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,
    2010oro

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

54-1956515(State or other jurisdiction
    of
    incorporation or organization)

(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


13ITEM 1B.

UNRESOLVED STAFF COMMENTS


21ITEM 2.

PROPERTIES


22ITEM 3.

LEGAL PROCEEDINGS


22ITEM 4.

(REMOVED AND RESERVED)


23PART IIITEM 5.

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


25ITEM 6.

SELECTED FINANCIAL DATA


26ITEM 7.

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


28ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


50ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


50ITEM 9A.

CONTROLS AND PROCEDURES


50ITEM 9A.(T)

CONTROLS AND PROCEDURES


51ITEM 9B.

OTHER INFORMATION


52PART IIIITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


52ITEM 11.

EXECUTIVE COMPENSATION


52ITEM 12.

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


52ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    AND DIRECTOR INDEPENDENCE


52ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES


52PART IVITEM 15.

EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


52   2




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FORWARD-LOOKING
    STATEMENTS
  Form 10-K
    
    demand for our services;
    the concentration of our products and services;
    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;
    general economic conditions, including the recent recession and
    the pace of economic recovery;
    disruptions to the credit and financial markets in the
    U.S. and worldwide;
    economic conditions specific to our financial institutions
    clients;
    ability to attract and retain qualified personnel; and
    the possibility that we may not make further dividend payments.   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
    Fulfillment
   7




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




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Online
    Brand Protection
  Our
    Services
  and/or
  Our
    Marketing
    Our
    Clients
    Operations,
    Information Technology & Customer
    Service
   9




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Data
    and Analysis Providers
    Competition
    Bail
    Bonds Industry Solutions
  Our
    Services
      Our
    Marketing
    Our
    Clients
    Operations,
    Information Technology & Customer
    Service
   10




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Data
    and Analysis Providers
    Competition
    Government
    Regulation
    Credit
    Reporting Laws and Regulations
    Privacy
    Laws and Regulations
     11




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Marketing
    Laws and Regulations
    Dodd-Frank
    Act
    Insurance
    Laws
    Laws
    and Regulations Particularly Affecting Our Online Brand
    Protection Segment
   12




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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 .
   13




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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.     14




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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
    dependent upon our consumer products and services for
    substantially all 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.
   15




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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.
   16




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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.
   17




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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 or
    governmental proceedings 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.
    
    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; 18




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
    establishing the internal controls and procedures that we are
    required to maintain under the Sarbanes-Oxley Act of
    2002; and
    mitigating contingent or assumed liabilities or unexpected costs.  We may
    not realize planned benefits of our membership agreement or
    other customer portfolio acquisitions.
    Fluctuations
    of foreign currency values may adversely affect our reported
    revenue, results of operations and financial
    condition
    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;
    amount and frequency of future dividend payments and share
    repurchases, if any;
    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.
   19




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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.
         20




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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.
      ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   21




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ITEM 2.
    PROPERTIES    Approx.



LeaseLocation

Square Feet

Segment

ExpirationChantilly, VA(1)


98,310


Consumer Products and Services


2019Altavista, VA


27,327


Consumer Products and Services


2015Rio Rancho, NM


28,000


Consumer Products and Services


2013Manassas, VA


11,500


Consumer Products and Services


2013Albany, NY


7,730


Bail Bonds Industry Solutions


2011Gainesville, FL


2,566


Online Brand Protection


2011Winchester, VA


1,800


Online Brand Protection


2011Chandler, AZ


300


Online Brand Protection


2011     (1)
    
    Includes expansion space.      ITEM 3.
    LEGAL
    PROCEEDINGS     22




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

Age

PositionMichael R. Stanfield


60


Chairman, Chief Executive Officer and DirectorNeal B. Dittersdorf


51


Executive Vice President, Chief Legal OfficerJohn G. Scanlon


43


Executive Vice President, Chief Financial OfficerSteven A. Schwartz


50


Executive Vice President, Consumer ServicesChristopher W. Shenefelt


52


Executive Vice President, OperationsMadalyn C. Behneman


47


Senior Vice President, Chief Accounting Officer   Michael R. Stanfield
  Neal B. Dittersdorf
  John G. Scanlon
  Steven A. Schwartz
  Christopher W. Shenefelt
 23




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Madalyn C. Behneman
 24




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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 Share


Dividends PaidHigh


Low


per Common Share2009 Quarter ended:March 31, 2009

$
5.48


$
3.66


$
0.00June 30, 2009

$
5.13


$
2.79


$
0.00September 30, 2009

$
6.13


$
3.90


$
0.00December 31, 2009

$
5.99


$
4.05


$
0.00   Sales Priceper Share


Dividends PaidHigh


Low


per Common Share2010 Quarter ended:March 31, 2010

$
4.66


$
4.01


$
0.00June 30, 2010

$
5.59


$
3.97


$
0.00September 30, 2010

$
9.20


$
3.89


$
0.15December 31, 2010

$
10.63


$
8.34


$
0.15        25




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ITEM 6.
    SELECTED
    FINANCIAL DATA  SELECTED
    CONSOLIDATED FINANCIAL DATA
  Form 10-K.
  Years Ended December 31,2006


2007


2008


2009


2010(In thousands, except per share data)Statements of Operations Data(1):Revenue

$
176,942


$
242,215


$
333,764


$
346,170


$
364,136Operating expenses:Marketing


25,173



36,285



52,439



65,267



53,333Commissions


25,786



52,624



86,008



110,348



117,588Cost of revenue


62,544



84,077



97,694



91,080



88,879General and administrative


40,965



44,844



53,145



61,416



63,170Goodwill, intangible and long-lived asset impairment charges(2)










30,987



949



Depreciation


8,085



8,181



8,426



7,436



8,119Amortization


919



2,841



10,284



9,078



6,716Total operating expenses


163,472



228,852



338,983



345,574



337,805Income (loss) from operations


13,470



13,363



(5,219
)


596



26,331Interest income (expense)


771



(572
)


(2,291
)


(1,103
)


(1,675
)Other income (expense), net


315



1,200



(698
)


1,362



(442
)Income (loss) from continuing operations before income taxes


14,556



13,991



(8,208
)


855



24,214Income tax (expense) benefit


(5,794
)


(5,776
)


2,755



(168
)


(9,338
)Income (loss) from continuing operations


8,762



8,215



(5,453
)


687



14,876Income (loss) from discontinued operations, net of tax


771



(2,800
)


(19,528
)


(11,420
)


(379
)Gain on disposal of discontinued operations


















5,868Net (income) loss attributable to noncontrolling interest in
    discontinued operations


(97
)


1,451



9,004



4,380



Income (loss) from discontinued operations


674



(1,349
)


(10,524
)


(7,040
)


5,489Net income (loss) attributable to Intersections Inc.

