Earthlink 2009 Annual Report Download - page 84

Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
3. Facility Exit and Restructuring Costs
Facility exit and restructuring costs consisted of the following during the years ended December 31, 2007, 2008 and 2009:
2007 Restructuring Plan
In August 2007, EarthLink adopted a restructuring plan (the "2007 Plan") to reduce costs and improve the efficiency of the Company's
operations. The 2007 Plan was the result of a comprehensive review of operations within and across the Company's functions and businesses.
Under the 2007 Plan, the Company reduced its workforce by approximately 900 employees, closed office facilities in Orlando, Florida;
Knoxville, Tennessee; Harrisburg, Pennsylvania and San Francisco, California and consolidated its office facilities in Atlanta, Georgia and
Pasadena, California. The 2007 Plan was primarily implemented during the latter half of 2007 and during the year ended December 31, 2008.
However, since management continues to evaluate EarthLink's businesses, there have been and may continue to be supplemental provisions for
new cost savings initiatives as well as changes in estimates to amounts previously recorded.
The following table summarizes facility exit and restructuring costs during the years ended December 31, 2007, 2008 and 2009 and the
cumulative costs incurred to date as a result of the 2007 Plan. Such costs have been classified as facility exit and restructuring costs in the
Consolidated Statements of Operations.
The Company recorded $9.4 million and $5.7 million of facility exit and restructuring costs during the years ended December 31, 2008 and
2009, respectively, primarily as a result of changes to sublease estimates in its exited facilities and further consolidation in its Atlanta, Georgia
facility. The asset impairment charges recorded during the years ended December 31, 2007 and 2008 primarily relate to fixed asset write-
offs
due to facility closings and consolidations and the termination of certain projects for which costs had been capitalized. These assets were
impaired as the carrying values of the assets exceeded the expected future undiscounted cash flows to the Company. The impairment charges
recorded during the years ended December 31, 2007 and 2008 have been classified as facility exit and restructuring costs in the Consolidated
Statements of Operations.
80
Year Ended December 31,
2007
2008
2009
(in thousands)
2007 Restructuring Plan
$
64,271
$
9,394
$
5,743
Legacy Restructuring Plans
1,110
(252
)
(128
)
$
65,381
$
9,142
$
5,615
Year Ended December 31,
Cumulative Costs
Incurred To Date
2007
2008
2009
(in thousands)
Severance and personnel
-
related costs
$
30,303
$
461
$
—
$
30,764
Lease termination and facilities
-
related costs
12,216
4,808
5,697
22,721
Non
-
cash asset impairments
20,621
4,125
46
24,792
Other associated costs
1,131
—
—
1,131
$
64,271
$
9,394
$
5,743
$
79,408