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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2008, 2009 and 2010 and the
cumulative costs incurred to date as a result of the 2007 Plan. Such costs have been classified as restructuring and acquisition-
related costs in the
Consolidated Statements of Operations.
The Company recorded $9.4 million, $5.7 million and $1.1 million of facility exit and restructuring costs during the years ended
December 31, 2008, 2009 and 2010, 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 classified as restructuring and acquisition-
related costs in the
Consolidated Statements of Operations 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 following table summarizes activity for the liability balances associated with the 2007 Plan for the years ended December 31, 2008,
2009 and 2010, including changes during the years attributable to costs incurred and charged to expense and costs paid or otherwise settled:
101
Year Ended December 31,
Cumulative
Costs
Incurred
To Date
2008 2009 2010
(in thousands)
Severance and personnel
-
related costs
$
461
$
—
$
—
$
30,764
Lease termination and facilities
-
related costs
4,808
5,697
1,012
23,733
Non
-
cash asset impairments
4,125
46
109
24,901
Other associated costs
—
—
—
1,131
$
9,394
$
5,743
$
1,121
$
80,529
Severance
and Benefits Facilities Asset
Impairments Other
Costs Total
(in thousands)
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
Accruals
—
5,697
46
—
5,743
Payments
—
(
5,442
)
—
—
(
5,442
)
Non
-
cash charges
—
489
(46
)
—
443
Balance as of December 31, 2009
—
17,438
—
—
17,438
Accruals
—
1,012
109
—
1,121
Payments
—
(
5,205
)
—
—
(
5,205
)
Non
-
cash charges
—
368
(109
)
—
259
Balance as of December 31, 2010
$
—
$
13,613
$
—
$
—
$
13,613