$
9,436


$
6,866


$
(15,977
)

$
(6,353
)

$
20,365Basic earnings (loss) per share:Income (loss) from continuing operations

$
0.52


$
0.48


$
(0.32
)

$
0.04


$
0.84Income (loss) from discontinued operations

$
0.04


$
(0.08
)

$
(0.61
)

$
(0.40
)

$
0.31Basic earnings (loss) per share

$
0.56


$
0.40


$
(0.93
)

$
(0.36
)

$
1.15Diluted earnings (loss) per shareIncome (loss) from continuing operations

$
0.50


$
0.47


$
(0.32
)

$
0.04


$
0.81Income (loss) from discontinued operations

$
0.04


$
(0.08
)

$
(0.61
)

$
(0.40
)

$
0.30Diluted earnings (loss) per share

$
0.54


$
0.39


$
(0.93
)

$
(0.36
)

$
1.11Weighted average shares outstanding:Basic


16,770



17.096



17,264



17,503



17,709Diluted


17,606



17,479



17,264



17,583



18,412 26




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Years Ended December 31,2006


2007


2008


2009


2010(In thousands, except per share data)Balance Sheet Data:Cash and cash equivalents

$
15,580


$
19,780


$
10,762


$
12,394


$
14,453Deferred subscription solicitation costs


11,786



21,912



28,951



34,256



24,756Working capital


26,858



30,365



33,661



25,040



30,519Total assets


179,467



206,268



201,629



192,171



162,627Long-term debt


13,304



23,046



38,369



33,074



3,399Total stockholders equity

$
104,576


$
114,848


$
101,439


$
96,407


$
116,556Statement of Cash Flow Data:Cash inflows (outflows) from:Operating activities

$
17,897


$
4,589


$
20,761


$
17,359


$
48,285Investing activities


(33,596
)


(11,481
)


(47,180
)


(6,992
)


1,024Financing activities

$
13,583


$
11,098


$
17,464


$
(8,551
)

$
(47,264
)Other Data:Subscribers at beginning of period


3,660



4,626



5,259



4,730



4,301New subscribers  indirect


2,460



2,270



1,831



818



934New subscribers  direct(3)


1,168



1,825



2,295



2,230



1,365Cancelled subscribers within first 90 days of subscription


(888
)


(1,031
)


(1,046
)


(933
)


(737
)Cancelled subscribers after first 90 days of subscription(3)


(1,774
)


(2,431
)


(3,609
)


(2,544
)


(1,713
)Subscribers at end of period


4,626



5,259



4,730



4,301



4,150Total revenue

$
176,942


$
242,215


$
333,764


$
346,170


$
364,136Revenue from transactional sales and lost/stolen credit card
    registry


(7,674
)


(5,887
)


(5,440
)


(4,406
)


(4,225
)Subscription revenue

$
169,268


$
236,328


$
328,324


$
341,764


$
359,911Marketing and commissions

$
50,959


$
88,909


$
138,447


$
175,615


$
170,921Commissions paid on transactional sales and lost/stolen credit
    card registry


(61
)


(51
)


(60
)


(109
)


(95
)Marketing and commissions associated with subscription revenue

$
50,898


$
88,858


$
138,387


$
175,506


$
170,826     (1)
    
    On July 19, 2010, we and Screening International Holdings
    entered into a membership interest purchase agreement with
    Sterling Infosystems, pursuant to which Screening International
    Holdings sold, and Sterling Infosystems acquired, 100% of the
    membership interests of Screening International for an aggregate
    purchase price of $15.0 million in cash plus adjustments
    for working capital and other items. Screening International
    Holdings is not an operating subsidiary and our background
    screening services ceased upon the sale of Screening
    International. Screening International qualified as a
    discontinued operation as we do not have significant continuing
    involvement in the business and its operations and cash flows
    were eliminated from our continuing operations. Our consolidated
    financial results include American Background Information
    Services, Inc. for the period through May 31, 2006, and
    Screening International, for the period June 1, 2006
    through December 31, 2009 as discontinued operations. Our
    financial results also include Intersections Insurance Services,
    which we acquired in July 2006 and Captira Analytical, beginning
    August 2007, and Net Enforcers, beginning December 2007.(2)
    
    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 Online Brand Protection and Bail
    Bonds Industry Solutions segments of $11.2 million and
    $1.4 million, respectively. We also impaired intangible
    assets in our Online Brand Protection segment of
    $2.6 million. We also impaired intangible and long-lived
    assets in our 27




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Online Brand Protection and Bail Bonds Industry Solutions
    segments of $125 thousand and $824 thousand, respectively, in
    the year ended December 31, 2009.(3)
    
    We classify subscribers from shared marketing arrangements with
    direct marketing arrangements.(4)
    
    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
    Consumer
    Products and Services
       28




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
    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.        As of December 31,2008


2009


2010(In thousands)Indirect marketing arrangements


2,114



1,677



1,699Direct and shared marketing arrangements


2,616



2,624



2,451Total subscribers


4,730



4,301



4,150      29




---



##### 



Percentage
    of Revenue for the
    Years Ended December 31,
  Client

Relationship

2008

2009

2010Bank of America (includes MBNA)

Shared/Direct Marketing


48
%


58
%


56
%Citibank

Direct Marketing


4
%


6
%


6
%Citibank

Indirect Marketing


4
%


4
%


4
%Capital One

Indirect Marketing


7
%


5
%


5
%     Online
    Brand Protection
  and/or
  Bail
    Bonds Industry Solutions
   30




---



##### 



Critical
    Accounting Policies
    Revenue
    Recognition
      Identity
    Theft and Credit Management Services
         31




---



##### 



Accidental
    Death Insurance and other Membership Products
        Other
    Monthly Subscription Products
    Deferred
    Subscription Solicitation and Advertising
   32




---



##### 



Commission
    Costs
      Goodwill,
    Identifiable Intangibles and Other Long Lived
    Assets
         33




---



##### 



Share-Based
    Compensation
      2008

2009

2010Expected dividend yield


0
%


0
%


.05
%Expected volatility


38
%


55.4
%


67.9
%Weighted average risk free interest rate


3.06
%


2.00
%


2.75
%Weighted average expected life of options


6.2 years



6.2 years



6.2 years   Expected Dividend Yield.
 34




---



##### 



Expected Volatility.
  Risk-free Interest Rate.
  Expected Term.
    Income
    Taxes
          Accounting
    Standards Updates Recently Adopted
  Consolidation  Consolidation of Variable
    Interest Entities
 35




---



##### 



Subsequent
    Events
  Derivatives and
    Hedging
  Accounting
    Standards Updates Not Yet Effective
  Software  Certain Revenue Arrangements That
    Include Software Elements. Software-Revenue
    Recognition.
  Fair Value
    Measurements and Disclosures
  Compensation  Stock Compensation
  Intangibles  Goodwill and Other
 36




---



##### 



Business
    Combinations
  Trends
    Related to the Current Economic Environment
    Results
    of Continuing Operations
    Year Ended December 31,2008


