<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A
                                 AMENDMENT NO. 1

           (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                             SECURITIES ACT OF 1934

                FOR THE TRANSITION PERIOD FROM _________ TO _____

                         COMMISSION FILE NUMBER 0-27890

                          MINDSPRING ENTERPRISES, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                   <C>
                      DELAWARE                                              58-2113290
          (State or other jurisdiction of                               (I.R.S. Employer
           incorporation or organization)                             Identification Number)

  1430 WEST PEACHTREE ST. NW, SUITE 400, ATLANTA, GA                          30309
      (Address of principal executive offices)                              (Zip Code)
</TABLE>

Registrant's telephone number, including area code: (404) 815-0770

            Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

            Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

                                             OUTSTANDING AT NOVEMBER 10, 1999
                                             --------------------------------
Common Stock at $.01 par value                      63,614,929


<PAGE>   2
                               EXPLANATORY NOTE


          This Amendment No. 1 to Quarterly Report on Form 10-Q/A is being
filed to revise note 4 to the enclosed financial statements and to revise the
enclosed "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
<PAGE>   3


PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                          MINDSPRING ENTERPRISES, INC.
                                 BALANCE SHEETS
                 AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                   SEPTEMBER 30,              DECEMBER 31,
                                                                                       1999                      1998
                                                                                   (UNAUDITED)

                                     ASSETS
CURRENT ASSETS:
<S>                                                                          <C>                         <C>
      Cash and cash equivalents..........................................    $             386,833       $          167,743
      Trade receivables, net.............................................                    5,179                    3,278
      Deferred income taxes..............................................                    6,452                    3,421
      Prepaids and other current assets..................................                    5,221                      758
                                                                             ---------------------       ------------------
            Total current assets.........................................                  403,685                  175,200
                                                                             ---------------------       ------------------

PROPERTY AND EQUIPMENT:
      Computer and telecommunications equipment..........................                   83,065                   35,580
      Assets under capital lease.........................................                    8,886                    9,546
      Other .............................................................                   14,400                    4,821
                                                                             ---------------------       ------------------
                                                                                           106,351                   49,947
      Less: accumulated depreciation.....................................                  (27,789)                 (14,106)
                                                                             ----------------------      ------------------
            Total property and equipment, net............................                   78,562                   35,841
                                                                             ---------------------       ------------------

OTHER ASSETS:
      Acquired customer base, net........................................                  212,441                   34,742
      Deferred debt costs................................................                    7,302                        -
      Deferred income taxes..............................................                   17,207                    1,123
      Other .............................................................                      346                      693
                                                                             ---------------------       ------------------
            Total other assets...........................................                  237,296                   36,558
                                                                             ---------------------       ------------------

                                                                             $             719,543       $          247,599
                                                                             =====================       ==================


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
      Trade accounts payable.............................................    $               3,361       $            4,990
      Current portion of capital lease liability.........................                    2,608                    2,695
      Deferred revenue...................................................                   10,710                    7,443
      Accrued telecommunications costs...................................                   11,868                    2,831
      Other accrued expenses.............................................                   30,564                   20,135
                                                                             ---------------------       ------------------

            Total current liabilities....................................                   59,111                   38,094
                                                                             ---------------------       ------------------

LONG-TERM LIABILITIES:
      Convertible notes..................................................                  179,975                        -
      Capital lease obligations..........................................                      526                    2,424
                                                                             ---------------------       ------------------
            Total long-term liabilities..................................                  180,501                    2,424
                                                                             ---------------------       ------------------

            Total liabilities............................................                  239,612                   40,518
                                                                             ---------------------       ------------------

STOCKHOLDERS' EQUITY:
      Common stock, $.01 par value; 400,000 authorized
         And 63,575 and 56,568 issued and outstanding at
        September 30, 1999 and December 31, 1998, respectively...........                      635                      566
      Additional paid-in-capital.........................................                  503,700                  209,700
      Accumulated deficit................................................                  (24,404)                  (3,185)
                                                                             ---------------------       ------------------
        Total stockholders' equity.......................................                  479,931                  207,081
                                                                             ---------------------       ------------------
                                                                             $             719,543       $          247,599
                                                                             =====================       ==================
</TABLE>

The accompanying condensed notes to financial statements are an integral part of
these balance sheets.

<PAGE>   4
                          MINDSPRING ENTERPRISES, INC.
                            STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                      (IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>

                                                   THREE MONTHS ENDED              NINE MONTHS ENDED
                                             SEPTEMBER 30,  SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,

STATEMENTS OF OPERATIONS DATA:                  1999            1998             1999             1998
                                             ----------      ----------       ----------       ----------

<S>                                          <C>              <C>              <C>              <C>
REVENUES

   Access                                    $  72,631        $  24,917        $ 196,645        $  64,795
   Business services                            15,548            3,778           38,823           10,344
                                             ---------        ---------        ---------        ---------
     Total revenues                             88,179           28,695          235,468           75,139
                                             ---------        ---------        ---------        ---------

COST AND EXPENSES

   Cost of revenues                          $  28,367        $   7,976        $  78,882        $  22,167
   General and administrative                   28,363            9,195           74,253           25,505
   Selling                                      22,366            4,806           46,503           11,735
   Depreciation                                  5,517            2,072           13,732            5,696
   Acquired customer base amortization          23,302            1,206           60,345            3,548
                                             ---------        ---------        ---------        ---------
          Total operating expenses             107,915           25,975          273,715           68,651
                                             ---------        ---------        ---------        ---------

OPERATING (LOSS) INCOME                        (19,736)           3,440          (38,247)           6,488
INTEREST INCOME, NET                             1,977              665            3,463              590
                                             ---------        ---------        ---------        ---------

(LOSS) INCOME BEFORE TAXES                     (17,759)           4,105          (34,784)           7,078

   Income tax benefit (provision)                6,925             (120)          13,565             (212)
                                             ---------        ---------        ---------        ---------
NET (LOSS) INCOME                            $ (10,834)       $   3,985        $ (21,219)       $   6,866
                                             =========        =========        =========        =========

NET (LOSS) INCOME PER SHARE

                           Basic             $   (0.17)       $    0.08        $   (0.35)       $    0.14
                                             =========        =========        =========        =========
                          Diluted            $   (0.17)       $    0.07        $   (0.35)       $    0.13
                                             =========        =========        =========        =========

WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING

                           Basic                63,475           51,585           61,042           48,086
                                             =========        =========        =========        =========
                          Diluted               63,475           54,687           61,042           50,892
                                             =========        =========        =========        =========

</TABLE>

            The accompanying condensed notes to financial statements
                    are an integral part of these statements

