Earthlink 2008 Annual Report Download - page 85

Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
8. Goodwill and Purchased Intangible Assets
Goodwill
The changes in the carrying amount of goodwill by operating segment during the year ended December 31, 2008 were as follows:
Purchased Intangible Assets
The following table presents the components of the Company's acquired identifiable intangible assets included in the accompanying
Consolidated Balance Sheets as of December 31, 2007 and 2008:
Amortization of intangible assets in the Consolidated Statements of Operations for the years ended December 31, 2006, 2007 and 2008
represents the amortization of definite lived intangible assets. The Company's definite lived intangible assets primarily consist of subscriber
bases and customer relationships, acquired software and technology, trade names and other assets acquired in conjunction with the purchases of
businesses and subscriber bases from other companies that are not deemed to have indefinite lives. The Company's identifiable indefinite lived
intangible assets consist of certain trade names. Definite lived intangible assets are amortized on a straight-
line basis over their estimated useful
lives, which are generally three to six years for subscriber bases and customer relationships and three years for acquired software and
technology. As of December 31, 2008, the weighted average amortization periods were 4.2 years for subscriber base assets and customer
relationships, 3.3 years for software and technology and 5.0 years for trade names. Based on the current amount of definite lived intangible
assets, the Company expects to record amortization expense of approximately $7.7 million, $4.1 million, $2.9 million, $1.5 million, $0.8 million
and $0.6 million during the years ending December 31, 2009, 2010, 2011, 2012, 2013 and thereafter, respectively. Actual amortization expense
to be reported in future periods could differ
81
Consumer
Services
Segment
Business
Services
Segment Total
(in thousands)
Balance as of December 31, 2007
$
102,252
$
100,025
$
202,277
Impairment loss
—
(
63,986
)
(63,986
)
Release of valuation allowance
(5,054
)
(4,434
)
(9,488
)
Utilization of acquired net operating loss carryforwards
(8,278
)
(7,713
)
(15,991
)
Balance as of December 31, 2008
$
88,920
$
23,892
$
112,812
As of December 31, 2007
As of December 31, 2008
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
(in thousands)
Intangible assets subject to amortization:
Subscriber bases and customer relationships
$
118,702
$
(79,763
)
$
38,939
$
94,039
$
(77,758
)
$
16,281
Software, technology and other
3,892
(3,161
)
731
739
(649
)
90
Trade names
—
—
—
1,521
(304
)
1,217
122,594
(82,924
)
39,670
96,299
(78,711
)
17,588
Intangible assets not subject to amortization:
Trade names
6,606
—
6,606
1,964
—
1,964
$
129,200
$
(82,924
)
$
46,276
$
98,263
$
(78,711
)
$
19,552