2009


2010Revenue


100.0
%


100.0
%


100.0
%Operating expenses:Marketing


15.7



18.9



14.7Commissions


25.8



31.9



32.3Cost of revenue


29.3



26.3



24.4General and administrative


15.9



17.7



17.4Goodwill, intangible and long-lived asset impairment charges


9.3



0.3



Depreciation


2.5



2.1



2.2Amortization


3.1



2.6



1.8Total operating expenses


101.6



99.8



92.8(Loss) income from operations


(1.6
)


0.2



7.2Interest income


0.1







Interest expense


(0.8
)


(0.4
)


(0.5
)Other (expense) income, net


(0.2
)


0.4



(0.1
)(Loss) income from continuing operations before income taxes


(2.5
)


0.3



6.6Income tax benefit (expense)


0.8



(0.1
)


(2.6
)(Loss) income from continuing operations


(1.6
)%


0.2
%


4.1
%    37




---



##### 



Years
    Ended December 31, 2009 and 2010 (in
    thousands):
    Consumer





Bail BondsProducts and


Online Brand


IndustryServices


Protection


Solutions


ConsolidatedYear Ended December 31, 2009Revenue

$
343,695


$
2,133


$
342


$
346,170Operating expenses:Marketing


65,267











65,267Commissions


110,348











110,348Cost of revenue


90,016



875



189



91,080General and administrative


52,847



6,820



1,749



61,416Goodwill, intangible and long-lived asset impairment charges






125



824



949Depreciation


7,380



12



44



7,436Amortization


8,583



69



426



9,078Total operating expenses


334,441



7,901



3,232



345,574Income (loss) from operations

$
9,254


$
(5,768
)

$
(2,890
)

$
596Year Ended December 31, 2010Revenue

$
361,570


$
2,033


$
533


$
364,136Operating expenses:Marketing


53,333











53,333Commissions


117,588











117,588Cost of revenue


88,239



582



58



88,879General and administrative


58,921



2,239



2,010



63,170Goodwill, intangible and long-lived asset impairment charges














Depreciation


8,085



20



14



8,119Amortization


6,690



26







6,716Total operating expenses


332,856



2,867



2,082



337,805Income (loss) from operations

$
28,714


$
(834
)

$
(1,549
)

$
26,331  38




---



##### 



Consumer
    Products and Services Segment
  OVERVIEW
    Years Ended December 31,2009


2010


Difference


%Revenue

$
343,695


$
361,570


$
17,875



5.2
%Operating expenses:Marketing


65,267



53,333



(11,934
)


(18.3
)%Commissions


110,348



117,588



7,240



6.6
%Cost of revenue


90,016



88,239



(1,777
)


(2.0
)%General and administrative


52,847



58,921



6,074



11.5
%Depreciation


7,380



8,085



705



9.6
%Amortization


8,583



6,690



(1,893
)


(22.4
)%Total operating expenses


334,441



332,856



(1,585
)


(0.5
)%Income from operations

$
9,254


$
28,714


$
19,460



210.3
%   Revenue.
    Years EndedDecember 31,2009

2010Percentage of subscribers from direct marketing arrangements to
    total subscribers


61.0
%


59.1
%Percentage of new subscribers acquired from direct marketing
    arrangements to total new subscribers acquired


73.1
%


59.4
%Percentage of revenue from direct marketing arrangements to
    total subscription revenue


87.6
%


90.5
%   out-of-period
    Marketing Expenses.
 39




---



##### 



Commissions Expenses.
    Cost of Revenue.
    General and Administrative Expenses.
      Depreciation.
    Amortization.
   40




---



##### 



Online
    Brand Protection Segment
    Years Ended December 31,2009


2010


Difference


%Revenue

$
2,133


$
2,033


$
(100
)


(4.7
)%Operating expenses:Cost of revenue


875



582



(293
)


(33.5
)%General and administrative


6,820



2,239



(4,581
)


(67.2
)%Goodwill, intangible and long-lived asset impairment charges


125







(125
)


(100.0
)%Depreciation


12



20



8



66.7
%Amortization


69



26



(43
)


(62.3
)%Total operating expenses


7,901



2,867



(5,034
)


(63.7
)%Loss from operations

$
(5,768
)

$
(834
)

$
4,934



85.5
%   Revenue.
  Cost of Revenue.
    General and Administrative Expenses.
    Goodwill, intangible and long-lived asset impairment
    charges.
  Amortization.
   41




---



##### 



Bail
    Bonds Industry Solutions Segment
    Years Ended December 31,2009


2010


Difference


%Revenue

$
342


$
533


$
191



55.8
%Operating expenses:Cost of revenue


189



58



(131
)


(69.3
)%General and administrative


1,749



2,010



261



(14.9
)%Goodwill, intangible and long-lived asset impairment charges


824







(824
)


(100.0
)%Depreciation


44



14



(30
)


(68.2
)%Amortization


426







(426
)


(100.0
)%Total operating expenses


3,232



2,082



(1,150
)


(35.6
)%Loss from operations

$
(2,890
)

$
(1,549
)

$
1,341



46.4
%   Revenue.
  Cost of Revenue.
    General and Administrative Expenses.
    Goodwill, intangible and long-lived asset impairment
    charges.
  Amortization.
  Interest
    Income
    Interest
    Expense
     42




---



##### 



Other
    Income (Expense)
    Income
    Taxes
    Years
    Ended December 31, 2008 and 2009 (in
    thousands):
    Consumer





Bail BondsProducts and


Online Brand


IndustryServices


Protection


Solutions


ConsolidatedYear Ended December 31, 2008Revenue

$
330,973


$
2,662


$
129


$
333,764Operating expenses:Marketing


52,439











52,439Commissions


86,008











86,008Cost of revenue


96,568



917



209



97,694General and administrative


48,808



2,167



2,170



53,145Goodwill, intangible and long-lived asset impairment charges


15,771



13,826



1,390



30,987Depreciation


8,411



6



9



8,426Amortization


9,221



637



426



10,284Total operating expenses


317,226



17,553



4,204



338,983Income (loss) from operations

$
13,747


$
(14,891
)

$
(4,075
)

$
(5,219
)Year Ended December 31, 2009Revenue

$
343,695


$
2,133


$
342


$
346,170Operating expenses:Marketing


65,267











65,267Commissions


110,348











110,348Cost of revenue


90,016



875



189



91,080General and administrative


52,847



6,820



1,749



61,416Goodwill, intangible and long-lived asset impairment charges






125



824



949Depreciation


7,380



12



44



7,436Amortization


8,583



69



426



9,078Total operating expenses


334,441



7,901



3,232



345,574Income (loss) from operations

$
9,254


$
(5,768
)

$
(2,890
)

$
596  43




---



##### 



Consumer
    Products and Services Segment
  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 (loss) 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.
    Commissions Expenses.
    Cost of Revenue.
 44




---



##### 



General and Administrative Expenses.
      Goodwill, intangible and long-lived asset impairment
    charges.
    Depreciation.
    Amortization.
      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.
 45




---



##### 



Cost of Revenue.
    General and Administrative Expenses.
    Goodwill, intangible and long-lived asset impairment
    charges.
  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.
    Goodwill, intangible and long-lived asset impairment
    charges.
  Interest
    Income
   46




