Earthlink 2004 Annual Report Download - page 49

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related to the payment of acquisition-related and other liabilities assumed in the transaction, and we used $1.1 million to acquire the final 20%
of the outstanding stock of Cidco Incorporated in January 2002.
Financing activities used cash of $24.5 million. Proceeds from the exercise of stock options and from the sale of common stock pursuant
to our employee stock purchase program were $1.6 million. Principal payments on capital lease obligations were $11.9 million. Additionally,
we used $14.2 million to acquire 2.6 million shares of our common stock.
Off-Balance Sheet Arrangements
As of December 31, 2004, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or
future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors. As described below, we entered into a joint venture relationship with SKT in
which we have committed to invest an aggregate of $220.0 million in the SK-EarthLink joint venture over the next three years. Our investment
in SK-EarthLink may adversely impact our liquidity and earnings in future periods.
Contractual Obligations and Commitments
As of December 31, 2004, we had the following contractual commitments:
We lease certain facilities and certain equipment under non-cancelable operating leases expiring in various years through 2014. Access to
the Internet for customers outside of our base of owned POPs is provided through capacity leased from a number of third-
party providers under
non-cancelable network service agreements expiring in 2005 and 2006.
During the year ended December 31, 2004, we extended the term of our lease for our principal executive offices for an additional seven
years, from 2007 to 2014. The extension of the lease term increased our aggregate future minimum lease commitment for our principal
executive offices by $51.8 million, including estimated costs for facility expenses such as property taxes, maintenance and utility costs.
Share repurchase program
During 2004, the Board of Directors increased the amount authorized to repurchase our common stock under our share repurchase
program by $200.0 million to a total of $350.0 million. Also during 2004, the Board of Directors approved repurchasing common stock
pursuant to plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. As of February, 28, 2005, we have utilized
approximately $203.9 million pursuant to the authorizations and have $146.1 million available under the current authorization. We may
repurchase our common stock from time to time in compliance with the Securities and Exchange Commission’s regulations and other legal
requirements, and subject to market conditions and other factors. The share repurchase program does not require us to acquire any specific
number of shares and may be terminated at any time.
46
Year Ending December 31,
2005
2006
2007
2008
-
2014
(in millions)
Non
-
cancelable operating leases, net of subleases
$
17.7
$
15.4
$
12.4
$
57.0
Non
-cancelable network service agreements and purchase
commitments
57.2
14.4
—
—
$
74.9
$
29.8
$
12.4
$
57.0