NetZero 2011 Annual Report Download - page 138

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
The following table presents information about assets at December 31, 2010 that were required to be measured at fair value on a recurring
basis (in thousands):
The Company estimated the fair value of its long-term debt 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, among other
factors, its estimate of its credit rating. The Company estimated its credit rating as BB+/BB- for the long-term debt associated with the Credit
Agreement, resulting in a discount rate of 6%. The table below summarizes the fair value estimates for long-term debt, net of discounts,
including the current portion, at December 31, 2011, as defined by ASC 825 (in thousands):
8. STOCKHOLDERS' EQUITY
Stockholder Rights Plan
On November 15, 2001, United Online, Inc.'s Board of Directors declared a dividend of one preferred share purchase right for each
outstanding share of common stock of United Online, Inc. (the "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 entitled the registered holder to purchase from United Online, Inc. 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 were exercisable only if a person or group
acquired beneficial ownership of 15% or more of the common stock or announced a tender or exchange offer which would result in a person or
group owning 15% or more of the common stock. United Online, Inc. generally would have been 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 common stock had been acquired or that a tender or
exchange offer which would result in a person or group owning 15% or more of the common stock had commenced. In February 2011, the
Board of Directors voted to accelerate the expiration date of the stockholder rights plan described above to February 28, 2011. Accordingly, on
February 28, 2011, such stockholder rights plan expired.
Preferred Stock
United Online, Inc. has 5.0 million shares of preferred stock authorized with a par value of $0.0001. At December 31, 2011 and 2010,
United Online, Inc. had no preferred shares issued or outstanding.
F-30
Description
Total Fair Value
Level 1 Fair Value
Money market funds
$
67,150
$
67,150
Carrying Amount Estimated Fair Value
Long
-
term debt, net of discounts, including
current portion
$
261,124
$
256,174