Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Leases

On March 30, 2010, the Company signed a twelve year lease for approximately 93,000 square feet of office space in Beltsville, Maryland. The Company relocated its corporate headquarters to the leased premises in the third quarter of 2011. The aggregate minimum lease commitment at the inception of the lease was approximately $21,496,000. In addition, under the terms of the lease, the landlord reimbursed the Company approximately $6,417,000 for leasehold improvements which is recorded as a reduction in rent expense ratably over the term of the lease.

The Company has various non-cancelable operating leases, primarily related to office real estate, that expire through 2023, including the office space in Beltsville, Maryland, and generally contain renewal options for up to five years. Lease incentives, payment escalations and rent holidays specified in the lease agreements are accrued or deferred as appropriate as a component of rent expense which is recognized on a straight-line basis over the terms of occupancy. As of December 31, 2010 deferred rent of $26,000 and $481,000 is included in accrued expenses and other liabilities, respectively. As of December 31, 2011 deferred rent of $566,000 and $6,135,000 is included in accrued expenses and other liabilities, respectively.

The Company also leases computer and office equipment under non-cancelable capital leases and other financing arrangements that expire through 2016.

Future minimum lease payments under non-cancelable operating and capital leases at December 31, 2011 are as follows (in thousands):

	Operating Leases		Capital Leases
2012	$	2,647	$	127
2013		2,801		130
2014		2,705		99
2015		2,419		96
2016		2,423		61
2017 and thereafter		12,594		—
Total future minimum payments	$	25,589		513
Less amount representing interest				(112	)
Less current portion				(84	)
Long-term capital lease obligations			$	317

Rent expense was $1,666,000, $1,930,000 and $2,927,000 for the years ended December 31, 2009, 2010, and 2011, respectively.

Purchase Commitments

The Company has entered into agreements with various vendors in the ordinary course of business. As of December 31, 2011, minimum required payments in future years under these arrangements are $4,467,000, $1,286,000, $393,000 and $5,000 in 2012, 2013, 2014 and 2015 and thereafter, respectively.

Letters of Credit

In May 2010, the Company established a letter of credit in favor of the landlord of the new corporate headquarters in Beltsville, Maryland. The irrevocable letter of credit is in the amount of $714,000. The letter of credit does not require a compensating balance and is active through May 2023. In accordance with the terms of the lease agreement, the Company is permitted to reduce the letter of credit by approximately $119,000 annually for each of the first five years commencing May 2012. As of December 31, 2011, the outstanding balance was $714,000; and no amounts had been drawn against it.

In February 2011, the Company established two letters of credit in favor of its principal landlord in the United Kingdom in the amounts of $564,000, in the aggregate. The letters of credit do not require a compensating balance and are active through 2016. The letters of credit are denominated in the local currency, and therefore are subject to foreign currency translation adjustments. As of December 31, 2011, the outstanding balances were $545,000, in the aggregate; and no amounts had been drawn against them.

Self-Insurance

In 2011, the Company enrolled in a self-insured plan for a majority of our U.S. employee health insurance costs, including claims filed and claims incurred but not reported (IBNR) subject to certain stop loss provisions. The Company estimates the liability based upon management’s judgment, historical data and the assistance of third-party actuaries in determining an adequate liability for self-insurance claims. The Company’s IBNR accrual and expenses may fluctuate due to the number of plan participants, claims activity and deductible limits.

Litigation and Claims

The Company from time to time is subject to lawsuits, investigations and claims arising out of the ordinary course of business, including those related to commercial transactions, contracts, government regulation and employment matters. The Company is not currently subject to any material legal proceedings that, in its opinion, would have a material effect on the financial position, results of operations or cash flows of the Company.