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Table of Contents
IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6—MARKETABLE SECURITIES (Continued)
The following table summarizes those investments with unrealized losses at December 31, 2008 that have been in a continuous unrealized
loss position for less than twelve months and those in a continuous unrealized loss position for twelve months or longer (in thousands):
During 2008, the Company recorded an other-than-
temporary impairment charge on marketable securities of $1.8 million that is included in
"Other income (expense)" in the accompanying consolidated statement of operations. The decline in value was determined to be other-than-
temporary due to the Company's assessment of the creditworthiness of the issuers of the securities. At December 31, 2008, the Company's
management determined that the gross unrealized losses on its available-for-sale marketable securities were temporary in nature because it was
not more likely than not that the Company would be required to sell any marketable securities before recovery of their amortized cost bases,
which may be maturity. There were no other-than-temporary impairment charges recorded in 2007.
During the year ended December 31, 2008, $0.6 million of net unrealized losses, net of tax, included within other comprehensive income at
December 31, 2007, were recognized into earnings. Additionally, $46.1 million in unrealized losses, net of tax, were recognized into earnings
related to the impairment of the Company's investment in ARO stock.
Investment in ARO
As part of the consideration for the sale of HSE to ARO on June 19, 2007, IAC received approximately 5.5 million shares of ARO stock
plus additional consideration in the form of a contingent value right ("CVR") (See Note 8 for additional information on the CVR). ARO shares
are listed on the German stock exchange (XETRA: ARO). During 2009, the Company sold its 5.5 million shares of ARO stock, resulting in a
pre-tax loss of $12.3 million, which is included in the gross realized losses for the year ended December 31, 2009 disclosed above. Prior to the
sale of its last 1.1 million shares of ARO stock, the Company concluded that the decline in the stock price of these remaining shares was other-
than-temporary, due in part, to ARO's insolvency filing on June 9, 2009, and recorded impairment charges totaling $4.6 million. During 2008,
the Company had concluded that the decline in the ARO stock price was other-than-temporary, due to the decline in, and the Company's
assessment of near-to-medium term prospects for recovery of, the ARO stock price, and recorded impairment charges totaling $166.7 million.
The investment in ARO is included in "Long-term investments" in the accompanying consolidated balance sheet at December 31, 2008.
82
Less than 12 months
12 months or longer
Total
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Corporate debt securities
$
6,844
$
(362
)
$
2,049
$
(6
)
$
8,893
$
(368
)
State of the U.S. and state
political subdivisions
2,116
(2
)
—
—
2,116
(2
)
Other fixed term obligations
384
(4
)
853
(53
)
1,237
(57
)
Total
$
9,344
$
(368
)
$
2,902
$
(59
)
$
12,246
$
(427
)