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IAC/INTERACTIVECORP
FORM 10-K
(Annual Report)
Filed 02/27/15 for the Period Ending 12/31/14
Address 555 WEST 18TH STREET
NEW YORK, NY 10011
Telephone 2123147300
CIK 0000891103
Symbol IACI
SIC Code 5990 - Retail Stores, Not Elsewhere Classified
Industry Computer Services
Sector Technology
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2015, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    IAC/INTERACTIVECORP FORM 10-K (Annual Report) Filed 02/27/15 for the Period Ending 12/31/14 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 555 WEST 18TH STREET NEW YORK, NY 10011 2123147300 0000891103 IACI 5990 - Retail Stores, Not Elsewhere Classified Computer Services ...

  • Page 2
    ... 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  No 3 Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if...

  • Page 3
    Documents Incorporated By Reference: Portions of the Registrant's proxy statement for its 2015 Annual Meeting of Stockholders are incorporated by reference into Part III herein.

  • Page 4
    ...of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Consolidated Financial Statements and Supplementary Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III...

  • Page 5
    ...About Group, which primarily consists of About.com, a comprehensive online content and reference library. In 2014, we acquired the remaining publicly traded shares of Meetic, ValueClick's "Owned and Operated" website businesses, including Investopedia and PriceRunner, as well as The Princeton Review...

  • Page 6
    2

  • Page 7
    ... power and the contractual rights described above, Mr. Diller is currently in a position to influence, subject to our organizational documents and Delaware law, the composition of IAC's Board of Directors and the outcome of corporate actions requiring shareholder approval, such as mergers, business...

  • Page 8
    ...charge. Our B2B operations work closely with partners in the software, media and other industries to design and develop customized browser1based search applications to be bundled and distributed with these partners' products and services. We also market and distribute a number of mobile applications...

  • Page 9
    4

  • Page 10
    ... access providers, social media platforms, online advertising networks, traditional media companies and companies that provide online content). When we market our content and other services, our competitors include destination websites that primarily acquire traffic through paid and algorithmic...

  • Page 11
    • • secure cost-effective distribution arrangements with third parties; and market and distribute our toolbars and other applications directly to consumers in a cost-effective manner. 5

  • Page 12
    ... and password and pay a subscription fee). Within our portfolio of websites, we have both subscription1based and ad-supported offerings. Our subscription1based websites offer registered members the ability to post a profile and use any related searching and matching tools free of charge, while...

  • Page 13
    • evolving industry standards; and 6

  • Page 14
    ... through television advertising, advertising on ad-supported video-on-demand services and content platforms and search engine marketing. Revenue. The Princeton Review and Tutor.com's revenue consists primarily of fees received for in-person and online test preparation classes, access to online test...

  • Page 15
    7

  • Page 16
    ... also sell custom advertising through our Brand Creative Fund service, which connects advertisers with video creators to produce original, branded videos, which are then presented as brand-sponsored content on vimeo.com and/or the advertiser websites. Marketing. We market Vimeo's services primarily...

  • Page 17
    and projects, and for international distribution only, attendance at industry trade 8

  • Page 18
    ... services, plus matches through the marketplace and, in the case of one package, custom website and mobile development and hosting services. Home services professionals who are new to HomeAdvisor must generally sign up for one of the subscription products described above. As of December 31, 2014...

  • Page 19
    9

  • Page 20
    ... other similar organizations. Additional Information Company Website and Public Filings. The Company maintains a website at www.iac.com. Neither the information on the Company's website, nor the information on the website of any IAC business, is incorporated by reference into this annual report, or...

  • Page 21
    ... key employees in the future. Effective succession planning is also important to our future success. If we fail to ensure the effective transfer of senior management knowledge and smooth transitions involving senior management across our various businesses, our ability to execute short and long term...

  • Page 22
    ... listings could have an adverse effect on our business, financial condition and results of operations. Such changes could come about for a number of reasons, including general market conditions, competition or policy and operating decisions made by Google. Our services agreement with Google requires...

