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IAC/INTERACTIVECORP
FORM 10-K
(Annual Report)
Filed 02/26/14 for the Period Ending 12/31/13
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 2014, 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
    ... Report) Filed 02/26/14 for the Period Ending 12/31/13 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 Technology 12/31 http://www.edgar-online.com...

  • 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 2014 Annual Meeting of Stockholders are incorporated by reference into Part III herein.

  • Page 4
    ... Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services PART IV Exhibits and Financial Statement Schedules 1 2 10 18 18 19 19 20 22 23...

  • Page 5
    ...I Item 1. Business OVERVIEW Who We Are IAC is a leading media and internet company comprised of more than 150 brands and products, including Ask.com, About.com, Match.com, HomeAdvisor and Vimeo. Focused in the areas of search, applications, online dating, local and media, IAC's family of websites is...

  • Page 6
    ... a successful tender offer in France and the businesses within ValueClick's "Owned and Operated" reporting segment, including Investopedia and PriceRunner, for $80 million. EQUITY OWNERSHIP AND VOTE IAC has outstanding shares of common stock, with one vote per share, and Class B common stock, with...

  • Page 7
    ...web and mobile platforms. Applications Our B2C operations develop, market and distribute a variety of downloadable applications that offer users the ability to access search services, as well as engage in a number of other activities online, such as play games, send e-cards, decorate e-mails and web...

  • Page 8
    ... 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 through which...

  • Page 9
    ... for a fee. We also offer access to our services via various mobile devices through our Match, OkCupid, Tinder and other branded mobile applications. We also provide live, local events for our Match.com members in certain markets in North America and Europe. Marketing We market our services through...

  • Page 10
    ... businesses in the online home services space in France, the Netherlands and the United Kingdom under various brands. HomeAdvisor also operates Felix, a pay-per-call advertising service that we acquired in August 2012 and which was previously operated by CityGrid Media. HomeAdvisor Services Matching...

  • Page 11
    ... services professionals through our sales force, as well as online through search engine marketing, relationships with trade associations and affiliate marketing relationships. Revenue HomeAdvisor's revenue is derived primarily from fees paid by members of our network of home services professionals...

  • Page 12
    ... or 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 in this annual report, or...

  • Page 13
    ... IAC's business prospects and strategy, anticipated trends and prospects in the industries in which IAC's businesses operate and other similar matters. These forward1looking statements are based on IAC management's expectations and assumptions about future events as of the date of this annual report...

  • Page 14
    ... web browsers, software programs and/or other applications that limit or prevent advertising from being displayed become commonplace and the extent to which the industry is able to effectively manage click fraud. Any lack of growth in the market for online advertising, particularly for paid listings...

  • Page 15
    ... as for the development and introduction of new products, services and enhancements, infrastructure and other related efforts. Marketing efforts designed to drive traffic to our various websites may not be successful or cost-effective. Traffic building and conversion initiatives involve considerable...

  • Page 16
    ...sales and marketing costs as a percentage 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...

  • Page 17
    ...the future, we have limited experience with mobile applications, both in terms of development and monetization. Moreover, mobile versions of our products and services that we develop may not be compelling to users and/advertisers. Even if we are able to develop mobile applications that resonate with...

  • Page 18
    ... 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 19
    ... must continue to successfully tailor our products and services to the unique customs and cultures of foreign jurisdictions, which can be difficult and costly and the failure to do so could slow our international growth and adversely impact our business, financial condition and results of operations...

  • Page 20
    ... Applications, Match and Local) rely heavily upon their trademarks (primarily Ask.com, About.com, Dictionary.com, our various toolbar brands, Match.com, OkCupid.com, OurTime.com, Meetic.com and HomeAdvisor.com and related domain names and logos), through which they market their products and services...

  • Page 21
    ... users and customers, which could have an adverse effect on our business, financial condition and results of operations and otherwise be costly to remedy. Item 1B. Unresolved Staff Comments Not applicable. Item 2. Properties IAC believes that the facilities for its management and operations...

  • Page 22
    ... 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 23
    ... 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, 2013 Fourth Quarter Third Quarter Second Quarter First Quarter...

  • Page 24
    ... by the Company of its common stock during the quarter ended December 31, 2013: (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (d) Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs Period (a) Total Number of...

