UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended December 31, 2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number: 005-50580
  INTERSECTIONS INC.
 (Exact name of registrant as
    specified in the charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

54-1956515(I.R.S. Employer
    Identification Number)3901 Stonecroft Boulevard,
    Chantilly, Virginia(Address of principal
    executive office)

20151(Zip
    Code)   (703) 488-6100 (Registrants
    telephone number including area code) Securities
    registered pursuant to Section 12(b) of the Act:
  Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, $.01 par value

The NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None.
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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INTERSECTIONS
    INC.
  TABLE OF
    CONTENTS
   
 PagePART IITEM 1.

BUSINESS


4ITEM 1A.

RISK FACTORS


15ITEM 1B.

UNRESOLVED STAFF COMMENTS


26ITEM 2.

PROPERTIES


26ITEM 3.

LEGAL PROCEEDINGS


26ITEM 4.

(REMOVED AND RESERVED)


27PART IIITEM 5.

MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


29ITEM 6.

SELECTED FINANCIAL DATA


30ITEM 7.

MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


32ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


63ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


63ITEM 9A.

CONTROLS AND PROCEDURES


63ITEM 9A.(T)

CONTROLS AND PROCEDURES


63ITEM 9B.

OTHER INFORMATION


64PART IIIITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


64ITEM 11.

EXECUTIVE COMPENSATION


65ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


65ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    AND DIRECTOR INDEPENDENCE


65ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES


65PART IVITEM 15.

EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


65   2




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FORWARD-LOOKING
    STATEMENTS
  Form 10-K
    
    demand for our services;
    general economic conditions, including the ongoing recession in
    the U.S. and a worldwide economic slowdown;
    recent disruptions to the credit and financial markets in the
    U.S. and worldwide;
    economic conditions specific to our financial institutions
    clients;
    product development;
    maintaining acceptable margins;
    maintaining secure systems;
    ability to control costs;
    the impact of foreign, federal, state and local regulatory
    requirements on our business, specifically the consumer credit
    market;
    the impact of competition;
    our ability to continue our long-term business strategy,
    including growth through acquisition and investments;
    ability to attract and retain qualified personnel; and
    the uncertainty of economic conditions in general.    3




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PART I  ITEM 1.
    BUSINESS  ®
          (703) 488-6100. Form 10-K, Form 10-Q, Form 8-K,
   4




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Consumer
    Products and Services
  Our
    Services and Subscribers
          Our
    Marketing
   5




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Our
    Clients
    
    Direct marketing arrangements:  Under direct
    marketing arrangements, we bear most of the new subscriber
    marketing costs and pay our client a commission for revenue
    derived from subscribers. These commissions could be payable
    upfront in a lump sum on a per newly enrolled subscriber basis,
    periodically over the life of a subscriber, or through a
    combination of both. These arrangements generally result in
    negative cash flow over the first several months after a program
    is launched due to the upfront nature of the marketing
    investments. In some arrangements, we pay the client a service
    fee for access to the clients customers or billing of the
    subscribers by the client, and we may reimburse the client for
    certain of its
    out-of-pocket
    marketing costs incurred in obtaining the subscriber.
    Indirect marketing arrangements:  Under
    indirect marketing arrangements, our client bears the marketing
    expense and pays us a service fee or percentage of the revenue.
    Because the subscriber acquisition cost is borne by our client
    under these arrangements, our revenue per subscriber is
    typically lower than that under direct marketing arrangements.
    Indirect marketing arrangements generally provide positive cash
    flow earlier than direct arrangements and the ability to obtain
    subscribers and utilize marketing channels that the clients
    otherwise may not make available.
    Shared marketing arrangements:  Under shared
    marketing arrangements, marketing expenses are shared by us and
    the client in various proportions, and we may pay a commission
    to or receive a service fee from the client. Revenue generally
    is split relative to the investment made by our client and us.     6




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Operations
      Customer
    Service
  on-the-job
    Information
    Processing
   7




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e-commerce e-commerce
  Information
    Technology
        Data
    and Analytics Providers
        Competition
     8




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Background
    Screening
  Our
    Services
    Our
    Marketing
    Our
    Clients
    Operations
   9




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Information
    Technology
    Data
    and Analytics Providers
    Competition
    Online
    Brand Protection
  Our
    Services
  and/or
  Our
    Marketing
   10




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Our
    Clients
    Operations,
    Information Technology & Customer
    Service
    Data
    and Analysis Providers
    Competition
    Bail
    Bonds Industry Solutions
  Our
    Services
    Our
    Marketing
   11




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Our
    Clients
    Operations,
    Information Technology & Customer
    Service
      Data
    and Analysis Providers
    Competition
    Government
    Regulation
    Credit
    Reporting Laws
   12




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Privacy
      Marketing
    Laws and Regulations
     13




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Insurance
    Laws
    Canadian
    Laws
    Laws
    and Regulations Particularly Affecting Our Background Screening,
    Online Brand Protection, and Bail Bonds Industry Solutions
    Segments
     14




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Intellectual
    Property
    Financial
    Information About Segments and Geographic Areas
  Form 10-K
  Employees
    ITEM 1A.
    RISK
    FACTORS  We believe the following risk factors, as well as the other
    information contained in this Annual Report on
    Form 10-K,
    are material to an understanding of our company. Any of the
    following risks as well as other risks and uncertainties
    discussed in this Annual Report on
    Form 10-K
    could have a material adverse effect on our business, financial
    condition, results of operations or prospects and cause the
    value of our stock to decline. Additional risks and
    uncertainties that we are unaware of, or that are currently
    deemed immaterial, also may become important factors that affect
    us.
  Risks
    Related to our Business
  Weakness
    in the U.S. economy may negatively impact our consumer base and
    financial institution clients.
    Consumers.
  Financial Institutions.
 15




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Disruptions
    in the world markets adversely affecting financial institutions
    could adversely affect our business.
    We
    must replace the subscribers we lose in the ordinary course of
    business and, if we fail to do so, our revenue and subscriber
    base will decline.
    
    changing subscriber preferences;
    competitive price pressures;
    general economic conditions;
    subscriber dissatisfaction;
    cancellation of subscribers due to credit card declines; and
    credit or charge card holder turnover.     16




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We
    historically have depended upon a few clients to derive a
    significant portion of our revenue.
    If one
    or more of our agreements with clients were to be terminated or
    expire, or one or more of our clients were to reduce or change
    (or threaten to reduce or change) the marketing of our services,
    we would lose access to prospective subscribers and could lose
    sources of revenue and profit.
      We are
    substantially dependent upon our consumer products and services
    for a significant portion of our revenue, and market demand for
    these services could decrease.
    If we lose our ability to purchase data from any of the
    three major credit reporting agencies, each of which is a
    competitor of ours, demand for our services could
    decrease.
   17




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Our
    consumer products and services depend on data and technology
    from third party suppliers, and any failure of that data or
    those technologies or their suppliers could harm our products
    and services and our business.
    A
    failure of any of the insurance companies that underwrite the
    insurance products or related benefits provided as part of our
    consumer products and services, or refusal by those insurance
    companies to provide the expected insurance, could harm our
    business.
    We may
    incur substantial marketing expenses as we enter new businesses,
    develop new products or increase our direct marketing
    arrangements, which could cause our operating income to decline
    on a quarterly basis and our stock price to drop.
  direct-to-consumer direct-to-consumer
  If we
    experience system failures or interruptions in our
    telecommunications or information technology infrastructure, our
    revenue could decrease and our reputation could be
    harmed.
    We and
    our clients outsource telemarketing to third parties who may
    take actions that lead to negative publicity and consumer
    dissatisfaction.
   18




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on-site
  We may
    lose subscribers and customers and significant revenue if our
    existing products and services become obsolete, or if we fail to
    introduce new products and services with broad appeal or fail to
    do so in a timely or cost-effective manner.
    We may
    lose subscribers and significant revenue if our subscribers
    cease to maintain the accounts through which they are billed for
    our products and services, or our clients change their billing
    or credit practices or policies.
    We may
    not be able to develop and maintain relationships with third
    party providers, and failures by those third parties could harm
    our business and prospects.
    Our
    senior secured credit agreement provides our lenders with a
    first-priority lien against substantially all of our assets and
    contains financial covenants and other restrictions on our
    actions, and it could therefore limit our operational
    flexibility or otherwise adversely affect our financial
    condition.
   19




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We may
    be unable to meet our future capital requirements to grow our
    business, which could adversely impact our financial condition
    and growth strategy.
    We
    depend on key members of our management and marketing
    personnel.
    If we
    determine in the future that we are required to establish
    reserves or we incur liabilities for any litigation that has
    been or may be brought against us, our results of operations,
    cash flow and financial condition could be materially and
    adversely affected.
  class-action
  We may
    not be able to consummate acquisitions or investments that are
    accretive or which improve our financial
    condition.
  and/or
  and/or
  We may
    not realize planned benefits of our acquisitions or
    investments.
   20




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
    unexpected losses of key employees, customers and suppliers of
    the acquired operations;
    difficulties in integrating the financial, technological and
    management standards, processes, procedures and controls of the
    acquired businesses with those of our existing operations;
    challenges in managing the increased scope, geographic diversity
    and complexity of our operations;
    establishing the internal controls and procedures that we are
    required to maintain under the Sarbanes-Oxley Act of 2002;
    mitigating contingent or assumed liabilities or unexpected
    costs; and
    risks of entering new markets, such as the United Kingdom and
    other global markets for our Background Screening and Online
    Brand Protection segments, or markets in which we have limited
    prior experience, such as the bail bond industry and online
    brand protection industry.  We may
    not realize planned benefits of our membership agreement or
    other customer portfolio acquisitions.
    Screening
    International is subject to additional risks due to its
    international scope.
     21




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Fluctuations
    of foreign currency values may adversely affect our reported
    revenue, results of operations and financial
    condition
    We
    recognized substantial impairment charges in 2008 and 2009 and
    may continue to incur future impairments of goodwill and other
    assets, both tangible and intangible, in the
    future.
             22




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Our
    stock price fluctuates and may continue to fluctuate
    significantly over a short period of time.
  period-to-period
  
    the timing and rate of subscription cancellations and additions;
    the loss of a key client or a change by a key client in the
    marketing of our products and services;
    our ability to introduce new and improve existing products and
    services on a timely basis;
    the introduction of competing products and services by our
    competitors;
    the demand for consumer subscription services generally;
    the ability of third parties to market and support our
    services; and
    general economic conditions.  Insiders
    have substantial control over us and could delay or prevent a
    change in corporate control, which may harm the market price of
    our common stock.
   23




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Risks
    Related to our Industry
  Our
    failure to protect private data could damage our reputation and
    cause us to expend capital and resources to protect against
    future security breaches or other unauthorized
    access.
    We are
    subject to government regulation and increasing public scrutiny,
    which could impede our ability to market and provide our
    services and have a material adverse effect on our
    business.
        Marketing
    laws and regulations may materially limit our or our
    clients ability to offer our products and services to
    consumers.
   24




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Laws
    requiring the free issuance of credit reports by credit
    reporting agencies, and other services that must be provided by
    credit reporting agencies under the law, could impede our
    ability to obtain new subscribers or maintain existing
    subscribers and could have a material adverse effect on our
    revenue.
    We are
    subject to legal claims, including consumer class action
    litigation and government agency enforcement, that could require
    us to pay damages and/or change our business
    practices.
    Competition
    could reduce our market share or decrease our
    revenue.
   25




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ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    Approx.



