Classmates.com 2010 Annual Report Download - page 82

Table of Contents
Commitments under letters of credit at December 31, 2010 were scheduled to expire as follows (in thousands):
Letters of credit are maintained pursuant to certain of our lease arrangements. The 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, sureties and
insurance companies, 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 employees that will require us, among other
things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. We
have also agreed to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such
companies. We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors
and certain of our officers and employees, and former officers, directors and employees of acquired companies, in certain circumstances.
It is not possible to determine the maximum potential amount of exposure under these indemnification agreements due to the limited history
of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements
may not be subject to maximum loss clauses.
Off-Balance Sheet Arrangements
At December 31, 2010, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material
effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Recent Accounting Pronouncements
Business Combinations —In December 2010, the FASB issued Accounting Standards Update ("ASU") No. 2010-29, Disclosure of
Supplementary Pro Forma Information for Business Combinations , as codified in ASC 805. The amendments in this update specify that if a
public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the
business combinations(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period
only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material,
nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.
The amendments in this update are effective prospectively for business combinations for which the acquisition date is on or after the beginning
of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. ASU No. 2010-29 will impact the pro
forma disclosures presented in our consolidated financial statements for acquisitions consummated after the effective date.
79
Total Less than
1 Year
1 Year to
Less than
3 Years
Letters of credit
$
1,594
$
1,336
$
258