<PAGE>   5

Financial Statements - Continued

                          MINDSPRING ENTERPRISES, INC.
                            STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                   1999             1998
                                                                                 ---------       ---------
<S>                                                                              <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net (loss) income.......................................................   $(21,219)       $  6,866
      Adjustments to reconcile net (loss) income to net cash
           provided by operating activities:
      Deferred income taxes ..................................................    (19,115)              -
      Depreciation and amortization ..........................................     74,077           9,244
      Changes in operating assets and liabilities:
            Other ............................................................        604               -
            Trade receivables ................................................     (3,572)           (368)
            Other current assets .............................................     (4,463)            441
            Trade accounts payable ...........................................     (1,629)         (3,689)
            Other accrued expenses ...........................................     26,466           3,061
            Deferred revenue .................................................      3,267           2,763
                                                                                 --------        --------
              Total adjustments ..............................................     75,635          11,452
                                                                                 --------        --------
            Net Cash Provided by Operating Activities ........................     54,416          18,318
                                                                                 --------        --------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property and equipment ....................................    (43,207)        (10,282)
      Cash paid in conjunction with acquisitions .............................   (226,569)         (1,350)
      Other ..................................................................        297            (302)
                                                                                 --------        --------
            Net Cash Used in Investing Activities ............................   (269,479)        (11,934)
                                                                                 --------        --------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Payments of notes payable ..............................................          -          (1,450)
      Cash provided by credit line, net of issuance costs ....................     77,987               -
      Repayment of credit line ...............................................    (80,000)              -
      Payments of capital lease obligations ..................................     (1,985)         (1,906)
      Proceeds from issuance of convertible debt .............................    174,082               -
      Issuance of common stock, net of issuance costs ........................    264,069          50,084
                                                                                 --------        --------
            Net Cash Provided by Financing Activities ........................    434,153          46,728
                                                                                 --------        --------

NET INCREASE IN CASH AND CASH
      EQUIVALENTS ............................................................    219,090          53,112
CASH AND CASH EQUIVALENTS, beginning of period ...............................    167,743           9,386
                                                                                 --------        --------

CASH AND CASH EQUIVALENTS, end of period......................................   $386,833        $ 62,498
                                                                                 ========        ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
      Cash paid for interest..................................................   $  1,510        $    718
                                                                                 ========        ========
      Cash paid for income taxes..............................................   $  8,425        $    226
                                                                                 ========        ========
SUPPLEMENTAL NONCASH DISCLOSURES:
      Stock issued in conjunction with acquisition............................   $ 30,000        $      -
                                                                                 ========        ========
</TABLE>

           The accompanying condensed notes to financial statements
                    are an integral part of these statements

<PAGE>   6



                          MINDSPRING ENTERPRISES, INC.
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 1999 AND 1998

1.    Certain information and footnote disclosures normally included in
      financial statements prepared in accordance with generally accepted
      accounting principles have been condensed or omitted pursuant to Article
      10 of Regulation S-X of the Securities and Exchange Commission. The
      accompanying unaudited condensed financial statements reflect, in the
      opinion of management, all adjustments necessary to achieve a fair
      statement of the Company's financial position and results for the interim
      periods presented. All such adjustments are of a normal and recurring
      nature. These condensed financial statements should be read in conjunction
      with the financial statements and notes thereto included in the Company's
      Annual Report on Form 10-K for the year ended December 31, 1998 (File No.
      0-27890).

      On May 25, 1999, the Company declared a two-for-one stock split in the
      form of a stock dividend which was paid on June 25, 1999 to shareholders
      of record on June 11, 1999. Accordingly, the stock split has been
      recognized in these financial statements by reclassifying approximately
      $317,000, the par value of the additional shares issued as a result of the
      split, from additional paid in capital to common stock. For all periods
      presented, all shares outstanding and per share amounts have been restated
      to reflect the stock split.

2.    Basic (loss) earnings per common share ("EPS") was computed by dividing
      net (loss) income by the weighted average number of shares of common stock
      outstanding for the period then ended. The effect of the Company's stock
      options (using the treasury stock method) was included in the computation
      of diluted EPS for the three and nine months ended September 30, 1998. For
      the three and nine months ended September 30, 1999, the effect of the
      options is excluded, as it is anti-dilutive. The effect of the potential
      conversion of the Company's 5% Convertible Subordinated Notes due 2006 is
      anti-dilutive and as such is excluded from diluted earnings per share for
      the three months and nine months ended September 30, 1999. The following
      table summarizes the shares used in the calculations:

<TABLE>
<CAPTION>

                                                             THREE MONTHS ENDED               NINE MONTHS ENDED
----------------------------------------------------------------------------------------------------------------------
                                                                   SEPTEMBER 30,                 SEPTEMBER 30,
----------------------------------------------------------------------------------------------------------------------
(in thousands except per share data)                          1999            1998            1999            1998
                                                           --------        --------        --------        --------
<S>                                                        <C>             <C>             <C>             <C>
Weighted average shares
     Outstanding-basic                                       63,475          51,585          61,042          48,086
Effect of dilutive stock options                                  -           3,102               -           2,806
                                                           --------        --------        --------        --------
Shares used for diluted earnings                             63,475          54,687          61,042          50,892
per share
                                                           ========        ========        ========        ========

Net (loss) income                                          $(10,834)       $  3,985        $(21,219)       $  6,866
                                                           --------        --------        --------        --------

Basic (loss) earnings per share                            $  (0.17)       $   0.08        $  (0.35)       $   0.14
                                                           --------        --------        --------        --------

Diluted (loss) earnings per share                          $  (0.17)       $   0.07        $  (0.35)       $   0.13
                                                           --------        --------        --------        --------
----------------------------------------------------------------------------------------------------------------------
</TABLE>



3.    On February 17, 1999, the Company completed its acquisition of certain
      assets used in connection with the United States Internet access and Web
      hosting business operated by NETCOM On-Line Communication Services Inc.,
      which subsequently changed its name to ICG Netahead, Inc. and is a wholly
      owned subsidiary of ICG Communications, Inc. In this transaction, the
      Company acquired NETCOM's subscriber base of approximately 408,000
      individual Internet


<PAGE>   7

      access accounts, 25,000 Web hosting accounts and 3,000 dedicated Internet
      access accounts in the United States. The Company paid NETCOM
      approximately $245 million, consisting of $215 million in cash and $30
      million in MindSpring common stock (752,232 shares, at a price per share
      of $38.88). The Company also incurred expenses of approximately $4.2
      million in connection with this acquisition.

      The following table summarizes the net assets purchased in connection
      with this acquisition and the amount attributable to intangibles (in
      thousands) :

<TABLE>
<S>                                                                  <C>
------------------------------------------------------------------------------
Working Capital                                                      $  (1,672)
------------------------------------------------------------------------------
Property and Equipment                                                  13,200
------------------------------------------------------------------------------
Acquired subscriber base                                               237,695
------------------------------------------------------------------------------
</TABLE>


      The preliminary estimate of net assets acquired represents management's
      best estimate based on currently available information; however, such
      estimate may be revised up to one year from the acquisition date. The
      Company is amortizing the acquired customer base over three years.

4.    In March 1999, the Company filed a universal shelf registration statement
      with the Securities and Exchange Commission for the public offering from
      time to time of up to $800 million of debt and equity securities. In April
      1999, the Company completed two public offerings of securities under this
      shelf registration statement. The Company sold 5,520,000 shares of common
      stock, raising net proceeds of approximately $263.2 million, out of which
      the Company repaid all amounts outstanding under its secured credit
      facility. The Company also sold $179,975,000 aggregate principal amount of
      5% Convertible Subordinated Notes due 2006, raising net proceeds of
      approximately $174.1 million. The remaining proceeds from these offerings
      will be used for expansion of our business, as additional working capital
      for general corporate purposes, and for strategic acquisitions of
      subscriber accounts and complementary businesses.