  • Page 23
    ... a multitude of websites with high levels of traffic and online advertising networks, for a share of available advertising expenditures and expect to face continued competition as more emerging media and traditional offline media companies continue to enter the online advertising market. We believe...

  • Page 24
    ...of revenue would increase over the long-term. Any failure to attract and acquire new (and retain existing) traffic, users and customers in a cost-effective manner could adversely affect our business, financial condition and results of operations. Our success depends, in part, on our ability to build...

  • Page 25
    ...including personal credit card data, as well as private content (such as videos and correspondence)) in connection with the processing of search queries, the provision of online products and services, transactions with users and customers and advertising on our websites. The sharing, use, disclosure...

  • Page 26
    ... Privacy Bill of Rights released by the White House in February 2012 and the enactment of a federal data breach notification law. In addition, in February 2013 the U.S. Federal Trade Commission issued a report seeking changes in Internet and mobile privacy protection and disclosures. Similarly, new...

  • Page 27
    ... management, operations and financial resources of IAC and its businesses and/or acquired businesses. • • • We may not be successful in addressing these challenges or any other problems encountered in connection with historical and future acquisitions. In addition, the anticipated benefits...

  • Page 28
    ... property rights, including trademarks, domain names, trade secrets, patents, copyrights and other similar intellectual property, as critical to our success. For example, the businesses within certain of our reporting segments (Search & Applications, The Match Group and eCommerce) rely heavily upon...

  • Page 29
    ..., Match.com, OkCupid.com, OurTime.com, Meetic.com, HomeAdvisor.com and ShoeBuy.com and related domain names and logos), through which they market their products and services and seek to build and maintain brand loyalty and recognition. So long as these businesses continue to police unauthorized use...

  • Page 30
    ... any of its principal properties. IAC's approximately 202,500 square foot corporate headquarters in New York, New York houses offices for IAC corporate and various IAC businesses within the following segments: Search & Applications, The Match Group and Media. For a discussion regarding the financing...

  • Page 31
    ... business, the Company and its subsidiaries are parties to litigation involving property, personal injury, contract, intellectual property and other claims. The amounts that may be recovered in such matters may be subject to insurance coverage. Rules of the Securities and Exchange Commission require...

  • Page 32
    ... public trading market for IAC Class B common stock. The table below sets forth, for the calendar periods indicated, the high and low sales prices per share for IAC common stock as reported on NASDAQ. High Low Year Ended December 31, 2014 Fourth Quarter Third Quarter Second Quarter First Quarter...

  • Page 33
    ... 31, 2014 2013 2012 2011 2010 (Dollars in thousands, except per share data) Statement of Operations Data: (1) $ 3,109,547 $ 3,022,987 Revenue Earnings (loss) from continuing operations 234,557 281,799 Earnings (loss) per share from continuing operations attributable to IAC shareholders: Basic...

  • Page 34
    ... classes, access to online test preparation materials and individual tutoring services. The revenue earned by our Media segment is derived from media production, subscriptions and advertising. HomeAdvisor's revenue is derived primarily from fees paid by members of its network of home services...

  • Page 35
    ...website businesses on January 10, 2014, growth from About.com and the contribution of CityGrid, which had been moved from the eCommerce segment to the Search & Applications segment, effective July 1, 2013, following its reorganization, partially offset by a decline in revenue from Ask.com. The Match...

  • Page 36
    ... sales. The Match Group increase was primarily due to the acquisition of The Princeton Review and increases in revenue share payments made in connection with in-app purchases sold through Dating's mobile products and hosting fees. As a percentage of revenue, cost of revenue in 2014 decreased from...

  • Page 37
    ... stock-based compensation) and other employee-related costs for personnel engaged in sales, sales support and customer service functions. Advertising expenditures include online marketing, including fees paid to search engines and third parties that distribute our B2C downloadable applications...