LeaseLocation

Square Feet

Segment

ExpirationChantilly, VA(1)


88,273


Consumer Products and Services


2019Rio Rancho, NM


28,000


Consumer Products and Services


2013Manassas, VA


11,500


Consumer Products and Services


2013Winchester, VA


22,594


Background Screening


2010Hammersmith, West London, UK


6,125


Background Screening


2013Albany, NY


7,730


Bail Bonds Industry Solutions


2011Gainesville, FL


2,566


Online Brand Protection


2011Phoenix, AZ


300


Online Brand Protection


2010     (1)
    
    Effective July 2009, we relocated our headquarters to a new
    location. The lease expires in ten years, subject to early
    termination provision.      ITEM 3.
    LEGAL
    PROCEEDINGS   26




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ITEM 4.
    (REMOVED
    AND RESERVED)    Executive
    Officers of the Registrant
    Name

Age

PositionMichael R. Stanfield


59


Chairman, Chief Executive Officer and DirectorNeal B. Dittersdorf


50


Chief Legal Officer and Chief Administrative OfficerJohn G. Scanlon


42


Chief Operating Officer, Business ServicesSteven A. Schwartz


49


Executive Vice President, Consumer ServicesChristopher W. Shenefelt


51


Executive Vice President, OperationsGeorge (Chip) K. Tsantes


50


Executive Vice President and Chief Technology OfficerMadalyn C. Behneman


46


Senior Vice President and Principal Financial Officer   Michael R. Stanfield
  Neal B. Dittersdorf
 27




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John G. Scanlon,
  Steven A. Schwartz
  Christopher W. Shenefelt
  George (Chip) K. Tsantes
  Madalyn C. Behneman
 28




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    Sales Priceper ShareHigh

Low2008 Quarter ended:March 31, 2008

$
9.00


$
7.10June 30, 2008

$
11.47


$
8.61September 30, 2008

$
11.25


$
8.13December 31, 2008

$
9.41


$
1.97   Sales Priceper ShareHigh

Low2009 Quarter ended:March 31, 2009

$
5.48


$
3.66June 30, 2009

$
5.13


$
2.79September 30, 2009

$
6.13


$
3.90December 31, 2009

$
5.99


$
4.05      29




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ITEM 6.
    SELECTED
    FINANCIAL DATA  SELECTED
    CONSOLIDATED FINANCIAL DATA
  Form 10-K.
  Years Ended December 31,2005


2006


2007


2008


2009(In thousands, except per share data)Statements of Operations Data(1):Revenue

$
165,171


$
201,051


$
271,723


$
361,607


$
364,632Operating expenses:Marketing


19,646



25,173



36,285



52,439



65,267Commissions


26,687



25,786



52,624



86,008



110,348Cost of revenue


57,351



75,188



101,815



114,338



102,767General and administrative


34,518



49,978



59,386



67,801



72,235Goodwill, intangible and long-lived asset impairment charges(5)














44,702



7,259Depreciation


6,115



8,661



9,081



9,372



8,294Amortization


342



1,357



3,346



10,789



9,470Impairment of software development costs(2)


1,515















Total operating expenses


146,174



186,143



262,537



385,449



375,640Operating income (loss)


18,997



14,908



9,186



(23,842
)


(11,008
)Interest income (expense)


1,183



780



(581
)


(2,365
)


(1,199
)Other income (expense)


37



173



1,139



(1,686
)


1,789Income (loss) before income taxes and noncontrolling interest


20,217



15,861



9,744



(27,893
)


(10,418
)Income tax (expense) benefit(4)


(7,747
)


(6,328
)


(4,329
)


2,912



(315
)Net (income) loss attributable to noncontrolling interest






(97
)


1,451



9,004



4,380Net income (loss) attributable to Intersections Inc.

$
12,470


$
9,436


$
6,866


$
(15,977
)

$
(6,353
)Net income (loss) per share:Basic

$
0.73


$
0.56


$
0.40


$
(0.93
)

$
(0.36
)Diluted

$
0.70


$
0.54


$
0.39


$
(0.93
)

$
(0.36
)Weighted average shares outstanding:Basic


17,002



16,770



17.096



17,264



17,503Diluted


17,815



17,606



17,479



17,264



17,503 30




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Years Ended December 31,2005


2006


2007


2008


2009(In thousands, except per share data)Balance Sheet Data:Cash and cash equivalents

$
17,555


$
15,580


$
19,780


$
10,762


$
12,394Deferred subscription solicitation costs


8,818



11,786



21,912



28,951



34,256Working capital


52,493



26,858



30,365



33,661



25,040Total assets


123,187



179,467



206,268



201,629



192,171Long-term debt


2,797



13,304



23,046



38,369



33,074Total stockholders equity

$
92,944


$
104,576


$
114,848


$
101,439


$
96,407Statement of Cash Flow Data:Cash inflows (outflows) from:Operating activities

$
17,597


$
17,897


$
4,589


$
20,761


$
17,359Investing activities


(3,225
)


(33,596
)


(11,481
)


(47,180
)


(6,992
)Financing activities

$
(8,844
)

$
13,583


$
11,098


$
17,464


$
(8,551
)Other Data:Subscribers at beginning of period


2,885



3,660



4,626



5,259



4,730New subscribers  indirect


2,182



2,460



2,270



1,831



818New subscribers  direct(3)


700



1,168



1,825



2,295



2,230Cancelled subscribers within first 90 days of subscription


(846
)


(888
)


(1,031
)


(1,046
)


(933
)Cancelled subscribers after first 90 days of subscription(6)


(1,261
)


(1,774
)


(2,431
)


(3,609
)


(2,544
)Subscribers at end of period


3,660



4,626



5,259



4,730



4,301Total revenue

$
165,171


$
201,051


$
271,723


$
361,607


$
364,632Revenue from transactional sales


(16,263
)


(31,702
)


(35,349
)


(33,247
)


(22,822
)Revenue from lost/stolen credit card registry


(77
)


(81
)


(46
)


(36
)


(46
)Subscription revenue

$
148,831


$
169,268


$
236,328


$
328,324


$
341,764Marketing and commissions

$
46,333


$
50,959


$
88,909


$
138,447


$
175,615Commissions paid on transactional sales


(105
)


(30
)


(13
)


(5
)


(3
)Commissions paid on lost/stolen credit card registry


(36
)


(31
)


(38
)


(55
)


(106
)Marketing and commissions associated with subscription revenue

$
46,192


$
50,898


$
88,858


$
138,387


$
175,506     (1)
    
    Our consolidated financial results include American Background
    Information Services for the period November 12, 2004
    through May 30, 2006, and Screening International, for the
    period May 31, 2006 through December 31, 2009. On
    July 1, 2009, we entered into an agreement with our former
    business partner to acquire the remaining ownership interest in
    Screening International. Our financial results also include
    Intersections Insurance Services, which we acquired in July
    2006. In addition, our consolidated financial results include
    Captira Analytical beginning August 2007 and Net Enforcers
    beginning December 2007.(2)
    
    During the year ended December 31, 2005, we re-assessed the
    development effort related to our small business product. As a
    result, we recognized an impairment charge of approximately
    $1.4 million related to software development costs. In
    addition, we agreed with a client to change certain processes
    that required new software resulting in an additional impairment
    charge of approximately $150 thousand.(3)
    
    We classify subscribers from shared marketing arrangements with
    direct marketing arrangements. 31




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(4)
    
    The income tax benefit for the year ended December 31, 2008
    includes a non-cash increase to record a valuation allowance on
    the cumulative federal, state and foreign deferred tax assets of
    approximately $672 thousand, $116 thousand and
    $1.4 million, respectively. These deferred tax assets are
    primarily related to federal, state and foreign net operating
    loss carryforwards that we believe cannot be utilized in the
    foreseeable future. U.S. GAAP requires a company to evaluate its
    deferred tax assets on a regular basis to determine if a
    valuation allowance against the net deferred tax assets is
    required. A historical cumulative loss is significant negative
    evidence in considering whether deferred tax assets are
    realizable. Due to over two years of cumulative losses and
    projected near term losses at our Background Screening segment,
    a valuation allowance was recorded in the fourth quarter of the
    year ended December 31, 2008. In addition, a valuation
    allowance was recorded on the federal, state and foreign
    deferred tax assets of approximately $1.2 million for the
    year ended December 31, 2009.(5)
    
    A contract with a third party provider, for which we make
    minimum monthly payments for the usage of data and certain
    exclusively rights, was tested for impairment. As a result, in
    the fourth quarter of 2008, we recognized a non-cash impairment
    charge of $15.8 million in accordance with U.S. GAAP. In
    addition, in 2008, we impaired goodwill as part of our annual
    impairment analysis in our Background Screening, Online Brand
    Protection and Bail Bonds Industry Solutions segments of
    $13.7 million, $11.2 million and $1.4 million,
    respectively. We also impaired intangible assets in our Online
    Brand Protection segment of $2.6 million. In 2009, we
    impaired goodwill in our Background Screening segment of
    $6.2 million. We also impaired intangible and long-lived
    assets in our Background Screening, Online Brand Protection and
    Bail Bonds Industry Solutions segments of $147 thousand, $125
    thousand and $824 thousand, respectively.(6)
    
