Attached files

        The following is a summary of all restricted stock activity in the Stock Plan for the three months ended March 31, 2011:

        There were no stock options granted during the three months ended March 31, 2011 or 2010.

        As of March 31, 2011, the Company had $1.0 million of unrecognized total stock-based compensation cost related to unvested stock options and restricted stock. The period over which such compensation cost is expected to be recognized is approximately three years.

3.     PROPERTY AND EQUIPMENT

        Property and equipment at March 31, 2011 and December 31, 2010 consisted of the following (in thousands):

        Capitalized internal labor costs amounted to $2.4 million and $3.2 million for the three months ended March 31, 2011 and 2010, respectively. Construction in progress costs relate to projects to acquire, install and make operational various network components.

        Property and equipment under capital leases totaled $26.1 million at March 31, 2011 and December 31, 2010.

        Depreciation expense, including the amortization of assets under capital leases, amounted to $14.6 million and $16.9 million for the three months ended March 31, 2011 and 2010, respectively.

7

ONE COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

4.     GOODWILL AND INTANGIBLE ASSETS

Goodwill

        There were no changes in the carrying value of goodwill for the three months ended March 31, 2011.

Intangible Assets

        Intangible assets consisted of the following as of March 31, 2011 (in thousands, except weighted average amortization period):

        Intangible assets consisted of the following as of December 31, 2010 (in thousands, except weighted average amortization period):

        Amortization expense amounted to $4.0 million and $9.6 million for the three months ended March 31, 2011 and 2010, respectively.

        The Company estimates that the future aggregated amortization expense related to purchased intangible assets as of March 31, 2011 will be as follows for the following years ending December 31 (in thousands). Actual amortization expense to be reported in future periods could differ materially from these estimates as a result of acquisitions, changes in useful lives and other relevant factors.

8

ONE COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

5.     OTHER ASSETS

        Other assets at March 31, 2011 and December 31, 2010 consisted of the following (in thousands):

6.     ACCRUED EXPENSES

        Accrued expenses at March 31, 2011 and December 31, 2010 consisted of the following (in thousands):

7.     BANK DEBT

        Bank debt at March 31, 2011 and December 31, 2010 consisted of the following (in thousands):

Senior Secured Debt

        In connection with the Transactions (see Note 1), the Company entered into the Original One Facility. The Company refinanced the Original One Facility on April 19, 2007, which was accomplished through the Amended and Restated One Facility wherein a $560.0 million term loan (the "Term Loan") and a $30.0 million revolving loan commitment (the "Revolver") were established. Subsequently, the Company has executed three amendments, on November 16, 2007, December 15, 2009 and July 16, 2010, respectively.

9

ONE COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

Amended and Restated One Facility and Further Amendments

        On April 19, 2007, the Company refinanced the Original One Facility. In this transaction, a $560.0 million term loan (the "Term Loan") and a $30.0 million revolving loan commitment (the "Revolver") were established. Under the Amended and Restated One Facility, the outstanding principal balance under the New Term Loan was to be paid in nineteen consecutive equal quarterly installments of $1.4 million, which commenced on September 30, 2007 and would have ended on March 31, 2012. Subject to the terms of the 2009 Amendment, the quarterly installments were increased to $5.0 million beginning with the December 31, 2009 payment and ending with the March 31, 2012 payment. The amount of the quarterly installments was reduced to $4.8 million to account for the pro-rata reduction associated with the mandatory excess cash flow payment of $4.8 million made in August 2010. The remaining unpaid balance under the New Term Loan is payable on June 30, 2012. The terms of the Revolver remain substantially unchanged under the Amended and Restated One Facility, in which the expiration date continues to be June 30, 2011. There were no borrowings outstanding under the Revolver at either March 31, 2011 or December 31, 2010. Under the Amended and Restated One Facility, additional payments of principal may become due annually, based upon the Company's level of excess cash flow (as defined in the facility). The Amended and Restated One Facility also carries a fee of 0.5% on the unutilized Revolver as well as a fee equivalent to an applicable margin for each outstanding letter of credit issued thereunder. Letters of credit up to $15.0 million are available under the facility; however, they may not exceed the aggregate unused amount of the Revolver. As of March 31, 2011 and December 31, 2010, outstanding letters of credit totaled $2.0 million. As was the case under the Original One Facility, the lenders under the Amended and Restated One Facility have a security interest in substantially all of the Company's assets.

