Classmates.com 2008 Annual Report Download - page 76

Table of Contents
Cash flows from financing activities were also negatively impacted by the withholding of a portion of shares underlying the restricted stock
units we award to employees. Upon vesting, we did not collect the applicable employee withholding taxes for restricted stock units from
employees. Instead, we automatically withheld, from the restricted stock units that vest, the portion of those shares with a fair market value equal
to the amount of the employee withholding taxes due. We then paid the applicable withholding taxes in cash. The net effect of such withholding
adversely impacted our cash flows from financing activities. The amounts remitted in the years ended December 31, 2007 and 2006 were
$5.6 million and $2.7 million, respectively, for which we withheld 390,000 shares and 215,000 shares of common stock, respectively, that were
underlying the restricted stock units.
Contractual Obligations
Contractual obligations at December 31, 2008 were as follows (in thousands):
(1)
Total
Less than
1 Year
1 Year to
Less than
3 Years
3 Years to
Less than
5 Years
More than
5 Years
Operating leases(1)
$
64,736
$
16,424
$
21,587
$
14,157
$
12,568
Services and promotional contracts
8,111
6,059
2,052
—
—
Telecommunications purchases
2,053
1,144
909
—
—
Media purchases
2,502
2,477
25
—
—
Floral
-
related purchase obligations
2,473
2,246
227
—
—
Debt, including interest
582,776
50,924
107,206
123,993
300,653
Member redemption liability, long
-
term
5,231
—
5,231
—
—
Other long
-
term liabilities
2,771
438
1,440
263
630
Total
$
670,653
$
79,712
$
138,677
$
138,413
$
313,851
The operating lease obligations shown in the table have not been reduced by minimum non
-
cancelable sublease rentals aggregating
$1.5 million. We remain secondarily liable under these leases in the event that any sublessee defaults under the sublease terms. We do not
believe that material payments will be required as a result of our secondary responsibilities.
At December 31, 2008, we had gross unrealized tax benefits of approximately $11.8 million, all of which, if recognized, would have an
impact on our effective tax rate.
Commitments under standby letters of credit at December 31, 2008 are scheduled to expire as follows (in thousands):
Standby letters of credit are maintained pursuant to certain of our lease arrangements. The standby letters of credit remain in effect at
declining levels through the terms of the related leases. In addition, standby letters of credit are maintained by FTD to secure credit card
processing activity.
Other Commitments
In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business
partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements,
services to be provided by us, or from intellectual property infringement claims made by third-parties. In addition, we have entered into
indemnification agreements with our directors and certain of our officers and
74
Total
Less than
1 Year
1 Year to
Less than
3 Years
3 Years to
Less than
5 Years
More than
5 Years
Standby letters of credit
$
12,929
$
11,805
$
882
$
242
$
—