ServiceMagic 2012 Annual Report Download - page 108

IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Future minimum payments under operating lease agreements are as follows:
Expenses charged to operations under these agreements are $30.6 million , $31.3 million and $31.1 million for the years ended
December 31, 2012, 2011 and 2010, respectively.
The Company's most significant operating lease is a 77 year ground lease for IAC's headquarters building in New York City and
approximates 55% of the future minimum payments due under all operating lease agreements in the table above.
The Company also has funding commitments that could potentially require its performance in the event of demands by third parties or
contingent events as follows:
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
income and non-
tax contingencies, to assess the likelihood of an unfavorable outcome 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 2010
On December 1, 2010, in accordance with the Company's stock exchange agreement with Liberty, IAC exchanged $217.9 million in cash
and all the outstanding shares of Celebrate Interactive, Inc., a wholly owned subsidiary of IAC that held all the equity interests of Evite, Inc.,
Years Ending December 31, (In thousands)
2013
$
24,071
2014
25,565
2015
23,812
2016
23,268
2017
20,593
Thereafter
210,798
Total
$
328,107
Amount of Commitment Expiration Per Period
Total
Amounts
Committed
Less Than
1 Year
1-3
Years
3-5
Years
(In thousands)
Letters of credit
$
2,780
$
2,780
$
—
$
—
Purchase obligations
41,109
18,785
22,233
91
Total commercial commitments
$
43,889
$
21,565
$
22,233
$
91