United Online Reports Fourth Quarter and Full Year 2012 Results

  United Online Reports Fourth Quarter and Full Year 2012 Results

  *Progress Continues Toward Planned Spin-off of FTD
  *Quarterly Consolidated Revenues of $219.0 Million
  *Quarterly Consolidated Operating Loss of $14.9 Million Due to a $26.9
    Million Non-Cash Impairment Charge on the MyPoints Business
  *Quarterly Consolidated Adjusted OIBDA of $32.7 Million
  *Quarterly FTD Segment Revenues Increase 7% Year-Over-Year

Business Wire

WOODLAND HILLS, Calif. -- February 20, 2013

United Online, Inc. (Nasdaq: UNTD), a leading provider of consumer products
and services over the Internet, today reported financial results for its
fourth quarter and full year ended December 31, 2012.

“We are continuing to work toward our planned spin-off of FTD as an
independent, publicly-traded company, and expect to complete this transaction
by the end of the third quarter of 2013. We already have submitted our request
for a private letter ruling from the Internal Revenue Service regarding the
tax-free status of the spin-off,” said Mark R. Goldston, Chairman, President
and Chief Executive Officer of United Online. “We also are continuing to
explore strategic alternatives for our other businesses and monetization
opportunities for our patent portfolio.”

“Fourth quarter 2012 results were in line with expectations, as consolidated
revenues and adjusted OIBDA were within our guidance range,” Goldston said.
“FTD segment revenues for the fourth quarter and full year 2012 increased 7%
and 4%, respectively, compared to the year-ago periods, driven by increases in
consumer orders. FTD segment adjusted OIBDA for the fourth quarter and full
year 2012 increased 2% and 4%, respectively, compared to the year-ago periods.
During the quarter, the FTD segment achieved its eighth consecutive quarter of
year-over-year revenue growth, when prior periods are adjusted for the timing
of the U.K. Mother’s Day in 2011.”

“In our Communications segment, quarterly revenues increased 6% compared to
the third quarter of 2012, the largest sequential-quarter increase in almost
eight years,” Goldston continued. “This increase was driven by increased
advertising revenues, which are seasonally stronger in the fourth quarter, and
by growth in the number of accounts in our NetZero 4G mobile broadband
business, which reached approximately 32,000 at year-end 2012. In our Content
& Media segment, pay accounts declined by 123,000 during the quarter, the
smallest net decrease in two and a half years. The quarterly net decrease in
segment pay accounts has now improved for four consecutive quarters.”

“Consolidated cash flows from operating activities and free cash flow for the
quarter were $41.7 million and $41.8 million, respectively, representing
increases of 6% and 19%, respectively, compared to the year-ago quarter. These
increases resulted primarily from favorable changes in net working capital and
a decrease in capital expenditures, partially offset by decreased adjusted
OIBDA,” said Neil P. Edwards, Executive Vice President and Chief Financial
Officer. “In the fourth quarter, the company recorded a $26.9 million goodwill
and intangible asset impairment charge due to a material decline in the fair
value of our MyPoints reporting unit. This was a non-cash charge, which did
not impact adjusted OIBDA, cash flows from operating activities or free cash
flow.”

Summary Results for Fourth Quarter Ended December 31, 2012:

The following table summarizes key financial results for the fourth quarter
ended December 31, 2012:

                           (in millions, except per share amounts and
                               percentages)
Financial Highlights           Q4 2012          Q4 2011          % Change
FTD revenues                   $  153.2           $  143.3           7     %
Content & Media                   39.5               45.7            (13   %)
revenues
Communications                    26.7               29.3            (9    %)
revenues
Intersegment                     (0.4   )          (0.3   )        (9    %)
eliminations
Consolidated revenues          $  219.0          $  217.9          -
                                                                     
GAAP operating income          $  (14.9  )        $  23.7            (163  %)
(loss)
                                                                     
Adjusted OIBDA^(1)             $  32.7            $  47.0            (30   %)
                                                                     
GAAP net income (loss)
attributable to common         $  (12.8  )        $  12.5            (202  %)
stockholders
GAAP diluted net
income (loss) per              $  (0.14  )        $  0.14            (200  %)
common share
                                                                     
Adjusted net income
attributable to common         $  13.2            $  22.7            (42   %)
stockholders^(2)
Adjusted diluted net
income per common              $  0.14            $  0.25            (44   %)
share^(2)
                                                                           

  *Consolidated revenues were $219.0 million, a slight increase compared to
    the year-ago quarter.
  *GAAP operating loss was $14.9 million, which included a $26.9 million
    goodwill and intangible asset impairment charge due to a material decline
    in the fair value of the MyPoints reporting unit. This was compared to
    GAAP operating income of $23.7 million in the year-ago quarter.
  *Consolidated adjusted OIBDA^(1) was $32.7 million, a decrease of 30%
    versus the year-ago quarter.
  *Interest expense was $3.3 million, a decrease of 7% compared to the
    year-ago quarter.
  *The effective income tax rate for the full year 2012 was 38%, versus 31%
    in 2011.
  *GAAP diluted net loss per common share was $0.14, which was impacted by
    the $26.9 million goodwill and intangible asset impairment charge. This
    was compared to GAAP diluted net income per share of $0.14 in the year-ago
    quarter.
  *Adjusted diluted net income per common share^(2) was $0.14, a decrease of
    44% compared to the year-ago quarter.

Cash Flows, Balance Sheet and Dividend Highlights:

  *Cash flows from operating activities and free cash flow^(3) for the
    quarter ended December 31, 2012 were $41.7 million and $41.8 million,
    respectively, increases of 6% and 19%, respectively, compared to the
    year-ago quarter.
  *Cash and cash equivalents at December 31, 2012 were $136.4 million,
    compared to $108.1 million at September 30, 2012.
  *Net debt at December 31, 2012 was $107.6 million, compared to $135.8
    million at September 30, 2012. The company defines net debt as total debt,
    net of discounts, less cash and cash equivalents.

  *The company paid $9.4 million in cash dividends during the quarter.

  *In January 2013, the company’s Board of Directors declared a quarterly
    cash dividend of $0.10 per share of common stock that is payable on
    February 28, 2013 to stockholders of record on February 14, 2013.