---



##### 



Interest
    Expense
    Other
    Income (Expense)
    Results
    of Discontinued Operations
      Years Ended December 31,2008


2009


2010Revenue

$
27,843


$
18,462


$
12,907Loss from discontinued operations

$
(19,685
)

$
(11,273
)

$
(158
)Income tax benefit (expense)


157



(147
)


(221
)Loss from discontinued operations


(19,528
)


(11,420
)


(379
)Gain on disposal from discontinued operations










5,868Net loss attributable to noncontrolling interest in discontinued
    operations


9,004



4,380



(Loss) income from discontinued operations

$
(10,524
)

$
(7,040
)

$
5,489   Liquidity
    and Capital Resources
  Cash
    Flow
       47




---



##### 



Years Ended December 31,2009


2010


Difference(In thousands)Cash flows provided by operating activities

$
17,359


$
48,285


$
30,926Cash flows (used in) provided by investing activities


(6,992
)


1,024



8,016Cash flows used in financing activities


(8,551
)


(47,264
)


(38,713
)Effect of exchange rate changes on cash and cash equivalents


(184
)


14



198Net increase in cash and cash equivalents


1,632



2,059



427Cash and cash equivalents, beginning of year


10,762



12,394



1,632Cash and cash equivalents, end of year

$
12,394


$
14,453


$
2,059           Cash Dividend AmountAnnouncement Date

Record Date

Payment Date

(per share)August 12, 2010

August 31, 2010

September 10, 2010

$
0.15November 15, 2010

November 30, 2010

December 10, 2010

$
0.15    48




---



##### 



Credit
    Facility and Borrowing Capacity
    co-borrowers co-borrowers
      Share
    Repurchase
   49




---



##### 



Contractual
    Obligations
    Year Ending December 31,Total


2011


2012


2013


2014


2015


ThereafterContractual Obligations at December 31, 2010Capital leases(1),(3)

$
5,603


$
1,903


$
1,500


$
867


$
785


$
548


$
Operating leases


18,414



1,646



2,037



2,499



2,120



2,161



7,951Software license & other arrangements(2)


33,567



30,847



2,720















$
57,584


$
34,396


$
6,257


$
3,366


$
2,905


$
2,709


$
7,951     (1)
    
    Includes interest expense and sales tax(2)
    
    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. In the year ended
    December 31, 2010, we terminated a contract with a data
    service provider. Under the termination provisions, we are
    obligated to pay $6.0 million for continued exclusivity and
    data usage in the year ending December 31, 2011. Also, in
    January, 2011, we entered into a new contract with a credit
    reporting agency, in which we will make non-refundable minimum
    payments totaling $21.5 million in the year ending
    December 31, 2011. In addition, we are obligated to pay
    approximately $432 thousand to a related party under contracts
    through December 31, 2011. The amounts in the table
    represent only the noncanceable portion of each respective
    arrangement. In general, contracts can be terminated with
    90 day notice.(3)
    
    In the year ended December 31, 2010, we entered into
    $3.6 million of capital leases for the acquisition of fixed
    assets.    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   50




---



##### 



ITEM 9A(T).
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rule 13a-15(e)
  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
   51




---



##### 



ITEM 9B.
    OTHER
    INFORMATION    PART III
  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    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.
 52




---



##### 



3. Exhibits
  ExhibitNumber

Description2
.1

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)2
.2

Form of Membership Interest Purchase Agreement, dated
    July 19, 2010, between Sterling Infosystems, Inc.,
    Intersections Inc., Screening International Holdings LLC and
    Screening International LLC (Incorporated by reference to
    Exhibit 10.1, filed with the
    Form 8-K
    dated July 22, 2010)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
.6.1

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
.6.2

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
.7

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) 53




---



##### 



ExhibitNumber

Description10
.8

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)10
.9.1

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
.9.2

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
.9.3

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
.9.4

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
.10

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
.11.1

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
.11.2

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
.11.3

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
.11.4

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
.11.5

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 (Incorporated by reference to Exhibit 10.17.5, filed
    with the
    Form 108-K
    for the year ended December 31, 2009)10
.12

Amended and Restated Employment Agreement dated as of
    December 23, 2010 between the Company and Michael R.
    Stanfield (Incorporated by reference to Exhibit 10.1 filed
    with the Registrants
    Form 8-K
    dated December 23, 2010)10
.13

Amended and Restated Employment Agreement dated as of
    December 23, 2010 between the Company and Neal B.
    Dittersdorf (Incorporated by reference to Exhibit 10.2
    filed with the Registrants
    Form 8-K
    dated December 23, 2010)10
.14

Amended and Restated Employment Agreement dated as of
    December 23, 2010 between the Company and John G. Scanlon
    (Incorporated by reference to Exhibit 10.3 filed with the
    Registrants
    Form 8-K
    dated December 23, 2010)10
.15

Amended and Restated Employment Agreement dated as of
    December 23, 2010 between the Company and Steven A.
    Schwartz (Incorporated by reference to Exhibit 10.4 filed
    with the Registrants
    Form 8-K
    dated December 23, 2010)10
.16

Amended and Restated Employment Agreement dated as of
    December 23, 2010 between the Company and Christopher W.
    Shenefelt (Incorporated by reference to Exhibit 10.5 filed
    with the Registrants
    Form 8-K
    dated December 23, 2010)14
.1

Code of Ethics of the Registrant (Incorporated by reference to
    Exhibit 14.1, filed with the 2004
    10-K). 54




---



##### 



ExhibitNumber

Description21
.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 John Scanlon, Chief 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 John Scanlon, Chief 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. 55




---



##### 



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


F-1Consolidated Financial Statements of
    Intersections Inc.:Consolidated Balance Sheets


F-2Consolidated Statements of Operations


F-3Consolidated Statements of Changes in
    Stockholders Equity


F-4Consolidated Statements of Cash Flows


F-5Notes to Consolidated Financial Statements


F-6Schedule II  Valuation and
    Qualifying Accounts


F-40  56




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
    F-1




---



##### 



INTERSECTIONS
    INC.CONSOLIDATED BALANCE SHEETS December 31, 2009 and 2010
    (In thousands, except par value)
  December 31,2009


2010ASSETSCURRENT ASSETS:Cash and cash equivalents

$
12,394


$
14,453Short-term investments


4,995



4,994Accounts receivable, net of allowance for doubtful accounts of
    $374 (2009) and $41 (2010)


