Earthlink 2004 Annual Report Download - page 35

Results of Operations
The following table sets forth statement of operations data, cash flow data and employee data for the periods indicated:
* denotes percentage is not meaningful
(1) Represents the amortization of intangible assets (other than software) acquired in the acquisitions of other companies and subscriber bases.
(2) In 2002, facility exit costs resulted from closing our Phoenix contact center facility. In connection with the closing of the facility, we incurred approximately $3.5 million of
costs, including $1.7 million for employee, personnel and related costs; $0.5 million for real estate and telecommunications costs; and $1.3 million in asset disposals.
In 2003, facility exit costs resulted from closing contact center facilities in Dallas, Texas; Sacramento, California; Pasadena, California; and Seattle, Washington. In
connection with the closing of these facilities, we incurred approximately $36.6 million of costs, including $10.7 million for employee, personnel and related costs; $18.2
million for real estate and telecommunications costs; and $7.7 million in asset disposals.
In 2004, facility exit costs resulted from closing contact centers in Harrisburg, Pennsylvania; Roseville, California; San Jose, California; and Pasadena, California; and
reducing contact center operations in Atlanta, Georgia. In connection with closing these facilities, we incurred approximately $30.2 million of costs, including $10.5 million
for employee, personnel and related costs; $11.3 million for real estate and telecommunications costs; and $8.4 million in asset disposals. Subsequent adjustments to
32
Year Ended December 31, 2003 vs. 2002 2004 vs. 2003
2002 2003 2004 $ Change % Change $ Change % Change
(dollars in thousands)
Statement of operations data:
Revenues:
Narrowband access
$
1,037,829
$
965,025
$
874,010
$
(72,804
)
-
7
%
$
(91,015
)
-
9
%
Broadband access
250,591
361,124
419,411
110,533
44
%
58,287
16
%
Web hosting
53,210
49,902
47,547
(3,308
)
-
6
%
(2,355
)
-
5
%
Advertising and other value-added services
15,791
25,879
41,234
10,088
64
%
15,355
59
%
Total revenues
1,357,421
1,401,930
1,382,202
44,509
3
%
(19,728
)
-
1
%
Operating costs and expenses:
Telecommunications service and equipment
costs
543,981
519,149
431,162
(24,832
) -
5
%
(87,987
) -
17
%
Sales incentives
37,669
21,176
10,040
(16,493
) -
44
%
(11,136
) -
53
%
Total cost of revenues
581,650
540,325
441,202
(41,325
)
-
7
%
(99,123
)
-
18
%
Sales and marketing
373,481
382,965
417,250
9,484
3
%
34,285
9
%
Operations and customer support
324,555
297,045
255,192
(27,510
)
-
8
%
(41,853
)
-
14
%
General and administrative
123,379
127,664
105,043
4,285
3
%
(22,621
)
-
18
%
Acquisition
-
related amortization (1)
110,885
84,299
24,363
(26,586
)
-
24
%
(59,936
)
-
71
%
Facility exit costs (2)
3,492
36,596
28,394
33,104
*
(8,202
)
-
22
%
Total operating costs and expenses
1,517,442
1,468,894
1,271,444
(48,548
) -
3
%
(197,450
) -
13
%
Income (loss) from operations
(160,021
)
(66,964
)
110,758
93,057
-
58
%
177,722
*
Loss on investments in other companies (3)
(650
)
(202
)
(1,420
)
448
-
69
%
(1,218
)
*
Interest income and other, net
12,638
4,972
6,131
(7,666
) -
61
%
1,159
23
%
Income (loss) before income taxes
(148,033
)
(62,194
)
115,469
85,839
-
58
%
177,663
*
Provision for income taxes
—
—
4,460
—
*
4,460
*
Net income (loss)
(148,033
)
(62,194
)
111,009
85,839
-
58
%
173,203
*
Deductions for accretion dividends
(19,987
)
(4,586
)
—
15,401
-
77
%
4,586
-
100
%
Net income (loss) attributable to common
stockholders
$
(168,020
)
$
(66,780
)
$
111,009
$
101,240
-
60
%
$
177,789
*
Cash flow data:
Cash provided by operating activities
$
18,958
$
101,728
$
188,152
Cash provided by (used in) investing activities
$
3,126
$
25,003
$
(69,070
)
Cash used in financing activities
$
(24,485
)
$
(88,882
)
$
(108,912
)
Employee data:
Number of employees at year end (4)
5,106
3,335
2,067