Earthlink 2010 Annual Report Download - page 107

Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
$26.6 million and $6.2 million, respectively. The following unaudited pro forma revenue and earnings of the combined entity assumes the
acquisition occurred on January 1, 2009:
Pending Acquisitions
On December 20, 2010, EarthLink entered into an agreement to acquire One Communications Corp. ("One Communications"), a privately-
held, multi-
regional integrated telecommunications solutions provider in the United States. EarthLink will acquire One Communications in a
transaction valued at $370 million. One Communications stockholders have the right to elect to receive the net merger consideration in the form
of cash or EarthLink common stock. The acquisition will further transform EarthLink into an IP infrastructure and managed services provider by
expanding its IP network footprint. Under the terms of the merger agreement, EarthLink will acquire 100% of One Communications in a merger
transaction with One Communications surviving as a wholly-
owned subsidiary of EarthLink. The completion of the acquisition is subject to
customary closing conditions, including regulatory approvals, and is expected to close in the second quarter of 2011.
Also in December 2010, EarthLink entered into an agreement to acquire Saturn Telecommunication Services Inc. ("STS Telecom"), a
privately-held provider of IP communication and information technology services to small and medium-
sized businesses primarily in Florida, for
approximately $28.0 million of cash. STS Telecom currently operates a sophisticated VoIP platform. EarthLink plans to leverage STS Telecom's
expertise in managed hosted VoIP on a nationwide basis as part of its Business Service offerings.
4. Restructuring and Acquisition-Related Costs
Restructuring and acquisition-related costs consisted of the following during the years ended December 31, 2008, 2009 and 2010:
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
100
Year Ended December 31,
2009 2010
(in thousands)
Total revenues
$
1,193,053
$
1,037,058
Net income
265,611
75,054
Year Ended December 31,
2008 2009 2010
(in thousands)
2007 Restructuring Plan
$
9,394
$
5,743
$
1,121
Legacy Restructuring Plans
(252
)
(128
)
294
Total facility exit and restructuring costs
9,142
5,615
1,415
Acquisition
-
related costs
—
—
20,953
Restructuring and acquisition
-
related costs
$
9,142
$
5,615
$
22,368