Segment Results for Fourth Quarter Ended December 31, 2012:

FTD:
                            
                                 (in millions, except percentages and metrics)
Financial Highlights             Q4 2012          Q4 2011         % Change
Products revenues                $  123.1           $  114.5          8    %
Services revenues                  30.0             28.8          4    %
Segment revenues                 $  153.2          $  143.3         7    %
                                                                      
Segment income from              $  21.3            $  19.9           7    %
operations
Segment adjusted                 $  22.4            $  21.8           2    %
OIBDA^(1)
as a % of segment                   14.6   %           15.2   %
revenues^(1)
                                                                      
Metrics Highlights               Q4 2012            Q4 2011           % Change
Consumer orders^(4) (in             1,787              1,615          11   %
thousands)
Average order value^(4)          $  60.13           $  62.31          (3   %)
                                                                      
British Pound / U.S.
Dollar exchange rate                1.61               1.57           3    %
(average)
                                                                           

  *Segment revenues were $153.2 million, an increase of 7% versus the
    year-ago quarter.
  *Segment income from operations was $21.3 million, an increase of 7% versus
    the year-ago quarter.
  *Segment adjusted OIBDA^(1) was $22.4 million, an increase of 2% versus the
    year-ago quarter.
  *Consumer orders^(4) were 1.8 million, an increase of 11% versus the
    year-ago quarter.
  *Average order value^(4) (AOV) was $60.13, a decrease of 3% compared to the
    year-ago quarter. Excluding the impact of consumer orders from the Flying
    Flowers and Flowers Direct businesses acquired in 2012, which have lower
    AOVs, AOV was relatively flat compared to the year-ago quarter.

Content & Media:
                            
                                 (in millions, except percentages and metrics)
Financial Highlights             Q4 2012          Q4 2011         % Change
Products revenues                $  0.8             $  0.8            (6    %)
Services revenues                   22.2               28.4           (22   %)
Advertising revenues               16.5             16.5          -
Segment revenues                 $  39.5           $  45.7          (13   %)
                                                                      
Segment income from              $  (20.8  )        $  12.6           (265  %)
operations
Segment adjusted                 $  7.4             $  14.9           (50   %)
OIBDA^(1)
as a % of segment                   18.8   %           32.5   %
revenues^(1)
                                                                      
Metrics Highlights               Q4 2012            Q4 2011           % Change
Segment pay accounts^(5)            2,864              3,484          (18   %)
(in thousands)
Net quarterly decline in
segment pay accounts^(5)            (123   )           (296   )       58    %
(in thousands)
Segment active
accounts^(5) (in                    11.5               10.3           12    %
millions)
ARPU^(6)                         $  2.52            $  2.60           (3    %)
                                                                      
Euro / U.S. Dollar                  1.30               1.35           (4    %)
Exchange Rate (average)
                                                                            

  *Segment revenues were $39.5 million, a decrease of 13% versus the year-ago
    quarter.

  *Segment loss from operations was $20.8 million, which included a $26.9
    million goodwill and intangible asset impairment charge due to a material
    decline in the fair value of the MyPoints reporting unit. This was
    compared to segment income from operations of $12.6 million in the
    year-ago quarter.
  *Segment adjusted OIBDA was $7.4 million, a decrease of 50% versus the
    year-ago quarter.
  *Segment pay accounts ^ at December 31, 2012 were 2.9 million, a decrease
    of 18% versus December 31, 2011.
  *Segment ARPU^(6) was $2.52, a decline of 3% versus the year-ago quarter.
    Excluding the unfavorable impact of foreign currency exchange rates,
    segment ARPU decreased by 2%.

Communications:
                            
                                 (in millions, except percentages and metrics)
Financial Highlights             Q4 2012         Q4 2011         % Change
Products revenues                $  1.1            $  -              N/A
Services revenues                   18.2              22.6           (20   %)
Advertising revenues               7.4             6.7           11    %
Segment revenues                 $  26.7          $  29.3          (9    %)
                                                                     
                                                                     
Segment income from              $  7.4            $  14.1           (47   %)
operations
Segment adjusted                 $  8.0            $  15.3           (48   %)
OIBDA^(1)
as a % of segment                   30.0  %           52.3  %
revenues^(1)
                                                                     
Metrics Highlights               Q4 2012           Q4 2011           % Change
Segment pay accounts^(5)            650               794            (18   %)
(in thousands)
ARPU^(6)                         $  9.05           $  9.09           -
                                                                           

  *Segment revenues were $26.7 million, a decrease of 9% versus the year-ago
    quarter.
  *Segment income from operations was $7.4 million, a decrease of 47% versus
    the year-ago quarter.
  *Segment adjusted OIBDA was $8.0 million, a decrease of 48% versus the
    year-ago quarter. The investment in the NetZero 4G mobile broadband
    business resulted in a negative adjusted OIBDA impact of $4.6 million
    during the fourth quarter of 2012.
  *Segment pay accounts at December 31, 2012 were 0.7 million, a decrease of
    18% versus December 31, 2011.

Unallocated Corporate Expenses:

For the quarter ended December 31, 2012, the impact of unallocated corporate
expenses on consolidated adjusted OIBDA was $5.0 million, flat compared to the
year-ago quarter.

Business Outlook:

The following forward-looking information includes certain of the projections
made by management as of the date of this press release. The company does not
intend to revise or update this information, except as required by law, and
may not provide this type of information in the future. Due to a variety of
factors, actual results may differ significantly from those projected. Factors
include, without limitation, the factors referenced later in this announcement
under the caption “Cautionary Information Regarding Forward-Looking
Statements.” These and other factors are discussed in more detail in the
company’s filings with the Securities and Exchange Commission.

First Quarter 2013 Guidance:

First Quarter 2013 (in millions)     Guidance
Revenues                             $243 - $248
Adjusted OIBDA^(1)                   $28 - $32
                                    

First Quarter 2013 Supplemental Information (in millions)         Guidance
Net interest expense                                              $3.1
Shares used to calculate diluted net income per common share      91.7
Shares used to calculate adjusted diluted net income per          91.9
common share^(2)
                                                                 

The table below reconciles the company’s guidance for operating income, a GAAP
measure, to adjusted OIBDA.

First Quarter 2013 (in millions)      Guidance
Operating Income                      $8.0 - $12.0
Depreciation                          $6.2
Amortization of intangible assets     $8.2
Stock-based compensation              $3.1
Transaction-related costs             $2.5
Adjusted OIBDA^(1)                    $28 - $32
                                     

Investor Conference Call on February 20, 2013 at 5:00 p.m. ET (2:00 p.m. PT):

The company will host a conference call to discuss the results at 5:00 p.m. ET
(2:00 p.m. PT) on Wednesday, February 20, 2013. The conference call dial-in
number is 888-428-9480 for U.S. and Canadian participants and 719-325-2376 for
participants outside the U.S. and Canada. The passcode is 3382482.
Alternatively, a live webcast of the conference call, along with a
presentation containing financial highlights for the fourth quarter ended
December 31, 2012, can be accessed within the Investor Relations section of
the company’s website at www.unitedonline.com.

The presentation and a replay of the broadcast will be available on the
company’s website for seven days following the call. A replay of the broadcast
will also be available for seven days following the call by dialing
888-203-1112 (or 719-457-0820 outside of the U.S. and Canada) and the replay
passcode, 3382482.