  • Page 25
    ... of results for the years 2013, 2012 and 2011, see "Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations." Included in 2009 is $1.0 billion in impairment charges at the Search & Applications segment (formerly the Search segment) related to the write-down of...

  • Page 26
    ...of Operations MANAGEMENT OVERVIEW IAC is a leading media and internet company comprised of more than 150 brands and products, including Ask.com, About.com, Match.com, HomeAdvisor and Vimeo. Focused in the areas of search, applications, online dating, local and media, IAC's family of websites is one...

  • Page 27

  • Page 28
    ... a pay-per-call advertising service acquired August 20, 2012. HomeAdvisor domestic revenue was negatively impacted by an 11% decrease in accepted service requests due primarily to its domain name change at the end of 2012. Media revenue increased 18% to $ 193.7 million primarily due to strong growth...

  • Page 29

  • Page 30
    ... to higher average lead acceptance fees. HomeAdvisor international revenue grew due to a 25% increase in accepted service requests and higher average lead acceptance fees. Local revenue further benefited from the contribution of Felix, a pay-per-call advertising service acquired August 20, 2012, and...

  • Page 31
    ... costs (including stock-based compensation) for personnel engaged in sales, sales support and customer service functions. Advertising and promotional expenditures include online marketing, including fees paid to search engines and third parties that distribute our B2C downloadable applications...

  • Page 32
    26

  • Page 33
    ...expense from Search & Applications increased primarily due to the acquisition of The About Group, and increases in compensation and other employee-related costs and professional fees. Product development expense Years Ended December 31, 2013 $ Change % Change 2012 $ Change % Change 2011 (Dollars in...

  • Page 34
    ... expense and $10.1 million in cost of revenue. The increase in selling and marketing expense is primarily due to new B2C downloadable applications and the inclusion of The About Group, beginning September 24, 2012. The increase in both product development expense and general and administrative...

  • Page 35

  • Page 36
    ...the exit of the Company's direct sponsored listings business in 2011. The increase in selling and marketing expense is driven primarily by increased online marketing expenditures related to Ask.com and existing B2C downloadable applications. The increase in traffic acquisition costs is primarily due...

  • Page 37
    of The About Group and a $3.4 million impairment charge associated with an indefinite-lived intangible asset related to the CityGrid Media restructuring in the second quarter of 2013. 29

  • Page 38
    ... the tender offer price of â,¬15.00 per share) in connection with our acquisition of a controlling interest. Partially offsetting these items are earnings related to Meetic through August 31, 2011. Interest expense Years Ended December 31, 2013 $ Change % Change 2012 $ Change % Change 2011 (Dollars...

  • Page 39
    30

  • Page 40
    ... taxed at lower rates. In connection with the acquisition of a controlling interest in Meetic in 2011, the Company concluded that it intends to indefinitely reinvest the earnings of Match's international operations related to Meetic, including the 2009 gain on sale of Match Europe, outside of the...

  • Page 41
    ... offset by an increase in accounts receivable at Electus due to higher revenue. The increase in other assets is primarily due to an increase in short-term and long-term production costs at certain of our media businesses that are capitalized as the television program, video or film is being produced...

  • Page 42
    ... for insurance claims related to Hurricane Sandy, an increase in capitalized downloadable search toolbar costs and an increase in short-term production costs at certain of our Media businesses that are capitalized as the television program, video or film is being produced. The decrease in accounts...

  • Page 43
    ... related to the internal development of software to support our products and services, partially offset by net maturities and sales of marketable debt securities and sales of long-term investments of $396.2 million . Net cash used in financing activities attributable to continuing operations in 2011...

  • Page 44
    ... Per Period Other Commercial Commitments (d) Letters of credit and surety bonds _____ (d) Less Than 1 Year 1-3 Years (In thousands) Total $ 2,937 $ 69 $ 3,006 Commercial commitments are funding commitments that could potentially require registrant performance in the event of demands by...

  • Page 45
    ...intangibles, if applicable) and goodwill impairment (if applicable) are non-cash expenses relating primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as content, technology, customer lists, advertiser and supplier...

  • Page 46
    ... 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 47
    ... 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 related to...

