Earthlink 2011 Annual Report Download - page 125

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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value of debt
The estimated fair value of the Company's Convertible Notes, Senior Notes and ITC^DeltaCom Notes were determined based on Level 1
input using quoted prices in active markets. The following table presents the fair value of the Company's debt, excluding capital leases, as of
December 31, 2010 and 2011:
16. Supplemental Disclosure of Cash Flow Information
17. Segment Information
The Company reports segment information along the same lines that its chief executive officer reviews its operating results in assessing
performance and allocating resources. The Company operates two reportable segments, Business Services and Consumer Services. The
Company's Business Services segment provides a comprehensive suite of communications and technology services, including voice, data,
managed network services, cloud hosting and equipment services, to businesses, enterprise organizations and communications carriers. The
Company's Consumer Services segment provides nationwide Internet access and related value-
added services to residential customers. The
results of ITC^DeltaCom, One Communications and STS Telecom are included in the Company's Business Services segment.
The Company evaluates performance of its segments based on segment income from operations. Segment income from operations includes
revenues from external customers, related cost of revenues and operating expenses directly attributable to the segment, which include costs over
which segment managers have direct discretionary control, such as advertising and marketing programs, customer support expenses, operations
expenses, product development expenses, certain technology and facilities expenses, billing operations and provisions for doubtful accounts.
Segment income from operations excludes other income and expense items and certain expenses over which segment managers do not have
discretionary control. Costs excluded from segment income from operations include various corporate expenses (consisting of certain costs such
as corporate management, human resources, finance and legal), depreciation and amortization, impairment of goodwill and intangible assets,
restructuring and acquisition-related costs, and
118
As of December 31, 2010 As of December 31, 2011
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
(in thousands)
ITC^DeltaCom senior notes
351,251
352,625
346,856
320,578
EarthLink convertible senior notes
243,069
300,281
—
—
EarthLink senior notes
—
—
290,221
284,700
Total debt, excluding capital leases
594,320
652,906
637,077
605,278
Year Ended December 31,
2009 2010 2011
(in thousands)
Additional cash flow information
Cash paid during the year for interest
10,422
10,825
59,170
Cash paid during the year for income taxes
4,261
4,750
4,375
Noncash investing activity
Fair value of restricted stock units assumed in
connection with acquisition
—
2,275
—