Juno 2014 Annual Report Download - page 39

Table of Contents
in market capitalization, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future
results of operations.
The determination of whether or not goodwill is impaired involves a significant level of judgment in the assumptions underlying the approaches used to
determine the estimated fair values of our reporting units. The determination of the fair values of our reporting units generally includes a study of market
comparables, including the selection of appropriate valuation multiples and discounted cash flow models based on our internal forecasts and projections. The
estimated fair value of each of our reporting units is typically determined using a combination of the income approach and the market approach. The income
approach is weighted at 75%, unless a meaningful base of market data is unavailable, in which case, the market approach is not used.
We operate two reportable segments, in accordance with ASC 280, , and we have identified three reporting units—Communications,
Classmates and MyPoints—for purposes of evaluating goodwill. These reporting units each constitute a business or group of businesses for which discrete
financial information is available and is regularly reviewed by segment management. The goodwill related to our acquired businesses is specific to each
reporting unit and the goodwill amounts are assigned as such.
Testing goodwill for impairment involves a two-step quantitative process. However, prior to performing the two-step quantitative goodwill impairment
test, we have the option to first assess qualitative factors to determine whether or not it is necessary to perform the two-step quantitative goodwill impairment
test for selected reporting units. If we choose the qualitative option, we are not required to perform the two-step quantitative goodwill impairment test unless
we have determined, based on the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
If the two-step quantitative impairment test is required or chosen, the first step of the impairment test involves comparing the estimated fair value of a
reporting unit with its respective carrying amount, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying amount, including
goodwill, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the estimated fair value of a reporting unit is less than
its carrying amount, including goodwill, then the carrying amount of the goodwill is compared with its implied fair value, and an impairment loss is
recognized in an amount equal to the excess.
We performed the annual quantitative goodwill impairment assessment for all of our reporting units in the fourth quarter of 2014. The first step of the
quantitative goodwill impairment test resulted in the determination that the fair values of our Communications, Classmates and MyPoints reporting units
substantially exceeded their carrying amounts, including goodwill. Accordingly, the second step was not required for these reporting units.
The determination of whether or not goodwill is impaired involves a significant level of judgment in the assumptions underlying the approaches used to
determine the estimated fair value of our reporting units. We believe our analysis included sufficient tolerance for sensitivity in key assumptions. The
determination of the fair value of our reporting units included a study of market comparables, including the selection of appropriate valuation multiples and
discounted cash flow models based on our internal forecasts and projections. We believe the assumptions and rates used in our impairment assessment are
reasonable, but they are judgmental, and variations in any assumptions could result in materially different calculations of fair value and, if applicable, the
impairment amount.

We account for identifiable intangible assets and other long-lived assets in accordance with ASC 360, , which addresses
financial accounting and reporting for the impairment and disposition of identifiable intangible assets and other long-lived assets. Intangible assets acquired
in a business combination are initially recorded at management's estimate of their fair values.
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