Earthlink 2010 Annual Report Download - page 76

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Table of Contents
Our available cash and marketable securities, together with our results of operations, are expected to be sufficient to meet our operating
expenses, capital requirements and investment and other obligations for the next 12 months. However, to increase available liquidity or to fund
acquisitions or other strategic activities, we are likely to seek additional financing. We have no commitments for any additional financing and
have no lines of credit or similar sources of financing. We cannot be sure that we can obtain additional financing on favorable terms, if at all,
through the issuance of equity securities or the incurrence of additional debt. Additional equity financing may dilute our stockholders, and debt
financing, if available, may restrict our ability to repurchase common stock or debt, declare and pay dividends and raise future capital. If we are
unable to obtain additional needed financing, it may prohibit us from making acquisitions, capital expenditures and/or investments, which could
materially and adversely affect our business.
Off-Balance Sheet Arrangements
As of December 31, 2010, we did not have any off-
balance sheet arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to investors.
Contractual Obligations and Commitments
As of December 31, 2010, we had the following contractual commitments:
(1)
These amounts represent base rent payments under noncancellable operating leases for facilities and equipment that expire in
various years through 2016, as well as an allocation for operating expenses. Not included in these amounts is expected sublease
income of $1.8 million, $1.9 million, $2.0 million and $1.1 million during the years ended December 31, 2011, 2012, 2013 and
2104, respectively.
(2) We have entered into agreements with vendors to purchase certain telecommunications services and equipment under non-
cancelable agreements. We also have commitments for certain advertising spending under non-cancelable agreements.
(3)
We have $255.8 million aggregate principal amount of EarthLink Notes outstanding. 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 their EarthLink Notes on each of November 15, 2011, November 15, 2016 and
November 15, 2021.
(4)
In connection with our acquisition of ITC^DeltaCom, we assumed ITC^DeltaCom's outstanding $325.0 million aggregate
principal amount of 10.5% senior secured notes due April 1, 2016.
70
Payment Due by Period
Total
1 Year
1-3 Years
3-5 Years
After 5 Years
(in millions)
Operating leases (1)
$
98.0
$
25.1
$
43.9
$
29.0
$
—
Purchase commitments
(2)
28.9
20.6
8.3
—
—
EarthLink Notes (3)
255.8
255.8
—
—
—
ITC^Deltacom
Notes (4)
325.0
—
—
—
325.0
$
707.7
$
301.5
$
52.2
$
29.0
$
325.0