5. Goodwill

 

Changes in the carrying value of our goodwill by reporting unit for the nine months ended September 30, 2013 are as follows (in thousands):

 

		Television			Online			SourceEcreative			Total
Balance at December 31, 2012:
Goodwill		$	364,344		$	353,679		$	1,998		$	720,021
Accumulated impairment losses		(131,291		)	(219,593		)	—			(350,884		)
		233,053			134,086			1,998			369,137
Foreign currency translation		(581		)	—			—			(581		)
Balance at September 30, 2013:
Goodwill		363,763			353,679			1,998			719,440
Accumulated impairment losses		(131,291		)	(219,593		)	—			(350,884		)
		$	232,472		$	134,086		$	1,998		$	368,556

 

Risk of Future Impairment

 

We test goodwill for possible impairment each year on December 31st and whenever events or changes in circumstances indicate the carrying value of our goodwill may not be recoverable.  As of September 30, 2013, we continue to believe that the fair value of our reporting units exceed their respective carrying values.  Accordingly, we have not performed an interim goodwill impairment test.

 

During 2012, we recorded a total of $219.6 million of goodwill impairment charges related to our online reporting unit.  The 2012 charges primarily related to reducing our forecasts to address weaker than previously expected operating results, and softer market conditions and trends.  As a result of the charges, the online reporting unit’s goodwill was adjusted to its then implied fair value.  We determine fair value based on a combination of the discounted cash flow methodology (which uses our internal forecasts as to future cash flows by reporting unit) and the guideline public company approach.  If our actual operating results, or our future expected operating results, were to fall sufficiently below our current forecasts, we may be required to record another goodwill impairment charge for the online reporting unit.

 

Further, at December 31, 2012, the fair value of our television reporting unit only exceeded its carrying value by 13%.  Similar to the online reporting unit, to the extent our actual or future expected operating results of the television reporting unit were to fall sufficiently below our current forecasts, we may be required to record a goodwill impairment charge for the television reporting unit.  The pending transaction with ER (see Note 1) to sell our television business is an indication that the fair value of the television reporting unit continues to exceed its carrying value.  At December 31, 2012, the fair value of our SourceEcreative reporting unit exceeded its carrying value by 977%.