    Includes the loss of approximately 800 thousand subscribers from
    our wholesale relationship with Discover.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following discussion and analysis of our financial
    condition and results of operations should be read together with
    Selected Consolidated Financial Data, and our
    financial statements and accompanying notes appearing elsewhere
    in this Annual Report on
    Form 10-K.
    This discussion contains forward-looking statements, based on
    current expectations and related to future events and our future
    financial performance, that involve risks and uncertainties. Our
    actual results may differ materially from those anticipated in
    these forward-looking statements as a result of many important
    factors, including those set forth under Risk
    Factors, Forward-Looking Statements and
    elsewhere in this Annual Report on
    Form 10-K.
  Overview
   32




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Consumer
    Products and Services
            
    Direct marketing arrangements:  Under direct
    marketing arrangements, we bear most of the new subscriber
    marketing costs and pay our client a commission for revenue
    derived from subscribers. These commissions could be payable
    upfront in a lump sum on a per subscriber basis for the
    subscribers enrollment, periodically over the life of a
    subscriber, or through a combination of both. These arrangements
    generally result in negative cash flow over the first several
    months after a program is launched due to the upfront nature of
    the marketing investments. In some arrangements, we pay the
    client a service fee for access to the clients customers
    or billing of the subscribers by the client, and we may
    reimburse the client for certain of its
    out-of-pocket
    marketing costs incurred in obtaining the subscriber.
    Indirect marketing arrangements:  Under
    indirect marketing arrangements, our client bears the marketing
    expense and pays us a service fee or percentage of the revenue.
    Because the subscriber acquisition cost is borne by our client
    under these arrangements, our revenue per subscriber is
    typically lower than that under direct marketing arrangements.
    Indirect marketing arrangements generally provide positive cash
    flow earlier than direct arrangements and the ability to obtain
    subscribers and utilize marketing channels that the clients
    otherwise may not make available.
    Shared marketing arrangements:  Under shared
    marketing arrangements, marketing expenses are shared by us and
    the client in various proportions, and we may pay a commission
    to or receive a service fee from the client. Revenue generally
    is split relative to the investment made by our client and us. 33




---



##### 



As of December 31,2007


2008


2009(In thousands)Indirect marketing arrangements


3,301



2,114



1,677Direct and shared marketing arrangements


1,958



2,616



2,624Total subscribers


5,259



4,730



4,301      34




---



##### 



Percentage
    of Revenue for the
    Years Ended December 31,
  Client

Relationship

2007

2008

2009Bank of America (includes MBNA)

Shared/Direct Marketing


33
%


48
%


58
%Capital One (direct and through Equifax agreement)

Indirect Marketing


10
%


7
%


5
%Citibank

Direct Marketing


5
%


4
%


6
%Citibank

Indirect Marketing


6
%


4
%


4
%         Background
    Screening
   35




---



##### 



Online
    Brand Protection
  and/or
  Bail
    Bonds Industry Solutions
   36




---



##### 



Critical
    Accounting Policies
    Goodwill,
    Identifiable Intangibles and Other Long Lived
    Assets
             37




---



##### 



start-up
       38




---



##### 



39




---



##### 



Revenue
    Recognition
      Identity
    Theft, Credit Management and Background Services
     40




---



##### 



Accidental
    Death Insurance and other Membership Products
        Other
    Monthly Subscription Products
    Deferred
    Subscription Solicitation and Advertising
   41




---



##### 



Commission
    Costs
        Share
    Based Compensation
     42




---



##### 



2007

2008

2009Expected dividend yield

0%

0%

0%Expected volatility

38%

38%

55.4%Weighted average risk free interest rate

4.19%

3.06%

2.00%Weighted average expected life of options

6.2 years

6.2 years

6.2 years   Expected Dividend Yield.
  Expected Volatility.
  Risk-free Interest Rate.
  Expected Term.
    Income
    Taxes
     43




---



##### 



Foreign
    Currency Translation
      Recent
    Accounting Pronouncements
  The FASB Accounting Standards
    Codification and the Hierarchy of Generally Accepted Accounting
    Principles
  Fair Value
    Measurement and Disclosures  Investments in Certain
    Entities That Calculate Net Asset Value per Share (or Its
    Equivalent), Financial Services  Investment
    Companies Fair Value Measurements and Disclosures
 44




---



##### 



Equity,
  Consolidation, Consolidation Consolidation Consolidation
  Accounting
    Standards Updates Not Yet Effective
  Consolidation  Consolidation of Variable
    Interest Entities
  Revenue
    Recognition  Multiple-Deliverable Revenue
    Arrangements. Multiple-Element Arrangements
  Software  Certain Revenue Arrangements That
    Include Software Elements. Software-Revenue
    Recognition.
  Fair Value
    Measurements and Disclosures
 45




---



##### 



Trends
    Related to the Current Economic Environment
  and/or
  Results
    of Operations
    Year Ended December 31,2007


2008


2009Revenue


100.0
%


100.0
%


100.0
%Operating expenses:Marketing


13.3



14.5



17.9Commissions


19.3



23.8



30.2Cost of revenue


37.5



31.6



28.2General and administrative


21.9



18.7



19.8Goodwill, intangible and long-lived asset impairment charges






12.4



2.0Depreciation


3.4



2.6



2.3Amortization


1.2



3.0



2.6Total operating expenses


96.6



106.6



103.0Operating income (loss)


3.4



(6.6
)


(3.0
)Interest expense


(0.2
)


(0.7
)


(0.3
)Other income (expense)


0.4



(0.5
)


0.4Income (loss) before taxes and noncontrolling interest


3.6



(7.8
)


(2.9
)Income tax (expense) benefit


(1.6
)


0.8



(0.0
)Net income (loss)


2.0



(7.0
)


(2.9
)Net loss attributable to noncontrolling interest


0.5



2.5



1.2Net income (loss) attributable to Intersections, Inc.


2.5
%


(4.5
)%


(1.7
)%    46




---



##### 



Years
    Ended December 31, 2008 and 2009 (in
    thousands):
    Consumer








Bail BondsProducts and


Background


Online Brand


IndustryServices


Screening


Protection


Solutions


ConsolidatedYear Ended December 31, 2008Revenue

$
330,973


$
27,843


$
2,662


$
129


$
361,607Operating expenses:Marketing


52,439















52,439Commissions


86,008















86,008Cost of revenue


96,568



16,644



917



209



114,338General and administrative


48,808



14,656



2,167



2,170



67,801Goodwill, intangible and long-lived asset impairment charges


15,771



13,715



13,826



1,390



44,702Depreciation


8,411



946



6



9



9,372Amortization


9,221



505



637



426



10,789Total operating expenses


317,226



46,466



17,553



4,204



385,449Income (loss) from operations

$
13,747


$
(18,623
)

$
(14,891
)

$
(4,075
)

$
(23,842
)Year Ended December 31, 2009Revenue

$
343,695


$
18,462


$
2,133


$
342


$
364,632Operating expenses:Marketing


65,267















65,267Commissions


110,348















110,348Cost of revenue


90,016



11,687



875



189



102,767General and administrative


52,847



10,819



6,820



1,749



72,235Goodwill, intangible and long-lived asset impairment charges






6,310



125



824



7,259Depreciation


7,380



858



12



44



8,294Amortization


8,583



392



69



426



9,470Total operating expenses


334,441



30,066



7,901



3,232



375,640Income (loss) from operations

$
9,254


$
(11,604
)

$
(5,768
)

$
(2,890
)

$
(11,008
)  47




---



##### 



Consumer
    Products and Services Segment
  OVERVIEW
    Years Ended December 31,2008


2009


Difference


%Revenue

$
330,973


$
343,695


$
12,722



3.8
%Operating expenses:Marketing


52,439



65,267



12,828



24.5
%Commissions


86,008



110,348



24,340



28.3
%Cost of revenue


96,568



90,016



(6,552
)


(6.8
)%General and administrative


48,808



52,847



4,039



8.3
%Goodwill, intangible and long-lived asset impairment charges


15,771







(15,771
)


(100.0
)%Depreciation


8,411



7,380



(1,031
)


(12.3
)%Amortization


9,221



8,583



(638
)


(6.9
)%Total operating expenses


317,226



334,441



17,215



5.4
%Income from operations

$
13,747


$
9,254


$
(4,493
)


(32.7
)%   Revenue.
    Years EndedDecember 31,2008

2009Percentage of subscribers from direct marketing arrangements to
    total subscribers


55.3
%


61.0
%Percentage of new subscribers acquired from direct marketing
    arrangements to total new subscribers acquired


44.6
%


73.1
%Percentage of revenue from direct marketing arrangements to
    total subscription revenue


78.9
%


87.6
%   Marketing Expenses.
 48




---



##### 



Commissions Expenses.
    Cost of Revenue.
    General and Administrative Expenses.
      Goodwill, intangible and long-lived asset impairment
    charge.
    Depreciation.
   49




---



##### 



Amortization.
      Background
    Screening Segment
  OVERVIEW
    Years Ended December 31,2008


2009


Difference


%Revenue

$
27,843


$
18,462


$
(9,381
)


(33.7
)%Operating expenses:Cost of revenue


16,644



11,687



(4,957
)


(29.8
)%General and administrative


14,656



10,819



(3,837
)


(26.2
)%Goodwill, intangible and long-lived asset impairment charges


13,715



6,310



(7,405
)


(54.0
)%Depreciation


946



858



(88
)


(9.3
)%Amortization


505



392



(113
)


(22.4
)%Total operating expenses


46,466



30,066



(16,400
)


(35.3
)%Loss from operations

$
(18,623
)

$
(11,604
)

$
7,019



37.7
%   Revenue.
  Cost of Revenue.
 50




---



##### 



General and Administrative Expenses.
    Goodwill, intangible and long-lived asset impairment
    charge.
  Online
    Brand Protection Segment
    Years Ended December 31,2008


2009


Difference


%Revenue

$
2,662


$
2,133


$
(529
)


(19.9
)%Operating expenses:Cost of revenue


917



875



(42
)


(4.6
)%General and administrative


2,167



6,820



4,653



214.7
%Goodwill, intangible and long-lived asset impairment charges


13,826



125



(13,701
)


(99.1
)%Depreciation


6



12



6



100.0
%Amortization


637



69



(568
)


(89.2
)%Total operating expenses


17,553



7,901



(9,652
)


(55.0
)%Loss from operations

$
(14,891
)

$
(5,768
)

