Earthlink 2013 Annual Report Download - page 38

Table of Contents
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(1)
On December 8, 2010, we acquired ITC^DeltaCom, a provider of integrated communications services to customers in the southeastern
U.S. On April 1, 2011, we acquired One Communications, a privately-
held integrated telecommunications solutions provider serving
customers in the northeast, mid-
Atlantic and upper midwest sections of the United States. The results of operations of ITC^DeltaCom
and One Communications have been included in our consolidated financial statements since the acquisition date. The comparison of
selected financial data is affected by these acquisitions and, to a lesser extent, by other smaller acquisitions completed during the year
ended December 31, 2011, including STS Telecom, Logical Solutions and Business Vitals, LLC, among others, and our CenterBeam
transaction completed during the year ended December 31, 2013.
(2) Operating costs and expenses for the years ended December 31, 2009, 2010 and 2013 include non-
cash impairment charges of
$24.1 million, $1.7 million and $ 255.6 million
, respectively, related to goodwill and certain intangible assets. During 2009, we
concluded the carrying value of goodwill and certain intangible assets of New Edge Holding Company in our Business Services
segment were impaired in conjunction with our annual tests of goodwill and intangible assets. During 2010, we decided to re-
brand the
New Edge name as EarthLink Business and wrote off our New Edge trade name. During 2013, we performed an interim goodwill
impairment test following a sustained decrease in our stock price and market capitalization which resulted in an impairment charge in
our Business Services reporting unit.
(3)
Operating costs and expenses for the years ended December 31, 2009, 2010, 2011, 2012 and 2013 include restructuring, acquisition and
integration-related costs of $5.6 million, $22.4 million, $32.1 million , $18.2 million and $40.0 million , respectively.
(4)
During the year ended December 31, 2009, we recorded an income tax benefit in the Statement of Comprehensive Income (Loss) of
approximately $198.8 million from the release of our valuation allowance related to deferred tax assets. These deferred tax assets
related primarily to net operating loss carryforwards which we determined we would more-likely-than-
not be able to utilize due to the
generation of sufficient taxable income in the future. During the year ended December 31, 2013, we recorded an income tax provision
of approximately $266.3 million during the fourth quarter to record a valuation allowance for deferred tax assets. These deferred tax
assets related primarily to net operating loss carryforwards which we determined we would not "more-likely-than-
not" be able to utilize.
(5)
The operating results of our telecom systems business acquired as part of ITC^DeltaCom have been separately presented as
discontinued operations for all periods presented. On August 2, 2013, we sold our telecom systems business. The telecom systems
results of operations were previously included in our Business Services segment.
(6)
Includes the carrying amount of ITC^DeltaCom's 10.5% senior secured notes due on April 1, 2016, EarthLink's 8.875% Senior Notes
due 2019, EarthLink's 8.375% Senior Secured Notes due June 1, 2020 and EarthLink's convertible senior notes due November 15,
2026. In December 2010, we assumed the ITC^DeltaCom Notes in our acquisition of ITC^DeltaCom. In May 2011, we issued
$300.0 million aggregate principal amount of 8.875% Senior Notes due May 15, 2019. In November 2011, we redeemed our
convertible senior notes. In December 2012, we redeemed $32.5 million aggregate principal amount of the ITC^DeltaCom Notes and in
May 2013, we redeemed the remaining $292.3 million aggregate principal amount of the ITC^DeltaCom Notes. Also in May 2013, we
issued $300.0 million aggregate principal amount of 8.375% Senior Secured Notes due June 1, 2020.