Earthlink 2004 Annual Report Download - page 94

Download and view the complete annual report

Please find page 94 of the 2004 Earthlink annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Under the terms of the definitive agreement, EarthLink and SKT will each have a 50 percent voting and economic ownership interest in
SK-EarthLink. Three members from each of EarthLink and SKT will comprise the Board of Directors.
The joint venture will be capitalized with $440.0 million of partner investments over the next three years. Pursuant to SK-EarthLink’s
Contribution and Formation Agreement, EarthLink has committed to invest an aggregate of $220.0 million, including $180.0 million of cash
and $40.0 million of non-cash assets, including customers, contractual arrangements and agreements to prospectively market SK-EarthLink’s
services.
20. Quarterly Financial Data (Unaudited)
The following table sets forth certain unaudited quarterly consolidated financial data for the eight quarters in the period ended
December 31, 2004. In the opinion of the Company’s management, this unaudited information has been prepared on the same basis as the
audited consolidated financial statements contained herein and includes all adjustments (consisting of normal recurring adjustments) necessary
to present fairly the information set forth therein when read in conjunction with the consolidated financial statements and notes thereto. The
operating results for any quarter are not necessarily indicative of results for any future period.
(1)
Reflects the accretion of the liquidation value per share on the Series A and Series B convertible preferred stock at a 3% annual rate, compounded quarterly, and dividends related to the beneficial
conversion features of the Series A and Series B convertible preferred stock in accordance with EITF Issue No. 98-5.
(2)
Because of the method used in calculating per share data, the quarterly net income (loss) per share amounts will not necessarily add to the net income (loss) per share computed for the year.
91
Three Months Ended
Mar. 31,
June 30,
Sept. 30,
Dec. 31,
Mar. 31,
June 30,
Sept. 30,
Dec. 31,
2003
2003
2003
2003
2004
2004
2004
2004
(unaudited)
(in thousands, except per share data)
Revenues
$
353,749
$
352,253
$
347,352
$
348,576
$
351,563
$
348,587
$
343,974
$
338,078
Operating costs and expenses
417,738
368,193
345,061
337,902
364,392
300,006
306,144
300,902
Income (loss) from operations
(63,989
)
(15,940
)
2,291
10,674
(12,829
)
48,581
37,830
37,176
Loss on investments in other companies
—
—
—
(
202
)
—
—
(
726
)
(694
)
Interest income and other, net
2,056
1,461
1,209
246
1,035
1,711
1,584
1,801
Income (loss) before income taxes
(61,933
)
(14,479
)
3,500
10,718
(11,794
)
50,292
38,688
38,283
Provision for income taxes
—
—
—
—
—
630
1,136
2,694
Net income (loss)
(61,933
)
(14,479
)
3,500
10,718
(11,794
)
49,662
37,552
35,589
Deductions for accretion dividends(1)
(3,744
)
(842
)
—
—
—
—
—
—
Net income (loss) attributable to common stockholders
$
(65,677
)
$
(15,321
)
$
3,500
$
10,718
$
(11,794
)
$
49,662
$
37,552
$
35,589
Basic net income (loss) per share(2)
$
(0.43
)
$
(0.10
)
$
0.02
$
0.07
$
(0.07
)
$
0.32
$
0.25
$
0.24
Diluted net income (loss) per share(2)
$
(0.43
)
$
(0.10
)
$
0.02
$
0.07
$
(0.07
)
$
0.31
$
0.24
$
0.23
Basic weighted average common shares outstanding
153,407
156,388
159,998
159,399
158,325
156,483
152,970
149,233
Diluted weighted average common shares outstanding
153,407
156,388
162,747
162,774
158,325
159,680
156,056
153,665