Non-GAAP Measures:

In evaluating the company’s performance, management uses one or more of the
following measures that are not determined in accordance with accounting
principles generally accepted in the United States of America (“GAAP”):
adjusted OIBDA, adjusted net income, adjusted basic and diluted net income per
common share, and free cash flow. These measures are adjusted to exclude
certain non-cash expenses such as depreciation, amortization, stock-based
compensation, and impairment of goodwill, intangible assets and long-lived
assets. In addition, these measures are adjusted to exclude the items
discussed below because such items are either operating expenses which would
not otherwise have been incurred by the company in the normal course of the
company’s business operations or are not reflective of the company’s core
results over time. These items may include recurring as well as non-recurring
items. These adjustments should not be construed as an inference that all of
these adjustments or costs are unusual, infrequent or non-recurring. For
example, certain restructuring and other exit costs may be considered
recurring given the company’s ongoing efforts to be more cost effective and
efficient, certain litigation or dispute settlement charges or gains may be
viewed as recurring given that the company is continually involved in, and
resolving, litigation, arbitration, investigations, disputes and similar
matters, and certain transaction-related costs may be deemed recurring given
the company's regular evaluation of potential transactions. Notwithstanding
that certain charges, costs or gains may be considered recurring, in order to
provide meaningful comparisons, the company believes that it is appropriate to
adjust for such charges, costs or gains because they are not reflective of the
company's core results and tend to vary based on timing, frequency and
magnitude.

Restructuring and Other Exit Costs — Restructuring and other exit costs
consist primarily of employee termination costs, facility closure and
relocation costs and contract termination costs.

Litigation or Dispute Settlement Charges or Gains — These charges or gains
include estimated losses for which we have established a reserve, as well as
actual settlements, judgments, fines, penalties, assessments or other
resolutions against, or in favor of, the company related to litigation,
arbitration, investigations, disputes or similar matters. Insurance recoveries
received by the company related to such matters are also included in these
adjustments.

Transaction-Related Costs —The company excludes certain expense items
resulting from actual or potential transactions such as business combinations,
mergers, acquisitions, dispositions, spin-offs, financing transactions, and
other strategic transactions, including, without limitation, (i) compensation
expenses and (ii) expenses for advisors and representatives such as investment
bankers, consultants, attorneys, and accounting firms. Transaction-related
costs may also include, without limitation, transition and integration costs
such as retention bonuses and acquisition-related milestone payments to
acquired employees.

Definitions of Non-GAAP Measures:

(1) Adjusted operating income before depreciation and amortization (“adjusted
OIBDA”) is defined by the company as operating income before depreciation;
amortization; stock-based compensation; restructuring and other exit costs;
litigation or dispute settlement charges or gains; transaction-related costs;
and impairment of goodwill, intangible assets and long-lived assets. The
company's definition of adjusted OIBDA has been modified from time to time.
Management believes that because adjusted OIBDA excludes (i) certain non-cash
expenses (such as depreciation, amortization, stock-based compensation, and
impairment of goodwill, intangible assets and long-lived assets) and (ii)
expenses that are not reflective of the company’s core operating results over
time (such as restructuring and other exit costs, litigation or dispute
settlement charges or gains, and transaction-related costs), this measure
provides investors with additional useful information to measure the company's
financial performance, particularly with respect to changes in performance
from period to period. Management uses adjusted OIBDA to measure the company’s
performance. The company’s board of directors has used this measure as a basis
in determining certain compensation incentives for certain members of the
company's management. Adjusted OIBDA is not determined in accordance with GAAP
and should be considered in addition to, not as a substitute for or superior
to, financial measures determined in accordance with GAAP. A limitation
associated with the use of adjusted OIBDA is that it does not reflect the
periodic costs of certain tangible and intangible assets used in generating
revenues in the company's business. Management evaluates the costs of such
tangible and intangible assets through other financial activities such as
evaluations of capital expenditures and purchase accounting. An additional
limitation associated with this measure is that it does not include
stock-based compensation expenses related to the company’s workforce.
Management compensates for this limitation by providing a summary of
stock-based compensation expenses within the accompanying tables and in the
footnotes accompanying its financial statements. A further limitation
associated with the use of this measure is that it does not reflect the costs
of restructuring and other exit costs, litigation or dispute settlement
charges or gains, transaction-related costs, and the impairment of goodwill,
intangible assets and long-lived assets. Management compensates for this
limitation by providing supplemental information about such charges, gains and
costs within its financial press releases and SEC filings, when applicable. An
additional limitation associated with the use of this measure is that the term
“adjusted OIBDA” does not have a standardized meaning. Therefore, other
companies may use the same or a similarly named measure but exclude different
items or use different computations, which may not provide investors a
comparable view of the company’s performance in relation to other companies.
Management compensates for this limitation by presenting the most comparable
GAAP measure, operating income, directly ahead of adjusted OIBDA within its
financial press releases and by providing a reconciliation that shows and
describes the adjustments made. A reconciliation to operating income is
provided in the accompanying tables. In addition, many of the adjustments to
our GAAP financial measures reflect the exclusion of items that are recurring
in nature and will be reflected in our financial results for the foreseeable
future.

Adjusted OIBDA for each of the company's segments is defined by the company as
segment income from operations, as set forth in the company’s Forms 10-K and
Forms 10-Q, before stock-based compensation, restructuring and other exit
costs, litigation or dispute settlement charges or gains, transaction-related
costs and the impairment of goodwill, intangible assets and long-lived assets.
The company’s definition of adjusted OIBDA for each of the company’s segments
has been modified from time to time. Management believes that because segment
adjusted OIBDA and segment adjusted OIBDA as a percentage of segment revenues
exclude (i) certain non-cash expenses (such as stock-based compensation, and
the impairment of goodwill, intangible assets and long-lived assets); and (ii)
expenses that are not reflective of the segment's core operating results over
time (such as restructuring and other exit costs, litigation or dispute
settlement charges or gains, and transaction-related costs), these measures
provide investors with additional useful information to evaluate the company’s
segment financial performance, particularly with respect to changes in
performance from period to period. Segment adjusted OIBDA and segment adjusted
OIBDA as a percentage of segment revenues are not determined in accordance
with GAAP and should be considered in addition to, not as a substitute for or
superior to, financial measures determined in accordance with GAAP. A
limitation associated with these measures is that they do not include
stock-based compensation expenses related to the company’s workforce.
Management compensates for this limitation by providing a summary of
stock-based compensation expenses within the accompanying tables and in the
footnotes accompanying its financial statements. A further limitation
associated with the use of these measures is that they do not reflect the
costs of restructuring and other exit costs, litigation or dispute settlement
charges or gains, transaction-related costs and impairment charges related to
an operating segment. Management compensates for this limitation by providing
supplemental information about such charges, gains and costs by segment within
its financial press releases and SEC filings, when applicable. A
reconciliation to segment income from operations, its most comparable GAAP
measure, is provided in the accompanying tables.