  • Page 48
    ... changes; and comparable valuations. During 2013, the Company recognized an impairment charge of $5.0 million related to a cost method investment and during 2012, the Company recorded an impairment charge of $8.7 million related to one of its long-term marketable equity securities. These charges...

  • Page 49
    ...the Company to adjust its financing and operating strategies. Foreign currency exchange gains and losses are not material to the Company's earnings in 2013, 2012 and 2011. As foreign currency exchange rates change, translation of the statements of operations of the Company's international businesses...

  • Page 50
    40

  • Page 51
    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. 41

  • Page 52
    ...the standards of the Public Company Accounting Oversight Board (United States), IAC/InterActiveCorp's internal control over financial reporting as of December 31, 2013, based on criteria established in the Internal ControlIntegrated issued by the Committee of Sponsoring Organizations of the Treadway...

  • Page 53
    ..., 2013 2012 (In thousands, except share data) ASSETS Cash and cash equivalents Marketable securities Accounts receivable, net of allowance of $8,540 and $11,088, respectively Other current assets Total current assets Property and equipment, net Goodwill Intangible assets, net Long-term investments...

  • Page 54
    ... Years Ended December 31, 2013 2012 (In thousands, except per share data) 2011 Revenue 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 55
    ... Ended December 31, 2013 2012 (In thousands) 2011 Net earnings Other comprehensive income (loss), net of tax: Change in foreign currency translation adjustment Change in net unrealized gains (losses) on available-for-sale securities (net of tax benefits of $3,050 in 2013 and $3,981 in 2012 and tax...

  • Page 56
    ...In thousands) Treasury Stock Total IAC Shareholders' Equity Noncontrolling Interests Total Shareholders' Equity Balance as of December 31, 2010 Net (loss) earnings for the year ended December 31, 2011 Other comprehensive loss, net of tax Noncontrolling interests related to acquisition of Meetic...

  • Page 57
    ... earnings for the year ended ended December 31, 2013 Other comprehensive income, net of tax Non-cash compensation expense Issuance of common stock upon exercise of stock options, vesting of restricted stock units and other, net of withholding taxes Income tax benefit related to the exercise of stock...

  • Page 58
    ... Impairment of long-term investments Excess tax benefits from stock-based awards Deferred income taxes Equity in losses of unconsolidated affiliates Acquisition-related contingent consideration fair value adjustments Gain on sales of long-term investments Gain on sales of assets Changes in assets...

  • Page 59
    Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ 350,467 749,977 1,100,444 $ 45,824 704,153 749,977 $ (37,946) 742,099 704,153 The accompanying Notes to Consolidated Financial Statements are an ...

  • Page 60
    ... STATEMENTS NOTE 1-ORGANIZATION IAC is a leading media and internet company comprised of more than 150 brands and products, including Ask.com, About.com, Match.com, HomeAdvisor and Vimeo. Focused in the areas of search, applications, online dating, local and media, IAC's family of websites is one of...

  • Page 61
    ... that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and accounts have been eliminated. Investments in the common stock or in-substance common stock of entities in which the Company has the ability to exercise...

  • Page 62
    ... 31, 2013 and 2012, respectively. Match also earns revenue from online advertising, which is recognized when an ad is displayed, and the purchase of add-on or premium features. Local HomeAdvisor's lead acceptance revenue is generated and recognized when an in-network home service professional is...

  • Page 63
    consumer lead. HomeAdvisor's membership subscription revenue is generated through subscription sales to service 50

  • Page 64
    ... of a new home service professional. Activation revenue is initially deferred and recognized over twenty-four months. Deferred revenue at HomeAdvisor is $4.0 million and $3.0 million at December 31, 2013 and 2012, respectively. Media Revenue of media businesses included in this segment is generated...

  • Page 65
    51

  • Page 66
    ... About Group primarily related to projects that commenced prior to its acquisition. During 2011, the Company wrote off $4.9 million in capitalized software costs associated with the exit of the Company's direct sponsored listings business. The net book value of capitalized internal use software is...

  • Page 67
    macroeconomic and industry specific 52

  • Page 68
    ...Local Media Media Other Other Media and Other include other operating segments that do not have goodwill. See Note 15 for additional information regarding the Company's method of determining operating and reportable segments. There were no material impairment charges recorded in 2013 , 2012 or 2011...