      The Company's 5% Convertible Subordinated Notes due 2006 may be converted
      at the option of the holder into shares of common stock of the Company at
      any time prior to their maturity, redemption or repurchase at a rate of 16
      shares per each $1,000 principal amount of notes, or $62.50 per share,
      subject to adjustment in certain circumstances. Interest on the notes is
      payable semiannually on April 15 and October 15 of each year beginning
      October 15, 1999. The notes are subordinated in right of payment to all
      senior debt of MindSpring.

      The Company may redeem the notes before April 15, 2002, in whole or in
      part, at a redemption price equal to $1,000 per note to be redeemed plus
      accrued and unpaid interest, if any, to the date of redemption, if the
      closing price for MindSpring's common stock has exceeded 150% of the
      conversion price for at least 20 trading days within a period of any 30
      consecutive trading days. The Company will make an additional payment of
      cash with respect to the notes called for redemption of $200 per $1,000
      note, less the amount of interest actually paid on such note prior to the
      call for redemption. In addition, the Company may redeem the notes on or
      after April 15, 2002 at a redemption price equal to 102.86% of the
      principal amount of the notes declining to 100% of the principal amount of
      the notes by April 15, 2006. Noteholders have the option, subject to
      certain conditions, to require the Company to repurchase any notes held in
      the event of a "Change in Control," at a price equal to 100% of the
      principal amount of the notes, plus accrued interest to the date of
      repurchase.

5.    On September 23, 1999, the Company announced that it had entered into an
      Agreement and Plan of Reorganization, dated September 22, 1999 (the
      "Merger Agreement"), with Earthlink Network, Inc. ("Earthlink"). The
      Merger Agreement sets forth the terms and conditions of the proposed
      Merger of MindSpring and Earthlink into a new company (the "Merger"). The
      Merger is structured to be a stock-for-stock Merger of equals. Pursuant to
      the Merger Agreement, each share of common stock of MindSpring will be
      converted into one share of common stock of the new company, and each
      share of common stock of Earthlink will be converted into 1.615 shares of
      common stock of the new company. Other outstanding securities of the two
      companies will be converted on the same basis. Upon consummation of the
      Merger, the new company will be renamed Earthlink, Inc. The parties intend
      for the Merger to be treated as a tax-free reorganization under Section
      368 of the Internal Revenue Code of 1986, as amended, and as a
      "pooling-of-interests" for accounting purposes. Subject to several
      conditions, including receipt of required regulatory approvals, approval
      by both


<PAGE>   8

      companies' shareholders, and certain third-party consents, the Merger is
      expected to close in the first quarter of 2000. For a more detailed
      discussion of the Merger, see Current Report on Form 8-K filed with the
      Securities and Exchange Commission on September 30, 1999 and the amendment
      on Form 8-K/A filed on October 12, 1999.

<PAGE>   9




ITEM 2-

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements regarding our expected financial position
and operating results, our business strategy and our financing plans are
forward-looking statements. These statements can sometimes be identified by our
use of forward-looking words such as "may," "will," "anticipate," "estimate,"
"expect," or "intend." Known and unknown risks, uncertainties and other factors
could cause our actual results to differ materially from those contemplated by
these statements. Such risks and uncertainties include our ability to retain and
grow our subscriber base, our ability to successfully integrate new subscribers
and/or assets obtained through acquisitions, the highly competitive markets in
which we operate and our ability to respond to technological developments
affecting the Internet. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998, filed with the Securities and Exchange Commission
on March 30, 1999, discusses some additional important factors that could cause
the Company's actual results to differ materially from those in such
forward-looking statements.

      All common stock numbers and per share amounts in this report give effect
to a 3-for-1 stock split effected by MindSpring in July 1998 and a 2-for-1 stock
split effected by MindSpring in June 1999.

OVERVIEW

      MindSpring is a leading national Internet service provider, or ISP. On
September 23, 1999, MindSpring announced that it had entered into an Agreement
and Plan of Reorganization, dated September 22, 1999 (the "Merger Agreement"),
with Earthlink Network, Inc. ("Earthlink"). The Merger Agreement sets forth the
terms and conditions of the proposed Merger of MindSpring and Earthlink into a
new company (the "Merger"). The Merger is structured to be a stock-for-stock
Merger of equals. Pursuant to the Merger Agreement, each share of common stock
of MindSpring will be converted into one share of common stock of the new
company, and each share of common stock of Earthlink will be converted into
1.615 shares of common stock of the new company. Other outstanding securities of
the two companies will be converted on the same basis. Upon consummation of the
Merger, the new company will be renamed Earthlink, Inc. The parties intend for
the Merger to be treated as a tax-free reorganization under Section 368 of the
Internal Revenue Code of 1986, as amended, and as a "pooling-of-interests" for
accounting purposes. Subject to several conditions, including receipt of
required regulatory approvals, approval by both companies' shareholders, and
certain third-party consents, the transaction is expected to close in the first
quarter of 2000. For a more detailed discussion of the Merger, see our Current
Report on Form 8-K filed with the Securities and Exchange Commission on
September 30, 1999 and our amendment on Form 8-K/A filed on October 12, 1999.

      MindSpring focuses on serving individuals and small businesses. Our
subscribers use their MindSpring accounts to, among other things, communicate,
retrieve information, and publish information on the Internet. Our primary
service offerings are dial-up Internet access and business services which we
offer in various price and usage plans designed to meet the needs of our
subscribers. Our business services include Web hosting, which entails
maintaining a customer's Web site; high-speed, dedicated Internet access; Web
page design; and domain name registration. Web hosting, our principal business
service, complements our Internet access business and is one of the fastest
growing segments of the Internet marketplace.

      We offer our subscribers:

      -     user-friendly and easy to install software, containing a complete
            set of the most popular Internet applications including electronic
            mail, World Wide Web access, Network News, File Transfer Protocol
            and Internet Relay Chat;


<PAGE>   10

      -     highly responsive customer service, and technical support which is
            available 24 hours a day, seven days a week; and

      -     a reliable nationwide network that enables subscribers in the 48
            contiguous United States and the District of Columbia to access the
            Internet via a local telephone call.

      Our nationwide network consists of MindSpring-owned points of presence, or
"POPs," and POPs that are owned by other companies with which we have service
agreements. Through these service agreements, we have the flexibility to offer
Internet access in a particular market through a MindSpring-owned POP, a third
party network provider's POP or a combination of the two. As part of our efforts
to control quality and cost, we typically seek to increase the number of
MindSpring-owned POPs in markets where we have higher numbers of subscribers.

      MindSpring has grown rapidly by:

      -     providing superior customer service and technical support;

      -     expanding marketing and distribution activities;

      -     making strategic acquisitions; and

      -     creating additional revenue streams by offering value-added services
            such as Web hosting that build on our basic operating capabilities
            and services.

      We have increased our subscriber base from approximately 12,000
subscribers at December 31, 1995 to approximately 1,297,000 subscribers at
September 30, 1999, including approximately 61,000 Web hosting subscribers and
approximately 3,000 Dedicated Internet access subscribers. In addition, by
providing superior customer service and technical support, we have been
successful in limiting our average monthly subscriber cancellations, calculated
as the number of cancellations in a month divided by the beginning subscriber
base for that month, to 3.8% in 1996 and 1997, 3.3% in 1998 and 5.2% for the
nine months ended September 30, 1999.