(2) Adjusted net income is defined by the company as net income before the
after-tax effect of: stock-based compensation; amortization of intangible
assets; impairment of goodwill, intangible assets and long-lived assets;
restructuring and other exit costs; litigation or dispute settlement charges
or gains; transaction-related costs; and the re-measurement of certain
deferred tax assets. Adjusted diluted net income per common share includes the
adjustment for shares resulting from the elimination of stock-based
compensation. Management believes that adjusted net income and adjusted
diluted net income per common share provide investors with additional useful
information to measure the company’s financial performance, particularly with
respect to changes in performance from period to period, because these
measures are exclusive of (i) certain non-cash expenses (such as stock-based
compensation, amortization of intangible assets, and the impairment of
goodwill, intangible assets and long-lived assets) and (ii) expenses that are
not reflective of the company’s core results over time (such as restructuring
and other exit costs, litigation or dispute settlement charges or gains, and
transaction-related costs). Management also uses adjusted net income and
adjusted diluted net income per common share for this purpose. Adjusted net
income and adjusted diluted net income per common share are not determined in
accordance with GAAP and should be considered in addition to, not as a
substitute for or superior to, financial measures determined in accordance
with GAAP. The limitations of adjusted net income and adjusted diluted net
income per common share are that, similar to adjusted OIBDA, they do not
include certain costs, and the terms “adjusted net income” and “adjusted
diluted net income per common share” do not have standardized meanings.
Therefore, other companies may use the same or similarly named measures but
exclude different items or use different computations, which may not provide
investors a comparable view of the company’s performance in relation to other
companies. Management compensates for this limitation by presenting the most
comparable GAAP measures, net income and diluted net income per common share,
directly ahead of adjusted net income and adjusted diluted net income per
common share within its financial press releases and by providing a
reconciliation of adjusted net income that shows and describes the adjustments
made. A reconciliation of adjusted net income to net income, its most
comparable GAAP measure, is provided in the accompanying tables.

(3) Free cash flow is defined by the company as net cash provided by operating
activities, less capital expenditures and cash received for litigation or
dispute settlement gains, and plus the excess tax benefits from equity awards,
cash paid for restructuring and other exit costs, cash paid for litigation or
dispute settlement charges, and cash paid for transaction-related costs.
Management believes that free cash flow provides investors with additional
useful information to measure operating liquidity because it reflects the
company’s operating cash flows after investing in capital assets and prior to
cash paid for restructuring and other exit costs, cash paid or received for
litigation or dispute settlement charges or gains, and cash paid for
transaction-related costs. It also fully reflects the tax benefits realized by
the company from stock-based compensation. This measure is used by management,
and may also be useful for investors, to assess the company’s ability to pay
its quarterly dividend, repay debt obligations, generate cash flow for a
variety of strategic opportunities, including reinvestment in the business,
and effect potential acquisitions and share repurchases. Free cash flow is not
determined in accordance with GAAP and should be considered in addition to,
not as a substitute for or superior to, measures determined in accordance with
GAAP. A limitation of free cash flow is that it does not represent the total
increase or decrease in cash during the period. An additional limitation
associated with the use of this measure is that the term “free cash flow” does
not have a standardized meaning. Therefore, other companies may use the same
or a similarly named measure but exclude different items or use different
computations, which may not provide investors a comparable view of the
company’s performance in relation to other companies. Management compensates
for this limitation by presenting the most comparable GAAP measure, net cash
provided by operating activities, directly ahead of free cash flow within its
financial press releases and by providing a reconciliation that shows and
describes the adjustments made. A reconciliation to net cash provided by
operating activities is provided in the accompanying tables.

(4) Consumer orders are orders delivered during the period that originated in
the U.S. and Canada, primarily from the www.ftd.com and www.ftd.ca websites
and the 1-800-SEND-FTD telephone number, and in the U.K. and the Republic of
Ireland, primarily from the www.interflora.co.uk, www.flyingflowers.co.uk,
www.flowersdirect.co.uk, and www.interflora.ie websites and various telephone
numbers. The number of consumer orders is not adjusted for non-delivered
orders that are refunded after the scheduled delivery date. Orders originating
with a florist or other retail location for delivery to consumers are not
included.

Average order value represents the average U.S. Dollar amount received for
consumer orders delivered during a period. For orders placed outside the U.S.
(principally in the U.K. and the Republic of Ireland), this average U.S.
Dollar amount is determined after translating the local currency amounts
received into U.S. Dollars. Average order value includes merchandise revenues
and shipping, handling and service fees paid by the consumer, less discounts
and refunds (net of refund-related fees charged to floral network members).

(5) A pay account is defined as a member who has paid for a subscription to a
Content & Media or Communications service, and whose subscription has not
terminated or expired. A subscription provides the member with access to our
service for a specific term (for example, a month or a year) and may be
renewed upon the expiration of each term. One-time purchases of our services
are not considered subscriptions and thus, are not included in the pay
accounts metric. A pay account does not equate to a unique subscriber since
one subscriber could have several pay accounts. In addition, at any point in
time, our pay account base includes a number of accounts receiving a free
period of service as either a promotion or retention tool, such as the
subscribers receiving our free NetZero 4G mobile broadband service, and a
number of accounts that have notified us that they are terminating their
service but whose service remains in effect.

Content & Media segment active accounts are defined as the sum of all pay
accounts as of the date presented; the monthly average for the period of all
free accounts who have visited our domestic or international online nostalgia
websites (excluding schoolFeed and The Names Database) at least once during
the period; and the monthly average for the period of all online loyalty
marketing members who have earned or redeemed points during such period.
Communications segment active accounts include all Communications segment pay
accounts as of the date presented combined with the number of free dial-up
Internet access and email accounts that logged on to our services at least
once during the preceding 31 days.

(6) ARPU is calculated by dividing services revenues generated from the pay
accounts of our Content & Media or Communications segment, as applicable, for
a period (after translation into U.S. Dollars) by the average number of
segment pay accounts for that period, divided by the number of months in that
period.

(7) Our average monthly churn rate is calculated as the total number of pay
accounts that terminated or expired in a period divided by the average number
of pay accounts for that period, divided by the number of months in that
period. Our average monthly churn percentage may fluctuate from period to
period due to our mix of subscription terms, which affects the timing of
subscription expirations, and other factors. We make certain normalizing
adjustments to the calculation of our churn percentage for periods in which we
add a significant number of pay accounts due to acquisitions. For our
Communications segment pay accounts, we do not include in our churn
calculation dial-up accounts canceled during the first 30 days of service
unless the accounts have upgraded from free accounts, although a number of
such accounts will be included in our account totals at any given measurement
date. Additionally, we do not include 4G mobile broadband accounts canceled
during the first 30 days of service provided the mobile broadband device is
returned within 30 days of cancelation. Subscribers who cancel one pay service
but subscribe to another pay service are not necessarily considered to have
canceled a pay account depending on the services and, as such, our segment
churn rates are not necessarily indicative of the percentage of subscribers
canceling any particular service.

