Earthlink 2000 Annual Report Download - page 58

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EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. STOCK OPTIONS AND WARRANTS (CONTINUED)
Following is a summary of stock options and warrants outstanding as of December 31, 2000:
11. INCOME TAXES
The provision (benefit) for income taxes is comprised of the following:
The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company's effective tax rate for
financial statement purposes:
As a result of the tax-free merger with OneMain in September 2000, the Company acquired $32.9 million of additional deferred tax liabilities
primarily related to the customer base and related intangibles. These additional deferred tax liabilities impact the net change to the valuation
allowance.
F
-
24
OPTIONS AND WARRANTS OUTSTANDING OPTIONS AND WARRANTS
---------------------------------------- --------------------------
WEIGHTED-
AVERAGE WEIGHTED- WEIGHTED-
RANGE OF REMAINING AVERAGE EXERCISABLE AVERAGE
EXERCISE NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
-------------------------------- -------------- ----------- --------- -------------- ---------
(IN THOUSANDS) (IN THOUSANDS)
$ 0.26 -- $ 6.63 4,473 6.37 $ 3.51 2,716 $ 1.95
6.72 -- 9.95 925 7.77 8.40 673 8.19
10.06 -- 10.06 7,351 9.66 10.06 3 10.06
10.38 -- 22.56 3,252 8.80 14.77 814 16.37
22.69 -- 26.32 3,226 8.82 25.13 382 24.93
26.41 -- 48.61 2,931 8.37 37.18 828 38.68
51.44 -- 51.44 8 8.07 51.44 -- --
---------- ---------
$ 0.26 -- $51.44 22,166 8.51 $15.07 5,416 $11.84
========== =========
YEAR ENDED DECEMBER 31,
------------------------------
1998 1999 2000
-------- -------- --------
(IN THOUSANDS)
Current........................................... $3,000 $ 3,654 $(6,654)
Deferred.......................................... (606) (3,654) 4,260
------ ------- -------
Income tax provision (benefit).................... $2,394 $ -- $(2,394)
====== ======= =======
YEAR ENDED DECEMBER 31,
-------------------------------
1998 1999 2000
-------- -------- ---------
(IN THOUSANDS)
Federal income tax (benefit) at statutory
rate........................................ $(17,774) $(60,793) $(121,911)
State income taxes, net of federal benefit.... (3,064) (8,915) (13,842)
Nondeductible goodwill and acquisition
costs....................................... 4,922 7,735 12,905
Net change to valuation allowance............. 18,085 62,083 119,908
Other......................................... 225 (110) 546
-------- -------- ---------
$ 2,394 $ -- $ (2,394)
======== ======== =========