25,111



19,195Prepaid expenses and other current assets


5,182



7,010Income tax receivable


2,460



Deferred subscription solicitation costs


34,256



24,756Total current assets


84,398



70,408PROPERTY AND EQUIPMENT, net


17,802



21,569DEFERRED TAX ASSET, net


3,700



2,298LONG-TERM INVESTMENT


3,327



4,327GOODWILL


46,939



43,235INTANGIBLE ASSETS, net


21,613



14,897OTHER ASSETS


14,392



5,893TOTAL ASSETS

$
192,171


$
162,627LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt

$
7,000


$
Capital leases, current portion


1,028



1,645Accounts payable


9,168



5,097Accrued expenses and other current liabilities


17,255



14,718Accrued payroll and employee benefits


2,782



2,342Commissions payable


2,044



787Income tax payable






1,782Deferred revenue


5,202



4,856Deferred tax liability, net, current portion


14,879



8,662Total current liabilities


59,358



39,889LONG-TERM DEBT


31,393



OBLIGATIONS UNDER CAPITAL LEASES, less current portion


1,681



3,399OTHER LONG-TERM LIABILITIES


3,332



2,783TOTAL LIABILITIES


95,764



46,071COMMITMENTS AND CONTINGENCIES (see notes 16 and 18)STOCKHOLDERS EQUITY:Common stock at $0.01 par value, shares authorized 50,000;
    shares issued 18,662 (2009) and 18,912 (2010); shares
    outstanding 17,595 (2009) and 17,795 (2010)


187



189Additional paid-in capital


104,810



109,250Treasury stock, shares at cost; 1,067 (2009) and 1,117
    (2010)


(9,516
)


(9,948
)Retained earnings


2,027



17,060Accumulated other comprehensive (loss) income:Cash flow hedge


(856
)


Other


(245
)


5TOTAL STOCKHOLDERS EQUITY


96,407



116,556TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
192,171


$
162,627    F-2




---



##### 



INTERSECTIONS
    INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended December 31, 2008, 2009 and
    2010
  2008


2009


2010(In thousands, except per share amounts)REVENUE

$
333,764


$
346,170


$
364,136OPERATING EXPENSES:Marketing


52,439



65,267



53,333Commissions


86,008



110,348



117,588Cost of revenue


97,694



91,080



88,879General and administrative


53,145



61,416



63,170Goodwill, intangible and long-lived asset impairment charges


30,987



949



Depreciation


8,426



7,436



8,119Amortization


10,284



9,078



6,716Total operating expenses


338,983



345,574



337,805(LOSS) INCOME FROM OPERATIONS


(5,219
)


596



26,331Interest income


253



149



48Interest expense


(2,544
)


(1,252
)


(1,723
)Other (expense) income, net


(698
)


1,362



(442
)(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES


(8,208
)


855



24,214INCOME TAX BENEFIT (EXPENSE )


2,755



(168
)


(9,338
)(LOSS) INCOME FROM CONTINUING OPERATIONS


(5,453
)


687



14,876Loss from discontinued operations, net of tax


(19,528
)


(11,420
)


(379
)Gain on disposal of discontinued operations










5,868Net loss attributable to noncontrolling interest in discontinued
    operations


9,004



4,380



(LOSS) INCOME FROM DISCONTINUED OPERATIONS


(10,524
)


(7,040
)


5,489NET (LOSS) INCOME ATTRIBUTABLE TO INTERSECTIONS INC

$
(15,977
)

$
(6,353
)

$
20,365Basic (loss) earnings per share:(Loss) income from continuing operations

$
(0.32
)

$
0.04


$
0.84(Loss) income from discontinued operations


(0.61
)


(0.40
)


0.31Basic (loss) earnings per share

$
(0.93
)

$
(0.36
)

$
1.15Diluted (loss) earnings per share:(Loss) income from continuing operations

$
(0.32
)

$
0.04


$
0.81(Loss) income from discontinued operations


(0.61
)


(0.40
)


0.30Diluted (loss) earnings per share

$
(0.93
)

$
(0.36
)

$
1.11Cash dividends paid per common share

$



$



$
0.30Weighted average shares outstanding:Basic


17,264



17,503



17,709Diluted


17,264



17,583



18,412    F-3




---



##### 



INTERSECTIONS
    INC.
  CONSOLIDATED STATEMENTS OF CHANGES IN
    STOCKHOLDERS EQUITY
 Years Ended December 31, 2008, 2009 and
    2010
  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, 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


$



$
96,407Issuance of common stock upon exercise of stock options and
    vesting of restricted stock units


250



2



(976
)


















(974
)






(974
)Share based compensation










5,808



















5,808







5,808Tax deficiency of stock options exercised and vesting of
    restricted stock units










(380
)


















(380
)






(380
)Other










(12
)


















(12
)






(12
)Cash dividends paid on common shares






















(5,332
)






(5,332
)






(5,332
)Purchase of treasury stock














50



(432
)










(432
)






(432
)Net income






















20,365







20,365







20,365Foreign currency translation adjustments


























250



250







250Cash flow hedge


























856



856







856Comprehensive Income






























20,149







20,149BALANCE, DECEMBER 31, 2010


18,912


$
189


$
109,250



1,117


$
(9,948
)

$
17,060


$
5


$
116,556


$



$
116,556    F-4




---



##### 



INTERSECTIONS
    INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 Years Ended December 31, 2008, 2009 and
    2010
  2008


2009


2010(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income

$
(24,981
)

$
(10,733
)

$
20,365Adjustments to reconcile net (loss) income to cash flows
    provided by operating activities:Depreciation


9,411



8,292



8,546Amortization


10,789



9,470



6,716Amortization of gain from sale leaseback


(39
)






Loss on disposal of fixed assets






64



Amortization of debt issuance cost


101



83



104Gain on disposal of discontinued operations










(5,868
)Derivative loss reclassified to earnings










565Provision for doubtful accounts


213



139



(210
)Accretion of interest on note payable










73Share based compensation


4,069



4,556



5,677Amortization of deferred subscription solicitation costs


54,201



66,466



61,824Foreign currency transaction losses (gain), net


800



(1,862
)


307Goodwill, intangible and long-lived asset impairment charges


44,702



7,259



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


(4,440
)


4,212



2,869Prepaid expenses and other current assets


350



572



(538
)Income tax, net


(2,974
)


4,869



4,242Deferred subscription solicitation costs


(67,073
)


(71,722
)


(48,991
)Other assets


(2,296
)


(4,138
)


4,897Tax benefit upon vesting of restricted stock units and option
    exercises


(112
)


87



(198
)Accounts payable


(782
)


(548
)


(2,887
)Accrued expenses and other current liabilities


743



2,037



(2,340
)Accrued payroll and employee benefits


147



(2,236
)


180Commissions payable


(12
)


(357
)


(1,257
)Deferred revenue


1,502



821



(342
)Deferred income tax, net


(4,959
)


1,032



(5,570
)Other long-term liabilities


1,401



(1,004
)


121Cash flows provided by operating activities


20,761



17,359



48,285CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES:Acquisition of property and equipment


(7,437
)


(7,020
)


(10,616
)(Purchase) sale of short-term investments


(4,955
)


28



Purchase of long-term investment


(3,327
)






(1,000
)Proceeds from the sale of discontinued operations










12,640Cash paid in the acquisition of Net Enforcers, Inc., net of cash
    received


(411
)






Cash paid in the acquisition of intangible membership agreements


(31,050
)






Cash flows (used in) provided by investing activities


(47,180
)


(6,992
)


1,024CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:Borrowings under Credit Agreement


35,611







Debt issuance costs


(133
)






Repayments under Credit Agreement


(16,708
)


(7,011
)


(37,583
)Repayment of note payable to Control Risks Group, Ltd.