  • Page 38
    ... fees related to the purchase of the remaining publicly-traded shares of Meetic ("Meetic tender offer"). The Search & Applications increase was primarily due to the inclusion of The About Group beginning September 24, 2012. Product development expense Years Ended December 31, 2014 $ Change % Change...

  • Page 39
    ...in online marketing related to our B2C downloadable applications and About.com. The increase in general and administrative expense was primarily due to increases in compensation and professional fees. The decrease in cost of revenue was primarily due to a decrease in traffic acquisition costs driven...

  • Page 40

  • Page 41
    ... CityGrid in the Search & Applications segment, partially offset by a decrease of $7.7 million in traffic acquisition costs driven primarily by decreased revenue from Ask.com. The Match Group Adjusted EBITDA increased 13% to $266.9 million , due to the revenue growth noted above, partially offset by...

  • Page 42
    Table of Contents Operating income (loss) Years Ended December 31, 2014 $ Change % Change 2013 (Dollars in thousands) $ Change % Change 2012 Search & Applications The Match Group Media eCommerce Corporate Total $ $ 311,340 $ 240,912 (40,177) (1,257) (132,091) 378,727 $ 12% (28,777) 12,757 (19,...

  • Page 43
    31

  • Page 44
    ... million otherthan-temporary impairment charge related to a cost method investment. Other expense, net in 2012 includes an $8.7 million other-than-temporary impairment charge related to a long-term marketable equity security as a result of the Company's assessment of the near-term prospects of the...

  • Page 45
    32

  • Page 46
    ... and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service is currently auditing the Company's federal income tax returns for the years ended December 31, 2010 through 2012. Various other jurisdictions are open to examination for various tax years...

  • Page 47
    ....2 million , capital expenditures of $57.2 million primarily related to the internal development of software to support our products and services, and investments of $24.3 million , partially offset by $58.4 million of proceeds from the sales of a business and long-term investments. Net cash used in...

  • Page 48
    ... The About Group, capital expenditures of $51.2 million primarily related to the internal development of software to support our products and services and investments of $36.1 million , partially offset by net maturities and sales of marketable debt securities and sales of long-term investments and...

  • Page 49
    ... depending on those factors IAC management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook. On February 3, 2015, IAC declared a quarterly cash dividend of $0.34 per share of common and Class B common stock outstanding payable on...

  • Page 50
    ... 73 $ 1,437 $ 2,786 _____ (e) Commercial commitments are funding commitments that could potentially require registrant performance in the event of demands by third parties or contingent events. Off-Balance Sheet Arrangements Other than the items described above, the Company does not have any...

  • Page 51
    ...that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairment charges of intangible assets or goodwill, if applicable, are not ongoing costs of doing business. Gains and losses recognized on changes in the fair...

  • Page 52
    Table of Contents RECONCILIATION OF ADJUSTED EBITDA For a reconciliation of Adjusted EBITDA to operating income (loss) by reportable segment for the years ended December 31, 2014, 2013 and 2012, see Note 13 to the consolidated financial statements. 39

  • Page 53
    ... intangible assets, which consist of the Company's acquired trade names and trademarks, are assessed annually for impairment as of October 1 or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or the fair value of an...

  • Page 54
    ... based upon an estimate of the royalty rates that a market participant would pay to license the Company's trade names and trademarks. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows...

  • Page 55
    ...to achieve its business plan; the need for changes to the investee's existing business model due to changing business and regulatory environments and its ability to successfully implement necessary changes; and comparable valuations. During 2014 and 2013, the Company recognized impairment charges of...

  • Page 56
    ... market risk for changes in interest rates relates primarily to the Company's cash equivalents, marketable debt securities and long-term debt. The Company invests its excess cash in certain cash equivalents and marketable debt securities, which consist of money market funds and short-to-medium-term...

