customers within the distinct customer
categories, which may result in changes to segment information in the future.
Segment information for the years ended December 31, 2013 and 2014 have not been restated to reflect the Company’s new reportable segment structure. The
Company began recording revenue and related cost of revenue transactions at the new segment level in 2015. Management has determined that it is impracticable
to restate financial information prior to 2015 to conform to the new reportable segment structure due to the level of effort required to segment customers that
terminated service prior to 2015 and identify the related cost of revenue associated with those customers, as this information is not currently available. For
comparability purposes, the following table presents segment results and a reconciliation to consolidated loss from continuing operations before income taxes
under the Company’s previous reportable segment structure for the years ended December 31, 2013, 2014 and 2015:
92