Classmates.com 2008 Annual Report Download - page 135

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. FAIR VALUE MEASUREMENTS (Continued)
presents information about assets required to be carried at fair value on a recurring basis at December 31, 2008 (in thousands):
The Company estimated the fair value of its long-term debt by using a discounted cash flow technique that incorporates a market interest
yield curve with adjustments for duration and risk profile. In determining the market interest yield curve, the Company considered its estimated
credit ratings. The Company estimated its credit ratings as A/A- for the long-term debt associated with the UOL Credit Agreement resulting in a
discount rate of 6% and a credit rating of BBB/BB+ for the long-
term debt associated with the FTD Credit Agreement resulting in a discount rate
of 10%. The table below summarizes the fair value estimates, at December 31, 2008, for financial instruments, as defined by SFAS No. 107 (in
thousands):
9. STOCKHOLDERS' EQUITY
Stockholders' Rights Plan
On November 15, 2001, the Board of Directors declared a dividend of one preferred share purchase right for each outstanding share of the
Company's common stock. The dividend was paid on November 26, 2001 to the stockholders of record at the close of business on that date.
Each right entitles the registered holder to purchase from the Company one unit consisting of one one-
thousandth of a share of its Series A junior
participating preferred stock at a price of $25 per unit. On April 29, 2003, the Board of Directors voted to amend the purchase price per unit from
$25 to $140. The rights generally will be exercisable only if a person or group acquires beneficial ownership of 15% or more of the Company's
common stock or announces a tender or exchange offer which would result in a person or group owning 15% or more of the Company's common
stock. The Company generally will be entitled to redeem the rights at $0.0007 per right at any time until 10 days after a public announcement
that a 15% position in the Company's common stock has been acquired or that a tender or exchange offer which would result in a person or
group owning 15% or more of the Company's common stock has commenced. The rights expire on November 26, 2011.
Preferred Stock
The Company has 5.0 million shares of preferred stock authorized with a par value of $0.0001, of which 300,000 shares are designated as
Series A junior participating preferred stock. At December 31, 2008 and 2007, the Company had no preferred shares issued or outstanding.
F-40
Description
Total
Level 1
Level 2
Cash equivalents
$
68,084
$
58,330
$
9,754
Derivative asset
40
—
40
Total
$
68,124
$
58,330
$
9,794
December 31, 2008
Carrying
Amount
Estimated
Fair Value
Long
-
term debt, including current portion
$
413,477
$
391,762
Total
$
413,477
$
391,762