Classmates.com 2010 Annual Report Download - page 85

Table of Contents
have a material impact on estimated annual revenues and estimated annual income before income taxes. These estimates assume an adverse shift
in all foreign currency exchange rates against the U.S. Dollar, which do not always move in the same direction or in the same degrees, and actual
results may differ materially. Net foreign currency transaction gains or losses arising from transactions denominated in currencies other than the
local functional currency are included in other income (expense), net in the unaudited condensed consolidated statements of operations.
Periodically, we enter into foreign currency forward contracts to partially offset the economic effect of fluctuations in the U.S. Dollar
against the GBP. These derivatives are intended to minimize the foreign currency exchange rate impact of intercompany dividend payments in
British Pounds. We may in the future also use other hedging programs, including derivative financial instruments commonly utilized, if it is
determined that such hedging activities are appropriate to reduce risk. At December 31, 2010, we had no foreign currency forward contracts
outstanding.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
For our Consolidated Financial Statements, Schedule I and Schedule II, see the Index to Consolidated Financial Statements on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the
Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end
of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as
of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing, and reporting,
on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are
effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.
Management's Report on Internal Control Over Financial Reporting
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The
Company's internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted
in the United States of America.
The Company's internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the Company; provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted
in the United States of America, and that receipts and expenditures are being made only in accordance with authorization of management and
directors of the Company; and
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