$
9,123



61.3
%   Revenue.
  Cost of Revenue.
    General and Administrative Expenses.
 51




---



##### 



Goodwill, intangible and long-lived asset impairment
    charge.
  Amortization.
    Bail
    Bonds Industry Solutions Segment
    Years Ended December 31,2008


2009


Difference


%Revenue

$
129


$
342


$
213



165.1
%Operating expenses:Cost of revenue


209



189



(20
)


(9.6
)%General and administrative


2,170



1,749



(421
)


(19.4
)%Goodwill, intangible and long-lived asset impairment charges


1,390



824



(566
)


(40.7
)%Depreciation


9



44



35



388.9
%Amortization


426



426







0.0
%Total operating expenses


4,204



3,232



(972
)


(23.1
)%Loss from operations

$
(4,075
)

$
(2,890
)

$
1,185



29.1
%   Revenue.
  Cost of Revenue.
    General and Administrative Expenses.
   52




---



##### 



Goodwill, intangible and long-lived asset impairment
    charge.
  Interest
    Income
    Interest
    Expense
      Other
    Income (Expense)
    Income
    Taxes
   53




---



##### 



Years
    Ended December 31, 2007 and 2008 (in
    thousands):
    Consumer








Bail BondsProducts and


Background


Online Brand


IndustryServices


Screening


Protection


Solutions


ConsolidatedYear Ended December 31, 2007Revenue

$
241,968


$
29,508


$
218


$
29


$
271,723Operating expenses:Marketing


36,285















36,285Commissions


52,624















52,624Cost of revenue


83,891



17,738



85



101



101,815General and administrative


44,028



14,542



96



720



59,386Goodwill, intangible and long-lived asset impairment charges


















Depreciation


8,145



900







36



9,081Amortization


2,599



505



64



178



3,346Total operating expenses


227,572



33,685



245



1,035



262,537Income (loss) from operations

$
14,396


$
(4,177
)

$
(27
)

$
(1,006
)

$
9,186Year Ended December 31, 2008Revenue

$
330,973


$
27,843


$
2,662


$
129


$
361,607Operating expenses:Marketing


52,439















52,439Commissions


86,008















86,008Cost of revenue


96,568



16,644



917



209



114,338General and administrative


48,808



14,656



2,167



2,170



67,801Goodwill, intangible and long-lived asset impairment charges


15,771



13,715



13,826



1,390



44,702Depreciation


8,411



946



6



9



9,372Amortization


9,221



505



637



426



10,789Total operating expenses


317,226



46,466



17,553



4,204



385,449Income (loss) from operations

$
13,747


$
(18,623
)

$
(14,891
)

$
(4,075
)

$
(23,842
)  54




---



##### 



Consumer
    Products and Services Segment
  Years Ended December 31,2007


2008


Difference


%Revenue

$
241,968


$
330,973


$
89,005



36.8
%Operating expenses:Marketing


36,285



52,439



16,154



44.5
%Commissions


52,624



86,008



33,384



63.4
%Cost of revenue


83,891



96,568



12,677



15.1
%General and administrative


44,028



48,808



4,780



10.9
%Goodwill, intangible and long-lived asset impairment charges






15,771



15,771



100.0
%Depreciation


8,145



8,411



266



3.3
%Amortization


2,599



9,221



6,622



254.8
%Total operating expenses


227,572



317,226



89,654



39.4
%Income (loss) from operations

$
14,396


$
13,747


$
(649
)


(4.5
)%   Revenue.
    Years EndedDecember 31,2007

2008Percentage of subscribers from direct marketing arrangements to
    total subscribers


37.2
%


55.3
%Percentage of new subscribers acquired from direct marketing
    arrangements to total new subscribers acquired


44.7
%


44.6
%Percentage of revenue from direct marketing arrangements to
    total subscription revenue


68.2
%


78.9
%   Marketing Expenses.
   55




---



##### 



Commission Expenses.
    Cost of Revenue.
    General and Administrative Expenses.
      Goodwill, intangible and long-lived asset impairment
    charge.
    Depreciation.
    Amortization.
   56




---



##### 



Background
    Screening Segment
  Years Ended December 31,2007


2008


Difference


%Revenue

$
29,508


$
27,843


$
(1,665
)


(5.6
)%Operating expenses:Cost of revenue


17,738



16,644



(1,094
)


(6.2
)%General and administrative


14,542



14,656



114



0.8
%Goodwill, intangible and long-lived asset impairment charges






13,715



13,715



100.0
%Depreciation


900



946



46



5.1
%Amortization


505



505







Total operating expenses


33,685



46,466



12,781



37.9
%Loss from operations

$
(4,177
)

$
(18,623
)

$
(14,446
)


(345.8
)%   Revenue.
  Cost of Revenue.
    General and Administrative Expenses.
    Goodwill, intangible and long-lived asset impairment
    charge.
    Depreciation.
   57




---



##### 



Online
    Brand Protection Segment
  Years Ended December 31,2007


2008


Difference


%Revenue

$
218


$
2,662


$
2,444



1,121.1
%Operating expenses:Cost of revenue


85



917



832



978.8
%General and administrative


96



2,167



2,071



2,157.3
%Goodwill, intangible and long-lived asset impairment charges






13,826



13,826



100.0
%Depreciation






6



6



100.0
%Amortization


64



637



573



895.3
%Total operating expenses


245



17,553



17,308



7,064.5
%Loss from operations

$
(27
)

$
(14,891
)

$
(14,864
)


55,051.9
)%   Revenue.
  Cost of Revenue.
    General and Administrative Expenses.
    Goodwill, intangible and long-lived asset impairment
    charge.
    Amortization.
   58




---



##### 



Bail
    Bonds Industry Solutions Segment
  Years Ended December 31,2007


2008


Difference


%Revenue

$
29


$
129


$
100



344.8
%Operating expenses:Cost of revenue


101



209



108



106.9
%General and administrative


720



2,170



1,450



201.4
%Goodwill, intangible and long-lived asset impairment charges






1,390



1,390



100.0
%Depreciation


36



9



(27
)


(75.0
)%Amortization


178



426



248



139.3
%Total operating expenses


1,035



4,204



3,169



306.2
%Loss from operations

$
(1,006
)

$
(4,075
)

$
(3,069
)


(305.1
)%   Revenue.
  Cost of Revenue.
    General and Administrative Expenses.
  Goodwill, intangible and long-lived asset impairment
    charge.
  Amortization.
    Interest
    Income
    Interest
    Expense
   59




---



##### 



Other
    Income (Expense)
    Liquidity
    and Capital Resources
          Years Ended December 31,2008


2009


Difference(In thousands)Cash flows provided by operating activities

$
20,761


$
17,359


$
(3,402
)Cash flows used in investing activities


(47,180
)


(6,992
)


40,188Cash flows provided by (used in) financing activities


17,464



(8,551
)


(26,015
)Effect of exchange rate changes on cash and cash equivalents


(63
)


(184
)


(121
)Net (decrease) increase in cash and cash equivalents


(9,018
)


1,632



10,650Cash and cash equivalents, beginning of year


19,780



10,762



(9,018
)Cash and cash equivalents, end of year

$
10,762


$
12,394


$
1,632    60




---



##### 



61




---



##### 



Year Ending December 31,Total


2010


2011


2012


2013


2014


ThereafterContractual Obligations at December 31, 2009Capital leases(1)

$
2,709


$
1,028


$
989


$
635


$
57


$



$
Operating leases


20,788



1,989



2,010



2,235



2,520



2,001



10,033Long term debt(2)


38,984



7,000



30,000



1,050



467



467



Software license & other arrangements(3)


12,308



6,113



6,195















$
74,789


$
16,130


$
39,194


$
3,920


$
3,044


$
2,468


$
10,033     (1)
    
    Includes interest expenses(2)
    
    Effective as of January 31, 2008, we amended our Credit
    Agreement in order to increase the term loan facility to
    $28 million. The amendment provides that the maturity date
    for the revolving credit facility and the term loan facility
    under the Credit Agreement will be December 31, 2011. The
    amendment also amends certain financial covenants which we are
    required to maintain compliance with under the Credit Agreement,
    including consolidated leverage ratio covenants, and provides
    new mandatory term loan prepayments based on excess 62




---



##### 



cash flow and the sale or issuance of equity interests, provides
    a new amortization schedule for the term loan and revises the
    acquisition covenant to reduce permitted costs of acquisitions.
    This does not include interest expense. In addition, we have a
    $810 thousand non-interest bearing note to Control Risk Group,
    as a result of the purchase of the noncontrolling interest of
    Screening International, LLC and it is classified as long-term
    debt on our consolidated balance sheet.(3)
    
    Other arrangements include payments related to agreements to a
    service provider under which we receive data and other
    information for use in our new fraud protection services. Under
    these arrangements we pay based on usage of the data or
    analytics, and make certain minimum payments in exchange for
    defined limited exclusivity rights. We entered into a new
    agreement with a non-credit data provider, effective
    December 31, 2008, under which we will receive enhanced
    data and services and improved licensing terms. In addition,
    minimum noncanceable payments by us to this provider under the
    new agreement will be lower than under the old agreement by
    $3.0 million and $1.5 million in 2009 and 2010,
    respectively. In addition, we are obligated to pay approximately
    $648 thousand to a related party under contracts through
    December 31, 2010. The amounts in the table represent only
    the noncanceable portion of each respective arrangement. In
    general, contracts can be terminated with 90 day notice.      Fair
    Value
    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  page F-1 Form 10-K.
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES    ITEM 9A(T).
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rule 13a-15(e)
 63




---



##### 



Internal
    Control over Financial Reporting
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
      Attestation
    Report of Registered Public Accounting Firm
  page F-3 Form 10-K.
  Changes
    in Internal Control over Financial Reporting
    ITEM 9B.
    OTHER
    INFORMATION    PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   64




---



##### 



ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES    ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES    page F-1.
 65




---



##### 



3. Exhibits
  ExhibitNumber

Description2
.1

Membership Purchase Agreement dated January 31, 2008
    between Registrant and Citibank (South Dakota), N.A.
    (Incorporated by reference to Exhibit 2.3, filed with the
    Form 10-K
    for the year ended December 31, 2007)2
.2

Asset Purchase Agreement dated August 7, 2007 among
    Registrant, Captira Analytical, LLC, Hide NSeek, LLC and
    certain members of Hide NSeek, LLC (Incorporated by
    reference to Exhibit 2.1 filed with the
    Form 8-k
    dated August 7, 2007).2
.3