  • Page 69
    Level 3 inputs. 53

  • Page 70
    ... 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 71
    "Earnings (loss) from discontinued operations, net of tax" in the accompanying consolidated statement of operations. 54

  • Page 72
    ... certain of our products, services and/or business practices, which could be costly to address or otherwise have an adverse effect on our business, financial condition and results of operations. For the years ended December 31, 2013 , 2012 and 2011 , revenue earned from Google is $1.5 billion...

  • Page 73
    Certain prior year amounts have been reclassified to conform to the current year presentation. 55

  • Page 74
    ... 20,099 27,437 43,378 156,339 December 31, 2013 (In thousands) 2012 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 75
    ...) 2011 Cost of revenue: Cost of service revenue Cost of product revenue Cost of revenue $ $ 883,730 116,371 1,000,101 $ $ 835,440 155,357 990,797 $ $ 659,069 94,820 753,889 Years Ended December 31, 2013 2012 (In thousands) 2011 Other income (expense), net: Gain on sales of long-term...

  • Page 76
    ... income tax payable was reduced by $32.9 million , $57.1 million and $22.2 million for the years ended December 31, 2013 , 2012 and 2011 , respectively, for excess tax deductions attributable to stock-based compensation. The related income tax benefits are recorded as increases to additional paid-in...

  • Page 77
    .... The valuation allowance is related to deferred tax assets for which it is more likely than not that the tax benefit will not be realized. December 31, 2013 (In thousands) 2012 Deferred tax assets: Accrued expenses Net operating loss carryforwards Tax credit carryforwards Stock-based compensation...

  • Page 78
    59

  • Page 79
    ... of capital losses will be limited to the Company's ability to generate future capital gains. At December 31, 2013 , the Company has tax credit carryforwards of $11.9 million . Of this amount, $5.5 million relates to federal credits for foreign taxes, $5.2 million relates to state tax credits for...

  • Page 80
    ...) (6,252) 351,561 The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax provision. Included in the income tax provision for continuing operations for the years ended December 31, 2013 , 2012 and 2011 is a $4.8 million expense, $5.2 million...

  • Page 81
    ... additional information related to the fair value measurement of the contingent consideration arrangement. Acquisition of About, Inc. On September 24, 2012, IAC completed its purchase of all the outstanding shares of About, Inc. ("The About Group"), an online content and reference library offering...

  • Page 82
    ...,154 Additions primarily relate to the acquisition of The About Group. The December 31, 2013, 2012 and 2011 goodwill balances include accumulated impairment losses of $916.9 million , $28.0 million and $11.6 million at Search & Applications, Shoebuy and Connected Ventures, respectively. Intangible...

  • Page 83
    63

  • Page 84
    ... 2.9 3.2 At December 31, 2012 , intangible assets with definite lives are as follows: Gross Carrying Amount Weighted-Average Useful Life (Years) Accumulated Amortization (In thousands) Net Content Technology Trade names Advertiser and supplier relationships Customer lists Total $ $ 47,800 37...

  • Page 85
    The contractual maturity of the debt security classified as current available-for-sale at December 31, 2013 is less than one year. 64

  • Page 86
    ...990 $ $ 113,830 8,104 31,244 8,100 161,278 In the third quarter of 2011, the Company acquired a 20% interest in the voting common stock of Zhenai Inc. ("Zhenai"), a leading provider of online matchmaking services in China. Our voting power is limited by a shareholders agreement. In light of this...

  • Page 87

  • Page 88
    ... In 2012 and 2011, the Company recorded pre-tax non-cash charges of $18.6 million and $11.7 million , respectively, related to the remeasurement of the carrying value of our equity method investments in News_Beast and Meetic, respectively, to fair value in connection with the acquisitions of...

  • Page 89
    not consider the second security to be other-than-temporarily impaired at December 66

  • Page 90
    ...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 arrangement...

  • Page 91
    ... the year ended December 31, 2011 , relating to the Company's financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs. Auction rate security The Company's auction rate security is valued by discounting the estimated future cash flow streams of...

