Earthlink 2008 Annual Report Download - page 52

Table of Contents
Contractual Obligations and Commitments
As of December 31, 2008, we had the following contractual commitments:
(1)
Year Ending December 31,
2009 2010 2011
2012 -
2014
(in millions)
Operating leases (1)
$
15.1
$
13.5
$
11.6
$
30.8
Purchase commitments (2)
27.4
0.5
—
—
Long
-
term debt (3)
—
—
258.8
—
$
42.5
$
14.0
$
270.4
$
30.8
These amounts represent base rent payments under noncancellable operating leases for facilities and equipment that expire in
various years through 2014, as well as an allocation for operating expenses. Not included in these amounts is contracted sublease
income of $2.5 million, $1.9 million, $0.7 million and $1.9 million during the years ended December 31, 2009, 2010, 2011 and
2012, respectively.
(2) We have commitments to purchase telecommunications services from third party providers under non-
cancelable agreements. We
also have commitments for advertising spending.
(3)
During November 2006, we issued $258.8 million aggregate principal amount of Convertible Senior Notes due November 15,
2026 (the "Notes") in a registered offering. The Notes are convertible on October 15, 2011 and upon certain events. We have the
option to redeem the Notes, in whole or in part, for cash, on or after November 15, 2011, provided that we have made at least ten
semi-
annual interest payments. In addition, the holders may require us to purchase all or a portion of their Notes on each of
November 15, 2011, November 15, 2016 and November 15, 2021.
Share Repurchase Program
The Board of Directors has authorized a total of $750.0 million to repurchase our common stock under our share repurchase program. As of
December 31, 2008, we had utilized approximately $580.9 million pursuant to the authorizations and had $169.1 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 by the Board of Directors at any time.
Income Taxes
We continue to maintain a partial valuation allowance of $256.6 million against our net deferred tax assets, consisting primarily of net
operating loss carryforwards, and we may recognize deferred tax assets in future periods if they are determined to be realizable. To the extent we
owe income taxes in future periods, we intend to use our net operating loss carryforwards to the extent available to reduce cash outflows for
income taxes. However, our ability to use our net operating loss carryforwards to offset future taxable income and future taxes, may be subject to
restrictions attributable to equity transactions that result in changes in ownership as defined by Internal Revenue Code Section 382.
Related Party Transactions
HELIO
As a result of our ownership interest in HELIO, HELIO was considered a related party. In August 2008, Virgin Mobile acquired HELIO
and our equity and debt investments in HELIO were exchanged for limited partnership units of Virgin Mobile. EarthLink and HELIO had a
services agreement pursuant to
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