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Table of Contents EARTHLINK HOLDINGS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
5. Restructuring, Acquisition and Integration-Related Costs
Restructuring, acquisition and integration-related costs consisted of the following during the years ended December 31, 2012, 2013 and 2014 :
Restructuring, acquisition and integration-related costs consist of costs related to the Company's restructuring, acquisition and integration-
related
activities. Such costs include: 1) integration-related costs, such as system conversions, rebranding costs and integration-
related consulting and
employee costs; 2) severance, retention and other employee termination costs associated with acquisition and integration activities and with
certain voluntary employee separations; 3) facility-related costs, such as lease termination and asset impairments; and 4) transaction-
related
costs, which are direct costs incurred to effect a business combination, such as advisory, legal, accounting, valuation and other professional fees.
Restructuring, acquisition and integration-
related costs are expensed in the period in which the costs are incurred and the services are received
and are included in restructuring, acquisition and integration-related costs in the Consolidated Statements of Comprehensive Income (Loss).
During the year ended December 31, 2013, the Company recorded $2.8 million
of restructuring costs to restructure the Company's sales
organization, which resulted in a reduction in the Company's sales workforce and some office closings. The Company recorded $2.2 million
of
severance costs and $0.6 million of facility-
related costs in connection with this restructuring. During the year ended December 31, 2014, the
Company recorded $7.3 million of restructuring costs in connection with a reduction in workforce that eliminated approximately 450
positions.
The reduction in workforce was driven by changes in the Company's business strategy. The restructuring costs consisted of severance and other
employee benefit costs. Restructuring costs for the years ended December 31, 2013 and 2014 are included in restructuring, acquisition and
integration-related costs in the Consolidated Statements of Comprehensive Income (Loss).
The following table summarizes activity for liability balances associated with facility exit and restructuring liabilities for the year ended
December 31, 2014:
As of December 31, 2013, $2.9 million of facility exit and restructuring liabilities were classified within current liabilities and $2.2 million
were
classified as other long-term liabilities. As of December 31, 2014, $6.8 million
of facility exit and restructuring liabilities were classified within
current liabilities and $3.3 million were classified as other long-term liabilities.
69
Year Ended December 31,
2012
2013
2014
(in thousands)
Integration-related costs
10,452
$
21,622
$
9,043
Severance, retention and other employee costs
6,067
14,844
9,297
Transaction-related costs
1,399
1,021
4
Facility-related costs
479
2,328
1,744
Legacy plan restructuring costs
(153
)
215
—
Restructuring, acquisition and integration-related costs
18,244
$
40,030
$
20,088
Severance and
Benefits
Facilities
Total
(in thousands)
Balance as of December 31, 2013
—
$
5,064
$
5,064
Accruals
7,337
1,744
9,081
Payments
(1,964
)
(2,095
)
(4,059
)
Balance as of December 31, 2014
5,373
$
4,713
$
10,086