Earthlink 2010 Annual Report Download - page 50

Table of Contents
obtain and maintain necessary permits and rights-of-
way could interfere with our network infrastructure and operations; (22) that we may be
unable to retain sufficient qualified personnel, and the loss of any of our key executive officers could adversely affect us; (23) that interruption or
failure of our network and information systems and other technologies could impair our ability to provide our services, which could damage our
reputation and harm our operating results; (24) that our business depends on effective business support systems and processes; (25) that
government regulations could adversely affect our business or force us to change our business practices; (26) that our business may suffer if third
parties used for customer service and technical support and certain billing services are unable to provide these services or terminate their
relationships with us; (27) that we may not be able to protect our intellectual property; (28) that we may be accused of infringing upon the
intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future; (29) that
if we, or other industry participants, are unable to successfully defend against legal actions, we could face substantial liabilities or suffer harm to
our financial and operational prospects; (30) that we may be required to recognize additional impairment charges on our goodwill and intangible
assets, which would adversely affect our results of operations and financial position; (31) that we may have to undertake further restructuring
plans that would require additional charges, including incurring facility exit and restructuring charges; (32) that we may have exposure to greater
than anticipated tax liabilities and the use of our net operating losses and certain other tax attributes could be limited in the future; (33) that we
may reduce, or cease payment of, quarterly cash dividends; (34) that our stock price may be volatile; (35) that our indebtedness could adversely
affect our financial health and limit our ability to react to changes in our industry; and (36) that provisions of our second restated certificate of
incorporation, amended and restated bylaws and other elements of our capital structure could limit our share price and delay a change of
management. These risks and uncertainties are described in greater detail in Item 1A of Part I, "Risk Factors."
Overview
EarthLink, Inc., together with its consolidated subsidiaries, provides a comprehensive suite of communications services to individual and
business customers. We operate two reportable segments, Consumer Services and Business Services. Our Consumer Services segment provides
nationwide Internet access and related value-added services to individual customers. These services include dial-up and high-
speed Internet
access services, ancillary services sold as add-on features to our
Internet access services, search and advertising. Our Business Services segment
provides integrated communications and related value-
added services to businesses, enterprise organizations and communications carriers. These
services include data services, including managed IP-
based network services and broadband Internet access services; voice services, including
local exchange, long-
distance and conference calling; mobile data and voice services; and web hosting. We provide our consumer services
primarily through third-
party telecommunications service providers, and we provide our business services primarily through a nationwide fiber
optic-based network utilizing Multi-Protocol Label Switching ("MPLS") and other technologies and a 14-
state fiber optic network. We also sell
transmission capacity to other communications providers on a wholesale basis. For further information concerning our business segments, see
Note 18, "Segment Information," of the Notes to Consolidated Financial Statements in Item 8 of Part II for additional information.
During 2010, we entered into two transactions that we believe will transform our business from being primarily an Internet services
provider ("ISP") to a leading IP infrastructure and managed services provider. The transactions will allow us to offer a more robust suite of
business services, including data, voice and video, and to create more scale in the markets we serve. In December 2010, we completed the
acquisition of ITC^DeltaCom, Inc. ("ITC^DeltaCom"), a provider of integrated communications services to customers in the southeastern U.S.
We acquired 100% of ITC^DeltaCom in a merger transaction valued at approximately $524 million, with ITC^DeltaCom surviving as a wholly-
owned subsidiary of EarthLink, Inc. ITC^DeltaCom is included in our Business Services segment. Also in
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