  • Page 92
    The contingent consideration arrangement entered into in 2013 arose from the acquisition of Twoo (see Note 5 for additional information). The fair value of the contingent consideration arrangement was determined using a probability68

  • Page 93
    ... primarily on management's internal projections and strategic plans, with limited additional consideration given to growth trends of similarly situated businesses. The fair value of the contingent consideration arrangement is sensitive to changes in the discount rate and changes in the forecasts...

  • Page 94
    69

  • Page 95
    ...22 for guarantor and non-guarantor financial information. The indentures governing the 2013 and 2012 Senior Notes contain identical covenants that would limit our ability to pay dividends or make other distributions and repurchase or redeem our stock in the event a default has occurred or we are not...

  • Page 96
    ... of IAC common stock and shares of IAC Class B common stock with respect to dividend or liquidation rights or both. At December 31, 2013 and 2012 there is no preferred stock issued and outstanding. Reserved Common Shares In connection with equity compensation plans, 24.7 million shares of IAC common...

  • Page 97
    2013 , the Company has approximately 8.6 million shares remaining in its share repurchase authorization. 71

  • Page 98
    IAC...earnings: Year Ended December 31, 2013 Foreign Currency Translation Adjustment Unrealized (Losses) Gains On AvailableFor-Sale... accumulated other comprehensive loss related to the maturities and sales of available-forsale securities are...2012 and 2011 were $2.1 million and $2.8 million , respectively....

  • Page 99
    ... employees, officers, directors and consultants. At December 31, 2013 , there are 13.9 million shares available for grant under the Company's stock-based compensation plans. The plans were adopted in 2005, 2008 and 2013, have a stated term of ten years , and provide that the exercise price of stock...

  • Page 100
    Directors (the "Committee"). Each grant agreement reflects the vesting 73

  • Page 101
    ... historical experience and revised, if necessary, in subsequent periods if actual forfeitures differ from the estimated rate. The total income tax benefit recognized in the accompanying consolidated statement of operations for the years ended December 31, 2013 , 2012 and 2011 related to stock-based...

  • Page 102
    ... pricing model incorporates various assumptions, including expected volatility and expected term. During 2013 , 2012 and 2011 , expected stock price volatilities were estimated based on the Company's historical volatility. Expected term is based upon the historical exercise behavior of our employees...

  • Page 103
    and expensed as 75

  • Page 104
    ... 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 105
    IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Years Ended December 31, 2013 2012 (In thousands) 2011 Revenue: Search & Applications Match Local Media Other Inter-segment elimination Total $ $ 1,604,950 $ 788,197 277,466 193,734 159,493 (853) 3,022,...

  • Page 106
    December 31, 2013 (In thousands) 2012 Segment Assets (b) : Search & Applications Match Local Media Other Corporate Total 77 $ $ 409,116 325,939 25,522 93,074 45,340 1,215,034 2,114,025 $ $ 355,159 225,781 46,842 71,495 28,842 978,651 1,706,770

  • Page 107
    ... applicable, goodwill and intangible assets from the measure of segment assets presented above. (b) Revenue by geography is based on where the customer is located. Geographic information about revenue and long-lived assets is presented below: Years Ended December 31, 2013 2012 (In thousands) 2011...

  • Page 108
    78

  • Page 109
    ... Company's reportable segments: Year Ended December 31, 2013 Operating Income Before Amortization Non-Cash Compensation Expense Acquisition-related Contingent Consideration Fair Value Adjustments Operating Income (Loss) Amortization of Intangibles (In thousands) Search & Applications Match Local...

  • Page 110
    ...905 105,166 978,651 3,805,828 Corporate assets consist primarily of cash and cash equivalents, marketable securities and IAC's headquarters building. NOTE 16-COMMITMENTS The Company leases land, office space, data center facilities and equipment used in connection with its operations under various...

  • Page 111
    80

  • Page 112
    ... Expenses charged to operations under these agreements are $36.7 million , $30.6 million and $31.3 million for the years ended December 31, 2013 , 2012 and 2011 , respectively. The Company's most significant operating lease is a seventy-seven years land lease for IAC's headquarters building in New...

