Classmates.com 2010 Annual Report Download - page 34

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Alternatively, we may not be able to obtain high-quality flowers in an amount sufficient to meet customer demand. Even if available,
flowers from alternative sources may be of lesser quality or more expensive than those currently offered by us. A large portion of our supply of
flowers is sourced from Colombia, Ecuador and Holland.
The availability and price of our products could be affected by a number of other factors affecting suppliers, including:
• severe weather;
• disease, infestation and other biological problems;
•
import duties and quotas;
•
time
-
consuming import regulations or controls at airports;
• changes in trading status;
•
economic uncertainties and currency fluctuations, including as a result of the recent volatility and disruptions in the credit markets
and general economy;
• foreign government laws and regulations;
• political, social and economic instability, terrorist attacks and security concerns in general;
•
governmental bans or quarantines;
•
disruption in transportation and delivery;
• trade restrictions, including U.S. retaliation against foreign trade practices; and
• transportation availability and costs.
Foreign, state and local governments may attempt to impose additional sales and use taxes, value-added taxes or other taxes on our business
activities, including our past sales, which could decrease our ability to compete, reduce our sales, and have a material adverse effect on our
business, financial condition, results of operations, and cash flows.
In accordance with current industry practice by domestic floral and gift order gatherers and our interpretation of applicable law, our FTD
consumer business collects and remits sales and use taxes on orders that are delivered in states where it has a physical presence or other form of
jurisdictional nexus, which is a limited number of states. If states successfully challenge this practice and impose sales and use taxes on orders
delivered in states where we do not have physical presence or another form of jurisdictional nexus, we could incur substantial tax liabilities for
past sales and lose future sales as a result of the increased tax cost that would be borne by the customer. Also, states may seek to reclassify the
status of Internet order gatherers, such as our FTD consumer business, as persons that are deemed to fulfill the underlying order, in which case, a
state may seek to impose taxes on the receipts generated by our FTD consumer business for orders fulfilled and delivered by florists outside such
state. In addition, future changes in the operation of our online and telephonic sales channels could result in the imposition of additional sales
and use tax or other tax obligations.
Additionally, in accordance with current industry practice by international floral and gift direct marketers and our interpretation of
applicable law, we collect and remit value-added taxes on certain consumer orders placed through Interflora. Future changes in the operation of
our business could result in the imposition of additional tax obligations. Moreover, if a foreign taxing authority challenges our current practice or
implements new legislative initiatives, additional taxes on consumer sales could be due by us. The imposition of additional tax liabilities for past
or future sales could decrease our
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