ServiceMagic 2011 Annual Report Download - page 37

in VUE. The increase in non-cash compensation expense is primarily related to an increase in expense attributable to awards granted subsequent
to the second quarter of 2009, partially offset by awards having become fully vested.
In connection with the Company's annual impairment assessment in the fourth quarter of 2010, the Company identified and recorded
impairment charges at the Media & Other segment related to the write-down of the goodwill and intangible assets of Shoebuy of $28.0 million
and $4.5 million, respectively, and at the Search segment related to the write-down of an indefinite-
lived intangible asset of IAC Search & Media
of $11.0 million. The goodwill and indefinite-lived intangible asset impairment charges at Shoebuy reflected expectations of lower revenue and
profit performance in future years due to Shoebuy's 2010 fourth quarter revenue and profit performance, which is its seasonally strongest quarter.
The indefinite-lived intangible asset impairment charge at IAC Search & Media is primarily due to lower future revenue projections associated
with a trade name and trademark based largely upon the impact of 2010's full year results. In the fourth quarter of 2009, the Company identified
and recorded impairment charges at the Search segment related to the write-down of the goodwill and intangible assets of IAC Search & Media
of $916.9 million and $128.3 million, respectively. The impairments reflected lower projections for revenue and profits at IAC Search & Media
in future years that reflected the Company's consideration of industry growth rates, competitive dynamics and IAC Search & Media's operating
strategies and the impact of these factors on the fair value of IAC Search & Media and its goodwill and intangible assets.
Other income (expense)
Equity in losses of unconsolidated affiliates in 2011 increased from 2010 primarily due to the inclusion in 2011 of losses related to the
Company's investment in The Newsweek/Daily Beast Company and a loss of $11.7 million related to marking down the carrying value of
Match's 27% equity method investment in Meetic to fair value (i.e., the tender offer price of €15.00 per share) upon achieving control. Partially
offsetting these losses are earnings from our investment in Meetic through August 31, 2011. The Company recognized a loss in 2010 related to
its investment in Meetic primarily due to the amortization of intangibles, which was required by purchase accounting rules. Equity in losses of
unconsolidated affiliates in 2010 includes an $18.3 million impairment charge to write-
down one of the Company's equity method investments to
fair value, described below.
Equity in losses of unconsolidated affiliates in 2010 increased from 2009 primarily due to an $18.3 million impairment charge to write-
down one of the Company's equity method investments to fair value. The decline in value was determined to be other-than-temporary due to the
investee's continued losses and negative operating cash flows. The Company estimated the fair value of its investment using a multiple of
revenue approach. Equity in losses of unconsolidated affiliates also includes reduced losses related to the Company's investment in Meetic due,
in part, to a decrease in amortization of intangibles.
34
Years Ended December 31,
2011 $ Change % Change 2010 $ Change % Change 2009
(Dollars in thousands)
Equity in
losses of
unconsolidated
affiliates
$(36,300
)
$(10,624
)
41
%
$(25,676
)
$(11,662
)
83
%
$(14,014
)
Years Ended December 31,
2011
$ Change
% Change
2010
$ Change
% Change
2009
(Dollars in thousands)
Other
income
(expense),
net
$10,060
$11,493
NM
$(1,433
)
$(106,435
)
NM
$105,002