About United Online^®:

United Online, Inc. (Nasdaq: UNTD), through its operating subsidiaries, is a
leading provider of consumer products and services over the Internet, where
their respective brands have attracted a large online audience that includes
more than 100 million registered accounts worldwide. The company's FTD segment
provides floral-related products and services (FTD, Interflora, Flying
Flowers, and Flowers Direct) for consumers and retail florists, as well as
other retail locations offering floral and related products and services. The
company's Content & Media segment provides online nostalgia products and
services (Classmates, schoolFeed and StayFriends) and online loyalty marketing
(MyPoints). Its primary Communications segment service is Internet access
(NetZero and Juno), including high-speed 4G mobile broadband (NetZero
Wireless).

Cautionary Information Regarding Forward-Looking Statements:

This release contains forward-looking statements within the meaning of the
“safe harbor” provisions of the Private Securities Litigation Reform Act of
1995, as amended, based on our current expectations, estimates and projections
about our operations, industry, financial condition, performance, results of
operations, and liquidity. Statements containing words such as “may,”
“believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “projections,”
“business outlook,” “estimate,” or similar expressions constitute
forward-looking statements. These forward-looking statements include, but are
not limited to, statements about the proposed spin-off of the FTD segment; the
exploration of strategic alternatives for the company’s other businesses and
monetization opportunities for the company’s patent portfolio; future
financial performance; revenues; operating expenses; operating income; capital
expenditures; depreciation and amortization; and stock-based compensation.
Potential factors that could cause actual results to differ materially from
those in the forward-looking statements include, among others: the effects of
the proposed spin-off or other transactions on our businesses; risks
associated with the integration or commercialization of new businesses,
products, services, applications or features or the success of new business
models; the severity and duration of current economic conditions; the effect
of competition; the company’s inability to maintain or increase the number of
free and pay accounts, visitors to its websites, and members of the floral
network; risks associated with litigation and governmental regulations or
investigations, including reviews of business practices such as marketing,
billing, renewal, and post-transaction sales practices; problems associated
with the company’s operations, systems or technologies; changes in marketing
conditions and laws; the company’s inability to maintain or increase its
advertising revenues; potential write down, reserve against or impairment of
assets including receivables, goodwill, intangible assets or other assets; the
company’s inability to enforce or defend its ownership and use of intellectual
property; financial market risk resulting from fluctuations in foreign
currency exchange rates, particularly the British Pound and Euro; changes in
stock-based compensation due to future equity issuances or other reasons;
changes in amortization or depreciation due to a variety of factors; changes
in the floral industry; the company’s inability to retain key customers,
vendors and personnel; changes in tax laws, the company’s business or other
factors that would impact anticipated tax benefits or the tax treatment of the
proposed spin-off transaction; the impact of, and restrictions associated
with, the company’s indebtedness; as well as the risk factors disclosed in the
company’s filings with the Securities and Exchange Commission (www.sec.gov),
including, without limitation, information under the captions “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
“Risk Factors.” Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management’s analysis only as the
date hereof. Any such forward-looking statements are not guarantees of future
performance or results and involve risks and uncertainties that may cause
actual performance and results to differ materially from those predicted.
Reported results should not be considered an indication of future performance.
Except as required by law, the company undertakes no obligation to publicly
release the results of any revision to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.

UNITED ONLINE, INC.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)

                        Quarter Ended December 31,    Year Ended December 31,
                          2012          2011            2012          2011
Revenues:
Products                  $ 125,000       $ 115,328       $ 502,683       $ 473,040
Services                   93,983        102,593       368,200       424,645 
Total revenues              218,983         217,921         870,883         897,685
Operating expenses:
Cost of                     94,712          85,671          374,438         352,207
revenues-products^(a)
Cost of                     23,937          23,698          90,057          94,068
revenues-services^(a)
Sales and                   41,822          36,499          172,393         166,760
marketing^(a)
Technology and              12,633          11,581          47,996          49,847
development^(a)
General and                 25,416          24,331          97,615          104,369
administrative^(a)
Amortization of             7,834           7,541           30,493          30,455
intangible assets
Acquisition-related
contingent                  551             -               (836    )       -
consideration
Restructuring and           77              4,926           91              5,677
other exit costs
Impairment of
goodwill, intangible       26,910        -             26,910        -       
assets and long-lived
assets
Total operating            233,892       194,247       839,157       803,383 
expenses
                                                                          
Operating income            (14,909 )       23,674          31,726          94,302
(loss)
                                                                          
Interest income             348             396             1,310           1,536
Interest expense            (3,261  )       (3,511  )       (13,562 )       (23,075 )
Other income, net          118           426           886           2,643   
                                                                          
Income (loss) before        (17,704 )       20,985          20,360          75,406
income taxes
Provision for
(benefit from) income      (5,251  )      8,120         7,818         23,676  
taxes
Net income (loss)         $ (12,453 )     $ 12,865       $ 12,542       $ 51,730  
Income allocated to
participating              (331    )      (392    )      (1,225  )      (1,993  )
securities
Net income (loss)
attributable to           $ (12,784 )     $ 12,473       $ 11,317       $ 49,737  
common stockholders
                                                                          
Basic net income
(loss) per common         $ (0.14   )     $ 0.14         $ 0.13         $ 0.56    
share
Shares used to
calculate basic net        90,938        89,192        90,469        88,478  
income (loss) per
common share
Diluted net income
(loss) per common         $ (0.14   )     $ 0.14         $ 0.12         $ 0.56    
share
Shares used to
calculate diluted net      90,938        89,251        90,564        88,631  
income (loss) per
common share
                                                                          
Shares outstanding at      91,092        89,423        91,092        89,423  
end of period
                                                                          
(a) Stock-based
compensation was
allocated as follows:
Cost of                   $ 18            $ 9             $ 43            $ 46
revenues-products
Cost of                     64              71              256             354
revenues-services
Sales and marketing         650             562             2,431           2,329
Technology and              461             465             1,659           2,159
development
General and                2,198         2,592         8,919         12,325  
administrative
Total stock-based         $ 3,391        $ 3,699        $ 13,308       $ 17,213  
compensation
                                                                                    
                                                                                    

UNITED ONLINE, INC.
Unaudited Reconciliation of Operating Income (Loss) to Adjusted OIBDA^(1)
(in thousands)

                      Quarter Ended December     Year Ended December 31,
                        31,
                        2012          2011         2012          2011
                                                                     