  • Page 57
    Table of Contents Company's objective in managing its foreign currency exchange risk is to minimize its potential exposure to the changes that foreign currency exchange rates might have on its earnings, cash flows and financial position. 44

  • Page 58
    ... in accordance with the standards of the Public Company Accounting Oversight Board (United States), IAC/InterActiveCorp's internal control over financial reporting as of December 31, 2014, based on criteria established in the Internal ControlIntegrated Framework issued by the Committee of Sponsoring...

  • Page 59
    ..., 2014 2013 (In thousands, except share data) ASSETS Cash and cash equivalents Marketable securities Accounts receivable, net of allowance of $12,437 and $8,540, respectively Other current assets Total current assets Property and equipment, net Goodwill Intangible assets, net Long-term investments...

  • Page 60
    ... Ended December 31, 2014 2013 (In thousands, except per share data) 2012 Revenue Operating costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) Selling and marketing expense General and administrative expense Product development expense Depreciation Amortization of...

  • Page 61
    ... INCOME Years Ended December 31, 2014 2013 (In thousands) 2012 Net earnings Other comprehensive (loss) income, net of tax: Change in foreign currency translation adjustment Change in unrealized gains and losses of available-for-sale securities (net of tax benefits of $1,852, $3,050 and $3,981...

  • Page 62
    ... Interests Class B Convertible Common Stock $.001 Par Value Additional Paid-in Capital (Accumulated Deficit) Retained Earnings Accumulated Other Comprehensive Loss (In thousands) Total IAC Shareholders' Equity Total Shareholders' Equity $ Shares $ Shares Treasury Stock Noncontrolling...

  • Page 63
    ... Paid-in Capital (Accumulated Deficit) Retained Earnings Accumulated Other Comprehensive Loss (In thousands) Total IAC Shareholders' Equity Total Shareholders' Equity $ Shares $ Shares Treasury Stock Noncontrolling Interests Net (loss) earnings for the year ended December 31, 2014 Other...

  • Page 64
    ... losses of unconsolidated affiliates Gains on sales of long-term investments, assets and a business Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable Other assets Accounts payable and other current liabilities Income taxes payable Deferred revenue Other, net Net...

  • Page 65
    Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ 1,100,444 990,405 $ 749,977 1,100,444 $ 704,153 749,977 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 51

  • Page 66
    ...-based and ad-supported online personals services in North America, Europe, Latin America, Australia and Asia. We provide these services through websites and applications that we own and operate. The Match Group's non-dating businesses consist of The Princeton Review and Tutor.com, which together...

  • Page 67
    ... achieve its business plan; the need for changes to the investee's existing business model due to changing business and regulatory environments and its ability to successfully implement necessary changes; and comparable valuations. If the Company has not identified events or changes in circumstances...

  • Page 68
    ... fee revenue is recognized over the terms of the applicable subscriptions, which are one month or one year, and advertising revenue is recognized when an ad is displayed or over the period earned. eCommerce HomeAdvisor's lead acceptance revenue is generated and recognized when an in-network home...

  • Page 69
    ... charge is recorded in current earnings and a new cost basis in the investment is established. Certain Risks and Concentrations A substantial portion of the Company's revenue is derived from online advertising, the market for which is highly competitive and rapidly changing. Significant changes...

  • Page 70
    ... Estimated Useful Lives Buildings and leasehold improvements Computer equipment and capitalized software Furniture and other equipment 3 to 39 Years 2 to 3 Years 3 to 12 Years The Company capitalizes certain internal use software costs including external direct costs utilized in developing...

  • Page 71

  • Page 72
    ... based upon an estimate of the royalty rates that a market participant would pay to license the Company's trade names and trademarks. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows...

  • Page 73
    ... Traffic acquisition costs consist of payments made to partners who distribute our B2B customized browser-based applications, integrate our paid listings into their websites or direct traffic to our websites. These payments include amounts based on revenue share and other arrangements. The Company...

  • Page 74
    ... 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which clarifies the principles for recognizing revenue and develops a common standard for all industries. The new guidance is effective for reporting periods...