Stock Purchase Agreement dated November 9, 2007 among
    Registrant, Net Enforcers, Inc. and Joseph C. Loomis.
    (Incorporated by reference to Exhibit 10.24, filed with the
    Form 10-K
    for the year ended December 31, 2007)3
.1

Restated Certificate of Incorporation (Incorporated by reference
    to Exhibit 3.1, filed with the Registrants
    Registration Statement on
    Form S-1
    (File
    No. 333-111194)
    (the
    Form S-1))3
.2

Amended and Restated Bylaws (Incorporated by reference to
    Exhibit 3.1, filed with the
    Form 8-K
    dated October 14, 2007)10
.1

Amended and Restated Marketing and Services Agreement dated
    April 20, 2007, by and between the Registrant, on the one
    hand, and Capital One Bank and Capital One Services Inc., on the
    other hand (Incorporated by reference to Exhibit 10.1,
    filed with the Registrants
    Form 8-K
    dated April 20, 2007).10
.2

Program Provider Agreement, dated as of August 1, 2002,
    among the Registrant, Citibank (South Dakota), N.A., Citibank
    USA N.A. and Citicorp Credit Services, Inc. (Incorporated by
    reference to Exhibit 10.5, filed with the
    Form S-1)10
.3.1

Agreement  Consumer Disclosure Services, dated as of
    April 7, 1997, by and between CreditComm Services LLC,
    Equifax Credit Information Services, Inc. and Digital Matrix
    Systems, as amended by the First Addendum dated March 30,
    2001 and the Second Addendum dated November 27, 2001.
    (Incorporated by reference to Exhibit 10.6, filed with the
    Form S-1)10
.3.2

Amendment, effective as of January 24, 2006, of
    Agreement  Consumer Disclosure Service, between the
    Registrant and Equifax Credit Information Services, Inc.
    (Incorporated by reference to Exhibit 10.3, filed with the
    Form 8-K
    dated January 30, 2006).10
.4.1

Agreement for Credit Monitoring Batch Processing Services, dated
    as of November 27, 2001, among the Registrant, CreditComm
    Services LLC and Equifax Services, Inc. (Incorporated by
    reference to Exhibit 10.7, filed with the
    Form S-1)10
.4.2

Amendment, effective as of January 24, 2006, of Agreement
    for Credit Monitoring Batch Processing Services, between the
    Registrant and Equifax Consumer Services, Inc. (Incorporated by
    reference to Exhibit 10.2, filed with the
    Form 8-K
    dated January 30, 2006).10
.5.1

Master Agreement for Marketing, Operational and Cooperative
    Services, dated as of November 27, 2001, among the
    Registrant, CreditComm Services LLC and Equifax Consumer
    Services, Inc., as amended, together with Addendum Number Two,
    dated May 31, 2002. (Incorporated by reference to
    Exhibit 10.8, filed with the
    Form S-1)10
.5.2

Amendment, effective as of January 24, 2006, of Master
    Agreement for Marketing, Operational and Cooperative Services,
    between the Registrant and Equifax Consumer Services, Inc.
    (Incorporated by reference to Exhibit 10.1, filed with the
    Form 8-K
    dated January 30, 2006).10
.9.1

Consumer Review Service Reseller Service Agreement between the
    Registrant and Experian Information Solutions, Inc.
    (Incorporated by reference to Exhibit 10.12, filed with the
    Form S-1)10
.9.2

Amendment, dated November 15, 2006, to the Pricing Schedule
    to the Consumer Review Services Reseller Agreement, dated
    July 1, 2003 between the Registrant and Experian
    Information Solutions, Inc. (Incorporated by reference to
    Exhibit 10.12.2 filed with the
    Form 10-K
    for the year ended December 31, 2006).10
.10

Agreement, effective as of December 1, 2003, between
    Citibank (South Dakota), N.A., Citibank USA, N.A. and Citicorp
    Credit Services, Inc. and the Registrant. (Incorporated by
    reference to Exhibit 10.13, filed with the
    Form S-1)10
.11

Service Agreement for Consumer Resale, dated as of
    August 31, 1999 by and between CreditComm Services LLC and
    TransUnion Corporation. (Incorporated by reference to
    Exhibit 10.14, filed with the
    Form S-1) 66




---



##### 



ExhibitNumber

Description10
.12.1

Master Agreement dated March 8, 2007 by and between Digital
    Matrix Systems, Inc. and the Registrant. (Incorporated by
    reference to Exhibit 10.3 filed with the
    Form 10-Q
    for the quarter ended March 31, 2007).10
.12.2

Data Services Agreement For Credit Bureau Simulator, effective
    as of September 1, 2004, between Digital Matrix Systems,
    Inc. and the Registrant. (Incorporated by reference to
    Exhibit 10.1, filed with the Registrants Quarterly
    Report on
    Form 10-Q
    for the quarter ended September 30, 2005)10
.12.3

Professional Services Agreement, dated November 11, 2005,
    between Digital Matrix Systems, Inc. and the Registrant.
    (Incorporated by reference to Exhibit 10.15.4 filed with
    the
    Form 10-K
    for the year ended December 31, 2006).10
.12.4

Disaster Recovery Site Agreement, by and among the Registrant
    and Digital Matrix Systems, dated as of March 16, 2006
    (Incorporated by reference to Exhibit 10.1, filed with the
    Form 10-Q
    dated May 5, 2006)10
.13

Employment Agreement between the Registrant and Michael R.
    Stanfield (Incorporated by reference to Exhibit 10.1, filed
    with the
    Form S-1)10
.14

Employment Agreement between the Registrant and Neal Dittersdorf
    (Incorporated by reference to Exhibit 10.19, filed with the
    Form S-1)10
.15

Data Services Agreement for Credit Browser, dated as of
    December 17, 2004, by and between Digital Matrix Systems,
    Inc. and the Registrant (Incorporated by reference to
    Exhibit 10.21, filed with the 2004
    10-K)10
.16

Employment Agreement, dated as of January 13, 2005, by and
    between the Registrant and George K. Tsantes (Incorporated by
    reference to Exhibit 10.22, filed with the 2004
    10-K).10
.17.1

Credit Agreement, by and among the Registrant, certain
    Subsidiaries thereof, Bank of America, N.A., and L/C Issuer,
    dated as of July 3, 2006 (Incorporated by reference to
    Exhibit 10.1, filed with the
    Form 8-K
    dated July 7, 2006)10
.17.2

Amendment dated November 29, 2007 to Credit Agreement dated
    as of July 3, 2006 by and among Registrant, certain
    Subsidiaries thereof, Bank of America, N.A. and L/C Issuer.
    (Incorporated by reference to Exhibit 10.21.2, filed with
    the
    Form 10-K
    for the year ended December 31, 2007)10
.17.3

Amendment effective as of January 31, 2008 to Credit
    Agreement dated as of July 3, 2006 by and among Registrant,
    certain Subsidiaries thereof, Bank of America, N.A. and L/C
    Issuer. (Incorporated by reference to Exhibit 10.21.3,
    filed with the
    Form 10-K
    for the year ended December 31, 2007)10
.17.4

Amendment No. 3 dated as of July 1, 2009 to Credit
    Agreement dated as of July 3, 2006 by and among Registrant,
    certain Subsidiaries thereof, Bank of America, N.A. and L/C
    Issuer (Incorporated by reference to Exhibit 10.1, filed
    with the
    Form 8-K
    dated July 1, 2009)10
.17.5*

Amendment No. 4 dated as of March 11, 2010 to Credit Agreement
    dated as of July 3, 2006 by and among Registrant, certain
    Subsidiaries, thereof, Bank of America, N.A. and
    L/C Issuer.10
.19

Employment Agreement by and between the Registrant and John G.
    Scanlon (Incorporated by reference to Exhibit 10.2, filed
    with the
    Form 8-K
    dated January 5, 2007)14
.1

Code of Ethics of the Registrant (Incorporated by reference to
    Exhibit 14.1, filed with the 2004
    10-K).21
.1*

Subsidiaries of the Registrant.23
.1*

Consent of Deloitte & Touche LLP31
.1*

Certification of Michael R. Stanfield, President and Chief
    Executive Officer, pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.31
.2*

Certification of Madalyn Behneman, Principal Financial Officer,
    pursuant to Section 302 of the
    Sarbanes-Oxley
    Act of 2002.32
.1*

Certification of Michael R. Stanfield, Chief Executive Officer,
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32
.2*

Certification of Madalyn Behneman, Principal Financial Officer,
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.
    
    Confidential treatment requested as to certain portions, which
    portions are omitted and filed separately with the Securities
    and Exchange Commission. 67




---



##### 



INDEX TO
    FINANCIAL STATEMENTS AND SCHEDULE INTERSECTIONS
    INC.
   
 Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Financial Statements of Intersections Inc.:Consolidated Balance Sheets


F-3Consolidated Statements of Operations


F-4Consolidated Statements of Changes in
    Stockholders Equity


F-5Consolidated Statements of Cash Flows


F-6Notes to Consolidated Financial Statements


F-7Schedule II  Valuation and
    Qualifying Accounts


F-45   F-1




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
      F-2




---



##### 



INTERSECTIONS
    INC.
 CONSOLIDATED
    BALANCE SHEETS

December 31, 2008 and 2009

(In thousands) December 31,2008


2009ASSETSCURRENT ASSETS:Cash and cash equivalents

$
10,762


$
12,394Short-term investments


4,955



4,995Accounts receivable, net of allowance for doubtful accounts of
    $235 (2008) and $374 (2009)


29,391



25,111Prepaid expenses and other current assets


5,697



5,182Income tax receivable


7,416



2,460Deferred subscription solicitation costs


28,951



34,256Total current assets


87,172



84,398PROPERTY AND EQUIPMENT, net


16,942



17,802DEFERRED TAX ASSET, net






3,700LONG-TERM INVESTMENT


3,327



3,327GOODWILL


53,102



46,939INTANGIBLE ASSETS, net


32,030



21,613OTHER ASSETS


9,056



14,392TOTAL ASSETS

$
201,629


$
192,171LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt

$
7,014


$
7,000Note payable to Control Risks Group Ltd.