Operating income        $ (14,909 )     $ 23,674     $ 31,726        $ 94,302
(loss)
Depreciation              6,057           6,736        25,616          25,854
Amortization of          8,228         7,860       32,045        31,506
intangible assets
Operating income
(loss) before             (624    )       38,270       89,387          151,662
depreciation and
amortization
Stock-based               3,391           3,699        13,308          17,213
compensation
Restructuring and         77              4,926        91              5,677
other exit costs
Litigation or
dispute settlement        -               75           (589    )       2,999
charges
Transaction-related       2,968           -            4,758           -
costs
Impairment of
goodwill,
intangible assets        26,910        -           26,910        -
and long-lived
assets
Adjusted OIBDA          $ 32,722       $ 46,970     $ 133,865      $ 177,551
                                                                       
                                                                       

UNITED ONLINE, INC.
Unaudited Reconciliation of Segment Income (Loss) from Operations to Segment
Adjusted OIBDA^(1)
(in thousands)
                                                              
                       Quarter Ended December 31,     Year Ended December 31,
                        2012            2011           2012            2011
                                                                       
FTD:
Segment income from     $ 21,273        $ 19,879       $ 82,204        $ 78,660
operations
Stock-based               1,106           983            4,456           3,878
compensation
Restructuring and         -               876            -               876
other exit costs
Litigation or
dispute settlement        -               75             (193    )       75
charges
Transaction-related      (26     )      -            593           -       
costs
Segment adjusted        $ 22,353       $ 21,813      $ 87,060       $ 83,489  
OIBDA
                                                                       
Content & Media:
Segment income
(loss) from             $ (20,793 )     $ 12,593       $ 1,212         $ 43,450
operations
Stock-based               611             650            2,334           3,301
compensation
Restructuring and         77              1,616          (14     )       1,616
other exit costs
Litigation or
dispute settlement        -               -              (396    )       2,924
charges
Transaction-related       613             -              46              -
costs
Impairment of
goodwill,
intangible assets        26,910        -            26,910        -       
and long-lived
assets
Segment adjusted        $ 7,418        $ 14,859      $ 30,092       $ 51,291  
OIBDA
                                                                       
Communications:
Segment income from     $ 7,428         $ 14,084       $ 35,129        $ 61,196
operations
Stock-based               568             601            2,183           2,493
compensation
Restructuring and        -             648          (8      )      1,399   
other exit costs
Segment adjusted        $ 7,996        $ 15,333      $ 37,304       $ 65,088  
OIBDA
                                                                       
Unallocated             $ (5,045  )     $ (5,035 )     $ (20,591 )     $ (22,317 )
corporate expenses
                                                                       
Consolidated            $ 32,722       $ 46,970      $ 133,865      $ 177,551 
adjusted OIBDA
                                                                                 
                                                                                 

UNITED ONLINE, INC.
Unaudited Reconciliation of Net Income (Loss) to Adjusted Net Income^(2)
(in thousands, except per share amounts)
                                                              
                        Quarter Ended December 31,     Year Ended December 31,
                        2012            2011           2012            2011
                                                                       
Net income (loss)       $ (12,453 )     $ 12,865       $ 12,542        $ 51,730
Income allocated to
participating            (331    )      (392   )      (1,225  )      (1,993  )
securities
Net income (loss)
attributable to           (12,784 )       12,473         11,317          49,737
common stockholders
                                                                       
Adjustments:
Stock-based               3,391           3,699          13,308          17,213
compensation
Amortization of           8,228           7,860          32,045          31,506
intangible assets
Restructuring and         77              4,926          91              5,677
other exit costs
Litigation or
dispute settlement        -               75             (589    )       2,999
charges
Transaction-related       2,968           -              4,758           6,078
costs^(a)
Impairment of
goodwill,
intangible assets        26,910        -            26,910        -       
and long-lived
assets
                          28,790          29,033         87,840          113,210
                                                                       
Income tax effect
of adjusting             (15,593 )      (6,323 )      (26,930 )      (21,353 )
entries
Adjusted net income
attributable to         $ 13,197       $ 22,710      $ 60,910       $ 91,857  
common stockholders
                                                                       
GAAP net income
(loss) per common
share:
Basic net income
(loss) per common       $ (0.14   )     $ 0.14        $ 0.13         $ 0.56    
share
Shares used to
calculate basic net      90,938        89,192       90,469        88,478  
income (loss) per
common share
Diluted net income
(loss) per common       $ (0.14   )     $ 0.14        $ 0.12         $ 0.56    
share
Shares used to
calculate diluted        90,938        89,251       90,564        88,631  
net income (loss)
per common share
                                                                       
Adjusted net income
per common share:
Adjusted basic net
income per common       $ 0.15         $ 0.25        $ 0.67         $ 1.04    
share
Shares used to
calculate adjusted       90,938        89,192       90,469        88,478  
basic net income
per common share
Adjusted diluted
net income per          $ 0.14         $ 0.25        $ 0.67         $ 1.03    
common share
Shares used to
calculate adjusted       91,321        89,449       90,787        88,788  
diluted net income
per common share
                                                                                 

      Includes a $6.1 million loss on extinguishment of debt recorded in the
(a)  quarter ended June 30, 2011 in connection with the refinancing of FTD's
      credit facilities.
      

UNITED ONLINE, INC.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
                                                         
                                             December 31,        December 31,
                                             2012                 2011
                                                                  
ASSETS
Cash and cash equivalents                    $   136,444          $   136,105
Accounts receivable, net                         43,721               43,177
Inventories, net                                 16,116               8,832
Deferred tax assets, net                         12,279               15,587
Property and equipment, net                      57,877               62,460
Goodwill and intangible assets, net              668,479              693,279
Other assets                                    28,068              36,917
Total assets                                 $   962,984          $   996,357
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable                             $   80,543           $   66,818
Accrued liabilities                              45,555               52,681
Member redemption liability                      21,479               22,453
Deferred revenue                                 49,581               57,915
Debt, net of discounts                           244,000              261,124
Deferred tax liabilities, net                    31,896               44,098
Other liabilities                               14,179              11,133
Total liabilities                               487,233             516,222
                                                                  
Stockholders' equity                             475,751              480,135
                                                                 
Total liabilities and stockholders'          $   962,984          $   996,357
equity
                                                                      
                                                                      