        Under the terms of the an amendment to the Amended and Restated One Facility dated December 15, 2009 (the "2009 Amendment"), commencing on that date, amounts borrowed under the Amended and Restated One Facility bear interest at the Company's option at either the greater of LIBOR or 1.75% plus 7.0% or the a defined base rate plus 6.0%. The defined base rate is equal to the higher of the prime lending rate or the overnight federal funds rate plus one-half of one percent (the "Base Rate"). As a result of the 2010 Amendment, effective July 16, 2010 amounts borrowed under the Amended and Restated One Facility bear interest at the Company's option at either the greater of LIBOR or 1.75% plus 10.0% or the Base Rate plus 9.0%.

        Exclusive of the interest rate swap, the borrowing rate was 11.79% under the New Term Loan at March 31, 2011. The actual borrowing rate at March 31, 2011 was 16.95% due to the fact that the Company entered into an interest rate swap agreement, as required by the Original One Facility (see Note 9).

        Under the Amended and Restated One Facility, the Company is subject to the following financial covenants (1) a minimum interest coverage ratio, (2) a maximum senior leverage ratio, and (3) maximum consolidated capital expenditures. The Company is also subject to various other restrictions, which affect, and in some cases significantly limit or prohibit, the Company's ability to incur additional indebtedness.

        The Company experienced a breach of its financial covenants as of September 30, and December 31, 2010 and March 31, 2011. However, under the terms of an amendment to the Amended and Restated One Facility dated July 16, 2010 (the "2010 Amendment"), the Company's lenders have agreed to forbear from exercising their rights and remedies related to a breach of the financial covenants under the Amended and Restated One Facility through the forbearance termination date of

10

ONE COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

December 31, 2010. As consideration for the 2010 Amendment, the Company agreed to pay a fee of $4.5 million which becomes due when the Term Loan is repaid. The Company has elected to extend this date through February 28, 2011 as permitted by the 2010 Amendment, in exchange for an additional fee of $2.7 million which becomes due when the Term Loan is repaid. The forbearance termination date was further extended through April 30, 2011, subject to the terms and conditions of the 2010 Amendment, in exchange for an additional fee of $1.4 million which becomes due when the Term Loan is repaid. The balance of the Term Loan was repaid on April 1, 2011 with the proceeds from the Company's acquisition by Earthlink, Inc. (See Note 14).

        During the three months ended March 31, 2010, the Company made voluntary principal prepayments of $7.0 million on the Term Loan.

        The weighted average interest rate on debt, excluding capital lease obligations and the effect of the interest rate swap, for the three months ended March 31, 2011 and 2010 was 11.77% and 8.75%, respectively. Interest expense on the Company's long-term debt was $11.3 million and $9.2 million for the three months ended March 31, 2011 and 2010, respectively.

8.     CAPITAL LEASE OBLIGATIONS

        The Company maintains capital leases relating to indefeasible rights to use fiber ("IRUs") and vehicles.

        Interest expense on capital lease obligations totaled $0.5 million and $0.6 million for the three months ended March 31, 2011 and 2010. The capital lease obligations have remaining terms that range from approximately 1 to 14 years.

9.     INTEREST RATE SWAP AGREEMENT

        In order to reduce the Company's exposure to fluctuations in interest rates and to comply with the terms of the Original One Facility, on July 5, 2006 the Company entered into an interest rate swap agreement with a notional amount of $504.0 million.

        On February 11, 2009, the Company consummated a partial settlement of its interest rate swap. This transaction reduced the notional amount of the swap from $400.0 million to $250.0 million in exchange for a cash payment of $6.4 million. The notional amount has remained at $250.0 million through March 31, 2011.

        The interest rate swap is based on the three-month LIBOR and the fixed rate is 5.769%. As of March 31, 2011 and December 31, 2010, 94% of the outstanding borrowings were covered by the swap. The fair value of the swap represented a liability of $3.4 million and $6.8 million as of March 31, 2011 and December 31, 2010, respectively. This liability is recorded within current liabilities as the termination of the interest rate swap is scheduled to occur within the following twelve months. The obligation under the swap was settled in full with the proceeds from the Company's acquisition by Earthlink, Inc. (See Note 14). As the swap did not qualify for hedge accounting, changes in fair value are recorded as a component of interest expense in the consolidated statements of operations. The changes in fair value of the interest rate swap liability resulted in gains of $3.4 million and $1.8 million during the three months ended March 31, 2011 and 2010, respectively.

11

ONE COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

10.   INCOME TAXES

        As of March 31, 2011 and December 31, 2010, the total liability for unrecognized income tax benefits was $5.6 million and $5.4 million, respectively. The Company recognizes interest and penalties related to uncertain tax positions in the income tax provision. As of March 31, 2011 and December 31, 2010, the Company had approximately $1.1 million and $1.0 million, respectively, of accrued interest and penalties related to uncertain tax positions included in the liability on the condensed consolidated balance sheet.

