Earthlink 2008 Annual Report Download - page 48

Table of Contents
our common stock on the date of grant. Such value is recognized as expense over the requisite service period, net of estimated forfeitures, using
the straight-line attribution method. For performance-
based awards, the Company recognized expense over the requisite service period, net of
estimated forfeitures, using the accelerated attribution method when it is probable that the performance measure will be achieved. The estimate
of awards that will ultimately vest requires significant judgment, and to the extent actual results or updated estimates differ from management's
current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when
estimating expected forfeitures, including types of awards, employee class and historical employee attrition rates. Actual results, and future
changes in estimates, may differ substantially from our current estimates.
Stock-
based compensation expense under SFAS No. 123(R) was $14.2 million, $19.6 million and $20.1 million during the years ended
December 31, 2006, 2007 and 2008, respectively. Stock-
based compensation expense is classified within the same operating expense line items
as cash compensation paid to employees. Stock-
based compensation expense in accordance with SFAS No. 123(R) was allocated as follows for
the years ended December 31, 2006, 2007 and 2008:
Facility Exit and Restructuring Costs
2007 Plan.
We expect to incur future cash outflows for real estate obligations through 2014 related to the 2007 Plan. The following table
summarizes activity for the liability balances associated with the 2007 Plan for the years ended December 31, 2007 and 2008, including changes
during the year attributable to costs incurred and charged to expense and costs paid or otherwise settled:
Legacy Plans.
As of December 31, 2008, we had $1.4 million remaining for real estate commitments associated with the Legacy Plans.
All other costs have been paid or otherwise settled. We expect to incur future cash outflows for real estate obligations through 2010 related to the
Legacy Plans.
44
Year Ended December 31,
2006 2007 2008
(in thousands)
Sales and marketing
$
3,280
$
3,826
$
5,713
Operations and customer support
6,516
7,007
9,829
General and administrative
4,445
8,720
4,591
$
14,241
$
19,553
$
20,133
Severance
and Benefits
Facilities
Asset
Impairments
Other
Costs Total
(in thousands)
Balance as of December 31, 2006
$
—
$
—
$
—
$
—
$
—
Accruals
30,303
12,216
20,621
1,131
64,271
Payments
(18,262
)
(480
)
—
(
760
)
(19,502
)
Non
-
cash charges
—
4,388
(20,621
)
(371
)
(16,604
)
Balance as of December 31, 2007
12,041
16,124
—
—
28,165
Accruals
461
4,808
4,125
—
9,394
Payments
(12,502
)
(6,174
)
—
—
(
18,676
)
Non
-
cash charges
—
1,936
(4,125
)
—
(
2,189
)
Balance as of December 31, 2008
$
—
$
16,694
$
—
$
—
$
16,694