900



Capital leases, current portion


637



1,028Accounts payable


9,802



9,168Accrued expenses and other current liabilities


15,843



17,255Accrued payroll and employee benefits


4,998



2,782Commissions payable


2,401



2,044Deferred revenue


4,381



5,202Deferred tax liability, net, current portion


7,535



14,879Total current liabilities


53,511



59,358LONG-TERM DEBT


37,583



31,393OBLIGATIONS UNDER CAPITAL LEASES, less current portion


786



1,681OTHER LONG-TERM LIABILITIES


4,686



3,332DEFERRED TAX LIABILITY, net, less current portion


2,611



TOTAL LIABILITIES


99,177



95,764COMMITMENTS AND CONTINGENCIES (see note 17 and 19)STOCKHOLDERS EQUITY:Common stock at $0.01 par, shares authorized; 50,000;
    shares issued 18,383 shares (2008) and
    18,662 shares (2009); shares outstanding 17,317 shares
    (2008) and 17,595 shares (2009)


184



187Additional paid-in capital


103,544



104,810Treasury stock, 1,067 shares at cost in 2008 and 2009


(9,516
)


(9,516
)Retained earnings


8,380



2,027Accumulated other comprehensive (loss) income:Cash flow hedge


(1,263
)


(856
)Other


110



(245
)Total Intersections Inc. stockholders equity


101,439



96,407Noncontrolling interest


1,013



TOTAL STOCKHOLDERS EQUITY


102,452



96,407TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
201,629


$
192,171    F-3




---



##### 



INTERSECTIONS
    INC.
 CONSOLIDATED
    STATEMENTS OF OPERATIONS

Years Ended December 31, 2007, 2008 and 2009 2007


2008


2009(In thousands, except per share amounts)REVENUE

$
271,723


$
361,607


$
364,632OPERATING EXPENSES:Marketing


36,285



52,439



65,267Commissions


52,624



86,008



110,348Cost of revenue


101,815



114,338



102,767General and administrative


59,386



67,801



72,235Goodwill, intangible and long-lived asset impairment charges






44,702



7,259Depreciation


9,081



9,372



8,294Amortization


3,346



10,789



9,470Total operating expenses


262,537



385,449



375,640INCOME (LOSS) FROM OPERATIONS


9,186



(23,842
)


(11,008
)Interest income


799



254



151Interest expense


(1,380
)


(2,619
)


(1,350
)Other income (expense)


1,139



(1,686
)


1,789INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTEREST


9,744



(27,893
)


(10,418
)INCOME TAX (EXPENSE ) BENEFIT


(4,329
)


2,912



(315
)NET INCOME (LOSS)


5,415



(24,981
)


(10,733
)NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST


1,451



9,004



4,380NET INCOME (LOSS) ATTRIBUTABLE TO INTERSECTIONS INC.

$
6,866


$
(15,977
)

$
(6,353
)NET INCOME (LOSS) PER SHARE  basic

$
0.40


$
(0.93
)

$
(0.36
)NET INCOME (LOSS) PER SHARE  diluted

$
0.39


$
(0.93
)

$
(0.36
)Weighted average common shares outstanding  basic


17,096



17,264



17,503Weighted average common shares outstanding  diluted


17,479



17,264



17,503    F-4




---



##### 



INTERSECTIONS
    INC.
 CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

Years Ended December 31, 2007, 2008 and 2009 Treasury





Accumulated


TotalCommon


Additional


Stock





Other


Intersections Inc.





TotalStock


Paid-in





Income


Retained


Comprehensive


Stockholders


Noncontrolling


StockholdersShares


Amount


Capital


Shares


(Loss)


Earnings


Income (Loss)


Equity


Interest


Equity(In thousands)BALANCE, JANUARY 1, 2007


17,836


$
178


$
95,462



965


$
(8,600
)

$
17,447


$
89


$
104,576


$
11,450


$
116,026Issuance of common stock upon exercise of stock options and
    vesting of restricted stock units


336



4



1,031



















1,035







1,035Share based compensation










2,715



















2,715







2,715Tax benefit of stock options exercised










498



















498







498Adoption of FIN No. 48






















44







44







44Repurchase of Company stock














102



(916
)










(916
)






(916
)Net loss






















6,866







6,866



(1,451
)


5,415Foreign currency translation adjustments


























30



30



25



55Comprehensive Loss






























10,272



(1,426
)


8,846BALANCE, DECEMBER 31, 2007


18,172


$
182


$
99,706



1,067


$
(9,516
)

$
24,357


$
119


$
114,848


$
10,024


$
124,872Issuance of common stock upon exercise of stock options and
    vesting of restricted stock units


211



2



(343
)


















(341
)






(341
)Share based compensation










4,069



















4,069







4,069Tax benefit of stock options exercised










112



















112







112Net loss






















(15,977
)






(15,977
)


(9,004
)


(24,981
)Foreign currency translation adjustments


























(9
)


(9
)


(7
)


(16
)Cash flow hedge


























(1,263
)


(1,263
)






(1,263
)Comprehensive Loss






























(13,409
)


(9,011
)


(22,420
)BALANCE, DECEMBER 31, 2008


18,383


$
184


$
103,544



1,067


$
(9,516
)

$
8,380


$
(1,153
)

$
101,439


$
1,013


$
102,452Issuance of common stock upon exercise of stock options and
    vesting of restricted stock units


279



3



(670
)


















(667
)






(667
)Share based compensation










4,556



















4,556







4,556Tax deficiency of stock options exercised and vesting of
    restricted stock units










(87
)


















(87
)






(87
)Release of uncertain tax benefits










526



















526







526Purchase of noncontrolling interest










(3,059
)














(200
)


(3,259
)


3,658



399Net loss






















(6,353
)






(6,353
)


(4,380
)


(10,733
)Foreign currency translation adjustments


























(155
)


(155
)


(291
)


(446
)Cash flow hedge


























407



407







407Comprehensive Loss






























(5,032
)


(1,013
)


(6,045
)BALANCE, DECEMBER 31, 2009


18,662


$
187


$
104,810



1,067


$
(9,516
)

$
2,027


$
(1,101
)

$
96,407


$



$
96,407    F-5




---



##### 



INTERSECTIONS
    INC.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS

Years Ended December 31, 2007, 2008 and 2009 2007


2008


2009(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)

$
5,415


$
(24,981
)

$
(10,733
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation


9,210



9,411



8,292Amortization


3,346



10,789



9,470Amortization of gain from sale leaseback


(94
)


(39
)


Loss on disposal of fixed assets


60







64Amortization of debt issuance cost


75



101



83Provision for doubtful accounts


(2
)


213



139Shared based compensation


2,715



4,069



4,556Amortization of deferred subscription solicitation costs


35,012



54,201



66,466Foreign currency transaction (gain) losses, net


61



800



(1,862
)Goodwill, intangible and long-lived asset impairment charges






44,702



7,259Changes in assets and liabilities, net of businesses acquired:Accounts receivable


(2,663
)


(4,440
)


4,212Prepaid expenses and other current assets


(1,018
)


350



572Income tax receivable


(2,242
)


(2,974
)


4,869Deferred subscription solicitation costs


(46,718
)


(67,073
)


(71,722
)Other assets


(4,375
)


(2,296
)


(4,138
)Tax benefit (deficiency) of stock options exercised


(498
)


(112
)


87Accounts payable


4,806



(782
)


(548
)Accrued expenses and other current liabilities


(836
)


743



2,037Accrued payroll and employee benefits


(2,151
)


147



(2,236
)Commissions payable


1,220



(12
)


(357
)Deferred revenue


(2,640
)


1,502



821Deferred income tax, net


4,417



(4,959
)


1,032Other long-term liabilities


1,489



1,401



(1,004
)Net cash provided by operating activities


4,589



20,761



17,359NET CASH USED IN INVESTING ACTIVITIES:Acquisition of property and equipment


(6,075
)


(7,437
)


(7,020
)Sale (purchase) of short-term investments


10,453



(4,955
)


28Purchase of long-term investment






(3,327
)


Cash paid in the acquisition of Intersections Insurances
    Services, Inc.


(5
)






Cash paid in the acquisition of Hide N Seek, LLC, net of
    cash received


(1,686
)






Cash paid in the acquisition of Net Enforcers, Inc., net of cash
    received


(14,168
)


(411
)


Cash paid in the acquisition of intangible membership agreements






(31,050
)


Net cash used in investing activities


(11,481
)


(47,180
)


(6,992
)CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:Repayments under credit agreement


(3,382
)


(16,708
)


(7,011
)Capital lease payments


(1,037
)


(1,077
)


(786
)Borrowings under credit agreement


14,900



35,611



Debt issuance costs






(133
)


Cash proceeds from stock options exercised


1,035



176



3Tax benefit (deficiency) of stock options exercised


498



112



(87
)Withholding tax payment on vesting of restricted stock units and
    options






(517
)


(670
)Repurchase of treasury stock


(916
)






Net cash provided by (used in) financing activities


11,098



17,464



(8,551
)EFFECT OF EXCHANGE RATE ON CASH


(6
)


(63
)


(184
)INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


4,200



(9,018
)


1,632CASH AND CASH EQUIVALENTS  Beginning of period


15,580



19,780



10,762CASH AND CASH EQUIVALENTS  End of period

$
19,780


$
10,762


$
12,394SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid for interest

$
1,084


$
2,019


$
1,515Cash paid for taxes

$
3,078


$
4,520


$
610NONCASH FINANCING AND INVESTING ACTIVITIES:Equipment obtained under capital lease

$



$
621


$
2,185Equipment accrued but not paid

$
363


$
384


$
592Forgiveness of note, accrued interest and payables

$



$



$
1,166Issuance of note in connection with purchase of noncontrolling
    interest (See Note 21)

$



$



$
778    F-6




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years Ended December 31, 2007, 2008 and 2009
  1.
    Organization
    and Business            2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation and Consolidation
     F-7




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Use of
    Estimates
    Cash
    and Cash Equivalents
    Investments
      Foreign
    Currency Translation
     F-8




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Property
    and Equipment
    Life(In years)Machinery and equipment

3-5Software

3-5Furniture and fixtures

5Leasehold improvements

Shorter of lease term or useful lifeBuilding

30   Goodwill,
    Identifiable Intangibles and Other Long Lived
    Assets
           F-9




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        start-up
     F-10




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               F-11




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Derivative
    Financial Instruments
   F-12




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair
    Value Measurements
              Revenue
    Recognition
      Identity
    Theft, Credit Management and Background Services
   F-13