  • Page 75
    ... was reduced by $45.0 million , $32.9 million and $57.1 million for the years ended December 31, 2014 , 2013 and 2012 , respectively, for excess tax deductions attributable to stock-based compensation. The related income tax benefits are recorded as increases to additional paid-in capital. 60

  • Page 76
    .... The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized. December 31, 2014 (In thousands) 2013 Deferred tax assets: Accrued expenses Net operating loss carryforwards Tax credit carryforwards Stock-based compensation...

  • Page 77
    61

  • Page 78
    ... of 1986, as amended. In addition, utilization of certain state NOLs may be subject to limitations under state laws similar to Section 382 of the Internal Revenue Code of 1986. At December 31, 2014 , the Company has foreign NOLs of $107.5 million available to offset future income. Of these foreign...

  • Page 79
    ... and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service is currently auditing the Company's federal income tax returns for the years ended December 31, 2010 through 2012. Various other jurisdictions are open to examination for various tax years...

  • Page 80
    ...changes in the carrying value of goodwill, for the year ended December 31, 2014 : Balance at December 31, 2013 Additions (Deductions) (In thousands) Foreign Exchange Translation Balance at December 31, 2014 Search & Applications The Match Group Media - Connected Ventures eCommerce: HomeAdvisor...

  • Page 81
    64

  • Page 82
    ... acquired in various acquisitions. At December 31, 2014 and 2013, intangible assets with definite lives are as follows: December 31, 2014 Gross Carrying Amount Accumulated Amortization (In thousands) Weighted-Average Useful Life (Years) Net Content Technology Trade names Customer lists Advertiser...

  • Page 83
    65

  • Page 84
    ... to changes in interest rates. Because the Company does not intend to sell any marketable debt securities and it is not more likely than not that the Company will be required to sell any marketable debt securities before recovery of their amortized cost bases, which may be maturity, the Company does...

  • Page 85
    related gross realized gains and losses: 66

  • Page 86
    ...investments Long-term marketable equity securities Auction rate security Total long-term investments Cost method investments $ $ 90,910 10,593 7,410 6,070 114,983 $ $ 137,286 22,073 11,711 8,920 179,990 In 2014, the Company recorded $66.6 million of other-than-temporary impairment charges for...

  • Page 87
    67

  • Page 88
    ... Measurements (In thousands) Assets: Cash equivalents: Money market funds Commercial paper Time deposits Marketable securities: Corporate debt securities Equity security Long-term investments: Auction rate security Marketable equity security Total Liabilities: Contingent consideration arrangements...

  • Page 89
    ... Fair Value Measurements (In thousands) Assets: Cash equivalents: Money market funds Commercial paper Time deposits Marketable securities: Corporate debt security Equity securities Long-term investments: Auction rate security Marketable equity securities Total Liabilities: Contingent consideration...

  • Page 90
    impaired at December 31, 2014 , due to 69

  • Page 91
    ... users based primarily on management's internal projections and strategic plans. The fair value of this arrangement is determined using a discount rate of 15% . The fair values of the contingent consideration arrangements are sensitive to changes in the forecasts of earnings and/or the relevant...

  • Page 92
    .... On December 21, 2012, the Company entered into a $300 million revolving credit facility, which expires on December 21, 2017. The annual fee to maintain the revolving credit facility is 30 basis points. In addition, the terms of the revolving credit facility require that we maintain a leverage...

  • Page 93
    71

  • Page 94
    ...Executive of the Company, holds 5.8 million shares, representing 100% of IAC's outstanding Class B common stock and 42.5% of the outstanding total voting power of the Company. Reserved Common Shares In connection with equity compensation plans, 22.2 million shares of IAC common stock are reserved at...

  • Page 95
    ... in connection with the exercise of these warrants. Common Stock Repurchases During 2014 , the Company did not purchase any shares of IAC common stock. During 2013 and 2012 , the Company purchased 4.5 million and 15.5 million shares of IAC common stock for aggregate consideration, on a trade date...