  • Page 113
    81

  • Page 114
    ... nor matching contributions are required to be invested in IAC common stock. IAC also has or participates in various benefit plans, principally defined contribution plans, for its international employees. IAC's contributions for these plans for the years ended December 31, 2013 , 2012 and 2011 are...

  • Page 115
    ...and marketing expense, general and administrative expense and product development expense. Accordingly, cost of revenue presented above for periods prior to the second quarter of 2013 differs from the amounts reflected in the Company's quarterly reports on Form 10-Q for the first quarter of 2013 and...

  • Page 116
    ... certain domestic subsidiaries which are 100% owned by the Company. The following tables present condensed consolidating financial information at December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013 , 2012 and 2011 for: IAC, on a stand-alone basis; the combined guarantor...

  • Page 117
    ... Other non-current assets Total assets Accounts payable, trade Other current liabilities Long-term debt, net of current maturities Income taxes payable Intercompany liabilities Other long-term liabilities Redeemable noncontrolling interests IAC shareholders' equity Noncontrolling interests Total...

  • Page 118
    ...31, 2013: Guarantor Subsidiaries Non-Guarantor Subsidiaries (In thousands) IAC Total Eliminations IAC Consolidated Revenue $ Costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) Selling and marketing expense General and administrative expense Product development...

  • Page 119
    ...31, 2012: Guarantor Subsidiaries Non-Guarantor Subsidiaries (In thousands) IAC Total Eliminations IAC Consolidated Revenue $ Costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) Selling and marketing expense General and administrative expense Product development...

  • Page 120
    ...31, 2011: Guarantor Subsidiaries Non-Guarantor Subsidiaries (In thousands) IAC Total Eliminations IAC Consolidated Revenue $ Costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) Selling and marketing expense General and administrative expense Product development...

  • Page 121
    ... from investing activities attributable 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 Purchases of long-term investments Other, net Net cash provided by...

  • Page 122
    ... attributable to continuing 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 Purchases of long-term investments Other, net Net...

  • Page 123
    ... attributable to continuing 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 Purchases of long-term investments Other, net Net...

  • Page 124
    ... 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 125
    ... is to express an opinion on the company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain...

  • Page 126
    ... 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 127
    ... 31, 2013, 2012 and 2011. 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 128
    ...Interval Leisure Group, Inc., HSN, Inc. and Tree.com, Inc. IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(1) Form of Terms and Conditions of Stock Options under the IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(1)(2) Form of Terms and Conditions of Restricted Stock Units under...

  • Page 129
    ... Plan.(1) Summary of Non-Employee Director Compensation Arrangements. (1) 2011 IAC/InterActiveCorp Deferred Compensation Plan for NonEmployee Directors.(1) Stock Option Agreement between the Registrant and Barry Diller, dated as of June 7, 2005.(1) Match.com, Inc. Equity Program.(1) Employment...

  • Page 130
    ... XBRL Taxonomy Extension Schema XBRL Taxonomy Extension Calculation XBRL Taxonomy Extension Definition XBRL Taxonomy Extension Labels XBRL Taxonomy Extension Presentation _____ Reflects management contracts and management and director compensatory plans. Filed herewith. Furnished herewith. 98

  • Page 131
    ...the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. February 26, 2014 IAC/INTERACTIVECORP By: /s/ JEFFREY W.... Vice President and Controller (Chief Accounting Officer) Director Director Director Director Director Director ...

  • Page 132
    /s/ ALEXANDER VON FURSTENBERG Alexander von Furstenberg /s/ RICHARD F. ZANNINO Richard F. Zannino 99 Director Director

  • Page 133
    ... at Newsweek. The Newsweek print business was transitioned to a digital only publication in December 2012 (and was subsequently sold in August 2013). Amount is primarily related to an unbenefited other-than-temporary impairment charge related to a long-term marketable equity security, an increase in...

  • Page 134
    100

  • Page 135
    Table of Contents (9) Amount is primarily related to losses from equity method investments. Amount is primary related to the net release of the valuation allowance on net benefited losses for 2011 unrealized gains on available-forsale securities included in accumulated other comprehensive income. ...

  • Page 136
    ...Incentive Plan Overview These Terms and Conditions apply to the grant to you by IAC/InterActiveCorp ("IAC" or the "Company") pursuant to Section 5 of the IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan (the "2013 Plan") of the right and option (the "Stock Options") to purchase the number of...