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Accidental
    Death Insurance and other Membership Products
        Other
    Monthly Subscription Products
    Deferred
    Subscription Solicitation and Advertising
   F-14




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Commission
    Costs
       F-15




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Software
    Development Costs
      Income
    Taxes
          Stock-Based
    Compensation
   F-16




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2007

2008

2009Expected dividend yield


0
%


0
%


0
%Expected volatility


38
%


38
%


55.4
%Weighted average risk free interest rate


4.19
%


3.06
%


2.00
%Weighted average expected life of options


6.2 years



6.2 years



6.2 years   Expected Dividend Yield.
  Expected Volatility.
  Risk-free Interest Rate.
  Expected Term.
    Treasury
    Stock
   F-17




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Segment
    Reporting
    3.
    Accounting
    Standards Updates  Accounting
    Standards Updates Recently Adopted
  The FASB Accounting Standards
    Codification and the Hierarchy of Generally Accepted Accounting
    Principles
  Consolidation 
    Noncontrolling Interest in Consolidated Financial
    Statements
  Financial
    Instruments  Disclosures about Derivative Instruments
    and Hedging Activities
 F-18




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Financial Instruments
     Interim Disclosures about Fair Value of Financial
    Instrument
  Fair Value
    Measurement and Disclosures - Investments in Certain Entities
    That Calculate Net Asset Value per Share (or Its
    Equivalent), Financial Services  Investment
    Companies Fair Value Measurements and Disclosures
  Equity.
  Consolidation. Consolidation Consolidation Consolidation
  Accounting
    Standards Updates Not Yet Effective
  Consolidation  Consolidation of Variable
    Interest Entities
 F-19




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Revenue
    Recognition  Multiple-Deliverable Revenue
    Arrangements. Multiple-Element Arrangements
  Software  Certain Revenue Arrangements That
    Include Software Elements. Software-Revenue
    Recognition.
  Fair Value
    Measurements and Disclosures
  4.
    Business
    Acquisitions  Net
    Enforcers
     F-20




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Current assets





$
683Intangible assets:Trade name (estimated useful life of 5 years)

$
395Customer relationships (estimated useful life of 7 years)


2,290Non-compete agreement (estimated useful life of 5 years)


560Existing developed technology assets (estimated useful life of
    5 years)


363Total intangible assets






3,608Goodwill






11,241Other current liabilities






(812
)Net assets acquired





$
14,720         Captira
     F-21




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash paid

$
833Assumption of operating liabilities


637Forgiveness of loans and accrued interest from Intersections


1,567Transaction costs


105$
3,142     Current assets





$
12Property, plant and equipment






36Intangible assets:Trade name (estimated useful life of 4 years)

$
407Existing developed technology assets (estimated useful life of
    4 years)


1,297Total intangible assets






1,704Goodwill






1,390Net assets acquired





$
3,142         5.
    Net
    Income (Loss) Per Common Share     F-22




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2008


2009Net income (loss) available to common shareholders 
    basic and diluted

$
6,866


$
(15,977
)

$
(6,353
)Weighted average common shares outstanding  basic


17,096



17,264



17,503Dilutive effect of common stock equivalents


383







Weighted average common shares outstanding  diluted


17,479



17,264



17,503Income (Loss) per common share:Basic

$
0.40


$
(0.93
)

$
(0.36
)Diluted

$
0.39


$
(0.93
)

$
(0.36
)   6.
    Fair
    Value Measurement    over-the-counter
    Fair Value Measurements at Reporting Date using:Quoted Pricesin Active

SignificantMarkets for

other

SignificantIdentical Assets

Observable

UnobservableDecember 31, 2009

(Level 1)

Inputs (Level 2)

Inputs (Level 3)Assets:US Treasury bills

$
4,995


$
4,995


$



$
Liabilities:Interest rate swap contracts


856







856



  F-23




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair Value Measurements Using:Quoted Prices

Significantin Active

Other

SignificantMarkets for

Observable

Unobservable

TotalIdentical Assets

Inputs

Inputs

GainsFair Value

(Level 1)

(Level 2)

(Level 3)

(Losses)Assets:Goodwill at June 30, 2009

$
3,704


$



$



$
3,704


$
(6,163
)Note Payable at September 30, 2009

$
778


$



$
778


$



$
Long-lived assets held at Captira at December 31, 2009

$



$



$



$



$
(823
)Intangible asset held at Net Enforcers at December 31, 2009

$



$



$



$



$
(126
)Intangible asset held at Background Screening at
    December 31, 2009

$



$



$



$



$
(147
)         7.
    Prepaid
    Expenses and Other Current Assets    December 31,


December 31,2008


2009(In thousands)Prepaid services

$
1,998


$
2,774Prepaid contracts


1,582



440Other


2,117



1,968$
5,697


$
5,182  F-24




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Deferred
    Subscription Solicitation Costs    9.
    Property
    and Equipment    December 31,


December 31,2008


2009(In thousands)Machinery and equipment

$
23,893


$
22,505Software


27,502



33,336Software
    development-in-progress


2,724



3,368Furniture and fixtures


2,020



1,689Leasehold improvements


4,002



3,069Building


725



725Land


25



2560,891



64,717Less: accumulated depreciation


(43,949
)


(46,915
)Property and equipment  net

$
16,942


$
17,802       December 31,


December 31,2008


2009(In thousands)Leased property consisting of machinery and equipment

$
3,213


$
3,213Leased property consisting of software






2,846Leased property


3,213



6,059Less: accumulated depreciation


(2,589
)


(3,201
)Leased property, net

$
624


$
2,858    F-25




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    10.
    Long-Term
    Investments      11.
    Goodwill
    and Intangibles    December 31, 2008Net Carrying








Net CarryingGross


Accumulated


Amount at








Amount atCarrying


Impairment


January 1,








December 31,Amount


Losses


2008


Impairment


Adjustments


2008Consumer Products and Services

$
43,235


$



$
43,235


$



$



$
43,235Background Screening


23,583







23,583



(13,716
)






9,867Online Brand Protection


8,437







8,437



(11,242
)


2,805



Bail Bonds Industry Solutions


1,251







1,251



(1,390
)


139



Total goodwill

$
76,506


$



$
76,506


$
(26,348
)

$
2,944


$
53,102   December 31, 2009Net CarryingGross


Accumulated


Net Carrying








Amount atCarrying


Impairment


Amount at








December 31,Amount


Losses


January 1, 2009


Impairment


Adjustments


2009Consumer Products and Services

$
43,235


$



$
43,235


$



$



$
43,235Background Screening


23,583



(13,716
)


9,867



(6,163
)






3,704Online Brand Protection


11,242



(11,242
)














Bail Bonds Industry Solutions


1,390



(1,390
)














Total goodwill

$
79,450


$
(26,348
)

$
53,102


$
(6,163
)

$



$
46,939  F-26




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          December 31, 2008Gross








NetCarrying


Accumulated





CarryingAmount


Amortization


Impairment


AmountAmortizable intangible assets:Customer related

$
42,992


$
(11,916
)

$
(1,794
)

$
29,282Marketing related


3,780



(2,449
)


(170
)


1,161Technology related


3,159



(1,390
)


(182
)


1,587Non-compete agreement


559



(121
)


(438
)


Total amortizable intangible assets

$
50,490


$
(15,876
)

$
(2,584
)

$
32,030   December 31, 2009Gross








NetCarrying


Accumulated





CarryingAmount


Amortization


Impairment


AmountAmortizable intangible assets:Customer related

$
40,857


$
(19,766
)

$
(147
)

$
20,944Marketing related


3,553



(3,048
)


(287
)


218Technology related


2,796



(1,832
)


(513
)


451Total amortizable intangible assets

$
47,206


$
(24,646
)

$
(947
)

$
21,613      F-27




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the years ending December 31,2010

$
6,7162011


3,8282012


3,5422013


3,4832014


3,437Thereafter


607$
21,613   12.
    Other
    Assets    December 31,


December 31,2008


2009(In thousands)Prepaid royalty payments

$
75


$
75Prepaid contracts


70



1,341Escrow receivable


501



Prepaid commissions


7,412



7,362Other


998



5,614$
9,056


$
14,392    F-28




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   13.
    Accrued
    Expenses and Other Current Liabilities    December 31,


December 31,2008


2009(In thousands)Accrued marketing

$
2,908


$
3,614Accrued cost of sales, including credit bureau costs


5,195



5,764Accrued general and administrative expense and professional fees


5,121



4,191Insurance premiums


1,610



1,473Other


1,009



2,213$
15,843


$
17,255   14.
    Accrued
    Payroll and Employee Benefits    December 31,


December 31,2008


2009(In thousands)Accrued payroll

$
3,466


$
415Accrued benefits


1,508



2,364Other


24



3$
4,998


$
2,782   15.
    Income
    Taxes    2007


2008


2009(In thousands)Current:Federal

$
(67
)

$
(323
)

$
(319
)State


23



(82
)


(71
)Foreign






330



(305
)Total current income tax expense


(44
)


(75
)


(695
)Deferred:Federal


(5,025
)


3,225



333State


(411
)


597



(3
)Foreign


1,151



(835
)


50Total deferred income tax (expense) benefit


(4,285
)


2,987



380Total income tax (expense) benefit

$
(4,329
)

$
2,912


$
(315
)  F-29




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2009(In thousands)Deferred tax assets:Reserves and accrued expenses

$
3,712


$
3,479NOL carryforwards


2,404



4,012Total deferred tax assets


6,116



7,491Deferred tax liabilities:Prepaid expenses


(13,292
)


(15,732
)Property, plant, and equipment


(2,994
)


(2,231
)Intangible assets


2,254



3,085Total deferred tax liabilities


(14,032
)


(14,878
)Valuation allowances


(2,230
)


(3,798
)Net deferred tax liability

$
(10,146
)

$
(11,185
)         December 31,2007


2008


2009Tax (provision) benefit at statutory rate

$
(3,413
)

$
9,758


$
3,661State income tax (benefit), net of federal benefit


(428
)


539



142Effect of tax rates different than statutory


(191
)


(283
)


(276
)Nondeductible executive compensation


(129
)


(46
)


(94
)Impairment of goodwill and intangible assets






(4,626
)


(2,209
)Valuation Allowances






(2,230
)


(1,482
)Write-off of receivable claim










(305
)Change in uncertain tax positions










272Other


(168
)


(200
)