UNITED ONLINE, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
                                                               
                        Quarter Ended December 31,      Year Ended December 31,
                        2012            2011            2012            2011
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Net income (loss)       $ (12,453 )     $ 12,865        $ 12,542        $ 51,730
Adjustments to
reconcile net
income to net cash
provided by
operating
activities:
Depreciation,
amortization and          17,676          18,295          70,969          74,573
stock-based
compensation
Provision for
doubtful accounts         665             1,014           2,311           2,808
receivable
Acquisition-related
contingent                551             -               (836    )       -
consideration
Accretion of
discounts and             188             203             1,010           1,484
amortization of
debt issue costs
Loss on
extinguishment of         -               -               -               6,078
debt
Impairment of
goodwill,
intangible assets         26,910          -               26,910          -
and long-lived
assets
Deferred taxes and        (8,067  )       455             (10,878 )       (503     )
other
Tax benefits
(shortfalls) from         94              (568    )       (59     )       (711     )
equity awards
Excess tax benefits       -               -               (14     )       (265     )
from equity awards
Change in operating
assets and
liabilities
(excluding the
effects of
acquisitions):
Accounts receivable       (3,954  )       (6,081  )       (2,643  )       3,736
Inventories               (4,374  )       (1,723  )       (8,452  )       (107     )
Other assets              1,329           (6,280  )       7,048           (2,993   )
Accounts payable
and accrued               24,122          26,063          1,646           (370     )
liabilities
Member redemption         (48     )       (344    )       (973    )       (2,412   )
liability
Deferred revenue          (1,871  )       (4,667  )       (8,609  )       (16,322  )
Other liabilities        937           151           (4,814  )      (5,609   )
Net cash provided
by operating             41,705        39,383        85,158        111,117  
activities
                                                                        
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Purchases of
property and              (4,595  )       (5,341  )       (17,813 )       (24,552  )
equipment
Purchases of
rights, content and       (472    )       (408    )       (2,198  )       (3,313   )
intellectual
property
Purchases of              (88     )       -               (184    )       -
investments
Proceeds from sales       36              403             480             403
of investments
Cash paid for
acquisitions, net         -               -               (11,355 )       -
of cash acquired
Proceeds from sales      -             -             -             221      
of assets, net
Net cash used for
investing                (5,119  )      (5,346  )      (31,070 )      (27,241  )
activities
                                                                        
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Proceeds from term        -               -               -               261,325
loan
Payments on term          -               (662    )       (17,663 )       (265,950 )
loans
Payments for debt         -               -               -               (778     )
issue costs
Proceeds from
exercises of stock        -               4               5               37
options
Proceeds from
employee stock            1,215           1,558           3,008           3,907
purchase plans
Repurchases of            (362    )       (764    )       (2,623  )       (7,743   )
common stock
Dividends and
dividend
equivalents paid on       (9,441  )       (9,267  )       (37,528 )       (37,213  )
outstanding shares
and restricted
stock units
Excess tax benefits      -             -             14            265      
from equity awards
Net cash used for
financing                (8,588  )      (9,131  )      (54,787 )      (46,150  )
activities
                                                                        
Effect of foreign
currency exchange
rate changes on           306             (1,643  )       1,038           (1,885   )
cash and cash
equivalents
                                                                        
Change in cash and        28,304          23,263          339             35,841
cash equivalents
Cash and cash
equivalents,             108,140       112,842       136,105       100,264  
beginning of period
Cash and cash
equivalents, end of     $ 136,444      $ 136,105      $ 136,444      $ 136,105  
period
                                                                                   
                                                                                   

UNITED ONLINE, INC.
Unaudited Reconciliation of Net Cash Provided by Operating Activities to Free
Cash Flow^(3)
(in thousands)
                                                             
                        Quarter Ended December        Year Ended December 31,
                        31,
                        2012           2011           2012            2011
Net cash provided
by operating            $ 41,705       $ 39,383       $ 85,158        $ 111,117
activities
Adjustments:
Capital                   (4,595 )       (5,341 )       (17,813 )       (24,552 )
expenditures
Excess tax benefits       -              -              14              265
from equity awards
Cash paid for
restructuring and         226            886            4,174           2,923
other exit costs
Cash paid for
litigation or             2,777          320            3,541           247
dispute settlement
charges
Cash paid for
transaction-related      1,719        -            3,355         -       
costs
Free cash flow          $ 41,832      $ 35,248      $ 78,429       $ 90,000  
                                                                                
                                                                                

UNITED ONLINE, INC.
Unaudited Segment Information
(in thousands)
                                                               
                        Quarter Ended                   Year Ended
                        December 31,                    December 31,
                        2012            2011            2012            2011
FTD
Revenues:
Products                $ 123,148       $ 114,520       $ 496,026       $ 471,885
Services                 30,030        28,784        117,488       115,364 
Total revenues            153,178         143,304         613,514         587,249
                                                                        
Operating expenses:
Cost of revenues          95,951          90,164          386,746         371,716
Sales and marketing       26,325          22,851          104,913         97,605
Technology and            3,854           3,627           15,052          14,450
development
General and               8,109           8,405           34,415          32,776
administrative
Amortization of           6,451           6,275           25,543          25,188
intangible assets
Restructuring and        -             876           -             876     
other exit costs
Total operating          140,690       132,198       566,669       542,611 
expenses
                                                                        
Operating income          12,488          11,106          46,845          44,638
                                                                        
Depreciation              2,334           2,498           9,816           8,834
Amortization of          6,451        6,275         25,543        25,188  
intangible assets
Segment income from       21,273          19,879          82,204          78,660
operations
Stock-based               1,106           983             4,456           3,878
compensation
Restructuring and         -               876             -               876
other exit costs
Litigation or
dispute settlement        -               75              (193    )       75
charges
Transaction-related      (26     )     -             593           -       
costs
Segment adjusted        $ 22,353      $ 21,813       $ 87,060       $ 83,489  
OIBDA
                                                                        
Content & Media
Revenues:
Products                $ 760           $ 808           $ 3,646         $ 1,155
Services                  22,233          28,388          95,119          123,992
Advertising and          16,516       16,469        54,731        60,328  
other
Total revenues            39,509          45,665          153,496         185,475
                                                                        
Operating expenses:
Cost of revenues          12,427          11,512          43,267          40,556
Sales and marketing       11,308          11,867          50,382          59,913
Technology and            6,151           5,163           22,639          23,892
development
General and               5,873           6,074           22,292          27,781
administrative
Amortization of           1,383           1,052           4,950           4,358
intangible assets
Acquisition-related
contingent                551             -               (836    )       -
consideration
Restructuring and         77              1,616           (14     )       1,616
other exit costs
Impairment of
goodwill,
intangible assets        26,910       -             26,910        -       
and long-lived
assets
Total operating          64,680       37,284        169,590       158,116 
expenses
                                                                        
Operating income          (25,171 )       8,381           (16,094 )       27,359
(loss)
                                                                        
Depreciation              2,601           2,841           10,804          10,682
Amortization of          1,777        1,371         6,502         5,409   
intangible assets
Segment income
(loss) from               (20,793 )       12,593          1,212           43,450
operations
Stock-based               611             650             2,334           3,301
compensation
Restructuring and         77              1,616           (14     )       1,616
other exit costs
Litigation or
dispute settlement        -               -               (396    )       2,924
charges
Transaction-related       613             -               46              -
costs
Impairment of
goodwill,
intangible assets        26,910       -             26,910        -       
and long-lived
assets
Segment adjusted        $ 7,418       $ 14,859       $ 30,092       $ 51,291  
OIBDA
                                                                        