(1,400
)Capital lease payments


(1,077
)


(786
)


(1,264
)Cash dividends paid on common shares










(5,332
)Cash paid to terminate interest rate swaps










(477
)Cash distribution on vesting of restricted stock units










(970
)Cash proceeds from stock options exercised


176



3



371Tax benefit upon vesting of restricted stock units and option
    exercises


112



(87
)


198Withholding tax payment on vesting of restricted stock units and
    option exercises


(517
)


(670
)


(375
)Purchase of treasury stock










(432
)Cash flows provided by (used in) financing activities


17,464



(8,551
)


(47,264
)EFFECT OF EXCHANGE RATE ON CASH


(63
)


(184
)


14(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(9,018
)


1,632



2059CASH AND CASH EQUIVALENTS  Beginning of period


19,780



10,762



12,394CASH AND CASH EQUIVALENTS  End of period

$
10,762


$
12,394


$
14,453SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid for interest

$
2,019


$
1,515


$
1,675Cash paid for taxes

$
4,520


$
610


$
11,596NONCASH FINANCING AND INVESTING ACTIVITIES:Equipment obtained under capital lease

$
621


$
2,185


$
3,599Equipment additions accrued but not paid

$
384


$
592


$
644Forgiveness of note, including accrued interest, in connection
    with the purchase of noncontrolling interest

$



$
1,166


$
Purchase of noncontrolling interest with issuance of note

$



$
778


$
    F-5




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    Ended December 31, 2008, 2009 and 2010
  1.
    Organization
    and Business          2.
    Basis of
    Presentation and Summary of Significant Accounting
    Policies  Basis
    of Presentation and Consolidation
    out-of-period
 F-6




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Use of
    Estimates
    Cash
    and Cash Equivalents
    Investments
      Foreign
    Currency Translation
    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-7




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               F-8




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Derivative
    Financial Instruments
    Fair
    Value Measurements
             F-9




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenue
    Recognition
      Identity
    Theft and Credit Management Services
          Accidental
    Death Insurance and other Membership Products
   F-10




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Other
    Monthly Subscription Products
    Deferred
    Subscription Solicitation and Advertising
    Commission
    Costs
   F-11




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Software
    Development Costs
      Income
    Taxes
         F-12




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Share-Based
    Compensation
      2008

2009

2010Expected dividend yield


0
%


0
%


.05
%Expected volatility


38
%


55.4
%


67.9
%Weighted average risk free interest rate


3.06
%


2.00
%


2.75
%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
    Segment
    Reporting
   F-13




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    3.
    Accounting
    Standards Updates  Accounting
    Standards Updates Recently Adopted
  Consolidation  Consolidation of Variable
    Interest Entities
  Subsequent
    Events
  Derivatives and
    Hedging
  Accounting
    Standards Updates Not Yet Effective
  Software  Certain Revenue Arrangements That
    Include Software Elements. Software-Revenue
    Recognition.
  Fair Value
    Measurements and Disclosures
 F-14




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Compensation  Stock Compensation
  Intangibles  Goodwill and Other
  Business
    Combinations
  4.
    Net
    Income (Loss) Per Common Share     F-15




---



##### 



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


2009


2010(Loss) income from continuing operations

$
(5,453
)

$
687


$
14,876(Loss) income from discontinued operations


(10,524
)


(7,040
)


5,489Net (loss) income available to common shareholders 
    basic and diluted

$
(15,977
)

$
(6,353
)

$
20,365Weighted average common shares outstanding  basic


17,264



17,503



17,709Dilutive effect of common stock equivalents






80



703Weighted average common shares outstanding  diluted


17,264



17,583



18,412Basic (loss) earnings per common share:(Loss) income from continuing operations

$
(0.32
)

$
0.04


$
0.84(Loss) income from discontinued operations

$
(0.61
)

$
(0.40
)

$
0.31Basic (loss) earnings per common share

$
(0.93
)

$
(0.36
)

$
1.15Diluted (loss) earnings per common share:(Loss) income from continuing operations

$
(0.32
)

$
0.04


$
0.81(Loss) income from discontinued operations

$
(0.61
)

$
(0.40
)

$
0.30Diluted (loss) earnings per common share

$
(0.93
)

$
(0.36
)

$
1.11   5.
    Fair
    Value Measurement      Fair Value Measurements at Reporting Date using:Quoted Pricesin Active

SignificantMarkets for

other

SignificantIdentical Assets

Observable

UnobservableDecember 31, 2010

(Level 1)

Inputs (Level 2)

Inputs (Level 3)Assets:US Treasury bills

$
4,994


$
4,994


$



$
  F-16




---



##### 



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



     6.
    Prepaid
    Expenses and Other Current Assets    December 31,


December 31,2009


2010(In thousands)Prepaid services

$
2,774


$
2,882Escrow receivable






1,750Prepaid contracts


440



927Other


1,968



1,451$
5,182


$
7,010       7.
    Deferred
    Subscription Solicitation Costs   F-17




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Property
    and Equipment    December 31,


December 31,2009


2010(In thousands)Machinery and equipment

$
22,505


$
21,484Software


33,336



32,971Software
    development-in-progress


3,368



6,162Furniture and fixtures


1,689



1,652Leasehold improvements


3,069



3,451Building


725



725Land


25



2564,717



66,470Less: accumulated depreciation


(46,915
)


(44,901
)Property and equipment  net

$
17,802


$
21,569         December 31,


December 31,2009


2010(In thousands)Leased property consisting of machinery and equipment

$
3,213


$
3,429Leased property consisting of software


2,846



3,015Leased property


6,059



6,444Less: accumulated depreciation


(3,201
)


(1,165
)Leased property, net

$
2,858


$
5,279     9.
    Long-Term
    Investments   F-18




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      10.
    Goodwill
    and Intangibles    December 31, 2009Net Carrying








Net CarryingGross


Accumulated


Amount at








Amount atCarrying


Impairment


January 1,








December 31,Amount


Losses


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   December 31, 2010Net CarryingGross


Accumulated


Net Carrying





Discontinued


Amount atCarrying


Impairment


Amount at





Operations (See


December 31,Amount


Losses


January 1, 2010


Impairment


Note 22)


2010Consumer Products and Services

$
43,235


$



$
43,235


$



$



$
43,235Background Screening


23,583



(19,879
)


3,704







(3,704
)


Online Brand Protection


11,242



(11,242
)














Bail Bonds Industry Solutions


1,390



(1,390
)














Total goodwill

$
79,450


$
(32,511
)

$
46,939


$



$
(3,704
)

$
43,235      F-19




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                 F-20




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      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   December 31, 2010Gross








NetCarrying


Accumulated





CarryingAmount


Amortization


Impairment


AmountAmortizable intangible assets:Customer related

$
38,846


$
(24,172
)

