On December 31, 2011, Gaiam converted its RSOL Class B common stock to Class A common stock that changed the GAAP accounting treatment for its approximate 38% ownership in RSOL from a consolidated basis to an equity method (“deconsolidated”). As a result, for 2012 Gaiam’s interest in RSOL’s net results are reflected as a single line in Gaiam’s financial statements, whereas for 2011 RSOL’s financial position and results of operations are consolidated into each line of Gaiam’s financial statements. The year-over-year financial comparisons below are stated as if RSOL had been deconsolidated as of January 1, 2011.Third quarter 2012 gross profit was $24.1 million, or 56.0% of net revenue, compared to $24.1 million, or 57.6% of net revenue, during the comparable quarter last year. The decrease in gross margin primarily reflects reduced net revenues in the typically higher margin direct response television marketing business, partially offset by the 100% margin (net fee revenue) of the Gaiam Vivendi Entertainment business. Operating expenses improved 360 basis points to 56.4% of net revenue, or $24.2 million, in the third quarter of 2012, compared to 60.0% of net revenue, or $25.1 million, in the prior-year period. Included in operating expenses in the 2012 third quarter is $1.0 million in non-cash amortization expense related to the Gaiam Vivendi Entertainment acquisition with no such similar expense in the prior year period. Operating loss was $0.2 million compared to a loss of $1.0 million in the third quarter of 2011. Adjusted EBITDA increased to $2.2 million in the third quarter of 2012 from $0.5 million in the prior-year period and rose by $8.7 million in the nine months ended September 30, 2012 to $5.3 million from a loss in the same period in 2011. Because of RSOL’s third quarter loss, including its non cash impairment charges for some its assets, primarily goodwill and deferred taxes, Gaiam’s recognition of its portion of RSOL’s loss, $14.3 million, reduced the GAAP carrying values of Gaiam’s investments in RSOL to zero. Gaiam will not recognize any future losses from RSOL.