Juno 2012 Annual Report Download - page 79
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Table of Contents
A goodwill and intangible asset impairment charge totaling $26.9 million was recorded in the quarter ended December 31, 2012 due to a material
reduction in the fair value of the MyPoints reporting unit. See "Critical Accounting Policies, Estimates and Assumptions—Impairment of Goodwill" for
additional information.
The decrease in Communications services revenues was primarily due to a 28% decrease in our average number of dial-up Internet access pay
accounts, partially offset by an increase in the number of NetZero 4G mobile broadband service accounts, as well as a 3% decrease in ARPU. The
decrease in ARPU was attributable to a higher percentage of pay accounts on lower-priced or discounted subscription plans or services. The decrease in
Communications advertising revenues was primarily due to the decrease in active accounts. These decreases were partially offset by $3.0 million in
Communications products revenues related to the sale of NetZero 4G mobile broadband service devices. We anticipate that Communications pay
accounts and revenues will continue to decline year over year, at least in the near term.
The increase in Communications cost of revenues was due to $5.6 million of costs associated with the launch of our NetZero 4G mobile
broadband service in the first quarter of 2012 and a $1.2 million inventory markdown in the quarter ended December 31, 2012 related to the NetZero
4G mobile broadband service devices. These increases were partially offset by a $2.5 million decrease in telecommunications, customer support and
billing-related costs due to a decrease in dial-up Internet
75
Content & Media impairment of goodwill, intangible assets and long-lived
assets $ 26,910 $ — $ 26,910 N/A
Products $ 3,011 $ — $ 3,011 N/A
Services 78,089 100,770 (22,681) (23)%
Advertising 24,342 25,762 (1,420) (6)%
Total Communications Revenues $ 105,442 $ 126,532 $ (21,090) (17)%
ARPU $ 8.90 $ 9.14 $ (0.24) (3)%
Average number of dial-up Internet access pay accounts 418 583 (165) (28)%
Communications cost of revenues $ 33,883 $ 33,442 $ 441 1%
Communications cost of revenues as a percentage of Communications revenues 32.1% 26.4%