$



$
14,674Marketing related


3,192



(3,119
)






73Technology related


2,796



(2,646
)






150Total amortizable intangible assets

$
44,834


$
(29,937
)

$



$
14,897        F-21




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the years ending December 31,2011

$
3,8282012


3,5422013


3,4832014


3,4372015


607Thereafter


$
14,897   11.
    Other
    Assets    December 31,


December 31,2009


2010(In thousands)Prepaid royalty payments

$
75


$
75Prepaid contracts


1,341



92Prepaid commissions


7,362



4,029Other


5,614



1,697$
14,392


$
5,893       12.
    Accrued
    Expenses and Other Current Liabilities    December 31,


December 31,2009


2010(In thousands)Accrued marketing

$
3,614


$
2,637Accrued cost of sales, including credit bureau costs


5,764



6,239Accrued general and administrative expense and professional fees


4,191



3,269Insurance premiums


1,473



1,190Other


2,213



1,383$
17,255


$
14,718    F-22




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    Accrued
    Payroll and Employee Benefits    December 31,


December 31,2009


2010(In thousands)Accrued payroll

$
415


$
233Accrued benefits


2,364



1,918Other


3



191$
2,782


$
2,342     14.
    Income
    Taxes    2008


2009


2010(In thousands)Current:Federal

$
(556
)

$
(463
)

$
(12,729
)State


(109
)


(63
)


(2,177
)Total current income tax expense


(665
)


(526
)


(14,906
)Deferred:Federal


2,865



359



5,011State


555



(1
)


557Total deferred income tax (expense) benefit


3,420



358



5,568Total income tax (expense) benefit

$
2,755


$
(168
)

$
(9,338
)     2009


2010(In thousands)Deferred tax assets:Reserves and accrued expenses

$
3,479


$
4,530Intangible assets


3,085



3,165NOL and capital loss carryforwards


4,012



4,878Total deferred tax assets


10,576



12,573Deferred tax liabilities:Prepaid expenses


(15,732
)


(11,170
)Property, plant, and equipment


(2,231
)


(3,162
)Total deferred tax liabilities


(17,963
)


(14,332
)Valuation allowances


(3,798
)


(4,605
)Net deferred tax liability

$
(11,185
)

$
(6,364
)  F-23




---



##### 



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


2009


2010Tax benefit (expense) at statutory rate

$
2,700


$
(474
)

$
(8,475
)State income (benefit) tax, net of federal benefit


539



164



(641
)Nondeductible executive compensation


(46
)


(94
)


(218
)Valuation allowances






(9
)


(194
)Change in uncertain tax positions






272



72Other


(438
)


(27
)


118Net tax benefit (expense)

$
2,755


$
(168
)

$
(9,338
)       December 31,2008


2009


2010Unrecognized tax benefit -January 1

$
813


$
2,160


$
225Gross increases, tax positions in current period


48



38



Gross increases, tax positions in prior period


1,299







Gross decreases, tax positions in prior period






(1,214
)


Decreases related to settlements with taxing authorities










(44
)Lapse of the statute of limitations






(759
)


Unrecognized tax benefit -December 31

$
2,160


$
225


$
181        F-24




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2008-2009 1999-2009
    15.
    Related
    Party Transactions  Digital Matrix Systems, Inc.
      RCS International, Inc.
  Lazard Freres & Co, LLC.
  White Sky, Inc.
 F-25




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Albertine Enterprises Inc.
  16.
    Debt and
    Other Financing  December 31,


December 31,2009


2010(In thousands)Term loan

$
14,583


$
Revolving credit facility


23,000



Demand note payable to CRG






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)%


810



Other






38,393



Less current portion


(7,000
)


Total long term debt

$
31,393


$
    F-26




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        17.
    Derivative
    Financial Instruments  Risk
    Management Strategy
   F-27




---



##### 



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


Accumulated OCI intoAmount of Gain or (Loss)


Reclassified from


Income (IneffectiveRecognized in OCI


Accumulated OCI


Portion and Amounton Derivative


into Income


Excluded fromCash Flow Hedge Relationships

(Effective Portion)


(Effective Portion)


Effectiveness Testing)Year Ended December 31,

2010


2009


2010


2009


2010


2009In thousands of dollarsInterest rate contracts

$
291


$
407


$
(541
)

$
(888
)

$
(565
)

$
Total

$
291


$
407


$
(541
)(1)

$
(888
)(1)

$
(565
)

$
     (1)
    
    Gain or (Loss) Reclassified from Accumulated Other Comprehensive
    Income (Loss) into income for the effective portion of the cash
    flow hedge is recorded in interest expense in our consolidated
    statement of operations.        (Losses) Gains for the Years EndedLine Item in Statements of

December 31,


December 31,


December 31,Derivatives not Designated as Hedging Instruments

Operations

2008


2009


2010Interest rate contracts

Other (expense) income, net

$



$



$
(477
)Total



$



$



$
(477
)  F-28




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  18.
    Commitments
    and Contingencies  Leases
    Operating


CapitalYears Ending December 31,

Leases


Leases(In thousands)2011

$
1,646


$
1,9032012


2,037



1,5002013


2,499



8672014


2,120



7852015


2,161



548Thereafter


7,951



Total minimum lease payments

$
18,414



5,603Less: amount representing interest






(559
)Present value of minimum lease payments






5,044Less: current obligation






(1,645
)Long term obligations under capital lease





$
3,399       For the years ended December 31 (in thousands):2011

$
2212012


1362013


8Obligations under arrangement

$
365      F-29




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Legal
    Proceedings
        Other
   F-30




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  19.
    Other
    Long-Term Liabilities    December 31,


December 31,2009


2010(In thousands)Deferred rent

$
1,129


$
2,415Uncertain tax positions, interest and penalties not recognized


224



224Interest rate swaps


856



Accrued general and administrative expenses


352



144Other


771



$
3,332


$
2,783       20.
    Transfers
    from Noncontrolling Interest        2008


2009


2010Net (loss) income attributable to Intersections

$
(15,977
)

$
(6,353
)

$
20,365Decrease in Intersections paid-in capital for purchase of 45
    common units of SI






(3,059
)


Change from net (loss) income attributable to Intersections and
    transfers from noncontrolling interest

$
(15,977
)

$
(9,412
)

$
20,365    F-31




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    21.
    Stockholders
    Equity  Outstanding
    Securities
    Share
    Repurchase
    Dividends
    Share
    Based Compensation
     F-32




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    and/or
        Stock
    Options
   F-33




---



##### 



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


2009


2010





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 thousands)


(In years)Outstanding, beginning of year


3,839,274


$
12.22



4,597,106


$
11.41



3,806,052


$
6.49Granted


1,130,492



8.42



2,332,522



3.85



724,335



4.36Canceled


(306,300
)


11.19



(3,007,760
)


12.32



(635,179
)


8.45Exercised


(66,360
)


10.04



(115,816
)


0.45



(100,151
)


