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Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. COMMITMENTS AND CONTINGENCIES (Continued)
Attorney General for the State of Washington regarding certain post-transaction sales practices in which it had previously
engaged with certain third-party vendors.
The Company cannot predict the outcome of these or any other governmental investigations or other legal actions or their potential
implications for its business. There are no assurances that additional governmental investigations or other legal actions will not be instituted in
connection with the Company's former post-transaction sales practices or other current or former business practices.
The Company records a liability when it believes that it is both probable that a loss will be incurred, and the amount of loss can be
reasonably estimated. The Company evaluates, at least quarterly, developments in its legal matters that could affect the amount of liability that
has been previously accrued, and makes adjustments as appropriate. Significant judgment is required to determine both probability and the
estimated amount. The Company may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among
others: (i) if the damages sought are indeterminate; (ii) if the proceedings are in early stages, (iii) if there is uncertainty as to the outcome of
pending appeals, motions or settlements, (iv) if there are significant factual issues to be determined or resolved, and (v) if there are novel or
unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including
a possible eventual loss, if any. At December 31, 2011, the Company had reserves of $4.8 million for pending legal settlements. With respect to
the other legal matters described above, the Company had determined, based on its current knowledge, that the amount of possible loss or range
of loss, including any reasonably possible losses in excess of amounts already accrued, is not reasonably estimable. However, legal matters are
inherently unpredictable and subject to significant uncertainties, some of which are beyond the Company's control. As such, there can be no
assurance that the final outcome of these matters will not materially and adversely affect the Company's business, financial condition, results of
operations, or cash flows.
14. QUARTERLY FINANCIAL DATA (UNAUDITED) (in thousands, except per share data)
F-44
Quarter Ended
December 31
September 30
June 30
March 31
Year ended December 31, 2011:
Revenues
$
217,921
$
182,694
$
255,565
$
241,505
Cost of revenues
$
108,915
$
82,801
$
131,942
$
120,826
Operating income
$
23,674
$
20,223
$
27,789
$
22,616
Net income
$
12,865
$
11,916
$
14,768
$
12,181
Net income attributable to common
stockholders
$
12,473
$
11,449
$
14,191
$
11,626
Basic net income per common share
$
0.14
$
0.13
$
0.16
$
0.13
Diluted net income per common share
$
0.14
$
0.13
$
0.16
$
0.13