  • Page 96
    ...-based stock units ("PSUs") are included in the denominator for earnings per share if (i) the applicable performance condition(s) has been met and (ii) the inclusion of the PSUs is dilutive for the respective reporting periods. For each of the years ended December 31, 2014 and 2012 less than...

  • Page 97
    common stock, RSUs, PSUs and restricted stock, as well as provide for the future grant of these and other equity 74

  • Page 98
    ... will not be less than the market price of the Company's common stock on the grant date. The plans do not specify grant dates or vesting schedules of awards as those determinations have been delegated to the Compensation and Human Resources Committee of IAC's Board of Directors (the "Committee...

  • Page 99
    ... of our employees and the dividend yields are based on IAC's historical dividend payments. The following are the weighted average assumptions used in the Black-Scholes option pricing model: Years Ended December 31, 2014 2013 2012 Expected volatility Risk-free interest rate Expected term Dividend...

  • Page 100

  • Page 101
    ... equal to the subsidiary's acquisition price; or, when funding a start-up business, its investment cost, or a certain fixed other amount. In some cases, these preferred interests accrete interest or dividends at a prescribed rate of return. The value of the stock options and phantom equity units...

  • Page 102
    ... are organized as to segment management, and the focus of the businesses with regards to the types of services or products offered or the target market. Operating segments are combined for reporting purposes if they meet certain aggregation criteria, which principally relate to the similarity of...

  • Page 103
    ...,016 $ $ 409,116 341,377 92,500 41,827 1,229,205 2,114,025 Years Ended December 31, 2014 2013 (In thousands) 2012 Capital expenditures: Search & Applications The Match Group Media eCommerce Corporate Total _____ (a) $ $ 17,701 22,105 1,566 9,620 6,241 57,233 $ $ 22,215 19,997 1,197 8,921...

  • Page 104
    ... December 31, 2014 Acquisitionrelated Contingent Consideration Fair Value Adjustments Adjusted EBITDA Non-Cash Compensation Expense Depreciation Amortization of Intangibles Operating Income (Loss) (In thousands) Search & Applications The Match Group Media eCommerce Corporate Total $ $ 362...

  • Page 105
    ... Intangible Assets Total Assets Search & Applications The Match Group Media eCommerce Corporate (c) Total _____ (c) $ $ 409...marketable securities and IAC's headquarters building. NOTE 14-COMMITMENTS The Company leases land, office space, data center facilities and equipment used in connection...

  • Page 106
    81

  • Page 107
    ...advertising commitments, which commitments are reducible or terminable such that these commitments can never exceed associated revenue by a meaningful amount. The letters of credit support the Company's casualty insurance program. NOTE 15-CONTINGENCIES In the ordinary course of business, the Company...

  • Page 108
    ... Company were not material. NOTE 18-BENEFIT PLANS IAC has a retirement savings plan in the United States that qualifies under Section 401(k) of the Internal Revenue Code. Participating employees may contribute up to 50% of their pre-tax earnings, but not more than statutory limits. IAC contributes...

  • Page 109
    ... 34,381 12,242 52,077 161,530 December 31, 2014 (In thousands) 2013 Property and equipment, net: Buildings and leasehold improvements Computer equipment and capitalized software Furniture and other equipment Projects in progress Land Accumulated depreciation and amortization Property and equipment...

  • Page 110
    ... thousands) 2012 Cost of revenue: Cost of service revenue Cost of product revenue Cost of revenue $ $ 757,194 125,982 883,176 $ $ 884,189 119,532 1,003,721 $ $ 833,374 158,314 991,688 Years Ended December 31, 2014 2013 (In thousands) 2012 Other (expense) income, net: Impairment of long-term...

  • Page 111
    85

  • Page 112
    ...in subsidiaries Other non-current assets Total assets Accounts payable, trade Other current liabilities Long-term debt Income taxes payable Intercompany liabilities Other long-term liabilities Redeemable noncontrolling interests IAC shareholders' equity Noncontrolling interests Total liabilities and...

