Earthlink 2010 Annual Report Download - page 111

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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During the year ended December 31, 2008, the Company recorded an other-than-
temporary impairment of $9.9 million to record the
auction rate securities at their fair value, as the Company no longer had the intent to hold the securities until maturity. The Company also elected
a one-time transfer of its auction rate securities from the available-for-
sale category to the trading category. The Company recorded the value of
the put right to long-
term investments in its Consolidated Balance Sheet with a corresponding $9.8 million gain on investments. The Company
elected the fair value option for the put right to offset the fair value changes of the auction rate securities. The other-than-
temporary impairment,
net of the gain on the put right, was $0.1 million during the year ended December 31, 2008 and is included in gain (loss) on investments, net, in
the Consolidated Statement of Operations.
During the years ended December 31, 2009 and 2010, the Company redeemed $9.6 million and $48.2 million, respectively, of its auction
rate securities at par, plus accrued interest. As a result, the Company no longer held investments in auction rate securities as of December 31,
2010. During the years ended December 31, 2009 and 2010, the Company recorded gains of $4.7 million and $5.3 million, respectively, related
to the auction rate securities and recorded losses of $4.6 million and $5.3 million, respectively, related to the put right. The net gains during the
years ended December 31, 2009 and 2010 are included in gain (loss) on investments, net, in the Consolidated Statements of Operations. See
Note 16, "Fair Value
Measurements," for a table that reconciles the beginning and ending balances of the auction rate securities.
The following table summarizes gross unrealized gains and losses as of December 31, 2010 on the Company's marketable securities
designated as available-for-sale:
As of December 31, 2009, the amortized cost and aggregate fair value of the Company's marketable securities designated as available-for-
sale was $42.1 million. Gross unrealized gains and gross unrealized losses as of December 31, 2009 were nominal.
The following table summarizes the estimated fair value of the Company's marketable securities designated as available-for-
sale classified
by the maturity of the security:
104
As of December 31, 2010
Amortized
Cost
Gross
Unrealized
Losses
Gross
Unrealized
Gains
Estimated
Fair
Value
(in thousands)
Government and agency notes
$
284,087
$
(1
)
$
355
$
284,441
Commercial paper
14,658
—
8
14,666
Corporate debt securities
20,980
(7
)
38
21,011
$
319,725
$
(8
)
$
401
$
320,118
As of
December 31,
2010
(in thousands)
Due within one year
$
307,814
Due after one year through two years
12,304
$
320,118