        The (benefit) provision for income taxes for the three months ended March 31, 2011 and 2010 of $(0.6) million and $0.3 million, respectively. The benefit for the three months ended March 31, 2011 was primarily the result of a refund of federal income taxes. The provision for income taxes for the three months ended March 31, 2010 was primarily from the accrual for certain current state income taxes in selected jurisdictions where net operating losses are not available. The overall effective rate for the three months ended March 31, 2011 and 2010 was 5.6% and (2.1)%, respectively. The effective tax rate for the three months ended March 31, 2011 and 2010 differs from the expected income tax benefit calculated using the statutory U.S. Federal income tax rate primarily as the result of changes in the valuation allowance associated with the Company's net deferred tax assets.

11.   COMMITMENTS AND CONTINGENCIES

Litigation

        The Company is a party to various legal actions arising in the normal course of business. While the Company does not believe, that the ultimate resolution of any such pending actions will have a material adverse effect on its results of operations, financial position or cash flows, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact in the period in which the ruling occurs.

        In January and February 2011, the Company entered into several confidential settlement agreements with other carriers resolving substantially all disputes between the respective parties through October 31, 2010. The negotiated cash payments, net of cash received, associated with these settlements amounted to $12.8 million. Through March 31, 2011, the Company has received net payments of $2.5 million. The remaining $15.3 million was remitted on April 1, 2011. The Company's reserve positions as of March 31, 2011 are consistent with the amounts that we remitted on April 1, 2011.

12.   FAIR VALUE MEASUREMENTS

        Generally accepted accounting principles establish a framework for measuring fair value and a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and

12

ONE COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

Level 3: Unobservable inputs for the asset or liability, which shall reflect the Company's own assumptions about what market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including the Company's own data.

        The following table summarizes the valuation of the Company's financial instruments in accordance with this established hierarchy as of March 31, 2011 (in thousands):

        The following table summarizes the valuation of the Company's financial instruments in accordance with this established hierarchy as of December 31, 2010 (in thousands):

        The valuation of the interest rate swap agreement is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the instrument. This analysis reflects the contractual terms of the agreement, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company has considered the need for a CVA to appropriately reflect both our own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurement.

        During the year ended December 31, 2010, goodwill with a carrying amount of $234.0 million was written down to its implied fair value of $94.4 million, resulting in an impairment charge of $139.6 million, which is reported as impairment loss—goodwill in the consolidated statements of operations for the year ended December 31, 2010. The impairment loss was determined by reference to the announced purchase price of the Company by Earthlink, Inc. (see Note 14), which indicated that the fair value of the Company's One Communications Reporting Unit was less than the current carrying value. The announced purchase price of the Company was determined to be a reasonable indication of fair value. The calculation of the implied value of the Company's goodwill is highly judgmental and involves the valuation of other tangible and intangible assets based on significant estimates and assumptions such as the future cash flows of the reporting unit and market conditions. Accordingly, the nonrecurring valuation of goodwill is determined based on Level 3 inputs.

13.   DISCONTINUED OPERATIONS

        In April 2010, the Company determined that it would pursue the sale of its FiberNet Reporting Unit. Effective December 1, 2010, the Company completed the sale of its FiberNet Reporting Unit to Ntelos Inc. in exchange for net proceeds of $152.7 million. Accordingly, the results of operations for the FiberNet Reporting Unit are presented as discontinued operations in the consolidated statements of operations for the three months ended March 31, 2010. Interest expense on the Company's long term debt has been allocated to the FiberNet Reporting unit proportionately based on the principal

13

ONE COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

balance that was required to be repaid with the proceeds from the sale. The Company has deferred $5.0 million of the gain associated with the sale of the FiberNet Reporting Unit which is to be held in escrow for a period not to exceed twelve months from the close of the sale. This amount is currently recorded within prepaid expenses and other current assets with a corresponding liability recorded within deferred revenue in the consolidated balance sheet as of March 31, 2011 and December 31, 2010.

        The following table presents the summarized results of operations for the Company's discontinued operations for the three months ended March 31, 2010:

14.   SUBSEQUENT EVENTS

        On April 1, 2011, the Company was acquired by Earthlink, Inc. with the Company becoming a wholly-owned subsidiary of Earthlink, Inc. Pursuant to the terms of the merger agreement, the aggregate merger consideration for the Company was $370.0 million which included repayment of net indebtedness of approximately $282.1 million and $40.6 million of other liabilities and certain working capital and other adjustments as provided in the merger agreement. In addition, $21.0 million of the aggregate merger consideration was deposited in an escrow account to secure potential post-closing adjustments to the aggregate consideration relating to working capital and other similar adjustments, indemnification obligations and post-closing employment-related obligations. The Company's interest rate swap liability was also terminated in conjunction with the acquisition.

14

QuickLinks

Exhibit 99.5