ServiceMagic 2011 Annual Report Download - page 110

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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 16—COMMITMENTS (Continued)
The Company also has funding commitments that could potentially require its performance in the event of demands by third parties or
contingent events, such as under letters of credit extended as follows:
The guarantee relates to the Company's guarantee of an equity method investee's debt. The letters of credit support the Company's casualty
insurance program. The purchase obligations primarily include advertising commitments, which commitments are reducible or terminable such
that these commitments can never exceed associated revenue by a meaningful amount. Purchase obligations also include minimum payments due
under telecommunication contracts related to data transmission lines.
NOTE 17—CONTINGENCIES
In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters
when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also
identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although
management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not
have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent
uncertainties and management's view of these matters may change in the future. The Company also evaluates other contingent matters, including
tax contingencies, to assess the probability and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of
these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company.
See Note 4 for additional information related to income tax contingencies.
NOTE 18—SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental Disclosure of Non-Cash Transactions for 2011
On February 8, 2011, in connection with the Liberty Exchange, the Company received 0.1 million shares of IAC common stock, valued at
$2.9 million, in fulfillment of post-closing working capital adjustments.
On January 31, 2011, IAC contributed The Daily Beast, previously reported in IAC's Media & Other segment, to a newly formed venture
with Harman Newsweek called The Newsweek/Daily Beast Company. IAC and Harman Newsweek operate The Newsweek/Daily Beast
Company jointly.
The consideration for the acquisition of OkCupid on January 20, 2011 includes a contingent consideration arrangement which is described
in Note 5.
103
Amount of Commitment Expiration Per Period
Total
Amounts
Committed Less Than
1 Year 1-3
Years 3-5
Years More Than
5 Years
(In thousands)
Guarantee and letters of credit
$
8,676
$
8,676
$
—
$
—
$
—
Purchase obligations
55,757
19,394
31,697
4,666
—
Total commercial commitments
$
64,433
$
28,070
$
31,697
$
4,666
$
—