Stamps.com 2009 Annual Report Download - page 39

TABLE OF CONTENTS
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio. We have not used
derivative financial instruments in our investment portfolio. None of the instruments in our investment portfolio are held for
trading purposes. Our cash equivalents and investments consist of money market, U.S. government obligations, asset-backed
securities and public corporate debt securities with weighted average maturities of 321 days at December 31, 2009. Our cash
equivalents and investments, net of restricted cash, approximated $71.2 million and had a related weighted average interest rate
of 1.1%. Interest rate fluctuations impact the carrying value of the portfolio. The fair value of our portfolio of marketable
securities would not be significantly affected by either a 10% increase or decrease in the rates of interest due primarily to the
short-term nature of the portfolio. We do not believe that the future market risks related to the above securities will have a
material adverse impact on our financial position, results of operations or liquidity.
Item 8. Financial Statements and Supplementary Data.
Our consolidated financial statements, schedules and supplementary data, as listed under Item 15, appear in a separate
section of this Report beginning on page F- 1 .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain 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, our management evaluated, with the participation of our Principal
Executive Officer and Principal Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have
concluded, as of that time, that our disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such
term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Our internal control system was designed to provide reasonable
assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial
statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief
Financial Officer, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment and those criteria, management,
including our Chief Executive Officer and Chief Financial Officer, concluded that our internal control over financial reporting
was effective as of December 31, 2009.
Ernst & Young, LLP, the independent registered public accounting firm who also audited our consolidated financial
statements, has issued an attestation report on the effectiveness of internal control over financial reporting as of December 31,
2009, which is included herein.
Changes in Internal Controls
During the quarter ended December 31, 2009, there has been no change in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Item 9B. Other Information.
None.
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