      We have also rapidly increased revenues. From our inception in February
1994 through 1997, we experienced annual net operating losses as a result of
efforts to build our network infrastructure and internal staffing, develop our
systems, and expand into new markets. During 1997, we generated positive cash
flows from operations, with EBITDA of approximately $5 million. We had our first
year of profitability in 1998, with net income of approximately $8.8 million,
excluding a one-time tax benefit of approximately $1.7 million. Including the
one-time tax benefit, our net income for 1998 was approximately $10.5 million.
In the third quarter of 1999, in an effort to continue to build our subscriber
base, we increased our sales and marketing expenditures from traditional levels.
This, along with the amortization charges related to our acquisitions of
subscriber bases in the fourth quarter of 1998 and the first quarter of 1999,
had a direct impact on our EBITDA and net income. For the three months ended
September 30, 1999, we had revenues of approximately $88.2 million, EBITDA of
approximately $9.1 million, a net loss of approximately $(10.8) million and net
loss per share of $(0.17). Excluding tax-effected amortization expense related
to our acquisitions of subscriber bases, net income for the three months ended
September 30, 1999 was approximately $3.4 million. Excluding tax-effected
amortization expense, net income per share ("EPS+A") for this period was $0.05
per diluted share. For the nine months ended September 30, 1999, we had revenues
of approximately $235.5 million, EBITDA of approximately $35.8 million, a net
loss of approximately $(21.2) million and net loss per share of $(0.35).
Excluding tax-effected amortization expense related to our acquisitions of
subscriber bases, net income for the nine months ended September 30, 1999 was
approximately $15.6 million. EPS+A for this period was $0.24 per diluted share.

      We expect to continue to focus on increasing our subscriber base.
Increases in our subscriber base will cause our revenues to increase but will
also cause our costs of revenue, selling, general and administrative expenses,
capital expenditures, and depreciation and amortization to increase. Our
purchases of subscriber bases such as the Spry and NETCOM acquisitions,
described below, cause an immediate increase in our amortization expense. We
generally amortize subscriber acquisitions over a three-year period. We expect
that annual amortization expense attributable to these transactions will be
between approximately $85 and $90 million per year through 2001. To the extent
we continue to expand our subscriber base through acquisitions such as the Spry
and NETCOM acquisitions, we will continue to experience increased amortization
expense.


<PAGE>   11

      We plan to continue to increase our subscriber base through other means in
addition to subscriber base acquisitions. In July 1999, we announced an
accelerated organic growth marketing effort in which we would increase our sales
and marketing expenditures in both the fourth quarter 1999 and the first quarter
2000. We stated that we would focus a large portion of the additional
expenditures on a national branding campaign, primarily involving television
advertisements, which began in September 1999. The branding campaign was an
integral part of the accelerated growth initiative. We expected that these
incremental sales and marketing expenditures would result in increased
subscriber growth beginning in the fourth quarter of 1999 and continue into the
first quarter of 2000. Under the proposed Merger with EarthLink, the combined
company is expected to conduct business under the EarthLink brand name.
Therefore, we have made adjustments to our existing marketing plans to focus
less on branding initiatives and more on direct subscriber acquisition channels
in the fourth quarter. Overall, we expect our sales and marketing expenditures
in the fourth quarter of 1999 to be significantly higher than our historical
levels, but less than anticipated in our original announcement of the
accelerated organic growth marketing effort.

      We expect to incur negative EBITDA for the fourth quarter of 1999 and the
first quarter of 2000, primarily as a result of increased sales and marketing
expenditures, and we expect to incur net losses through 2000, primarily as a
result of the amortization expense associated with the Spry and NETCOM
acquisitions and the increased sales and marketing expenditures.

      Spry and NETCOM Acquisitions. On October 15, 1998, we completed our
acquisition of the customer base and certain related assets of Spry, Inc. The
total purchase price for the Spry acquisition was approximately $32 million. On
February 17, 1999, we completed the purchase of certain assets used in
connection with the United States Internet access and web hosting business
operated by NETCOM On-Line Communication Services for approximately $245
million, consisting of $215 million in cash and $30 million in MindSpring common
stock (752,232 shares, at a price per share of $39.88).

      Credit Facility. On February 17, 1999, we entered into a credit agreement
with First Union National Bank ("First Union") and several other lenders. The
credit agreement provides for a $100 million revolving credit facility that may
be increased at our option to $200 million with the approval of First Union and
the other lenders under the credit agreement. The credit facility will mature on
February 17, 2002. The credit facility is to be used to fund working capital and
for general corporate purposes, including permitted acquisitions. Our
obligations under the credit facility are secured by substantially all of
MindSpring's assets. On February 17, 1999, we borrowed approximately $80 million
under the credit facility to finance the NETCOM acquisition. We repaid all
amounts outstanding under the credit facility with a portion of the net proceeds
from our April 1999 offering of 5,520,000 shares of common stock, and we amended
the credit facility to permit the issuance of notes, the payment of interest
thereon, and certain redemptions thereof. For a more detailed description of our
secured credit facility, see our Current Report in form 8-K filed with the
Securities and Exchange Commission on February 25, 1999.

      Securities Offerings during 1999. In March 1999, we filed a universal
shelf registration statement with the Securities and Exchange Commission for the
public offering from time to time of up to $800 million of debt and equity
securities. In April 1999, we completed two public offerings of securities under
this shelf registration statement. We sold 5,520,000 shares of common stock,
raising net proceeds of approximately $263.2 million, out of which we repaid all
amounts outstanding under the secured credit facility. We also sold $179,975,000
aggregate principal amount of 5% Convertible Subordinated Notes due 2006,
raising net proceeds of approximately $174.1 million. The remaining proceeds
from these offerings will be used for expansion of our business, as additional
working capital for general corporate purposes, and for strategic acquisitions
of subscriber accounts and complementary businesses.

      Revenues. MindSpring derives revenue primarily by providing individuals
with dial-up access to the Internet. Monthly subscription fees vary by billing
plan. Under MindSpring's current pricing plans, customers have a choice of
several "flat rate" plans (The Works and Unlimited Access, e.g.) and several
"usage sensitive" plans (Standard and Light, e.g.). MindSpring also has a
prepayment plan available to all dial-up subscribers which allows subscribers to
prepay their access fees for either one or two years at a discounted rate. For
the three months ended September 30, 1999, the average monthly recurring revenue
per dial-up subscriber was approximately $20.


<PAGE>   12

      In addition, MindSpring earns revenue by providing Web hosting, full-time
dedicated access connections to the Internet, and other value-added services
such as Web page design and domain registration. MindSpring's Web hosting
services allow a business or individual to post information on the World Wide
Web so that the information is available to anyone who has access to the
Internet. MindSpring currently offers price plans for Web hosting subscribers
ranging from $19.95 to $99.95 per month. MindSpring had approximately 61,000 Web
hosting subscribers as of September 30, 1999. Through our domain registration
services, MindSpring offers subscribers the ability to personalize electronic
mail addresses and URLs (Uniform Resource Locators). The revenue from the
services described in this paragraph have been classified as business services
in MindSpring's statements of operations and in the "Results of Operations"
table shown below.

      Costs. MindSpring's costs include (1) costs of revenue that are primarily
related to the number of subscribers; (2) selling, general and administrative
expenses that are associated more generally with operations; and (3)
depreciation and amortization, which are related to the number and amount of
MindSpring-owned POPs and other equipment, and the deferred costs associated
with acquired customer bases.

