Classmates.com 2010 Annual Report Download - page 114

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING
PRONOUNCEMENTS
Description of Business
United Online, Inc. (together with its subsidiaries, "United Online", "UOL" or the "Company") is a leading provider of consumer products
and services over the Internet through a number of brands, including FTD, Interflora, Memory Lane, Classmates, StayFriends, NetZero, and
MyPoints. On August 26, 2008, the Company completed its acquisition of 100% of the capital stock of FTD Group, Inc. (together with its
subsidiaries, "FTD"). The Company reports its business in three reportable segments: FTD, Content & Media and Communications. The
Company's FTD segment provides floral and related products and services to consumers and retail florists, as well as to other retail locations
offering floral and related products and services. The Company's Content & Media services are online nostalgia services and online loyalty
marketing. Prior to this Annual Report on Form 10-K, the Company's Content & Media segment was referred to as the Classmates Media
segment. The Company's primary Communications service is Internet access. On a combined basis, the Company's web properties attract a
significant number of Internet users and the Company offers a broad array of Internet marketing services for advertisers.
The Company's corporate headquarters are located in Woodland Hills, California, and the Company also maintains offices in Fort Lee, New
Jersey; Seattle, Washington; San Francisco, California; Schaumburg, Illinois; Downers Grove, Illinois; Sleaford, England; Erlangen, Germany;
Berlin, Germany; and Hyderabad, India.
Basis of Presentation
The Company's consolidated financial statements for the years ended December 31, 2010, 2009 and 2008 have been prepared in accordance
with accounting principles generally accepted in the United States of America ("GAAP"). All significant intercompany accounts and transactions
have been eliminated in consolidation. The consolidated financial statements, in the opinion of management, reflect all adjustments (consisting
only of normal recurring adjustments) that are necessary for a fair statement of the results for the periods shown. The results of operations for
such periods are not necessarily indicative of the results expected for any future periods.
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent liabilities and the reported amounts of revenues and expenses. Actual results
could differ from these estimates and assumptions.
The most significant areas of the consolidated financial statements that require management judgment include the Company's revenue
recognition, allocation of purchase price in business combinations, goodwill and indefinite-lived intangible assets, definite-
lived intangible assets
and other long-lived assets, member redemption liability, income taxes, and legal contingencies. The accounting policies for these areas are
discussed elsewhere in these consolidated financial statements.
The Company believes that its existing cash and cash equivalents and cash generated from operations will be sufficient to service its debt
obligations and fund its working capital requirements, capital expenditures, dividend payments, and other obligations through at least the next
twelve months.
F-8