Earthlink 2010 Annual Report Download - page 48

Table of Contents
44
As of December 31,
2006
2007
2008
2009
2010
(in thousands)
Balance sheet data:
Cash and cash
equivalents
$
158,369
$
173,827
$
486,564
$
610,995
$
242,952
Investments in
marketable securities
236,407
114,768
47,809
84,966
320,118
Cash and marketable
securities
394,776
288,595
534,373
695,961
563,070
Total assets
966,298
729,970
845,866
1,074,618
1,523,918
Long
-
term debt,
including long-term
portion of capital
leases (6)
198,223
208,472
219,733
232,248
594,320
Total liabilities
448,616
415,452
359,391
340,594
766,050
Accumulated deficit
(1,046,293
)
(1,191,390
)
(1,016,833
)
(729,715
)
(648,235
)
Stockholders' equity
517,682
314,518
486,475
734,024
757,868
(1)
On December 8, 2010, we acquired ITC^DeltaCom, a provider of integrated communications services to customers in the
southeastern U.S. The results of operations of ITC^DeltaCom have been included in our consolidated financial statements
since the acquisition date.
(2) Operating costs and expenses for the years ended December 31, 2008, 2009 and 2010 include non-
cash impairment
charges of $78.7 million, $24.1 million and $1.7 million, respectively, related to goodwill and certain intangible assets of
New Edge in our Business Services segment. During 2008 and 2009, we concluded the carrying value of these assets were
impaired in conjunction with our annual tests of goodwill and intangible assets deemed to have indefinite lives. During
2010, we decided to re-brand the New Edge name as EarthLink Business and wrote off our New Edge trade name.
(3)
Operating costs and expenses for the years ended December 31, 2008, 2009 and 2010 include restructuring and
acquisition-related costs of $9.1 million, $5.6 million and $22.4 million, respectively.
(4)
During the years ended December 31, 2008 and 2009, we recorded income tax benefits in the Statement of Operations of
approximately $56.1 million and $198.8 million, respectively, from releases of our valuation allowance related to deferred
tax assets. These deferred tax assets related primarily to net operating loss carryforwards which we determined we will
more likely than not be able to utilize due to the generation of sufficient taxable income in the future.
(5)
In November 2007, management concluded that the municipal wireless broadband operations were no longer consistent
with our strategic direction and our Board of Directors authorized management to pursue the divestiture of our municipal
wireless broadband assets. As a result of that decision, we classified the municipal wireless broadband assets as held for
sale and presented the municipal wireless broadband operations as discontinued operations for all periods presented.
(6)
Includes the carrying amount of the EarthLink Notes, which was $198.0 million, $208.3 million, $219.7 million,
$232.2 million and $243.1 million as of December 31, 2006, 2007, 2008, 2009 and 2010, respectively. During November
2006, we issued $258.8 million aggregate principal amount of EarthLink Notes in a registered offering. The EarthLink
Notes are convertible on October 15, 2011 and upon certain events. We have the option to redeem the EarthLink Notes, in
whole or in part, for cash, on or after November 15, 2011, provided that we have made at least ten semi-
annual interest
payments. In addition, the holders may require us to purchase all or a portion of the EarthLink Notes on each of
November 15, 2011, November 15, 2016 and November 15, 2021. During 2009, we began paying quarterly cash dividends
on our common stock. This requires an adjustment to the conversion rate for the EarthLink Notes and opens a conversion
period for holders. As a result, the EarthLink Notes were classified as a current liability in our Consolidated Balance
Sheets as of December 31, 2009. On November 15, 2011, holders of the EarthLink Notes have the right under the
governing