      Costs of revenue that are primarily related to the number of subscribers
consist primarily of the costs of telecommunications facilities necessary to
provide service to subscribers. Telecommunications facilities costs include (1)
the costs of providing local telephone lines into each MindSpring-owned POP; (2)
costs related to the use of third party networks; and (3) costs associated with
leased lines connecting each MindSpring-owned POP and third party network to
MindSpring's hub and connecting MindSpring's hub to the Internet backbone.

      Selling, general and administrative costs are incurred in the areas of
sales and marketing, customer service and technical support, network operations
and maintenance, engineering, accounting and administration. Selling, general
and administrative costs will increase over time as MindSpring's scope of
operations increases. As noted above, we have significantly increased the level
of marketing activity beginning in the third quarter of 1999 to increase the
rate of subscriber growth. Our new marketing strategy is expected to have a
short-term negative impact on net income. We believe that these increased costs
will result in greater subscriber growth; however, there can be no assurance
that these additional sales and marketing expenditures will result in
significantly greater subscriber growth. MindSpring does not defer any sales or
marketing expenses.

      As MindSpring expands into new markets, both costs of revenue and selling,
general and administrative expenses will increase. To the extent MindSpring
opens MindSpring POPs in new markets, these costs and expenses may also increase
as a percentage of revenue in the short term for the period immediately after a
new MindSpring POP is opened. Many of the fixed costs of providing service in a
new market through a new MindSpring POP are incurred before significant revenue
can be expected from that market. However, to the extent that we expand into new
markets by using third party POPs instead of opening our own POPs, MindSpring's
incremental monthly recurring costs will consist primarily of the fees to be
paid to third parties under network services agreements. In general, the margins
on those subscribers will initially be higher than if we had opened our own POP
in new markets. When a market matures, if the market is served through
purchased, third party network services rather than MindSpring-owned POPs, costs
of revenue as a percentage of revenue will tend to be higher, and therefore,
margins on subscribers will tend to be lower. This is because the full costs of
using third party networks is included in costs of revenue, as compared to the
costs of using MindSpring-owned POPs, a portion of which is included in
depreciation. In addition, in more mature markets where we have greater
concentrations of subscribers, we often can provide services at a lower cost per
subscriber through MindSpring-owned POPs after the initial period when related
expenses are higher. This depends in part on how much we must pay for local area
telecommunications charges and the cost of available alternative third party
providers.

      In connection with the NETCOM acquisition, ICG Netahead retained the
network assets that they formerly used to serve the customers we acquired. We
purchase access to that network under a network services agreement with a term
of one year and an option for a second year on potentially different terms to be
agreed upon by the parties. During the first year of the network services
agreement with ICG Netahead, we will pay for use of ICG Netahead's POPs at rates
that are generally comparable to the costs of using MindSpring POPs.


<PAGE>   13



RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1998

      The following table shows unaudited financial data for the three months
ended September 30, 1999 and 1998. Operating results for any period are not
necessarily indicative of results for any future period. Dollar amounts are
shown in thousands (except per share data)

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED                  THREE MONTHS ENDED
                                                                 SEPTEMBER 30, 1999                  SEPTEMBER 30, 1998

                                                                                % OF                                  % OF
STATEMENTS OF OPERATIONS DATA:                              (000's)            REVENUE            (000's)            REVENUE
                                                          -----------        -----------        -----------        -----------
<S>                                                       <C>                <C>               <C>                <C>
REVENUES
   Access                                                 $    72,631                 82        $    24,917                 87
   Business services                                           15,548                 18              3,778                 13
                                                          -----------        -----------        -----------        -----------
     Total revenues                                            88,179                100             28,695                100

COST AND EXPENSES

   Cost of revenues                                            28,367                 32              7,976                 28
                                                          -----------        -----------        -----------        -----------
     Gross margin                                              59,812                 68             20,719                 72

   General and administrative                                  28,363                 32              9,195                 32
   Selling                                                     22,366                 26              4,806                 17
                                                          -----------        -----------        -----------        -----------
     EBITDA (1)                                                 9,083                 10              6,718                 23

   Depreciation                                                 5,517                  6              2,072                  7
   Acquired customer base amortization                         23,302                 26              1,206                  4
                                                          -----------        -----------        -----------        -----------

OPERATING (LOSS) INCOME                                       (19,736)               (22)             3,440                 12
INTEREST INCOME, NET                                            1,977                  2                665                  2

                                                          -----------        -----------        -----------        -----------
(LOSS) INCOME BEFORE TAXES                                    (17,759)               (20)             4,105                 14

   Income tax benefit (expense)                                 6,925                  8               (120)                (0)
                                                          -----------        -----------        -----------        -----------
NET(LOSS) INCOME                                          $   (10,834)               (12)       $     3,985                 14
                                                          ===========                           ===========

NET (LOSS) INCOME PER SHARE

Basic                                                     $     (0.17)                          $      0.08

Diluted                                                   $     (0.17)                          $      0.07


WEIGHTED AVERAGE COMMON
</TABLE>

<PAGE>   14

<TABLE>
<S>                                                       <C>                                  <C>
   SHARES OUTSTANDING

Basic                                                          63,475                               51,585

Diluted                                                        63,475                               54,687

OTHER OPERATING DATA:

     Approx. number of subscribers at end of period         1,297,000                              455,000
     Number of employees at end of period                       2,051                                  732
</TABLE>

(1) EBITDA represents earnings before interest expense, income taxes,
    depreciation and amortization. EBITDA is not a measurement of financial
    performance under generally accepted accounting principles and should not be
    considered an alternative to net income as a measure of performance.


      REVENUE. Revenues for the three months ended September 30, 1999 totaled
approximately $88,179,000 as compared to approximately $28,695,000 for the three
months ended September 30, 1998. This approximately 207% increase in period
revenues resulted primarily from a 185% increase in total subscribers. The
increase in subscribers is due to the acquisition of the NETCOM subscribers in
February 1999, the acquisition of Spry subscribers in October 1998, and organic
growth. Revenues from access to the Internet, which include start-up fees and
advertising revenues, represented approximately 82% of total revenue for the
three months ended September 30, 1999 vs. 87% for the three months ended
September 30, 1998. Business services revenue, consisting primarily of
Web-hosting and dedicated Internet access, grew to 18% of total revenue for the
three months ended September 30, 1999 from 13% for the three months ended
September 30, 1998. This increase in business service revenue as a percentage of
total revenue for the three months ended September 30, 1999 as compared to the
three months ended September 30, 1998 can be attributed to the growth in our
business service customer base.

      COSTS OF REVENUES. For the three months ended September 30, 1999, cost of
revenues increased to approximately 32% of total revenue, compared to
approximately 28% of total revenue for the three months ended September 30,
1998. Cost of revenues increased as a percentage of total revenues as a result
of a greater percentage of our subscribers being served by third party networks
rather than MindSpring POPs primarily due to the Spry and NETCOM acquisitions.
Cost of revenues for subscribers being serviced by MindSpring POPs does not
include depreciation for these POP's and other related equipment.

      SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. Selling, general, and
administrative expenses were approximately 58% of revenue for the three months
ended September 30, 1999, compared to approximately 49% of revenue for the three
months ended September 30, 1998. This increase was due to sales and marketing
costs increasing to 26% of revenue for the three months ended September 30, 1999
from 17% for the three months ended September 30, 1999. Selling costs increased
due primarily to higher advertising expenditures related to the Company's
accelerated growth program initiated in September 1999.

      EBITDA MARGIN. EBITDA margin refers to EBITDA as a percentage of revenues.
EBITDA margin decreased to 10% of revenues for the three months ended September
30, 1999 from 23% of revenues for the three months ended September 30, 1998.
This decrease is primarily attributable to the increased sales and marketing
expenditures and higher costs of revenue.

      DEPRECIATION AND AMORTIZATION. Customer base amortization expense
increased significantly from 4% of revenues for the three months ended September
30, 1998 to 26% for the three months ended September 30, 1999 due to the
acquisitions of the Spry and NETCOM customer bases, which are being amortized
over three years. Depreciation expense decreased from 7% of revenues for the
three months ended September 30, 1998 to 6% of revenues for the three months
ended September 30, 1999 due to a smaller percentage of our subscriber base
being served by the Company-owned network.


<PAGE>   15

      INTEREST INCOME, NET. Interest income (expense), net was approximately
$1,977,000 for the three months ended September 30, 1999 compared to
approximately $665,000 for the three months ended September 30, 1998. This
increase in interest income (expense), net for the three months ended September
30, 1999 compared to the three months ended September 30, 1998 was primarily due
to interest income increasing as a result of the increase in cash available for
investment purposes, net of interest expense increasing, resulting from our
equity offering and our convertible debt offering which were both completed in
April 1999. The offerings raised net proceeds of approximately $437 million from
which we repaid $80 million outstanding under our secured credit facility.
Interest expense includes interest on our 5% Convertible Subordinated Notes due
2006 and fees related to our unused credit facility as well as the amortization
of deferred financing costs associated with both.

      INCOME TAX BENEFIT (PROVISION). For the three months ended September 30,
1999, the Company recorded an income tax benefit of $6,925,000, for an effective
tax rate of 39%, compared to an income tax provision of $120,000, for an
effective tax rate of 3%, for the three months ended September 30, 1998.

      NET (LOSS) INCOME AND (LOSS) INCOME PER SHARE. As discussed above, and
primarily as a result of the increase in acquired customer base amortization and
sales and marketing expenditures, the Company had a net loss for the three
months ended September 30, 1999 of ($10,834,000) or $(0.17) per basic and
diluted share. The Company's net income for the three months ended September 30,
1998 was $3,985,000 or $0.07 per diluted share. Excluding tax-effected customer
based amortization expense, the Company recorded earnings of $3,380,000 or $0.05
per diluted share ("EPS+A") for the three months ended September 30, 1999 and
earnings of $4,721,000 or $0.09 per diluted share for the three months ended
September 30, 1998.


<PAGE>   16




NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998

      The following table shows unaudited financial data for the nine months
ended September 30, 1999 and 1998. Operating results for any period are not
necessarily indicative of results for any future period. Dollar amounts are
shown in thousands (except per share data)

<TABLE>
<CAPTION>

                                                                NINE MONTHS ENDED                        NINE MONTHS ENDED
                                                                SEPTEMBER 30, 1999                      SEPTEMBER 30, 1998

                                                                                 % OF                                 % OF
STATEMENTS OF OPERATIONS DATA:                               (000's)            REVENUE            (000's)            REVENUE
                                                          -----------        -----------        -----------        -----------
<S>                                                       <C>                         <C>       <C>                         <C>
REVENUES
   Access                                                 $   196,645                 84        $    64,795                 86
   Business services                                           38,823                 16             10,344                 14
                                                          -----------        -----------        -----------        -----------
     Total revenues                                           235,468                100             75,139                100

COST AND EXPENSES

   Cost of revenues                                            78,882                 33             22,167                 30
                                                          -----------        -----------        -----------        -----------
     Gross margin                                             156,586                 67             52,972                 70

   General and administrative                                  74,253                 32             25,505                 34
   Selling                                                     46,503                 20             11,735                 15
                                                          -----------        -----------        -----------        -----------
     EBITDA (1)                                                35,830                 15             15,732                 21

   Depreciation                                                13,732                  6              5,696                  8
   Acquired customer base amortization                         60,345                 26              3,548                  5
                                                          -----------        -----------        -----------        -----------

OPERATING (LOSS) INCOME                                       (38,247)               (16)             6,488                  8
INTEREST INCOME, NET                                            3,463                  1                590                  1

                                                          -----------        -----------        -----------        -----------
(LOSS) INCOME BEFORE TAXES                                    (34,784)               (15)             7,078                  9

   Income tax benefit (expense)                                13,565                  6               (212)                (0)
                                                          -----------        -----------        -----------        -----------
NET(LOSS) INCOME                                          $   (21,219)                (9)       $     6,866                  9
                                                          ===========                           ===========


NET (LOSS) INCOME PER SHARE

Basic                                                     $     (0.35)                          $      0.14

Diluted                                                   $     (0.35)                          $      0.13


WEIGHTED AVERAGE COMMON
</TABLE>

<PAGE>   17

<TABLE>
<S>                                                       <C>                                   <C>
   SHARES OUTSTANDING

Basic                                                          61,042                               48,086

Diluted                                                        61,042                               50,892

OTHER OPERATING DATA:

     Approx. number of subscribers at end of period         1,297,000                              455,000
     Number of employees at end of period                       2,051                                  732
</TABLE>

(1) EBITDA represents earnings before interest expense, income taxes,
    depreciation and amortization. EBITDA is not a measurement of financial
    performance under generally accepted accounting principles and should not
    be considered an alternative to net income as a measure of performance.

      REVENUE. Revenues for the nine months ended September 30, 1999 totaled
approximately $235,468,000 as compared to approximately $75,139,000 for the nine
months ended September 30, 1998. This approximately 213% increase in period
revenues resulted primarily from a 185% increase in total subscribers. The
increase in subscribers is due to the acquisition of the NETCOM subscribers in
February 1999, the acquisition of Spry subscribers in October 1998 and organic
growth. Revenues from dial-up access to the Internet, which include start-up
fees and advertising revenues, represented approximately 84% of total revenue
for the nine months ended September 30, 1999 vs. 86% for the nine months ended
September 30, 1998. Business services revenue, consisting primarily of
Web-hosting and dedicated Internet access, grew to 16% of total revenue for the
nine months ended September 30, 1999 from 14% for the nine months ended
September 30, 1998. This increase in business service revenue as a percentage of
total revenue for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998 can be attributed to the growth in our
business service customer base.

      COSTS OF REVENUES. For the nine months ended September 30, 1999, cost of
revenues increased to approximately 33% of total revenue, compared to
approximately 30% of total revenue for the nine months ended September 30, 1998.
Cost of revenues increased as a percentage of total revenues as a result of a
greater percentage of our subscribers being served through the use of third
party networks rather than MindSpring POPs due to the Spry and NETCOM
acquisitions. Cost of revenues for subscribers being serviced by MindSpring
POP's does not include depreciation for these POPs and other related equipment.

      SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. Selling, general, and
administrative expenses were approximately 52% of revenue for the nine months
ended September 30, 1999, compared to approximately 49% of revenue for the nine
months ended September 30, 1998. This increase was due to sales and marketing
costs increasing to 20% of revenue for the nine months ended September 30, 1999
from 15% for the nine months ended September 30, 1999. Selling costs increased
due primarily to higher advertising expenditures related to the Company's
accelerated growth program initiated in September 1999 offset by general and
administrative costs declining to 32% of revenue for the nine months ended
September 30, 1999 from 34% for the nine months ended September 30, 1998.
General and administrative costs decreased due to efficiencies gained primarily
through economies of scale.

      EBITDA MARGIN. EBITDA margin refers to EBITDA as a percentage of revenues.
EBITDA margin decreased to 15% of revenues for the nine months ended September
30, 1999 from 21% of revenues for the nine months ended September 30, 1998. This
decrease is primarily attributable to the increased sales and marketing
expenditures and to costs of revenue being relatively higher in 1999.

      DEPRECIATION AND AMORTIZATION. Customer base amortization expense
increased significantly from 5% of revenues for the nine months ended September
30, 1998 to 26% for the nine months ended September 30, 1999 due to the
acquisitions of the Spry and NETCOM customer bases, which are being amortized
over three years. Depreciation expense decreased from 8% of revenues for the
nine months ended September 30, 1998 to 6% of revenues for the nine months ended
September 30, 1999 due to a smaller percentage of our subscriber base being
served by the company-owned network.


<PAGE>   18

      INTEREST INCOME, NET. Interest income (expense), net was approximately
$3,463,000 for the nine months ended September 30, 1999 compared to
approximately $590,000 for the nine months ended September 30, 1998. This
increase in interest income (expense), net for the nine months ended September
30, 1999 compared to the nine months ended September 30, 1998 was primarily due
to interest income increasing as a result of the increase in cash available for
investment purposes, net of interest expense increasing, resulting from equity
offerings in December 1998 and April 1999 and a convertible debt offering
completed in April 1999. The offerings raised net proceeds of approximately $562
million from which we repaid $80 million outstanding under a secured credit
facility. Interest expense includes interest on our 5% Convertible Subordinated
Notes due 2006 and fees related to our unused credit facility as well as
amortization of deferred financing costs incurred in conjunction with both.

      INCOME TAX BENEFIT (PROVISION). For the nine months ended September 30,
1999, the Company recorded an income tax benefit of $13,565,000 for an effective
tax rate of 39%, compared to an income tax provision of $212,000, for an
effective tax rate of 3% for the nine months ended September 30, 1998.

      NET (LOSS) INCOME AND (LOSS) INCOME PER SHARE. As discussed above, and
primarily as a result of the increase in sales and marketing expenditures and in
acquired customer base amortization, the Company had a net loss for the nine
months ended September 30, 1999 of ($21,219,000) or $(0.35) per basic and
diluted share. The Company's net income for the nine months ended September 30,
1998 was $6,866,000 or $0.13 per diluted share. Excluding tax-effected customer
based amortization expense, the Company recorded earnings of $15,591,000 or
$0.24 per diluted share ("EPS+A") for the nine months ended September 30, 1999
and earnings of $9,030,000 or $0.18 per diluted share for the nine months ended
September 30, 1998.



      LIQUIDITY AND CAPITAL RESOURCES

      For the nine months ended September 30, 1999, MindSpring generated net
cash from operations of approximately $54.4 million, compared to $18.3 million
for the nine months ended September 30, 1998, an increase of approximately 197%.
During the first nine months of 1999, we spent a total of approximately $43.2
million primarily related to purchases of telecommunications equipment necessary
for the provision of service to subscribers. We did not enter into any capital
lease agreements in the first nine months of 1999. On February 17, 1999, we paid
$215 million in cash to ICG in connection with the closing of the NETCOM
acquisition, approximately $80 million of which we borrowed under our $100
million secured revolving credit facility, which we repaid as discussed below,
and the remainder from our available cash.

      As of September 30, 1999, we had approximately $386.8 million of cash. In
March 1999, we filed a universal shelf registration statement with the
Securities and Exchange Commission for the public offering from time to time of
up to $800 million of debt and equity securities. In April 1999, we completed
two public offerings of securities under this shelf registration statement. We
sold 5,520,000 shares of our common stock raising net proceeds of approximately
$263.2 million, from which we repaid approximately $80 million of principal and
interest outstanding under our secured credit facility. We also sold
$179,975,000 aggregate principal amount of our 5% Convertible Subordinated Notes
due 2006, raising net proceeds of approximately $174.1 million. Net of expenses
and repayment of debt, the Company raised an aggregate of approximately $357.3
million in these offerings.

      MindSpring's future capital requirements depend on various factors
including, without limitation:

      -     the rate of market acceptance of MindSpring's services;

      -     our ability to maintain and expand our subscriber base;

      -     the rate of expansion of MindSpring's network infrastructure;

      -     the resources required to expand our marketing and sales efforts;
            and

      -     the availability of hardware and software provided by third party
            vendors.




<PAGE>   19

      We currently estimate that our cash and financing needs for the remainder
of 1999 and 2000 can be met by cash on hand, amounts available under our credit
facility, additional capital financing arrangements, and cash flow from
operations. If our credit facility is unavailable or if our expectations change
regarding our capital needs due to market conditions, strategic opportunities or
otherwise, then our capital requirements may vary materially from those
currently anticipated. We do not currently have any commitments for any
additional financing, and there can be no assurance that if and when we need
additional capital it will be available on terms that are acceptable to us, if
at all. If additional capital financing arrangements, including public or
private sales of debt or equity securities, or additional borrowings from
commercial banks are insufficient or unavailable, or if we experience shortfalls
in anticipated revenues or increases in anticipated expenses, we will be
required to modify our growth and operating plans to match available funding.
Any additional equity financing may be on terms that are dilutive or potentially
dilutive to MindSpring's stockholders. Debt financing, if available, may involve
restrictive covenants with respect to dividends, raising future capital and
other financial and operational matters and incurring additional debt may
further limit MindSpring's ability to raise additional capital. In addition, our
credit facility contains restrictions on our ability to incur additional debt
and to issue some types of convertible or redeemable capital stock.

      MindSpring frequently engages in discussions involving potential business
combinations. Depending on the circumstances, MindSpring may not disclose
material transactions until completion of a definitive agreement. MindSpring may
determine to raise additional debt or equity capital to finance potential
acquisitions and/or to fund accelerated growth. Any significant acquisitions or
increases in MindSpring's growth rate could materially affect MindSpring's
operating and financial expectations and results, liquidity and capital
resources.

      As referenced in Form 8-K, as a result of the Merger, the holders of the
5% Convertible Subordinated Notes due 2006 will have the option to require the
new Company to repurchase the notes. Pursuant to the Merger Agreement, the
repurchase price for the notes will be paid in cash at a repurchase price of
100% of the principal amount plus accrued interest to the date of repurchase.

      YEAR 2000

      Introduction. The term "Year 2000 issue" is a general term used to
describe the various problems that may result from the improper processing of
dates and date-sensitive calculations by computers and other machinery as the
year 2000 is approached and reached. These problems generally arise from the
fact that most of the world's computer hardware and software have historically
used only two digits to identify the year in a date, often meaning that the
computer will fail to distinguish dates in the "2000's" from dates in the
"1900's." These problems may also arise from other sources as well, such as the
use of special codes and conventions in software that make use of the date
field.

