Classmates.com 2011 Annual Report Download - page 88

Table of Contents
We currently utilize forward foreign currency exchange contracts to protect the value of our net investments in certain foreign subsidiaries
and certain forecasted cash flows denominated in currencies other than the U.S. Dollar. These contracts are designated as hedges of net
investments in foreign entities and hedges of cash flows. At December 31, 2011, the notional value of open forward foreign currency exchange
contracts accounted for as net investment and cash flow hedges totaled $1.9 million and $5.2 million, respectively.
Periodically, we enter into forward foreign currency exchange contracts which are not designated as hedging instruments for accounting
purposes. We enter into these derivative instruments to hedge intercompany transactions and partially offset the economic effect of fluctuations
in foreign currency exchange rates. At December 31, 2011, the notional value of open forward foreign currency exchange contracts that did not
qualify for hedge accounting treatment totaled $4.2 million. We may, in the future, also use other derivative financial instruments, if it is
determined that such hedging activities are appropriate to reduce risk.
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
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