(24
)Net tax (expense) benefit

$
(4,329
)

$
2,912


$
(315
)    F-30




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,2007


2008


2009Unrecognized tax benefit -January 1

$
719


$
813


$
2,160Gross increases, tax positions in current period


94



48



38Gross increases, tax positions in prior period






1,299



Gross decreases, tax positions in prior period










(1,214
)Lapse of the statute of limitations










(759
)Unrecognized tax benefit -December 31

$
813


$
2,160


$
225         2000-2008 1999-2008 2006-2008
    16.
    Related
    Party Transactions  Digital Matrix Systems, Inc.
     F-31




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    RCS International, Inc.
  Lazard Freres & Co, LLC.
  White Sky, Inc.
  17.
    Debt and
    Other Financing  December 31,


December 31,2008


2009(In thousands)Term loan

$
21,583


$
14,583Revolving line of credit


23,000



23,000Demand note payable to CRG


900



Note payable to CRG: In 2009, a $1.4 million face amount,
    non-interest bearing, due in three annual payments of $467
    thousand beginning June 30, 2012 (less unamortized discount
    of $590 thousand which is based on an imputed interest rate of
    16%)






810Other


14



45,497



38,393Less current portion


(7,914
)


(7,000
)Total long term debt

$
37,583


$
31,393    F-32




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            For the years ending December 31,2010

$
7,0002011


30,0002012


1,0492013


4672014


467Total

$
38,983   18.
    Derivative
    Financial Instruments  Risk
    Management Strategy
   F-33




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Summary
    of Derivative Financial Statement Impact
    The
    Effect of Derivative Instruments on the Statement of
    Operations
    (In thousands)
  Amount of Gain or(Loss) Reclassified fromAmount of (Loss)


Accumulated OCI intoAmount of Gain or (Loss)


Reclassified from


Income (IneffectiveRecognized in OCI


Accumulated OCI


Portion and AmountDerivative in SFAS No. 133 Cash

on Derivative


into Income


Excluded fromFlow Hedge Relationships Year Ended

(Effective Portion)


(Effective Portion)


Effectiveness Testing)December 31,

2009


2008


2009


2008


2009


2008In thousands of dollarsInterest rate contracts

$
407


$
(703
)

$
(888
)

$
(199
)

$



$
Total

$
407


$
(703
)

$
(888
)(1)

$
(199
)(1)

$



$
     (1)
    
    Gain or (Loss) Reclassified from Accumulated OCI into income for
    the effective portion of the cash flow hedge is recorded in
    interest expense in the consolidated statement of operations. F-34




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Commitments
    and Contingencies  Leases
    Operating


CapitalYears Ending December 31,

Leases


Leases(In thousands)2010

$
1,989


$
1,2052011


2,010



1,0862012


2,235



6522013


2,520



572014


2,001



Thereafter


10,033



Total minimum lease payments

$
20,788



3,000Less: amount representing interest






(291
)Present value of minimum lease payments






2,709Less: current obligation






(1,028
)Long term obligations under capital lease





$
1,681       For the years ended December 31 (in thousands):2010

$
1932011


2162012


1302013


6Long term obligations under arrangement

$
545    F-35




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Legal
    Proceedings
       F-36




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Other
    20.
    Other
    Long-Term Liabilities    December 31,


December 31,2008


2009(In thousands)Deferred rent

$
106


$
1,129Uncertain tax positions, interest and penalties not recognized


3,267



224Interest rate swaps


1,263



856Accrued general and administrative expenses






352Other


50



771$
4,686


$
3,332     21.
    Transfers
    from Noncontrolling Interest   F-37




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2007


2008


2009Net income (loss) attributable to Intersections Inc.

$
6,866


$
(15,977
)

$
(6,353
)Decrease in Intersections paid-in capital for purchase of 45
    common units of Screening International, LLC










(3,059
)Net transfers from noncontrolling interest










(3,059
)Change from net income attributable to Intersections Inc. and
    transfers from noncontrolling interest

$
6,866


$
(15,977
)

$
(9,412
)     22.
    Stockholders
    Equity  Outstanding
    Securities
    Share
    Repurchase
    Share
    Based Compensation
   F-38




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      and/or
        Stock
    Options
   F-39




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2008


2009





WeightedWeighted





Weighted





Weighted





AverageAverage





Average





Average





RemainingNumber of


Exercise


Number of


Exercise


Number of


Exercise


Aggregate


ContractualShares


Price


Shares


Price


Shares


Price


Intrinsic Value


Term(In years)Outstanding, beginning of year


3,944,566


$
13.10



3,839,274


$
12.22



4,597,106


$
11.41Granted


863,000



9.88



1,130,492



8.42



2,332,522



3.85Canceled


(719,241
)


14.69



(306,300
)


11.19



(3,007,760
)


12.32Exercised


(249,051
)


5.63



(66,360
)


10.04



(115,816
)


0.45Outstanding, end of year


3,839,274


$
12.22



4,597,106


$
11.41



3,806,052


$
6.49


$
2,879



7.49Exercisable at end of the year


2,865,688


$
12.97



2,970,940


$
12.93



1,241,941


$
11.00


$




3.97           Options Outstanding


Options ExercisableWeighted Average


Weighted





WeightedRemaining


Average Exercise





AverageExercise Price

Shares


Contractual Term


Price


Shares


Exercise Price(In years)$0  $5.00


1,599,475



9.39


$
3.10






$
0.00$5.01  $10.00


1,585,180



6.57



7.03



628,044



8.20$10.01  $15.00


478,750



5.13



12.92



471,250



12.95$15.01  $20.00


142,647



4.51



16.95



142,647



16.95Greater than $20.00






0.00



0.00







0.003,806,052



7.49


$
6.49



1,241,941


$
11.00  F-40




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Stock Units
    2007


2008


2009Weighted





Weighted





WeightedAverage





Average





AverageNumber of


Grant Date


Number of


Grant Date


Number of


Grant DateRSUs


Fair Value


RSUs


Fair Value


RSUs


Fair ValueOutstanding, beginning of year


459,000


$
9.43



568,512


$
9.70



513,884


$
9.33Granted


336,000



9.90



155,000



8.39



1,288,941



4.18Canceled


(132,768
)


9.52



(64,722
)


6.52



(78,346
)


9.41Vested


(93,760
)


9.43



(144,906
)


9.61



(162,371
)


9.41Outstanding, end of year


568,512


$
9.70



513,884


$
9.33



1,562,108


$
4.32         23.
    Employee
    Benefit Plan    24.
    Major
    Clients    2007

2008

2009Capital One


10
%


7
%


5
%Citibank


11
%


8
%


10
%Discover


13
%


8
%


2
%Bank of America (includes MBNA)


33
%


48
%


58
%    F-41




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    25.
    Segment
    and Geographic Information   F-42




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Bail BondsConsumer Products


Background


Online Brand


Industryand Services


Screening


Protection


Solutions


Consolidated(In thousands)Year Ended December 31, 2007Revenue

$
241,968


$
29,508


$
218


$
29


$
271,723Depreciation


8,145



900







36



9,081Amortization


2,599



505



64



178



3,346Income (loss) before income taxes and noncontrolling interest


15,022



(4,247
)


(25
)


(1,006
)


9,744Year Ended December 31, 2008Revenue

$
330,973


$
27,843


$
2,662


$
129


$
361,607Depreciation


8,411



946



6



9



9,372Amortization


9,221



505



637



426



10,789Income (loss) before income taxes and noncontrolling interest


10,754



(19,686
)


(14,886
)


(4,075
)


(27,893
)Year Ended December 31, 2009Revenue

$
343,695


$
18,462


$
2,133


$
342


$
364,632Depreciation


7,380



858



12



44



8,294Amortization


8,583



392



69



426



9,470Income (loss) before income taxes and noncontrolling interest


9,512



(11,274
)


(5,768
)


(2,888
)


(10,418
)As of December 31, 2008Property, plant and equipment, net

$
14,862


$
2,004


$
20


$
56


$
16,942Identifiable assets

$
174,015


$
16,936


$
7,662


$
3,016


$
201,629As of December 31, 2009Property, plant and equipment, net

$
15,553


$
2,212


$
37


$



$
17,802Identifiable assets

$
165,995


$
14,016


$
9,210


$
2,950


$
192,171     United States

United Kingdom

Other

Consolidated(In thousands)RevenueYear ended December 31, 2007


261,130



10,584



9



271,723Year ended December 31, 2008


351,165



10,417



25



361,607Year ended December 31, 2009


360,392



3,945



295



364,632Total assetsAs of December 31, 2008


200,717



1,947



(1,035
)


201,629As of December 31, 2009


187,040



5,029



102



192,171  F-43




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   26.
    Subsequent
    Events    Form 10-K,
 F-44




---



##### 



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS AdditionsBalance at

Charged to

Deductions

Balance atBeginning of

Costs and

from

End ofDescription

Period

Expenses

Allowance

PeriodYear Ended December 31, 2009Allowance for doubtful accounts

$
234,599


$
482,838


$
343,448


$
373,989Year Ended December 31, 2008Allowance for doubtful accounts

$
36,696


$
239,047


$
41,144


$
234,599Year Ended December 31, 2007Allowance for doubtful accounts

$
38,392


$
6,248


$
7,944


$
36,696  F-45




---



##### 



SIGNATURES
    
   By:
    /s/  Michael
    R. Stanfield   Title:
    Chief Executive Officer      Signature

Title

Date/s/  Michael
    R. StanfieldMichael
    R. Stanfield

Chairman, Chief Executive Officer and Director (Principal
    Executive Officer)

March 16, 2010/s/  Madalyn
    C. BehnemanMadalyn
    C. Behneman

Senior Vice President (Principal Financial and Accounting
    Officer)

March 16, 2010/s/  John
    M. AlbertineJohn
    M. Albertine

Director

March 16, 2010/s/  /s/
    Thomas G. Amato/s/
    Thomas G. Amato

Director

March 16, 2010/s/  James
    L. KempnerJames
    L. Kempner

Director

March 16, 2010/s/  Thomas
    L. KempnerThomas
    L. Kempner

Director

March 16, 2010/s/  David
    A. McGoughDavid
    A. McGough

Director

March 16, 2010/s/  Norman
    N. MintzNorman
    N. Mintz

Director

March 16, 2010/s/  William
    J. WilsonWilliam
    J. Wilson

Director

March 16, 2010