      State of Readiness. We have established a Year 2000 program office to
coordinate appropriate activity and report to the Board of Directors on a
continuing basis with regard to the Year 2000 issue. Our Year 2000 program
office has developed and is currently implementing a comprehensive Year 2000
program for us to become Year 2000 ready. The Year 2000 program consists of six
phases: (1) project planning and inventory of our assets, (2) assessment of
remediation requirements, (3) remediation (whether by upgrade or replacement),
(4) testing and validation of selected critical assets, (5) implementation and
(6) creation of contingency plans in the event of year 2000 failures.

      The Year 2000 program covers the following: (1) internally developed
software products which we provide to our customers, (2) our information
technology systems, (3) our network elements, (4) our operational support
systems, and (5) certain non-information technology systems, including embedded
technology. In addition, the program calls for us to identify and assess the
systems and services of our third party suppliers, such as major vendors, third
party network service providers and other material service providers, and take
appropriate remedial actions and develop contingency plans where appropriate in
connection with such third party suppliers.

      We provide our customers with a software package which, among other
things, allows our customers to access our services. The software package
consists of internally developed software (e.g., the MindSpring Internet
software) which is bundled with third party software. We have conducted
operational testing and believe that the current shipping version of the
MindSpring Internet software is Year 2000 ready.


<PAGE>   20

      As of November 10, 1999, we have completed the inventory and assessment
phases of the Year 2000 program. We have substantially completed the remediation
and testing and validation phases of the Year 2000 program, and expect to
complete these phases by the end of November, 1999. We have not and do not
intend to test our USENET news service which is heavily dependent on external
news feeds.

      We have performed a technical review of many of the more critical third
party systems and have surveyed the publicly available statements issued by the
vendors of those systems, in an effort to assess their Year 2000 readiness
status. Additionally, we have contacted our significant providers of third party
systems requesting information regarding their vulnerability to Year 2000 issues
and whether the products and services purchased from those entities are Year
2000 ready. We are evaluating these responses for their accuracy and adequacy,
and are updating appropriate contingency plans for any material supplier that
does not provide an adequate response.

      We have not deferred any specific information technology project due to
the Year 2000 program. We engaged a consulting firm to assist us in completing
the inventory, assessment and testing phases of our Year 2000 program, and to
assist us in our Year 2000 program management.

      Costs. As of November 10, 1999, we have incurred expenses of approximately
$600,000 in connection with the implementation of the Year 2000 Program Office
and Year 2000 program. We estimate that we will incur minimal expenses through
the remainder of the Year 2000 program. These costs will be expensed as
incurred. The costs and estimates provided include our estimate of the cost of
internal resources directly attributable to the Year 2000 program. We have
funded, and anticipate that we will continue funding, the costs of the Year 2000
program from cash flows. The estimates for the costs of the Year 2000 program
are based upon management's best estimates and may be updated or revised as
additional information becomes available. We currently believe these costs will
not have a material effect on our financial condition, liquidity or results of
operations.

      Risks. Our failure to correct a material Year 2000 problem could result in
an interruption in, or a failure of, normal business activities or operations.
Presently, however, we perceive that our most reasonably likely worst case
scenario related to the Year 2000 is associated with potential concerns with
third party services or products.

      Specifically, we are heavily dependent on a significant number of third
party vendors to provide both network services and equipment. A significant Year
2000-related disruption of the network services or equipment provided to us by
third party vendors could cause customers to consider seeking alternate
providers or cause an unmanageable burden on customer service and technical
support, which in turn could materially and adversely affect our results of
operations, liquidity and financial condition. We are not presently aware of any
vendor related Year 2000 issue that is likely to result in this type of
disruption.

      Furthermore, our business depends on the continued operation of, and
widespread access to, the Internet. To the extent that the normal operation of
the Internet is disrupted by the Year 2000 issue, our results of operations,
liquidity and financial condition could be materially and adversely affected.

      Contingency Plans. We developed contingency plans for our primary business
operations. We will continue to monitor our third party suppliers and will
adjust any appropriate contingency plans accordingly.

      The estimates and conclusions included in this discussion contain
forward-looking statements and are based on management's best estimates of
future events. Our expectations about risks, future costs and the timely
completion of its Year 2000 modifications may turn out to be incorrect and any
variance from these expectations could cause actual results to differ materially
from what has been discussed above. Factors that could influence risks, amount
of future costs and the effective timing of remediation efforts include our
success in identifying and correcting potential Year 2000 issues and the ability
of third parties to appropriately address their Year 2000 issues. The foregoing
Year 2000 discussion and the information contained herein is provided as a "Year
2000 Readiness Disclosure" as defined in the Year 2000 Information and Readiness
Disclosure Act of 1998 (Public Law 105-271, 112 Stat. 2386) enacted on October
19, 1998.




<PAGE>   21

RECENT ACCOUNTING PRONOUNCEMENTS

The FASB has issued Statement No 133, Accounting for Derivative Instruments and
Hedging Activities, which must be adopted by the year 2000. In June 1999, the
FASB issued Statement No. 137, Accounting for Derivative Instruments and Hedging
Activities- Amendment of thE Effective Date of FASB No. 133, which amends
Statement No. 133 to be effective for all fiscal quarters and for all fiscal
years beginning after June 15, 2000 (that is, January 1, 2001 for companies with
calendar-year fiscal years). This statement establishes accounting and reporting
standards for derivative instruments- including certain derivative instruments
embedded in other contracts - and for hedging activities. Adoption of this
statement is not expected to have a material impact on the Company's financial
statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We believe our exposure to market rate fluctuations on our investments is
nominal due to the short-term nature of those investments. We have no material
future earnings or cash flow exposures with respect to our outstanding capital
leases, which are all at fixed rates. We have no material earnings or cash flow
exposure with respect to our outstanding convertible notes, which are all at
fixed rates. To the extent MindSpring has borrowings outstanding under the
credit facility, we would have market risk relating to those amounts because the
interest rates under the credit facility are variable. At present, we have no
plans to enter into any hedging arrangements with respect to potential future
borrowings.

PART II  OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)    Exhibits

            27. Financial Data Schedule

(b)         Reports on Form 8-K

      On September 30, 1999, the Company filed a Current Report on Form 8-K to
report that, on September 22, 1999, the Company had entered into an Agreement
and Plan of Reorganization with Earthlink Network, Inc. (the "Merger
Agreement"). The Merger Agreement sets forth the terms and conditions of the
proposed merger of MindSpring and Earthlink into a new company (the "Merger").

      On October 12, 1999, the Company filed a Current Report on Form 8-K/A
amending its Current Report on Form 8-K dated September 30, 1999. The Form 8-K/A
included certain pro forma financial statements with respect to the Merger.


<PAGE>   22







                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                     MINDSPRING ENTERPRISES, INC.
                                     ----------------------------
                                     (Registrant)

Date: December 16, 1999              By: /s/ Juliet M. Reising
                                         ------------------------
                                     Juliet M. Reising
                                     Executive Vice President and
                                     Chief Financial Officer


<PAGE>   23



                                INDEX TO EXHIBITS

Exhibit                                                                 Numbered
Number                          Exhibit Description                       Page

27.                           Financial Data Schedule