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EARTHLINK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these consolidated financial statements.
61
Year Ended December 31,
2002
2003
2004
(in thousands)
Cash flows from operating activities:
Net income (loss)
$
(148,033
)
$
(62,194
)
$
111,009
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization
217,621
164,244
79,219
Loss on disposal of fixed assets
1,049
7,798
10,103
Loss on investments in other companies
650
202
1,420
Deferred income taxes
—
—
1,969
Deferred compensation
—
13
633
(Increase) decrease in accounts receivable, net
(7,318
)
17,618
4,852
(Increase) decrease in prepaid expenses and other assets
(518
)
8,533
74
Decrease in accounts payable and accrued and other liabilities
(30,050
)
(27,599
)
(11,746
)
Decrease in deferred revenue
(14,443
)
(6,887
)
(9,381
)
Net cash provided by operating activities
18,958
101,728
188,152
Cash flows from investing activities:
Purchases of property and equipment, net
(32,533
)
(28,445
)
(29,890
)
Proceeds from the sale of fixed assets
1,035
542
733
Investments in marketable securities
Purchases
(430,844
)
(477,663
)
(540,881
)
Sales and maturities
507,561
542,436
507,222
Investments in other companies
—
—
(
3,835
)
Purchases of businesses, net of cash acquired
(20,374
)
—
—
Purchases of subscriber bases
(21,719
)
(11,867
)
(2,419
)
Net cash provided by (used in) investing activities
3,126
25,003
(69,070
)
Cash flows from financing activities:
Principal payments under capital lease obligations
(11,892
)
(3,074
)
(896
)
Proceeds from stock options exercised, employee stock purchase plan
purchases and issuance of phantom share units
1,583
4,360
17,696
Purchases of treasury stock
(14,176
)
(90,168
)
(125,712
)
Net cash used in financing activities
(24,485
)
(88,882
)
(108,912
)
Net (decrease) increase in cash and cash equivalents
(2,401
)
37,849
10,170
Cash and cash equivalents, beginning of year
173,292
170,891
208,740
Cash and cash equivalents, end of year
$
170,891
$
208,740
$
218,910
Acquisitions of businesses:
Cash paid and transaction costs, net of cash acquired
$
20,374
$
—
$
—
Net liabilities assumed
34,004
—
—
Intangible assets acquired
$
54,378
$
—
$
—