  • Page 137
    ...of Common Stock subject to your Stock Options and/or the exercise price per share. In the event of a merger, consolidation, acquisition of property or shares, stock rights offering, liquidation, Disaffiliation, or similar event affecting IAC or any of its Subsidiaries (each, a "Corporate Transaction...

  • Page 138
    ... free of any conditions not acceptable to the Committee. Conflicts and Interpretation In the event of any conflict between this Award Agreement and the 2013 Plan, the 2013 Plan shall control; provided, that an action or provision that is permissive under the terms of the 2013 Plan, and required...

  • Page 139
    ...time to IAC or any of its Subsidiaries or Affiliates and to the Agent (together, the "Relevant Companies") of any and all personal or professional data that is necessary or desirable for the administration of your Stock Options and/or the Plan (the "Relevant Information"). Without limiting the above...

  • Page 140
    ...right to continue in the employ or service of IAC or any of its Subsidiaries or Affiliates or interfere in any way with their rights to terminate your employment or service at any time. Vesting Subject to these Terms and Conditions and the 2013 Plan, the restricted stock units ("RSUs") in respect of...

  • Page 141
    ... business or subsidiary of IAC by which you are employed or for which you are performing services at the time of such sale or other disposition by IAC shall be considered a Termination of Employment ( not a Change in Control of IAC) and shall be governed by the applicable provisions of the 2013 Plan...

  • Page 142
    ...free of any conditions not acceptable to the Committee. Conflicts and Interpretation In the event of any conflict between these Terms and Conditions and the 2013 Plan, the 2013 Plan shall control; provided, that an action or provision that is permissive under the terms of the 2013 Plan, and required...

  • Page 143
    In no event shall IAC be required to pay you any "gross-up" or other payment with respect to any taxes or penalties imposed under Section 409A with respect to any amounts or benefits paid to you in respect of your Award. 4

  • Page 144
    ... Productions, LLC Falcon Holdings II, LLC FC & Co Felix Calls, LLC Five Star Matchmaking Information Technology (Beijing) Co., Ltd. Gym Interactive, LLC Hatch Labs, Inc. High Line Venture Partners Follow On Fund GP, LLC Delaware People's Republic of China Cayman Islands Delaware Delaware Delaware...

  • Page 145
    ....com, LLC LocalVets.com, LLC Lucky Morning Productions, LLC M8 Singlesnet LLC Magnusville Limited Maker Shack, LLC Massive Media Europe NV Massive Media Limited Massive Media Match NV Delaware Delaware Delaware Delaware Delaware Colorado Netherlands Delaware Delaware Germany Delaware Delaware New...

  • Page 146

  • Page 147
    ... Match.com Canada Ltd. Match.com Europe Limited Match.com Events LLC Match.com France Ltd. Match.com Global Investments SARL Match.com Global Services Limited Match.com HK Limited Match.com International Holdings, Inc. Match.com International Ltd. Match.com Investments, Inc. Match.com Japan KK Match...

  • Page 148

  • Page 149
    .... TanningNearYou.com, LLC Targeted Media Solutions LLC TDB Holdings, Inc. The Daily Beast Company LLC The IAC Foundation, Inc. Tinder, Inc. TMC Realty, L.L.C. Triple Threat Marketing, LLC Tutor.com, Inc. TVRepairMan.com, LLC uDate.com Ltd. USA Electronic Commerce Solutions LLC USA Video Distribution...

  • Page 150
    ... Public Accounting Firm We consent to the incorporation by reference in the following registration statements (and any amendments thereto) of IAC/InterActiveCorp of our reports dated February 26, 2014, with respect to the consolidated financial statements and schedule of IAC/InterActiveCorp...

  • Page 151
    ... in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who...

  • Page 152
    ... in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who...

  • Page 153
    ... of 2002, 18 U.S.C. Section 1350, that, to my knowledge: (1) the Annual Report on Form 10-K for the fiscal year ended December 31, 2013 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...

  • Page 154
    ... of 2002, 18 U.S.C. Section 1350, that, to my knowledge: (1) the Annual Report on Form 10-K for the fiscal year ended December 31, 2013 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...