Communications
Revenues:
Products                $ 1,092         $ -             $ 3,011         $ -
Services                  18,194          22,621          78,089          100,770
Advertising              7,383        6,674         24,342        25,762  
Total revenues            26,669          29,295          105,442         126,532
                                                                        
Operating expenses:
Cost of revenues          10,367          7,825           34,952          34,637
Sales and marketing       4,466           1,992           18,197          10,179
Technology and            2,628           2,791           10,305          11,505
development
General and               2,843           3,301           11,622          13,818
administrative
Amortization of           -               214             -               909
intangible assets
Restructuring and        -            648           (8      )      1,399   
other exit costs
Total operating          20,304       16,771        75,068        72,447  
expenses
                                                                        
Operating income          6,365           12,524          30,374          54,085
                                                                        
Depreciation              1,063           1,346           4,755           6,202
Amortization of          -            214           -             909     
intangible assets
Segment income from       7,428           14,084          35,129          61,196
operations
Stock-based               568             601             2,183           2,493
compensation
Restructuring and        -            648           (8      )      1,399   
other exit costs
Segment adjusted        $ 7,996       $ 15,333       $ 37,304       $ 65,088  
OIBDA
                                                                        
Total segment           $ 37,767      $ 52,005       $ 154,456      $ 199,868 
adjusted OIBDA
                                                                        
Reconciliation of
segment revenues to
consolidated
revenues:
FTD                     $ 153,178       $ 143,304       $ 613,514       $ 587,249
Content & Media           39,509          45,665          153,496         185,475
Communications            26,669          29,295          105,442         126,532
Intersegment             (373    )     (343    )      (1,569  )      (1,571  )
eliminations
Consolidated            $ 218,983     $ 217,921      $ 870,883      $ 897,685 
revenues
                                                                        
Reconciliation of
segment operating
expenses to
consolidated
operating expenses:
FTD                     $ 140,690       $ 132,198       $ 566,669       $ 542,611
Content & Media           64,680          37,284          169,590         158,116
Communications            20,304          16,771          75,068          72,447
Unallocated               8,591           8,337           29,399          31,780
corporate expenses
Intersegment             (373    )     (343    )      (1,569  )      (1,571  )
eliminations
Consolidated            $ 233,892     $ 194,247      $ 839,157      $ 803,383 
operating expenses
                                                                        
Reconciliation of
segment income
(loss) from
operations to
consolidated
operating income
(loss):
FTD                     $ 21,273        $ 19,879        $ 82,204        $ 78,660
Content & Media           (20,793 )       12,593          1,212           43,450
Communications           7,428        14,084        35,129        61,196  
Total segment
income from               7,908           46,556          118,545         183,306
operations
Depreciation              (6,057  )       (6,736  )       (25,616 )       (25,854 )
Amortization of           (8,228  )       (7,860  )       (32,045 )       (31,506 )
intangible assets
Unallocated
corporate expenses,      (8,532  )     (8,286  )      (29,158 )      (31,644 )
excluding
depreciation
Consolidated
operating income        $ (14,909 )    $ 23,674       $ 31,726       $ 94,302  
(loss)
                                                                        
Reconciliation of
segment adjusted
OIBDA to
consolidated
adjusted OIBDA:
FTD adjusted OIBDA      $ 22,353        $ 21,813        $ 87,060        $ 83,489
Content & Media           7,418           14,859          30,092          51,291
adjusted OIBDA
Communications           7,996        15,333        37,304        65,088  
adjusted OIBDA
Total segment             37,767          52,005          154,456         199,868
adjusted OIBDA
Unallocated              (5,045  )     (5,035  )      (20,591 )      (22,317 )
corporate expenses
Consolidated            $ 32,722      $ 46,970       $ 133,865      $ 177,551 
adjusted OIBDA
                                                                                  
                                                                                  

UNITED ONLINE, INC.
Unaudited Selected Quarterly Historical Key Metrics(a)
                                                                         
                    December        September       June 30,        March 31,       December
                    31,             30,             2012            2012            31,
                    2012            2012                                            2011
Consolidated:
Revenues (in        $ 218,983       $ 177,751       $ 231,857       $ 242,292       $ 217,921
thousands)
                                                                                    
FTD:
Segment
revenues (in        $ 153,178       $ 116,362       $ 167,527       $ 176,447       $ 143,304
thousands)
% of
consolidated          70      %       65      %       72      %       73      %       66      %
revenues
                                                                                    
Consumer
orders^(4) (in        1,787           1,239           1,997           1,997           1,615
thousands)
Average order       $ 60.13         $ 61.06         $ 60.75         $ 62.91         $ 62.31
value^(4)
Average foreign
currency              1.61            1.58            1.58            1.58            1.57
exchange rate:
GBP to USD
                                                                                    
Content &
Media:
Segment
revenues (in        $ 39,509        $ 36,556        $ 37,986        $ 39,445        $ 45,665
thousands)
% of
consolidated          18      %       21      %       16      %       16      %       21      %
revenues
                                                                                    
Pay
accounts^(5)          2,864           2,987           3,120           3,293           3,484
(in thousands)
Segment               3.5     %       3.4     %       3.6     %       3.9     %       4.1     %
churn^(7)
ARPU^(6)            $ 2.52          $ 2.50          $ 2.50          $ 2.54          $ 2.60
Segment active
accounts^(5)          11.5            10.9            10.3            11.3            10.3
(in millions)
Currency
exchange rate:        1.30            1.25            1.28            1.31            1.35
EUR to USD
                                                                                    
Communications:
Segment
revenues (in        $ 26,669        $ 25,203        $ 26,810        $ 26,760        $ 29,295
thousands)
% of
consolidated          12      %       14      %       12      %       11      %       13      %
revenues
                                                                                    
Pay
accounts^(5)
(in thousands):
Access                421             440             467             498             535
Other                229           235           242           249           259     
Total
Communications       650           675           709           747           794     
pay accounts
                                                                                    
Segment               2.9     %       3.1     %       3.2     %       3.4     %       3.4     %
churn^(7)
ARPU^(6)            $ 9.05          $ 8.97          $ 8.97          $ 8.99          $ 9.09
Segment active
accounts^(5)          1.3             1.4             1.4             1.5             1.5
(in millions)
                                                                                              

      More information on the financial results for these quarters can be
(a)  found in the company's filings with the Securities and Exchange
      Commission.

Contact:

United Online, Inc.
Investors:
David Bigelow, 818-287-3560
dbigelow@corp.untd.com
or
Press:
Scott Matulis, 818-287-3388
pr@untd.com
 
Press spacebar to pause and continue. Press esc to stop.