Earthlink 2008 Annual Report Download - page 100

Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
the years ended December 31, 2006, 2007 and 2008, fees received for services provided to HELIO were $2.3 million, $1.6 million and
$1.0 million, respectively.
As of December 31, 2007, the Company had accounts receivable from HELIO of approximately $0.2 million.
Director
Prior to December 31, 2001, the Company had made equity investments totaling $10.0 million in EVG, an affiliate of eCompanies, LLC
("eCompanies"). The carrying value of the investment in EVG as of December 31, 2007 and 2008 was zero. Sky Dayton, a former member of
EarthLink's Board of Directors, is a founding partner in EVG, a limited partnership formed to invest in domestic emerging Internet-
related
companies, and a founder and director of eCompanies. During the years ended December 31, 2006 and 2007, the Company received $0.4 million
and $1.6 million, respectively, in cash distributions from EVG.
19. Segment Information
In accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," the Company reports segment
information along the same lines that its chief executive officer reviews its operating results in assessing performance and allocating resources.
The Company operates two reportable segments, Consumer Services and Business Services. The Company's Consumer Services segment
provides Internet access services and related value-added services to individual customers. These services include dial-up and high-
speed
Internet access and voice services, among others. The Company's Business Services segment provides integrated communications services and
related value-added services to businesses and communications carriers. These services include managed private IP-
based wide area networks,
dedicated Internet access and web hosting, among others.
The Company evaluates performance of its segments based on segment income from operations. Segment income from operations includes
revenues from external customers, related cost of revenues and operating expenses directly attributable to the segment, which include costs over
which segment managers have direct discretionary control, such as advertising and marketing programs, customer support expenses, site
operations expenses, product development expenses, certain technology and facilities expenses, billing operations and provisions for doubtful
accounts. Segment income from operations excludes other income and expense items and certain expenses over which segment managers do not
have discretionary control. Costs excluded from segment income from operations include various corporate expenses (consisting of certain costs
such as corporate management, human resources, finance and legal), amortization of intangible assets, impairment of goodwill and intangible
assets, facility exit and restructuring costs, and stock-
based compensation expense under SFAS No. 123(R), as they are not considered in the
measurement of segment performance.
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