  • Page 113
    ...In thousands) IAC Eliminations IAC Consolidated Cash and cash equivalents Marketable securities Accounts receivable, ...Accounts payable, trade Other current liabilities Long-term debt Income taxes payable Intercompany liabilities Other long-term liabilities Redeemable noncontrolling interests IAC...

  • Page 114
    ...2014: Guarantor Subsidiaries Non-Guarantor Subsidiaries (In thousands) IAC Eliminations IAC Consolidated Revenue $ Operating costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) Selling and marketing expense General and administrative expense Product development...

  • Page 115
    ... costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) Selling and marketing expense General and administrative expense Product development expense Depreciation Amortization of intangibles Total operating costs and expenses Operating (loss) income Equity in earnings...

  • Page 116
    ...2012: Guarantor Subsidiaries Non-Guarantor Subsidiaries (In thousands) IAC Eliminations IAC Consolidated Revenue $ Operating costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) Selling and marketing expense General and administrative expense Product development...

  • Page 117
    ... operations: Acquisitions, net of cash acquired Capital expenditures Proceeds from maturities and sales of marketable debt securities Purchases of marketable debt securities Proceeds from sales of long-term investments and a business Purchases of long-term investments Other, net Net cash used in...

  • Page 118
    ...to continuing operations: Acquisitions, net of cash acquired Capital expenditures Proceeds from maturities and sales of marketable debt securities Proceeds from sales of long-term investments and assets Purchases of long-term investments Other, net Net cash provided by (used in) investing activities...

  • Page 119
    ...: Acquisitions, net of cash acquired Capital expenditures Proceeds from maturities and sales of marketable debt securities Purchases of marketable debt securities Proceeds from sales of long-term investments and a business Purchases of long-term investments Other, net Net cash provided by (used in...

  • Page 120
    ... 31, 2014 Revenue Cost of revenue Operating income Earnings (loss) from continuing operations (Loss) earnings from discontinued operations, net of tax Net earnings (loss) Net earnings (loss) attributable to IAC shareholders Per share information attributable to IAC shareholders: Basic earnings (loss...

  • Page 121
    ...) earnings from discontinued operations, net of tax, in the third quarter of 2014 includes the release of tax reserves as a result of the expiration of the statutes of limitations for federal income taxes for the years 2001 through 2009. Quarterly per share amounts may not add to the related annual...

  • Page 122
    ... as conditions warrant. As required by Rule 13a-15(d), IAC management, including the Chairman and Senior Executive and the Chief Financial Officer, also conducted an evaluation of the Company's internal control over financial reporting to determine whether any changes occurred during the quarter...

  • Page 123
    ... become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, IAC/InterActiveCorp maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the...

  • Page 124
    ... herein by reference. Item 14. Principal Accounting Fees and Services Information required by Item 9(e) of Schedule 14A regarding the fees and services of IAC's independent registered public accounting firm and the pre-approval policies and procedures applicable to services provided to IAC by such...

  • Page 125
    ... 31, 2014, 2013 and 2012. Notes to Consolidated Financial Statements. (2) Consolidated Financial Statement Schedule of IAC Schedule Number II Valuation and Qualifying Accounts. All other financial statements and schedules not listed have been omitted since the required information is either...

  • Page 126
    ... Exhibit 3.1(ii) to the Registrant's Current Report on Form 8-K, filed on December 6, 2010. Exhibit 4.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Exhibit 4.3 to the Registrant's Registration Statement on Form S-4, filed on May 3, 2013. Exhibit 4.4 to...

  • Page 127
    ...1, 2010, by and between the Registrant and Barry Diller. Tax Sharing Agreement, dated as of August 20, 2008, by and among the Registrant, Ticketmaster, Interval Leisure Group, Inc., HSN, Inc. and Tree.com, Inc. IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(1) Form of Terms and Conditions...

