Classmates.com 2009 Annual Report Download - page 147

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. IMPAIRMENT OF GOODWILL, INTANGIBLE ASSETS AND LONG-LIVED ASSETS (Continued)
During the latter half of the December 2008 quarter, there was deterioration in the general business environment, weakening consumer
spending, a significant decline in the market capitalization of the Company and its competitors, and a decline in the Company's business outlook
primarily due to adverse macroeconomic factors. In accordance with ASC 350, the Company performed an interim impairment assessment of the
fair values of the FTD and Interflora trademarks and trade names.
As a result of the December 31, 2008 valuation, the Company recorded a $44.0 million and $17.9 million impairment charge for the
trademarks and trade names of FTD and Interflora, respectively. These impairment charges were included in impairment of goodwill, intangible
assets and long-lived assets in the consolidated statements of operations. A reconciliation of the value of the Company's indefinite-lived
intangible assets is as follows:
Impairment of Goodwill
2008 Impairment Charge
The Company performed its annual impairment assessment of goodwill as of October 1, 2008 and determined that goodwill at its
Classmates Online, MyPoints and Communications reporting units was not impaired. Due to the proximity of the Closing Date to the annual
impairment assessment date of October 1, 2008, management reviewed the validity of the assumptions included in the Closing Date valuation
and determined that there was no impairment of the FTD and Interflora reporting units as of October 1, 2008.
During the latter half of the December 2008 quarter, there was deterioration in the general business environment, weakening consumer
spending, a significant decline in the market capitalization of the Company and its competitors and a decline in the Company's business outlook
primarily due to adverse macroeconomic factors. In accordance with ASC 350, the Company considered whether these factors and
circumstances made it more likely than not that any of its reporting units would have a fair value less than carrying value and an interim
impairment assessment should be performed. As a result of this review, the Company concluded that an interim impairment assessment as of
December 31, 2008 should be performed for its FTD and Interflora reporting units. Due to the significant excess of fair value over carrying value
of the Classmates Online, MyPoints and Communications reporting units at the annual impairment assessment date, the Company determined
that an interim impairment assessment was not required for these reporting units. However, in order to validate the overall enterprise valuation,
the Company performed an updated valuation of these reporting units at December 31, 2008.
As a result of the updated valuation, the Company recorded an impairment charge of $114.0 million related to goodwill within the FTD
reporting unit. These impairment charges were included in impairment of goodwill, intangible assets and long-lived assets in the consolidated
statements of operations. The Company concluded that goodwill in the Interflora reporting unit was not impaired as of December 31, 2008.
F-43
Acquired in FTD acquisition
$
229,800
Impairment charges
(61,867
)
Translation adjustment
(14,419
)
Balance at December 31, 2008
$
153,514