Juno 2012 Annual Report Download - page 22

Table of Contents
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There are a number of risks associated with the FTD Spin-Off Transaction and the Company's exploration of other Strategic Transactions,
including, without limitation, the following:
•Management estimates that the costs to complete the FTD Spin-Off Transaction and any other Strategic Transaction approved by the
Board of Directors will be significant. In the event such transactions are not consummated, we will have incurred significant costs that
we will not be able to recover, and for which we will not have received any benefit.
•The FTD Spin-Off Transaction and any other Strategic Transaction will require significant time and attention of our management and
operational resources, and they may detract from the operation of our businesses and the execution of other strategic initiatives. In
addition, the Company may experience a loss of employees, or employees may be distracted by the FTD Spin-Off Transaction and our
exploration of other Strategic Transactions due to uncertainty about their future roles pending the completion of any such transactions.
•Each of the independent publicly-traded companies resulting from the completion of the FTD Spin-Off Transaction may be unable to
achieve some or all of the full strategic and financial benefits that we expect will result from the separation of the Company into
independent publicly-traded companies, or such benefits may be delayed or may not occur at all. For example, there can be no assurance
that analysts and investors will place values on each of the independent companies that will equal a total value that is greater than that
which the Company has today.
•If the FTD Spin-Off Transaction is consummated, each of the newly separated, publicly-traded companies will be smaller and less
diversified, as compared to the Company today.
Any of the foregoing, in addition to any other risks related to the contemplated transactions that are not specifically described above, could
materially and adversely affect our business, financial condition, results of operations, and cash flows.
 
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United Online, Inc. has requested a private letter ruling from the Internal Revenue Service ("IRS"), substantially to the effect that, for U.S. federal
income tax purposes, the FTD Spin-Off Transaction and certain related transactions will qualify under Sections 355 and 368 of the Internal Revenue
Code of 1986, as amended. In addition, United Online, Inc. expects to receive an opinion from the law firm of Skadden, Arps, Slate, Meagher &
Flom LLP, substantially to the effect that the FTD Spin-Off Transaction and related transactions so qualify. The IRS ruling and the tax opinion will rely
on certain facts, assumptions and undertakings, and certain representations from United Online, Inc. and FTD, regarding the past and future conduct of
their respective businesses and other matters, and the tax opinion will rely on the IRS ruling. Notwithstanding the IRS ruling and the tax opinion, the
IRS could determine that the FTD Spin-Off Transaction should be treated as a taxable transaction if it determines that any of these facts, assumptions,
representations, or undertakings is not correct, or that the FTD Spin-Off Transaction should be taxable for other reasons, including if the IRS were to
disagree with the conclusions in the tax opinion that are not covered by the IRS ruling.
If the FTD Spin-Off Transaction ultimately is determined to be taxable, then a stockholder of United Online, Inc. that received shares of FTD
common stock in the FTD Spin-Off Transaction would be treated as having received a distribution of property in an amount equal to the fair market
value of such shares on the distribution date and could incur significant income tax liabilities. Such distribution
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