  • Page 128
    ..., between the Registrant and Google Inc. Form 10-Q for the fiscal quarter ended June 30, 2011. Credit Agreement, dated as of December 21, 2012, among Exhibit 10.20 to the Registrant's Annual Report on IAC/InterActiveCorp, as Borrower, the Lenders party thereto, Form 10-K for the fiscal year ended...

  • Page 129
    ...IAC/INTERACTIVECORP By: /s/ JEFFREY W. KIP Jeffrey W. Kip Executive Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed...Vice President and Controller (Chief Accounting Officer) Director Director Director ...

  • Page 130
    /s/ RICHARD F. ZANNINO Richard F. Zannino Director 103

  • Page 131
    ... Contents Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS Balance at Beginning of Period Description Charges to Earnings Charges to Other Accounts (In thousands) Deductions Balance at End of Period 2014 Allowance for doubtful accounts and revenue $ reserves...

  • Page 132
    Table of Contents (9) Amount is primarily related to an unbenefited other-than-temporary impairment charge related to a long-term marketable equity security, an increase in deferred tax assets for investments in subsidiaries and an increase in federal net operating losses. 105

  • Page 133
    ..., LLC CH Pacific, LLC CityGrid Media, LLC CollegeHumor Press LLC Comedy News Ventures, Inc. Connect, LLC Connected Ventures, LLC ConsumerSearch, Inc. CraftJack Inc. CV Acquisition Corp. Daily Burn, Inc. DatingDirect.com Limited Delightful.com, LLC Diamant Production Services, LLC Diamond Dogs, LLC...

  • Page 134

  • Page 135
    ... High Line Venture Partners III, L.P. High Line Venture Partners, L.P. Higher Edge Marketing Services, Inc. Home Industry Leadership Board HomeAdvisor B.V. HomeAdvisor, Inc. HowAboutWe, LLC HSN Capital LLC HSN Home Shopping Network GmbH HSN, LLC HTRF Ventures, LLC Humor Rainbow, Inc. IAC 19 th St...

  • Page 136
    Mash Dating, LLC Delaware

  • Page 137
    ...Limited Massive Media Match NV Match Group, LLC Match ProfilePro, LLC Match.com Canada Ltd. Match.com Europe Limited Match.com Events LLC Match.com France Limited Match.com Global Investments SARL Match.com Global Services Limited Match.com HK Limited Match.com International Holdings, Inc. Match.com...

  • Page 138
    Search Floor, Inc. California

  • Page 139
    Entity Jurisdiction of Formation ServiceMagic Canada Inc. ServiceMagic Europe S.Ã r.l. ServiceMagic GmbH ServiceMagic International S.Ã r.l. ServiceMagic IP Ireland Limited ServiceMagic Limited Shanghai Huike Network Technology Co., Ltd. Shoebuy.com, Inc. Shoptouch, Inc. SIA "Ask.fm" Slimware ...

  • Page 140
    ... and schedule of IAC/InterActiveCorp, and the effectiveness of internal control over financial reporting of IAC/InterActiveCorp, included in this Annual Report (Form 10-K) for the year ended December 31, 2014. COMMISSION FILE NO.: Form S-8, No. 333-127410 Form S-8, No. 333-127411 Form S-4, No...

  • Page 141
    ... 31.1 Certification I, Barry Diller, certify that: 1. 2. I have reviewed this report on Form 10-K for the fiscal year ended December 31, 2014 of IAC; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the...

  • Page 142
    ... 31.2 Certification I, Jeffrey W. Kip, certify that: 1. 2. I have reviewed this report on Form 10-K for the fiscal year ended December 31, 2014 of IAC; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the...

  • Page 143
    ... (1) the Annual Report on Form 10-K for the fiscal year ended December 31, 2014 of IAC/InterActiveCorp (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o (d)); and the information...

  • Page 144
    ... (1) the Annual Report on Form 10-K for the fiscal year ended December 31, 2014 of IAC/InterActiveCorp (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o (d)); and the information...