5.21Outstanding, end of year


4,597,106


$
11.41



3,806,052


$
6.49



3,795,057


$
5.79


$
19,373



7.31Exercisable at end of the year


2,970,940


$
12.93



1,241,941


$
11.00



1,388,008


$
8.67


$
4,138



5.25           Options Outstanding


Options ExercisableWeighted Average


Weighted





WeightedRemaining


Average Exercise





AverageExercise Price

Shares


Contractual Term


Price


Shares


Exercise Price(In years)$0  $5.00


2,171,698



8.60


$
3.48



342,064


$
3.12$5.01  $10.00


1,149,262



6.25



6.80



573,097



7.62$10.01  $15.00


348,750



4.16



12.89



347,500



12.89$15.01  $20.00


125,347



3.50



16.87



125,347



16.87Greater than $20.00






0.00



0.00







0.003,795,057



7.31


$
5.79



1,388,008


$
8.67  F-34




---



##### 



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


2009


2010Weighted





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


568,512


$
9.70



513,884


$
9.33



1,562,108


$
4.32Granted


155,000



8.39



1,288,941



4.18



1,015,205



4.34Canceled


(64,722
)


6.52



(78,346
)


9.41



(260,567
)


4.52Vested


(144,906
)


9.61



(162,371
)


9.41



(372,938
)


5.79Outstanding, end of year


513,884


$
9.33



1,562,108


$
4.32



1,943,808


$
4.62           22.
    Discontinued
    Operations       F-35




---



##### 



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


2009


2010Revenue

$
27,843


$
18,462


$
12,907Loss before income taxes from discontinued operations

$
(19,685
)

$
(11,273
)

$
(158
)Income tax benefit (expense)


157



(147
)


(221
)Loss from discontinued operations


(19,528
)


(11,420
)


(379
)Gain on disposal from discontinued operations










5,868Net loss attributable to noncontrolling interest in discontinued
    operations


9,004



4,380



(Loss) income from discontinued operations

$
(10,524
)

$
(7,040
)

$
5,489       As ofAs of


December 31,July 19, 2010


2009Accounts receivable

$
3,307


$
1,809Prepaid expenses and other current assets


448



652Property and equipment, net


2,016



2,212Goodwill


3,704



3,704Accounts payable

$
1,014


$
1,113Accrued expenses and other current liabilities


640



366Accrued payroll and employee benefits


615



358Other


10



46   23.
    Employee
    Benefit Plan   F-36




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  24.
    Major
    Clients    2008

2009

2010Citibank


8
%


10
%


10
%Capital One


7
%


5
%


5
%Bank of America (includes MBNA)


48
%


58
%


56
%     25.
    Segment
    and Geographic Information   F-37




---



##### 



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


Online Brand


Industryand Services


Protection


Solutions


Consolidated(In thousands)Year Ended December 31, 2008Revenue

$
330,973


$
2,662


$
129


$
333,764Depreciation


8,411



6



9



8,426Amortization


9,221



637



426



10,284Income (loss) from continuing operations before income taxes


10,753



(14,886
)


(4,075
)


(8,208
)Year Ended December 31, 2009Revenue

$
343,695


$
2,133


$
342


$
346,170Depreciation


7,380



12



44



7,436Amortization


8,583



69



426



9,078Income (loss) from continuing operations before income taxes


9,513



(5,769
)


(2,889
)


855Year Ended December 31, 2010Revenue

$
361,570


$
2,033


$
533


$
364,136Depreciation


8,085



20



14



8,119Amortization


6,690



26







6,716Income (loss) from continuing operations before income taxes


26,607



(835
)


(1,558
)


24,214   Bail BondsConsumer Products


Background


Online Brand


Industryand Services


Screening


Protection


Solutions


ConsolidatedAs of December 31, 2009Property, plant and equipment, net

$
15,553


$
2,212


$
37


$



$
17,802Total assets

$
165,995


$
14,016


$
9,210


$
2,950


$
192,171   Bail BondsConsumer Products


Online Brand


Industryand Services


Protection


Solutions


ConsolidatedAs of December 31, 2010Property, plant and equipment, net

$
21,424


$
23


$
122


$
21,569Total assets

$
148,884


$
9,900


$
3,843


$
162,627    F-38




---



##### 



INTERSECTIONS
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  26.
    Quarterly
    Financial Data (Unaudited)  First

Second

Third

FourthQuarter

Quarter

Quarter

Quarter(In thousands)Year ended December 31, 2008:Revenue

$
79,073


$
86,277


$
85,600


$
82,814Income (loss) from operations


7,042



8,203



6,042



(26,506
)Income (loss) from continuing operations before income taxes


6,567



7,597



5,426



(27,798
)Net income

$
3,439


$
4,352


$
2,697


$
(26,465
)Year ended December 31, 2009:Revenue

$
82,834


$
85,807


$
88,324


$
89,205Income (loss) from operations


1,907



1,284



2,950



(5,545
)Income (loss) from continuing operations before income taxes


1,528



1,216



2,742



(4,631
)Net income (loss)

$
(558
)

$
(2,658
)

$
349


$
(3,486
)Year ended December 31, 2010:Revenue

$
91,489


$
92,125


$
89,326


$
91,196Income from operations


708



8,641



7,782



9,200Income from continuing operations before income taxes


86



8,092



7,036



9,000Net income (loss)

$
(1,068
)

$
5,176


$
10,304


$
5,953   27.
    Subsequent
    Events     F-39




---



##### 



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS  AdditionsBalance at


Charged to


Deductions


Balance atBeginning of


Costs and


from


End ofDescription

Period


Expenses


Allowance(1)


Period(In thousands)Year Ended December 31, 2010Allowance for doubtful accounts(2)

$
375


$
58


$
391


$
42Year Ended December 31, 2009Allowance for doubtful accounts

$
235


$
483


$
343


$
375Year Ended December 31, 2008Allowance for doubtful accounts

$
37


$
239


$
41


$
235     (1)
    
    The year ended December 31, 2010 includes a reduction of
    $75 thousand related to the sale of SI on July 19, 2010.(2)
    
    The deductions from allowance includes $127 thousand
    related to write-offs. F-40




---



##### 



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, 2011/s/  John
    G. ScanlonJohn
    G. Scanlon

Executive Vice President (Principal Financial Officer)

March 16, 2011/s/  Madalyn
    C. BehnemanMadalyn
    C. Behneman

Senior Vice President (Principal Accounting Officer)

March 16, 2011/s/  John
    M. AlbertineJohn
    M. Albertine

Director

March 16, 2011/s/  Thomas
    G. AmatoThomas
    G. Amato

Director

March 16, 2011/s/  James
    L. KempnerJames
    L. Kempner

Director

March 16, 2011/s/  Thomas
    L. KempnerThomas
    L. Kempner

Director

March 16, 2011/s/  David
    A. McGoughDavid
    A. McGough

Director

March 16, 2011/s/  Norman
    N. MintzNorman
    N. Mintz

Director

March 16, 2011/s/  William
    J. WilsonWilliam
    J. Wilson

Director

March 16, 2011